Decided on November 16,2006

I.T.C. LTD. Respondents


Arijit Pasayat, J. - (1.)In this appeal challenge is to the judgment rendered by a learned Single Judge of the Allahabad High Court allowing the writ petition filed by the respondent. The matter came to be placed before learned Single Judge as there was difference of opinion between two Honble Judges constituting the Division Bench and the learned Single Judge as the third judge decided the Writ Petition.
(2.)The facts giving rise to present petition, filtering out unnecessary details are as follows :- Respondent ITC Ltd. is a company incorporated under the Companies Act, 1956 (in short Company) having its registered office at 37, Chowringee Road, Calcutta. This company is engaged in manufacture of cigarette and has established several factories for this purpose including a factory at Sardar Patel Marg, Saharanpur. For manufacture of cigarette, leaf tobacco is required which is excisable to fee levied and collected by the Tobacco Board (in short the Board) constituted under Tobacco Boards Act, 1975 (in short Tobacco Act). The Company purchases tobacco in its raw form from the auction body established by the Tobacco Board at various places throughout the country. The raw tobacco so purchased is brought to the factory at Saharanpur where it is processed and cut tobacco is prepared. This cut tobacco is further processed and then such tobacco is used for manufacture of cigarette. The cut tobacco prepared in the factory at Saharanpur is dispatched to the factories of the company at Calcutta where it is used for manufacturing cigarettes. Some of the cut tobacco produced at Saharanpur factory is dispatched to certain contract manufacturers who entered into agreements with the respondent for manufacture of cigarettes. Respondent companys supplies them raw material i.e. cut tobacco paper and packing materia1 etc. and pays them manufacturing charges.
(3.)Under Section 12 of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter referred to as the Act, a committee called Mandi Samiti is established for every market area which is a body corporate having perpetual and official seal. Mandi Samiti is entitled to levy and collect fee under Section 17 of the Act in respect of all transactions of sale of specified agricultural produces in the market area at such rates, being not less than 1% per centum and not more than 2% of the price of aricultura1 produce as sold, as the State Government may specify by notification. By U.P. (Amendment) Act No.12 of 1987 an explanation was inserted which provided that for the purpose of clause (iii) unless the contrary is proved, any specified agricultural produce taken out or proposed to be taken out of the market area by or on behalf of licensed dealer shall be presumed to have been sold within such area for levying Mandi fee, and in such case, the price of such produce presumed to be sold shall be deemed to be such reasonable price as may be ascertained in the manner prescribed. This explanation came into force w.e.f. 31st March, l987.

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