IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.02.2011 Coram The Hon'ble Mrs. Justice R.BANUMATHI W.P.Nos.45554 of 2002, 399, 412, 454 and 14008 of 2003 W.P.No.45554 of 2002: Ramavilas Tobacco Company rep.by its Partner V.Parthiban S/o.G.Vaiyapuri Bhavanisagar Roiad Punjaipuliyampatti .... Petitioner Vs. 1.The Secretary Erode District Agricultural Marketing Committee Erode 2.The Superintendent Erode District Agricultural Marketing Committee Punjaipuliyampatti .... Respondents W.P.No.399 of 2003: Taj Agencies rep.by its Managing Partner M.Saffiyulla Market Road, Punjaipuliampatti Erode District. .... Petitioner Vs. 1.The Secretary Erode District Agricultural Marketing Committee Erode 2.The Superintendent Erode District Agricultural Marketing Committee Punjaipuliyampatti .... Respondents https://hcservices.ecourts.gov.in/hcservices/ W.P.No.412 of 2003: M.M.A.Mohammed Sulthan and Sons rep.by its Managing Partner Saffiyulla, Market Road, Punjaipuliampatti. ... Petitioner Vs. 1.The Secretary Erode District Agricultural Marketing Committee Erode 2.The Superintendent Erode District Agricultural Marketing Committee Punjaipuliyampatti .... Respondents W.P.No.454 of 2003: M/s.E.S.Mydeen & Co., rep.by its Managing Partner Mr.E.S.M.P.Kaleel No.20, Potramaraikulam North Kumbakonam, Tanjore District. .... Petitioners Vs. 1.The Secretary Periyar Regulated Marketing Committee Dharapuram – 6398 656 2.The Superintendent, Periyar Regulated Marketing Committee Dharapuram – 638 656 Erode District. .... Respondents W.P.No.714 of 2003: The Tobacco Merchants Development Association, Reg.No.6/93 rep.by its President N.Chinnaiaya Gounder Door No.5/171, Kalliapallayam Madurai Post, Erode District PIN -638 459. ... Petitioner Vs. https://hcservices.ecourts.gov.in/hcservices/ 1.The Secretary Coimbatore District Marketing Committee Coimbatore 2.The Superintendent Coimbatore District Marketing Committee Annur, PIN 641 654 3.The Secretary Erode District Agricultural Marketing Committee Erode 4.The Superintendent Erode District Agricultural Marketing Committee Erode District. .... Respondents W.P.No.14008 of 2003: Nambiyur Taluk Tobacco Merchants Association rep. By its Secretary P.Thangavelu ... Petitioner Vs. 1.The Secretary Erode District Agricultural Market Committee, Erode 2.The Superintendent Erode District Agricultural Marketing Committee Nambiyur. .... Respondents Prayer: Writ Petition in W.P.No.45554 of 2002 of 2002 is filed under Article 226 of the Constitution of India seeking for the relief of issuance of writ of certiorari to call for the proceedings of respondent dated 2.12.2002 made in Ku.No.59/02 and quash the same. Writ Petition in W.P.No.399 of 2003 is filed under Article 226 of the Constitution of India seeking for the relief of issuance of writ of certiorari to call for the proceedings of respondent dated 2.12.2002 made in Ku.No.59/02 and quash the same. Writ Petition in W.P.No.412 of 2003 is filed under Article 226 of the Constitution of India seeking for the relief of issuance of writ of certiorari to call for the proceedings of respondent dated 2.12.2002 made in Ku.No.59/02 and quash the same. Writ Petition in W.P.No.454 of 2003 is filed under Article 226 of https://hcservices.ecourts.gov.in/hcservices/ the Constitution of India seeking for the relief of issuance of writ of certiorari to call for the records pertaining to the proceedings of the 2nd respondent in notice No.59 of 2002 dated 17.12.2002 and quash the same. Writ Petition in W.P.No.714 of 2003 is filed under Article 226 of the Constitution of India seeking for the relief of issuance of writ of mandamus to forbear the respondents restraining the respondents from insisting the production of statement of accounts and levying and demanding of fees for the period prior to the Judgment of Supreme Court rendered in I.T.C.Ltd., Vs. State of Karnataka and others reported in AIR 2002 SC 852 for receiving application in Form No.I, and grant licence as contemplated under Section 8 of the Tamil Nadu Agricultural Produce Marketing (Regulation) Act read with Rules 25 and 26 of the Tamil Nadu Agricultural Produce Marketing (Regulation) Rules, 1991. Writ Petition in W.P.No.14008 of 2003 is filed under Article 226 of the Constitution of India seeking for the relief of issuance of writ of mandamus to forbear the respondents restraining the respondents from insisting the production of statement of accounts and levying and demanding of fees for the period prior to the Judgment dt.24.1.2002 of Supreme Court rendered in I.T.C.Ltd., Vs. State of Karnataka and others as reported in AIR 2002 SC 852 for receiving application in Form No.I, and grant licence as contemplated under Section 8 of the Tamil Nadu Agricultural Produce Marketing (Regulation) Act read with Rules 25 and 26 of the Tamil Nadu Agricultural Produce Marketing (Regulation) Rules, 1991. For Petitioner : Mr.M.Devaraj in W.P.Nos.45554 for Mr.S.Elamurugan