# Sugar Works Farid Nagar and others v. State of Uttar Pradesh and others

- **Citation:** (2009) 3 ILRA 905
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2009-10-27
- **Case number:** Civil Misc. Writ Petition No. 2252 of 2008
- **Bench:** Rajes Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sugar-works-farid-nagar-and-others-v-state-of-uttar-pradesh-and-others-41559
- **Pages:** 10

## Headnote

1964-Section 17 (iii) (a)-Power of Mandi
Samiti to levy and collect fee-petitioners
sold chili during Jan. 08 to March 08-fee
paid in presence of Inspector-demand of
further amount by Mandi Samiti-heldproper liberty given to file objection
before secretary-who will decide the
same-whether objections earlier filed or
not order impugned set a side.

Held: Para 10 & 11

In Civil Appeal Nos. 1769-1773 of 1998
Krishi Utpadan Mandi Samiti Vs. M/s
Sarswati
Cane
Crusher
&
others
(unreported judgment), the Apex Court
observed as follows:

"We are satisfied that the orders of
this Court afore-referred to would need
some repair work. We treat the said
order to be conceiving of a provisional
assessment
where-after
doors
are
opened for a final assessment. We
conceive that when demands are raised
by the Krishi Utpadan Mandi Samiti
against a trader before he could ask for
transit of goods outside the market area,
the trader would be entitled to tender a
valid rebuttal to say that no sale had
taken place within the notified area and
that if the explanation is accepted there
and then by the Mandi Samiti, no
question of payment would arise as also
of withholding the gate passes. If prima
facie evidence led by the trader is not
acceptable by the Mandi Samiti, the
trader or the dealer can be compelled to
pay the market fees demanded before
issuance of gate pass. If the trader
makes the payment without demur, the
matter
ends
and
the
assessment
finalized. But in case he does so and
arises protest, then the assessment shall
be taken to be provisional in nature
making it obligatory on the trader to pay
the fee before obtaining the requisite
gate pass. After protest has been lodged
and the provisional assessment has been
made, a funo-frame would be needed to
deviso making the final assessment. We,
therefore, conceive that innately be read
in the order of this Court that a final
assessment has to be made within a
period of two months after provisional
assessment so that the cute transition in
that
respect
is
over
enabling
the
aggrieved party, if any to challenge the
final assessment in the manner provided
under the afore Act or under the general
law of the land in appropriate form.
Having
added
this
concept
in
this
manner in the two-Judge Bench decision
of this Court, we declare that what repair
has been done instantly would add to the
orders of the High Court and the instant
corrective
decision
shall
be
the
governing rule. The Civil Appeal thus
stand disposed of."

In
the
absence
of
any
machinery
provision
for
the
purposes
of
assessment, the Division Bench of this
Court in the case of Shri Mahalaxmi
Sugar Works Farid Nagar and others Vs.
State of Uttar Pradesh and others
(Supra)
has
issued
the
following
direction:

"For
this
purpose
we
are
constrained to observe that due to
906 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
apathy of State Government in framing
the
necessary
rules
and
making
provision for assessment etc. this Court
considers
it
appropriate
to
issue
following
directions
to
protect
the
interest
of
traders
and
safeguard
payment of fee in accordance with law.

(1) Every trader proposing to take out
the
goods
manufactured
or
produced in the market area shall
be entitled to issue of gate passes
from
the
Mandi
Samiti
if
he
produces documents to establish
that the goods were being taken out
of
the
market
area.
Necessary
entries shall be made by Mandi
Samiti in records maintained by it.
(2) A trader taking out goods shall file a
statement before the Mandi Samiti
within six weeks indicating therein
that the goods were sold by the
Commission
agent
or
by
the
petitioners themselves inside or
outside the market area.
(3) In case the traders do not file the
statement the Mandi shall issue
notice to the traders after expiry of
six weeks to file the statement
within 10 days of receipt of notice.
(4) If the return is filed the same shall
be scrutinized by the Mandi Samiti
and if it is satisfied about i

## Text

3 All] M/s Amar & Sons V. State of U.P. and others
905
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 27.10.2009

BEFORE
THE HON'BLE RAJES KUMAR, J.

