Supreme Court of India
HEINZ INDIA PVT. LTD. & ANR.versusSTATE OF U.P. & ORS.
- Citation
- 2012 INSC 147
- Decided
- 23 March 2012
- Disposal
- Dismissed
- Bench
- T S THAKUR
Holding
The Board’s revisional power under s.32 can be validly exercised by the Director as a delegate under s.33, and the presumption of sale under s.17(iii) can be rebutted only by clear and convincing evidence, which the dealers failed to produce, so the orders stand.
Summary
Heinz India Pvt. Ltd. and other dealers challenged market fee assessments levied by the Uttar Pradesh Krishi Utpadan Mandi Samiti, claiming that the ghee they exported was transferred as stock and not sold within the mandi, thus exempting them from the fee. The Samiti rejected the refund claims, holding the statutory presumption of sale under Section 17(iii) was unrebutted; the dealers appealed under Section 32 of the Act, arguing the Board’s revisional power was not properly exercised and that the presumption required only a pre‑ponderance of evidence. The Supreme Court clarified that the Board’s revisional power may be delegated to the Director under Section 33 and that the presumption is rebuttable only by clear and convincing evidence, a higher standard than mere pre‑ponderance. The Court found the dealers had failed to produce such evidence, and the findings of the Samiti and Director were not irrational or perverse. Consequently, the appeals and the related writ petition were dismissed with costs.
Issues considered
- Whether the Uttar Pradesh Krishi Utpadan Mandi Act provides a sufficient adjudicatory machinery for assessment and dispute resolution under Sections 32 and 33.
- What standard of proof is required to rebut the statutory presumption of sale under the Explanation to Section 17(iii).
- Whether the orders of the Mandi Samiti and the Director, as delegate of the Board, are legally infirm and subject to judicial review.
Legislation cited
- Rules framed under the Acts. 133-A
- Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964s. 17(iii) Explanation, s. 2(h), s. 32, s. 33
Subjects
market feestatutory presumptionrevisional powerUttar Pradesh Krishi Utpadan Mandi Actjudicial reviewburden of proofclear and convincing evidencedelegation of authority
Judgment
[2012] 3 S.C.R. 898
A HEINZ INDIA PVT. LTD. & ANR.
v.
STATE OF U.P. & ORS.
(Civil Appeal NO. 1476 of 2006)
MARCH 23, 2012
B
[T.S. THAKUR AND DIPAK MISRA, JJ.]
The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam,
1964:
c
ss. 2(h), 32 and 33 of the Act read with r.133-A of the
Rules framed under the Act - Market fee - Levy of -
Assessment and adjudicatory machinery - Held: Dealers
aggrieved of an order of assessment or an order declining
0 refund of the fee paid by them are entitled to question the
correctness of any such demand in terms of s.32 which is in
the nature of a revisional power vested in the Board - The
power vested in the Board including that u/s 32 of the Act
could be exercised by the Director as a delegate of the Board
E keeping in view the provisions of s. 33 of the Act which permits
such delegation - Rule 133-A of the Rules regulates the filing
and disposal of the revision petitions uls 32 and is, therefore,
a step in the direction of providing a machinery under the Act
for adjudication of disputes that may arise between dealers
on the one hand and the market committee on the other -
F That being so, the Act is not completely bereft of a machinery
nor can it be said that the observations made in Ram Chandra
Kai/ash Kumar's case have gone unheeded - However, in
order to make the Board's revisional power more effective and
its exercise more transparent and credible, the Board would
G do well to delegate the power of hearing and disposal of the
revision petitions to a senior and experienced officer who is
well-versed in dealing with legal issues concerning
assessment and/or determination of the liability under the Act.
H 898
HEINZ !NOIA PVT. LTD. & ANR. v. STATE OF U.P. & 899
ORS.
s. 2(h) - 'Director' - Held: It is manifest from a plain A
reading of s.2(h) that the expression 'Director' wherever used
in the Act including s. 33 thereof includes an officer authorised
by the Director to perform all or any of his functions under the
Act.
B
s.17(iii), Explanation - Presumption as regards sale of
a product within the market area - Standard of proof to rebut
the presumption - Held: The presumption is rebuttable in
nature, for it holds good only till the contrary is not proved by
the· dealer - The evidence intended to rebut the statutory
presumption u/s 17 of the Act ought to be clear and C
convincing, showing that what is presumed under the
provision is not the real fact - In the instant case, the Market
Committee and the Director have recorded concurrent
findings of fact to the effect that the dealers had failed to
establish that no sale of the stocks of Ghee had taken place D
within the Mandi limits - The statutory presumption that any
transfer of stocks from within the Mandi area was pursuant to
a sale was, thus, held to have remained unrebutted.
Judicial Review: E
Mandi Samiti - Market fee - Levy of - Judicial review of
- Held: The court in exercise of power of judicial review does
not substitute its judgment for that of the legislature or
executive or their agents as to matters within the province of
the either - In the instant case, the Mandi Samiti appreciated F
each piece of evidence and found the same to be insufficient
to hold that the sale transactions had, in fact, taken place
outside the Mandi area so that the presumption arising uls
17(iii) of the Act stood rebutted - The Director exercising
powers of the Mandi Parishad once again evaluated the G
evidence and concurred with the view taken by the Mandi
Samiti - It is neither feasible for the Court to embark upon
. an exercise of re-appreciating the entire material nor to
substitute its own findings for those recorded by the Mandi
Samiti and the Director/Mandi Parishad - So long as the H
900 SUPREME COURT REPORTS [2012] 3 S.C.R.
A finding recorded by the Mandi Samiti and the Mandi Parishad
are not irrational or perverse, and so long as the view taken
by them is a reasonably possible view, the Court would not
interfere.
The predecessor-in-interest of appellant no. 1 in C.A.
8 No. 1476 of 2006 manufactured certain products
generically called milkfoods/weaning foods and energy
beverages. The manufacturing process also produced
'ghee' as a by-product of the said items. With effect from
1.10.1994, the unit was taken over by appellant no. 1 and
C it continued to manufacture the said items including·
'ghee'. After February 1995, the Mandi Samiti constituted
under the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam,
1964 (the Act), started issuing gate passes only on
payment of Mandi fee. However, the dealers could make
D a claim for refund of the amount paid by them on
furnishing proof of the fact that the goods had moved out
of the Mandi area without being subjected to a
transaction of sale. The appellants made claims for the
refund of the amount paid by them towards Mandi fee and
E furnished to the Mandi Samiti the material in support of
their claim. The Mandi Samiti rejected the claim holding
that the material produced by the appellants was not
sufficient to rebut the statutory presumption that the
removal of goods from the Mandi limits was pursuant to
F a sale effected within such limits. The revision petitions
filed by the dealers were dismissed by the Director, Mandi
Parishad; and the writ petitions challenging the orders of
the Director were dismissed by the High Court.
In the instant appeals filed by the dealers, the
G question for consideration before the Court were: (i)
"Whether the Krishi Utpadan Mandi Adhiniyam does not
contain the necessary machinery provisions for
assessment of the fees and for adjudication of disputes
in relation thereto? If so to what effect?" (ii) "What
H precisely is the correct legal standard/test for determining
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 901
ORS.
whether or not the presumption arising under the A
Explanation to Section 17(iii) of the Act has been
rebutted"? and (iii) "Whether the orders passed by the
Mandi Samiti and those passed by the Director, as
delegate of the Mandi Parishad, suffer from any legal
infirmity to call for interference?" B
Dismissing the appeals as also the writ petition, the
Court
HELD: 1.1. This Court in the case of Ram Chandra
Kai/ash Kumar & Co.* specifically rejected the contention C
that in the absence of any machinery under the Uttar
Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 and the
Rules no market fee could be levied or collected. [para
18-19) [922-E]
D
*Ram Chandra Kai/ash Kumar & Co. & Ors. v. State of
U.P. & Anr. 1980 SCR 104 =1980 (Supp) SCC 27;
Kunnathat Thathunni Moopil Nair etc., v. State of Kera/a and
Anr. 1961 SCR 77 =AIR 1961 SC 552; Rai Ramkrishna and
Ors. etc. v. State of Bihar 1964 SCR 897 =AIR 1963 SC E
1667; Raja Jagannath Baksh Singh v. State of Uttar Pradesh
and Anr. 1963 SCR 220 =AIR 1962 SC 1563; The State of
Andhra Pradesh and Anr. v. Na/la Raja Reddy and Ors. 1967
SCR 28 =AIR 1967 SC 1458; Mis Vishnu Dayal Mahendra
Pal and Ors. v. State of Uttar Pradesh and Ors. 1975 (1) SCR
376 = (1974) 2 SCC 306, and D.G. Gose and Co. (Agents) F
Pvt. Ltd. v. State of Kera/a and Anr. 1980 (1) SCR 804 =
(1980) 2 sec 410 - referred to.
1.2. Section 32 of the Act empowers the Board to call
for and examine the proceedings of the Committee for the G
purpose of satisfying itself as to the legality or propriety
of any decision or order passed by a Committee and to
pass such orders thereon as it may deem fit including an
order modifying, annulling or reversing any such decision
or order of the Committee. Dealers aggrieved of an order H
902 SUPREME COURT REPORTS [2012] 3 S.C.R.
A of assessment or an order declining refund of the fee paid
by them are entitled to question the correctness of any
such demand in terms of the said provision which is in
the nature of a revisional power vested in the Board. It is
common ground that the dealers in the instant case had
B invoked the said power of the Board u/s 32. It is also
common ground that the revisions so filed have been
entertained and dealt with on merits. It has not been
disputed that the power vested in the Board including that
u/s 32 of the Act could be exercised by the Director as a
c delegate of the Board keeping in view the provisions of
s.33 of the Act which permits such delegation.[para 21)
[923-H; 924-A-C]
1.3. It is manifest from a plain reading of s.2(h) that
the expression 'Director' wherever used in the Act
D including s. 33 thereof includes an officer authorised by
the Director to perform all or any of his functions under
the Act. Significantly enough, neither before the High
Court nor before this Court was it contended that the
officer who had handled and disposed of the revision
E petitions filed by the dealers, was not duly authorised in
terms of s.2(h) or that the power of the Board u/s 32 of
the Act was not duly delegated to the Director. It is not,
therefore, a case of inherent lack of jurisdiction. [para 24)
[825-C-D]
F 1.4. It is true that the stakes involved are substantial
and those called upon to satisfy the demands raised
against them would like their cases to be heard by a
senior officer or a Committee of officers to be nominated
by the Board. But in the absence of any data as to the
G number of cases that arise for consideration involving a
challenge to the demands raised by the Market
Committee and the nature of the disputes that generally
fall for determination in such cases, it will not be possible
for this Court to step in and direct an alteration in the
H mechanism that is currently in place. The power to
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 903
ORS.
decide the revisions vests with the Board, which also A
enjoys the power to delegate that function to the Director.
