TMI Blog2001 (4) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... e which are being transported into the declared market area in the State of Assam are liable to cess U/S 21 of the Act even before their sale and purchase in the market area in view of the decisions of the Supreme Court in Ram Chandra Kailash Kumar Co. and in Shalimar Chemical Works Ltd. reported In 2. Pronouncing the order dated 17.8.1999 in C.R. No. 1142/97 (Tinsukia Trading Co. others v. State of Assam Others) filed by the petitioner's firm questioning the legality and validity of realisation of cess under the provisions of Section 21 of the Assam Agricultural Produce Market Act, 1972, (for Short, 'the Act') and Rule 21(7) of Assam Agricultural Produce Market (General) Rules, 1975 (for short, the Rules'), the learned Single Judge observed that the decision of the Division Bench of this Court in Anjali Trading Co. v. Assam Agricultural Marketing Board others, reported in 1998(1) GLR 111 affirming the decision of the learned Single Judge in Anjali Trading Co. v. Assam Agricultural Marketing Board others, reported in 1995(3) GLR 62 holding that the consignment of notified. agricultural produce which are being transported into declared market area in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondents purchased the agricultural produce. The Board has no authority or right to erect check gates on National High Way and realise cess on those check gates from the trucks carrying agricultural produce although no sale or purchase of transaction takes place at those places declared as market area. 5. We have heard Mr. P.G. Baruah, learned Advocate General, Assam in W.A. No. 39/2000, Mr. D.K. Misra, learned Sr. counsel assisted by Mrs. M. Hazarika and WA No. 378/99, W.A. No. 392/99, C.RNo. 1274/ 97, C.R. No. 1142/97, WP(C) No. 4952/200 D.P.C. No. 1749/2001. Also heard Mr. GN Sahewalla, learned Sr. counsel appearing in W.P.C. No. 257/99 and W.P.C. No. 1125/99, Mr. N. Dutta, learned Sr. counsel appearing in W.A. No. 646/97. Mr. A. Sattar, learned counsel appearing in W.P.C. No. 3556/2000 and Mr. S.A. Laskar, learned counsel appearing on behalf of the Board in all the cases. 6. Considering the nature and importance of the issues under reference we do hereby propose to decide all the questions raised in those cases involving common question of facts and law. 7. To initiate the discussion on the questions raised, it will be appropriate, a priori, to have a look on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural produce, to provide for establishment of organised market and market yards to ensure sale and purchase of agricultural produce at a fair price to be notified and to ensure correct weighment of such produce bought and sold in the market yards. 10. Section 3(1) of the Act confers power on the State Government to establish and constitute a State Agricultural Marketing Board consisting of Chairman and 10 other members to be nominated by the State Government in the manner prescribed for exercising the powers and duties conferred on the Board under the Act. The Board is vested with all the power of superintendence and control over the Market Committee in the manner prescribed under Section 3(10) of the Act. 11. Elaborating the manner in which the control and superintendence over Market Committee has to be exercised by the Board, Rule 4 of the Rules enunciates as follows:- 4. Control and superintendence of Market Committee :- For the purpose of enabling the Board to exercise superintendence and control over the Market Committee as per sub-section (10) of Section 3 of the Act:- 1. All the employees of the Market Committee shall under control and superintendence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Board or any other employees of the Board not lower than the rank of that of an Inspector authorised in this behalf by the Secretary of the Board may at any time inspect, examine and check the weighing instruments, weights, measures kept by a Committee. After inspection the inspecting authority may give such directions as it may deem proper and the Committee shall be bound to comply with such directions. The inspecting authorities as prescribed herein may at any time and without previous notice, inspect, examine and test any weighing instrument, weight or measures used kept or possess within notified market area by a licences, and every such licensee in possession of any such weighing instrument, weight or measure shall when required, be bound to produce before the person entitled so to inspect examine and test it. 8. The Chairman or the Secretary of the Board or any other employees of the Board may at any time inspect and examine the records and accounts of the Committee and issue directions to the Committee as deem proper and the Committee shall be bound to comply with such directions. 