Civil Misc. Writ Petition No. 2252 of 2008

M/s. Amar & Sons

...Petitioner
Versus
The State of U.P. and others

 ...Respondents

Counsel for the Petitioner:
Sri Girish Chandra Yadav

Counsel for the Respondents:
Sri B.D. Mandhyan
Sri Satish Mandhyan
Sri Tarun Gaur

U.P. Krishi Utpadan Mandi Adhiniyam
1964-Section 17 (iii) (a)-Power of Mandi
Samiti to levy and collect fee-petitioners
sold chili during Jan. 08 to March 08-fee
paid in presence of Inspector-demand of
further amount by Mandi Samiti-heldproper liberty given to file objection
before secretary-who will decide the
same-whether objections earlier filed or
not order impugned set a side.

Held: Para 10 & 11

In Civil Appeal Nos. 1769-1773 of 1998
Krishi Utpadan Mandi Samiti Vs. M/s
Sarswati
Cane
Crusher
&
others
(unreported judgment), the Apex Court
observed as follows:

"We are satisfied that the orders of
this Court afore-referred to would need
some repair work. We treat the said
order to be conceiving of a provisional
assessment
where-after
doors
are
opened for a final assessment. We
conceive that when demands are raised
by the Krishi Utpadan Mandi Samiti
against a trader before he could ask for
transit of goods outside the market area,
the trader would be entitled to tender a
valid rebuttal to say that no sale had
taken place within the notified area and
that if the explanation is accepted there
and then by the Mandi Samiti, no
question of payment would arise as also
of withholding the gate passes. If prima
facie evidence led by the trader is not
acceptable by the Mandi Samiti, the
trader or the dealer can be compelled to
pay the market fees demanded before
issuance of gate pass. If the trader
makes the payment without demur, the
matter
ends
and
the
assessment
finalized. But in case he does so and
arises protest, then the assessment shall
be taken to be provisional in nature
making it obligatory on the trader to pay
the fee before obtaining the requisite
gate pass. After protest has been lodged
and the provisional assessment has been
made, a funo-frame would be needed to
deviso making the final assessment. We,
therefore, conceive that innately be read
in the order of this Court that a final
assessment has to be made within a
period of two months after provisional
assessment so that the cute transition in
that
respect
is
over
enabling
the
aggrieved party, if any to challenge the
final assessment in the manner provided
under the afore Act or under the general
law of the land in appropriate form.
Having
added
this
concept
in
this
manner in the two-Judge Bench decision
of this Court, we declare that what repair
has been done instantly would add to the
orders of the High Court and the instant
corrective
decision
shall
be
the
governing rule. The Civil Appeal thus
stand disposed of."

In
the
absence
of
any
machinery
provision
for
the
purposes
of
assessment, the Division Bench of this
Court in the case of Shri Mahalaxmi
Sugar Works Farid Nagar and others Vs.
State of Uttar Pradesh and others
(Supra)
has
issued
the
following
direction:

"For
this
purpose
we
are
constrained to observe that due to
906 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
apathy of State Government in framing
the
necessary
rules
and
making
provision for assessment etc. this Court
considers
it
appropriate
to
issue
following
directions
to
protect
the
interest
of
traders
and
safeguard
payment of fee in accordance with law.

