IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY SIXTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No.19006 of 2004 Between : M/s Sai Sea Foods, rep. by its Manager, A.S.A. Sundaram, Chinna Waltair, Visakhapatnam. ..... PETITIONER AND The Secretary, Agricultural Market Committee, Akividu, West Godavari District. .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring that the proceedings bearing R.C.No. 121/B 2002, dated 13-3-2003 issued by the Respondent Market Committee, whereby the market fee has been re-determined on best judgment in contrary to Section 12-B (5) of A.P. (Agricultural Produce & Livestock) Market, Act, 1966, as illegal, arbitrary, erroneous, without jurisdiction, ultravires and consequently direct the Respondent not to claim the reassessed market fee from the petitioner. Counsel for the Petitioner : MR.Y.V.RAVI PRASAD Counsel for the Respondent: MR.K.MADHAVA REDDY (SC FOR AGRL.MRKT.COMTTS) The Court made the following : ORDER : This writ petition is filed by a Public Limited Company, questioning the validity of the order, dated 13- 03-2003, passed in R.C.No.121/B/2002, by the Secretary & Assessing Authority of Agricultural Market Committee, Akividu, in exercise of powers conferred under Section 12 (B) of the A.P. (Agricultural Produce & Livestock) Markets, Act, 1966 (hereinafter referred to as ‘the Markets Act’), demanding an amount of Rs.7,22,913/- towards market fee, and also an amount of Rs.14,45,826/- towards penalty. 2. Necessary facts, in brief, are as under: The petitioner/Public Limited Company is engaged in the business of processing prawns and exporting the frozen prawns to foreign countries. It has its processing plant in Kopalle Village of Kalla Mandal, West Godavari District, which is within the notified area of Agricultural Market Committee, Akividu. The petitioner- Company has obtained license as contemplated under the provisions of the Markets Act from the assessment year 1999-2000, and is doing business by paying necessary market fee and filing its returns on year-to-year basis. 3. For the assessment year 1999-2000, the petitioner- Company has filed its returns, showing a turnover of Rs.12,25,81,527/- and paid the market fee of Rs.0.50 paise for every Rs.100/- of the aggregate purchase or sale. Though the petitioner-Company has filed its returns and paid the total market fee of Rs.6,12,908/-, but subsequently, the respondent has initiated proceedings under Section 12 (B) of the Markets Act, alleging that the petitioner did not submit complete returns to the assessing authority, and thus, escaped the liability of paying market fee on the turnover of Rs.14,45,82,617/-. In the notice issued under Section 12 (B) of the Markets Act, it is alleged that the petitioner-Company has disclosed lesser turnover compared to the turnover submitted by it before the Commercial Tax Authorities. It is alleged that the petitioner has suppressed a turnover of Rs.14,45,82,617/-, and accordingly, evaded the market fee of Rs.7,22,913/-. On receipt of said notice, dated 14-10-2002, the petitioner- Company has submitted a representation, dated Nil, in the office of the respondent-Market Committee on 01-11- 2002, denying the allegation regarding suppression of turnover. In its representation, it is categorically stated by the petitioner-Company that they have procured shrimp not only from the notified area of the Agricultural Market Committee, Akividu, but also from the areas which fall within the jurisdiction of other Market Committees. Precisely, it is stated that the total turnover of the Company is not assessable in the Market Committee of Akividu area alone. In spite of receipt of the said representation, on the ground that the petitioner has not produced the books of account in support of their defence, the impugned order is passed by recording a finding that the petitioner has escaped the liability of paying advolorem market fee on the turnover of Rs.14,45,82,617/-, and demanded the petitioner to pay an amount of Rs.7,22,913/- towards market fee on the undisclosed turnover, and also to pay Rs.14,45,826/- as a penalty. 4. At the stage of admission, this Court, on 22.12.2004, granted interim orders, suspending the impugned order and the said order continued all along during the pendency of this Writ Petition. 5. In this Writ Petition, it is contended by Sri Y.V.Ravi Prasad, the learned counsel for petitioner that the impugned order is passed without recording any valid reason, in spite of denial of liability by the petitioner. It is submitted that though the petitioner-Company was prepared to submit the records, without giving sufficient time, impugned order is passed. It is contended that the turnover, which is shown in the proceedings before the Commercial Tax Authorities, cannot be adopted for the purpose of turnover under the provisions of the Markets Act, because the turnover, which is to be disclosed under the provisions of the Markets Act, is only with reference to sales and purchases made within the notified area of that particular Market Committee alone, whereas the turnover, which is disclosed in the Commercial Tax Proceedings, includes the purchases and sales that are made within the notified areas of other Market Committees also. 6. On the other hand, it is contended by Sri K.Madhava Reddy, the learned Standing Counsel for the respondent- Market Committee that every sale and purchase made within the notified area of the respondent-Market Committee is liable to be assessed for the purpose of market fee, and the petitioner, having done business with a turnover of Rs.26,71,64,144/-, has merely shown the turnover as Rs.12,25,81,527/-, and escaped the liability of paying market fee on the balance turnover. It is submitted that though the petitioner- Company was given an opportunity, it has not substantiated its defence by producing the books of account and also did not show the proof of paying market fee in any other Market Committees. 