# RAUNAQ RAM TARA CHAND & ORS. ETC v. THE STATE OF PUNJAB & ORS - **Citation:** [1976] 1 S.C.R. 1 - **Court:** Supreme Court of India - **Decided:** 1975-07-14 - **Bench:** A. Alagiriswami, P. N. Bhagwati, P. K. Goswami - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/raunaq-ram-tara-chand-ors-etc-v-the-state-of-punjab-ors-6486 - **Pages:** 5 ## Headnote B Pun;ah Agricultural Produce Markets Act, 1961---Sections 6, 10, 23-Punjab c D E F G H Agricultural Produce Markets (General) Rules. 1962-Rules 17~ 29 and 31Jf'hether fees can he levied on persons who a,re not licensees as contemplared by Section 23 'and rule 29. The appellants sell Gur and Shakkar within the market area notified under Punjab Agricultural Produce Markets Act, 1961. The appellants have obtained licences under section 10 of the Act in Form B as Commission Agents. Since the appellants were selling Gur and Sbakkar in their own shops withfn the notified market area \Vilhout submitting accounts and without payment of fees they were asked to show cause b.v the Market Committee why legal action should not be taken against them for violation of rules 29(3) and 31(1) of the Punjab Agricultural Prnduce 1-Iarkets (General) Rules, 1962. The appellants disclaimed the~.r liability to pay the fees under the Act. The Administrator of Market Committee levied fees on the appe11ants on the basis of best judgment assessment and also imposed penalty. The High Court allowed the Writ Petitions filed by the appellants and quashed the order of assessment as arbitrary and violaEve of the principles of natural jUstice. The High Court, however, rejected the contention of the appellants questioning the validity of the fees levied. Under section 10 of the Act any person may apply for a licence which may be granted on such conditions as may be prescribed. Under section 6 (3) after the :.ssue of a notification under section 6(1) no person can purchase or sell any agricultural produce except under a licence granted in accordance with lhe provisions of the Act. Section 23 authorizes the Committee to levy fees on the agricultural produce bought or sold by the licensees in the notified ma-rket area. Rule 29 provides that the Committee shall levy fees on the agricultural produce bought or sold by licensees in the no'ified market area. Rule 17(1) provides that a person desirous of cbtaining a licence under section 10 of the Act shall apply in form A. The licence granted to the appellant is in accordance with form B. No licence has been issued to the appellants for doing the business of buying and selling agricultural produce. Therefore, although the appellants are licensees as required for some of the businessses mentioned in Form B. they have no licence for carrying on business of purchase and sale of agricultural produce within the notified ?i.farkcl Area. Reading section 23 and rule 29 it is clear that the Act authorises levy of' fee on the agricultural produce bought or sold by licensees only. Allowing the appeal, llELD : The apoellants have not as a matter of fact been issued licence<; of b~st iudgment asses,ment and imposed equal amount of penalty and a demand notice was issued for payment. M/s Prem Chand Ram Lal filed a writ application before the High Court for quashing the demand no:ice. The High Court allowed the petition quashing the order of assessment as arbitrary and violative of the principles of natural justice. Th 0 High Court. however, reiected the other contentions of the said petitioner questioning the validity of the fee levied. M/s Prem Chand Ram Lal filed a Letters Patent Appeal against the judgment of the learned single Judge rejecting their other substantial points. The appellants in Civil Appeal No. 299 of 1972 had also filed a writ appl:ication under articles 226 and 227 of the Constitution in the High Court questionin~ the action taken against them as well as the levy under the Act. By a common judgment of March 25, 1970, the Division Bench of the High Court dismissed the Letters Patent Appeal of M/s Prem Chand Ram Lal as also the writ application of the appellants and granted certificates to appeal to this Court. The question is whether the appellants are liable to payment of fee under the Act. A B c • D E F - ' G • tH • • • A B c D E F G RAUNAQ RAM v. PUNJAB (Goswami, J.) 3 Action in this case was taken for violation of rules 29(3) and 31{!) of the Rules. We will read these rules: R.29(1). 'Under section 23 a Commattee s!hall levy fee• on the agricultural produce bought or sold by licensees in tho notified market area at the rates fixed by the Board from time to time . ........... " (3) "The fees shall be paid to the Committee or a paid officer duly authorised to receive such payment on the day of the transaction or on the following day". R.31 (I). "Every licensed dealer and every dealer exempted under rule 18 f[om obtaining a licence shall submit to the Committee a return in Form M showing his purchases and sale of each transaction of agricultural produce on each day, on the day on which the transact:ion takes place or .on the. following day . ........... " The fault of the appellants lies in that they have neither paid fees under rule 29(3) nor have they submitted returns in Form 'M'. A peru· sal of the above two rules would show that the Committee is authoris·~d to levy fees on agricultural produce brought or sold only by a licensee in the notified market area. Similarly under rule 31 (I) only a licensed dealer is required to submit a return. We have now to take note of the scheme disclosed in a few other relevant provisions which are material for our purpose. Under section 10 of the Act "any person may apply to the authority specified in section 9 for a licence which may be granted for such period, . in such form, on such conditions and on payment of such fees not exceeding one hundred rupees as may be prescribed". There is a proviso to this sub-section whereby "if any person carrying on any business of the nature specified in sub-section (3) of section 6 in a notified market area on the date of issue of notification under sub-section (I) of that section, fails to apply for