# KRISHI UTPADAN MANDI SAMITI AND ORS v. PILLIBHIT PANTNAGAR BEEJ LTD. AND ANR - **Citation:** [2003] Supp. 6 S.C.R. 344 - **Court:** Supreme Court of India - **Decided:** 2003-11-28 - **Case number:** Civil Appeal No. 6301 of 2001 - **Bench:** V.N. Khare, S.B. Sinha, Dr. Ar. Lakshmaj'Jan - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/krishi-utpadan-mandi-samiti-and-ors-v-pillibhit-pantnagar-beej-ltd-and-anr-19589 - **Pages:** 51 ## Headnote UP. Krishi Utpadan Mandi Adhiniyam, 1964; Sections 2(a), 2(y), 11, 17(iii)-Seeds Act, 1966,: Section 2(11)-Seeds Rules, 1968, Rule 2 (e) - C Wheat and wheat seed - Respondents dealing i_n purchase and sale of certified seeds of wheat-Levy of Market Fee under the State ActCompetency of-Held, wheat and wheat seed are different-Hence, State is not competent to levy market fee since seeds of wheat is not a specified agricultural produre under the State Act-On harmonious reading of State Act and Central Act, respondents are not traders under the State Act- _ D Essential Commodities Act, 1955; Section 3-Seeds Control Order, , 1983-Food grains Movement Restriction (Exemption of Seeds) Orders, 1970. Respondents are engaged in business -of buyfog, processing and selling of certified wheat seeds. The appellant-Market Committee E issued notices to the respondents for levying market fees under section 17 (iii) (b) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (U.r. Act) on the ground that the respondents are dealing in wheat, a specified 'agricultural produce' under section 2(a) of the U.P. Act. The respondents replied to the notices of the appellants that they are F dealing with certified seeds of wheat and not wheat and hence are not liable to market fee under the U.P. Act. The appellants rejected· the representations and passed an order demanding market fees under 'the U.P. Act. The respondents filed a Writ Petition before High Court for quashing the order of the appellants. The High Court allowed the writ petition and quashed the order of the appellants following the decision G in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association, AIR (1996) SC 2179. In appeal, the appellants contended that the market fee is levied under the U.P. Ad on purchases of wheat by the respondents and not H on sale of certified seeds; that wheat is an agricultural .produce notified '.l.14 KRISHI UTPADAN MANDI SAMITI v. PILLIBHIT PANTNAGAR BEEJ LTD. 345 under the heading 'cereal' chargeable to market fee under the U.P. A Act; that cereal is a seed in itself; and that there is no difference between wheat and wheat seed. i The respondents contended that they are dealing only in certified seeds of wheat and not in purchase or sale of wheat; that the breeder B seeds of wheat are purchased from Agricultural Universities for processing them into certified seeds; that the seeds of wheat are not wheat; and that wherever seeds are intended to be notified, it has been specifically mentioned as seeds in the Schedule to the U.P. Act and since the seeds of wheat are not notified, it cannot be subjected to market fee under the U.P. Act C Dismissing the appeal, the Court Per AR. Lakshmanan, J (for himself and V.N Khare, CJ): HELD: 1.1. A perusal of the Schedule to the U.P. Krishi Utpadan D Mandi Adhiniyam, 1964 (U.P. Act) shows that wherever seeds have been intended to be notified, it has been specifically mentioned as see~s. In case of wheat, the Schedule does not provide or notify seed of wheat and thus the seeds of wheat are not specified in the Schedule and thus not covered by the definition of 'agricultural produce'. The object of E legislature was to notify only those seeds which are different from the produce itself. 1360-G-Hl 1.2 The ratio decidendi of the decision in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association is squarely applica~le F where the appellants seek to give a wide connotation to the words· in the Schedule. Giving a wide interpretation is not possible and since wheat seed is not included in the Schedule, the Market Committee is not allowed to levy market fee on its purchase. As the Market Committee plays no role in the trade of the respondents' seeds, it may G not be allowed to levy the market fee. (364-F-G-Hl 1.3. There is no nexus whether the seed has been chemically treated or not and the levy of market fees. Since the seed is a separate ~ommodity from grain, the same is not covered under the Schedule of ## Text _Characters 0–39,774 of 111,848. This is a partial read: ask again with offset=39774 for what follows._ A B KRISHI UTPADAN MANDI SAMITI AND ORS. v. PILLIBHIT PANTNAGAR BEEJ LTD. AND ANR. NOVEMBER 28, 2003 [V.N. KHARE, CJ. AND S.B. SINHA AND DR. AR. LAKSHMAJ'JAN, JJ.] UP. Krishi Utpadan Mandi Adhiniyam, 1964; Sections 2(a), 2(y), 11, 17(iii)-Seeds Act, 1966,: Section 2(11)-Seeds Rules, 1968, Rule 2 (e) - C Wheat and wheat seed - Respondents dealing i_n purchase and sale of certified seeds of wheat-Levy of Market Fee under the State ActCompetency of-Held, wheat and wheat seed are different-Hence, State is not competent to levy market fee since seeds of wheat is not a specified agricultural produre under the State Act-On harmonious reading of State Act and Central Act, respondents are not traders under the State Act- _ D Essential Commodities Act, 1955; Section 3-Seeds Control Order, , 1983-Food grains Movement Restriction (Exemption of Seeds) Orders, 1970. Respondents are engaged in business -of buyfog, processing and selling of certified wheat seeds. The appellant-Market Committee E issued notices to the respondents for levying market fees under section 17 (iii) (b) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (U.r. Act) on the ground that the respondents are dealing in wheat, a specified 'agricultural produce' under section 2(a) of the U.P. Act. The respondents replied to the notices of the appellants that they are F dealing with certified seeds of wheat and not wheat and hence are not liable to market fee under the U.P. Act. The appellants rejected· the representations and passed an order demanding market fees under 'the U.P. Act. The respondents filed a Writ Petition before High Court for quashing the order of the appellants. The High Court allowed the writ petition and quashed the order of the appellants following the decision G in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association, AIR (1996) SC 2179. In appeal, the appellants contended that the market fee is levied under the U.P. Ad on purchases of wheat by the respondents and not H on sale of certified seeds; that wheat is an agricultural .produce notified '.l.14 KRISHI UTPADAN MANDI SAMITI v. PILLIBHIT PANTNAGAR BEEJ LTD. 345 under the heading 'cereal' chargeable to market fee under the U.P. A Act; that cereal is a seed in itself; and that there is no difference between wheat and wheat seed. i The respondents contended that they are dealing only in certified seeds of wheat and not in purchase or sale of wheat; that the breeder B seeds of wheat are purchased from Agricultural Universities for processing them into certified seeds; that the seeds of wheat are not wheat; and that wherever seeds are intended to be notified, it has been specifically mentioned as seeds in the Schedule to the U.P. Act and since the seeds of wheat are not notified, it cannot be subjected to market fee under the U.P. Act C Dismissing the appeal, the Court Per AR. Lakshmanan, J (for himself and V.N Khare, CJ): HELD: 1.1. A perusal of the Schedule to the U.P. Krishi Utpadan D Mandi Adhiniyam, 1964 (U.P. Act) shows that wherever seeds have been intended to be notified, it has been specifically mentioned as see~s. In case of wheat, the Schedule does not provide or notify seed of wheat and thus the seeds of wheat are not specified in the Schedule and thus not covered by the definition of 'agricultural produce'. The object of E legislature was to notify only those seeds which are different from the produce itself. 1360-G-Hl 1.2 The ratio decidendi of the decision in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association is squarely applica~le F where the appellants seek to give a wide connotation to the words· in the Schedule. Giving a wide interpretation is not possible and since wheat seed is not included in the Schedule, the Market Committee is not allowed to levy market fee on its purchase. As the Market Committee plays no role in the trade of the respondents' seeds, it may G not be allowed to levy the market fee. (364-F-G-Hl 1.3. There is no nexus whether the seed has been chemically treated or not and the levy of market fees. Since the seed is a separate ~ommodity from grain, the same is not covered under the Schedule of the U.P. Act and as such 110 market fee is leviable over .the sale or H 346 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R. A purchase of the same. (366-C-D) 1.4. The seeds are not specified agricultural produce under the · . ' ' provisions of the Act and therefore the business of purchase and sale o_(seeds under the supervision of Seed Certification agency established B under t~e ~ct is not a business of.