of 2002, 399, 412, 714 and 14008 of 2003 For Petitioner : Mr.P.Venkatesan in W.P.No.454 of 2003 For Respondents : Mr.D.Krishna Kumar in all W.Ps COMMON ORDER In these writ petitions, petitioners, who are tobacco traders, seek writ of certiorari to quash the impugned proceedings of the respondents calling upon the petitioners that in view of the judgment of the Supreme Court in the case of I.T.C.LTD. VS. AGRICULTURAL PRODUCE MARKET COMMITTEE, (AIR 2002 SC 852) to pay licence fee and market fee for the tobacco traded by the petitioners from 1.4.1994 to 31.3.2003. https://hcservices.ecourts.gov.in/hcservices/ 2. Since common points are involved, with the consent of the counsel for petitioners and respondents, all the writ petitions were taken up together and shall stand disposed by this common order. 3. In brief, the factual matrix are as follows: (i) The petitioners are traders in tobacco, who purchase tobacco from the agriculturists and transport them to their godowns situated at various places and deal with tobacco. The control of tobacco business was governed by Tobacco Board Act 1975. The Government of Tamil Nadu enacted Tamil Nadu Agricultural Produce Marketing (Regulation) Act (TNAPMR Act), 1987. Under the said Act, various Marketing Committees were constituted and as per the provisions of the Act, any person carrying on business in any agricultural produce has to get a licence on payment of prescribed fees and to remit the appropriate fees as levied by the Market Committee based on the value of the produce dealt with by the licensee. Earlier writ petitions came to be filed challenging the acts of respondent in including tobacco as "agricultural produce" within the meaning of TNAPMR Act and levy of fees under the said Act. In case of I.T.C.LTD. VS. STATE OF KARNATAKA (1985 Suppl (1) SCC 476) (hereinafter referred to as "ITC-I case), Supreme Court has held that the levy of market fee and insisting licensee for tobacco is ultra vires the legislative competence. Applying the ratio of the said decision, the writ petitions earlier filed by the traders were allowed by the judgment dated 31.8.1995. (ii) The question whether the judgment in ITC-I case (1985 Suppl SCC 476) came to be correctly decided or not was referred to the Constitutional Bench, which rendered judgment on 24.1.2002 reported in I.T.C.LTD. VS. AGRICULTURAL PRODUCE MARKET COMMITTEE (AIR 2002 SC 852), (in short, ITC-II case), wherein the Supreme Court held that the ITC-I case (1985 Suppl SCC 476) was not correctly decided and that the tobacco producers could be subjected to levy of licence on market fee under Agricultural Produce Marketing Regulation Act. Subsequent to the ITC-II case (AIR 2002 SC 852), the respondent issued impugned notices calling upon the petitioners to obtain licence from 2002 and also to pay the licence fee from 1.4.1994 till 31.3.2003 clear the arrears which would have been levied on tobacco by producing the records for the earlier period. Challenging the impugned notices and levy of licence fee retrospectively and also calling upon the petitioners to produce the records and pay the arrears of market fee, petitioners have filed these writ petitions. 4. The respondents have filed counter stating that in view of the subsequent decision in ITC-II case (AIR 2002 SC 852) the petitioners are bound to pay the market fee on tobacco and thereby comply the provisions of the Act and the Rules framed thereunder to the Market Committee. According to the respondents, the impugned notices were issued only to recover the market fee and the other amounts due to be collected by the Market Committee as per the provisions of the said Act. Since the validity of the Agricultural Produce Marketing https://hcservices.ecourts.gov.in/hcservices/ Regulation Act was upheld by the judgment - AIR 2002 SC 852 (dated 24.1.2002), the petitioners are liable to comply with the demand in the impugned notices, which were issued as per the provisions of the Act 1987 and the rules framed thereunder. 5. The learned counsel for petitioners contended that for issuing the licence, the respondent has no jurisdiction to impose any condition and by issuing the impugned notices, the respondents are attempting to impose fee, which they could earlier directly impose as per the powers conferred under the Act and the Rules. It was further contended that even in ITC-II case (AIR 2002 SC 852), the Supreme Court has made it clear that arrears could not be collected and no refund could be claimed. In support of their contention, the learned counsel for the petitioners would rely upon the view taken by the minority in ITC-I case (1985 Suppl SCC 476) in Paragraphs Nos.27 and 28, which reads as under: "27. Practically the same view has been taken in Baijnath Kedia v. State of Bihar (1969) 3 SCC 838) where the following observations were made: (SCC p. 847-48, para 13) “It is open to Parliament to declare that it is expedient in the public interest that the control should rest in Central Government. To what extent such a declaration can go is for Parliament to determine and this must be commensurate with public interest. Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is abstracted from the legislative competence of the State Legislature. This proposition is also self-evident that no attempt was rightly made to contradict it.” (emphasis supplied) 28. Thus, it would appear that in view of the recent decisions, once the Centre takes over an industry under Entry 52 of List I and passes an Act to regulate the legislation, the State Legislature ceases to have any jurisdiction to legislate in that field and if it does so, that legislation would be ultra vires the powers of the State Legislature. 6. Mr.D.Krishna Kumar, learned counsel appearing for Marketing committee submitted that the impugned notices were issued only to recover the market fee and other amounts due to be collected by the Market Committee as per the provisions of the said Act. According to the respondents, since the validity of the TNAPMR Act has been upheld by the judgment of the Supreme Court, the petitioner Company is liable to comply with the demand made in the impugned notice, which was https://hcservices.ecourts.gov.in/hcservices/ issued as per the provisions of the Act and the Rules framed thereunder. 7. On the above submissions, the following points arise for consideration in these writ petitions: "1. Whether the levy of licence fee from 1.4.2000 to 31.3.2003 (W.P.No.45554 of 2002), 1.4.1994 to 31.3.2003 (W.P.Nos.399 and 412 of 2003) and 1.10.1995 to 31.3.1996 (W.P.No.454 of 2003) in the respective impugned notices is against the principles laid down by the Supreme Court in ITC-II case (AIR 2002 SC 852). 2. Whether calling upon the petitioners to produce the accounts for the past from 1994- 1995 till 2002-2003 is beyond the purview of the respondents. 3. Whether the petitioners are justified in raising objection to obtain licence from 2002-2003 and to pay fee levied on purchase or sale of the tobacco?" 8. Points No.1 to 3: Tamilnadu Agricultural Produce Marketing (Regulation) Act 1987 and the Rules framed thereunder came into force with effect from 1.2.1991. As per the provisions of the said Act, many produces defined as 'agricultural produce' were brought under the Schedule of the Act. Even horticulture, fruit crops, seed crops, animal husbandry, apiculture, pisciculture, agriculture and sericulture etc., are included as 'agricultural produce' in the Schedule for the propose of the said Marketing Act, 1987. The object of the Act is to provide for the better regulation of buying and selling of agricultural produce and the establishment of proper administration of markets for agricultural produce in the State of Tamilnadu. The regulated markets are doing service to dispose the notified agricultural produces brought to mortgage for sale by the farmers without any remuneration. There are also provisions in the Marketing Act to regulate the buying and selling of notified agricultural produce and its movements, to control and avoid unauthorised deduction of abnormal commission and brokerage prevalent in the trade. The enactment is mainly intended to protect the interest of the farming community to secure a fair and reasonable price. In exercise of the powers conferred by Section 52 of the Act, Rules were framed. Rule 25 provides for grant of licence and Rule 26 stipulates renewal of licence, Rule 27 deals with licence fee. As per Rule 32, every licensee shall submit a monthly return. Rule 33 deals with fee leviable on sale or purchase of agricultural produce. 9. In the impugned proceedings, the petitioners were called upon to ●obtain licence for carrying on trade in tobacco from 2002- 2003; ●submit periodical returns relating to the purchase or sale of tobacco dealt with by the petitioners from 1994-1995 till 31.10.2002; ●to pay the market fee leviable on the tobacco dealt with https://hcservices.ecourts.gov.in/hcservices/ by the petitioners upto 31.10.2002 and also to pay the licence fee for the past i.e., from 1994-95 upto 2002- 2003. 10. Before considering the contentious points, we may usefully refer to the judgments of the Supreme Court in respect of tobacco. In the ITC-I case (1985 Supp SCC 476), challenge was to the constitutional validity of Karnataka Agricultural Produce Marketing (Regulation) Amendment Act, 1980. By the amending Act, tobacco was enumerated as an 'agricultural produce' for the purpose of Karnataka in APMR Act 1966. The contention canvassed before the Court in the ITC-I case was in view of the Central Act viz., Tobacco Board Act, State Legislature was not competent to bring into fold of the State Act the tobacco being matter covered under Entry 52 of Union List of 7th Schedule of the Constitution of India. The precise question in the ITC-I case was as to whether in respect of