- (1.) Fishing and its export is a flourshing trade in the State of Kerala. Its rare varieties of shrimps, lobsters, cuttle fish and squid etc, are exported on large scale. The persons involved in it are fishermen, the agents who purchase from fishermen or those who deshell or clean and cut the fish and exporters or those who carry on business of buying and selling fish, or processing fish for export or are commission agents and brokers or non- residents. The condition of fishermen of whom 90% are traditional fishermen is miserable. Their pathetic condition was described in a report published by the Fisheries Department in 1980 thus, "They are all traditionally downtrodden and illiterate and hence subjected to indebtedness and hardships as well as exploitation by middlemen. It is a painful fact that, through the implementation of various plan schemes for past 30 years no substantial changes have been brought about in improving their living conditions." In a study carried on by the State in 1987 it was found that the per capita income of fishermen was not even half of normal per capita income of ordinary person in the State. Therefore, the State enacted The Kerala Fishermen's Welfare Fund Act, 1985('Act' for short) which was assented to by the President of India on 10-2-1985. The Act provides for constitution of a welfare fund for promotion of welfare of fishermen in the State of Kerala. Section 3 of the Act empowers the Government to frame a scheme for establishment of a fund for the welfare of fishermen. Sub-section (2) of Section 3 gives out the contributions which shall be credited to the fund. They comprise of contributions specified in Section 4, fee levied under the schemes, damages realised under Section 21, grants or loans or advances made by the Government of India or the State Government, any penalty levied under the Kerala Marine Fishing Regulation Act, 1980 and any amount raised by the Board from other sources. Sub-section (3) vests the fund in the Board which under Clause (a) of Section 2 means, 'the Kerala Fishermen's Welfare Fund Board' constituted under Section 7. And sub-section (4) provides for utilization of the fund for distress relief to fishermen in times of natural calamities, for payment of financial assistance to fishermen who suffer permanent or temporary disablement, to advance loans or grants to meet the expenses in connection with disease or death of dependants, or any unexpected expenditure or day to day expenditure during lean months, to provide for the fishermen and their family members education, vocational, training, employment etc., for payment of financial assistance, for suffered of houses or fishing implements or any other damages due to natural calamities or other unexpected causes, to provide old age assistance, and for implementation of any other purposes specified in the scheme. Section 4 specifies the persons and the rate at which they shall contribute to the fund. The contribution has to be made by fishermen, owners of fishing vessel, fishing net, owners of prawn filtration area, persons who employ fishermen in a fishing vessel. The provision for contribution by a dealer reads as under :- "S. 4. - Contribution to the fund.- (1) ..................... (2) A dealer shall contribute every year to the fund one per cent of his sale proceeds in the year, Provided that the Board shall fix upon such members as may be specified in the scheme, the amount which a dealer shall contribute every year to the fund, for a period of three years from the commencement of this Act. Provided further that the amount fixed under the preceding proviso shall not exceed one per cent of the sale proceeds of the dealer." The other relevant Sections are 7 and 12. The former provides for constitution of the Board and the latter lays down the procedure for determination of contribution. It empowers the authorities to determine the amount from person liable to contribute after making inquiry as the authority may consider necessary and after having every person liable to pay contribution, under Section 4 an opportunity of hearing.
(2.) After the Act was enforced its validity was challenged by filing writ petitions, on earlier occasion, and the rate of contribution at 1% of gross sale was claimed to be extortionate. The Government, however, after deliberations with representatives of exporters reduced the rate to 0.9%. The writ petitions were withdrawn. Later the rate was revised and the contribution from dealers was once more raised to 1%. The authorities, therefore, determined the amount due from various exporters at this rate. But the orders, it appears, were passed without affording any opportunity. Consequently, the exporters of fish/respondents approached the High Court assailing the orders passed against them, and challenging the constitutional validity of the Act both for lack of legislative competence and violation of Article 14 of the Constitution.
(3.) Even though the High Court framed issues including the constitutional challenge but professed to confine its adjudication as to whether the exporters such as respondents were dealers but allowed the writ petitions, set aside the assessment orders, and directed the authorities to hear the exporters in the light of the observations made by the Court giving them liberty and permission to produce the necessary material to establish their claim that they were not dealers without deciding the basic controversy as to who would be 'dealer' within the meaning of Section 4(2) read with Section 2(d) of the Act. The observations made by the High Court are neither findings nor decisions on as to who would be the 'dealer' in the Act. It has only noticed the arguments advanced by both the parties. How then the assessing authority would decide whether a particular person carrying on certain activity would be a 'dealer' or not Therefore, it has become necessary to decide this question. The discussion hereinafter is confined to the narrow question whether a person like respondents could be a 'dealer' within the meaning of the Act.;