~ale and purchase of specified agricultura.1 produce and as such the. resp~ndents are not required to pay the market fee or to take o.ut a licenc~. Since the processing. of · wheat resulting in loss of its basic characteristics of being cereal, it cannot be subjected to levy .as agricultural produce since the purchase by the respondent is for the purpose of g~o"'.ing seeds, no levy is C permissible and therefore the market fee cannot be imposed on seeds which are unfit for human consumption. (366-D-G) D .. '· State of Rajasthan v. Rajasthan Agriculture Input Dealers Association, AIR (1996) SC 2179, relied on. State of Rajasthqn v. Mangi Lal Pindwasl, (1996) · 5· SCC 60, referred to. Per S. B. Sinha, J (supplementing) E 'l:t. The entire process beginning from procurement of see'ds breeder, further production thereof as well a~ sale is g~verned under the Seeds Act, 1966 and the Rules framed thereunder: The U.P. Krishi Utpadan Mandi Adhiniyam, 1964 contains both penal and· fiscal provisions. A 'trader' within the meaning of the U.P. Act wo.u!d be a. person who carries on business inter ·alia i'n 'the agricultu'r~I produce. F Although the dictionary meaning of 'business' may, be ~ide, but f~r the purpose of conside,ring th~ same 'in the conte~t of regulatory ~nd ~ · ~ ~ , ' • • • ;._ ·I • i • f ,1 I l ' °t • I I penal statute, the same must be read as carrying on a commercial venture in th'e agricultural pr~d~ce. The. r~le' of st~ict c~-nstruction· · shouid be applied in the 'instant case~ The intentio~ of the legislature G in directing the ,trader to. obtain 'iicence is ab~olutely ~lear: ·a'nd· unambiguous in so far ~s it seeks to regulate the. trade' for purc~ase and sale. Thus a person who is not buying an agricultural produce for the pu'rpose «:»fs.elling it, ~.hether i~ the s~me form o~,in the transf~~red · form, may n~r be ~ trader •. The construction of a stat~t~ wm depend .. • ' .J ~ t • t .. . • H upon the purport and object of the, Act. The di.fferent provisions of the .. KRISHI UTPADAN MANDI SAMITI 1·. PILLIBHIT PANTNAGAR BEEJ LID. 34 7 statute which have the object of enforcing the provisions thereof A namely levy of market fee, which was to be collected for the benefit of the producers is to be interpreted differenily from a provision where it requires a person to obtain a licence so as to regulate a trade. In case of doubt in construction of a penal statute, the same should be · construed in favour of the subject and against the State. The fiscal · B statute must not only be construed literally, but also strictly. If in terms of the provisions of a penal statute, a person becomes liable to follow . the provisions thereof, it should be clear and unambiguous so as to let him know his legal obligations and liabilities thereunder. [368-C-D; 369-F-G; 370-G-H; 371-A-C, E-Fl State of Andhra Pradesh v. Niis Abdul Bashi & Bros, AIR (1965) SC 531 and Sri Krishna Coconut Co. v. East Godavari Coconut & Tobacco Market Committee, AIR (1967) SC 973, referred to. c London & North Eastern Railway Company & Berrriman. (1946) AC 278 and Tuck & Sons v. Priester, [1987) 19 QBD 629, referred to. 0 1.2. The legal maxim "Expressio unius (persone vel rei) est exclusio a/terius" is applicable in the instant case. Mis. Khemka & Co. (Agencies) Pvt. Ltd. Etc. v. State of Maharashtra E Etc., f1975) 2 SCC 22, referred to. 1.3. A conflict would arise in the event it is held that buying of seeds, which is a commodity governed by a Central Act (Seeds Act) would attract payment of market fee in terms of the State A<'t (U.P. Act). In ordinary parlance, at particular stages in which seeds are p grown from breeder seeds may take the form of wheat but the said production which is bought by the respondents is also governed by the provisions of the Seeds Act and the Rules framed thereunder. The definition of 'seed', is of wide amplitude. It includes seedling of food crops. It is thus necessary to construe both the statutes harmoniously. G Both the statutes must be given proper effect and allowed to work in their respective fields, Taking into consideration the totality of the situation and upon giving harmonious construction to both the Seeds Act' and the U.P Act, the respondent cannot be said to be a trader of agricultural produce and hence no market fee can be demanded from it by the appellants. [371-H; 372-A-DI H 348 SUPREME COURT REPORTS [2003} SUPP. 6 S.C.R. A 1.4. 