- (1.) Challenge in this appeal is to the judgment of a Division Bench of the Allahabad High Court holding that the appellant was not entitled to levy market fee under Section 17(iii) (b) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (in short the 'Adhiniyam') if the agricultural produce is neither brought nor taken out of the market place, and deciding in favour of respondent No. 1.
(2.) Background facts in a nutshell are as follows : Respondent is a registered partnership firm having its business premises and office at 14, Navyug Market, Ghaziabad, and it carried on the business of sale and purchase of iron and steel and also export of rice. It wanted to purchase broken rice from the rice millers of U.P. for the purpose of export to foreign countries and accordingly, made an application on July 31, 1997, to Krishi Utpadan Mandi Samiti, Ghaziabad, for grant of a licence. It was also stated in the application that the respondent had exported rice in November, 1996 by purchasing it from places outside U.P. Appellant No. 1 asked the respondent No. 1 to deposit the licence fees for the years 1995-96, 1996-97 and 1997-98, which was done as per the demand. Thereafter, the appellant No. 1 sent a demand notice to the respondent No. 1 on October 12, 1997, demanding market fee at the rate of 2 per cent amounting to Rs. 12,94,860.00. The respondent No. 1 sent a reply on October 18, 1997, stating that it had never purchased any rice from inside the State of U.P. nor any transaction of sale or purchase of rice was carried out within the State. It was accordingly requested that the demand notice/order dated October 12, 1997, be rescinded. The appellant No.1, however, initiated proceeding for recovery of the amount in question and issued a citation dated December 6, 1997. The respondent No. 1 thereafter, filed C.M. Writ Petition No, 43329 of 1997 in the High Court which was disposed of on December 17, 1997, with a direction to appellant No. 1 to decide the respondent No. 1's representation within a month and the recovery proceeding were suspended for six months. The respondent No.1 appeared before appellant No.1 on the date fixed, namely January 14, 1998, along with the relevant records and submitted that the rice had been purchased from places outside the State of U.P. and had been sent directly to the ports for being exported to South Africa and as such, it was not liable to pay any market fee. The appellant passed an order on January 25, 1998, holding that the transaction of sale of the rice exported by the respondent No.1 firm took place within the market area of Ghaziabad, and, accordingly, the market fee imposed by the order dated October 12, 1997 was valid and proper. Feeling aggrieved, the respondent No. 1 preferred a revision under Section 32 of the Act before the Rajya Krishi Utpadan Mandi Parishad, Lucknow (appellant No.2) which was dismissed by order dated March 9, 1998. The writ petition under Article 226 of the Constitution of India, 1950 (in short the 'Constitution') was filed for quashing the orders dated October 12, 1997 passed by appellant No. 1 and the order dated March 9, 1998 passed by appellant No.2. The learned Single Judge, who heard the petition, was of the opinion that the controversy raised involved a substantial question of law of general importance and made a reference to larger Bench. That is how the matter came before the Division Bench. The case of the respondent No. 1 was that the rice was exported by it because certain dealers in South Africa wanted to buy rice from India. The respondent No. 1 quoted the rates and entered into negotiations. After the deal was settled, the rice was purchased from rice millers in Haryana, Punjab, Madhya Pradesh from where it was directly dispatched to the ports of Mumbai and Kandla and clearing and forwarding agents of the respondent No. 1 loaded the same on the ship. After the goods had been loaded a Bill of Lading was prepared and signed by the Master of the ship in the capacity of carrier acknowledging the receipt of the goods. The Bill of Lading was given to the clearing and forwarding agents and on receipt of the Bill of Lading by the buyer through the respondent No.1's bankers, the rice were retired by the buyer in South Africa. The sale price of the rice was received by the respondent No. 1 through its banker viz. Oriental Bank of Commerce at Delhi. It is the specific case of the respondent No. 1 was that the entire quantity of the exported rice was purchased from places outside the State of U.P. and was directly sent to the ports without it ever coming within the market area of Ghaziabad or in the State of U.P. It was also asserted that the sale was effected only at the ports when the goods were loaded in the ship and the Bill of Lading was handed over to the respondent No.1's clearing and forwarding agents. The case of the present appellants was that the business establishment of the respondent is at 14, Navyug Market Ghaziabad and the entire transaction was done from the said place. The purchase order was received and accepted by it at Ghaziabad and the sale price was also received there and therefore the transaction of sale took place in Ghaziabad. It was also pleaded that the transport of the goods and how it was actually exported was wholly irrelevant for ascertaining where the transaction of sale took place. The High court did not accept the said stand and allowed the writ petition filed.
(3.) In support of the appeal, learned counsel for the appellants submitted that since the transaction took place within the jurisdiction of the market area, the levy was justified and the High Court was wrong in its view.;