marketing of tobacco State Government was entitled to legislate or whether in view of the fact that there was a declaration under Entry 52 of the Union List, State Legislature has no competence to legislate on tobacco. The Supreme Court has held that in Public Interest, once tobacco industry has been declared as such under Entry 52 List I of VIIth Schedule of the Constitution, the State Legislatures ceased to be competent to legislate on the subject viz., 'Tobacco' in conflict with the laws made by the Parliament. The Supreme Court further held that the Karnataka State Act levying market fee on sale of tobacco in the market area was thus held to be invalid. The Supreme Court took the view that the whole legislative field in relation to the subject of tobacco including its sale as an agricultural produce was held to have vested in the Parliament. 11. The correctness of ITC-I case (1985 Supp SCC 476) came to be referred to a constitutional bench. In I.T.C.LTD. VS. AGRICULTURAL PRODUCE MARKET COMMITTEE (AIR 2002 SC 852), the validity of Bihar Agricultural Produce Markets Act came to be challenged. In the ITC-II case, it was argued that the Market Committee can levy market fee in respect of sale and purchase of tobacco within the notified area as the Market Committee Act is a duly enacted law by the State Legislature within its competence to legislate under Entry 14 and Entry 28 and therefore there is no question of conflict or repugnance between the Tobacco Board Act and Bihar Act since both the Acts operate in mtually exclusive and different field. 12. The Supreme Court upholding the validity of Bihar Agricultural Produce Markets Act, the majority judges of the Hon'ble Supreme Court held that the ITC-I case (1985 Supp SCC 476) was not correctly decided and held as under: "193. In keeping with the conclusions of the majority, expressed in the judgments of Sabharwal, Ruma Pal and Brijesh Kumar, JJ., it is held that: (1) ITC's case (1985 Supp SCC 476) was not correctly decided. https://hcservices.ecourts.gov.in/hcservices/ (2) The State Legislatures are competent to enact legislation providing for the levy and collection of a market fee on the sale of tobacco in a market area. Consequently, the Market Acts enacted by the States are valid. (3) The State legislations and the Tobacco Board Act, 1975, to the extent that they relate to the sale of tobacco in market areas, cannot co-exist and the former prevail over the latter." 13. Under Section 8 of TNAPMR Act,1987, no person shall, within a notified area, operate as a trader, broker, or in any other capacity in relation to buying and selling of any notified "agricultural produce" except in accordance with the conditions of licence granted to him by the Market Committee. Rules 25 and 26 of Tamil Nadu Agricultural Produce Marketing (Regulation) Rules deal with grant/renewal of licence under Section 8 of the Act in Form 3 and 4 to a place or to broker/trader. As per Rule 27, licence fee of Rs.300/- shall be payable in respect of a licence for three years for wholesalers specified in Section 8 Sub-section (7)(a). Licence fee of Rs.75/- shall be payable in respect of a licence for one year for other traders specified in Section 8 Sub-section (7)(b). 14. Under Section 8(9) of the Act, every licensee shall keep and maintain a true and correct account and such other records as may be specified in the by-laws of the Market Committee and shall also submit periodical returns relating to the business transaction including processing as may be prescribed. Rule 32 deals with submission of periodical return. As per Rule 33, the fee on a notified "agricultural produce" leviable under sub-section (1) of Section 24 of the Act shall be Re.1 for every hundred rupees of the aggregate amount of the notified agricultural produce which is brought or sold in the notified market area. Since the legislative competence of the State to include tobacco as "agricultural produce" within the meaning of "agricultural produce Marketing (Regulation) Act has been upheld in ITC-II case (AIR 2002 SC 852), insofar as the period from the year 2002-2003, for trading/dealing in tobacco, the writ petitioners are statutorily bound to obtain licence and also to pay fee levied on the purchase or sale value of the tobacco transaction dealt with by them as per the provisions of the Act. Point No.3 is answered accordingly. 