(1) Every trader proposing to take out
the
goods
manufactured
or
produced in the market area shall
be entitled to issue of gate passes
from
the
Mandi
Samiti
if
he
produces documents to establish
that the goods were being taken out
of
the
market
area.
Necessary
entries shall be made by Mandi
Samiti in records maintained by it.
(2) A trader taking out goods shall file a
statement before the Mandi Samiti
within six weeks indicating therein
that the goods were sold by the
Commission
agent
or
by
the
petitioners themselves inside or
outside the market area.
(3) In case the traders do not file the
statement the Mandi shall issue
notice to the traders after expiry of
six weeks to file the statement
within 10 days of receipt of notice.
(4) If the return is filed the same shall
be scrutinized by the Mandi Samiti
and if it is satisfied about its
correctness,
then
it
shall
pass
appropriate orders levying fee. If
the sale has been made in the
market area and exempting in case,
it has been made outside the
market area.
(5) In case the return of trader is found
to be incorrect or he omits to file his
return despite notice by Mandi Samiti
then the Mandi Samiti shall levy market
fee on trader on the goods which had
been taken out and for which gate pass
had been issued."
Case law discussed:
1996 All CJ-577,
UPLBEC-957,
A.I.R. 1980 SC-1124,
(1994) 2 UPLBEC-1405,

(Decided by Hon'ble Rajes Kumar, J.)

1. These are the bunch of cases
involving common questions arising from
the Uttar Pradesh Krishi Utpadan Mandi
Adhiniyam, 1964 (hereinafter referred to
as the "Act") and, therefore, all the writ
petitions are being disposed of together by
a common order.

2. All the petitioners were carrying
on the business of Chillies. Chillies was
one of the notified agriculture produce.
All the petitioners were the licensees
under the Act. Admittedly the petitioners
sold chillies during the period January,
2008 to March, 2008 in a up-mandi area,
Phoolpur which comes under the principal
mandi of Shahganj, Jaunpur. On the sales
of chillies, the petitioners had paid mandi
fees on the value shown in 6R. There is
no dispute in this regard.

3. The Secretary, U.P. Krishi
Utpadan Mandi Samiti Shahganj, Jaunpur
issued an order dated 30.4.2008 asking
the petitioners to pay additional mandi
fees on the sales of chillies during the
period January, 2008 to March, 2008 on
the ground that in 6R the value of chillies
was shown much less than the prevailing
value with the view to evade the mandi
fees. In the order, mandi fees had been
demanded on the value of Rs.600/- for the
month of January and February and at the
rate of Rs.800/- for the month of March,
2008. The petitioners claimed to have
filed an objection on 21.5.2008, which is
Annexure-5 to the writ petition, disputing
the demand on the ground that mandi fees
were paid through the Mandi Samiti
Inspector at the time of sales itself who
was present, on the prevalent market rate
on which no objection has been raised by
the Inspector and, therefore, the demand
3 All] M/s Amar & Sons V. State of U.P. and others
907
is wholly unjustified. It appears that no
cognizance has been taken by the
Secretary, U.P. Krishi Utpadan Mandi
Samiti Shahganj, Jaunpur to the letter of
the petitioners. Therefore, the petitioners
filed the revision against the order dated
30.4.2008 before the Deputy Director,
Rajya Krishi Utpadan Mandi Parishad,
U.P., Varanasi. The revisions of the
petitioners have been rejected by the
impugned orders dated 20.9.2008.

4. Heard Sri Girish Chandra Yadav,
learned counsel appearing on behalf of the
petitioners and Sri B.D. Mandhyan,
Senior Advocate, assisted by Sri Satish
Mandhyan, learned counsel for the
respondents.

5.

Learned
counsel
for
the
petitioners
submitted
that
on
the
prevailing market price, the goods were
sold against 6R on which mandi fees were
paid in the presence of Inspector, who had
not raised any objection. He submitted
that the selling rate depends upon the
quality of the goods and there was no
fixed price. He submitted that once the
mandi fees have been accepted by the
Inspector, who was present at the time of
sales, without any objection, it was not
open to the Secretary, U.P. Krishi
Utpadan Mandi Samiti Shahganj, Jaunpur
to raise the demand on the ground that
prevailing market rate was much higher
than on which the chillies were sold by
the petitioners during the period January,
2008 to March, 2008. He submitted that
the Secretary, U.P. Krishi Utpadan Mandi
Samiti Shahganj, Jaunpur has no power to
pass a re-assessment order merely on the
surmises
and
conjectures.
Learned
counsel for the petitioners submitted that
the order has been passed without giving
any
show
cause
notice
and
any
opportunity of hearing.

