AGRICULTURAL PRODUCE MARKET COMMITTEEversusBIOTOR INDUSTRIES LTD. & ANR.

                   [2013] 16 S.C.R. 939


   AGRICULTURAL PRODUCE MARKET COMMITTEE                     A
                             v.
            BIOTOR INDUSTRIES LTD. & ANR.
           (Civil Appeal Nos.3130-3131 of 2008)

                  NOVEMBER 29, 2013
                                                             B
      [G.S. SINGHVI AND V. GOPALA GOWDA, JJ.]

     Agricultural Produce. Market Fee - Respondent-
company, situated in market area of appe/lant-APMC,
undertaking manufacture of castor oil out of castor seed.s - C
Appel/ant-APMC sought to levy market fee on castor seeds .
bought by respondent-company - Respondent-company·~
contested the levy contending that castor seeds were brought,
into the market area of APMC as provided u/r. 48(2) of the
1965 Rules and no fees were leviable on agricultural produce D
brought from outside the market area into the market area fOr .
use therein by industrial concern situated in the market area
- Levy of market fee on castor seeds - Validity - Held:
Respondent-company placed order for purchase of castor
seeds from its suppliers from outside the market area qut no E
payment was immediately made for the same - When the
castor seeds reached the market area, it was weighed by
respondent-company and payment thereof was agreed to be
made to the tune of quantity received and till then the castor
seeds continued to be in the ownership of the seller - F
Respondent-company became owner of the property only
once the exact weight of the castor seeds was ascertained and
purchase voucher was obtrined - Sale of castor seeds thus
took place within the market area of appellant-APMC and
accordingly appellant was authorized to charge fees from G
respondent-Company for such purchase - r.48(1) was
applicable to the fact situation and not r.48(2) - Appellant-
APMC rightly made assessment of market fee and levied the
same as per s.28 of the Act - Respondent-Company liable
                           939                               H
    940      SUPREME COURT REPORTS              [2013] 16 S.C.R.

A    to pay market fee which is cess on purchase of castor seeds,
    justifying the claim of APMC - Gujarat Agricultural Produce
     Markets Act, 1963 - ss.2(1)(i) and 28 - Gujarat Agricultural
    Produce Market Rules, 1965 - r.48 - Sale of Goods Act, 1930
    - ss. 19, 20 and 21.
B
        Agricultural Produce Market Fee - Respondent-
  Company, situated in market area of appellant-APMC,
  undertaking manufacture of castor oil out of castor seeds -
  Extraction of castor oil leading to production of de-oiled cake,
  a by-product containing less than 1% castor oil - De-oiled
C cake then sold in the market - Levy of market fee on de-oiled
  cake ..;. Validity - Held: The by-product of de-oiled cake is
  different from the oil cake as it contains oil less than 1% and
  it is not included in the Schedule to the Act for. the purpose
  of charging market fee - The item which is mentioned is oil
D cake which is different and distinct from the de-oiled cake -
  No market fee could thus be levied by appel/ant-APMC on
  de-oiled cake - Gujarat Agricultural Produce Markets Act,
  1963 - ss.2(1)(i) and 28.

E     The respondent-Company is an industrial concern
  undertaking manufacture of castor oil out of the castor
  seeds which are declared as agricultural produce in the
  Schedule to the Gujarat Agricultural Produce Markets Act,
  1963. The appellant-Agricultural Produce Market
F Committee, Baroda ("APMC") sought to levy market fee
  on the castor seeds bought by respondent-Company.
  The respondent-Company contested the levy contending
  that castor seeds were brought into the market area of
  APMC as provided under sub-rule (2) of Rule 48 of the
  Gujarat Agricultural Produce Market Rules, 1965 and no
G fees are leviable on agricultural produce brought' from
  outside the market area into the market area for use
  therein by the industrial concern situated in the market
  area.

H         The single Judge of the High Court upheld the plea
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 941
          BIOTOR INDUSTRIES LTD.

of APMC for levy of market fee on the castor seeds A
purchased by the respondent-Company, but in respect
to levy of market fee on de-oiled cake, a by-product in
course of manufacturing castor oil, accepted the
contention of respondent-Company that de-oiled cake
could not be treated as oil cake, and therefore, it was not B
liable for levy of market fee since it was not mentioned in
the Schedule to the Act.

    Aggrieved, respondent-Company as well as the
APMC preferred cross appeals. The Division Bench of the C
High Court allowed the appeal preferred by respondent-
Company and dismissed the appeal preferred by the
APMC.

     In the instant appeals, the following questions arose
for the consideration of this Court:- 1) Whether APMC,        D
Baroda was entitled to claim the market fee on the castor
seeds purchased by respondent-Company on the plea
that the same were purchased within the market area of
APMC, Baroda which castor seeds were used by the said
industrial concern for manufacture of castor oil within the   E
market area of APMC, Baroda; 2) Whether purchase of
castor seeds for use of respondent industrial concern for
manufacturing castor oil fall within Rule 48(2) of the
Gujarat Agricultural Produce Market Rules, 1965 to get
exemption from payment of market fee; 3)Whether the           F
Division Bench was justified in setting aside the finding
of fact recorded by the single Judge, holding that the
castor seeds purchased by the respondent-Company
were within the market area of APMC and 4) Whether the
Division Bench was justified in recording the finding that    G
the respondent concern was not liable to pay any market
fee on the de-oiled cakes sold by it which are stated to
be the by-product in the course of manufacturing castor
oil and not one of the items enumerated in the Schedule
to the Act and notification issued by the Directorate.
                                                              H
                                       "
    942      SUPREME COURT REPORTS           [2013] 16 S.C.R.

A         Disposing of the appeals, the Court

          HELD:1.1. The levy of market fee on the castor seeds
    purchased by the respondent-Company is upheld, and
    it is liable to pay the said market fee. [Para 19] [968-C]

