Rambhai Gopalbhai Patel and others vs Coimbatore Market Committee

Sathiadev, J.—This appeal is preferred against an order dated 22-7-1987 dismissing W.P. No. 7167 of 1967 filed by the appellant herein.

Petitioners filed the writ petition for issue of a writ of mandamus to for bear the respondent-Coimbatore Market Committee from enforcing the

provisions of the Tamil Nadu Agricultural Produce Markets Act, 1959, rules and by-laws framed thereunder in respect of beedi tobacco.

Petitioners claim that they purchase beedi tobacco from Gujarat, Karnataka and Andhra Pradesh, which are the only States in India where

beedi tobacco is cultivated, and that the beedi tobacco is not cultivated within the notified area of the respondent Committee. They being obliged

to take a licence under S. 6(1) of the Act and in fact have obtained a licence to trade with any of the notified agricultural produce within the

respondent''s market area. Beedi tobacco is different from chewing tobacco, which is alone grown within notified area and in adjoining district.

R.51A(2) states that the fees referred to in sub-rule (1) shall be collected from the first purchaser on the basis of the records or returns submitted

by the licensee and it shall he paid by the purchaser immediately after the purchase is effected in a market established by the Market Committee,

and that R.51A(5) reads that to unable the Market Committee to assess the quantum of fees due to it under the Act every person who deals with

the notified agricultural produce, shall submit to the Market Committee a weekly return in a specified form showing the purchases and sales of each

transaction of the Market Committee. R.57 contemplates that any contravention of R.51A shall be punishable with fine. The Market Committee

had framed by-laws under S.30 of the Act. By-law 2 (v) defines ""Agricultural Produce"" and it makes no difference between showing tobacco and

beedi tobacco, even though a clear definition exists as noticed in tariff Notification issued by the Central Excise authorities. As petitioners purchase

beedi tobacco outside Tamil Nadu, they are not liable to submit returns, as contemplated under R.51A(5). When they sell beedi tobacco to

anyone within the notified fee, it is only the first purchaser, who will be liable to pay fees referred to in R.51A(1), and therefore, petitioners cannot

be characterised as purchasers of beedi tobacco. Since they refused to submit returns, prosecution had been launched before the Judicial First

Class Magistrate, Coimbatore and therefore, they are compelled to file the writ petition seeking for the relief, as stated above.

Learned Judge in admission stage dismissed the writ petition by holding that, whether beedi tobacco is grown within the market are or not, so

long as the notified agricultural produce is brought within the notified area for the purpose of marketing, undoubtedly all the provisions of the Act

would apply. It was further held that failure to make a distinction between chewing tobacco and beedi tobacco while issuing the Notification under

the Act, cannot absolve the liability of the petitioner to comply with the requirements of the Act. On the claim of cess, it was held that, if cess had

been already paid in another State where the purchase was made, it is an aspect relating to proof before the concerned authority, and therefore no

justification existed for entertaining the writ petition. Aggrieved against this order, this writ appeal is preferred.

The first and foremost point taken by Mr. K.K. Venugopal, learned Counsel for the appellants. Petitioners ( ranking of parties as in W.P. ) is

that, petitioners cannot be treated as purchasers under the provisions of the Act and the Rules framed thereunder. They have taken out licence

under the Act when they sell beedi tobacoo within the notified area. They claim that they have already paid cess in Gujarat and other States, where

they have purchased beedi tobacoo, and therefore, they cannot be compelled to pay cess once over within the notified area, where they sell their

produce. They have produced certain documents to show that they have made purchases outside the notified area. They have also paid cess at the

points, where they have purchased the agricultural produce. Therefore, in respect of a notified agricultural produce, if it is purchased outside the

notified area, and later on brought within the notified area, purchasers under such circumstances, cannot be treated as purchasers within the notified

area. The Act does not define a ''purchaser'', a ''buyer'', and a ''seller''. It only defines a ''producer'' as any person, who grows, rears or produces

by himself or by hired labour or otherwise any agricultural produce and does not include a dealer or broker in that produce, although he may grow,

rear or produce, that produce. In the Rules, the expressions ''buyer'' and ''seller'' are defined. A ''buyer'' is a person who buys or offers to sell any

agricultural produce. Therefore, unless the purchase of a notified agricultural produce is within the market area, any purchase outside the notified

area but brought into the notified area would not result in the owner of the said produce being treated as a purchaser for the purposes of the Act,

the rules framed thereunder and the by laws. The liability to pay fees would arise only in circumstances contemplated under R.51-A. R.51-A(1)

states that levy and collection of fee would arise, only when the agricultural produce is bought or sold in the notified market area. Petitioners having

bought beedi tobacoo from outside the notified market area, thereafter bring the notified agricultural produce within the notified market area and

hence this would not result in themselves being treated as purchasers, because they are owners of the agricultural produce brought into the area.