6. In support of the contention, he
relied upon the decisions of this Court in
the case of M/s. Madan Sugar Works
Vs. Chairman, Krishi Utpadan Mandi
Samiti Kichcha and another, reported
in 1996 All CJ-577 and in the case of
Maha Laxmi Sugar Works and others
Vs. State of U.P. and others, reported in
UPLBEC-957.

7. Sri B.D. Mandhyan, Senior
Advocate, appearing on behalf of Krishi
Utpadan Mandi Samiti submitted that the
market yard of Phoolpur is about 25
kilometres from Shahganj wherein the
average selling rate of chillies during the
period involved was three times to the
rate disclosed by the petitioners as per
report of Senior Agriculture Marketing
Inspector. He submitted that Senior
Agriculture
Marketing
Inspector,
Azamgarh has given the report that selling
rate per quintal of chillies in Azamgarh
were between Rs.1400/- to Rs.1600/- per
quintal
and
the
Senior
Agriculture
Marketing Inspector of Jaunpur has given
report that during the relevant period the
selling rate of chillies was between
Rs.700/- to Rs.1000/-. Therefore, the
selling rate disclosed by the petitioners at
Rs.200/- to Rs.276/- during the year under
consideration were highly on a lower side
and,therefore,
the
Secretary,
Mandi
Samiti has passed the order and raised the
demand on the basis of the average selling
rate of Rs.600/- for the months of January
and February and Rs.800/- for the month
of
March,
2008
which
was
very
reasonable. He submitted that if the
petitioners were aggrieved, they should
file the objection but no such objection
has been filed. He further submitted that
908 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
under Section 17 of the Act, the
authorities have a right to levy mandi
fees, which includes both imposition of
tax as well as assessment and by way of
order dated 30.4.2008, the Secretary,
Mandi Samiti has passed an assessment
order. He submitted that it is not the case
of re-assessment but is a case of original
assessment inasmuch as before the order
dated 30.4.2008 no other demand has
been raised by the Secretary, Mandi
Samiti. He submitted that Secretary,
Mandi Samiti has issued the order in the
month of April relating to the transactions
of January, 2008 to March, 2008 within a
reasonable period. He submitted that it is
true that no machinery has been provided
for the assessment under the Act but even
in the absence of such machinery the
validity of the Act has been upheld by the
Apex Court in the case of Ram Chandra
Kailash Kumar & Company and others
Vs. State of U.P. and others, reported
in A.I.R. 1980 SC-1124 and the Division
Bench of this Court in the case of Shri
Mahalaxmi Sugar Works Farid Nagar and
others Vs. State of Uttar Pradesh and
others, reported in 1987 UPLBEC-957
has upheld the validity of the explanation
added to Section 17 of the Act and has
issued the direction relating to the
assessment. He submitted that a further
direction has been issued by the Division
Bench of this Court in the case of Ram
Karan Vs. Krishi Utpadan Mandi
Samiti, Saharanpur, reported in (1994)
2 UPLBEC-1405. He submitted that if
the petitioners would have any grievance
against the order dated 30.4.2008, the
petitioners would have filed the objection
before the Secretary, Mandi Samiti itself.

8. Having heard learned counsel for
the parties, I have perused the impugned
orders and the material available on
record.

The relevant parts of Section 17 read
as follows:

"17. Powers of the Committee- A
Committee shall, for the purposes of this
Act, have the power to-

(iii) levy and collect,-
(a) such fees as may be prescribed for the
issue or renewal of licences; and

(b) market-fee which shall be payable on
transactions
of
sale
of
specified
agricultural produce in the market area at
such rates, being not less than one
percentum and not more than two and a
half percentum of the price of the
agricultural produce so sold as the State
Government may specify by notification,
and development cess which shall be
payable on such transactions of sale at the
rate of half percentum of the price of the
agricultural produce so sold and such fee
or development cess shall be realised in
the following manner-

(1) if the produce is sold through, a
Commission Agent, the Commission
Agent, may realise the market-fee and the
development cess from the purchaser and
shall be liable to pay the same to the
Committee;

