Holding

The Market Committee is justified in levying the market fee unless the dealer satisfies all three conditions of Rule 30(3)-(5), and mere assertion of prior payment is insufficient.

Summary

The first respondent, a dealer under the Punjab Agricultural Produce Market Act, purchased paddy outside the jurisdiction of the Kamal Market Committee and filed a return in Form M late, leaving the column on fee liability blank. The Committee levied a market fee, rejecting the dealer's claim of exemption on the ground that the required declaration and certificate in Form LL, as mandated by Rule 30(3)-(5) of the Punjab Agricultural Produce Markets (General) Rules, 1962, were not filed within the prescribed 20‑day period. The dealer contended that the fee had already been paid at the place of purchase and obtained a writ from the High Court quashing the levy, holding that the Committee lacked jurisdiction. On appeal, the Supreme Court held that the Committee was justified in levying the fee because the dealer had not complied with the three conditions for exemption: prior payment, filing Form LL with declaration and certificate, and doing so within 20 days. However, the Court directed the dealer to file Form LL within two weeks, after which the Committee must grant exemption if all conditions are otherwise satisfied. The appeal was allowed.

Issues considered

Whether a dealer can claim exemption from market fee under Rule 30(3)-(5) of the Punjab Agricultural Produce Markets (General) Rules, 1962 by merely stating that the fee was already paid at the place of purchase.
Whether the failure to file Form LL with the required declaration and certificate within the stipulated 20‑day period bars the claim of exemption.
Whether the Market Committee has jurisdiction to levy the market fee in the absence of compliance with the prescribed procedural requirements.

Legislation cited

Punjab Agricultural Produce Markets (General) Rules, 1962s. Rule 30 (sub‑rules 3‑5), s. Rule 31

Subjects

market feeexemptionPunjab Agricultural Produce Markets (General) RulesForm LLdealeragricultural producejurisdictionprocedural compliance

Judgment

A HARYANA STATE AGRICULTURAL MARKETING
BOARDS AND ORS.
v.
SH. GANESH RICE AND GENERAL MILLS AND ANR.
.
DECEMBER 4, 1998
B
[S. SAGHIR AHMAD AND M. SRINIVASAN, JJ.]

Punjab Agricultural Produce Markets (General) Rules, 1962 : Sub-
rules (3) to (5) of Rule 30 and Rule 31-Levy of market fee-Dealer-
C Purchase ofpaddy-Market Committee-Memos issuedfor payment of market
fee-Exemption claimed on the ground that market fee already paid at the
place of purchase-Rejected on the ground that relevant rules were not
complied with-On challenge High Court holding that the levy of market fee
was without jurisdiction-On appeal, held, the conditions required under the
D rules are to be fulfilled by a dealer for claiming exemption-Mere statement
that market fee already paid cannot be accepted-Levy of market fee justified-
Exemption be granted to dealer on filing of declaration and cenificate in
Form LL.
..
The first respondent, a dealer, purchased paddy from areas outside the
E jurisdiction of the Market Committee for processing. It submitted a return
in Form 'M' under Rule 31 of the Punjab Agricultural Produce Markets
(General) Rules, 1962 setting out the details of the purchase. Column 7 in
the said form which provides for stating whether fee was leviable or not was
left blank by the first respondent. The Market Committee issued Memos to
the first respondent requiring it to pay the purchase fee within a week as
F the necessary information and declaration was not given in time. The First
respondent sent a reply claiming exemption from payment on the ground that
market fee had already been paid at the place of purchase. In return the
Market Committee sent notices rejecting the stand of the first respondent
and reiterating that the relevant Rules were not complied with. The Market
G Committee forwarded the papers to the Assistant Collector for recovery of
the fee as arrears of land revenue and the latter issued notice to the first
respondent treating it as a "defaulter". The first respondent filed a writ
petition before the High Court which was allowed holding that the levy of
market fee was without jurisdiction. Hence the present appeal.