Therefore, it is only when these petitioners sell the produce brought inside the market area, it is the concerned purchasers from these petitioners,

who would be liable to pay fees to the respondent-market Committee.

S.18(1) of the Act states that a Market Committee shall levy a fee on any notified agricultural produce, bought or sold in the notified market

area. Therefore, it is only when the produce is purchased within the notified market area, the concerned purchaser would be liable to pay the fees,

correspondingly, R.51A(1) also fastens the liability, only when the produce is purchased, or sold within the notified market area. S.18(2) states

that the fee referred to in sub-Section (1) shall be paid by the purchaser of the notified agricultural produce within the market area. R.51-A (2) is

to the same effect. Therefore, when the beedi tobacco which had been bought within the notified area by the purchasers was sold, the liability or

incident to pay fee would arise, and that would be on the concerned purchaser from these petitioners. The Proviso to S. 18(2) states that, it is only

when the purchaser cannot be identified, the seller shall be liable to pay the fee. It is claimed by the petitioners that the purchasers of the produce

from them are submitting their returns and paying fees.

Hence, in respect of beedi tobacco, if purchase is made outside the notified market area and if by that time the ownership in the property had

already been transferred in favour of such a purchaser and thereafter goods are brought within the notified area; then under such circumstances,

they would not be liable to pay any fee under S.18, because they cannot be treated as purchasers of the produce, within the notified market area.

If such produces are sold by them, they would not be liable to pay fee, provided the purchasers from them could be identified. It is only when they

cannot be identified, the seller of such a produce could be called upon to pay fees. Therefore, beedi tobacco being brought into the notified market

area by purchases made outside the notified area, would not by itself entitle the respondent-Committee to demand payment of fee. To this extent,

the petitioners succeed.

The next contention of Mr. Venugopal, learned counsel for the Petitioners, is that, they having taken out licence, they cannot be called upon to

submit returns. This contention cannot be entertained, because there are prescribed authorities relating to agricultural produce being dealt with,

within the notified market area. It has been already seen that, in such of these cases where the first purchaser cannot be identified, the seller in

respect of the said transaction, could be called upon to pay fees. Under such a contingency, when liability to pay fees arises, it is just and proper or

persons like that of petitioners, and who are license holders to submit the requisite returns with necessary particulars, so that they could avail of the

benefits to the extent to which they are entitled to. Filing of such a return would help them to avoid harassment, because they would be disclosing

about the first purchaser in such returns, and in turn it helps the respondent Committee to collect fees from the proper persons. A licensee can

never refuse to comply with the requirements of filing the prescribed form about the purchases made outside the notified or within the notified area.

Therefore, (sic) petitioners cannot claim that they are not covered (sic) by the provisions of the Act, and the mandamus in the nature asked cannot

be issued, because they will have to comply with the requirements of the Act, so long as they deal with a notified agricultural produce within the

notified market area. Therefore the reliefs that can be granted in this writ appeal can be summed up as follows--

(1) The petitioners cannot be treated as purchasers when they bring beedi tobacco purchased outside the State, but brought into the notified

market area; and

(2) So long as the first purchaser from them is identified, petitioner and like persons cannot be called upon to pay fee/cess, as contemplated under

S.18 of the Act.

(3) Regarding the prosecution launched, if they relate to failure to take out a licence, then it can be further proceeded with. Also if they relate to

their failure to file prescribed returns, they can be further proceeded with. For any contravention committed by them regarding the provisions of the

Act, there could be no restraint on the respondent from taking appropriate action. But, if prosecution is launched nor proceedings initiated by the

Market Committee pertains to nonpayment of fee by treating them as first purchaser within the notified area, to that extent, the

prosecution/proceedings cannot be further proceeded with and they will have to be dropped.

To this limited extent alone, this writ appeal is allowed. No costs.