Case: Ram Chandra Kailash Kumar and Company Vs. State of Uttar Pradesh Etc

of this Court in Raunaq Ram Tara Chand &Ors. etc. v. The State of Punjab &Ors. But that case is distinguishable because of the language of rules 29 and 31 of the Punjab Agricultural Produce Market Rules framed in accordance with the Punjab Agricultural Produce Markets Act, 1961. Both the rules aforesaid clearly stated that the fee could be charged from the licensees only. Not only that even the charging section 23 of the Act itself stated:-"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... " On the other hand in section 17 (iii) (b) of the U.P. Act and Rules 66 and 68 of the Rules charging of market fee in terms is not found to be chargeable from the licensees only. The traders cannot escape their liability to pay the fee on account of their default of taking out licences. Point No. 21 37. This point is also well founded and must be accepted as correct. Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match-sticks purchases wood from the producer for the purposes of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match-stick s or match boxes. Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products. Exactly the same will be the position with regard to the articles sold by Kisan Products Ltd. and the sale of Pan. Agricultural produce purchased by the dealers will be chargeable to market fee and not the sale of the products after one kind of processing or the other. Point No. 22 38. Under this head the submission on behalf of the fruit and vegetable merchants was that they bring their products to the market and sell them in wholesale through their commission agents. No market fee, therefore, should be charged from them. In our opinion the argument so placed on behalf of the merchants is misconceived. Under sub-clause (1) of s. 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the Commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables. The burden does not fall on the producer. The liability in the first instance is of the commission, agent and finally of the purchaser of the articles. Point No. 23 and 24 39. Reliance was placed upon a decision of the Mysore High Court (now Karnataka) in the case of K. N. Marudaradhya v. The Mysore State but the view taken by the Mysore High Court was dissented from by the Patna High Court in the case of Mangalchand Ramchandra and others etc. etc. v. State of Bihar. One of us (Untwalia J, ) delivering the judgment of the Patna High Court stated at page 1053 thus:"At this stage I would discuss a Bench decision of the Mysore High Court on which great reliance was pl aced on behalf of the petitioners in support of their contention that no fee can be levied on transaction of buying and selling between a dealer and a dealer even though such transactions take place within the market area or the market proper. The decision of the Mysore High Court is in the case of K. N. Marudaradhya v. The Mysore State A.I.R. 1970, Mysore 114. At page 126 (column 2) from paragraph 33 starts the discussion on the point at issue. To the extent the decision goes to hold that the purchase in respect of which the fee could be levied or collected is the earliest purchase, that is to say, the fee can be levied only on one purchase and not on subsequent purchases, with respect I am inclined to agree with that view expressed in paragraphs 33 to 38. But while discussing the point, Iyer J., has confined this earliest purchase of the agricultural produce belonging to the producer only. There does not seem to be a pointed discussion of the question whether the first purchase from a dealer could be subjected to levy or not. But by necessary implication, as I read the judgment, it seems, their Lordships of the Mysore High Court took the view that such a deal cannot be subjected to the levy of fee. With great respect, in that regard, I strike my note of dissent from the view expressed by the Mysore High Court. Firstly, merely because the object of the legislation is the protection of the agriculturist, the plain meaning of the section cannot be cut down. Secondly, they have relied upon the practice prevailing around the area under different State statutes as mentioned in paragraph 36. If I may say with respect, law could not be so decided on the basis of any practice. Of course, the interpretation given to the Statute can be supported by reference to practice. Thirdly, I am inclined to think that the Supreme Court decision in the case of Krishna Coconut Company does not lend support to the limited view expressed by the Mysore High Court." We approve of the Patna view and in the set-up of the U.P. Act after an elaborate discussion we have pointed out as to in what kind of transaction who is liable to pay the market fee. In the U.P. Act even traders under certain circumstances have been made liable to pay such fees. Similarly the argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is also devoid of any substance. Conclusions