B      1.2. On the basis of the material facts, the single
  Judge of the High Court arrived at the conclusion that
  respondent-Company placed order for purchase of
  castor seeds from its suppliers from outside the market
  area but no payment was immediately made for the same.
C On the demand of the respondent-Company, the quantity
  of castor seeds so requisitioned by it was transported by
  the supplier which was received by it within the market
  area. The consignment so received was weighed by the
  Company within the market area. Thereafter, on finding
D out the exact weight of castor seeds received by it, the
  payment at the agreed rate was made by the Company
  to the supplier. Therefore, the single Judge came to the
  conclusion that the sale was not effected till the
  consignment was received by respondent-Company and
E the same was weighed within the market area. The single
  Judge of the High Court rightly rejected the assertion
  made by respondent-Company holding that in case of
  shortfall or loss or damage during transport, the seller
  could claim damage from the transporter and that would
F further demonstrate that the respondent-Company did
  not become owner of the goods till it took the physical
  delivery thereof, weighing the same and satisfying itself
  about the quantity received by it. It was held that it was
  not a mere formality to find out the quantity by it but it
G has the essential element of making payment depending
  on the extent of quantity received and in case of any
  drastic shortfall in the quantity, the issue would be
  between the supplier and the transporter. Further finding
  was recorded that if against the quantity of 100 quintals
  of castor seeds supplied by the trader, the respondent-
H
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 943
          BIOTOR INDUSTRIES LTD.
Company received only half of it on account -of loss,         A
damage or pilferage, the company would make payment
only-for such quantity leaving it for the trader to recover
the damages from the transporter. There would also be
a case where on account of some untoward and
unforeseen circumstances, such as natural calamity or         B
theft, the respondent-Company did not receive the full
quantity of castor seeds, the payment shall be made only
for the quantity received by it and not for the entire
quantity to be supplied by the trader. The single Judge
further rightly recorded the finding of fact that when the    c
castor seeds reach the market area, it was weighed by
the Company and. payment thereof was agreed to be
made to the tune of quantity received and till then the
castor seeds continue to be in the ownership of the
seller. The Company becomes the owner of the property         D
only once the exact weight of the castor seeds was
ascertained and purchase voucher was obtained. The
single Judge rightly held that APMC is justified in
contending that the sale of castor seeds did take place
within the market area and the appellant was authorized
                                                              E
to charge fees from the respondent-Company for such
purchase. Therefore, the single Judge held that the
castor seed was bought by the respondent-Company
within the market area of APMC, Baroda and therefore
Rule 48(1) of the Rules is applicable to the fact situation
and not Rule 48(2). The said conclusion was arrived at        F
after referring to the provisions of Sections 19, 20 and 21
of the Sale of Goods Act, 1930. [Para 13] [957-E-H; 958-
A-H; 959-A, B]
    1.3. The single Judge on the basis of documents           G
which are all admitted documents came to the right
conclusion and held that the castor seeds were bought by
the respondent-Company within the market area.
Therefore, APMC rightly made assessment of market fee
and levied the same as per Section 28 of the Act, which       H
   944      SUPREME COURT REPORTS            [2013] 16 S.C.R.


A assessment order has been erroneously set aside by the
  Revisional Authority without proper appreciation of facts
  and applying the relevant provisions namely, Section 28
  and Rule 48(1) and came to the erroneous conclusion and
  held that the goods bought were brought from outside the
B market area for the purpose of manufacturing oil by the
  Company in its factory. Therefore, the contention that
  these are not exigible, was rightly set aside by the single
  Judge and it was held that the respondent-Company is
  liable to pay market fee which is cess on the purchase of
c castor seeds, justifying the claim of the APMC. That order
  was erroneously set aside by the Division Bench. The
  single Judge rightly held that the sale of goods of castor
  seeds is within the market area of APMC. The Division
  Bench on the other hand, placed strong reliance upon
  Rule 48(2) by placing reliance upon Form No. V of the
0
  Rules, which is the Form of declaration and certificate
  produced by the Company which are totally irrelevant for
  the purpose of finding out whether the goods i.e. the castor
  seeds were bought by the Company within the market
E area of APMC or not. [Para 14] [960-G, H; 961-A-F]
       1.4. The factual matrix is supported by the documents
  of the respondent-Company which have been
  extensively referred to by the single Judge in his
  judgment to come to the conclusion holding that the
F castor oil seeds were bought by the respondent-
  Company within the market area of APMC and. therefore,
  he has rightly held that Rule 48(2) is not applicable to the
  fact situation as claimed by the respondent-Company
  and the reliance placed upon Form No. V which is the
G Form of declaration and certificate obtained from the
  APMC seeking exemption from payment of market fee on
  the castor seeds brought by it from outside APMC area,
  is contrary to the material evidence on record and
  therefore, the Division Bench gravely erred in reversing
H the finding of fact recorded by the single Judge. [Para 15]
  [961-F-H; 962-A-B]
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 945
      ,   BIOTOR INDUSTRIES LTD.
   Agricultural Market Committee v. Shalimar Chemical       A
Works Limited AIR 1997 SC 2502: 1997 (1) Suppl. SCR 164
- referred to.

    Hoe Kim Seing v. Maung Ba Chit AIR 1935 PC 182 -
referred to.
                                                            B
     2.1. Oil cake is included in the Schedule to the Act as
an agricultural produce which is exigible agricultural
produce in terms of section 2(1 )(i)of the Act. Sub-rule (iv)
therein contains oil seeds. Item No. 8 therein is castor
seed .and Item No. 11 therein is oil cakes. The oil cake is C
the exigible agricultural produce for the purpose of
levying market fee upon such produce. The single Judge
arrived at the finding with regard to the process
undertaken by the respondent-Company for extraction of
castor oil from the castor seeds purchased by it. The by- D
product which is produced by the respondent-Company
is de-oiled cake which contains less than 1% of castor
oil and castor seeds have to undergo a complex process
so as to extract maximum possible oil ·out of it. At the first
stage, after cleaning and separating raw seeds from husk E
etc. the castor seeds are crushed through mechanical
devices to extract oil from the same. After the mechanical
process which is involved in extracting substantial
amount of oil in the oil cake, the residual product is the
de-oiled cake which is sold in the market. The same does F
not fall under the head of oil cake. [Para 16] [963-C-F]

     2.2. The term oil cake is not defined in the APMC Act
and further on the basis of the available material on record
which elaborates the difference in the contents of oil in
oil cake and de-oiled cake, cognizance of different terms G
namely, oil cake and de-oiled cake in the Gujarat Sales
Tax Act, difference in the process of oil extraction which
would lead to by-product of the oil cake and de-oiled
cake, it is clear that de-oiled cake is a completely different
product than oil cake. The by-product of de-oiled cake is H
    946      SUPREME COURT REPORTS            [2013] 16 S.C.R.

A   different from the oil cake as it contains oil less than 1%
    and it is not included in the Schedule for the purpose of
    charging market fee, therefore, the single Judge accepted
    the case against levying the market fee on the de-oiled
    cake. [Para 17] [966-B-C]
B
         2.3. The by-product obtained out of the
    manufacturing process is not oil cake but is de-oiled cake
    after undergoing the process which would lead to
    obtaining de-oiled cake. The single Judge came to the
    conclusion that de-oiled cake containing less than 1% oil
C   is not mentioned in the Schedule as per Section 2(1 )(i) of
    the APMC Act as 'agricultural produce' by the authority
    and further held that the above produce is totally different
    from the oil cake. Therefore, no market fee can be levied
    by the APMC to be paid by the respondent-Company.
D   The said finding of fact of the single Judge has been
    rightly concurred with by the Division Bench of the High
    Court. The High Court was right in holding that the by-
    product of the manufacture in producing the oil from the
    castor seeds is only de-oiled cake and is not one of the
E   Schedule items in the Notification for the purpose of
    levying market fee. The view taken by it is based on a
    proper appreciation of the factual matrix and the statutory
    provisions as de-oiled cake is not mentioned in the
    Schedule to the Act and the Notification. The item which
F   is mentioned is oil cake which is different and distinct
    from the de-oiled cake. Accordingly, the appeal of the
    APMC on this aspect of the matter must fail in regard to
    levy of the market fee on de-oiled cake by directing that
    the amount in relation to the market fee levied on de-oiled
G   cake is to be reduced. [Para 18] [967-A-H; 968-A]

          State of A.P. and Ors. v. Modern Proteins Ltd. (1994)
    Supp (2) SCC 496 - referred to.