7. Under Section 12 (1) of the A.P. (Agricultural Produce & Livestock) Markets, Act, 1966, a particular Market Committee is empowered to levy fees on the notified agricultural produce, livestock and products of livestock purchased or sold in the notified market area of that particular Market Committee. Under Section 12 (A) of the Act, every trader in the notified area is liable to pay market fee by submitting returns relating to his turnover in such manner within such period and to such authority as may be specified by the Market Committee in the byelaws. Under Section 12(B) of the Markets Act, if the assessing authority is satisfied that the returns submitted by the petitioner are not correct, he is empowered to assess the amount of market fee, on the basis of the returns submitted by the traders. Further, if the returns appear to be incorrect or incomplete, he is empowered to assess to the best of his judgment, the market fee due, after giving opportunity to the trader. 8. Coming to the present case on hand, for the Assessment Year, 1999-2000, the petitioner-Company has submitted its returns as contemplated under Section 12 (1) of the Markets Act, by showing the turnover of Rs.12,25,81,527/-, and based on the same, it has already paid the market fee. Subsequently, proceedings were initiated by issuing notice under Section 12 (B) of the Markets Act, mainly on the ground that the turnover shown by the petitioner-Company for the relevant year for the Commercial Tax Authorities is Rs.26,71,64,144/-, and as such, there is a difference in the returns filed by the petitioner with regard to the turnover shown. It is alleged that the petitioner has shown the turnover of only Rs.12,25,81,527/- before the respondent-Market Committee, whereas before the Commercial Tax Officer, the turnover was shown as Rs.26,71,64,144/-, as such, it is alleged that the petitioner has escaped the liability of paying market fee on the balance turnover of Rs.14,45,82,617/-. However, it is to be noted that when the notice was issued under Section 12 (B) of the Act, the petitioner has submitted its representation, which is received in the office of the respondents on 01-11-2002, by which, it has categorically denied the allegation of the respondent, by pleading that they have procured shrimp not only from the notified area of Agricultural Market Committee, Akividu, but also from the notified areas of other Market Committees. It is specifically stated that the total turnover of the Company is not assessable under the Agricultural Market Committee, Akividu area alone for the purpose of paying the market fee. In spite of such a plea taken by the petitioner, the impugned order is passed, mainly on the ground that the petitioner has not produced the books of account in the enquiry conducted under Section 12 (B) of the Markets Act. From a reading of the impugned order, it is clear that there is no finding recorded by the assessing authority on the objections raised by the petitioner in the representation, which is received by the respondent on 01.11.2002. The order reads simply that the petitioner has escaped the liability of paying market fee on the turnover of Rs.14,45,82,617/-. Upon a reading of Section 12 (B) of the Act, it is clear that the assessing authority is empowered to assess the market fee to the best of his judgment not only after giving an opportunity to the trader, but also, after making such further enquiry as he consider necessary to assess the market fee due from the trader. In view of this Provision, it is obligatory on the part of the respondent to record a finding on the defence of the petitioner-Company with reference to the objections raised by it in the enquiry. The learned counsel for petitioner has also produced a copy of the representation, dated 28.04.2003, which was submitted in the office of the respondent- Market Committee on 30.04.2003, by which, they have requested for some more time to produce the relevant books of account to the Market Committee. It is submitted that the said representation is filed before receipt of the impugned orders by the petitioner. In view of the submissions made, this Court is of the view that so far as the market fee is concerned, the respondent-Market Committee is entitled to collect the market fee only with regard to sales and purchases made within its notified area, and merely because the petitioner has shown higher turnover before the Commiercial Tax Authorities, by itself, is no ground to allege that the petitioner-Company has escaped the liability of paying market fee on the balance turnover. In the absence of recording any clear findings on the objections raised by the petitioner, and further, in view of the fact that the petitioner has requested for some more time for producing the books of account in the enquiry initiated under Section 12 (B) of the Markets Act, I deem it appropriate to remit the matter for fresh consideration by the respondent-Market Committee, and to make further enquiry in the matter, so as to verify whether the petitioner has escaped any liability of payment of market fee in the relevant assessment year. 9. For the aforesaid reasons, the order under challenge, dated 13.03.2003, passed in proceedings R.C.No.121/B/2002, is hereby set aside and the matter is remitted to the Agricultural Market Committee, Akividu, West Godavari District, for fresh consideration. The petitioner-Company is permitted to file books of account for the relevant Assessment Year, or any other supporting material in support of their plea before the respondent- Market Committee, without waiting for any further notice, within a period of eight weeks from the date of receipt of a copy of this order. On receipt of such material, if any, the respondent shall consider the same and pass appropriate orders by giving opportunity of hearing to the petitioner. It is also made clear that if no further material is filed by the petitioner within the time referred above, it is open for the respondent-Market Committee, to proceed with the enquiry and pass appropriate orders. 10. Subject to above directions, the Writ Petition is allowed to the extent indicated above. No order as to costs. ______________________ R.SUBHASH REDDY, J. 26th June 2009. Skmr/ajr