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. These four points are taken up together as there is no substance in any of them. Declaration of big areas as Market Areas does not offend any provision of law. Any area big or small including towns and villages can be declared as Market Area under s.6 of the Ac t. As explained in the case of Kewal Krishan Puri (supra) the whole of the market area is not meant where the traders or the licensees can be allowed to set up and carry on their business. The traders are required to take out licences under s.9(2) re ad with s.11 of the Act, for such place which is either a Principal Market Yard or a Sub-Market Yard or at any specified place in the Market Area. No body can be permitted to carry on his business anywhere in the Market Area as the Market Commit tee will not be able to control and levy fee throughout the Market Area. The question of rendering service and its co-relation to the charging of fee has been elaborately discussed in the said decision and the following principles have been culled out:-"(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose(2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce(3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefit must be conferred on them which have a direct, close and reasonable co-relation between the licensees and the transactions(4) That while conferring some special benefits on the licensee it is permissible to render such service in the market which may be in the general interest of all concerned with the transactions taking place in the market(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefitting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them(6) That the element of quid pro quo may not be possible or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.(7) A t least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above."11. As already stated, Market Yards also have been established while issuing notifications under s.7. By and large, the Mandis where the traders are carrying on their business for the time being have been declared as Market Yards. When the Market Committees are able to construct their own Market Yards, as in some places they have been able to do, then a question will arise whether a trader can be forced to go to that place only for carrying on his business in agricultural produce or he can be permitted to carry on his business in his old place. For the time being this question is left open. Market Committees have not been constituted yet in accordance with the provisions contain ed in s.13 of the Act. They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which Act was a temporary Act and has been extended from year to year. But it is high time t hat Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act. But the levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants. A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees. We have already observed and expressed our hope for bringing into existence such machinery in one form or the other. But it is not correct to say that in absence of such a machinery no market fee can be levied or collected. If a dispute arises then in the first instance the Market Committee itself or any Sub-Committee appointed by it can give its finding which will be subject to challenge in any court of law when steps are taken for enforcement of the provisions for realisation of the market fee12. Under clause (b) of s.17(iii) of t he Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature. The minimum is 1% and the maximum is 1 1/2 of the price of the agricultural produce sold. The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services as explained by this Court in Kewal Krishan Puris case. The facts placed before the High Court as also before us were too meagre to indicate that services to the extent of the fee levied at 1% are not being rendered. In Puris case we upheld the levy of market fee at 2% on the value of the goods sold. But there we found that the Market Committees were rendering greater services than are being rendered by the Market Committees of Uttar Pradesh. Yet charging of 1% fee as is being charged throughout the State of Uttar Pradesh by all the Market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puris case13. It is difficult to understand the significance of this point. The notification dated 11-4-1978 indicates that in the various Districts, the number of which is about 55, 250 Market Committees have been constituted and about 115 items have been selected in respect of which market fee has been directed to be levied. None of the items so specified is such that it cannot be covered by the Schedule which is a part of the Act. The definition of agricultural produce is very wide. It is not confine d to items of agricultural produce only but includes items of produce of horticulture, viticulture, apiculture, sericulture, pisci-culture, animal husbandry or forest. Such items are specified in the Act which is undoubtedly a part of the Act . That being so challenge to the notification dated 11-4-1978 on the ground that it was issued without any application of mind is devoid of any substance and must be rejected14. It is clear and it was expressly conceded to on behalf of the Market Committees and the State that there cannot be any multi point levy of market fee in the same market areaSection 17(iii)(b), as amended by U.P. Act 7 of 1978 reads as follows:-"market fee, which shall be payable on transactions of sale specified agricultural produce in the market area at such rates, being not less than one percentum and not more than one and half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification, and such fee shall be realised in the following manner(1) if the produce is sold through a commission agent, the commission agent may realise the market fee from the purchaser and shall be liable to pay the same to the Committee;(2) if the produce is purchased directly by a trader from a producer the trader shall be liable to pay the market fee to the Committee;(3) if the produce is purchased by