H
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 947
          BIOTOR INDUSTRIES LTD.

                     Case Law Reference :                     A

  AIR 1935 PC 182                 referred to   Para 13
  1997 (1) Suppl. SCR 164         referred to . Para 13

  (1994) Supp (2) SCC 496         referred   to Para 17       B
    CIVIL APPELLATE JURISDICTION : Civil Appeal No
3130-3131 of 2008.

     From the Judgment and Order dated 24.04.2007 of the
High Court of Gujarat at Ahmedabad in LPA Nos. 139 and 195 C
of 2006.

    B. K. Satija for the Appellant.

    Sanjay Bhatt, Hemantika Wahi, for the Respondnts.
                                                              D
    The Judgment of the Court was delivered by

     V. GOPALA GOWDA, J. 1. These appeals have been
directed against the common judgment and order dated
24:04.2007 passed by the High Court of Gujarat at Ahmedabad E
in Letters Patent Appeal Nos. 139 of 2006 and 195 of 2006 in
Special Civil Application No. 13606 of 2005 with Civil
Application No. 514 of 2006 and Civil Application No. 1380 of
2006 filed by the appellant-Agricultural Produce Market
Committee, Baroda (for short "APMC") as it is aggrieved by
the dismissal of its Letters Patent Appeal No.195 of 2006. The F
High Court allowed Letters Patent Appeal No. 139 of 2006
preferred by the respondent-Company. Both the Letters Patent
Appeals were filed against the order dated 22.12.2005 of
learned single Judge passed in Special Civil Application
No.13606 of 2005 whereby the learned single Judge G
substantially set aside the order dated 19.4.2005 of the
Revisional Authority and partly allowed the application filed by
the APMC by framing questions of law.

    2. The brief facts of the case are stated below to H
    948      SUPREME COURT REPuRTS                [2013] 16 S.C.R.


A   appreciate the rival claims of the parties and to find out as to
    whether the appellant-APMC is entitled for the relief sought for
    in these appeals:

          The appellant-APMC was constituted pursuant to
    Notification issued on 14.1.1958 under the provisions of the
8
    Bombay Agricultural Produce Markets Act, 1939 and the area
    of Baroda city and Baroda Taluk of Baroda District was
    declared as the market area for the purpose of Gujarat
    Agricultural Produce Markets Act, 1963 (hereinafter referred to
C   as "the Act"). The respondent-Company, manufacturing castor
    oil from out of the castor seeds purchased by it comes under
    the jurisdiction of the market area of the APMC and therefore,
    it is liable for paying the market fees/cess for the trading
    activities carried out by it in the market area. APMC levied
    market fee on the castor seeds bought by the Company on the
D   basis that castor seeds were brought within the market area
    of APMC. The respondent-Company contested the said levy
    by filing Revision Application No. 2 of 2005 under Section 48
    of the Act before the State Government contending that castor
    seeds were brought into the market area of the APMC, Baroda
E   as provided under sub-rule (2) of Rule 48 of the Gujarat
    Agricultural Produce Market Rules, 1965 (for short "the Rules")
    and no fees are leviable on agricultural produce brought from
    outside the market area into the market area for use therein
    by the industrial concern situated in the market area. The State
F   Government vide its order dated 19.04.2005 decided the
    Revision Application No. 2 of 2005 in favour of the respondent-
    Company by setting aside the order dated 27.12.2004 issued
    by the APMC levying the market fee.

G        3. The APMC filed a Special Application No. 13606 of
    2005 under /' ;les 226, 14 & 19 of the Constitution of India
    before the High Court against the said order of the State
    Government. The learned single Judge of the High Court after
    hearing the parties at length partly allowed the said application
    holding that the sale of the castor seeds in question took place
H
'AGRICULTURAL PRODUCE MARKET COMMITTEE v. 949
  BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]

within the market area of APMC, Baroda, therefore, APMC was          A
right in levying the market fee on the castor seeds purchased
by the respondent within the market area of APMC. The learned
single Judge in respect to exemption clause in sub-rule 2 of
Rule 48 held that the said exemption was available to the
agricultural produce brought by the industrian:oncern itself         B
from outside ·the market area into the market area of APMC
and the exemption was not available where the castor seeds
were bought within the market area by the seller and sold to
the industrial concern within the market area. As such the
learned single Judge upheld the plea of APMC for levy of             c
market fee on the castor seeds purchased by the respondent-
Company. In respect to the levy of market fee on de-oiled cake
by APMC the learned single Judge accepted the contention
urged on behalf of the respondent-Company and held that de-
oiled cake could not be treated as oil cake, and therefore, it       D
was not eligible for levy of market fee since it was not mentioned
in the Schedule. Both the respondent-Company as well as the
APMC being aggrieved by the judgment and order dated
22.12.2005 of the learned single Judge preferred Letters Patent
Appeal No.139 of 2006 and Letters Patent Appeal No. 195 of           E
2006 respectively. The Division Bench of the High Court
allowed the appeal preferred by the respondent-Company and
dismissed the appeal preferred by the APMC and stated that
as soon as the agricultural produce, namely, castor seeds,
bought by the representatives of the Company, is brought from
outside the market area into the market area, after payment of       F
octroi on such produce in their capacity as owner of the goods,
the same would be treated as completion of sale outside the
jurisdiction of the market area. The Division Bench of the High
Court, therefore, held that the collection of market fees from the
respondent-Company by APMC is contrary to the provisions of          G
the Rules, namely, Rule 48, sub-rule (2) of the Rules, which
grants exemption to agricultural produce brought from outside
into market area by the industrial unit for its own use. On the
second issue, the High Court held that the by-product, namely,
de-oiled cake contains less than 1% oil and is not notified in       H
    950      SUPREME COURT REPORTS                 (2013] 16 S.C.R.


A   the Schedule as per Section 2(i) of the Act and hence, the
    above product being totally different from oil cake, there is no
    liability upon the respondent-Company to pay the market fees.
    Hence, the present Civil Appeals.