'Seed' is also an essential commodity withiri the meaning of the provisions of the Essential Commodities Act; 1955. Ifa Parliamentary Act governs the entire field; the seeds, which are brought and further seeds produced therefrom and processed upon being governed by the Parliament Acts aiid Statutory Rules, it must be h~ld to have B been excluded from the purview of the provisions of the U.P. A'ct. The seeds, which are subject matter of not only a Pariiamentary Act but also an order made under Section 3 of the Essential Commodities Act would by necessary implication are not meant to be included within the definition of 'agricultural produce' uiider the i.J.P. Act. As the respondents purchase the seed is riot meant to be used as a 'cereal', C which is an agricultural produce within the meaning of the Said Act, the High Court has tightly held that th~ respondents are not liable to pay any market fee. [372-D-E, G-H; 373-E-F[ State of Maharashtra v. Indian Medical Association & Ors., [2002} D I SCC 589 and S. Samuel, MD. Harrisons Malayalam & Anr. v. Union of India & Ors., JT (2003) 8 SC 413, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6301 of 2001. E From the Judgment and Order dated 25.8.99 of the Allahabad High F Court in C.M.W.P. No. 17877 of 1999. Rakesh Dwivedi, Pradeep Misra, Ms. Iildu Misra, Ms. Virflla Sinha, Abhishek Chaudhary for the Appellants. Dushyant A. Dave Huzefa Ahmadi, Vibha Datta Makhija, Nakul Diwan, Ms. Priya Ahluwalia, Sanjay R. Hegde for the Respondents. The Judgments of the Court were delivered by G DR. AR. LAKSHMANAN, J. The unsuccessful respondents 2;3 and 4 before the High Court of Allahabad are the appellants in this appeal. The writ petition was filed by the first respondent herein to quash the order dated 12.03.1999 (Annexure 17 to the writ petition) and for mandamus restraining the appellants herein from interfering in the business fa certified H seeds either before or after processing and further in restraining the KRISHIVTPADAN MANDI SA!ll!TI v. PILLIBHIT PANTNAGAR BEEJ LTD [DR. LAKSHMANAN, J] 349 appellants from demanding and realising market fee on the transaction of A unprocessed or processed certified seeds. A Division Bench of the Allahabad High Court allowed the writ petition following the decision of this Court in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association reported in AIR ( 199~) B SC 2179 which has also been followed by the Division Bench of the said Court in Writ Petition No. 7262of1993 dated 18. 12.J 996. The High Coult quashed the impugned order dated l 2.03. l 999 and also held that the respondents in the writ petition/appellants herein cannot charge mandi fee on the seeds in which the first respondent herein deals. Aggrieved by the judgment of the High Court in Civil (M) No. 17877 of 1999 dated C 25.08.1999, a Special Leave Petition was filed under Article 136 of the Constitution oflndia. When the Special Leave Petition came up for hearing on 06.09.2001, leave was granted by this.Court and considering the importance of the questions involved, the ·'matter was placed before Hon'ble the Chief Justice for referring to a larger Bench. D The facts giving rise to this appeal are s~ated below:- The U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter re-. ferred to as "the Adhiniyam") was enacted to regulate sale and purchase of agricultural produce and for establishment, superintendence and control E of market in U.P. Section 6 provides for declaration of market area and 1 Sections 9 and I 0 prohibit business of specified agricultural produce in such market areas without licence. Spei::ified Agricultural produce is defined under Section 2 (a) of the F Adhiniyam, as follows: "2(a) 'agricultural produce' means such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husbandry ot forest as are specified in the Schedule, and includes admixture of two or more of such items, G and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery." The schedule appended to the Adhiniyam provides a list of agriculture produce. Section l 7(iii) of the Adhiniyam provides for imposition of H 350 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A market fee on the transactions of such specified agricultural produce