a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the Committee; and(4) in any other ca se of sale of such produce, the purchaser shall be liable to pay the market fee to the Committee."15. All the four clauses of clause (b) are mutually exclusive. If the produce is purchased from a producer directly the trader shall be liable to pay the market fee to the Committee in accordance with sub-clause (2). But if the trader sells the same produce or any product of the same produce to another trader neither the seller-trader nor the purchaser-trader can be made to pay the market fee under sub-clause (3). So far the position was not disputed by the Market Committees, rather it was conceded, and in our opinion, rightly. But some difficulty arises in regard to the products of the agricultural produce which has been subjected to the levy of market fee. This will be relevant when we come to consider the various agricultural produce in respect of which challenge was made on the ground that it amounts to multi point levy. At this stage we may explain our view point by taking a few examples from the Schedule appended to the Act. Wheat, an agricultural produce, is mentioned under the heading CerealsWe shall show hereinafter that in a particular market area market fee can not be levied both in relation to the transaction of purchase and sale of paddy and the rice produced from the same paddy. Fee can be charged only on one transaction. This finds support from the unamended Rules a s they are, wherein is to be found sub-r.(2) of Rule 66. But we find nothing in the provisions of the Act or the Rules to warrant the taking of the view that in another market area the Market Committee of that area cannot levy fee on a fresh transaction of sale and purchase taking place in that area. Supposing the Wheat is purchased in market area X by a trader from a producer, fee will be chargeable under s.17(iii)(b)(2). If the same Wheat is taken to another market area say Y and another transaction of sale and purchase takes place there between a trader and a trader the market fee will be leviable under sub-clause (3). It is also not correct to say that the agricultural produce must have been produced in the market area in which the first levy is made. It might have been produced in another market area or even outside the State of Uttar Pradesh but if a transaction of sale and purchase takes place of an agricultural produce as defined in the Act and covered by the notification within a particular market area then fee can be charged in relation to the said transaction18. It would thus be seen that before 1973, reading the provisions of the Act and the Rules, market fee was to be charged at such rates as specified in the bye-laws of a particular Market Committee. But it could not exceed 1/2 percentum of the price of the agricultural produce. We were informed at the Bar that almost every Market Committee had levied fees @ 1/2%. The liability to pay the fee was of t he seller of the agricultural produce. Market fee was liable to be paid under Rule 68(2)(ii) even if the specified agricultural produce was sold directly by the seller to the consumer. This provision has been superseded now by an amendment in the Act brought about by U.P. Act 19 of 1979, whereby a proviso to the following effect has been added to section 17(iii)(b)It would be noticed that by the said amendment in clause (b) the minimum rate fixed was 1 percentum and the maximum 1-1/2 percentum and the liability to pay the fee became that of the purchaser instead of the seller as prescribed earlier by the Rules. Yet the Rules continued as they were. Nonetheless it is plain that after the amendment in the Statute, Rules could apply only mutatis mutandis and wherever there was a conflict between the Rules and the Statute the latter had to prevail20. In passing, reference may be made to the substitution of the words market area in place of the words "Principal Market Yard or the Sub-Market Yards" occurring in clause (b) by U.P. Act 6 of 1977 w.e.f. 20-12-1976. We have already adverted to this aspect of the matter and pointed out that transactions cannot take place in whole of the market area and although theortically fee is chargeable in the whole of the area now but actually the Rules and especially the Explanation to Rule 66 indicate that the transactions do take place in the Principal Market Yard or Market Yards or some specified place or places in a particular market area. Then came the amended section 17(iii)(b) of U.P. Act 7 of 1978, which had already been extracted above and it was made retrospective w.e.f. 12-6-1973. Under the present provision a liability to pay the fee is under four mutually exclusive clauses. The Rules which were framed in 1965 namely Rules 66 and 68 are so very different from the present provision of law that we had to express our distress in the beginning of this judgment for the failure of the Government to amend the Rules and bring it in conformity with the amended provisions of the Statute from time to time. Any way, the Rules will apply as far as possible so long they do not come in conflict with the Statute and even without the aid of the Rules the provision in section 17(iii)(b) as it stands after the amendment brought about by U.P. Act 7 of 1978 is workable and can be given effect to. The State legislature was competent to make retrospective amendment vide B. Banerjee v. Anita Pan and M/s. S. K.G. Sugar Ltd. v. State of Bihar and Ors. It has also been pointed out in H. H. Sudhundra Thirtha Swamiar v. Commissioner for Hindu Religious &Charitable