# KRISHNA COCONUf CO. & ANR v. EAST GODAVARI COCONUf & TOBACCO MARKET COMMITTEE October 27, I 966

- **Citation:** [1967] 1 S.C.R. 974
- **Court:** Supreme Court of India
- **Decided:** 1967
- **Case number:** Civil Appeal Nos. 858 to 861 of 1964
- **Bench:** K. SUBBA RAo, M. Hidayatullah, S. M. Sikri, R. S. Bachawat, J. M. Shelat
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/krishna-coconuf-co-anr-v-east-godavari-coconuf-tobacco-market-committee-october-3953
- **Pages:** 10

## Headnote

Madras Comt11'1rcial Crops Market Act, 1933, ss. 2( I) (a), and 11 (I)-
Goods declared under s. 2(l)(a) as comt11'1rcial crops-levy of fee under
A
B
s. 11(1) on goods "bought and sold" In notified area-whether refe"ed to
single transaction of purchase and corresponding sale-er applied to subseC
quent sale by purchaser-whether object of the Act to be consideredwhether levy valid.
By a notification in June 1949, the State Government, in exercise of a
power under s. 2(1)(a) of the Madras Commerical Crops Market Act.
1933, declared coconuts and copra to be 'commercial crops" within tho
meaning of the Act. The respondent Market Committee levied in respect
of the dcclared commerical crops, a fee on the goods 'bought and Sold'
D
within the notified area under s. 11 (I) of the Act, read with Rule 28 (I)
of the Rules made under the Act. Tho appellants filed various suils contesting the levy on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State; consoquently, they sought refund of the fees collected by the respondent committee.
The suits filed were tried together and the trial Judge held that tho
levy, though called a "fee'', was really a "tax", and that the Committee
was only empowered to impose such tax when the goods were bought and
sold within the notified area. He therefore passed decrees in all the suits
for refund of the fees collected.
The first appeal by the respondent Commillcc was dismissed by
the
Sub-Judge who further held that the fee in substance being a tax, such tax
on sales completed outside the State would also offend Art. 286 of the
Constitution.
However, a second appeal to the High Court was allowed
on the view that the transactions which were the subject-matter of tho
levy under Section II (I) were transactions consisting of the purchase of
the goods by the appellants and the corresponding sales to them by Hr. producers and not the subsequent sales effected by the appellants to their customers outside the notified area or the States; therefore the transactions on
which the said fee was levied were effected and completed inside the notifi-
«I area and fell within the expression "bought and sold" in section 11 ( 1).
lo the appeal before this court it was contended on behalf of the appellants that the transactions effected by them consisted in th-~ir purchasing
the goods and stopped at the stage of $Oods "bought" so that no fee could
be levied .in the absence of the other mgredient, i.e., sale within the notified area.
HELD : The construction placed on s. 11 ( 1) by the High Court was
correct and the respondent Committee had therefore rightly charged the
fee.
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KRISHNA co. v. MARKET COMMITTEE (She/at, 1.)
975
The words "bought and sold" used in s. 11 (I) aim at those transactions
whereunder a dealer buys from a producer who brings to the market his
goods for sale. The transaction aimed at must be viewed in the sense in
which the legislature intended it to be viewed, that is, as one transaction
resulting in buying on the one hand and selling on the other. Such a
construction is commendable because it is not only in consonance with
the words used in s. 11 (I) but is consistent with the object of the Act
as expressed through its various provisions,, i.e., to prevent the mischief of
exploitation of producers of commercial crops such as coconuts and copra
and to see that such producers got a fair price for their goods. [982 A-B,
E-F]
Kutti Koya v. State of Madras A.I.R. 1954 Mad. 621; Satyanarayana
.and Venkataraju Firm v. Godavari Market Committee A.I.R. 1959 Andh.
Pra. 398; M.C.V.S. Arunachala Nadar v. The State of Ma4ras [1959]
Suppl. I S.C.R. 92; Louis Drevfus & Co. v.
South Arcot Groundn111
Market Committee A.I.R. 1945 Mad. 383; referred to.

## Text

KRISHNA COCONUf CO. & ANR.
v.