B         4. It is the case of the APMC that on 31.3.2004, the
    Director of APMC, Baroda and Rural Finance, Gujarat State,
    in exercise of the power vested in him under the Act, issued
    Notification including castor seeds and castor cake in the
    regulated agricultural produces of APMC, Baroda. On
C   19.4.2004 the Notification issued by the APMC, Baroda through
    its Director was published in the daily newspaper intimating that
    the trading of those produces is liable for paying of market fees/
    cess to the APMC, Baroda. On 28.6.2004 the APMC issued
    notices to the respondent-Company asking it to produce the
    accounts for the period 19.4.2004 to 30.11.2004 in respect of
D   the goods being used in the mill and further asked to obtain
    license from Market Committee for the year 2004-2005. The
    respondent-Company failed to submit the accounts and further
    failed to obtain license within the stipulated period as
    mentioned in an earlier letter dated 28.6.2004, and therefore,
E   the APMC sent the reminder to the respondent-Company and
    asked to comply with the direction. Vide letter dated 7.12.2004
    the respondent-Company submitted monthly statement for the
    period 19.4.2004 to 30.11.2004 in respect of the purchases
    of castor seeds made by the Company. APMC on the basis
F   of the details provided by the respondent-Company prepared
    a statement showing the names of the suppliers, weight, price,
    quantity and amount paid by the company as per the
    weighment made by the Company which clearly shows that as
    per bills, different parties were selling castor seeds to the
G   respondent-Company for which weighment was done at the mill
    site in the market area Baroda and payment made to the
    parties as per the weighment done by the respondent-
    Company. On 27.12.2004 on the basis of statement submitted
    by the respondent-Company, the APMC assessed the market
H   cess for the purchases of the castor seeds in the market area
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 951
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
in respect of the same being used for processing and                A
converting them into castor oil and oil cake and on the basis
of assessment the respondent-Company was directed to pay
the market cess of 1,27,46,349.38 within a period of 10 days.

      5. Being aggrieved by the said assessment made by             B
APMC on 27.12.2004, the respondent-Company preferred
Revision Application No. 2 of 2005 under Section 48 of the Act
before the State of Gujarat on 05.01.2005 challenging the
decision of the APMC directing it to pay the market cess as
per its letter dated 27.12.2004. To the said .Revision
Application, APMC filed its reply on 23.01.2005. The                C
respondent-Company filed rejoinder on 23.02.2005 to the reply
filed by the APMC. The Deputy Secretary, (Appeal) allowed the
Revision Application No. 2 of 2005 by its cryptic order dated
19.04.2005 and set aside the order dated 27.12.2004 passed
by APMC. It is the case of the APMC that the Revisional             D
Authority erroneously arrived at the conclusion that Rule 48(1)
is not applicable and wrongly held that Rule 48(2) was
applicable to the fact situation and further wrongly held that no
market fee is to be paid by the respondent-Company on the
de-oiled cake.                                                      E

     6. Being aggrieved by the order of the Revisional Authority
dated 19.4.2005 in Revision Application No. 2 of 2005 of the
Revisional Authority, the APMC preferred Civil Application No.
13606 of 2005 before the learned single Judge of the High           F
Court of Gujarat. The learned single Judge after hearing the
parties vide its order dated 22.12.2005 set aside the order of
revision in so far as the levy of market fee on the castor seeds
is concerned holding that the sale did take place within the
market area and therefore APMC was authorized to charge fee         G
from the respondent-Company for such purchase and partly
allowed the application. However, the learned single Judge,
with respect to the levy of fee on the de-oiled cake which was
sold by the respondent-Company held that it is the by-product
in the course of manufacturing of castor oil and therefore, it is   H
not an agricultural produce and not Jiable to levy of market fee.
    952         SUPREME COURT REPORTS             [2013] 16 S.C.R.


A         7. Being aggrieved by the said judgment dated
    22.12.2005, the respondent-Company ·filed Letters Patent
    Appeal No. 139 of 2006 on 18.1.2006 before the Division
    Bench of the Gujarat High Court challenging the findings of
    learned single Judge that market fee is exigible on the
B   purchase of castor oil seeds by the industrial concern. The
    APMC also being aggrieved by the said order dated
    22.12.2005 of learned single Judge filed Letters Patent Appeal
    No. 195 of 2006 for rejecting of claim of APMC, Baroda for
    market fees/cess on de-oiled cake. The Division Bench of the
c   High Court on 24.4.2007 after hearing the parties allowed the
    appeal of the respondent-Company and dismissed the appeal
    of the APMC, Baroda after setting aside the order of the
    learned single Judge holding that Rule 48(2) is applicable and
    that the castor seeds were brought from outside the market
D   area. The Division Bench upheld the rejection of the Special
    Civil Application No. 13606 of 2005 filed by the APMC, Baroda
    not accepting the case pleaded by it that market fee is levied
    on de-oiled cake which is a by-product sold by it and is not
    exigible goods as it is not an agricultural produce. Aggrieved
E   by the common judgment, present appeals are filed.

         8. On the basis of the legal grounds urged in these
    appeals questioning the correctness of the findings and
    reasons recorded by the Division Bench of the High Court on
    both the points which have been formulated by it, the following
F   points would arise for the consideration of this Court in these
    appeals:-

          (1)    Whether the APMC, Baroda is liable to claim the
                 market fee on the castor seeds purchased by the
                 respondent-Company on the plea that the same
G
                 were purchased within the market area of APMC,
                 Baroda which castor seeds are used by the said
                 industrial concern for manufacture of castor oil
                 within the market area of APMC, Baroda?

H         (2)    Whether purchase of the castor seeds for use of the
AGRICULTURAL PRODUCE MARKET   '·
                                 COMMITTEE v. 953
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]

             respondent industrial concern for manufacturing            A
             castor oil falls within Rule 48(2) of the Rules to get
             exemption from payment of market fee?

      (3)   Whether the Division Bench was justified in setting
            aside the finding of fact recorded by the learned           B
            single Judge, holding that the castor seeds
            purchased by the respondent-Company are within
            the market area of APMC?

      (4)   Whether the Division Bench is justified in recording
            the finding on point No.2 in connection with LPA No. C
            195 of 2006 that the respondent concern is not
            liable to pay any market fee on the de-oiled cakes
            sold by it which are stated to be the by-product in
            the course of manufacturing castor oil which is not
            one of the items enumerated in the Schedule to the D
            Act and notification issued by the Directorate?

      (5)   What order?

Answer to Point Nos. 1 to 3
                                                                        E
      9. The point Nos. 1 to 3 are answered together as they are
inter-related with each other by assigning the following reasons:

      It would be necessary for this Court to refer to the definition
of 'Agricultural Produce' under Sections 2(i) and provisions            F
relating to levy of market fee under Section 28 of the Act and
under Rule 48(1) of the Rules for the purpose of appreciating
the factual matrix with reference to the rival legal contentions
urged on behalf of the parties:-

     "2(i)-"agricultural produce" means all produce, whether            G
     processed or not, of agriculture, horticulture and animal
     husbandry, specified in the Schedule.

