B. P. Jeevan Reddy, J. - (1.) A common question arises in this batch of 12 writ petitions. They can be disposed of under a common order. For the sake of convenience, we shall refer to the facts in C.M.W.P. No. 9579 of 1987. The 15 petitioners in this writ petition are licensed traders within the Market Area, Bareilly. For Bareilly District, a market Committee has been constituted under the U. P. Krishi Utpadan Mandi Adhiniyam, 1964. All the petitioners also happen to be millers. They purchase paddy both within the Bareilly Market area and from outside Bareilly Market Area, which they mill in their respective rice mills.
(2.) UNDER section 3 of the Essential Commodities Act, the State of U. P. issued the U. P. Rice and Paddy (Levy and Regulation of Trade) Order, 1981 which was replaced in the year 1985 by another similar order. UNDER the aforesaid Control Orders, Rice Mills are obliged to deliver 60 per cent of the rice milled by them to the State by way of levy. The remaining 40 per cent they are free to sell in open Market. The levy rice has to be delivered to the State on the price notified by the State Government. The U. P. Krishi Utpadan Mandi Adhiniyam, 1964 (for short, Mandi Adhiniyam) provides for levy of Market fee on all transactions taking place in the market Area. The charging provision is contained in clause (iii) of section 17. Section 17 deals with the powers of the Committee. In so far as it is relevant, it reads as follows :- "17. Powers of the Committee- A Committee shall, for the purposes of this Act, have the power to- (i) ... (ii) .. (iii) Levy and Collect : (a) such fees as may be prescribed for the issue or renewal of licences, and (b) market fee, which shall be payable on transactions of sale of specified agricultural produce in the market area at such rates, being not less than one percentum and not more than one and half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification, and such fee shall be realised in the following manner- (1) if the produce is sold through a commission agent, the commission agent may realise the market fee from the purchaser and shall be liable to pay the same to the Committee ; (2) if the produce is purchased directly by a trader from a producer the trader shall be liable to pay the market fee to the committee ; (3) if the produce is purchased by a trader from another trader, the trader selling the produce may realise if from the purchaser and shall be liable to pay the market fee to the Committee, and (4) in any other case of sale of such produce, the purchaser shall be liable to pay the market fee to the Committee ; Provided that no market fee shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer" A reading of clause (iii) discloses that the market fee is levied upon transactions of sale (of specified agricultural produce) taking place in the market area. (The expression 'Market Area' is defined in clause (k) of section 2 to mean an area notified as such under section 6 or as modified under section 8). The person liable to pay the market fee is identified in the lour sub-clauses of clause (iii) (b) of section 17. Clauses (1) (2), (3) and (4) of clause (iii) (b) are mutually exclusive. In each case, one has to see under which of the said sub-clauses does a transaction fall and then determine the person liable to pay the fee.
(3.) IN the year 1986, the Market Committee issued notices to the petitioners calling upon them to remit the market fee in respect of levy-rice- sales effected by them. According to the Committee, the sales effected by the petitioners fell under sub-clause (3) and hence they being the selling traders, are liable to pay the market fee. This demand was questioned by the petitioners in a batch of writ petitions in this court. Two contentions were mainly urged by the petitioners in those writ petitions, namely ; (i) That delivery of levy rice in pursuance of the statutory order (levy order) does not amount to a 'transaction of sale' within the meaning of section 17 (iii) (b) ; (ii) That the State Government is not a trader and, if so, the transaction of sale (assuming that delivery of levy rice to the State amounts to a transaction of sale) does not fall under sub-clause (3), but under sub-clause (4), in which event the levy is upon the purchaser. Both these contentions were repelled by a Division Bench of this court and the writ petitions dismissed. The judgment of the Division Bench is M/s. Mahalaxmi Rice Mills, Nainital Road, Bareilly v. State of U. P., 1987 UP LB EC 749. The Division Bench held that the delivery of levy rice in pursuance of the levy order does amount to a transaction of sale within the meaning of section 17 (iii) (b) of the Mandi Adhiniyam. It also found that the Government is a trader and, whether such trader is licenced or not, the transaction fails under sub-clause (3), and hence the liability to pay the market fee lies upon the selling trader, namely, the writ petitioners. The attention of the Division Bench was also drawn to the letter dated 5-2-1986 written by the Assistant Secretary Food and Civil Supplies Department, Government of U. P., to the Regional Food Controllers asking them to pay the market fee on the said transactions to the concerned Market Committee. Dealing with this submission, the Court made the following observations, which constitute the sheet anchor of the petitioners' case in the present batch of the writ petitions :- "28. The last contention raised then by Sri Ambwani that the liability to pa the market fee to the Mandi Samiti would be of the State Government as purchaser and not the sellers i.e. the petitioners need not detain us long. To take this view is unwarranted on the plain and unambiguous language of section 17 (iii) (b) (3) already reproduced above. The words are "the trader selling the produce.... shall be liable to pay the market fee to the Committee." IN clause (1) also, is will be observed, the commission Agent who sells is liable to pay the fee to the Committee. True, the seller may both under clauses (3) and (1) realise from the purchaser, but then vis-a-vis the Committee the liability is of the seller squarely. Clause (4) is residuary and of no avail in the case unless clause (3) is ruled out. The Committee can recover market fee only from such person on whom the liability to pay the same has been fixed by section 17 (iii) (b). This was also the view taken in Agra Roller Flour Mills etc. v. Krishi Utpadan Mandi Samiti, 1981 ALJ 76 (DB). There the petitioners-traders purchased the produce from the Food Corporation of INdia and it was held that the liability under clause (3) for payment of market fees in respect of such transaction could only be that of the Food Corporation of INdia and not of the petitioners. 29. Our attention was invited on petitioners' behalf to the directive which the State Government issued to the Regional Food Controllers in general on 5th February, 86 (Annexure 1) wherein the latter were directed to clear of the Mandi fee in accordance with the rules. This suggests that the State Government did not refute its liability to re-imburse the sellers in respect of the market fee. Strangely enough in the counter affidavit filed for the State, though there could be nothing stated to explain this directive, the stand taken is that the price of rice paid to the seller is inclusive of market fee. This in believed clearly from the note appended to the notification no. 8168/XXIX Food-4 dated 6th November, 1985 (published in the Gazette of the same date) under clause 16 of the Levy Order, 1985 specifying the prices for the different varieties. The note reads as under :- "Note-Prices of rice are inclusive of Mandi Tax on Paddy and depreciation on Gunny used for packing paddy but exclusive of Gunny charges for Rice and purchase or sales tax levied after the ex-mill stage on rice. Above mentioned prices are subject to revision if there is any change in the rate of Mandi or any change in other statutory charges." 30. INcluded within the prices of rice, therefore, is Mandi tax on paddy and significantly not rice. Before us is the question of market fee payable on rice supplied to the State Government under the Levy Order, 1985 milled of paddy purchased from outside the market area. The price thereof is not inclusive of market fee. It indeed does not behove the State Government not to carry out the statutory liability imposed upon it under section 17 (iii) (b) (3). This litigation may have been averted if only the State Government had duly paid off the market fee to the Mandi Samiti. We hope and trust that there would be no daily delying further on part of the State Government in paying off its dues to the trader-sellers who are placed under the liability vis-a-vis the Mandi Samiti.";