EAST GODAVARI COCONUf & TOBACCO MARKET
COMMITTEE
October 27, I 966
[K. SUBBA RAo, C. J., M. HIDAYATULLAH, S. M. SIKRI,
R. S. BACHAWAT AND J. M. SHELAT, JJ.j
Madras Comt11'1rcial Crops Market Act, 1933, ss. 2( I) (a), and 11 (I)-
Goods declared under s. 2(l)(a) as comt11'1rcial crops-levy of fee under
A
B
s. 11(1) on goods "bought and sold" In notified area-whether refe"ed to
single transaction of purchase and corresponding sale-er applied to subseC
quent sale by purchaser-whether object of the Act to be consideredwhether levy valid.
By a notification in June 1949, the State Government, in exercise of a
power under s. 2(1)(a) of the Madras Commerical Crops Market Act.
1933, declared coconuts and copra to be 'commercial crops" within tho
meaning of the Act. The respondent Market Committee levied in respect
of the dcclared commerical crops, a fee on the goods 'bought and Sold'
D
within the notified area under s. 11 (I) of the Act, read with Rule 28 (I)
of the Rules made under the Act. Tho appellants filed various suils contesting the levy on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State; consoquently, they sought refund of the fees collected by the respondent committee.
The suits filed were tried together and the trial Judge held that tho
levy, though called a "fee'', was really a "tax", and that the Committee
was only empowered to impose such tax when the goods were bought and
sold within the notified area. He therefore passed decrees in all the suits
for refund of the fees collected.
The first appeal by the respondent Commillcc was dismissed by
the
Sub-Judge who further held that the fee in substance being a tax, such tax
on sales completed outside the State would also offend Art. 286 of the
Constitution.
However, a second appeal to the High Court was allowed
on the view that the transactions which were the subject-matter of tho
levy under Section II (I) were transactions consisting of the purchase of
the goods by the appellants and the corresponding sales to them by Hr. producers and not the subsequent sales effected by the appellants to their customers outside the notified area or the States; therefore the transactions on
which the said fee was levied were effected and completed inside the notifi-
«I area and fell within the expression "bought and sold" in section 11 ( 1).
lo the appeal before this court it was contended on behalf of the appellants that the transactions effected by them consisted in th-~ir purchasing
the goods and stopped at the stage of $Oods "bought" so that no fee could
be levied .in the absence of the other mgredient, i.e., sale within the notified area.
HELD : The construction placed on s. 11 ( 1) by the High Court was
correct and the respondent Committee had therefore rightly charged the
fee.
(983 B]
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KRISHNA co. v. MARKET COMMITTEE (She/at, 1.)
975
The words "bought and sold" used in s. 11 (I) aim at those transactions
whereunder a dealer buys from a producer who brings to the market his
goods for sale. The transaction aimed at must be viewed in the sense in
which the legislature intended it to be viewed, that is, as one transaction
resulting in buying on the one hand and selling on the other. Such a
construction is commendable because it is not only in consonance with
the words used in s. 11 (I) but is consistent with the object of the Act
as expressed through its various provisions,, i.e., to prevent the mischief of
exploitation of producers of commercial crops such as coconuts and copra
and to see that such producers got a fair price for their goods. [982 A-B,
E-F]
Kutti Koya v. State of Madras A.I.R. 1954 Mad. 621; Satyanarayana
.and Venkataraju Firm v. Godavari Market Committee A.I.R. 1959 Andh.
Pra. 398; M.C.V.S. Arunachala Nadar v. The State of Ma4ras [1959]
Suppl. I S.C.R. 92; Louis Drevfus & Co. v.
South Arcot Groundn111
Market Committee A.I.R. 1945 Mad. 383; referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 858 to
861 of 1964.
Appeals by special leave from the judgment and order of the
Andhra Pradesh High Court in Second Appeals Nos. 720 and 724
to 726 of 1957.
C.B. Agarwala and T. V. R. Tatachari, for the appellants
(in all the appeals).
P. Ram Reddy and K. R. Sharma for the respondent (in all
the appeals. )
The Judgment of the Court was delivered by
Shelat, J. All these four appeals by special leave raise a
common
question regarding interpretation of section
II (I)
of the Madras Commercial Crops Market Act, XX of 1933 and
Rule 28 of the Rules made thereunder and therefore can be disposed
of by a common judgment.