So long as there is statutory sanction for the Director to
exercise the revisional power vested in the Board, it
cannot be said that such a delegation is either
impermissible or does not serve the purpose of providing B
a suitable machinery for adjudication of the disputes.
[para 24] [925-E-H]
1.5. It is noteworthy that r.133-A of the Rules framed
under the Act regulates the filing and disposal of the
revision petitions u/s 32 thereof. This provision has been C
inserted with effect from 11.5.2008 and empowers the
Board either to decide the revision petition itself or to
nominate an officer for doing so. It also provides for grant
of an opportunity of being heard to the person
concerned and a time bound disposal of the revision. D
Rule 133-A is, therefore, a step in the direction of
providing a machinery under the Act for adjudication of
disputes that may arise between dealers on the one hand
and the market committee on the other. That being so, the
Act is not completely bereft of a machinery nor can it be E
said that the observations made by this Court in Ram
Chandra Kai/ash Kumar's case have gone unheeded. [para
24] [926-A-C]
1.6. However, in order to make the Board's revisional
power more effective and its exercise more transparent F
and credible, the Board would do well to delegate the
power of hearing and disposal of the revision petitions
to a senior and experienced officer who is well-versed in
dealing with legal issues concerning assessment and/or
determination of the liability under the Act. [para 24] [926- G
D-E]
2.1. Explanation to s.17(iii) of the Act raises a
presumption to the effect that any specified agricultural
produce taken out of or proposed to be taken out of a H
904 SUPREME COURT REPORTS [2012] 3 S.C.R.
A market area by or on behalf of a licensed trader has been
sold within such area; the price of the produce so
presumed to be sold is then determinable in the manner
prescribed. It is fairly evident that the presumption is
rebuttable in nature; for it holds good only till the contrary
s is not proved by the dealer. [para 25-26) [926-F-G; 937-8)
Sodhi Transport Co. & Ors. v. State of UP. & Ors. 1986
(1) SCR 939 = (1986) 2 SCC 486; lzhar Ahmad Khan v.
Union of India and Ors. 1962 Suppl. SCR 235 =AIR 1962 SC
1052; Harbhajan Singh v. State of Punjab & Anr.
C 1965 SCR 235 =AIR 1966 SC 97 - referred to.
Miller v. Minister of Pensions [1947].2 All ER 372; Bater
v. Bater [1950] 2 All ER 458; Homa/ v. Neuberger Products
Ltd. [1957] 1 Q.8. 247; Addington v. Texas, 441 U.S. 418,
D 423 (1979); R. v. Clark (1921 61 SCR 608); Sodeman v. R
[1936) 2 All ER 1138 - referred to.
Black's Law Dictionary 5th Edition, 1979; and 32A
Corpus Juris Secundum Evidence§ 1624 - referred to.
E 2.2. It is well-settled that a decision is an authority for
the point it decides. It is equally well-settled that the text
of the decision cannot be read as if it were a statute. That
apart, the expression used by this Court in Sodhi
Transport Co. is "evidence fairly and reasonably tending
F to show", which signifies that it is not just any evidence,
howsoever shaky and nebulous that would satisfy the
test of preponderance of probability to rebut the statutory
presumption, but evidence that can by proper and judicial
appl!cation of mind be said to be fairly and reasonably
showing that the real fact is not as presumed. The
G evidence required to rebut a statutory presumption ought
to be clear and convincing, no matter the degree of proof
may not be as high as pro~ing the fact to the contrary
beyond a reasonable doubt. [para 39) [935-A-C]
H 2.3. The heightened standard of proof required to
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 905
ORS.
rebut a presumption raised under the statute at hand is A
applicable for two distinct reasons: The first and foremost
is that the presumption is raised in relation to a fiscal
statute. While the amount payable is not a tax it is
nevertheless a statutory levy which is attracted the
moment the transaction of sale takes place within the B
market area. Goods, admittedly produced within the
market area and not consumed within such area are
presumed to be leaving pursuant to a transaction of sale
unless the contrary is proved. That the goods are
produced within the market area is not in dispute in the c
instant case. That they left the market area is also
admitted. In the ordinary course, therefore, the
presumption would be that the goods left pursuant to a
sale unless the appellants are in a position to prove the
contrary. The second reason is that the nature of
0
transaction pursuant to which the goods are removed
from the market area is within the exclusive knowledge
of the appellants or the persons to whom such goods are
being dispatched. The circumstances in which the
transactions, which the statute presumes to be sales, but E
which the appellants claim are simple transfer of stocks
are within the exclusive knowledge of the appellants. The
entire evidence relevant to the transactions, being
available only with the appellants and the true nature of
the transactions being within their special knowledge,
there is no reason why the rebuttal evidence should not F
satisfy the higher standard of proof and clearly and
convincingly establish that the fact presumed is not the
actual fact. The evidence intended to rebut the statutory
presumption u/s 17 of the Act ought to be clear and
convincing evidence showing that what is presumed G
under the provision is not the real fact. [para 39-40] [935-
D-H; 936-A-C]
2.4. The Market Committee and the Director have
recorded concurrent findings of fact to the effect that the H
906 SUPREME COURT REPORTS [2012] 3 S.C.R.
A dealers had failed to establish that no sale of the stocks
of Ghee had taken place within the Mandi limits. The
statutory presumption that any transfer of stocks from
within the Mandi area, was pursuant to a sale was thus
held to have remained unrebutted. [para 41] [936-D-E]
B
3.1. The power of judicial review is neither unqualified
nor unlimited. It has its own limitations. That the court
dealing with the exercise of power of judicial review does
not substitute its judgment for that of the legislature or
C executive or their agents as to matters within the province
of either, and that the court does not supplant 'the feel
of the expert' by its own review, is also fairly well-settled
by the decisions of this Court. In all such cases judicial
examination is confined to finding out whether the
findings of fact have a reasonable basis on evidence and
D whether such findings are consistent with the laws of the
land. [para 42 and 46] [936-F; 939-H; 940-A-B]
Council of Civil Service Unions (CCSU) v. Minister for
the Civil Service [1984] 3 All ER 935; Tata Cellular v. Union
E of India 1994 ( 2 ) Suppl. SCR 122 = (1994) 6 SCC 651;
State of Punjab v. Gurdial Singh 1980 (1) SCR 1071 = (1980)
2 SCC 471; Union of India v. S.8. Vohra, 2004 (1) SCR 36 =
(2004) 2 SCC 150, Shri Sitaram Sugar Co. Ltd. v. Union of
India, 1990 (1) SCR 909 = (1990) 3 sec 223, and
F Thansingh Nathmal and Ors. v. Supdt. of Taxes and Ors.,
Dhubri, 1964 SCR 654 =AIR 1964 SC 1419; Dharangadhra
Chemical Works Ltd. v. State of Saurashtra and Ors., 1957
SCR 152 = AIR 1957 SC 264 - relied on
Chief Constable of North Wales Police v. Evans [1982]
G 3 All ER 141; Trop v. Dulles 356 U.S. 86 (1958); and Reid
v. Secretary of State for Scotland [1999] 1 All ER 481 -
referred to.
3.2. The Mandi Samiti has upon examination of the
H evidence adduced before it recorded a finding that the
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 907
ORS.
same did not inspire confidence for a variety of reasons. A
The Samiti has found that the appellants had failed to
produce any evidence as to when and where any
transaction regarding sale and purchase of ghee
manufactured within Mandi area was finalised. No
evidence was adduced by the appellants to show as to B
who had been instrumental in finalising such sale
transactions out of its officers and employees. The Samiti
was of the view that although the appellant had claimed
that there were separate C&F agreements with various
agents appointed by it at several destinations outside the c
mandi area the appellant had produced only two of such
agreements in support of its case that such C&F agents
existed at all such destinations. The Samiti found
information furnished by the appellant incomplete and
discrepant in regard to the sales. The Samiti took the view
0
that the so called C&F agents were the actual purchasers
of ghee from the company and the C&F agreements, two
of which were placed on record, were only meant to avoid
payment of market fee. Suffice it to say that the Mandi
Samiti appreciated each piece of evidence and found the E
same to be insufficient to hold that the sale transactions
had, in fact, taken place outside the mandi area so that
the presumption arising u/s 17(iii) of the Act stood
rebutted. The Director exercising powers of the Mandi
Parishad has in its order dated 25.9.2004 once again
evaluated the evidence and concurred with the view F
taken by the Mandi Samiti. The orders passed by the
Mandi Samiti and the Director clearly show that there was
no clear and convincing evidence to establish that the
presumption arising u/s 17(iii) of the Act stood rebutted
and that the actual was not, what was presumed under G
the said provision. [para 50-52, 55 and 56) [941-E-H; 942-
A-E; 943-E; 944-F-G]
3.4. In the light of the legal position, it is neither
feasible for this Court to embark upon an exercise of re- H
908 SUPREME COURT REPORTS [2012] 3 S.C.R.
A appreciating the entire material nor to substitute its own
findings for those recorded by the Mandi Samiti and the
Director/Mandi Parishad. So long as the findings
recorded by the Mandi Samiti and the Mandi Parishad are
not irrational or perverse, and so long as the view taken
B by them is a reasonably possible view, this Court would
not interfere. [para 57] [944-H; 945-A]
4. No remand ought to be made only to enable a
party to produce additional material. A remand is neither
mechanical nor a routine affair. If there is nothing wrong
C in the orders under challenge, there is no question of
interference with the same. [para 61) [946-D]
Krishi Utpadan Mandi Samiti & Ors. v. Shree Mahalaxmi
Sugar Works & Ors. (1995) Supp (3) SCC 433 - cited.
D Case law Reference:
(1995) Supp (3) sec 433 cited para 3
1961 SCR 77 referred to para 12
E 1964 SCR 897 referred to para 13
1963 SCR 220 referred to para 14
1967 SCR 28 referred to para 15
1975 (1) SCR 376 referred to para 17
F
1980 (1) SCR 804 referred to para 17
1980 SCR 104 referred to para 18
1986 (1) SCR 939 referred to para 27
G
[1947) 2 All ER 372 referred to para 31
[1950) 2 All ER 458 referred to para 32
[1957) 1 Q.B. 247 referred to para 33
H 441 U.S. 418, 423 (1979) referred to Para 34
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 909
ORS.
1962 Suppl. SCR 235 referred to para 35 A
1965 SCR 235 referred to para 37
(1921 61 SCR 608) referred to para 37
[1936] 2 All ER 1138 referred to para 37 8
[1984] 3 All ER 935 referred to para 42
.