     Section 28: The market committee shall, subject to the
     provisions of the rules and the maxima and minima from             H
    954           SUPREME COURT REPORTS              (2013) 16 S.C.R.

A          time to time prescribed levy and collect fees on the
           agricultural produce bought or sold in the market area:

           Provided that the fees so levied may be collected by the
           Market Committee through such agents as it may appoint.

B          Rule 48: Market fees:- (1) The market committee shall
           le.vy and collect fees on agricultural produce bought or sold
           in the market area at such rate as may be specified in the
           by-laws subject to the following minima and maxima vis.,

c           (1)    rates when levied ad valorem shall not be less than
                   30 paise and shall not exceed 2 (two) per hundred
                   rupees.

            (2)    Rates when levied in respect of cattle, sheep or
                   goat shall not be less than 25 paise per animal and
D                  shall not exceed 4 per anmimal.

           Explanation- For the purposes of this Rule a sale of
            agricultural produce shall be deemed to have taken place
            in a market are!:l if it has been weighed or measured or
E           surveyed or delivered in case of cattle in the market area
            for the purpose of sale, notwithstanding the fact that the
          . property in the agricultural produce has by reason of such
            sale passed to a person in a place outside the market
            area.
F
           (2) No fee shall be levied on agricultural produce brought
           from outside the market area into the market area for use
           therein by the industrial concerns situated in the market
           area of for export and, in respect of which declaration has
           been made and a certificate has been made and a
G          certificate has been obtained in Form V:-

          Provided that if such agricultural produce brought into the
          market are for export is not exported or removed therefrom
          before the expiry of twenty days from the date on which it
H         was so brought, the market committee shall levy and
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 955
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
    collect fees on such agricultural produce from the person      A
    bringing the produc~ into the market area at such rates
    as may be specified in the by-laws subject to the
    maximum and minimum specified in sub-rule (i):

    Provided that no fee shall be payable on a sale or             B
    purchase to which sub-section (3) of Section 6 applies."

      10. It is an undisputed fact that the respondent-Company
is an industrial concern which has been undertaking
manufacture of castor oil out of the castor seeds which are
declared as agricultural produce in the Schedule to the Act vide   C
notification issued by the Directorate of APMC, Baroda.

      11. It is the case .of the respondent-Company that the
demand and assessment made and levying the market fee on
the castor seeds for the period from 19. 04.2004 to 30.11.2004 D
is erroneous as castor seeds were purchased from outside the
market area of APMC, Baroda and the same were brought for
the use of the industrial concern which is situated within the
market area of APMC, Baroda for the purpose of using the
same for manufacturing of the oil. In this regard, the APMC has
                                                                   E
called upon the respondent-Company to produce the accounts
for the period 19.04.2004 to 30.11.2004 in respect of the
goods being used in the mill and was further asked to obtain
license from the Market Committee for the year 2004-2005.
On 07.12.2004, the respondent-Company submitted monthly
statement for the aforesaid period in respect of the purchases F
made of castor seeds by the company. The APMC on the
basis of details provided by the respondent-Company
prepared the statement showing the names of the suppliers,
weighment, quantity of the agricultural produce goods
purchased and amount paid by the company to its trader as G
per the weighment made by the company. According to the
committee, the purchases made by the company clearly show,
as per the bills issued to different parties for castor seeds sold
to the respondent-Company, that the weighment of castor
seeds was made at mill site in Baroda and payment was· H
    956      SUPREME COURT REPORTS                 [2013] 16 S.C.R.


A   made to the parties as per the weighment done by the
    respondent-Company. Therefore, on the basis of the
    assessment, the respondent-Company was directed to pay the
    market cess of 1,27,46,349.38 vide its order dated 27.12.2004.
    The respondent-Company aggrieved by the said assessment
B   order preferred Revision Application No. 2 of 2005 under
    Section 48 of the Act before the State of Gujarat questioning
    the correctness of the assessment order r.iade by the APMC.
    The Deputy Secretary (Appeal) after hearing the parties passed
    a cryptic order dated 19.04.2005 by allowing the Revision
c   Application and setting aside the order of assessment of the
    market Committee dated 27.12.2004. While allowing the
    Revision Application, the Revisional Authority arrived at the
    conclusion that Rule 48(1) of the Rules is not applicable and
    held that Rule 48(2) will be applicable to the fact situation. The
    correctness of the same was challenged before the learned
0
    single Judge of the High Court of Gujarat by filing a petition
    under Article 226 of the Constitution i.e. Special Civil
    Application No. 13606 of 2005.

         12. The learned single Judge after giving opportunity to the
'E respondent-Company and hearing both the learned counsel
   appearing on behalf of the parties has held that castor seeds
   have been bought within the market area of APMC, therefore,
   sub-rule (1) of Rule 48 is applicable to the fact situation and
   not sub-rule (2) of Rule 48 upon which reliance was placed by
 F the respondent-Company's counsel. In arriving at the said
   conclusion the learned single Judge has referred to the factual
   aspects with reference to certain documents such as invoices,
   bill receipts etc. exchanged between the respondeht-company
   and its suppliers of castor seeds. The bill issued by one Manish
 G Trading Company of Naroda, Ahmedabad dated 03.05.2004
   for supply of 150 bags of castor seeds weighing 75 kilos each
   was examined. The rate charged was 305/- per 100 kg. The
   total quantity shown was 112.50 quintals and the total amount
   claimed was 1,71,562/-. In the said bill dated 03.05.2004, it was
 H indicated that payment was yet to be made. At page 28 to the
AGRICULTURAL PRODUCE MARKET COMMITTEE v: 957
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
compilation, there is a purchase voucher/remittance note             A
issued by the respondent-Company. It is not in dispute that the
said purchase voucherlremittance note pertains to the same
consignment transported by the Manish Trading Company
under the bill dated 03.05.2004. The purchase voucher
indicates that the quantity of the castor seeds received was         B
short by 37.50 kilos. Weight of bags of 150 kilos was also
deducted from the quantity of castor seeds. The agreed rate
of 305/- for 100 kilos remained constant and the respondent-
Company therefore agreed to remit a total amount of 1,70,991/
- to the Manish Trading Company referred to supra. To the query      c
from the court, the learned counsel appearing on behalf of the
company, on instructions, made submissions that
                                                       •
consignments were received from the sellers within the market
area for the purpose of finding out shortfall or pilferage and the
payment is made to the extent of actual quantity received. The       D
learned single Judge has also referred to the total quantity of
castor seeds weighing 112.50 quintals which was transported
to the respondent-Company by Manish Trading Company ~nd
it had made payment after weighing consignment and after
finding out the correct weight of the castor'seeds received by       E
it.