The Act was originally enacted by the Madras Legislature. It
was a law in force immediately before the constitution of the State
of Andhra Pradesh and governed the territories now forming part
of that State. By virtue of Andhra Pradesh Act of 1953 and
the Adaptation of Laws Order passed on November I, 1953 byth e
State Government of Andhra Pradesh it became applicable to the
newly formed State of Andhra Pradesh. By a Notification dated
June 27, 1949 the then Government of Madras, in exercise of the
power conferred on it by section 2(1)(a), declared coconuts and
copra to be commercial crops. Under section 4 of the Act, the
State Government also declared the District of East Godavari as
the "notified area" for purposes of the Act in respect of coconuts
and copra. By a further notification dated December 5, 1950
issued under section 4(a) of the Act it established a Market Com-
976
SUPREME COURT REPORTS
[I 967) I S.C.R.
mittee at Rajahrnundry for the said notified area. The said Market
A
Committee levied the following fees, viz., (1) a licence fee under s.
5(1) of the Act read with Rule 28(3); (2) a licence fee for storage,
wharf age etc., under section 5(3) read with Rule 28(3);
(3)
a registration fee under s. 18 read with Rule 37; (4) a fee on the
said goods bought and sold within the notified area and under
s. 11(1) read with Rule 28(1); and (5) a fee under the same section
B
on consignments of coconut oil.
Contesting the levy of fees under items 2 to 5 as being illegal on
the ground that they sold coconuts and copra to customers outside
the notified area and in some cases outside the State, the appellants
filed various suits in the court of the District M unsif, Amalapuram
for refund of the said fees collected by the said Committee at different times. The Market Committee resisted the said suits claiming
that the aforesaid provisions conferred power upon it to levy the
said fees and that the said levy was valid and legal.
The said
suits were tried together and the District Munsif by his judgment
dated October 17, 1955, inter alia, held that the levy under section
11(1) read with Rule 28(1) though called a "fee" was really a "tax",
that the said provisions empowered the Committee to impose the
said tax only when the said goods were bought and sold within the
notified area, that the sales effected by the appellants were to
customers outside the said area and in some cases outside the State,
that the Committee had no power to levy and collect the said fees
and therefore the appellants were entitled to refund of the said fees
and accordingly passed decrees in all the suits. In appeals by the
Committee, the Subordinate Judge,
Amalapuram,
held
that
though the appellants purchased the said goods within the notified
area they exported them to their customers outside the notified area
and outside the State and relying upon the decision in Kutti Koya
v. State of M adras(1) he held that though sc:ction I I (I) called the
said levy as fee it was in substance a tax and that such a tax beil}g on
sales completed at the places of their customers outside the State
offended Art. 286 of the Constitution and was therefore illegal.
The Subordinate Judge, except for deleting the relief granted in
respect of licence fee under s. 5(3) of the Act, dismissed the appeals
and confirmed the judgment and decree of the Trial Court. The
Market Committee thereupon filed
Second Appeals in the High
Court of Andhra Pradesh. Before the High Court the controversy centred round the question of fee under s. I 1(1) only. By its
common judgment dated November 8, 1961 the High Court relying
upon the judgment of a Division Bench of that Court in Satyanarayana and Venkataraju Firm v. Godavari Market Committee(2)
held that the word "fee" in section I 1(1) was in fact a fee and not a
tax. The Division Bench also held that the said goods were pur-
(I) A.I.R. 1954 Mad. 621.
(2) A.I.R. 1959 Andb. Pradesh 398.
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KRISHNA co. v. MUKET COMMITTEE (Shelat, J.)
977
chased by the appellants from producers or petty dealers wtthin
the notified area and then sold by them to customers outside the said
area or the State, that the transactions which were the stibjectmatter of the levy under section
11 (1) were· transactions
consisting of purchase of the said goods by the appellants and the
corresponding sales to them by the producers and petty dealers and
not the subsequent sales effected by them to their customers outside the notified area or the State, that therefore the transactions on
which the said fee was levied were effected and completed inside the
notified area and fell within the expression "bought and sold" in
section 11(1) and therefore the Market Committee rightly levied the
said fee on those transactions. In the result, the Division Bench
allowed the appeals and dismissed the appellants' suits. It is this
judgment and decree against which these appeals are directed.
The preamble of the Act states that the Act was passed for
making provisions for better regulation of buying and selling of
and the establishment of markets for commercial crops. As stated
in M.C. V.S. Arunachala Nadar v. The State of Madras('), the Act
was the result of long exploratory investigation by experts in
the field, conceived and enacted to regulate the buying and selling
of commercial crops to provide suitable and regulated markets, to
eliminate middlemen and bring face to face the producer and the
buyer so that they meet on equal terms thereby eradicating or at
any rate reducing the scope for exploitation of the producers. It
therefore provided a machinery for regulating trade by providing a
common place where facilities would be furnished by way of
space, buildings and storage acconnnodation, and where market
practices would be regularised and market charges clearly defined
and unwarranted ones prohibited, where correct weighment would
be ensured by licensed weighmen and all weights would be checked
and stamped, where payment on hand would be ensured, where
provision would be made for settlement of disputes, where daily
prevailing prices would be made available to the grower and reliable
market information provided regarding arrivals, stocks, prices etc.,
and where quality standards would be fixed when necessary and
contract forms standardized for purchase and sale. The result of
the implementation of the Act would be thus to give reasonable
facilities to the growers of commercial crops ensuring proper price
for their commodities.