1994 ( 2 ) Suppl. SCR 122 referred to para 43
1980 (1 ) SCR 1071 referred to para 44
c
[1982] 3 All ER 141 referred to para 45
356 U.S. 86 (1958) referred to para 45
2004 (1) SCR 36 referred to para 46
1990 (1) SCR 909 referred to para 46 D
1964 SCR 654 referred to para 46
1957 SCR 152 referred to para 47
[1999] 1 All ER 481 referred to para 48 E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1476 of 2009.
From the Judgment & Order dated 20.08.2004 of the High
Court of Judicature at Allahabad, Lucknow Bench, Lucknow in F
Civil Misc. Writ Petition No. 2323 (MIS), 2321 (M/S), 2322
(M/S), 2324 (M/S), 2325 (M/S), 2326 (MIS), 2474 (M/S), 2475
(M/S), 2476 (MIS), 2477 (M/S}, 2478 (M/S) of 1997.
WITH
G
W.P. (C) No. 144 of 2005, C.A. Nos. 1477 & 1478 of 2006.
Sudhir Chandra, Rakesh Dwivedi, Gaurav Goel, Abhinav
Agarwal, Mahesh Agarwal, E.C. Agrawala, U.A. Rana, Mrinal
Mazumdar, Awigin M. George (for Gagrat & Co.), Daleep Kr.
H
910 SUPREME COURT REPORTS [2012] 3 S.C.R.
A Dhyani, Suraj Singh, Pradeep Misra, Kamlendra Mishra, Manoj
Swarup, Ashok Anand, Anil Kapur, Ajay Kumar for the
appearing parties.
The Judgment of the Court was delivered by
B T.S. THAKUR, J. 1. These appeals by special leave arise
out of an order dated 20th August, 2004, passed by the High
Court of Judicature at Allahabad whereby a batch of writ
petitions challenging an order passed by the Director, Rajya
Krishi Utpadan Mandi Parishad, Lucknow, dated 3rd July,
C 1997, under Section 32 of the Uttar Pradesh Krishi Utpadan
Mandi Adhiniyam, 1964 (hereinafter called 'the Act'), have been
dismissed. The order passed by the Director, Rajya Krishi
Utpadan Mandi Parishad pertained to 19 revision petitions of
which 8 petitions were filed by Glaxo India Ltd. relevant to the
D period 1st November, 1990 to 30th September, 1994 while the
remaining 11 petitions pertained to Heinz India Pvt. Ltd.
relevant to the period between 1st October, 1994 and 31st May,
1996. During the pendency of the Special Leave Petitions, Writ
Petition (C) No.144/2005 was filed under Article 32 of the
E Constitution of India, inter alia, praying for a writ of certiorari,
quashing order dated 25th September, 2004 passed by the
Deputy Director (Administration) Krishi Utpadan Mandi
Parish ad, Gomti Nagar, Lucknow in another batch of revision
petitions (pertaining to the period between 3rd June, 1996 and
F 30th April, 2004) and an assessment order dated 7th July,
1998 passed by the Krishi Utpadan Mandi Samiti, Aligarh. A
declaration to the effect that the goods removed from the
petitioner's unit at Aligarh to places outside the State of Uttar
Pradesh were by way of stock transfer and no Mandi Fee was
G payable on such transfers has also been prayed for. The facts
giving rise to the appeals and the writ petition may be
summarised as under:
2. Glaxo India Ltd., set up an industrial unit at Aligarh for
the manufacture of what is sold in the market under the brand
H names Glacto, Complan, Farex, Glucon D and other products
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 911
ORS. [T.S. THAKUR , J.]
generically called milk foods/weaning foods and energy A
beverages. It is not in dispute that the manufacturing process
undertaken in the said unit produced ghee as a by-product of
the said items. It is also not in dispute that with effect from 1st
October, 1994, the Family Products Division of Glaxo India Ltd.
was taken over by Heinz India Pvt. Ltd. who continued B
manufacturing the products mentioned above including ghee
as a by-product of its manufacturing activity.
3. In terms of Section 17(iii) of the Act, sale of specified
agricultural produce within the Mandi limits attracts levy of what C
is described as Mandi Fee from the person effecting the sale.
The Mandi Samiti accordingly started demanding the said fee
from Glaxo India Ltd., upto the year 1994 and from Heinz India
Ltd., from 1994 onwards qua sales effected by the said two
companies of its products including ghee. These demands
were resisted by both the companies primarily on the ground D
that bulk of the ghee produced in their unit at Aligarh, if not the
entire quantity, was sent out of the Mandi limits on stock transfer
basis and that there was no sale involved in such transfers so
as to attract the levy of the Mandi Fee on the s~me. Even so,
the companies appear to have continued removing their goods E
from the Mandi limits in accordance with the procedure in vogue
at the relevant time. In Krishi Utpadan Mandi Samiti & Ors. v.
Shree Mahalaxmi Sugar Works & Ors. (1995) Supp (3) SCC
433, decided on 2nd February, 1995, this Court noticed the
Explanation to Section 17(iii) of the Act and observed that there F
was a presumption against the dealers. This Court held that in
view of the said presumption it is open to the Mandi Samiti to
raise demands against the dealers before the issue of passes.
If there is a valid rebuttal to the presumption and it is shown
that no sale took place within the notified market area the G
dealers will be entitled to the passes, otherwise not. This Court
further held that even if the dealers are compelled to pay the
market fee as demanded it shall be open to them to challenge
the same in the manner provided under the Act. This implied
that if the claim of the dealers that the goods were not being H
I
912 SUPREME COURT REPORTS (2012] 3 S.C.R.
A removed pursuant to any sale transaction was rejected and a
demand for payment of Mandi Fee raised, the aggrieved dealer
could question that demand in appropriate proceedings.
4. It is evident from a reading of the order passed by the
Mandi Parishad that the earlier procedure of issuing free gate
8
passes remained in vogue upto February, 1995, whereafter the
Mandi Samiti started issuing gate passes only on payment of
the Mandi Fee demanded by it. This change came about as a
result of the aforementioned decision of this Court in Shree
Mahalaxmi Sugar Works (supra). Subsequently, in Krishi
C Utpadan Mandi Samiti v. Mis Saraswati Cane Crusher & Ors.
(Civil Appeal Nos. 1769-1773of1998), decided on 25th March,
1998 this Court prescribed the procedure to be followed in the
matter of issue of gate passes, making of provisional
assessment and the time frame for making a final assessment.
D
"We are satisfied that the orders of this Court afore-
referred to would need some repair work. We treat the said
order to be conceiving of a provisional assessment where
after doors are opened for a final assessment. We
E conceive that when demands are raised by the Krishi
Utpadan Mandi Samiti against a trader before he could
ask for transit of goods outside the market area, the trader
would be entitled to tender a valid rebuttal to say that no
sale had taken place within the notified area and that if the
F explanation is accepted there and then by the Mandi
Samiti, no question of payment would arise as also of
withholding the gate passes. If prima facie evidence led
by the trader is not accepted by the Mandi Samiti, the
trader or the dealer can be compelled to pay the market
fee as demanded before issuance of gate pass. If the
G
trader makes the payment without demur, the matter ends
and the assessment finalized. But in case he does so and
raises protest, then the assessment shall be taken to be
provisional in nature making it obligatory on the trader to
pay the fee before obtaining the requisite gate pass. After
H
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 913
ORS. [T.S. THAKUR , J.]
protest has been lodged and the provisional assessment A
has been made, a time frame would be needed to devise
making the final assessment. We, therefore, conceive that
it innately be read in the order of this Court that a final
assessment has to be made within a period of two months
after provisional assessment so that the entire transaction B
in that respect is over enabling the aggrieved party, if any,
to challenge the final assessment in the manner provided
under the afore Act or under the general law of the land in
appropriate fora. Having added this concept in this manner
in the two Judge Bench decision of this Court, we declare c
that what repair has been done instantly would add to the
order of the High Court and the instant corrective decision
shall be the governing rule. The Civil Appeals would thus
stand disposed of.
Since the assessment thus far made against the D
traders, who are involved in the instant appeals, would have
to be treated as provisional awaiting final assessment, we
permit the concerned traders to move the respective Mandi
Samiti within two months from today to hear their objections
and proceedings onwards be regulated in accordance with E
procedure devised hereinbefore. Nonetheless we add that
should the basis of provisional assessment be knocked off,
the Samiti would refund the market fee to the traders/
dealers within two months thereafter."
F
5. Suffice it to say that according to the above decision
the dealers could make a claim for the refund of the amount
paid by them on furnishing of proof of the fact that the goods
had moved out of the mandi area without being subjected to a
transaction of sale.
G
6. What is important for the present is that Heinz made
claims for the refund of the amount paid by it towards market
fee and furnished to the Mandi Samiti material to support that
claim. The material so produced was then evaluated by the
Mandi Samiti who came to the conclusion that the same was H
914 SUPREME COURT REPORTS [2012] 3 S.C.R.
A not sufficient to rebut the statutory presumption that the removal
of goods from the Mandi limits was pursuant to a sale effected
with.in such limits. The claim for refund of the amount paid by
the appellant-Heinz was accordingly rejected by the Mandi
Samiti in terms of the orders referred to earlier.
B
7. Aggrieved by the order passed by the Mandi Samiti
both Glaxo India Ltd. and Heinz India Pvt. Ltd. filed revision
petitions before the Director, Mandi Parishad, invoking his
jurisdiction under Section 32 read with Section 33 of the Act
as a delegate of the Mandi Parishad. By his order dated 24th
C October, 1996, the Director dismissed the revision petitions,
aggrieved whereof the companies filed Writ Petitions before
the High Court of Allahabad. These Writ Petitions were
eventually allowed by the High Court in terms of an order dated
3rd April, 1997, and the matter remitted back to the Director
D for a fresh consideration and disposal in accordance with law.
8. The Director accordingly heard the revision petition
afresh, re-appraised the material relied upon by the companies
in support of their claim for refund and came to the conclusion
E that the claim of the companies for refund remained
unsubstantiated and the presumption arising under the
Explanation to Section 17(iii) un-rebutted. The Director
observed:
"17 .....
F
(3) Neither the evidences produced by Revisionist
company with the details of information of sale has been
given to C & F Agent with dates on the basis of which C
& F Agent would deliver the goods to the buyer after
G receipt of payment nor any instance has been produced
for giving required instructions to C & F Agent regarding
the sale of goods and nor even any evidence has been
produced. In this way, the evidence produced regarding
the actual mode of sale at the place of destination as to
H how and by whom it is being done, are contradictory or
HEINZ !NOIA PVT. LTD. & ANR. v. STATE OF U.P. & 915
ORS. [T.S. THAKUR , J.]
are missing. Mandi Samiti gave time to revisionist for A
clarifying and proving this sale process but, the revisionist
has not been able to produce clear case and desired
evidence on this subject till date.