(2) if the produce, is purchased directly by
a trader from a producer, the trader shall
be liable to pay the market-fee and
development cess to the Committee;

(3) if the produce is purchased by a trader
from another trader, the trader selling the
produce may realise it from the purchaser
3 All] M/s Amar & Sons V. State of U.P. and others
909
and shall be liable to pay the market-fee
and development cess to the Committee:

Provided that notwithstanding anything to
the contrary contained in any judgment,
decree or order of any Court, the trader
selling the produce shall be liable and be
deemed always to have been liable with
effect from June 12, 1973 to pay the
market-fee to the Committee and shall not
be absolved from such liability on the
ground that he has not realised it from the
purchaser:

Provided further that the trader selling the
produce shall not be absolved from the
liability to pay the development cess on
the ground that he has not realised it from
the purchaser;

(4) in any other case of sale of such
produce, the 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 specified agricultural
produce
on
which
market-fee
or
development cess has been levied in any
Market Area if the trader furnishes in the
from and manner prescribed, a declaration
or certificate that on such specified
agricultural
produce
market-fee
or
development cess has already been levied
in any other Market Area.

(iii-a)..........................................................
(iv).............................................................
(v)...............................................................
(v-a)............................................................
(v-b)............................................................
(vi).............................................................
(vii)...........................................................
(viii)..........................................................

Explanation.- For the purpose of clause
(iii), unless the contrary is proved, any
specified agricultural produce taken out or
proposed to be taken out of a Market Area
by or on behalf of a licensed trader shall
be presumed to have been sold within
such area and in such case, the price of
such produce presumed to be sold shall be
deemed to be such reasonable price as
may be ascertained in the manner
prescribed."

Rules 66 and 68 of the U.P. Krishi
Utpadan
Mandi
Niyamawali,
1965
(hereinafter referred to as the "Rule") read
as follows:

"Rule 66. Market Fee and Cess
(Section 17 (iii)).- (1) The market
Committee shall levy and collect market
fee and development cess in the Market
Area in accordance with the provisions of
sub-clause (b) of clause (iii) of Section 17
910 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
of the Act at such rate as may be specified
in the bye-laws:

Provided
that
no
market
fee
and
development cess shall be levied and
charged prior to the date on which
provisions of Section 10 of the Act are
enforced:

Provided further that when the specified
agricultural produce is presumed to have
been sold in accordance with the
explanation given under clause (viii) of
Section 17 of the Uttar Pradesh Krishi
Utpadan Mandi Adhiniyam, 1964, the
price of such produce shall be the price
which prevailed for that type of produce
in that market just on the previous
working day.

(2) No market fee or development cess
shall be levied more than once on any
consignment of the specified agricultural
produce brought for sale in the Market
Yard if the market fee or development
cess has already been paid on it in any
Market Yard of the same Market Area
and in respect of which a declaration has
been made and a certificate has been
given by the seller in Form No. V.

Rule 68. Recovery of fees (Section 17
(iii)).-
(1)
The
market
fee
and
development
cess
on
specified
agricultural produce shall be payable as
soon as such produce is sold in the market
area in accordance with the terms and
conditions specified in the bye-laws.

(2) The market fee and development
cess shall be realised in the manner laid
down in sub-clause (b) of clause (iii) of
Section 17.

(3) The Licence-fee shall be paid along
with the application for licence:

Provided that in case, the Market
Committee refuses to issue a licence, the
fee deposited by the applicant shall be
refunded to him.

(4) The payment of the market fee and
Licence fee shall be made to the
Committee in cash and in special
circumstances
by
bank
draft
of
nationalised bank."