in the market area, on such rates notified by the State. Wheat is specified in the Schedule at Serial No.1 under the heading of cereals. It was submitted that wherever seeds have been intended to be notified, it has been specifically mentioned as seeds. In case of wheat, however, it has not been notified B for seed and thus the seeds of wheat are not covered in the Schedule and are thus not covered by the definition of Specified Agricultural Produce. The first respondent-company is a private limited company, engaged in production of certified seeds since 1996-97 and holds valid registration ce1tificate from the Distriet Agriculture Officer, Pilibhit under the Seeds C Control Order 1983 valid upto 25.5.2000 and holds a certificate of registration from the U.P. Seeds CertificaticnAge!"lcy, Alam. Bagh, Lucknow. According to the first respondent, the business of the company is to purchase 'breeder seeds' from Agricultural Research Institute and to D produce 'certified seeds'. The first step of production is to distribute this breeder seeds to the listed and scheduled farmers. The breeder seeds are sown and are germinated under strict supervision of the statutory Seeds Certification Agency, set up under the Seeds Act, 1966 (hereinafter referred to as "the Act"). The harvest is selected caref~lly under E supervision of the Agency. The lots which do not confonn to sp~cifications are rejected. It was further submitted that the standardized seeds so obtained are called 'Foundation Seeds'. These foundation seeds are thereafter again F supplied to the listed farmers variety wise with intimation to the Agency. The farmers sow these foundation seeds which are again supervised by the Agency. This crop is again germinated under strict supervision of the agency and once again the lots rejected are not taken back by farmers. After harvesting the approved standardised certified seeds,' these lots are fumigated for preservation under the samples of each lot is tested in the G laboratories of Seeds Certification Agency at Alam Bagh (Lucknow), Kanpur, Rudrapur (Udham Singh Nagar). The rejected lots and losses at processing are returned to farmers only after the foundation seeds-are certified as conforming to specifications, the lots are subjected to treatment with insecticides (Cell phose, Quick phose) and pesticides (thiram and H barastin) at the time of packing. KRISHI UTPADAN MANDI SAMITI •·. PILLIBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANAN, J.] 351 It is the case of the first respondent that the bags are marked as poi~on A and are thereafter marketed. The entire production, operation is supervised by the Seed Certification Agency. It was submitted that until the seeds are certified they continue to be the property of the farmer, who agrees to such agreement on the foundation seed distribution form. In the year 1988, the Market Committee issued notices to the companies engaged in certified B seeds. The notices were challenged and that after contest, the High Com1 allowed the writ petition holding that certified seeds are not specified agricultural produce and the notices issued by the Mandi Samiti were quashed. The aforesaid judgment was challenged by the Mandi Samiti in Civil Appeal Nos. l 06-110of1990. This Court relying upon the judgment C i'n State of Rajasthan v. Rajasthan Agriculrural Input Dealers Association, (supra) dismissed the civil appeals. Based on the aforesaid judgment, all the pending writ petitions were also decided in favour of the dealer~ in certified seeds. However, by notice dated 15.10.1997, the Mandi Samiti directed the 1st respondent to deposit the market fee on seeds. The first D respondent submitted a detailed reply a.nnexing certificates issued by the Seeds Certification Agency and the other relevant documents. The first respondent also submitted that they are not _dealing in sale. and purchase of food grains or wheat but deals only in certified seeds and that the stock stored by them were not of wheat but by the certified seeds of wheat unlier the supervision of the U.P. Seeds Ce11ification Agency. The appellants E rejected the representation of the first respondent and directed them to pay market fee. The first respondent challenged the aforesaid order by filing Writ Petition No. I 090 of 1997. Again by Notification dated 11.8.1998, tne first respondent was required to submit information regarding sale and purchase of wheat for the year 