TMI Blog1984 (9) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of other contentions canvassed on behalf of the respondents who were petitioners in the High Court as the High Court declined to examine them, as the writ petitioners were allowed on this one narrow contention which according to the High Court went to the root of the matter. - Civil Appeal No. 10072, 10073 of 1983, 2283 of 1984, 10074, 10075, 10076 of 1983, 2281, 2282 of 1984, 2284, 2285, 2286, 2287, 2525, 2526, 2527 of 1984 - - - Dated:- 25-9-1984 - DESAI D.A., BALAKRISHNA ERADI V. AND KHALID V. JJ. Mrs. Sobha Dikshit, Advocate, for the State of U.P. A.K. Sen and R.P. Bhatt, Senior Advocates (E.C. Agarwala and V.K. Pandita, Advocates with them), for the appellants. Dr. Y.S. Chitale, Senior Advocate (Y.K. Jain and P.R. Agarwala, Advocates, with him) (in C.A. Nos. 10072 and 10073 of 1983), F.S. Nariman, Senior Advocate (B.K. Garg, Advocate, with him) (in C.A. Nos. 2286, 3919 and 5342 of 1984), Shanti Bhushan, Senior Advocate (Pankaj Kalra, Advocate, with him) (in C.A. No. 2283 of 1984), S.N. Kacker, Senior Advocate (R.K. Jain, Suman Kapur, Miss. Sangeeta Agarwal and P.K. Jain, Advocates, with him) (in C.A. No. 10076 of 1983), N.C. Talukar, Senior Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore, the Market Committee had no authority to levy market fee on the transaction of sale of dal. The respondents approached the High Court of Allahabad by filing writ petitions under article 226 of the Constitution raising myriad contentions including the one as herein set out. The High Court by its judgment dated January 28, 1983, held that legume in its split form was not the same thing as legume specified in the Schedule and therefore, in the absence of a specification, dal of any of the legumes enumerated in the Schedule cannot be said to be specified agricultural produce and therefore, any transaction of sale in respect of them was not exigible to the levy of market fee. In reaching this conclusion, the High Court took note of the fact that apart from anything else the subsequent conduct of the Government of U.P. in issuing Notification No. 383/12-5-600 (401)/81 dated January 20, 1982, substituting the entry under the heading "II Legumes" a description in the bracket against the name of each legume (Saboot Aur Dala Hua) dispelled doubt, if any, lingering on the subject. During the pendency of the writ petitions in the High Court, it appears that the Government of U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agricultural produce has to be notified as specified agricultural produce by issuing either a notification under section 6 or addition or alteration in exercise of power under section 8 of the Act. It was contended that after the amendment of the Schedule by the impugned notification fresh notification either under section 6 or section 8 having not been issued, the agricultural produce introduced in the Schedule, namely, dal of various legumes have not become specified agricultural produce since the amendment of the Schedule and therefore, any sale in respect of such agricultural produce even in the Market Area will not enable the Market Committee to levy market fee nor would it oblige persons or parties to the transaction of sale to pay the same. This contention equally found favour with the High Court. It was held that till the agricultural produce under the heading "II Legumes" set out in the Schedule since the amendment of January 20, 1982, are notified as specified agricultural produce, the Market Committee was not entitled to levy and collect market fee on the transaction of sale of such agricultural produce. The High Court accordingly allowed the petitions and quashed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that area as a Market Area it may, by notification in the Gazette, and in such other manner as may be prescribed, declare its intention so to do, and invite objections against the proposed declaration. Section 6 provides for the declaration of Market Area in respect of agricultural produce set out in the notification issued under section 5 after considering the objections. A combined reading of sections 5 and 6 would show that in order to be an effective declaration, the notification must set out the Market Area, that is, its geographical boundaries as also the agricultural produce in respect of which the Market Area is so declared. Section 7 confers power to carve out Market Yard and Sub-Market Yards in a Market Area. Section 8 confers power on the State Government to alter Market Area as also modification of the list of agricultural produce in respect of each Market Area. If a change in the geographical limits of a Market Area becomes necessary or addition or omission in the list of agricultural produce in respect of a Market Area is desired, section 8 confers power on the State Government by a notification to that effect in the Gazette to so alter the Market Area or modify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the