(4) When the chain related to the sale at the place of
8
destination in accordance with aforesaid through stock
transfer breaks then while keeping in view the declaration
given under Excise Rule 52(A)/173C, two possibilities
appear. First is that the sale agreement for deal at the
place of destination and according to marketing system
given in letter dated 4.1.95 it may be, that the Revisionist C
company by itself or through its marketing staff who might
be visiting the place of destination give the delivery of
goods to C & F Agent by fixing before the arrival of goods
at the place of destination after receiving amount of money
in the form of bank draft and pay order which resulted in D
the sale having taken place from the factory at Aligarh
office because the direct contact of buyer with revisionist
took place at Aligarh or it took place through the
employees/officers of revisionist's marketing department
at Aligarh and they were given the delivery on that basis E
only.
xxxxxxxxx
xxxxxxxxx
F
19. In this way by the analysis and close consideration
of said paras 16, 17 and 18 it is concluded that under
the arrangement given by Hon'ble Supreme Court in
1995 (Supp. 3) S. C. C. 433 the sale taking place in the
matter of Mis Mahalaxmi Sugar Works, Revisionist's G
disputed transmitted and its sale taking place at the place
of destination by taking stock outside the mandi area in
the form of stock transfer and the concept of taking out
the sale under explanation of 17(3)(8), it has failed to
prove by producing counter valid rebuttal of concept H
916 SUPREME COURT REPORTS [2012] 3 S.C.R.
A because according to the case went for revision on stock
transfer and place of destination it has failed to tell the
presence by producing the best chain of evidence for
proving.... "
B 9. Writ Petition Nos. 2320(MIS), 2516(MiS), 2517(M/S),
2518(MIS), 2519(M/S), 250(M/S), 226(M/S) and 2527(M/S) of
1997 filed by Glaxo India Ltd., before the High Court of
Allahabad challenged the correctness of the above order. Heinz
India Pvt. Ltd. also filed Writ Petition Nos. 2323(M/S), 2321(M/
C S), 2322(M/S), 2324(M/S), 2325(M/S), 2326(M/S), 2474(M/S),
2475(M/S), 2476(M/S), 2477(M/S) and 2478(M/S) of 1997
before the High Court challenging the same order. The High
Court, however, concurred with the view taken by the Mandi
Samiti and the Director of the Parishad and dismissed the writ
petitions by its order dated 20th August, 2004. The High Court
D held that the material produced by the companies did not make
out a case for refund for it did not rebut the presumption that
ghee produced in the company's unit at Aligarh was not sold
from Aligarh or that the stocks of ghee had been transferred
outside the Mandi limit on consignment basis. The High Court
E gave several reasons for holding that the material produced by
the companies in support of their claim that the so called sales
were in fact stock transfer was either not reliable or was
deficient. High Court also held that the companies had withheld
the best evidence available to them without offering any
F explanation for doing so. The High Court said:
'The long and short of the discussions made above is that
the petitioners have miserably failed to rebut the
presumption of sale in the market area at Aligarh and
therefore, the Director and the assessing authorities rightly
G
levie.d the Mandi fee on the consignments of Ghee
transported by Glaxo and its successor Heinz India Private
Limited to other States. The judgments passed by the
Revisional Authority are not perverse so as to be interfered
with by this Court; rather all the questioned judgments are
H
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 917
ORS. [T.S. THAKUR , J.]
well discussed and reasoned. In the result, the petitioners A
are not entitled to claim any relief."
10. The present appeals assail the above order as already
mentioned.
11. We have heard the learned counsels of the parties at 8
considerable length. Three questions fall for our determination.
These are:
1. Whether the Krishi Utpadan Mandi Adhiniyam does
not contain the necessary machinery provisions for c
assessment of the fees and for adjudication of
disputes in relation thereto? If so to what effect?
2. What precisely is the correct legal standard/test for
determining whether or not the presumption arising
under the Explanation to Section 17(iii) of the Act
0
has been rebutted?
And
3. Whether the orders passed by the Mandi Utpadan E
Samiti and that passed by the Director, as
delegate of the Mandi Parishad, suffer from any
legal infirmity to call for interference?
Re: Question No.1
F
12. This Court has in a long line of decisions rendered from
time to time, emphasised the importance of machinery
provisions for assessment of taxes and fees recoverable under
a taxing statute. In one of the earlier decisions on the subject a
Constitution Bench of this Court in Kunnathat Thathunni G
Moopil Nair etc., v. State of Kera/a and Anr. (AIR 1961 SC
552) examined the constitutional validity of the Travancore-
Cochin Land Tax Act (15 of 1955). While recognising what is
now well-settled principle of law that taxing statute is not wholly
immune from attack on the ground that it infringes the equality H
918 SUPREME COURT REPORTS [2012] 3 S.C.R.
A clause in Article 14, this Court found that the enactment in
question was violative of Article 14 of the Constitution for
inequality was writ large on the Act and inherent in the very
provisions under the taxing section thereof. Having said so, this
Court also noticed that the Act was silent as to the machinery
B and the procedure to be followed in making the assessment. It
was left to the Executive to evolve the requisite machinery and
procedure thereby making the whole thing from beginning to
end purely administrative in character completely ignoring the
legal position that the assessment of a tax on person or property
c is a quasi-judicial exercise. Speaking for the majority Sinha,
C.J. said:
"Ordinarily, a taxing statute lays down a regular
machinery for making assessment of the tax proposed
to be imposed by the statute. It lays down detailed
D procedure as to notice to the proposed assessee to
make a return in respect of property proposed to be taxed,
prescribes the authority and the procedure for hearing
any objections to the liability for taxation or as to the
extent of the tax proposed to be levied, and finally, as to
E the right to challenge the regularity of assessment made,
by recourse to proceedings in a higher Civil Court. The
Act merely declares the competence of the Government
to make a provisional assessment, and by virtue of s. 3
of the Madras Revenue Recovery Act, 1864, the land-
F holders may be liable to pay the tax. The Act being silent
as to the machinery and procedure to be followed in
making the assessment leaves it to the Executive to
evolve the requisite machinery and procedure. The whole
thing, from beginning to end, is treated as of a purely
G administrative character, completely ignoring the legal
position that the assessment of a tax on person or
property is at least of a quasi-judicial character."
(emphasis supplied)
H
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 919
ORS. [T.S. THAKUR , J.]
13. In Rai Ramkrishna and Ors. etc. v. State of Bihar (AIR A
1963 SC 1667) this Court was examining the constitutional
validity of the Bihar Taxation on Passengers and Goods
(Carried by Public Service Motor Vehicles) Act, 1961.
Reiterating the view taken in Kunnathat Thathunni Moopil Nair
(supra) this Court held that a statute is not beyond the pale of B
limitations prescribed by Articles 14 and 19 of the Constitution
and that the test of reasonableness prescribed by Article 304(b)
is justiciable. However, in cases where the statute was
completely discriminatory or provides no procedural machinery
for assessment and levy of tax or where it was confiscatory, thec
Court would be justified in striking it down as unconstitutional.
In such cases the character of the material provisions of the
impugned statute may be such as may justify the Court taking
the view that in substance the taxing statue is a cloak adopted
by the legislature for achieving its confiscatory purpose.
D
14. In Raja Jagannath Baksh Singh v. State of Uttar
Pradesh and Anr. (AIR 1962 SC 1563) this Court was
examining the constitutional validity of U.P. Large Land
Holdings Tax Act (31 of 1957). Dealing with the argument that
the Act did not make a specific provision about the machinery E
for assessment or recovery of tax, this Court held:
".... if a taxing statute makes no specific provision about
the machinery to recover tax and the procedure to make
the assessment of the tax and leaves it entirely to the F
executive to devise such machinery as it thinks fit and
to prescribe such procedure as appears to it to be fair,
an occasion may arise for the Courts to consider whether
the failure to provide for a machinery and to prescribe a
,procedure does not tend to make the imposition of the G
tax an unreasonable restriction within the meaning of
Article 19(5). An imposition of tax which in the absence
9f a prescribed machinery and the prescribed procedure
would partake of the chaiacter,of a purely administrative
affair can, in/ a proper sense, be challenge as
contravening Article 19(1)(f)." (emphasis supplied) H
920 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 15. In The State of Andhra Pradesh and Anr. v. Na/la
Raja Reddy and Ors. (AIR 1967 SC 1458), this Court was
examining the constitutional validity of Andhra Pradesh Land
Revenue (Additional Assessment) and Cess Revision Act (22
of 1962) as amended by Amendment Act (23 of 1962).
B Noticing the absence of machinery provisions in the impugned
enactments this Court observed:
" .. .if S.6 is put aside, there is absolutely no provision in
the Act prescribing the mode of assessment. Section 3
and 4 are charging sections and they say in effect that a
c person will have to pay an additional assessment per
acre in respect of both dry and wet lands. They do not
lay down how the assessment should be levied. No
notice has been prescribed; no opportunitv is given to the
person to question the assessment on his land. There
D is no procedure for him to agitate the correctness of the
classification made by placing his land in a particular
class with reference to ayacut. acreage or even taram.
The Act does not even nominate the appropriate officer
to make the assessment to deal with questions arising
E in respect of assessments and does not prescribe the
procedure for assessment. The whole thing is left in a
nebulous form. Briefly stated, under the Act there is no
procedure for assessment and however grievous the
blunder made there is no way for the aggrieved party to
F get it corrected. This is a typical case where a taxing
statute does not provide any machinery of assessment."
(emphasis supplied)
16. The appeals filed by the State against the judgment
G of the High Court striking down the enactment were on the
above basis dismissed.
17. Reference may also be made to Mis Vishnu Dayal
Mahendra Pal and Ors. v. State of Uttar Pradesh and Ors.
H (1974) 2 SCC 306, and D.G. Gose and Co. (Agents) Pvt. Ltd.
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 921
ORS. [T.S. THAKUR , J.]
v. State of Kera/a and Anr. (1980) 2 SCC 410, where this Court A
held that sufficient guidance were available from the preamble
and other provisions of the Act. The members of the committee
owe a duty to be conversant with the same and discharge their
functions in accordance with the provisions of the Act and the
Rules and that in cases where the machinery for determining B
annual value has been provided in the Act and the Rules of the
local authority, there is no reason or necessity of providing
same or similar provisions in the other Act or Rules.