Section 4(a) (!) provides for the formation of a market committee for enforcing the provisions of the Act and the Rules and bylaws framed thereunder. Sub-section (2) lays down that the Committee shall establish in the notified area such number of markets
providing such facilities, as the State Government may from time
to time direct, for purchase and sale of commercial crops. Section 5
(I) (1959) Suppl. I S.C.R. 92.
978
SUPIU!UB COUllT lll!PO!l Tl
1967) 1 s.c.a.
prohibits any person to set up, establish or use, continue or
allow to be continued any place within the notified area for the
purchase or sale of commercial crops except under a licence and
in accordance with the conditions thereof. The Market Committee,
however, can exempt from the provisions of this sub-section any
person who carries on the business of purchasing or selling any
commercial crop in quantities not exceeding those prescribed by
the Rules. It also exempts from the provisions of this section a
person selling a commercial crop which has been grown by him or
a co-operative society selling a commercial crop which has been
grown by any of its members and also a person purchasing
for
his
private
use a
commercial crop in quantities not
exceeding those prescribed by the rules. Section 6 provides that
every
market committee shall consist of such number of members
not exceeding twelve as may be fixed by the State Government and
provides for representatives of Iicencees under section 5 and buyers,
sellers and buyers and sellers registered under the Rules prescribed
in that behalf. Section 11(1) with which we are concerned in these
appeals reads:
"The Market Committee shall, subject to such rules as
may be made in this behalf, levy fees on the notified commercial crop or crops bought and sold in the notified area at
such rates as it may determine."
The Explanation to sub-section (I) provides that all notified commercial crops leaving a notified area shall, unless the contrary is
proved, be presumed to be bought and sold within such area.
Sub-section 2 provides that the fee chargeable under sub-section(!)
shall be paid by the purchaser of the commercial crop concerned
provided that where such a purchaser cannot be identified the fee
shall be paid by the seller. Section 12 provides that all monies
received by a market committee shall lie paid into a fund and all
expenditure incurred by the market committee shall be defrayed out
of the said fund. The expenditure which the committee can incur
is for purposes set out in section 13 which incidentally reflect the
object and purpose of the Act. Section 18 empowers the State
Government to make rules including rules for licence fee under section, 5, the registration fee and the prohibition of buying and selling
of commercial crops in the notified area by persons not so registered and the fee to be levied on commercial crops bought and
sold in the notified area.
Rule 28 lays down the maximum fee
Ieviable on commercial crops under section 11(1) as also the maximum
fee payable for licences and
registration.
Rule
28-A provides
that the fees referred to in sub-rule (1 ), that is, "fees" under section
11(1), shall not be levied more than once on a commercial crop in
a notified area. These provisions clearly show the policy of safeguarding the interests of the producers and of guaranteeing to them
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ICIUSHNA co. v. MARKET COMMITTEE (She/at, /.)
979
reasonable return for the crops they would bring to sell without
being exploited.
Mr. Agarwala raised the following contentions: (1) that the
fee charged by the Market Committee under s.11 (I) was on sales
effected by the appellants with their customers, some of whom were
admittedly outside the notified area and the rest outside the State;
(2) that that was the footing on which the parties proceeded with ~he
suits but that case was given up in the High Court and the High
Court was in error in permitting the Committee to shift its case and
argue that the fee was levied not on those sales but on transactions
of purchase entered into by the appellants with the producers and
other petty dealers.
It is true that in para 3 of their plaint the appellants averred
that their business activities consisted of buying coconuts and
copra in East Godavari District and selling them to customers
outside the notified area and even the State and that those sales were
completed at the respective places of those customers. The appellants' case therefore was that in respect of these sales with customers
some of whom were outside the notified area and the rest outside
the State, the levy of fee was in the former case beyond the ken of
s. 11(1) and in the latter case repugnant to Art. 286 of the Constitution. The written statement of the respondent committee denied
these allegations. The Committee asserted that both the purchases
and sales took place in the notified area and that though the fee
levied by it was on sales by the appellants and though delivery of the
said goods thereunder took place outside the notified area the sales
in respect thereof were made within the notified area and therefore
the question of the levy under section 11 (1) being repugnant to Art.