licence on or before the date specifi·~d therein for obtaining licence, the prescribed authority may, before a licence is issued, impose on him such penalty not exceeding one hundred rupees as may be prescribed". By section 5 of the Act the State Government by not;ific;ition declares its intention of exercising control over the purchase, sale, storage and processing of specified agricultural produce in a sp~cified area. By section 6(1) the Government by notification notifies a market area for the purpose of the Act. Section 6(3) may be quoted: 6(3). "After the date of issue of such notification or from such later date as may be specified therein, no person, unless exempted by rules made under this Act, shall, either for himH self or on behalf oft another person, or of the State Government within the notified market area, set up, establish or continue or allow to be eonfinued any place :llor the purchase, sale, storage and processing of the agricultural produce except 4 SUPREME COURT REPORTS [ 197 6] l s.c.R. uuder a licence granted in accordance with the provisions of the Act. the rules and by-laws made thereunder and the conditions specified in the licence ........ " A As we read the above snb-sect:ion it. is clear that no person shall, unless exempted by rules, inter alia, purchase, sell, store or process the specified agricnltural produce except under a licence. It is not the case of the appellants that they belong to the exempted class. B Rule 17 ( 1) provides that "a person desirous of obtaining a licence under section 10 of the Act shall apply jn Form A (to be submitted in duplicate) to the Chairman of the Board through the Committee of the area in which he wishes to carry on his business and shall also deposit with the committee the reqUisite licence fee". Sub-rule (3) provides that if any person on the specified date flails to apply for a licence, he C i 9 liable to penalty in accordance with a certain scale. Under sub-rule ( 7) "the Chairman may grant a licence to the applicant in Form B. The licence shall be subject to the conditions mentioned therein". When we look to Form 'A' which is the form for application for a licence under section 10 we find that against entry 8, the applicant has to give the "particulars of the business for which the licence is required" under four heads : (!) Kacha Arhtiya (2) Commission Agent (3) Storage ( 4) Processling Similarly in Form 'B' which is the form of the licence under section 10, against entry 5, the same particulars of the business as against entry 8 in Form 'A' appear. As a matter of fact one of the licences of the appellants was shown to u~ and it was in accordance with Form 'B'. It is, therefore, clear that no licence has been issued to the appellants for doing business of buying and selling agricultural produce. It is the case of the appellants that they make direct purchases and this fact is not controverted. Although, therefore, the appellants are licensees as required for some of the businesses mentioned in Form 'B', they have no licence for carrying on business of purchase, and sale of agricultural produce within the notified market area. Now under section 23 "a Committee may, subject to such rules as may be made by the State Government Jn this behalf, levy on ad valorem basis fees on the agricultural produce brought or sold by licensees in the notified market area at a rate not excee,ding rupee one fifty paise for every one hundred rupees, provided ...... I' Section 43 provides for rul~ making power. Rule 24 is referable to scct,ion 43(2)(v), but we are not concerned with this rule in this case. Rule 29 provides that under rection 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rates fixed by the Board from time to time. Reading section 23 and rule 29 together it is not possible to escape from the conclusion that the Act D E F G H • • I r • • A B ) • c - D E \ • RAUNAQ RAM v. PUNJAB (Goswami, l.) 5 authorises levy of fee on agricultural produce bought or sold by licensees only. The appellants have licence only in respect of the business of kacha arhtiya and commission agent. While we express no oPinion on the point whether the absence of reference to buying and selling of agricultural produce in Form 'A' and Form 'B' disables the Committee to issue licences for that purpose, we are of opinion that the present appeals can be disposed of on the sole ground that the appellants have not as a matter of fact been issued such licences and no fees can, therefore, be levied on them in respect of purchases and sales of agricultural produce by them. The appellants are, therefore, not liable to payment of fee under the Act as demanded . The appellants also contend that since gur and shakkar are manufactured products they cannot come under the definition of agricultural produce with the meaning of section 2(a) of the Act. Section 2(a) defines agricultural produce to mean "all produce whether processed or not, of ag~iculture, horticulture, animal husbandry or forest as specified in the Schedule to this Act" which mentions 85 items of commodities. These arc statutorily agricultural produce under section 2(a). It is not possible to entertain the argument that the Court will undertake a judicial scrutiny of these items in order to come to a conclusion whether these are agricultural produce or not. In view of the definition in section 2(a) such an enquiry is out of place. In this context we may note that under section 38 the State Government may be notification add to the schedule any other item of agricultural produce or amend or omit any such specified item. It is because of this power to add to the sche.. duk items of agricultural produce that the first part of the definition under section 2(a) gives guidance as to what agricultural produce means. The submissions are, therefore, devoid of substance. In the result the appeals are allowed. The appellants are not liable for payment of fee with regard to their sales in the notified market area other than in the capacity as kacha arhtiyas or commission a~ents. 1n the circumstances of the case there will be no order as to costs. P.H.P. Appeals allowf'f •.