Allowing the appeal, this Court
H 394
H.S.A.MKT. BOS v. SH. GANESH RICE AND GEN. MILLS 395

HELD: I.I. Market Committee was justified in levying the market fee A
on the first respondent and the judgment of the High Court is not sustainable.
[399-D-E]

.... 1.2. Sub-rules (3) to (5) of Rule 30 of the Punjab Agricultural Produce
Markets (General) Rules, 1962 requires three conditions to be satisfied by
a dealer for claiming exemption, viz., (i) the dealer should have paid the B
market fee already in a market area; (ii) the dealer shall make a declaration

- and give certificate to the Committee in Form LL where the fee has already
been paid; and (iii) such form shall be filed within twenty days of the bringing
of the agricultural produce. Unless all the three conditions are fulfilled it
is not possible for the Market Committee to accept mere statement that the C
market fee had already been paid. (398-B-C-Df

1.3. In the instant case, the first respondent did not admittedly file
Form LL with the Market Committee. It filed Form M only after the prescribed
time limit. Even in that Form, Col. 7 was not filled up. Thus the stand taken
by the Market Committee that the first respondent was liable to pay market D
fee was correct. The High Court has unfortunately overlooked the above
facts and proceeded on the footing that there was only a delay in filing
required declaration. [398-E-F]

2. The first respondent's right to claim exemption from payment of
market fee shall not be defeated as it is stated to have already been paid in E
the area where the produce was purchased. The first respondent is also
willing to file the declaration and certificate in Form LL. Hence the first
respondent is directed to file the declaration and certificate in Form LL with
the Market Committee within a period of two weeks and the latter shall on
such filing of the declaration and certificate grant exemption to the first
respondent from payment of market fee if the other conditions in the rule F
are satisfied irrespective of the period of limitation prescribed in the rule.
(399-A-B, D-Ef

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6081 of
1998.
G
From the Judgment and Order dated 18.12.97 of the Punjab and Haryana
High Court in C.W.P. No. 10984of1997.

K.T.S. Tulsi and Prem Malhotra for the Appellants.

M.K. Dua for the Respondents. H
396 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A The Judgment of the Court was delivered by

SRINIVASAN J., Leave granted.

I. The first respondent, a dealer under the Punjab Agricultural Produce
Market act, 1961 (hereinafter referred to as 'the Act') purchased paddy from .....
B areas outside the jurisdiction of the Market Committee, Kamal between 8.12.96
and 1.1.97 amounting to Rs. 5,94,630.35 for processing. It submitted a return
in Form Munder Rule 31 of the Punjab Agricultural Produce Markets (General)
Rules, 1962 (hereinafter referred to as 'The Rules') on 17.3.97 setting out the
details of the purchases. Column 7 in the form provides for stating whether
-
fee was leviable and if not, why In the return filed by the first respondent
C as aforesaid in Form M the said column was left blank. The Market Committee,
Kamal issued Memo No. 241 dated 18.3.97 to the first respondent, pointing
out the delay in filing the report and infonning it that fee of Rs. 11,892.60 was
payable on the purchase and the same may be deposited within a week and
in case of default action will be taken. On 21.3.97, another memo was issued
D along with a certified copy of rule 30(5) of the Rules, pointing out that the
first respondent had not given necessary infonnation and declaration in time
and as such liable to pay the fee claimed already.

2. The first respondent sent a reply on 4.4.91 claiming exemption from ...
payment on the ground that the fee had been paid at the place of purchase
E and it was not payable second time. The Market Committee sent notices on
8.4.97 and 28.4.97 rejecting the stand of the first respondent and reiterating
that the relevant Rules were not complied with and the requisite forms were
not filed. The Market Committee forwarded the papers to the Assistant
collector, Grade II, Kamal (the 4th petitioner herein) for recovery of the fee
as arrears of land revenue and the latter issued notice dated 10.6.97 to the
F first respondent treating it as a 'defaulter'.

3. The first respondent filed a writ petition in the High Court for quashing
proceedings including the levy of market fee. The High Court proceeded on
the footing that the first respondent had paid the fee at the place where the
purchase was made and there was only a delay in complying with the Rules.
G The High Court held that mere delay will not enable the Market Committee
to levy fee for second time even though it may be entitled to levy a penalty.
Consequently, the High Court allowed the writ petition holding that the levy
of market fee was without jurisdiction. Aggrieved by the said judgment, the
appellants have preferred this appeal by Special Leave.

H · 4. Rule 30 of the Rules provides that no market fee shall be levied on
.Ill

H.S.A.MKT. BDS v. SH. GANESH RICE AND GEN. MILLS [M. SRINIVASAN, J.] 397

the sale or purchase of any agricultural produce in respect of which such fee A
is already paid in the notified market area in which the said produce was
manufactured of extracted. Sub-rules (3) to (5) are relevant in this case. They
read as follows:-