9. In the case of Ram Chandra
Kailash Kumar & Company and others
Vs. State of U.P. and others (Supra), the
question was raised that in the absence of
any machinery provision, the provision of
levy is inoperative. The Apex Court
upheld the validity of the Act and
observed as follows "A machinery for
adjudication of disputes is necessary to be
provided under the Rules for the proper
functioning of the Market Committees.
We have already observed and expressed
our hope for bringing into existence such
machinery in one form or the other. But it
is not correct to say that in absence of
such a machinery no market fee can be
levied or collected. If a dispute arises then
in the first instance the Market Committee
itself or any Sub-Committee appointed by
it can give its finding which will be
subject to challenge in any court of law
when steps are taken for enforcement of
the provisions for realisation of the
market fee."

10. In Civil Appeal Nos. 1769-1773
of 1998 Krishi Utpadan Mandi Samiti Vs.
M/s Sarswati Cane Crusher & others
(unreported judgment), the Apex Court
observed as follows:
3 All] M/s Amar & Sons V. State of U.P. and others
911
"We are satisfied that the orders of
this Court afore-referred to would need
some repair work. We treat the said order
to be conceiving of a provisional
assessment where-after doors are opened
for a final assessment. We conceive that
when demands are raised by the Krishi
Utpadan Mandi Samiti against a trader
before he could ask for transit of goods
outside the market area, the trader would
be entitled to tender a valid rebuttal to say
that no sale had taken place within the
notified area and that if the explanation is
accepted there and then by the Mandi
Samiti, no question of payment would
arise as also of withholding the gate
passes. If prima facie evidence led by the
trader is not acceptable by the Mandi
Samiti, the trader or the dealer can be
compelled to pay the market fees
demanded before issuance of gate pass. If
the trader makes the payment without
demur,
the
matter
ends
and
the
assessment finalized. But in case he does
so and arises protest, then the assessment
shall be taken to be provisional in nature
making it obligatory on the trader to pay
the fee before obtaining the requisite gate
pass. After protest has been lodged and
the provisional assessment has been
made, a funo-frame would be needed to
deviso making the final assessment. We,
therefore, conceive that innately be read
in the order of this Court that a final
assessment has to be made within a period
of
two
months
after
provisional
assessment so that the cute transition in
that respect is over enabling the aggrieved
party, if any to challenge the final
assessment in the manner provided under
the afore Act or under the general law of
the land in appropriate form. Having
added this concept in this manner in the
two-Judge Bench decision of this Court,
we declare that what repair has been done
instantly would add to the orders of the
High Court and the instant corrective
decision shall be the governing rule. The
Civil Appeal thus stand disposed of."

11. In the absence of any machinery
provision for the purposes of assessment,
the Division Bench of this Court in the
case of Shri Mahalaxmi Sugar Works
Farid Nagar and others Vs. State of
Uttar Pradesh and others (Supra) has
issued the following direction :

"For this purpose we are constrained
to observe that due to apathy of State
Government in framing the necessary
rules
and
making
provision
for
assessment etc. this Court considers it
appropriate to issue following directions
to protect the interest of traders and
safeguard payment of fee in accordance
with law.

(1) Every trader proposing to take out
the goods manufactured or produced
in the market area shall be entitled to
issue of gate passes from the Mandi
Samiti if he produces documents to
establish that the goods were being
taken out of the market area.
Necessary entries shall be made by
Mandi Samiti in records maintained
by it.
(2) A trader taking out goods shall file a
statement before the Mandi Samiti
within six weeks indicating therein
that the goods were sold by the
Commission
agent
or
by
the
petitioners
themselves
inside
or
outside the market area.
(3) In case the traders do not file the
statement the Mandi shall issue
notice to the traders after expiry of
six weeks to file the statement within
10 days of receipt of notice.
912 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
(4) If the return is filed the same shall be
scrutinized by the Mandi Samiti and
if it is satisfied about its correctness,
then it shall pass appropriate orders
levying fee. If the sale has been made
in the market area and exempting in
case, it has been made outside the
market area.
(5) In case the return of trader is found
to be incorrect or he omits to file his
return despite notice by Mandi
Samiti then the Mandi Samiti shall
levy market fee on trader on the
goods which had been taken out and
for which gate pass had been issued."

