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TMI Blog1996 (10) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter referred to as Markets Act) and are also not required to pay market levy. The petitioners contended that the market committee had established principal/sub market yards within the territorial jurisdiction of the market committee. But the petitioners did not carry on their business within the principal market or market yards/sub market yards. On the contrary, they had been dealing with agricultural produce outside the principal market/yard or sub yards. They had been carrying on their business in their own premises which were though within the notified market area, but were outside the principal market/market yard or sub-market yards. Even then, the market committees were insisting the petitioners to obtain licence and pay market fee in accordance with the provisions of the Markets Act and the Rules framed thereunder. Such action on the part of the market committee was wholly illegal and unconstitutional. It appears from the impugned decision of the High Court that the petitioners' contention was that the provisions relating to taking of licences for carrying on business and payment of market fee under the Markets Act have placed unreasonable restrictions on their right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 983]3SCR843 . 5. In Kewal Krishna Pun's case (supra), market fees were levied under the Punjab Agricultural Produce Markets, 1961. But such fees were increased. Such increase was challenged before this Court by contending that the market fees levied under the said Act were sufficient for meeting the requirements of the said Act. Even then, increase in such fees was made for diverting the said fund for purposes other than those for which market fees were levied. A Constitution Bench of this Court has held that the fee must have direct nexus with the services provided by the market committee and since the increase was not intended to provide any additional service, the same cannot be lawfully imposed. 6. It has been indicated by this Court in Kewal Krishna Puri's case that the element of quid pro quo may not be possible or even necessary to be established with mathematical exactitude but proudly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of fees. It has also been indicated that a good and substantial portion of amount collected on account of fees, may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng quid pro quo are not to be read as Euclid's Theorems nor as provisions of the statute. The observation must be read in the context in which they appear. The constitutional validity of Section 23A has been upheld in Amar Nath's case by indicating that Section 23A intended to prevent unjust enrichment by these dealers who had already passed on the burden to the next purchaser and so reimbursed themselves. 9. The High Court has held in the impugned judgment that levy of market fee on the traders carrying on business outside principal market/market or sub market yard, cannot be held as invalid as it has sufficient nexus with the services rendered. The services are directly beneficial to the producers of agricultural produce and are available within the notified market area. 10. Mr P.P. Rao, learned Senior Counsel appearing for the appellant, has submitted that Section 4(3) and 21 of the Markets Act may not be held invalid on the score of offending Article 19(1)(g) of the Constitution and the Markets Committee may be competent to impose levy of market fee on Scheduled agricultural produce generally but the question required to be considered as to whether any market fee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the imposition of levy of market fee may be held justified if the principal market and market yards or sub market yards are reasonably accessible to the producers and traders of Scheduled agricultural produce so that the benefit arising out of an organised market having various amenities, are available to the producers and dealers coming to the principal/sub market yards. When principal/sub market yards are established, completion of such principal/sub market yards with consequential constructions of shops, yards, toilets, rest room, offices etc. etc. may take a reasonable time. It may not be necessary to wait for imposition of levy of market fee till the construction of infra structures of such principal/sub market yards are fully completed because such completion takes some time. There may be impelling necessity to generate funds out of imposition of levy of market fee to take various works necessary to establish principal and market and sub market yards at a desired level consisting of various essential infra structures with amenities of services attached thereto for effective implementation of the aims and objectives under the Markets Act. Where principal market and market/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them from exploitation by traders and middlemen it is unlikely that the government will fix longer distance in the prevailing circumstances. In Lakha Lal's case (supra), a Constitution Bench of this Court has held that power under Section 4(1) of the Bihar Markets Act to notify market area should be exercised reasonably consistent with the beneficial purpose envisaged under the Act. In R.K. Porwal's case (supra), this Court has examined the question of reasonableness of the location of a market and after being satisfied that the location of the market was reasonable, upheld the same. 15. Mr. Rao, has submitted that it cannot be reasonably presumed that the Himachal Pradesh Legislature have intended that Section 4(3) should be construed literally to cover even retail dealers in Scheduled agricultural produce to be covered for the imposition of levy and requirement to obtain licence from such retail dealers. Until Section 4(3) is read down by reasonably interpreting the scope and ambit of the said Section, Section 4(3) is liable to be struck down being violative of Articles 14 and 19(1)(g) of the Constitution. 