Endowments, Myso re at pages 324-25 that retrospective imposition of a fee is valid. Of course, this cannot be a rule of universal application. In a given case and in a given situation the retrospective operation may be hit by Article 19. But in the present case we are inclined to take the view that the retrospectivity of the law as such is not bad and the only safeguard which we want to point out is this. If market fee has been realised by any Market Committee in respect of transactions of sale of agricultural produce taking place between 12-6-1973 and coming into force of U.P. Act 7 of 1978, in accordance with the law as it prevailed then, no market fee under the amended law can be realised again. But if in respect of any transactions aforesaid market fee has not yet been realised then it can be realised in accordance with the amended provision of the law. The only hardship will be to persons covered by sub-clauses (1) and (3) wherein a provision has been made to pass on the burden of fee to others. In the case of sub-clause (1) the commission agent can realise the market fee from the purchaser and the seller-trader under sub-clause (3) can realise it from the purchaser. If market fees are realised from such persons in accordance with the amended provision of the law then in turn they may be able to realise it from persons on whom they could pass on the burden. We are not disposed to hold the law bad only on that account21. We have already alluded to this aspect of the matter earlier in our judgment and taken the view that market fee could be levied on transactions of goods not produced within the limits of a particular market area by the Market Committee of that area even though the goods are produced outside the State of Uttar Pradesh or outside the market area of that particular Market Committee provided the transactions take place within the limits of that Market area. On the other hand we find no provision in the Act or the Rules to limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area24. In relation to the transactions of Ghee we had two types of dealers before us-(1) a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant and (2) a dealer who purchases such Ghee from the manufacturer of Ghee and sells it to another trader in the same market area. The first dealer will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also. When he sells Ghee to another dealer in Ghee who is simply a dealer then under sub-clause (3) of section 17(iii)(b) the manufacturing dealer will be liable to pay market fee to the Market Committee on the transaction of Ghee. But he will be entitled to pass on the burden to his purchaser. Apropos the Market Committee, however, the liability will be of the manufacturing dealer. If milk, butter or cream would have been included in the notification then the charging of fee in relation to the first transaction of sale and purchase of such commodities would have been attracted in the light of the principle of law we have enunciated above with reference to paddy and rice. But in the case of Group D such commodities are not mentioned in the notificationWe would, therefore, like to clarify the position of law in this regard. If paddy is purchased in a particular market area by a rice miller and the same paddy is converted into rice and sold then the rice miller will be liable to pay market fee on his purchase of paddy from the agriculturist-producer under sub clause (2) of section 17(iii)(b). He cannot be asked to pay market fee over again under sub-clause (3) in relation to the transaction of rice. Nor will it be open to the Market Committee to choose between either of the two in the example just given. Market fee has to be levied and collected in relation to the transaction of paddy alone. Otherwise, there will be a risk of violation of Article 14 if it is left to the sweet-will of the Market Committee in the case of some rice millers to charge market fee on the transaction of paddy and in case of others to charge it when the sale of rice takes place. If, however, paddy is brought by the rice-miller from another market area, then the Market Committee of the area where paddy is converted into rice and sold will be entitled to charge market fee on the transaction of sale in accordance with sub-clause (3)25. An attempt was made on behalf of the Hides and Skins dealers to show that hides and skins cannot be an agricultural produce within the meaning of the Act. They are obtained from the carcass of an animal and not from a living animal. Argument stressed was t hat under group G in the Schedule appended to the Act Animal Husbandry Products only can come. Item 11 Hides and Skins, item 12 bones, item 13 meat etc. are not products of Animal Husbandry. Some authoritative books were cited before us on "Words and Phrases" to show the meaning of Animal, Husbandry and Animal Husbandry. Animal Husbandry means that branch of agriculture which is concerned with farm animals especially as regards breeding, care and production. We are not impressed by this argument. The definition clause (a) of section 2 uses the expression animal husbandry by way of a descriptive one without strictly confining to the products of animal husbandry as the addition of the words "specified in the schedule" indicates. In the schedule under the group husbandry products are mentioned all these items. We may also add that one may breed and rear animals in a farm for the purpose of obtaining hides and skins after they are butchered.Market fee is, therefore, leviable on the transactions