IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.1937 of 2010 (O&M) Date of decision:23.2.2010 LT Foods Limited -----Petitioner Vs. State of Haryana and others -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE ALOK SINGH Present:- Mr. Sumeet Mahajan, Sr. Advocate with Mr. Sham Lal Bhalla, Amit Kohar and Ekant Agarwal, Advocates for the petitioner. Mr. Vijay Pal, Advocate for respondent-Haryana State Agricultural Marketing Board. Adarsh Kumar Goel,J. 1. This petition seeks quashing of order of assessment dated 3.7.2007, Annexure P.9, as affirmed by the appellate authority vide order dated 30.9.2009, Annexure P.13 under the provisions of the Punjab Agricultural Produce Markets Act, 1961 (for short, ‘the Act’) and Punjab Agricultural Produce Markets (General) CWP No.1937 of 2010 (O&M) Rules, 1962 (for short, ‘the Rules’), as applicable to Haryana. 2. The petitioner is a dealer registered under the provisions of the Act and the rules and purchased paddy from Delhi and brought the same for processing in its mill in Haryana during the period between 15.10.2005 to 14.12.2005. Demand for market fee was raised in respect to the said transaction, which was contested by the petitioner on the plea that there was exemption from payment of market fee in respect of transaction of bringing of agricultural produce for processing when market fee had been paid at the place where transaction of sale and purchase took place. The exemption was subject to furnishing of proof of such transaction in prescribed form i.e. Form LL. This plea was not accepted on the ground that the proof in prescribed form was not furnished within the time laid down under the rules. The appellate authority observed as under:- “As far as the claim of the appellant firm with regard to exemption form the payment of Market fee is concerned, it is not disputed that the exemption can be claimed in respect 2 CWP No.1937 of 2010 (O&M) of agricultural produce where fee has already been paid in any other market area subject to the condition that the requisite Forms LL are deposited within the stipulated time of 20 days with the Market Committee. Admittedly, the appellant failed to deposit and to make declaration in Form LL within the stipulated time. Thus, the appellant is not entitled to the exemption from the payment of Market fee.” 3. Contention raised in the petition is that the forms in question were duly furnished on 20.5.2006 and this fact was pointed out to the appellate authority and in such circumstances, claim for exemption could not be rejected. Reliance has been placed on judgments of this Court in M/s Varsha Spinning Mills Limited v. State of Haryana, 1995(1) PLR 600, National Coop.Consumer Fed. Of India Limited v. Market Committee, Bhiwani, 1996(3) PLR 499 and judgment of the Hon’ble Supreme Court in Haryana State Agriculture Marketing Boards v. Sh. Ganesh Rice and General Mills, (1999) 1 SCC 86. 3 CWP No.1937 of 2010 (O&M) 4. Learned counsel for the respondent-Board submitted that the requirement of furnishing proof in Form LL within 20 days was mandatory. 5. The question is whether requirement of furnishing certificate in Form LL for claiming exemption under Proviso to Rule 30(5) of the rules can be held to be mandatory. 6. In our view, the answer has to be in the negative. The issue is not res integra and is covered by earlier judgments of this Court in M/s Varsha Spinning Mills and National Cooperative Consumer Fed. (supra). In M/s Varsha Spinning Mills (supra), in para 3, it was observed:- “3. We have heard learned counsel for the parties and in our opinion, the stand of the committee is not tenable. Mere delay in the submission of Form LL showing that the market fee has already been paid in some other committee within the State of Haryana from where the raw material was purchased cannot deprive the dealer of his substantive right to claim exemption which is granted by sub rule (5) of Rule 30 of the Rules. The intention underlying this Rule is that a 4 CWP No.1937 of 2010 (O&M) purchase is not to be made to pay market fee twice and the period of twenty days prescribed by the proviso for producing Form LL is not to be treated that sacrosanct so as to deprive the purchaser of his right to claim exemption as given by the main provision of the sub rule. The period of twenty days as prescribed by the proviso is only directory and not mandatory. The Company is, therefore, entitled to the exemption claimed.” 