"(3) The dealer who claims exemption from the payment of market
fee leviable or1 any agricultural produce manufactured or extracted B
from the agricultural produce in respect of which the market fee has
already been paid in another notified market area, shall make declaration
and give certificate to the Committee in Form LL, where the fee has
already been paid within twenty days of the day of bringing of
agricultural produce within the notified market area. Form LL shall be C
prepared in quadruplicate form the booklets duly attested and issued
by the Secretary of the Committee against the payment fixed by the
Committee. It will be the duty of the dealer claiming exemption from
the market fee under this sub-rule to send the original copy of Form
LL to the Committee within whose market area the agricultural produce
is brought. The second copy shall be sent to the office of the Committee D
within whose market area such agricultural produce was bought, and
the third and fourth copies shall be retained by the dealer-purchaser
and the dealer-seller, respectively and the same shall be kept as a part
of their accounts maintained in respect of market fees."
E
"(4) It shall be the duty of the dealer claiming exemption from
market fee under sub-rule (3) and (5) to produce a copy of the R/R,
forwarding note, builty or challan, as the case may be, duly signed by
him or his authorised agent in the office of the Committee from whose
market area the agricultural produce is brought before it is unloaded,
the second copy in the office of the Committee within whose market F
area the agricultural produce is brought before it is unloaded and the
third copy to be retained by him:

Provided that, if no such copy of R/R, forwarding note, builty or
challan is produced in the office of the concerned Committee, no claim G
for exemption shall be entertained".

"(5) The agricultural produce brought for processing from within
the State 'or from out side the State' and for which market fee has
already been paid in any market in the State 'or out side the State',
shall be exempted from payment of market fee second time. H
398 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A Provided that the dealer who claims exemption under sub-rule ( 5)
from the payment offee leviable on any agricultural produce brought
for processing shall make declaration and give certificate to the
Committee in Form LL duly attested by the Secretary of the Committee
where fee has already been paid, within twenty days of the bringing
agricultural produce within the notified market area and complies with
B the provisions of sub-rule(2)".

5. Under the above rule, three conditions are required to be
satisfied for the purpose of claiming exemption by a dealer:

A. The dealer should have paid the market fee already in a
c market area.

B. The dealer shall make a declaration and give certificate to the
Committee in Form LL where the fee has already been paid.

C. Such Form shall be filed within 20 days of the date of bringing
D the agricultural produce within the notified market area.

6. Unless all the above conditions are fulfilled it is not possible for
the Market Committee to accept a mere statement that market fee had
already been paid and the dealer was not liable to pay it again.
Compliance with the rule is not a mere technical formality. Jn the
E present case, first respondent did not admittedly file Form LL with the
Market Committee. It filed Form M only after the prescribed time limit.
Even in that Form, as pointed out already, Col. 7 was not filled up. In
such circumstances the stand taken by the Market Committee that the
first respondent was liable to pay market fee was correct.

F 7. The High Court has unfortunately over looked the fact that the first
respondent had not filed Form LL and make a declaration or give a
certificate as required by the Rule, but instead filed only Form M and
that too leaving column 7 blank. The High Court has proceeded on
the footing that there was only a delay in filing the required declaration.
Hence the judgment of the High Court is not sustainable and the
G
appeal is to be allowed. But learned counsel for the first respondent
points out rightly that in the memo issued by the Market Committee
on 18.3.97, it was· not pointed out that the first respondent ought to
file Form LL containing declaration and certificate. Nor was the
attention of the first respondent drawn to Rule 30. It is also submitted
H by learned counsel that the market fee was actually paid when the
H.S.A.M. BOARDS v. SH. GANESH RICE AND GEN. MILLS [M. SRINIVASAN, J.] 399

produce was purchased. According to him all the relevant receipts for A
payment of market fee in the area are readily available with the first
respondent.

8. In the circumstances we are of the opinion that the frrst respondent's
right to claim exemption from payment of market fee in Kamal shall not
be defeated as it is stated to have been paid already actually in the B
area wrere the produce was purchased. The fust respondent is also
willing to file the declaration and certificate in Form LL. Mr. K.T.S.
Tulsi, learned senior counsel for the appellants has submitted that if
the declaration and certificate in Form LL are filed within 2 weeks from
this date the Market Committee would not insist upon compliance C
with the period of limit:ition prescribed in the Rule in view of the
defect in the memo dated 18.3.97 and consider the question whether
the fee had been paid already and the frrst respondent is entitled to
exemption.

9. Hence, We direct the first respondent to file the declaration and D
certificate in Form LL with the Marketing Committee, Kamal within a
period of two weeks from this date and the latter shall on such filing
of the declaration and certificate grant the exemption to the frrst
respondent from payment of market fee if the other conditions in the
Rule are satisfied irrespective of the period of limitation prescribed in
the Rule. This appeal is disposed of with the above directions. E
S.V.K. Appeal allowed.