1997-1998. A reply was submi~ed F protesting the demands against law laid down by this Court. Aggrieved by the demands, the first respondent filed Writ Petition No. 32740of1998 against the order dated 22.9.1998. The writ petition was disposed of with a direction to the first respondent herein to file a fresh representation. In pursuance of the aforesaid order, the first respondent filed a detailed G representation dated 15.2.1999. The repr~sentation was rejected by the appellants on 123.1999 and a demand has been made for payment 1 of market fee which was again challenged by the first respondent herein by filing the present Writ Petition No. 17877 of 1999 which was allowed by the High Court on 25.8.1999. H 352 SUPREME COURT REPORTS [2003] SUPP. 6 S:C.R. A Against the said judgment of the High Court, 1he above appeal by way of special leave petition has been filed. The instant appeal raises the following .questions of law: (i) What is the true scope and ambit of Sections 2(a) and 17 iii (b) B of the Krishi Utpadan Mandi Samiti Adhiniyam, 1964? c (ii) Whether the market fee can be levied on the purchases of •wheat by ~he seed processing unit to process :and convert the same into certified seed by treating it chemically? (iii) Whether there is any ·difference in wheat and wheat seed before it is chemically treated and converted into certified seed and thus becomes unfit for hum~ consumption? (iv) Whether it is necessary, to notify seed ofcereals which can itself D be used as seed wh~n the object df the legislature w;:is .to notify only those seeds which are different from produce itself? E On the above pleadings, we heard Mr. Rakesh Dwivedl, learned senior counsel .appearing for :the appellants and Mr.. Dushyant :A. Dave, learned senior counsel for the 1tontesting respondent.· It was submitted by the appellants herein/respondents in the writ petition that after the first resporident p~rchased wheat, they convert it.into seed by applying pesticides and other chemicals and then the sale was effected as wheat seed and on this transaction, 'Mandi Samiti is not F demanding market fee. It was .also submitted that the decision of this Court in State of Rajasthan 'v. Rajasthan Agricultural Jnput .Dealers Association (supra) are not applicable in the case of the first respondent and that what is purchased by the first respondent herein ·is nothing but wheat and the entire .transadtion of wheat is within .the .market area ·of Mandi Samiti, Pilibhit and ·hence subject to payment of ~arket fee. It was G also submitted that the 'first respondent-·Company"is engaged:in producing certified seeds but for that purpose it purchases regulaiJy .wlieat and other commodities for preparing :seeds ana on "these 'trans!lctions, the first respondent is liable'to pay·nrarket fee. Before:aavetti~g:to•theTespective arguments, it is beneficiaI·to :reproduce sub~sections (a)c& (b)·of Section H 17(iii) of the Adhiniyam, which reads as under: KRISHI l'TPADAN MAl\'DI SAMIT! 1·. PILLIBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANA.N. J.] 353 ''(iii) levy and collect: (a) such fees as may be prescribed for the issue or renewal of licences; and A (b) market fee, which shall be payable on transactions of sale of specified agricultural produce in the market area at such rates, B 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 ofhalfpercentum ofthe price of the agricultural produce C 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 D cess from the purchaser and shall be liable to pay the same to t~e Committee; (2) if the produce is purchased directly by a trader from the 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 ancther trader, th~ trader selling the produce may realise it from the purchaser 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 judgement, decree or order of any court, th~ trader selling the produce shall be liable and be deemed always E F to have been liable with effect from June 12, 1973 to pay the market fee to the Committee and shall not be absolved from sucti G liability on the ground that he has not realised it from the purchaser: Provided further that tht trader selling the produce shall nqt b.e absolved from the liability to pay the development cess on the H 354 A B c D E SUPREME COURT REPORTS [2003] SUPP, 6 S.C.R. 