Civil Appeals Nos 299 and 120 to 124 of 1972
From the Judgment and order dated the 25th March 1970 of the Punjab  Haryana High Court in Civil Writ No 325 of 1968 LPA No 177 of 1969 Civil Writ No 1534 1545 1829 and 2201 of 1969 respectively
G L Sanjay section K Mehta R L Batta and M Qumaruddin for the appellants in Civil Appeal No 29972
2 V C Mahajan section section Khanduja and R L Bata for the appellants In CAs
120 12472 D Mukherjee Hardev Singh R section Sodhi and G C Garg for the respondents
In CA No 29972
The Judgement of the Court was delivered by GOSWAMI J
In these appeals by certificate of the High Court of Punjab and Haryana validity of action taken by the Market Committee Patiala under the provisions of the Punjab Agricultural Produce Markets Act 1961 is under challenge
The appellants are shop keepers of Gur Mandi Patiala and are licensees under section 10 of the Punjab Agricultural Produce Markets Act 1961 briefly the Act and are also pucca arhtiyas
It is not in dispute that they sell gur and shakkar within the market area notified under the Act
It is also admitted that they have licences under section 10 of the Act in Form B  as kacha arhtiyas or commission agents
Since they were found to be selling gur and shakkar in their own shops within the notified market area without submitting accounts and without payment of fees they were asked to show cause by the Market Committee why legal action should not be taken against them for violation of rules 293 and 311 of the Punjab Agricultural Produce Markets General Rules 1962 briefly the Rules and for violation of condition No 1 of the licence which is to the effect that the licensee shall comply with the provisions of the Act Rules and Bye laws framed thereunder and instructions issued from time to time
The appellants disclaimed liability to pay fee under the Act on various grounds
The Administrator of the Market Committee after some correspondence levied on one of the appellants Ms Prem Chand Ram Lal appellants in Civil Appeal No 120 of 1972 Rs 5014 as market fee on the basis of best judgment assessment and imposed equal amount of penalty and a demand notice was issued for payment
Ms Prem Chand Ram Lal filed a writ application before the High Court for quashing the demand notice
The High Court allowed the petition quashing the order of assessment as arbitrary and violative of the principles of natural justice
The High Court however rejected the other contentions of the said petitioner questioning the validity of the fee levied
Ms 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 application under articles 226 and 227 of the Constitution in the High Court questions the action taken against them as well as the levy under the Act
By a common judgement of March 25 1970 the Division Bench of the High Court dismissed the Letters Patent Appeal of Ms 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
3 Action in this case was taken for violation of rules 293 and 311 of the Rules
We will read these rules  R291 Under section 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  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
R311
Every licensed dealer and every dealer exempted under rule 18 from 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 transaction takes place or on the following day    The fault of the appellants lies in that they have neither paid fees under rule 293 nor have they submitted returns in Form M 
A perusal of the above two rules would show that the Committee is authorised to levy fees on agricultural produce brought or sold only by a licensee in the notified market area
Similarly under rule 31 1 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 personal 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 1 of that section fails to apply for licence on or before the date specified therein tor 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 notification declares its intention of exercising control over the purchase sale storage and processing of specified agricultural produce in a specified area
By section 61 the Government by notification notifies a market area for the purpose of the Act
Section 63 may be quoted 63 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 him I self or on behalf of another person or of the State Government within the notified market area set up establish or continue or allow to be continued any place for the purchase sale storage and processing of the agricultural produce except 4 under 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  As we read the above sub section it is clear that no person shall unless exempted by rules inter alia purchase sell store or process the specified agricultural produce except under a licence
It is not the case of the appellants that they belong to the exempted class
Rule 171 provides that a person desirous of obtaining a licence under section 10 of the Act shall apply in 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 fails to apply for a licence he is 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 1 Kacha Arhtiya 2 Commission Agent 3 Storage 4 Processing 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 in Form A  appear
As a matter of fact one of the licences of the appellants was shown to us 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 there are 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 in 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 exceeding rupee one fifty paise for every one hundred rupees provided   Section 43 provides for rule making power
Rule 24 is referable to section 432v but we are not concerned with this rule in this case
Rule 29 provides that under section 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 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 all 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 2a of the Act
Section 2a defines agricultural produce to mean all produce whether processed or not of agriculture horticulture animal husbandry or forest as specified in the Schedule to this Act which mentions 85 items of commodities
These are statutorily agricultural produce under section 2a
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 2a 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 schedule items of agricultural produce that the first part of the definition under section 2a 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 agents
In the circumstances of the case there will be no order as to costs
PHP Appeals allowed


Summary:
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 as Commission Agents
Since the appellants were selling Gur and Shakkar in their own shops within the notified market area without submitting accounts and without Payment of fees they were asked to show cause by the Market Committee why legal action should not be taken against them for violation of rules 293 and 311 of the Punjab Agricultural Produce markets General Rules 1962
The appellants dismissed their liability to pay the fees under the Act
The Administrator of Market Community levied fees on the appellants 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 violative 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 63 after tho issue of a notification under section 61 no person can purchase or sell any Agricultural produce except under a licence granted in accordance with the pro visions of the Act
Section 23 authorizes the Committee to levy fees on the agricultural produce bought or sold by the licensees in the notified market area
Rule 29 provides that the Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area
Rule 171 provides that a per son desirous of obtaining 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 busing and selling agricultural produce
Therefore although the appellants are licensees as required for some of the businesses mentioned in Form B they have no licence for carrying out business of purchase and sale of agricultural produce within the notified Market 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  HELD  The appellants have not as a matter of fact been issued licences as contemplated by section 23 and rule 29 and no fees can therefore be levied on them in respect of purchase and sale of agricultural Produce by them
The appellants are therefore not liable to payment of fee under the Act as demanded
15B C