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1994 (7) TMI 280 - SC - VAT and Sales Tax


Issues:
Interpretation of the term "trader" under section 2(p) of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972.
Validity of government instructions restraining agriculturists from selling produce through commission agents.
Classification of agriculturists as traders under the Act.

Analysis:
The judgment by the Supreme Court involved the interpretation of the term "trader" under section 2(p) of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972. The High Court had interpreted the term to include agriculturists, allowing them to sell their produce through commission agents. However, the Supreme Court disagreed with this interpretation, emphasizing that the normal course of business of an agriculturist is cultivation, not buying or selling produce. The Court highlighted that the Act aims to protect farmers from middlemen and that agriculturists can directly sell their produce in designated markets. The Court noted that traders and commission agents are explicitly excluded from the definition of "agriculturist" under the Act, a point overlooked by the High Court.

The specific issue of the validity of government instructions restraining agriculturists from selling produce through commission agents was addressed. The respondents, who were commission agents, challenged these instructions, arguing that agriculturists should be considered traders under the Act. The High Court, in its reasoning, allowed the writ petition and quashed the government instructions, stating that agriculturists selling produce through commission agents should be classified as traders. However, the Supreme Court disagreed with this reasoning, emphasizing that the definition of "trader" in the Act does not encompass agriculturists and that the Act aims to empower farmers to sell directly to consumers or purchasing agencies in designated markets.

In conclusion, the Supreme Court allowed the appeal, set aside the High Court's judgment, and dismissed the writ petition filed by the commission agents. The Court held that agriculturists should not be classified as traders under the Act, reiterating the distinction between the roles of agriculturists, traders, and commission agents. The respondents were ordered to pay costs of the proceedings, quantified at Rs. 20,000.

 

 

 

 

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