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 agricul· tural 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 spe~ify: 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 declarati.on or certificate that on such specified agricultural produce market fee or development cess has already been levied in any other market area." p It was submitted by Mr. Rakesh Dwivedi, learned senior counsel appearing for the appellants that the first respondent being the purchaser/ trader is liable to pay market fee under Section 17(iii) of the Act and that the contention of the respondent that they sell wheat and the entire transaction is of wheat within the market area of Mandi Samiti cannot be G accepted. Mr. Rakesh Dwivedi, learned senior counsel for the appellants, submitted that at the time of hearing in the case of State of Rajasthan v. Mangi Lal Pindwal, [ 1996] 5 SCC 60 by this Court, it could not be brought to the notice of this Court that the intention of the legislature was to notify H only those seeds which are different from its produce and that the definition KRISHI UTPAOAN MANDI SAMITI ''· PILLIBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANAN. J.] 355 of agricultural produce being so wide that seeds of the cereals are included A in that entry and hence there was no necessity to notify the same separ~tely because there is no difference in Bazra or seed of Bazra. It was also submitted that in the aforesaid judgment, this Court has held that seeds which are manufactured after cJiemical treatment of Bazra by adding insecticides the market fee cannot be levied on the sale and purchase of B the same because the same cannot be used for hum-.:1 cvnsumption and ceases to be a cereal. Therefore, it is clear that before chemical treatment Bazra remains an agricultural produce and sale and purchase of the s~e attracts imposition of market fee. Arguing further, learned senior cou~sel for the appellants contended that the High Court failed to appreciate that the cereals are seeds itself and hence the same have not been notified C separately because there is no difference between wheat and seed of wtieat and that Wheat includes its seed. Otherwise also the appellant is imposing market fee on wheat and not its certified seed as manufactured by the first respondent. Concluding his arguments, learned senior counsel, submitted that since the Wheat purchased by the first respondent is neither chemically D treated nor the same unfit for the human consumption and hence market fee was rightly imposed. Per contra, Mr. Dushyant A. Dave, learned senior counsel appearing for the first respondent, submitted that the respondent is not dealing in sale and purchase of food grains or wheat but deals only in certified seeds and E the stocks stored by them were not of wheat but the certified seeds of wheat. It was further submitted that the first respondent purchases breeder seeds from Agricultural Universities and that seeds of Wheat is not included in the Schedule to the Adhiniyam. It was further argued that the first respondent intakes only the standardised and certi-fied seeds from the F farmers and the undersize, oversize and seeds found unfit by Seed Certificate Agency are returned to the fanners and the certified seeds so purchased are thereafter chemically treated at the processing plant and, therefore, these certified seeds either before processing with chemical or thereafter do not fall within the definition of tenn "wheat" and its G purchasers are not liable to market fee. At the time of hearing, our attention was drawn to a note on method and process of seed production submitted by the first respondent. The principle and method of production, as submitted in the note, is as under:- H 356 A B SUPRE'.ME COURT REPORTS [2003] SUPP. 6 S.CR. "J. Reasons for Seed Production: All high yielding seeds are made by scientists by changing the compos.ition of genes in the seeds so that the seed gives high yields. However, nature's force has a tendency to change the seeds over a period of time and, .therefore, it is necessary to produce pure seed year after year. 2. Laws governing seeds business: 2.L The seed industry for production and sale is regulated under C the Seeds Act, 1966 and Rules and Seed Control Order, 1983. D E F :G Under the seeds Act, the Government has made State Seed Certification Agencies who are responsible to certify seeds and monitor their prodμction and sales. 2.2. "The Indian Minimum Seed Standards" lays down the minimum seed standards required for each crop which can be certified. 3. Method of Seed Pro