18. There is no gainsaying that a total absence of
machinery provisions for assessment/recovery of the tax levied C
under an enactment, which has the effect of making the entire
process of assessment and recovery of tax and adjudication
of disputes relating thereto administrative in character, is open
to challenge before a Writ Court in appropriate proceedings.
Whether or not the enactment levying the tax makes a D
machinery provision either by itself or in terms of the Rules that
may be framed under it is, however, a matter that would have
to be examined in each case. In our opinion, it is not necessary
to dilate any further on this aspect in the context of the provisions
of Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 having E
regard to the fact that the question whether the said Act provides
a suitable machinery for assessment and recovery of the fee
has been examined by this Court in Ram Chandra Kai/ash
Kumar & Co. & Ors. v. State of U.P. & Anr. 1980 (Supp) SCC
27. That decision arose out of a writ petition filed before the F
High Court of Allahabad challenging the constitutional validity
of the Adhiniyam. The High Court had dismissed the challenge
to the constitutional validity of the enactment which order was
then assailed before this Court in an appeal by special leave.
This Court formulated as many as 24 distinct points for G
determination based on the grounds that were urged in support
of the challenge. One of the points that fell for consideration was
whether the rules framed under the Act provide for any
machinery for adjudication of disputes in addition to the factum
and quantum of liability arising as under the Act. The contention H
922 SUPREME COURT REPORTS [2012) 3 S.C.R.
A precisely was that neither the Act nor the rules made any
provision for adjudication of disputes that would arise on both
these aspects. While rejecting the submission on behalf of the
Marl<eting Committee that no such disputes actually exist or are
likely to exist which would require any machinery of the Market
B Committee for adjudication, this Court observed:
"xxxxxxx A machinery for adjudication of dispute is
necessary to be provided under the rules for proper
functioning of the market committees. We have already
observed and expressed our hope for bringing into
c existence such machinery in one form or the other. But it
is not correct to say that in absence of such a machinery
no market fee can be levied or collected. If a dispute
arises then in the first instance the market committee itself
or any sub-committee appointed by it can give its finding
D which will be subjected to challenge in any Court of law
when steps are taken for enforcement of the provisions for
realisation of the market fee."
19. It is evident from the above that this Court had
E specifically rejected the contention that in the absence of any
machinery under the Act and the Rules no market fee could be
levied or collected. That being so, it not necessary for us to
either re-examine that aspect or to take a contrary view
contrary at this stage.
F
20. "Mr. Sudhir Chandra, learned senior counsel appearing
for the appellant-company, however, contended that the hope
expressed by this Court that a comprehensive machinery
provision shall be made for adjudication of disputes has been
belied by the inaction of the respondents for over 30 years
G which calls for suitable directions and/or guidelines to the State
as. also to the authorities under the Act to make necessary
machinery provisions especially when serious disputes involving
substantial sums of money towards market fee are arising for
adjudication without there being a semblance of an
H adjudicatory mechanism or judicial approach in the matter of
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 923
ORS. [TS. THAKUR , J.]
adjudication of such disputes. Elaborating his submissions Mr. A
Chandra contended that while the Market Committee examines
the question of refund of the fee paid by the seller of any
produce, any dispute touching the correctness of any such
adjudication or assessment by the committee is examinable by
the Board in terms of Section 32 of the Act. Since the Board B
is a multi-member body any exercise in the nature of review or
revision of the order passed by the Committee on the claim for
refund cannot be undertaken by the Board itself, the practice
that is followed is that such revisions are heard and decided
by the Director to whom the revisional powers of the Board are c
delegated in terms of Section 33 of the Act. What according
to Mr. Chandra is surprising is that even the Director does not
hear the matters himself. The actual disposal of the revision is
left to a junior officer to whom the Director may assign the case
for disposal. Hearing by any such junior officer who is neither D
by training nor by qualification suited for such determination of
complicated issues regarding the liability of the purchaser or
seller of goods within a market area makes the entire process
of determination farcical. A machinery for adjudication of
disputes can be said to have been provided for only if the same
ensures a fair and objective adjudication of the matters in E
disputes at the hands of the authority who is either by reasons
of his training, experience or qualification fit to determine the
controversy. So long as such a provision is absent in the
scheme of the Act, the requirement of machinery for
adjudication of disputes must be deemed to be absent, argued F
Mr. Chandra.
21. Section 32 of the Act empowers the Board to call for
and examine the proceedings of the Committee for the purpose
of satisfying itself as to the legality or propriety of any decision G
or order passed by a Committee and to pass such orders
thereon as it may deem fit including an order modifying,
annulling or reversing any such decision or order of the
Committee. Dealers aggrieved of an order of assessment or
an order declining refund of the fee paid by them are entitled H
924 SUPREME COURT REPORTS (2012] 3 S.C.R.
A to question the correctness of any such demand in terms of the
said provision which is in the nature of a revisional power
vested in the Board. It is common ground that the dealers in
the present case had invoked the said power of the Board
under Section 32. It is also common ground that the revisions
B so filed have been entertained and dealt with on merits. What
is unsatisfactory according to the dealers is the fact that the
revisions have been dealt with by an officer authorised by the
Director. Mr. Chandra did not dispute the proposition that the
power vested in the Board including that under Section 32 of
c the Act could be exercised by the Director as a delegate of the
Board keeping in view the provisions of Section 33 of the Act
which permits such delegation. Sections 32 and 33 read as
under:
"32. Powers of the (Board) to call for the proceedings
D of a Committee and pass orders thereon. - The [Board]
may, for the purpose of satisfying itself as to the legality
or propriety of any decision of, or order passed by, a
Committee, at any time call and examine the proceedings
of the Committee, and, where it is of the opinion that the
E decision or order of the Committee should be modified,
annulled or reversed, pass such orders thereon as it may
deem fit.
33. Delegation of powers. - The Board may, by
F regulations, delegate subject to such conditions and
restrictions and in such manner, as may be specified
therein, any of its powers to the Director."
22. What, according to· the learned counsel for the
appellants, was unacceptable is the fact that the revisions could
G be heard and disposed of even by an officer authorised by the
Director. This, argued Mr. Chandra, resulted in dilution of the
sanctity and efficacy of the revisional exercise not because it
was dehors the statute but because the exercise of quasi-
judicial powers were entrusted to an officer at the lower rung
H of the hierarchy.
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 925
ORS. [TS. THAKUR , J.]
23. Section 2(h) defines the term 'Director' as under: A
'"Director' means an officer appointed by the State
Government as Director of Mandis and includes any other
officer authorised by the Director to perform all or any of
his functions under this Act." B
24. It is manifest from a plain reading of the above that the
expression 'Director' wherever used in the Act including
Section 33 thereof includes an officer authorised by the Director
to perform all or any of his functions under the Act. Significantly C
enough neither before the High Court nor before us was it
contended that the officer who had handled and disposed of
the revision petitions filed by the dealers, was not duly
authorised in terms of Section 2(h) or that the power of the
Board under Section 32 of the Act was not duly delegated to
the Director. It is not, therefore, a case of inherent lack of D
jurisdiction. All that the appellants propose is that the revisions
could either be heard by the Board itself or made over for
disposal to a Committee of officers senior enough to decide
issues of fact and law involving substantial financial stake$ of
the parties. Now it is true that the stakes involved in the present E
batch of cases are substantial and those called upon to satisfy
the demands raised against them would like their cases to be
heard by a senior officer or a Committee of officers to be
nominated by the Board. But in the absence of any data as to
the number of cases that arise for consideration involving a F
challenge to the demands raised by the Market Committee and
the nature of the disputes that generally fall for determination
in such cases, it will not be possible for this Court to step in
and direct an alteration in the mechanism that is currently in
place. The power to decide the revisions vests with the Board G
who also enjoys the power to delegate that function to the
Director. So long as there is statutory sanction for the Director
to exercise the revisional power vested in the Board, any
argument that such a delegation is either impermissible or does
not serve the purpose of providing a suitable machinery for H
926 SUPREME COURT REPORTS [2012] 3 S.C.R.
A adjudication of the disputes shall have to be rejected. It is
noteworthy that Rule 133-A of the Rules framed under the Act
regulates the filing and disposal of the revision petitions under
Section 32 thereof. This provision was inserted with effect from
11th May, 2008 and empowers the Board either to decide the
B revision petition itself or to nom:nate an officer for doing so. It
also provides for grant of an opportunity of being heard to the
person concerned and _a time bound disposal of the revision.
Rule 133-A is, therefore, a step in the direction of providing a
machinery under the Act for adjudication of disputes that may
c arise between dealers on the one hand and the market
committee on the other. That being so, the Act is not completely
bereft of a machinery nor can it be said that the observations
made by this Court in Ram Chandra Kai/ash Kumar's case
(supra) have gone unheeded. All that we need to add is that in
order to make the Board's revisional power more effective and
0
its exercise more transparent and credible, the Board would
do well to delegate the power of hearing and disposal of the
revision petitions to a senior and experienced officer who is
well-versed in dealing with legal issues concerning assessment
and/or determination of the liability under the Act. Beyond that
E it is neither necessary nor proper for us to say anything.
Question No.1 is answered accordingly.
Re: Question No.2
F 25. Explanation to Section 17(iii) of the Act raises a
presumption to the effectth~t any specified agricultural produce
taken but of or proposed to be taken out of a market area by
or on behalf of a licensed trader has been sold within such
area; the price of the produce so presumed to be sold is then
G determinable in the manner prescribed. The Explanation reads:
Explanation.- For the purpose of clause (iii), unless the
contrary is proved, any specified agricultural produce taken
out or proposed to be taken out of a market area by or on
behalf of a licensed trader shall be presumed to have been
H sold within such area and in such case, the price of such
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 927
ORS. [T.S. THAKUR , J.]
produce presumed to be sold shall be deemed to be such A
reasonable price as may be ascertained in the manner
prescribed."
26. It is fairly evident that the presumption is rebuttable in
nature; for it holds good only till the contrary is not proved by
8
the dealer. The question is what is the standard of proof
required to rebut the statutory presumption; and whether the
Market Committee, the Director or the High Court applied the
correct legal standard for holding that the presumption was not
effectively rebutted.
c
27. Relying upon the decision of this Court in Sodhi
Transport Co. & Ors. v. State of U.P. & Ors. (1986) 2 SCC
486, Mr. Sudhir Chandra contended that the standard of proof
applicable was that applied in civil actions which are decided
on the preponderance of probability and not the higher standard D
of "proof beyond reasonable doubt" applied in criminal cases.