286 of the Constitution did not arise. Besides these pleadings Mr.
Agarwala drew our attention to certain notices of demand and
circulars issued by the Committee in which it was stated that the
said fee was being levied on goods exported outside East Godavari
District and that the traders were liable to pay it both on coconuts
exported to outsiders and also consumed internally. That presumably was stated because if the goods were "bought and sold" within
the notified area, even if they were subsequently exported outside,
section 11(1) would apply. The practice followed by the appellants and not denied by the Committee was that they used to despatch these goods by rail to their customers. Railway receipts
and hundies were then sent to their bankers at the destination and
railway receipts were delivered to the customers on their honouring
the hundies Thus the goods were delivered outside the notified area
and the sales effected by the appellants to their customers were also
completed at places outside the notified area and in some cases
outside the State.
On these facts the District Munsif held that property in the
goods having passed at destination, sales took place outside the
980
~'UP.RBMB COUllT llBPORTS
(1967] 1 S.C.R.
notified area and therefore the fee charged by the Committee was
illegal as section 11(1) pennitted such a levy only on goods bought
and sold within the notified area. On appeal by the Committee,
the Subordinate Judge held that the said fee was a tax, that it was
a tax on sales outside the notified area and the State and was not
therefore warranted under section 11(1) and was repugnant to Art.
286. It seems that in both the courts, the real issue was lost sight
of, viz., whether the goods in respect of which the fee under s. I 1(1)
was levied were goods "bought and sold" within the notified area
as envisaged by the section.
In the High Court however the questions convassed were :
(I) whether the'fee provided in section 11(1) was a fee or a tax and
(2) even if it was a fee whether the Committee had the power to
levy it in respect of goods sold by the appellants outside the notified
area. As already stated the Trial Judge and the Subordinate Judge
had proceeded on the footing that the said fee was levied on sales
entered into by the appellants with their customers who undoubtedly
were outside the notified area. But the real question that ought to
have been dealt with by the Trial Judge and on appeal by the Subordinate Judge was not whether the appellant's sales were to customers outside the notified area or the State but whether the fee
which was levied was valid. The question of the validity of the
levy entailed another question, viz., whether the levy was on transactions effected by the appellants before they sold those goods to
their customers. Were the appellants entitled to a refund of the fees
levied on them under s. 11 (l)?, was the principal question in the
suits. To decide that question it was necessary for the court to go
into the question whether the fee was charged on the sales by the
appellants or on the transactions· made between them and those
from whom they purchased the goods in question. Since neither
the Trial Court nor the Subordinate Judge had gone into that question, it was necessary for the High Court to go into it not only to do
justice to the parties but also because that was the real issue arising
in the suits and was the crux of the litigation. There was therefore
no question of the High Court allowing the respondent-Committee
to make out a new case. The question from the very inception was
whether the Committee was competent to levy the fee in question
under section 11(1). To answer that question the court necessarily
had to enquire on which transactions could the said fee be levied
under section 11(1) and whether it was rightly levied by the Committee. The High Court answered these questions by holding that
it was levied on the transactions effected by the appellants 1"ith
those from whom they bought the said goods, that section 11(1)
dealt with those transactions and was not therefore concerned
with the subsequent sales entered into by the appellants with their
customers outside the notified area. Since, accordmg to the High
Court, those transactions were admittedly effected within the notiB
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KRISHNA co. v. MARKET COMMITTEE (She/at, J.)
981
fied area the levy was valid and warranted under s. 11(1). In our
view the High Court approached the question from a correct angle
and therefore there was no question of its having allowed the Committee to change its case or make out a new case.
That being the position, the next question is whether the Committee could levy fee under section 11(1) on the transactions effected
by the appellants before they sold those goods to their customers.
Mr. Agarwala's contention was that the fee levied under section
11(1) could only be in respect of goods "bought and sold" and
not in respect of transactions where goods were only "bought"
or only "sold". According to him it is only when a person bought
goods and sold those identical goods within the notified area that
the fee under section 11(1) could be levied. According to him, the
transactions effected by the appellants consisted in their purchasing
the said goods; they stopped at the stage of goods "bought".