     13. On the basis of the said material facts the learn~d
single Judge arrived at the conclusion that the respondent-
Company placed order for purchase of castor seeds from its
suppliers from outside t~e market area but no payment was F
immediately made for the same. On the demand of the
respondent-Company, the quantity of castor seeds so
requisitioned by it was transported by the supplier which was,.
received by it within the market area. It is an undisputed fcfct)
that the consignmenf so received was weighed by the G
Company within the market area. Thereafter, on finding out the
exact weight of castor seeds received by it, the payment at the
agreed rate was made by the Company to the supplier.
Therefore, the learned single Judge came to the conclusion on
the basis of appreciation of the aforesaid facts and held that H
    958      SUPREME COURT REPORTS                 [2013] 16 S.C.R.

A the sale was not effected till the consignment was received by
  the respondent-Company and the same was weighed within the
  market area. The learned single Judge has rightly rejected the
  assertion made by the learned counsel on behalf of the
  Company holding that in case of shortfall or loss or damage
s during transport, the seller could claim damage from the
  transporter and that would further demonstrate that the
  respondent-Company did not become owner of the goods till
  it took the physical delivery thereof, weighing the same and
  satisfying itself about the quantity received by it. It was held that
c it was not a mere formality to find out the quantity by it but it
  has the essential element of making payment depending on the
  extent of quantity received and in case of any drastic shortfall
  in the quantity, the issue would be between the supplier and
  the transporter. Further finding was recorded that if against the
  quantity of 100 quintals of castor seeds supplied by the trader,
0
  the respondent-Company received only half of it on account of
  loss, damage or pilferage, the company would make payment
  only for such quantity leaving it for the trader to recover the
  damages from the transporter. There would also be a case
  where on account of some untoward and unforeseen
E circumstances, such as natural calamity or theft, the
  respondent-Company did not receive the full quantity of castor
  seeds, the payment shall be made only for the quantity received
  by it and not for the entire quantity to be supplied by the trader.
  The learned single Judge has further rightly recorded the finding
F of fact that when the castor seeds reach the market area, it was
  weighed by the Company and payment thereof was agreed to
  be made to the tune of quantity received and till then the castor
  seeds continue to be in the ownership of the seller. The
  Company becomes the owner of the property only once the
G exact weight of the castor seeds was ascertained and
  purchase voucher was obtained. The learned single Judge
  rightly held that APMC is justified in contending that the sale of
  castor seeds did take place within the market area and the
  appellant was authorized to charge fees from the respondent-
H Company for such purchase. Therefore, the learned single
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 959
BIOTOR INDUSTRIES t:TD. [V. GOPALA GOWDA, J.]

Judge held that the castor seed was bought by the respondent-        A
Company within the market area of APMC, Baroda and
therefore Rule 48(1) of the Rules is applicable to the fact
situation and not Rule 48(2) as contended by the counsel. The
said conclusion was arrived at after referring to the provisions
of Sections 19, 20 and 21 of the Sale of Goods Act, 1930 and         B
the Privy Council judgment in Hoe Kim Seing v. Maung Ba
Chit1. Sections 19, 20 and 21 of Sale of Goods Act are
extracted hereunder :-

       "19. Property passes when intended to pass.-
                                                                     c
       (1)   Where there is a contract for the sale of specific or
             ascertained goods the property in them is
             transferred to the buyer at such time as the parties
             to the contract intend it to be transferred.
                                                                     D
       (2)   For the purpose of ascertaining the intention of the
             parties regard shall be had to the terms of the
             contract, the conduct of the parties and the
             circumstances of the case.

       (3)   Unless a different intention appears, the rules         E
             contained in Section 20 to 24 are rules for
             ascertaining the intention of the parties as to the
             time at which the property in the goods is to pass
             to the buyer.
                                                                     F
      20. Specific goods in a deliverable state.- Where there is
      an unconditional contract for the sale of specific goods in
      a deliverable state, the property in the goods passes to
      the buyer when the contract is made, and it is immaterial
      whether the time of payment of the price or the time of        G
      delivery of the goods, or both, is postponed.

      21. Specific goods to be put into a deliverable state.-
      Where there is a contract for the sale of specific goods

1.   AIR 1935 PC 182.                                                H
    960           SUPREME COURT REPORTS                [2013] 16 S.C.R.


A         and the seller is bound to do something to the goods for
          the purpose of putting them into a deliverable state, the
          property does not pass until such thing is done and the
          buyer has notice thereof."

         The above judgment of the Privy Council is referred to by
8
    this Court in the decision of Agricultural Market Committee v.
    Shalimar Chemical Works Limited2 wherein the learned single
    Judge rightly extracted the following paragraph from the said
    judgment and it is worthwhile to extract the same hereunder:-

C         "40. In order that Section 20 is attracted, two conditions
          have to be fulfilled :

           (i)     the contract of sale is for specific goods which are
                   in a deliverable state; and
D
           (ii)    the contract is an unconditional contract. If these two
                   conditions are satisfied, Section 20 becomes
                   applicable immediately and it is at this stage that
                   it has to be seen whether there is anything either
                   in the terms of the contract or in the conduct of the
E                  parties or in the circumstances of the case which
                   indicates a contrary intention. This exercise has to
                   be done to give effect to the opening words,
                   namely, "Unless a different intention appears"
                   occurring in Section 19(3). In Hoe Kim Seing v.
F                  Maung Ba Chit, it was held that intention of the
                   parties was the decisive factor as to when the
                   property in goods passes to the purchaser. If the
                   contract is silent, intention has to be gathered from
                   the conduct and circumstances of the case."
G
        14. Therefore, the learned single Judge on the basis of
    documents which are all admitted documents came to the right
    conclusion and held that the castor seeds were bought by the
    respondent-Company within the market area. Therefore, APMC
H 2. AIR 1997 SC page 2502.
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 961
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
has rightly made assessment of market fee and levied the            A
same as per Section 28 of the Act, which assessment order
has been erroneously set aside by the Revisional Authority
without proper appreciation of facts and applying the relevant
provisions namely, Section 28 and Rule 48(1) and came to the
erroneous conclusion and held that the goods bought were            B
brought from outside the market area for the purpose of
manufacturing oil by the Company in its factory. Therefore, the
contention that these are not exigible, was rightly set aside by
the learned single Judge and it was held that the respondent-
Company is liable to pay market fee which is cess on the            c
purchase of castor seeds, justifying the claim of the APMC. The
order dated 22.12.2005 was questioned py the Company filing
Letters Patent Appeal No.139 of 2006 and that order was
erroneously set aside by the Division Bench by answering the
point No.1 in favour of the Company after referring to Rule 48(2)   D
and erroneously applying the aforesaid judgments. The learned
single Judge rightly placed strong reliance on the said judgment
referred to supra and came to the right conclusion and held that
the sale of goods of castor seeds is within the market area of
APMC. The learned Division Bench on the other hand, further
placed strong reliance upon Rule 48(2) by placing reliance upon     E
Form No. V of the Rules, which is the Form of declaration and
certificate produced by the Company which were found from
pages 79 to 86 which are totally irrelevant for the purpose of
finding out whether the goods i.e. the castor seeds were bought
by the Company within the market area of APMC or not.               F

     15. The factual matrix is supported by the documents
produced at Annexure 'F' to the Special Civil Application No.
13606 of 2005 which are the documents of the respondent-
Company which have been extensively referred to by the              G
learned single Judge in his judgment at para 11 to come to the
conclusion holding that the castor oil seeds were bought by the
respondent-Company within the market area of APMC and,
therefore, he has rightly held that Rule 48(2) is not applicable
to the fact situation as claimed by the respondent-Company          H
     962     SUPREME COURT REPOR rs               (20131 16 S.C.R.