of hides and skins as no market fee can be charged on transactions of sale and purchase of animals in a market area in the State of Uttar Pradesh, the same having not be en included in the notification. Had it been included in the notification, then no market fee could be charged in the same market area on hides and skins. It could only be charged in relation to the transaction of purchase and sale of animals26. For discussing this point we have to refer to group E of the notification dated 11-4-1978 which deals with forest products. The items mentioned in the said group are (1) Gum, (2) Wood, (3) Tendu leaves, (4) Catechu and (5) Lac. Market fee can be charged on purchase of wood by a trader from a producer. No fee can be charged on the sale of furniture manufactured by the purchaser of wood. It was also conceded on behalf of the Market Committees that market fee was not being charged on the sale of furniture. If it has been so charged it will be refunded. Furniture is not an item mentioned in the group of forest products. Therefore, this question does not present any difficulty at all. Difficulty cropped up in relation to the charging of market fee apropos the transaction of Catechu. According to the Market Committees Catechu is a product from timber or trees like Gum or Lac. It trickles down from the trees. On the other hand, according to the Catechu dealers by processing of Khar trees Catechu is produced. We leave this question of fact to be decided by the Market Committees concerned in the first instance and then by a court of law. If Catechu is a product of Khar trees by some processing as prima facie it appears to us to be so, then it is plain that market fee can be charged only on the purchase of Khar wood and not on the sale of Catechu27. This item presented some difficulty in solution. A licence is granted to a Paper Mill and to other kinds of dealers for cutting wood from the jungle and bringing it to their factories for manufacture of various articles such as paper etc. It was argued that there was no transaction of sale and purchase involved in the above operation. Moreover the wood is cut from the jungle area which although has been roped in the market area but no service is rendered in that jungle area by any Market Committee. In our opinion in the licence is involved sale of wood and a right t o go to that land to cut that wood. The wood may be used by the manufacturer for manufacturing furniture or may be used in the manufacture of paper or any other commodity. That is immaterial. The owner of the jungle wherefrom the wood is cut and brought will be a producer within the meaning of the Act and the licensee-producer of that wood would be a purchaser of an agricultural produce within the meaning of sub-clause (2) of section 17(iii)(b) of the Act liable to pay market fee. It matters little what use is made of the wood by him. The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held by this Court in Kewal Krishan Puris case. The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee28. This point also presented some difficulty. But on a parity of reasoning mentioned so far in connection with the other items, we have got to hold that such Kirana goods as are included in the notification brought from outside a particular market area or even from outside the State of Uttar Pradesh are chargeable to market fee when their sale takes place in a particular market area. In group A-VI Spices are mentioned including certain Kirana items such as Ripe Chillies, Sonf, turmeric etc. They are sold by the Kirana dealers. Sometimes they purchase them from the agriculturists in the same market area. In relation to those transactions they will be liable to pay market fee under sub-clause (2) of section 17(iii)(b). More often than not such articles are brought from outside and sold by the Kirana merchants. If they are sold to consumers, no market fee can be levied in view of the proviso added in the year 1979. If they are sold in wholesale, then the transaction can be subjected to the levy of market fee because in a particular market area they enter into the first transaction of sale in respect of the specified agricultural produce29. Market fee can be charged on transaction of tobacco as it is included in group A-V of the notification. As in the case of other items so in this case also the fee will be leviable if to bacco is purchased in the same market area from an agriculturist in accordance with sub-clause (2). Otherwise it would be leviable under sub-clause (3). Similar is the position in regard to tendu leaves which is mentioned in group E. Bidi cannot be treated as an agricultural produce as it is not an admixture of tobacco and tendu leaves within the meaning of section 2(a) of the Act. It was conceded on behalf of the Market Committees that no market fee was being charged on the transactions of Bidi. But if a Bidi manufacturer purchases tobacco and tendu leaves in the market area and uses them in the manufacture of Bidi, he will be liable to pay market fee in relation to the transaction of tobacco and tendu leaves30. This point has been stated merely to be rejected. There is no substance in this point. Our attention was drawn to some provisions in the municipal Acts and the Zila Parishad Acts to show that no market committee could be constituted in a municipal area or a Nyaya Panchayat. We do not consider it necessary to deal with this point in any detail. We merely reject it as being devoid of any substanceAccording to the case of some of the appellants who deal in these