K.N.SETH, J. - (1.) THE Appellants filed a petition under Art. 226 of the Constitution challenging the levy and collection of market fee by the Krishi Utpandan Mandi Samiti on the sale of rice. The petitioner are residents of Atarra and hold licences from the Krishi Utpadan Mandi Samiti, Atarra, for carrying on the business of sale and purchase of agricultural produce within the 'market area' of the Mandi Samiti. They purchase paddy and rice which are specified agricultural produce from the producers. The paddy is de-husked and converted into rice and then sold to the customers. At the time of sale by the producers of both paddy and rice market fee is paid in accordance with the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam (hereinafter referred to as the Act) and the rules framed there under. The case set up by the petitioners was that paddy and rice are the same agricultural produce and once market fee has been paid on the sale of paddy, it cannot again be levied when the same paddy after de-husking and conversion into rice is sold by the petitioners.
(2.) THERE is no dispute that under s.6 of the Act the entire area of Atarra municipal board has been declared to be the Atarra Market area and by a notification under S. 7 of the Act the area falling within the Atarra municipality has been declared to be principal market yard of the Atarra market area. The producers bring paddy and rice into the market area which are purchased by the petitioners and market fee as prescribed by the Mandi Samiti is paid by the producers on these transactions. After purchasing paddy the petitioners get the husk removed in various rice mills established within the market area of Atarra. The petitioners contend that the Mandi Samiti is not empowered to levy and collect fee from the petitioners on the sale of rice effected by them. Sec. 17 (iii) (b) empowers Mandi Samiti to levy and collect market fees on transactions of sale and purchase of specified agricultural produce in the principal market yard and sub market yards from such persons and at such rates as may be prescribed, but not exceeding one half of one per centum of the price of the specified agricultural produce sold or purchased there in r. 66(1) framed under the Act provides that " the market committee shall have the power to levy and collect fees on the specified agricultural produce brought and sold in the Market yards at such rates as may be specified in the by laws but not exceeding one half of one percentum of the price of the specified agricultural produce.". The fee is payable by the seller. sub-r. (2) provides that no market fee shall be levied more than once on any consignment of the specified agricultural produce brought for sale in the market yard if the market fee had already been paid on it in any market yard of the same market area and in respect of which a declaration has been made and a certificate has been given by the seller in Form No. V. there is no dispute with regard to the sale of rice which is purchased by the petitioners from the producers in the form of rice. On the sale by the producers to the petitioners fee at the prescribed rate is paid by the producers and a declaration is made and a certificate issued in From No. V. prescribed by the rules. On the sale of that rice by the petitioners no fee is leviable in view of r.66(2).
(3.) THE dispute is confined to the sale of rice by the petitioners obtained after be-husking the paddy which they purchase from the producers and on which fee had been paid at the time when the paddy was brought and sold to the petitioners in the market area. It was contended by the petitioners that paddy and rice are once and the same commodity and once fee has been levied on the sale of paddy, fee cannot be levied again on the sale effected by the petitioners of the rice which was nothing but husked paddy. The dispute whether paddy and rice are the same agricultural produce has been set at rest by the decision of the Supreme Court in Genesh Trading Co. vs. State of Haryan AIR. 1974 S. C. 1362 : 1974 CTR S. C. 6 wherein it has been held that when paddy is be-husked and rice is produced there is a change in the identity of the goods. The contention of the petitioners on this score must be rejected.;