consumer; .............................." The Schedule appended to the Act enumerates various species of agricultural produce as required by section 2(a). Under the heading "II Legumes" in the Schedule 14 different legumes such as (1) gram (2) peas (3) arhar (4) urad, etc., are specified for the purpose of section 2(a) and section 4A. On the date on which the first batch of writ petitions were filed in the High Court, the relevant notification under section 5 read with section 6 provided that with effect from May 1, 1978, the agricultural produce mentioned in the Schedule "kha" shall be included in the list of agricultural produce of the Market Area mentioned in the Schedule "ka". Amongst others at placitum (2) following entries are to be found: "(2) Dwi Daliya Utpadan: (1) Channa (2) Matar (3) Arhar (4) Urad (5) Moong (6) Masoor (7) Lobhia (seed) (8) Soyabean (9) Sanai (seed) (10) Dhencha (seed) (11) Ganwar." In the first batch of appeals arising from writ petitions filed before January 20, 1982, it was contended that various legumes set out in the Schedule which became specified agricultural produce by being included in the notification da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause of the statute. This canon of construction is too well-recognised to necessitate any reference to precedent. Analysing the definition of the expression "agricultural produce", it would mean not only those items of produce of agriculture as are specified in the Schedule, but will also include the admixture of two or more of such items as also any such item in its processed form. Let us rewrite the definition by substituting one of the items in the Schedule to make explicit what is implicit therein. "Agricultural produce" means a produce of agriculture such as gram as specified in the Schedule and would also include gram in its processed form. Therefore, not only gram is an agricultural produce but gram in its processed form is equally an agricultural produce. When it is said in the definition "such items of produce of agriculture as are specified in the Schedule", it means that not only all those items of agricultural produce which are set out in the Schedule will constitute agricultural produce but also the admixture of two or more of such items of produce of agriculture as set out in the Schedule as well as any such items of agricultural produce in their processed form. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning to be given to the whole grain and denotes dal, i.e., split folds as specified agricultural produce. The Hindi protagonists used the expression "dwi daliya utpadan" meaning thereby double folded grain called gram, peas, arhar, moong, etc. On a strict construction, the two dals, i.e., two parts forming the whole grain both are comprehended in the expression "Dwi daliya utpadan". Therefore, it is crystal clear that while enumerating legumes in the Schedule and reproduced in the 1978 notification to make them specified agricultural produce, the framers intended to include both the grain as a whole and its split parts the dal. And when the agricultural produce enumerated in the Schedule such as gram including its processed part is reproduced in the notification as dwi daliya utpadan, the dal of each of the legumes therein mentioned became specified agricultural produce. It was however, urged that if the legume in the split form is the same as legume as a whole grain, the Market Committee would not be entitled to levy any market fee on the transaction of sale of legume in split form because market fee already having been once levied in the form of the whole grain, a second levy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification dated April 11, 1978. Mr. Shanti Bhushan for some of the respondents urged that the respondents have set up their factory for processing whole grain of legumes into its split folds and the commodity known as dal is a well recognised identifiable commercial commodity distinct from the legume whole grain from which it is derived by a manufacturing process and as the Act was enacted for protecting the interest of producers of agricultural produce, the factory owners being in no need of such protection cannot be subjected to the levy of market fee on the transaction of sale of legume in split form. The submission does not commend to us because it proceeds on an erroneous assumption that the Act was primarily enacted for the protection of producers of scheduled agricultural produce. In fact, as pointed out earlier, the Act was enacted primarily for "the regulation of sale and purchase of agricultural produce and for the establishment, superintendence and control of markets therefor". In the Statement of Objects and Reasons accompanying the Act, it is in terms stated that the proposed measure to regulate the market in the State has been designed with a view to achieving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana [1973] 32 STC 623 (SC); AIR 