Therefore, the other ingredient for a valid levy of the fee not being
present the fee levied in the present case was not in accordance
with the requirements of section 11(1) and was unwarranted. This
contention raises the question as to the meaning of the words
"bought and sold" in section 11 (! ).
At first sight they would
appear to be susceptible of three meanings; viz., (1) that they mean
duality of transactions where the same person buys goods and sells
those identical goods in the notified area; (2) that they mean
"bought" or "sold" the conjunctive "and" meaning in the context
of the sub-section the disjunctive "or" and (3) that they apply to a
transaction of purchase as the concept of purchase includes a corresponding sale. When a person buys an article from another person,
that other person at the same time sells him that article and it is
in that sense that section 11(1) nses the words "bought and sold."
The incidence of the fee under section 11(1) is on the goods thus
"bought and sold". This last interpretation was favoured by the
High Court of Madras in Louis Dreyfus &
Co. v. South Arcot
Groundnut Market Committee(') which has been accepted by the
High Court in the present case .
If the construction co=ended to us for acceptance by Mr.
Agarwala were to be correct, viz., that the appellant's transactions
stopped at the stage of goods "bought", they would not be transactions in respect of goods "bought and sold". If the fee was levied
on sales effected by the appellants with their customers its levy would
not be valid under section 11(1) and would also be repugnant to Art.
286 where goods were delivered outside the State. But it is a well settled rule of construction that the court should endeavour as far as
possible to construe a statute in such a manner that the construction
results in validity rather than its invalidity and gives effect to the
(I) A.I.R. 1945 Mad. 383.
982
SUPIU!MB COU.T IU!POJ.TS
(1967] I S.C.R.
manifest intention of the legislature enacting that statute. The object
in passing the Act was to prevent the mischief of exploitation of
producers of commercial crops such as coconuts and copra and to
see that such producers got a fair price for their goods. The mischief to prevent which the Act was enacted was the exploitation of
these producers by middlemen and those buying goods from them
and therefore the Act pro~idcd facilities such as
market place,
place for storage, correct wc1ghmcnt etc., so that the producers and
his purchasers come face to face in a regulated and controlled
market and a fair price was obtained by them. If the construction
suggested by Mr. Agarwala were to be accepted and the section
were to be construed as being applicable to those transactions only
which have a dual aspect, that is, buying by a dealer from a producer and the dealer selling those identical goods within the notified
area, the object of the Act would be defeated, for in a large number
of cases the transactions would halt at the stage of buying and the
Committee in those cases would have no power to levy the fee on
them. Why is a buyer or a seller or a buyer and seller required to
be registered and why does the Act prevent those who have not registered themselves from effecting transactions in commercial crops
unless the object was to regulate and control transactions in those
commodities at all stages and in a manner preventing the exploitation of the producer ? The legislature had thus principally the
producer in mind who should have a proper market where he can
bring his goods for sale and where he can secure a fair deal and a
fair price. The Act thus aims at transactions which such a producer
would enter into with those who buy from him.
The words
"bought and sold" used in section 11(1) aim at those transactions
whereunder a dealer buys from a producer who brings to the market
his goods for sale. The transactions aimed at must be viewed
in the sense in which the legislature intended it to be viewed, that
is, as one transaction resulting in buying on the one hand and selling on the other. Such a construction is commendable because it
is not only in consonance with the words used in section 11(1) but is
consistent with the object of the Act as expressed through its various
provisions. The construction on the other hand canvassed by the
appellants is dcfeative of the purpose of the Act and should, unless
we are compelled to accept it, be avoided. The construction which
we are inclined to accept acquired some support from the fact that
section 11 makes the purchaser and not the seller primarily responsible for payment of the fee and it is only when the purchaser
cannot be identified that the seller is made liable.
Mr. Agarwala at first also urged that the fee under s. 11(1)
amounted to a tax and that it was in fact a sales tax. But at the last
moment he stated that he did not wish to press that contention and
requested us not to express any opinion thereon. Since the contention is not pressed we need not express any opinion on that ques-
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:DUSHNA CO. v. MARKET COMMITTEE (She/at, /.)
983
tion and confine ourselves to the question as to the interpretation of
the words "bought and sold" in that section.
In our view the construction placed by the High Court on
s. ll(l) was a correct construction and therefore the respondentcommittee had rightly charged the appellants with said fee.
The appeals therefore fail and are dismissed with costs. One
hearing fee.
R.K.P.S.
Appeals dismissed .