7. In National Coop. Consumer Fed. (supra), in para 6 and 7, it was observed:- “6……Although it is laid down in the proviso that exemption certificate in Form LL is to be produced within a period of ten days from the receipt of the goods, yet it does not lay down in explicit terms that a licensee would be required to pay the market fee again in case such an exemption certificate is not produced. In the absence of such a provision, the only harmonious construction which can be placed on the rule and proviso is that a licensee cannot be burdened with the payment of market fee again if the same has already been paid in any market area within the State but such a licensee would be liable to pay the penalty under the 5 CWP No.1937 of 2010 (O&M) Act. This is what was precisely held by a Division Bench of this Court in Civil Writ Petition No.2863 of 1991 M/s Anand Canvass Mills Pvt. Limited v. State of Haryana and others, 1993(2) RRR 622 (P&H) (DB) decided on 5.5.1993. While interpreting Rule 30(5) of the Rules, it was further held by the Division Bench in the aforesaid case that the market fee could not be levied second time on the same agricultural produce. A fine of Rs.500/- was imposed by the Division bench in the aforesaid case. Following the aforementioned judgment, we hereby impose a fine of Rs.500/-. It can further be safely held that the compliance of the proviso is not mandatory and is only directory and that the licensee can submit the Form LL after the expiry of the period prescribed in the proviso. The petitioners were all the time wanting to submit Form LL and for this purpose had been addressing several letters. 7. The principle that a licensee or dealer is not to pay the market fee second time can be deduced from a perusal of Rule 30(1) of the Rules. It has been laid down that no market fee would be levied second time if it has already been paid. Rule 30(1) of the Rules clearly lays down that no market fee shall be levied on the sale or purchase of any agricultural produce 6 CWP No.1937 of 2010 (O&M) manufactured or extracted from the agricultural produce in respect of which fee has already been paid in the notified market area where it was so manufactured or extracted. The only obligation upon such a dealer who claims exemption from the payment of market fee is to make a declaration and give certificate in Form LL. A combined reading of the entire Rule 30 (1) and (5) of the Rules clearly indicates that a dealer or a licensee is not required to pay the market fee second time where he has purchased the agricultural produce for the purposes of manufacturing, extraction or for the purposes of processing.” 8. In Ganesh Rice and General Mills (supra), the Hon’ble Supreme Court observed:- “8. In the circumstances we are of the opinion that the first respondent's right to claim exemption from payment of market fee in Karnal shall not be defeated as it is stated to have been paid already actually in the area where the produce was purchased. The first respondent is also willing to file the declaration and certificate in Form LL. Mr. K.T.S. Tulsi, learned senior counsel for the appellants has submitted that if the declaration and certificate in Form LL are 7 CWP No.1937 of 2010 (O&M) filed within 2 weeks from this date the Market Committee would not insist upon compliance with the period of limitation prescribed in the Rule in view of the defect in the memo dated 18- 3-97 and consider the question whether the fee had been paid already and the first respondent is entitled to exemption. 9. Hence, we direct the first respondent to file the declaration and certificate in Form LL with the Marketing Committee, Karnal within a period of two weeks from this date and the latter shall on such filing of the declaration and certificate grant the exemption to the first respondent from payment of market fee if the other conditions in the rule are satisfied irrespective of the period of limitation prescribed in the rule. This appeal is disposed of with the above directions.” Learned counsel for the respondent-Board referred to observations in para 6 to submit that requirement was not mere formality and the stand of the Market Committee that there was liability to pay market fee was correct. The said para is as under:- “6. Unless all the above conditions are fulfilled it is not possible for the Market 8 CWP No.1937 of 2010 (O&M) Committee to accept a mere statement that market fee had already been paid and the dealer was not liable to pay it again. Compliance with the rule is not a mere technical formality. In the present case, first respondent did not admittedly file Form LL with the Market Committee. It filed Form M only after the prescribed time limit. Even in that Form, as pointed out already, Col. 7 was not filled up. In such circumstances the stand taken by the Market Committee that the first respondent was liable to pay market fee was correct.” 9. We are unable to accept the submission made on behalf of the respondent. Observations in para 6 are to be read with observations in paras 8 and 9. The provisions for furnishing requisite forms are machinery provisions. Admittedly, there is exemption from payment of market fee on goods brought for processing on furnishing of proof. So long as proof is furnished before the assessment and the same is found to be genuine, mere delay does not justify levy of market fee which will nullify the provision of exemption. 9 CWP No.1937 of 2010 (O&M) 10. Accordingly, the impugned order of the appellate authority cannot be sustained and the same is set aside and the matter is remitted back to the appellate authority. The appellant may appear before the appellate authority for further proceedings on 30.3.2010. (Adarsh Kumar Goel) Judge February 23, 2010 (Alok Singh) ‘gs’ Judge 10