12. In the case of Ram Karan Vs.
Krishi
Utpadan
Mandi
Samiti,
Saharanpur (Supra), the Division Bench
of this Court has issued some more
direction in addition to the direction
issued in the case of Shri Mahalaxmi
Sugar Works Farid Nagar and others
Vs. State of Uttar Pradesh and others
(Supra) as follows:

"(1) Every trader proposing to take out the
goods manufactured or produced in the
market area shall be entitled to issue of
gate passes from the Mandi Samiti if he
produces documents to establish that the
goods were being taken out of the market
area. Necessary entries shall be made by
Mandi Samiti in records maintained by it;
(2) A trader taking out goods shall file a
statement before the Mandi Samiti within
twelve weeks indicating therein that the
goods were sold by the Commission agent
or by the petitioners themselves inside or
outside the market area;
(3) In case the traders do not file the
statement, the Mandi Samiti shall issue
notice to the traders after expiry of twelve
weeks to file the statement within 10 days
of receipt of notice;
(4) If the return is filed, the same shall be
scrutinized by the Mandi Samiti within 3
months of its Filing and if it is satisfied
about its correctness, then it shall pass
appropriate orders levying fee. If the sale
has been made in the market area and
exempting in case. It has been made
outside the market area;
(5) In case the return of trader is found to
be incorrect or he omits to file his return
despite notice by Mandi Samiti then the
Mandi Samiti shall levy market fee on
trader on the goods which had been taken
out and for which gate-pass had been
issued;
(6) A Mandi Samiti shall have a right to
make reassessment in case some material
comes into its possession after assessment
within six months of passing of the order
of assessment for which it shall issue a
show
cause
notice
mentioning
the
grounds therein on the basis of which
reassessment is proposed to be made."

13. It is significant that under
Section 17 (iii) (a) of the Adhiniyam
every Mandi Samiti has been empowered
to 'levy and collect ' fees. The Supreme
Court in the case of Assistant Collector of
Central Excise, Calcutta Division v.
National Tobacco Company of India
Limited,
(1972)
2
SCC
560
has
interpreted the word 'levy' to include both
imposition of tax as well as Assessment.
According to the said decision the word
'levy' does not include Collection but, as
observed above. Mandi Samitis have been
empowered under Section 17 (iii) (a) to
collect fees also. Similarly, the Supreme
Court in the case of Bharat Steel Tubes
Limited and another v. State of Haryana
and another, (1988) 3 SCC 478 has laid
down that where no period of limitation is
prescribed under the Statute, assessment
should be completed expeditiously within
3 All] M/s Amar & Sons V. State of U.P. and others
913
a reasonable time which would depend
upon the circumstances of each case. In
these circumstances, it is imperative that
adequate provisions should be made in
this behalf for hearing and redressal of the
grievances etc. of the persons who are
required to pay the fees.

14. Section 17 (iii) of the Act gives
the power to levy and collect which also
includes the assessment. The explanation
to Section 17 provides that "the price of
such produce presumed to be sold shall be
deemed to be such reasonable price as
may be ascertained in the manner
prescribed." The proviso of Rule 66 (1)
says that when the specified agricultural
produce is presumed to have been sold in
accordance with the explanation given
under clause (viii) of Section 17 of the
Uttar Pradesh Krishi Utpadan Mandi
Adhiniyam, 1964, the price of such
produce shall be the price which prevailed
for that type of produce in that market just
on the previous working day. Therefore,
the mandi fee was payable on the price of
such produce which prevailed in that
market just on the previous working day.
In case, if it is found that the mandi fee
has not been paid on the price which was
prevailed in the market just on the
previous working day, the Committee has
a authority to issue notice and pass
assessment order and raise the demand.
Such order may be considered as a
provisional order in view of the Division
Bench decision of this Court. If the
licensee accepts the order, the mandi fee
shall be deposited and in case if he
disputes the same then it has a right to file
the objection and then on a consideration
of the said objection, the final assessment
order is to be passed.