9. The Board shall issue instructions and directions to the Committee whenever nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred on it under Sections 14, 15, 16 and 21 of the Act and also under Rule 21(3) of the Rules which are quoted as under - 14. The functions of a Market Committee shall be as follows:- (i) to maintain and manage the market yard and to control, regulate and run the market in the interest of the agriculturists and traders holding licence from the Market Committee (ii) to regulate and control transactions in the market and to deal with licence holder who, default to open, close and suspend trade in any notified agricultural produce to settle dispute, levy and recover market charges, fees on an agricultural produce, licences and other fees to impose fines and venalities; (iii) to act as a mediator, arbitrator or Surveyor in all matters of differences, disputes, claims, etc. between licences or between them and agriculturists making use of the market as sellers or agricultural produce; (iv) to control and regulate the admission to the market, to determine the conditions for the use of the market and to prosecute and confiscate the goods belonging to persons trading without a valid licence; (v) to bring prosecute and defend or aid in bringing prosecuting or defending a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sale and purchase in the agricultural produces (Section 21 and 49(2)(v):- (1)..... (2)..... (3) The cess shall be paid to the committee or to a paid officer duly authorised by the Market Committee to receive such payment within 4 days of the day of transaction. Explanation : In computing the period of 4 days specified in sub-rule (3) of Rule 21 the day of transaction shall be included. 16. Rule 21{7) of the Rule the vires of which has been challenged in all these cases in extracted below:- 21. Levy and collection of cess on the sale and purchase in the agricultural produce (Section 21 and 49(2)(v):- (7) For the purpose of this Rule agricultural produce shall be deemed to have been bought or sold in a notified area:- (i) If the agreement of sale or purchase thereof is entered into in the said area; or (ii) if in pursuance of the agreement of sale or purchase the agricultural produce is weighed in the said area; or (iii) if in pursuance of the agreement of sale or purchase the agricultural produce is delivered in the said area to the purchaser or to some other persons on behalf of the purchased. 17. In the backdrop of those provisions of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited to taking out or proposed to be taken out. Mr. Misra has also stated that the learned Single Judge in the impugned judgment dated 29.9.1999 observed that the decision of the Division Bench in Anjali Trading Co. case (supra) affirming the decision of the learned Single Judge is not applicable inasmuch as in that case vires of section 21(7) was not challenged when in Anjali Trading Co. case (supra) it was held that the realisation of the cess at the check gates are legal and within the authority of law and erection of check gates are neither illegal nor without authority of law. Relying on Shalimar case's (supra) the learned Sr. counsel states that the law laid down in the Anjali Trading Co. case (supra) cannot be said to be a good law because the erection of check gates for the purposes of realisation of cess on the agricultural produce apparently illegal and unauthoirsed when no sale or purchase has taken place at such places. Realisation of cess, thus, cannot be permitted in terms of Section 21 of the Act as well as Rule 21(7) of the Rules. 19. In support of his argument, Mr. Misra, learned Sr. counsel has relied on several decisions of the Apex Court. Referring to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Chandra's case (supra). According to the Apex Court, therefore, if goods are merely brought in any market yard and despatched outside the market area without transaction of sale taking place therein, then no market fee can be charged in respect of the said case. 23. The learned Sr. counsel has also referred to a decision of this Court in Bonomali Tea Estate v. State of Assam, reported in and also the decision of the Apex Court in M/s Goodyear India Ltd. v. State of Haryana, reported in [1991]188ITR402(SC) and (1990) 2 SCC 71 in which interpretation of fiscal statutes were discussed by the Apex Court. Applying ratio of these decisions it is submitted that there is no room for any intentment for fiscal statute and there is no equity about the tax. One has to look fairly only at what has been stated in the said taxing statute and interprets the section accordingly. Therefore, looking into the proposition of law laid down in these decisions also, Rule 21(7) is beyond legislative competence. 