1974 SC 1362, Babu Ram Jagdish Kumar Co. v. State of Punjab [1979] 44 STC 159 (SC); [1979] 3 SCR 952, State of Karnataka v. B. Raghurama Shetty [1981] 47 STC 369 (SC); [1981] 3 SCR 280 and Laxmi Chand Badri Narain v. Commissioner of Sales Tax, M.P. [1971] 27 STC 211; AIR 1971 MP 74 and urged that dehusked paddy which is rice has been held to be not the same or identical goods but two distinct commercially known commodities and they are separately enumerated and therefore one does not include the other. In all the four judgments, the question arose under the relevant sales tax law. The contention raised was whether paddy and rice can be considered as identical goods for the purpose of imposition of sales tax? Under the relevant Sales Tax Act exemption from payment of sales tax is provided if the very paddy in respect of which purchase tax was levied was sold and not if that paddy is converted into rice and sold. The contention was that paddy and rice are identical goods and therefore, when the law grants an exemption in respect of paddy that exemption is also available to rice. It was urged that rice is nothing but dehusked paddy and when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otton waste is not the processed form of cotton but it is a bye-product quite different form of cotton though containing cotton fibre which cannot be used as ordinary cotton. As its name indicates, cotton waste appears to be droppings, stripping and other waste product while ginning cotton. It cannot be said to be a bye-product of cotton but it is cotton nonetheless minus the removed seed. In other words it is residue of ginned cotton. We, therefore, find it difficult to agree with the view of the High Court that cotton waste is not comprehended in the item "cotton ginned and unginned". Lastly a reference was made to the State of Gujarat v. Sakarwala Brothers [1967] 19 STC 24 (SC). The question that came up for consideration before this Court was: whether sales tax was payable in respect of sales of patasa, harda and alchidana? The contention arose in the context of the provision contained in section 5(1) of the Bombay Sales Tax Act, 1959, in its application to the State of Gujarat, which provided that "notwithstanding anything contained in the Act, but subject to the conditions or exceptions (if any) set out against each of the goods specified in column 3 of Schedule A, no tax s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 6 or under section 8 of the Act and until that is done the agricultural produce even if it is so enumerated in the Schedule does not become "specified agricultural produce" and no market fee can be levied on the transaction of sale of such agricultural produce. It was urged that four steps have to be taken before an agricultural produce becomes a "specified agricultural produce" in respect of a market area. Undoubtedly, when in exercise of powers conferred by section 5 the State Government publishes its intention to set up a market area by a notification in the Official Gazette, the State Government is simultaneously under an obligation to specify not only the market area, that is, its geographical limits or boundaries but must specify the agricultural produce qua such market area. After inviting objections both in respect of the market area and the agricultural produce, a further notification is required to be issued under section 6 making the requisite declaration both in respect of the market area as well as the agricultural produce. When these two steps are taken, the agricultural produce set out in the notification issued under section 6 becomes specified agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clined to examine them, as the writ petitioners were allowed on this one narrow contention which according to the High Court went to the root of the matter. Before the High Court, the respondents raised various contentions. Most of them were repelled by the High Court, but the petitioners succeeded on the narrow contention as herein set out. It was said by Mr. Shanti Bhushan referring to the writ petition in which he appeared that there were other contentions which the respondents wanted to canvass but which the High Court declined to examine. It may be that there might be some other contentions which the respondents wanted the High Court to examine and the High Court having held in favour of the respondents on one point may have declined to examine the same. Therefore, while allowing the appeals, all the matters are remitted to the High Court. The High Court may examine contentions other than those which were dealt with in the judgment from which the present batches of appeals were preferred. All those contentions which have been negatived by the High Court and in respect of each one of them no attempt was made to support the judgment of the High Court before this Court, those c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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