TMI Blog2008 (5) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... d Ms. Shobha Dikshit, Senior Advocates (K.K. Mohan, Amit Kr. Singh, Shatanu Krishna, Ms. Mukti Chowdhary, Anant Prakash, Ms. Sneha Kalita, Sanjai K. Pathak, Vivek Narayan, Ajit Kumar Pande, Sunil Roy, Ms. Madhurima Tatia, Mrs. Anil Katiyar, V.K. Verma, Shishir Pinaki, Amit Singh, P.I. Jose, Pradeep Misra, Daleep Dhayani, Gopal Singh, Anukul Raj, Manish Kr. and Chandan Kr. Advocates with them) for the appearing parties. -------------------------------------------------- The judgment of the court was delivered by S.B. SINHA J. Levy of market fee on Zafrani zarda in terms of the provisions of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (for short, "the Act") is in question in these appeals which arise out of a common judgment and order dated July 21, 2003. The Act was enacted to provide for the regulation of sale and purchase of agricultural produce and for the establishment, superintendence and control of markets therefor in Uttar Pradesh. Before embarking on the question, we may notice some of the relevant provisions of the Act. Sections 2(a), 2(d), 6, 8, 17(iii)(b) read as under: "2. (a) 'agricultural produce' means such items of produce of agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed manner, objections, if any, against the proposed action. (2) When during the term of a market committee the limits of the market area for which it is established are altered under clause (b), clause (c) or clause (d) of sub-section (1), the following consequences shall, with effect from the date specified in the notification, follow: (a) the market committee shall stand dissolved and its members shall vacate their offices as such members; (b) a new market committee shall be constituted for the modified or newly created market area in accordance with the provisions of section 13; (c) all property and assets, all rights, liabilities and obligations of the dissolved market committee in respect of civil or criminal proceedings, contracts, agreements or other matter or thing arising in relation to any part of the market area of a dissolved market committee shall be vested in and stand transferred to the new market committee having jurisdiction over that part. (3) Where a market area ceases to be such area under clause (e) of sub-section (1), the following consequences shall, with effect from the date specified in the notification, follow: (a) the market committee shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purchaser shall be liable to pay the market fee and development cess to the committee: Provided that no market fee or development cess shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer for his domestic consumption only: Provided further that notwithstanding anything contained in this Act, the committee may at the option of, as the case may be, the commission agent, trader or purchaser, who has obtained the licence, accept a lump sum in lieu of the amount of market fee or development cess that may be payable by him for an agricultural year in respect of such specified agricultural produce, for such period, or such terms and in such manner as the State Government may, by notified order specify: Provided also that no market fee or development cess shall be levied on transactions of sale of specified agricultural produce on which market fee or development cess has been levied in any market area if the trader furnishes in the form and manner prescribed, a declaration or certificate that no such specified agricultural produce market fee or development cess has already been levied in any other marke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into consideration the provisions of section 5(1)(i) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, it was held that Zafrani zarda is a manufactured form of tobacco. The issue apparently is directly covered by a decision of this court in Agricultural Produce Market Committee v. Prabhat Zarda Factory [1994] Supp 2 SCC 514, in relation to the definition of "agricultural produce" as contained in the Bihar Agricultural Produce Markets Act, 1960, which is pari materia with the definition of "agricultural produce" under section 2(1)(a) of the Act, which reads: "'Agricultural produce' includes all produce, whether processed or non-processed of agriculture, horticulture, animal husbandry, and forest specified in the Schedule. Later, however, the said definition was amended by the Amending Act of 1982 effective from April 30, 1982, the English rendering of which is as under: 'Agricultural produce' means all produce whether processed or non-processed, manufactured or not, product of agriculture, horticulture, plantation, animal husbandry, forest, sericulture, pisciculture, livestock or poultry, as specified in the Schedule." This court clearly affirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r chewing tobacco under Chapter Sub- Headings 2404.49/2404.40." Indisputably an agricultural produce has to be a specified one for the purpose of levy of market fee. [See Krishi Utpadan Mandi Samiti v. Ganga Dal Mill and Co. [1984] 4 SCC 516, Belsund Sugar Co. Ltd. v. State of Bihar [1999] 9 SCC 620 and Krishi Utpadan Mandi Samiti v. Pilibhit Pantnagar Beej Ltd. [2004] 1 SCC 391.] Ms. Shobha Dikshit, however, relied upon the decision of this court in Park Leather Industry (P.) Ltd. v. State of U.P. [2001] 3 SCC 135 wherein a Division Bench opined that leather is only a processed form of hides and skins. The process undertaken for making leather from hides and skins has been noticed therein. It is not in dispute that when a new form comes into being and in the market parlance it is considered to be a new product, the same would be deemed to be manufactured goods as contra-distinguished from processed goods. Market fee is leviable on specified agricultural produce, not on agricultural produce simpliciter. Zarda is not a specified agricultural produce. It can be subjected to payment of market fee provided it is held to be "tobacco ". Zafrani Zarda, as an agricultural produce for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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