15. The main point falling for consideration is, the payment of licence fee and market fee during the interregnum period from 1994-95 till 2002-2003. While upholding the legislative competence of the State Government for including "tobacco" as "agricultural produce" for collection of market fee and while upholding the constitutional validity of Bihar Agricultural Produce Markets Act. In the ITC-II case (AIR 2002 SC 852), the Supreme Court did not say anything about the prospective overruling. In paragraph No.28 of the judgment, the minority judges took the view that "Tobacco Board Act will prevail and Agricultural Produce Markets Act so far as it relates to levy of fee https://hcservices.ecourts.gov.in/hcservices/ for sale and purchase of tobacco within the market area must be held to go out of the purview of the said Act." While so striking down Bihar Agricultural Produce Markets Act so far as it relates to levy of fee for sale and purchase of tobacco, the minority judges also discussed the effect of market fee already collected/to be collected in future. Minority view was that in different appeals arising out of the Madhya Pradesh High Court, interim stay was granted by the Supreme Court on different dates and while referring to those appeals in paragraph No.35 of the Judgment, having regard to the facts and circumstances of case and also the resources of the Market Committee, the minority judges took the view that it is not necessary to direct the Market Committee to refund the market fee already collected. At the same time, it was also observed that the Market Committee will not be entitled to collect the levy of fee for the sale and purchase of tobacco within the market area. 16. Laying emphasis upon the views of the minority, the learned counsel for writ petitioners contended that when the majority judges did not express any opinion on the issue, but the minority opinion examined the issue and answered the point, such opinion expressed by the minority will have a binding force on the Courts in India. In support of his contention, the learned counsel placed reliance upon a decision of the Supreme Court in STATE OF SERAIKELLA VS. UNION OF INDIA, (AIR 1951 SC 253), which was referred to by a learned single Judge in PREM PRAKASH GUPTA VS. UNION OF INDIA, (AIR 1977 ALLAHABAD 482). Placing reliance on the above decisions, learned counsel for the writ petitioners contended that since the majority judges did not express any opinion on the market fee to be collected/refunded, minority opinion in paragraph No.35 will have binding effect on the Courts and therefore the writ petitioners cannot be compelled to pay the licence fee/market fee for the purchase or sale of tobacco in the notified area and to that extent the impugned orders are vitiated. The above contention cannot be countenanced. 17. While upholding the legislative competence of State Government including tobacco for collection of market fee, in the ITC- II case (AIR 2002 SC 852), the majority judges did not express any opinion on the market fee to be collected during the interregnum period from 1994-95 till the decision in ITC-II case (AIR 2002 SC 852). It is fairly well settled that there is no prospective overruling unless so expressly indicated . For the first time the Supreme Court in Golak Nath v. State of Punjab (AIR 1967 SC 1643) accepted the doctrine of “prospective overruling” and held as under: “51. As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, we would like to move warily in the beginning. We would lay down the following propositions: (1) The doctrine of prospective overruling can be invoked only in matters arising under our Constitution; (2) it can be applied only by the highest court of the country i.e. the Supreme Court as it has the constitutional jurisdiction to declare law binding on all the courts in https://hcservices.ecourts.gov.in/hcservices/ India; (3) the scope of the retroactive operation of the law declared by the Supreme Court superseding its ‘earlier decisions’ is left to its discretion to be moulded in accordance with the justice of the cause or matter before it.” 18. Under the doctrine of "prospective overruling", the law declared by the Court applies to the cases arising in future only and its applicability to the cases which have attained finality is saved, because the repeal would otherwise work hardship on those who had trusted to its existence. However, the invocation of the doctrine of "prospective overruling" is left to the discretion of the Supreme Court to mould with the justice of the case or the matter before the Court. In M/S.SOMAIYA ORGANICS (INDIA) LTD. VS. STATE OF UTTAR PRADESH, (2001 (3) CTC 434), the Supreme Court observed that the Court can always direct that the declaration of invalidity of legislation would take effect from future date. Again, in the case of P.V.GEORGE VS. STATE OF KERALA, ((2007) 3 SCC 557), the Supreme Court held that the law declared by the Court will have a retrospective effect if not otherwise stated to be so specifically. While upholding the validity of Agricultural Produce Markets Act and the legislative competence of the State including tobacco as "agricultural produce" is well within the legislative competence of the State, the Supreme Court did not specifically state that the decision in ITC-II case (AIR 2002 SC 852) will have prospective operation. In the absence of any such specific direction by the Supreme Court, the decision in ITC-II