A and the reliance placed upon Form No. V which is the Form of
  declaration and certificate obtained from the APMC seeking
  exemption from payment of market fee on the castor seeds
  brought by it from outside APMC area, is contrary to the
  material evidence on record and therefore, the Division Bench
B has gravely erred in reversing the finding of fact recorded by
  the learned single Judge on proper appreciation of undisputed
  material evidence on record and recorded the finding of fact
  with reference to Sections 19, 20 and 21 of the Sale of Goods
  Act and the judgment of Privy Council referred to supra which
C has been referred to by this Court in the Shalir.iar Works Ltd.
  case (supra) wherein the learned single Judge rightly came to
  the conclusion that the castor seeds were purchased by the
  Company in the market area for the relevant period in question
  in respect of which the assessment order was passed levying
D the market fee and directing the Company to pay the same was
  legal and valid. The same came to be erroneously set aside
  by the Revisional Authority without proper application of mind
  and law to the fact situation and the same was then set aside
  by the learned single Judge of the High Court. The said findings
  of the learned single Judge have been erroneously set aside
E by the learned Division Bench at the instance of the respondent-
  Company in LPA No.139 of 2006. Therefore, we have to hold
  that the said finding of the Division Bench in reversing the legal
  and valid finding of fact recorded by the learned single Judge
  on proper appreciation of facts and undisputed evidence on
F record and rightly applying the provisions of the Sale of Goods
  Act referred to supra and Rule 48(1) is erroneous. Therefore,
  we have to set aside the said order passed in LPA No. 139 of
  2006 and restore the order of the learned single Judge passed
  in special civil application No. 13606 of 2005 and allow the C.A.
G No. 3130 of 2008.
     Answer to Point No. 4

         16. The point No. 4 is answered against the APMC
     upholding the order of the learned single Judge affirmed by the
'H
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 963
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
Division Bench of the High Court in dismissing the Letters             A
Patent Appeal No. 195 of 2006 of the appellant by assigning
the following reasons :-

      It is an undisputed fact that oil cake is included in the
Schedule as an agricultural produ.ce which is exigible                 B
agricultural produce in terms of section 2(1 )(i)of the Act. Sub-
rule (:iv) tb~rein contains oil seeds. Item No. 8 therein is castor
seed and Item No. 11 therein is oil cakes.

      The oil cake is the exigible agricultural produce for the
purpose of levying market fee upon such produce. On the basis          c
of tile factual and rival contentions and on the basis of material
evidence produced by the parties the learned single Judge has
arrived at the finding held at paragraph 23 with regard to the
process undertaken by the respondent-Company for extraction
of castor oil from the castor seeds purchased by it. The by-           D
product which is produced by the respondent-Company is de-
oiled cake which contains less than 1% of castor oil and castor
seeds have to undergo a complex process so as to extract
maximum possible oil out of it. At the first stage, after cleaning         t
and separating raw seeds from husk etc. the castor seeds are           E
crushed through mechanical devices to extract oil from the
same. After the mechanical process which is involved in
extracting substantial amount of oil in the oil cake, the residual
product is the de-oiled cake which is sold in the market. The
same does not fall under the head of oil cake. The process             F
which is adopted for the purpose of getting the said"by-product
of de-oiled cake has been extensively referred to in the
paragraph 23 of the order of the learned single Judge and it is
worthwhile to extract the same hereunder:-

     "23.The process undertaken by respondent no.2 for                 G
     extraction of castor oil from the castor seeds purchased     ,,
     by it is not seriously in d1spute. The fact that ultimately by-
     product which respondent no.2 claims to be de-oiled cake
     which the respondent no.2 sells in the market and on which
     th.e petitioner is seeking to levy market fee contains less       H
    964        SUPREME COURT REPORTS                  [2013] 16 S.C.R.


A          than 1% castor oil is also not seriously in dispute. The
           respondent no.2 has explained the complex process
           through which the castor seeds are made to undergo so
           as to extract maximum possible oil out of it. At the first
           stage after cleaning and separating raw seeds from husk
B          etc., the castor seeds are crushed through mechanical
           devices to extract oil from the same. This mechanical
           process would obviously leave substantial amount of oil in
           the oil cake which may come into existence after extraction
           of oil. If this residual product was sold by respondent no.2
c          in. the market, same would squarely fall under the head of
           oil cake. To that extent there is no serious dispute raised
           by the respondent no.2 also. However, respondent no.2
           does not sale the oil cake which comes into existence by
           extracting oil from castor seeds through the above
           mentioned mechanical process. The oil cake so produced
D
           is made to undergo further extensive sophisticated and
           complex process by which instead of leaving 10% oil
           contents in the oil cake, the percentage cif residue of the
           oil is brought down to less than 1%. By sophisticated
          ·means of operation, the wastage of oil is minimised and
E          the oil extraction percentage is improved. Ultimately
           therefore, final by-product which comes into existence and
           which is sold by the respondent no.2 in the market is de-
           oiled cake having less than 1% oil'contents. It can thus be
           seen that oil cake and de-oiled cake are two separate
F          products. By very nature of terminology used for both
           products it would indicate that oil cake would contain the
           residue of oil seeds which would also include some
           percentage of oil. It is only when almost entirely the oil cake
           is devoid of oil contents that it is labeled as de-oiled cake.
G          Gujarat Sales Tax Act also takes cognizance of two
           different products namely oil cake and de-oiled cake. I am
           only drawing further support from these entries contained
           in Gujarat Sales Tax Act and not for the purpose of
           interpretation of the term so defined in the said Act. As
H          noted said Act does not define the term oil cake. From the
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 965
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
     available material on record, such as difference in fhe-         -A
     contents of oil in oil cake and de-oiled cake, cognizance
     of different terms namely oil cake and de-oiled cake in the
     Gujarat Sales Tax Act, the difference in the process of oil
     extraction which would lead to by-product of the oil cake
     and de-oiled cake, the certificate produced on record by         B
     the respondent no.2 indicating the difference of percentage
     of oil contents in oi~ cake and de-oiled cake, it can be seen
     that two are independent, separate and distinct products
     and so understood in common parlance as well. The term
     "oil cake" contained in the Schedule therefore, in my            c
     opinion would not inclutierd~olled cake. The attempt on the.
     part of the petitioner- Agriculture Produce Market
     Committee to levy market fees on sale and purchase of
     such de-oiled
               I
                       cake in my opinion is not permissible.
     Schedule to the Act specifies oil cake as one of the             D
     agricultural produces on which market fee can be charged.
     In view of my conclusion, that term oil cake does not
     include deoiled cake, I find that petitioner is not authorised
     to charge market fees on the de-oiled cake sold by the
     respondent no.2. The difference in process which would
     lead to obtaining oil cake and de-oiled cake was also
                                                                      E
     noticed by Hon'ble Supreme Court in the case of State of
     A.P. and others v. Mis. Modern Proteins ltd 3 on which
     reliance was placed by the learned advocate for the
     respondent no.2. It was' noted that groundnut seeds
     obtained after the process of decortication are of high          F
     grade quality, rich in proteins but free from 'harmful
     materials processed in the expel!er and the outcome is
     groundnut oil and groundnut oil cake. The groundnut oil
     cake again·is pressed through the solvent in which "food
     hexane" is sprayed resultantly groundnut oil and groundnut       G
     de-oiled cakes are obtained."