The appellants had according to the learned counsel discharged
the burden of rebutting the presumption by adducing evidence
which tended to show that the ghee manufactured by them had
not been sold within the market area to attract the levy of market E
fee on the price thereof. He urged that the produce had been
removed out of the market area on transfer of stock basis
without any element of sale in such transfers. Reliance was in
support placed by Mr. Chandra upon an agreement which
Heinz had executed with its Clearing and Forwarding (C&F) F
Agent in the State of Rajasthan apart from other material
adduced before the Market Committee, in a bid to prove that
the stocks in question had not been sold within the market area.
28. Appearing for the Market Committee Mr. Rakesh
Dwivedi argued that the mere production of some evidence G
howsoever feeble was not enough to rebut the presumption
which would continue to hold the field till such time the trader
adduced evidence to prove the contrary. It was only "proof to
the contrary" that could rebut the presumption and for doing so
just any material or evidence was not enough. It must, argued H
928 SUPREME COURT REPORTS [2012] 3 S.C.R.
A Mr. Dwivedi, be evidence that would clearly establish that there
was ,indeed no sale effected within the market area as
presumed in terms of the Explanation. The appellant-
companies had failed to do so as before the Market Committee
and· the Director and even before the High Court.
B
29. Black's Law Dictionary 5th Edition, 1979, defines
'Presumption' as under:
"A presumption is a rule of law, statutory or judicial, by
which finding of a basic fact gives rise to existence of
c presumed fact, until presumption is rebutted."
3o. The same dictionary defines 'Rebut' as under:
"In pleading and evidence, to defeat, refute, or take away
the effect of something. When a plaintiff in an action
D produces evidence which raises a presumption of the
defendant's liability, and the defendant adduces evidence
·which shows that the presumption is ill-founded, he is said
to "rebut it."
E 31. Both in England and America, law permits raising of
presumptions both conclusive and rebuttable. There is
considerable judicial authority in both jurisprudential systems,
dealing with the question of the standard of proof required to
rebut a presumption whether statutory or at common law. In
F England, the civil standard of proof is defined by Lord Denning
in Miller v. Minister of Pensions [1947] 2 All ER 372, thus:
" .......... It need not reach certainty, but it must carry a
high degree of probability. Proof beyond reasonable
doubt does not mean proof beyond the shadow of doubt.
G The law would fail to protect the community if it admitted
fanciful possibilities to deflect the course of justice. If the
evidence is so strong against a man as to leave only a
remote possibility in his favour which can be dismissed
with the sentence "of course it is possible, but not in the
H
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 929
ORS. [T.S. THAKUR , J.]
least probable" the case is proved beyond reasonable A
doubt, but nothing short of that will suffice."
32. Three years later came Bater v. Bater [1950] 2 All ER
458, in which the civil standard of proof to an extent modified,
was seen by some jurists as somewhat confusing the concept 8
so clearly stated in Miller's case (supra). In Bater (supra) the
Court declared that neither civil nor criminal standard of proof
was an absolute standard. A 'civil case' may be proved by a
preponderance of probability, explained, Denning J.,
" ...... but there may be degrees of probability within that C
standard. The degree depends on the subject-matter. A
civil court, when considering a charge of fraud, will naturally
require a higher degree of probability than that which it
would require if considering whether negligence were
established. It does not adopt so high a degree as a D
criminal court, even when it is considering a charge of a
criminal nature, but still it does require a the degree of
probability required should be commensurate with the
occasion."
E
33. Then came Homa/ v. Neuberger Products Ltd. [1957]
1 Q.B. 247, where the Court held that in a civil action where
fraud or other matter which is or may be a crime is alleged
against a party or against persons not parties to the action, the
standard of proof to be applied is that applicable in civil actions
F
generally, namely, proof on the balance of probability, and not
the higher standard of proof beyond all reasonable doubt
required in criminal matters; but there is no absolute standard
of proof, and no great gulf between proof in criminal and civil
matters; for in all cases the degree of probability must be
commensurate with the occasion and proportionate to the G
subject-matter. The elements of gravity of an issue are part of
the range of circumstances which have to be weighed when
deciding as to the balance of probabilities. The law in England,
therefore, is that degree of probability must be commensurate
with the subject-matter. This implies that graver the charge in H
930 SUPREME COURT REPORTS [2012] 3 S.C.R.
A a civil action, higher the degree of proof required. A civil case
may be proved by preponderance of probability, but the degree
of probability would depend upon the nature of the subject-
matter.
8
:34. In the American system of justice, the Courts have
adopted a somewhat different approach, though the essence,
may appear to be the same as is accepted by the Courts in
England. In America, standard of proof depends upon the
degree of confidence which the American society thinks the fact
finder should have in the correctness of factual conclusions for
C a particular type of adjudication. [See Addington v. Texas, 441
U.S. 418, 423 (1979)]. Proof may be required by a.
preponderance of the evidence, by clear and convincing
evidence or by proof that is beyond reasonable doubt. Proof
by 'clear and convincing evidence' lies between standard of
D 'preponderance of the evidence' at one end and 'beyond a
reasonable doubt' at the other. Clear and convincing evidence
has been described as evidence that produces in the mind of
the trier of the fact an abiding conviction that the truth of the
factual contentions is highly probable. [See 32A Corpus Juris
E Secundum Evidence§ 1624].
35. We may at this stage refer to a few decisions of this
Court on the subject. In lzhar Ahmad Khan v. Union of India
and Ors. (AIR 1962 SC 1052), this Court was examining the
F provisions of Schedule 111 Rule 3 of the Citizenship Rules, 1956
which made it obligatory on the enquiring authority to infer the
acquis;ition of citizenship of a foreign country from the fact that
the passport of foreign country has been obtained by an Indian
citizen. The question was whether a rule about irrebuttable
G presumption is a rule of evidence or not. The question had
arisen in the context of rule-making power of the Central
Government under Section 9(2) of the Citizenship Act, 1955
according to which the Central Government could prescribe
rules of evidence subject to which the competent authority could
H hold an inquiry. The contention urged was that instead of
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 931
ORS. [T.S. THAKUR , J.]
prescribing a rule of evidence the Central Government had by A
enacting Rule 3 and raising a conclusive presumption regarding
the acquisition of citizenship of another country, framed a rule
of substantive law and not a rule of evidence.
36. This Court held that while answering any such question
8
it is not correct to assume that all rules prescribing irrebuttable
presumption are rules of substantive law. Any such question,
declared this Court, has to be answered after examining the
rule and its impact on the proof of the fact in issue. Explaining
the juristic basis of a rebuttable presumption and the approach C
to be adopted in applying such presumptions to different
situations this Court observed:
"25. It is conceded, and we think, rightly, that a rule
prescribing a rebuttable presumption is a rule of evidence.
It is necessary to analyse what the rule about the rebuttable D
presumption really means. A fact A which has relevance
in the proof of fact B and inherently has some degree of
probative or persuasive value in that behalf may be
weighed by a judicial mind after it is proved and before a
conclusion is reached as to whether fact B is proved or E
not. When the law of evidence makes a rule providing for
a rebuttable presumption that on proof of fact A, fact B
shall be deemed to be proved unless the contrary is
established, what the rule purports to do is to regulate the
judicial process of appreciating evidence and to provide F
that the said appreciation will draw the inference from the
proof of fact A that fact B has also been proved unless the
contrary is established. In other words, the rule takes away
judicial discretion either to attach the due probative value
to fact A or not and requires prima facie the due probative G
value to be attached in the matter of the inference as to
the existence of fact 8, subject, of course, to the said
presumption being rebutted by proof to the contrary.
xxx xxx xxx:
H
932 SUPREME COURT REPORTS [2012] 3 S.C.R.
A )()()( )()()( )()()(
Thus, the rule of rebuttable presumption adds statutory
force to the natural and inheren~obative value of fact A
in relation to the proof of the existe~e of fact B and in
adding his statutory value to the probati'le-torce of fact A,
B
the rule, it is conceded, makes a provision within the scope
and function of the law of evidence. If that is so, how does
it make a difference in principle if the rule adds conclusive
strength to the probative value of the said fact A in relation
to the proof of the existence of fact B? In regard to the
c category of facts in respect of which an irrebuttable
presumption is prescribed by a rule of evidence, the
position is that the inherent probative value of fact A in that
behalf is very great and it is very likely that when it is
proved in a judicial proceeding, the judicial mind would
D normally attach great importance to it in relation to the proof
of fact B. The rule steps in with regard to such facts and
provides that the judicial mind should attach to the said fact
conclusiveness in the matter of its probative value. It would
be noticed that as in the case of a rebuttable presumption,
E so in the case of an irrebuttable presumption, the rule
purports to assist the judicial mind in appreciating the
existence of facts. In one case the probative value is
statutorily strengthened but yet left open to rebuttal, in the
other case, it is statutorily strengthened and placed beyond
F the pale of rebuttal. Considered from this point of view, it
seems rather difficult to accept the theory that whereas a
rebuttable presumption is within the domain of the law of
evidence, irrebuttable presumption is outside the domain
of that law and forms part of the substantive law.•
G
37. In Harbhajan Singh v. State of Punjab & Anr. (AIR
1966 SC 97), this Court was examining the nature and scope
of onus of proof which an accused person had to discharge in
seeking protection of the Exception 9 to Section 499 IPC. This
Court held that onus to prove its case fies on the prosecution
H
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 933
ORS. [T.S. THAKUR , J.]
no matter what the charge or where the trial is held. The A
principle that prosecution must prove the guilt of the prisoner
is part of the common law of England and also part of the
criminal law of this country. Having said so, the Court further
. declared that if an exception is taken by an accused person
· he is not required to justify his plea beyond a reasonable doubt B
and that the degree and character of proof which he is expected
to furnish in support of his plea cannot be equated with the
degree and character of proof that is expected of the
prosecution. This Court with approval quoted the English
decision in R. v. Clark (1921 61 SCR 608), which was c
approved by Lord Hailsham in Sodeman v. R [1936] 2 All ER
1138 to the following effect:
" ............. the necessity for excluding doubt contained in
the rule as to the onus upon the prosecution in criminal
cases might be regarded as an exception founded upon D
considerations of public policy. There can be no
consideration of public policy calling for similar stringency
in the case of an accused person endeavouring to
displace a rebuttable presumption."