15. It is true that at the time of
transactions when the gate passes are
being issued on the payment of mandi fee
in the presence of the Inspector, it would
be more reasonable that the objection can
be raised about the rate and the market
price on the basis of which the assessment
may take place subsequently. It is not
necessary that at the time of objection the
gate pass may be denied on this ground.
In the present case, it appears that no
objection has been raised, at the time of
transactions, by the Inspector ,who was
present at the time of transactions and
mandi fee has been paid on the price
mentioned in 6R but in my view, mere not
raising the objection will not preclude the
Committee
to
raise
the
objection
subsequently on the basis of the material
on record. Although, it would be more
appropriate that the objection should be
raised at the time of transactions itself.
Therefore, in my view, the demand raised
by the Secretary, Mandi Samiti on the
ground that the mandi fee has not been
paid on a prevalent price was within his
jurisdiction. Present is not the case of any
reassessment. Learned counsel for the
petitioners are not able to show that
before 30.4.2008 any other demand has
been raised. Therefore, it is a case of
original assessment. In the absence of any
machinery being provided, in view of the
direction given by the Division Bench of
this Court in the case of Ram Karan Vs.
Krishi
Utpadan
Mandi
Samiti,
Saharanpur (Supra), the order passed by
the
Secretary,
Mandi
Samiti
dated
30.4.2008 can be considered only as a
provisional assessment. The case of the
petitioners are that they have filed the
objection to the aforesaid assessment
while the case of the respondents is that
no objection has been filed. However,
there is no dispute that no final
914 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
assessment order has been passed after the
order
dated
30.4.2008.
In
the
circumstances, I am of the view that the
objection of the petitioners requires to be
considered by the Secretary, Mandi
Samiti and on a consideration of the said
objection, the final assessment order to be
passed. In this view of the matter without
going into the controversy whether the
petitioners have filed objection or not, the
petitioners are directed to file a fresh
objection within a period of one month
and the Secretary, Mandi Samiti is
directed to decide the objection and pass
the final assessment order.

16. Before parting, I would say that
it is unfortunate that despite the direction
given by the Apex Court and two
Division Benches of this Court, referred
to hereinabove, the machinery provisions
have not been provided in the Act like the
other
taxing
statutes.
In
the
circumstances,
State
Government
is
directed to take appropriate steps within a
period of three months to provide
machinery provisions in the Act for the
assessment,
collection,
recovery,
reassessment etc.

In the result, the writ petitions are
allowed. The impugned order dated
20.9.2008 passed by the revisional
authority is set aside. The petitioners are
directed to file objection within a period
of 30 days to the order dated 30.4.2008
and the Secretary, Mandi Samiti is
directed to pass the final assessment order
after considering the objection of the
petitioners
in
accordance
to
law
expeditiously.

Copy of this order be provided to
learned Standing Counsel within 10 days
to
serve
the
Principal
Secretary,
Agricultural Product, Lucknow, U.P. for
the compliance of aforesaid directions.
---------
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 30.10.2009

BEFORE
THE HON'BLE IMTIYAZ MURTAZA, J.
THE HON'BLE K.N. PANDEY, J.

Criminal Capital Appeal No. 4696 of 2008
Reference No. 7 of 2008

Harveer

...Appellant
Versus
State of U.P.

 ...Opposite Party

Counsel for the Appellant:
Sri D.K. Tyagi
Sri Abhishek Pandey
Amicus Curiae

Counsel for the Opposite Party:
Sri D.R. Chaudhary
Sri Arunendra Singh
Sri M.S. Yadav
Sri V.K. Mishra
A.G.A.

Code of Criminal Procedure Section 304Criminal Trail concluded-all prosecution
witnesses
examined-Amicus
curiae
appointed on belated stage-application
to
cross
examine
the
prosecution
witness
rejected-held-Trail
Court
committed great illegality conviction set
a side with direction to examine and
cross examine all witness.

Held: Para 15

The crux that boils down from the
discussion of the aforesaid decisions is
that the court is under a duty to ensure
that
accused
person
before
it
is
represented or not and whether he
requires the services of a lawyer from
State through Legal Aid Scheme on
account of his indigent conditions or