      17. Further reference was made to the Gujarat Sales Tax

3.   1994 Supp (2) sec 496.                                           H
    966        SUPREME COURT REPORTS              [2013] 16 S.C.R.

A Act wherein the oil cake and de-oiled cake are considered to
  be two different products from the entries contained in the said
  Act and the Schedule. The said entries are referred to for the
  purpose of interpretation of the terms so defined in the said Act.
  The term oil cake is not defined in the APMC Act and further
B on the basis of the available material on record which
  elaborates the difference in the contents of oil in oil cake and
  de-oiled cake, cognizance of different terms namely, oil cake
  and de-oiled cake in the Gujarat Sales Tax Act, difference in
  the process of oil extraction which would lead to by-product of
c the oil cake and de-oiled cake, we have to hold that de-oiled
  cake is a completely different product than oil cake. Also we
  have to refer to the judgment of this Court in the case of State
  of A.P. and Ors. v. Modern Proteins Ltd4 . on which strong
  reliance was placed by the respondent-Company wherein in the
  said case, it was noted that the groundnut seeds obtained after
0
  the process of decortication are of high grade quality, rich in
  proteins but free from harmful materials processed in the
  expeller and the outcome is groundnut oil and groundnut oil
  cake. The groundnut oil cake again is pressed through the
E solvent in which "food hexane" is sprayed resultantly groundnut
  oil and groundnut de-oiled cakes are obtained. On the basis
  of the said decision and applying it to the fact situation on hand
  with regard to the process adopted for obtaining by-product of
  de-oiled cake, it is clear that it is different from the oil cake as
   it contains oil less than 1% and it is not included in the Schedule
F for the purpose of charging market fee, therefore, the learned
   single Judge accepting the case against levying the market fee
   on the de-oiled cake, rejected the prayer in this regard in
   Special Civil Application No. 13606 of 2005. The same was
  questioned in the Letters Patent Appeal filed by the APMC that
G has been examined by the Division Bench with reference to rival
   legal contentions and it has answered the said point against
   the APMC by extracting paragraph No. 23 from the judgment
   of the learned single Judge.

H   4.    (1994) Supp (2) sec 496.
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 967
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
      18. The by-product obtained out of the manufacturing· A
process is not oil cake but is de-oiled cake after undergoing
the process which would lead to obtaining de-oiled cake. After
noticing the judgment of the Supreme Court in the case· of
Modern Proteins Ltd. (supra), the learned single Judge came
to the conclusion that de-oiled cake containing less than 1% . B
oil is not mentioned in the Schedule as per Section 2(1)(i) of
the APMC Act as 'agricultural produce' by the authority and
further held that the above produce is totally different from the
oil cake. Therefore, no market fee can be levied by the APMC
to be .Paid by the respondent-Company. The said finding of fact  c
of the learned single Judge has been rightly concurred with by
the Division Bench of the High Court. The same was sought to
be set aside by the APMC. We have carefully examined the
correctness of the concurrent finding of fact arrived at by the
Division Bench on this aspect of the matte.r. We are in D
agreement with the view taken by the High Court of Gujarat in
holding thatthe by-product of the manufacture in producing the
oil from the castor seeds is only de-oiled cake and is not one
of the Schedule items in the! Notification for the purpose of
levying market fee. Therefore, we do not find any good reason
whatsoever to interfere with the concrete finding of fact on this E
aspect of the matter. Hence, we have to affirm the concrete
finding of fact recorded by the learned single Judge and of the
Division Bench of the High Court. We do not find any valid and
cogent reasons to arrive at a different conclusion other than the
view taken by them as the said view is based on a proper F
appreciation of the factual matrix and the statutory provisions
as de-oiled cake is not mentioned in the Schedule to the Act
and the Notification. The item which is mentioned is oil cake
which is different and distinct from the de-oiled cake as
distinguished by this Court in the Modern Proteins Ltd. case G
referred to supra. The High Court has rightly applied the said
decision to the fact situation. Therefore, we are of the view that
the said finding of fact recorded by the High Court is legal and
valid. The same does not call for interference. Accordingly, the
appeal of the APMC on this aspect of the matter must fail as H
    968       SUPREME COURT REPORTS               [2013] 16 S.C.R.


A   we are affirming the order of the Division Bench of the High
    Court on the levy of the market fee on de-oiled cake by
    directing that the amount in relation to the market fee levied on
    de-oiled cake is to be reduced.

B        19. For the reasons recorded by us on the point Nos. 1 to
    3 in C.A. No. 3130 of 2008 the APMC must succeed.
    Accordingly, we allow the appeal and set aside the order of the
    Division Bench of the High Court in Letters Patent Appeal No.
    139 of 2006 and uphold the levy of market fee on the castor
    seeds purchased by the respondent-Company for the period
C   in question, and it is liable to pay the said market fee.

         20. For the reasons recorded in answer to the point No.
    4, we dismiss the C.A. No. 3131 of 2008 filed by APMC,
    Baroda against order passed in Letters Patent Appeal No. 195
D   of 2096, upholding the order of the learned single Judge which
    was affirmed by the Division Bench of the High Court.

        21. In view of the aforesaid reasons, Civil Appeal No.3130
    of 2008 is allowed and Civil Appeal No.3131 of 2008 is
    dismissed. There will be no order as to costs.
    Bibhuti Bhus.han Bose                          Appeals disposed of