E
38. We may also refer to the decision of this Court in Sodhi
Transport Co. (supra) upon which heavy reliance was placed
by learned counsel for the appellant in support of the plea that ·
the standard of proof required of the person against whom
statutory presumption is raised is a simple preponderance of F
probability and no more. In Sodhi Transport Co. (supra) this
Court was examining the provisions of Section 28-B of Uttar
Pradesh Sales Tax Act, 1948 which was alleged to be ultra
vi res of the Constitution inasmuch as it permitted the authorities
to raise a rebuttable presumption regarding the sale of goods G
having taken place inside the State of U.P. if the transit pass
is not handed over to an officer at the check-post or the barrier
near the place of exit from the State. Such a presumption with
an object of preventing evasion of tax, it was contended, as
regards the proof of a set of circumstances which would make
H
a transaction liable to tax was tantamount to conferring on the
934 SUPREME COURT REPORTS [2012] 3 S.C.R.
A authority concerned the power to levy a tax which the legislature
could not otherwise levy. Repelling the contention this Court held
that a rebuttable presumption has the effect of shifting the
burden of proof, for the authority concerned, before levying
sales tax arrives at the conclusion about the exigibility of the
B tax loy a judicial process and only upon his satisfaction that the
goods have been sold inside the State. In doing so, the
aut~ority no doubt relies upon the statutory rules and
presumption contained in Section 28-B of the Act. But such
presumption can be rebutted by the person against whom
c action is taken under Section 28-B when the person concerned
has the opportunity to displace the presumption by leading
evidence. That being so, provision of Section 28-B inasmuch
as the same raises a rebuttable presumption did not suffer from
any vice of unconstitutionality. This Court obseNed:
D · "14. A presumption is not in itself evidence but only makes
a prima facie case for party in whose favour it exists. It is
a rule concerning evidence. It indicates the person on
whom the burden of proof lies. When presumption is
· i::onclusive, it obviates the production of any other evidence
E to dislodge the conclusion to be drawn on proof of certain
·facts. But when it is rebuttable it only points out the party
on whom lies the duty of going forward with evidence on
the fact presumed, and when that party has produced
evidence fairly and reasonably tending to show that the real
F fact is not as presumed the purpose of presumption is
,. over. Then the evidence will determine the true nature of
· the fact to be established. The rules of presumption are
, deduced from enlightened human knowledge and
experience and are drawn from the connection, relation and
G ·coincidence of facts, and circumstances."
39. Mr. Chandra, however, laid considerable emphasis on
the 'words "tending to show that the real fact is not as
presumed", to argue that the test applied by this Court in
H rebuttable presumptions had been the test of 'preponderance·
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 935
ORS. [T.S. THAKUR , J.]
of probability'. We do not think so. It is well-settled that a A
decision is an authority for the point it decides. It is equally well-
settled that the text of the decision cannot be read as if it were
a statute. That apart the expression used by this Court is
"evidence fairly and reasonably tending to show", which
signifies that it is not just any evidence, howsoever shaky and B
nebulous that would satisfy the test of preponderance of
· probability to rebut the statutory presumption but evidence that
can by proper and judicial application of mind be said to be
fairly and reasonably showing that the real fact is not as
presumed. In other words the evidence required to rebut a c
statutory presumption ought to be clear and convincing, no
matter the degree of proof may not be as high as proving the
fact to the contrary beyond a reasonable doubt. The heightened
standard of proof required to rebut a presumption raised under
the statute at hand is in our view applicable for two distinct
0
reasons. The first and foremost is that the presumption is raised
in relation to a fiscal statute. While the amount payable is not
a tax it is nevertheless a statutory levy which is attracted the
moment the transaction of sale takes place within the market
area. Goods, admittedly produced within the market area and E
not consumed within such area are presumed to be leaving
pursuant to a transaction of sale unless the contrary is proved.
That the goods are produced within the market area is not in
dispute in the instant case. That they left the market area is also
admitted. In the ordinary course, therefore, the presumption
would be that the goods left pursuant to a sale unless the F
appellants are in a position to prove the contrary.
40. The second reason for applying a higher standard of
proof than mere preponderance of probability is that the nature
of transaction pursuant to which the goods are removed from G
the market area is within the exclusive knowledge of the
appellants or the persons to whom such goods are being
dispatched. In other words, the circumstances in which the
transactions, which the statute presumes to be sales, but which
the appellants claim are simple transfer of stocks are within the H
936 SUPREME COURT REPORTS [2012] 3 S.C.R.
A exclusive knowledge of the appellants. The entire evidence
relevant to the transactions, being available only with the
· appellants and the true nature of the transactions being within
their special knowledge, there is no reason why the rebuttal
evidence should not satisfy the higher standard of proof and
B clearly and convincingly establish that the fact presumed is not
the actual fact. Our answer to Question No.2 accordingly is that
the evidence intended to rebut the statutory presumption under
Section 17 of the Adhiniyam ought to be clear and convincing
evidence showing that what is presumed under the provision
c is not the real fact.
Re: Question No.3
41. The Market Committee and the Director have recorded
concurrent findings of fact to the effect that the petitioners had
D failed to establish that no sale of the stocks of Ghee had taken
place within the Mandi limits at Aligarh. The statutory
presumption that any transfer of stocks from within the Mandi
area, was pursuant to a sale was thus held to have remained
unrebutted. A challenge to the above finding would necessarily
E raise the question as to the scope of judicial review of such
findrngs. We need to sail smooth over that aspect before
examining the validity of the orders within the permissible
parameters of judicial review.
42. The power of judicial review is neither unqualified nor
F unlimited. It has its own limitations. The scope and extent of the
power that is so very often invoked has been the subject-matter
of several judicial pronouncements within and outside the
country. When one talks of 'judicial review' one ·is instantly
reminded of the classic and oft quoted passage from Council
G of Civil Service Unions (CCSU) v. Minister for the Civil
Service [1984] 3 All ER 935, where Lord Diplock summed up
the permissible grounds of judicial review thus:
"Judicial Review has I think developed to a stage today
H when, without reiterating any analysis of the steps by
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 937
ORS. [T.S. THAKUR , J.]
which the devolopment has come about, one can A
conveniently classify under three heads the grounds on
which administrative action is subject to control by judicial
review. The first ground I would call 'illegality; the second
'irrationality' and the third 'procedural impropriety'.
B
By 'illegality' as a ground for judicial review I mean that the
decision-maker must understand correctly the law that
regulates his decision-making power and must give effect
to it. Whether he has or not is par excellence a justiciable
question to be decided, in the event of dispute, by those C
persons, the judges, by whom the judicial power of the
State is exercisable.
By 'irrationality' I mean what can by now be succinctly
referred to as 'Wednesbury unreasonableness'. It applies
to a decision which is so outrageous in its defiance of logic D/
or of accepted moral standards that no sensible person
who had applied his mind to the question to be decided
could have arrived at it. Whether a decision falls within this
category is a question that judges by their training and
experience should be well equipped to answer or else E
there would be something badly wrong with our judicial
system ..... .
I have described the third head as 'procedural
impropriety' rather than failure to observe basic rules of F
natural justice or failure to act with procedural fairness
towards the person who will be affected by the decision.
This is because susceptibility to judicial review under this
head covers a/so failure by an administrative tribunal to
observe procedural rules that are expressly laid down in
the legislative instrument by which its jurisdiction is G
conferred, even where such failure does not involve any
denial of natural justice."
43. The above principles have been accepted even by this
Court in a long line of decisions handed down from time to time. H
938 SUPREME COURT REPORTS [2012] 3 S.C.R.
A· We'may, however, refer only to some of those decisions where
the development of law on the subject has been extensively
examined and the principles applicable clearly enunciated. In
Tata Cellular v. Union of India (1994) 6 SCC 651, this Court
identified the grounds of judicial review of administrative action
B in the following words :
! 'The duty of the court is to confine itself to the question of
legality. Its concern should be :
f.
1. Whether a decision-making authority exceeded its
C powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
D 4. reached a decision which no reasonable tribunal would
have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether
E a particular policy or particular decision taken in the
fulfilment of that policy is fair. It is only concerned with the
manner in which those decisions have been taken. The
extent of the duty to act fairly will vary from case to case.
Shortly put, the grounds upon which an administrative
F action is subject to control by judicial review can be
classified as under :
(i) Illegality : This means the decision-maker must
understand correctly the law that regulates his
G decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury
unreasonableness.
(iii) Procedural impropriety."
H
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 939
ORS. [T.S. THAKUR , J.]
44. Reference may also be made to the decision of this A
Court in State of Punjab v. Gurdial Singh (1980) 2 SCC 471
where Krishna Iyer, J. noticed the limitations of judicial review
and declared that the power vested in the Superior Courts
ought to be exercised with great circumspection and that
interference may be permissible only where the exercise of the B
power seems to have been vitiated or is otherwise void on well
established grounds. The Court observed:
"The court is handcuffed in this jurisdiction and cannot
raise its hand against what it thinks is a foolish choice. C
Wisdom in administrative action is the property of the
executive and judicial circumspection keeps the court
lock-jawed save where the power has been polluted by
oblique ends or is otherwise void on well-established
grounds. The constitutional balance cannot be upset."
D
45. There is almost complete unanimity on the principle that
judicial review is not so much concerned with the decision itself
as much with the decision-making process. (See Chief
Constable of North Wales Police v. Evans (1982) 3 All ER
141). As a matter of fact, the juristic basis for such limitation E
on the exercise of the power of judicial review is that unless
the restrictions on the power of the Court are observed, the
Courts may themselves under the guise of preventing abuse
of power, be guilty of usurping that power. Justice Frankfurter's
note of caution in Trop v. Dulles 356 U.S. 86 (1958) is in this F
regard apposite when he said:
"All power is, in Madison's phrase, 'of an encroaching
nature'. Judicial power is not immune against this human
weakness. It also must be on guard against encroaching
beyond its proper bounds, and not the less so since the G
only restraint upon it is self-restraint."
46. That the Court dealing with the exercise of power of
judicial review does not substitute its judgment for that of the
legislature or executive or their agents as to matters within the H
940 SUPREME COURT REPORTS [2012] 3 S.C.R.
A province of either, and that the Court does not supplant 'the feel
of the expert' by its own review, is also fairly well-settled by the
decisions of this Court. In all such cases judicial examination
is confined to finding out whether the findings of fact have a
reasonable basis on evidence and whether such findings are
B consistent with the laws of the land. [See Union of India v. S.8.
Vohra, (2004) 2 SCC 150, Shri Sitaram Sugar Co. Ltd. v.
Union of India, ( 1990) 3 SCC 223, and Thansingh Nathmal
and Ors. v. Supdt. of Taxes and Ors., Dhubri, AIR 1964 SC
1419].
c 47. In Dharangadhra Chemical Works Ltd. v. State of
Saurashtra and Ors., AIR 1957 SC 264, this Court held that
decision of a Tribunal on a question of fact which it has
jurisdiction to determine is not liable to be questioned in
proceedings under Article 226 of the Constitution unless it is
D shown to be totally unsupported by any evidence.