24. Mr. Misra, learned Sr. counsel also claims that since the Rule 21(7) is declared ultra vires by the learned Single Judge, they are entitled to refund of the cess already realised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut at the same time, advancing his submissions, the learned Advocate General has fairly conceded that so far Sub-Clause 7(ii) of the Rule 21 of the Rules is concerned, the said Clause requires to be declared as ultra vires inasmuch as the same has, ex facie, already widened the scope of presumption. 28. Mr. Baruah, learned Advocate General during the course of hearing, has informed the Court that on 11.1.2001 Section 21 of the Act has been amended by the Assam Agricultural Produce Marketing (Amendment) Act, 2000 (published in Assam Gazette, Extra-ordinary on 30.1.2001) substituting the existing Explanation-1 to Section 21. In our considered opinion, we do not feel inclined to look into the said amended provisions of Section 21 because the same is not before us either in any of the writ appeals or writ petitions on which we are delving upon to answer the questions referred to us in this reference. 29. On the other hand, Mr. SA Laskar, learned counsel, appearing on behalf of the Board, has vehemently argued that in the State of Assam the market areas have already been declared by Government and the Board has acted legally and within its jurisdiction in levying and collecting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notified produce which are bound for any unnotified areas in the State or where the consignment is legitimately based in such unnotified areas. Any cess levied on such consignment at the inter State check gate inadvertently is always refundable forthwith to the consignee. 14. So, the cess is levied only on goods brought to the notified areas and as will be evident from the provisions of the Act, the cess can be levied on the notified areas in case of notified goods. It is the further case of the respondents that the collection of cess of consignment of noticed agricultural produce is conducted at the Srirampur check gate by the staff of the Board where the purchasers of the produce to whom the consignment is being delivered is shown by the documents accompanying the consignment to be based and maintaining trading premises, within a declared market areas of any Market Committee under the Board. In such a case the trader is a purchaser as shown by the document accompanying the consignment and the goods are delivered within the notified area (within the declared market area), the levy of cess shall be attracted under the provisions of the Act and the Rules. 15. Regarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and articles were purchased by the writ appellants and brought into the State of Assam for purpose of sale and not for sale within the market area and therefore, the cess can be levied on the notified areas in case of notified goods. The authority concerned conducted the collection of cess of consignments of notified agricultural produce at Srirampur check gate where the purchasers of the produce to whom the consignment is being delivered is shown by the documents accompanying the consignment to be based and maintaining trading premises within a declared market area of any Market Committee under the Board. The learned Single Judge held, that in such a case the trader is a purchaser as shown by the accompanying the consignment and the goods are delivered within the notified areas (within the declared market area) the levy of cess shall be attracted under the provisions of the Act and the Rules. We are of the view that the payment of cess on consignment of notified agricultural produce like rice, wheat etc, is mandatory in respect of the present writ applicant, and his firm or trading premises is located within the declared market areas in the State, to which premises the produce is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature to another body of its choice but the legislature should, before delegating, enunciate either expressly or by implication, the policy and the principles for the guidance of the delegates. These principles also apply to taxing statutes. The effect of these principles is that the delegate which has been authorised to make subsidiary rules and regulations has to work within the scope of its authority and cannot widen or constrict the scope of the Act or the policy laid down thereunder. It cannot, in the garb of making rules, legislate on the field covered by the Act and has to restrict itself to the mode of implementation of the policy and purpose of the Act. 27. Applying the above principles to the instant case, it will be seen that the market fee can be levied under the Act only on the sales and purchase of notified agricultural produce within the notified area. Explanation 1 to Section 12 creates a legal fiction and provides that if any notified agricultural produce is taken out of a notified market area, it shall be presumed to have been purchased of sold within such area. The presumption is a rebuttable presumption and can be shown to be not correct. The policy in enacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we safely agree to defer with their submissions for the reasons below. 