16. Mr. Rao, has submitted that it is the case of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market fee when they sell agricultural produce grown by them to dealers. Since the appellant is small retail dealer who purchases from various other dealers it should be reasonably held that the other dealers being liable to pay levy of market fee, must have been subjected to such levy on the first transaction in course of dealership business and once the goods in question have already been subjected to levy subsequent transaction between dealer and sub dealer and sub dealer and retailer like the appellant is not open to any levy of market fee. 19. Mr. Rao has also submitted that the purpose of requiring a licence to be obtained for carrying on dealership business is to bring the dealer under control so that such dealer does not escape payment of levy of market fee due from him. Where a retailer has no obligation to pay levy of fee, the very purpose of obtaining licence for dealership business in case of such retailer does not arise. Mr. Rao has submitted that the dealer must be understood and defined in the context or its liability to pay levy of market fee. All traders in the State of Himachal Pradesh are not liable to pay levy of market fee even if they carry on their business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alorem basis fee on agricultural produce bought or sold by licencees in the notified market area at the rate not exceeding one rupee for everyone hundred rupees, as may be fixed by the Board. 22. The market area of Solan District in Himahcal Pradesh included the area of Kasauli, Dharampur, Jagjitnagar, Garkhal etc. including Chakki Ka More. By notification dated June 18, 1973, the extent of area of the Market Committee, Solan was described as: (1) All the revenue estates including Municipal Committees, notified area committees and Cantonment Board area of Solan District (except Nalagarh Tehsil). (2) Revenue of Rajgarh Sub-Tehsil/Padihad Tehsil of Sirmor District. 23. Mr. Agarawala has contended that the appellant Bhagwan Das admittedly carries on business in agricultural produce in Kasuali which is within a notified market area. The appellant is a 'dealer' within the meaning of Section 2(1) of the Markets Act. In view of the fact that the entire Solan revenue estate and District of Solan excluding Nalagarh area have been notified as market area, the appellant being a dealer and carrying on business in agricultural produce was bound to obtain licence under Section 4(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee arises only after a person has obtained a licence and submits proof of the fact that particular agricultural produce in which he is carrying on business activity has already been subjected to levy of market fee so that further levy of market fee is not enforced. 27. Mr. Agarwala has also submitted that the question of including small traders was taken into consideration by this Court in Arunachala Nadar's case (supra). It has been held that "The Act is an integrated one and it regulates the buying and selling of commercial crops. If the small traders are exempted, it creates loopholes in the scheme through which the big trader may operate and thereby the object itself may be defeated." 28. Mr. Agarwala has further submitted that the law is well settled by a series of decisions of this Court as already referred that correlation of quantum of fees levied under the Markets Act and extent of services rendered by the Market Committee by establishing principal market yards and sub yards etc. is not to be scrutinised with any mathematical precision. It will be sufficient to uphold the validity of levy of market fee if it is established that steps for establishing market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for the appellant to move this Court. The appeal being devoid of any substance, should be dismissed with exemplary cost. 32. After giving our careful consideration to the facts and circumstances of the case and the submissions made by the learned Counsel for the parties, it appears to us that under the Markets Act any trader or dealer dealing in Scheduled agricultural produce within notified market area is under an obligation to obtain licence under Section 4(3) of the Markets Act. Such obligation is not confined to wholesalers of agricultural produce or intermediate dealers indulging wholesale and retailed business but also to retail traders like the appellant. 33. In our view, licence is required to be taken by a small retailer operating within a notified market area. The question of reasonable interpretation of 'dealer' under Section 2(1) and provisions requiring a dealer to obtain licence under Section 4(3), in the context of single point levy of market fee under Rule 81 of the Rules framed under the Act, as sought to be contended by Mr. Rao, though ingenuous , is devoid of any substance. 34. It has been rightly contended by Mr. Agarwala that a licenced dealer may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary infrastructures involving substantial cost, the Marketing Act invariably contains provisions for imposition of levy of market fee at a specified rate on the traders and dealers in specified agricultural produce operating within the specified market area and in principal and sub-market yards established by the Market Committee. The dealers and traders are required to take licence for their trading activities in such area in respect of specified agricultural produce so that their trading activities are monitored and controlled and they may not escape the liability of imposition of market levy. 36. Levy of market fee being essentially a fee and not a tax, such imposition of levy of market fee necessarily inheres in it the essence of quid pro quo between the fees levied and services returned to the payer of such fees. What should be the extent of service rendered to the payers of levy of market fees so as to keep such levy of fees within the bounds of accepted principle of 'fee' involving existence of reasonable quid pro quo has been a vexed question agitated before various High Courts including this Court from time to time. Some of the decisions of this Court on this q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and amenities to be made available to traders and producers coming to such yards, in order to decide whether concrete steps have been translated into action with reasonable sincerity in implementing the schemes envisaged under the Marketing Act and the Rules framed thereunder. 37. In the instant case, it has been established that the market committee in the district of Solan after notifying market area, has taken real and effective steps to identify various sub market yards and some of such yards have been commissioned after constructing essential infrastructures and in. respect of some of such yards, tenders have been invited. It is true that the facility of sub-market yards from the town of Kasauli is at some distance. But it should be borne in mind that Solan is a hilly terrain with scarce population. The volume of agricultural produce is also limited because of geographical features of the area. Consequently, volume of transaction in agricultural produce is expected to be much less than that in good agricultural belts in the plains. Such factors are undoubtedly operating as constraints in establishing sub-market yards with necessary infrastructures within a proximate distance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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