48. To the same effect is the view taken by this Court in
Thansingh Nathma/'s case (supra) where this Court held that
the High Court does not generally determine questions which
E require an elaborate examination of evidence to establish the
right to enforce which the writ is claimed.
49. We may while parting with the discussion on the legal
dimensions of judicial review refer to the following passage
from Reid v. Secretary of State for Scotland [1999] 1 All ER
F 481, which succinctly sums up the legal proposition that judicial
review does not allow the Court of review to examine the
evidence with a view to forming its own opinion about the
substantial merits of the case.
G "Judicial review involves a challenge to the legal
validity of the decision. It does not allow the court of review
to examine the evidence with a view to forming its own
view about the substantial merits of the case. It may be
that the tribunal whose decision is being challenged has
H done something which it had no lawful authority to do. It
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 941
ORS. [T.S. THAKUR , J.]
may have abused or misused the authority which it had. A
It may have departed from the procedures which either
by statute or at common law as a matter of fairness it
ought to have observed. As regards the decisions itself
it may be found to be perverse or irrational or grossly
disproportionate to what was required. Or the decision B
may be found to be erroneous in respect of a legal
deficiency, as for example, through the absence of
evidence, or of sufficient evidence, to support it, or
through account being taken of irrelevant matter, or
through a failure for any reason to take account of a c
relevant matter, or through some misconstruction of the
terms of the statutory provision which the decision maker
is required to apply. But while the evidence may have to
be explored in order to see if the decision is vitiated by
such legal deficiencies it is perfectly clear that in case
0
of review, as distinct from an ordinary appeal, the court
may not set about forming its own preferred view of
evidence."
50. In its order dated 13th September, 1995 the Mandi
Samiti, Aligarh, has upon examination of the evidence adduced E
before it recorded a finding that the same did not inspire
confidence for a variety of reasons. The Samiti has found that
the appellants had failed to produce any evidence as to when
and where any transaction regarding sale and purchase of ghee
manufactured within Mandi area was finalised. No evidence F
was adduced by the appellants to show as to who had been
instrumental in finalising such sale transactions out of its officers
and employees. If the product was being sold under the
directions of the officers of the Company it should have been
possible for the company to firmly establish the identity of such G
officers and furnish details as to when and where the sale
transaction of different stocks of ghee sent out from the market
area was finalised. The Samiti was of the view that although
the appellant had claimed that there were separate C&F
agreements with various agents appointed by it at several H
942 SUPREME COURT REPORTS [2012] 3 S.C.R.
A destinations outside the mandi area the appellant had produced
only two of such agreements in support of its case that such
C&F agents existed at all such destinations. The Mandi Samiti
noticed that 25 consignments relevant to the order passed by
the Samiti on 13th September, 1995 were sent out of the Mandi
B area but the appellant-company had not adduced evidence
perta1ining to all such consignments. Even in regard to
consignments where such evidence had been adduced the
Samiti noticed shortcomings that adversely affected the
credibility of the evidence. For instance, there were no Book
C Numbers on the sales invoice-cum-challans relied upon by the
company. The evidence was in the form of loose papers, hence
not reliable. It was noticed that although payments were
mentioned on the documents submitted, no particulars as to
who made the payment and to whom, were available. The
Samil:i also noticed that signatures of the vendor of the goods
0
on the sale invoice-cum-challan were absent. It was, therefore,
not clear whether the person making the sale was an individual
from the company or one representing the C&F agent. The
Samiti found information furnished by the appellant incomplete
and discrepant in regard to the sales made in Jodhpur, Jaipur
E and Indore. The Samiti on the basis of the above observations
took the view that the so called C&F agents were the actual
purchasers of the ghee from the company and the C&F
agreements, two of which V'{ere placed on record, were only
meant to avoid payment of market fee.
F
51. In its order dated 3rd July, 1997 the Mandi Parishad
which heard the revision against the above order of the Mandi
Samiti did not find any error in the appreciation of the evidence
per se to warrant a different view. It took the view that no
G evidence was produced to show as to why a particular quantity
of ghee was to be delivered to a particular place. The transport
bi/tis did not mention as to who shall pay the freight for th~
transportation of the ghee. This is because if the transport of
ghee outside Aligarh, was a stock transfer and not pursuant to
H
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 943
ORS. [T.S. THAKUR , J.]
a sale made within the market area, the payment of freight A
would have been the responsibility of the company for there is
no transfer of the ownership in that case to any third party. The
company should have in that case firmly established that the
transport charges payable in regard to the transport of the
stocks of ghee out of the mandi area were paid by it and by B
no one else. Keeping in view the fact that the company is doing
business worth crores of rupees and maintains regular accounts
book, both in the ordinary course of its business as also for tax
purposes, there was no reason why the company should have
failed to establish that the transport charges were paid by it. c
· The Director exercising powers of the Mandi Parishad also held
that there was a break in the chain of reasons in as much as
the appellants did not bring forth the link evidence giving details
of the sale transactions pursuant to which C&F agents had
made the delivery of the goods.
D
52. The orders passed by the Mandi Samiti and the
Director exercising powers of the Mandi Parishad thus clearly
show that the.re was no clear and convincing evidence to
establish that the presumption arising under Section 17(iii) of
the Act stood rebutted and that the actual was not, what was E
presumed under the said provision.
f-
53. To the same effect are the findings recorded by the
Mandi Samiti in its order dated 7th July, 1998 with minor
variations here and there. The Mandi Samiti, inter a/ia, noticed F
that while some of the transport consignment note showed that
the same would be billed at Bombay, some others showed that
they would be billed at Aligarh. The amount of freight was also
not mentioned nor details regarding the payment of these
consignments notes produced. It was not established whether G
the payment was to be made by the appellants or the recipients
of the goods. Hence, the same were insufficient to prove that
no sale had taken place inside the mandi area .
. 54. There was also no evidence to prove that the rent of
godown was being paid by the appellant-company nor was H
944 SUPREME COURT REPORTS [2012) 3 S.C.R.
A there any evidence to show the procedure followed for the sale
of the products at Indore and Jaipur. Twenty one of the invoices
made for Jaipur had no signature of the recipient of the goods
nor it was clear as to who received the payment and what was
the me>de of making of such payments. The Samiti noted that
B these invoices were not in book form but were in the form of
loose papers and did not bear any book number. No evidence
was, according to the Mandi Samiti, produced by the appellant
regarding the decision of the company's marketing department
in connection with the stock transfer and in connection with the
C directions given to the Aligarh office for transfer of a particular
consignment sent to a particular destination and in a particular
quantity.
55. The Samiti also noted that the appellants had not
produced any evidence to show that the C&F agents were not
D authorized to settle the bargain for sale of goods and were
supposed to simply follow the directions of the company as
regards the delivery of zpecified quantity to a specified party
upon receipt of payment. No evidence regarding instructions
to the C&F agents was adduced before the Mandi Samiti to
E prove that the company continued to exercise complete
dominion over its stocks and also the power to sell the goods
and to receive payments kept in the custody of the C&F agent.
56. Suffice it to say that the Mandi Samiti appreciated each
F piece of evidence and found the same to be insufficient to hold
that the sale transactions had, in fact, taken place outside the
mandi area so that the presumption arising under Section 17(iii)
of the Act stood rebutted. The Director exercising powers of
the Mandi Parishad has in its order dated 25th September,
G 2004 once again evaluated the evidence and concurred with
the view taken by the Mandi Samiti.
57. In the light of the legal position stated in the earlier part
of this order, it is neither feasible for us to embark upon an
exercise of re-appreciating the entire material or to substitute
H our own findings for those recorded by the Mandi Samiti and
HEINZ INDIA PVT. LTD. & ANR. v. STATE OF U.P. & 945
ORS. [T.S. THAKUR , J.]
the Director/Mandi Parishad. So long as the finding recorded A
by the Mandi Samiti and the Mandi Parishad are not irrational
or perverse, and so long as the view taken by them is a
reasonably possible view, this Court would not interfere.
58. In course of arguments at the Bar, we repeatedly asked
8
Mr. Chandra as to why the appellants had failed to adduce the
material which would throw a flood of light as to the true nature
of the transaction within or outside the mandi area. Mr.
Chandra's reply was that the material was available and could
be produced if so required. Some of this material which was C
with the appellant but was not produced was sought to be
introduced even at the stage of hearing before us, while the rest
could, argued Mr. Chandra be laid before the Samiti, if an
opportunity to do so could be granted to the appellant.
59. We regret our inability to accede to any such request. D
We do not think that a party who has had ample opportunity
before the authorities below, to substantiate its claim can have
the luxury of either producing material for the first time in the
Supreme Court or ask for a remand to enable it to do what it
ought to have done at the appropriate stage. It was not the E
contention of the appellants that they were not given a fair
opportunity to prove their case before the authorities below. As
a matter of fact, orders passed by the Mandi Samiti and the
Mandi Parishad show that sufficient opportunity was indeed
afforded to the appellants and the matter had remained pending F
for a number of years before those authorities.
60. Mr. Chandra contended that the appellants had been
requesting the authorities to indicate as to what kind of material
would satisfy them but since the authorities had failed to
respond to that query the appellant had not produced the bulk G
of the material which was relevant and available with them. We
do not think that such a procedure was legally permissible or
even called for in the facts and circumstances of the case. As
to what material would be sufficient to prove the case of the
party who goes to the Court for relief is a matter for the party H
946 SUPREME COURT REPORTS [2012] 3 S.C.R.
A or those in charge of its legal affairs to determine. No litigant
can: ask for guidelines from the Court or statutory body as to
the evidence which the party should adduce to substantiate its
claim. The query made by the appellants as to what material if
adduced would satisfy the authorities was, therefore, misplaced
B and a red herring to say the least. This is particularly so when
the appellants were in no way handicapped on account of lack
of 'resources or capacity to get the best of legal advice.
Companies with such tremendous resources as.the appellants
before us cannot find a shortcut to the discharge of their
c obligations under the law by asking the Court or the authority
concerned to indicate as to what kind of evidence would be
sufficient in its opinion to entitle them to the refund of the amount
paid, or payable towards market fee.
61. So also, no remand ought to be made only to enable
D a party to produce additional material. A remand is neither
mechanical nor a routine affair. If there is nothing wrong in the
orde1~s under challenge, there is no question of interference with
the same. There is no reason for this Court to set the clock back
and start a process which would take the parties another
E decade or so to come to terms with the problem.
62. In the result these appeals as also W.P. (C) No.144/
2005 fail and are hereby dismissed with cost assessed at
Rs.15,000/- in each case.
F R.P. Matters dismissed.
'.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "market fee"Sign in to search