39. Applying the ratio of Ram Chandra Kailash's Case (supra) and Shalimar's Case (supra) to the case in hand, we can unhesitantly hold that the State Government in the exercise of Rule making power u/s 49 of the Act has widened the scope of presumption laid down in the Explanation 1 to section 21 of the Act by framing Rule 21 (7) providing further that if in a notified area any agreement of sale or purchase is entered into or if in pursuance of such agreement of sale or purchase, notified agricultural produce is weighed or delivered in the said area to the purchaser or to some other persons on behalf of the purchase, the agricultural produce shall be deemed to have been brought and sold in the notified area. 40. We have already quoted herein above the Explanation 1 appended to Section 21 of the Act. A bare perusal of the said provision of law would clearly indicate that the statutory presumption regarding sale and purchase is raised in respect of notified agricultural produce, if they are taken out or presumed to be taken out of a notified market area. It is to be presumed that such notified agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or delivered. The expression 'agreement of sale' or 'purchased', or 'weighed', or 'delivered' are additional factors which are not mentioned in explanation appended to Section 21 of the Act. Thus, it is clearly seen that Rule 21(7) has widened the scope the Explanation 1 of Section 21. 43. Rule 21(7) of the Rules is a piece of delegated legislation. It is settled law that the authority exercising its delegated power cannot travel beyond the legislative policy what is not within its domain. Applying maxim of 'delegates non protest delegate'. It is well accepted that delegate cannot further delegate its power. The delegate authorised to make rules has to work within the scope of its authority and cannot either enlarge or constrict the scope of the Act. In the instant case, when the State Government empowered to frame rules u/s 49(2)(v) of the Rules of the Act, has no authority to expand the horizon of the legal fiction enunciated in 'Explanation' 1 to Section 21 of the Act. Such action of widening or expanding could only be effected by the legislature itself and not by the delegate i.e. the State Government in exercise of its rule ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants/Writ petitioners consignee. The agricultural produce are insured in the name of consignee i.e. appellants/writ petitioners and the same is brought to the State of Assam at the risk and costs of consignee. These agricultural produce are ascertained goods and are in deliverable state. Therefore, the sale on agricultural goods in complete in outside State wherefrom purchases are being made. When these agricultural produce are imported to Assam, no sale or purchase takes place either at Srirampur check gates or at any other check gates erected on the National High Way. If they are exposed to further realization of cess on those check gates at the time of passing through, they would be subjected to double taxation which is not permitted under the law. After purchase of the agricultural produce, those are loaded in the Truck or railways and sellers of outside Assam shall have no liability at all with regard to any further damages for which agricultural produce are insured and transported at the risk and cost of the appellants/writ petitioners. As such, neither the Board nor the Market Committee has the authority to levy and collect cess at the check gates erected in various places ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no cess can be levied and collected at the check gates where no sale or purchase takes place during the course of transportation of agricultural goods to different places in the State of Assam. 50. Seemingly, tow Judgments of this Court (Anjali Trading Company (supra) reported in (1995) 3 GLR 62 and 1998 (1) GLR 111, referred to above, in so far as they permit the realization of cess on the agricultural produce at the check gates as legal and valid, cannot be treated as good law after the decision of the Apex Court on Shalimar's case (supra) as well as Ram Chander Kailash's case (supra). 51. As regards to refund of the cess already collected we would like to say that since cess has already been realized by the authorities, the same need not be refunded. But further realization of the cess on the different check gates on the National High Way erected for such as per notification dated 29.7.1993 as mentioned hereinabove or any other notification in this regard, be stopped forthwith. 52. In view of the above discussion, we are inclined to agree with the decision of the Assam Roller Flour mills v. Assam Agricultural Marketing Board in Civil Rule No. 1453/98 disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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