commodities they are the bye-products and market fee has already been charged on rab and therefore the fee cannot be charged again on rab galawat and rab salawat. Disputes of facts were raised in this connection before us on behalf of the Market Committees. On the materials placed before us it was clear to us that rab galawat and rab salawat cannot be subjected to a separate charge of market fee apart from the transaction of rab. Market fee can be levied on the first transaction of rab taking place in any market area in accordance with any of the sub-clauses of section 17 (iii) (b), as it may be applicable. It cannot be again charged on the second transaction of rab galawat or rab salawat even assuming that it is rab. But on the materials placed before us it appeared to us that rab galawat and rab salawat are not rab in the original form but they are obtained at one stage or the other in the process of manufacture of khandsari. Any way the question of fact may be decided as we have indicated in respect of the other items in the first instance by the Market Committee and thereafter by the High Court, if necessary, in a fresh writ petition. It will bear repetition to say that the only transaction which can be subjected to levy of market fee in a particular market area is the first transaction of rab and no other transaction of rab galawat and rab salawat32. This point urged on behalf of the appellants is well founded and must be accepted as correct. On the very wordings of clause (b) of section 17(iii) market fee is payable on transactions of sale of specified agricultural produce in the market area and if no transaction of sale takes place in a particular market area no fee can be charged by the Market Committee of that area33. If goods are merely brought in any market area and are despatched outside it without any transaction of sale taking place therein, then no market fee can be charged. If the bringing of the goods in a particular market area and their despatch therefrom are as a result of transactions of purchase and sale taking place outside the market area, it is plain that no fee can be levied34. This point has no substance and has got to be rejected. As held in Vishnu Agencies (Pvt.) Ltd. etc. v. Commercial Tax Officer &Ors. etc. on a review of earlier decisions even if a commodity is sold pursuant to the controlled regulations still some small area is left to make it a transaction of sale. It may well be that no freedom is left to the parties in a large area of the transaction yet it is a transaction of sale35. This point also must be rejected. A pure and simple producer as defined in clause (p) of section 2 is not required to take any licence for selling his agricultural produce nor is he required to pay market fee under any of the sub-clauses of section 17(iii)(b). But if he is a producer-trader in the sense we have explained above, then he will be required to take out a licence in accordance with s. 9(2) of the Act and no body can be permitted to carry on any trade in agricultural produce in the market area without a valid licence. Merely for his lapse of not taking out a licence he cannot escape the liability to pay the market fee. Market fee will still be chargeable from the trader, as, in s. 17(iii)(b) it is not stated that market fee can be charged only from the licensees. The proviso to clause (p) of s. 2 will be attracted only if a question arises as to whether any person is a producer or not for the purposes of the Act and in that event the decision of the Director made after an inquiry conducted in the manner prescribed by the rules shall be final. The proviso has nothing to do with a case of a producer-trader. If a question arises whether a person is merely a producer or producer-trader the Director will have no power to decide this question. Such a question will have to be decided by the Market Committee itself which will be subject to the final decision of a court of lawOn the other hand in section 17 (iii) (b) of the U.P. Act and Rules 66 and 68 of the Rules charging of market fee in terms is not found to be chargeable from the licensees only. The traders cannot escape their liability to pay the fee on account of their default of taking out licences37. This point is also well founded and must be accepted as correct. Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match-sticks purchases wood from the producer for the purposes of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match-stick s or match boxes. Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products. Exactly the same will be the position with regard to the articles sold by Kisan Products Ltd. and the sale of Pan. Agricultural produce purchased by the dealers will be chargeable to market fee and not the sale of the products after one kind of processing or the other38. Under this head the submission on behalf of the fruit and vegetable merchants was that they bring their products to the market and sell them in wholesale through their commission agents. No market fee, therefore, should be charged from them. In our opinion the argument so placed on behalf of the merchants is misconceived. Under sub-clause (1) of s. 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the Commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables. The burden does not fall on the producer. The liability in the first instance is of the commission, agent and finally of the purchaser of the articlesWe approve of the Patna view and in the set-up of the U.P. Act after an elaborate discussion we have pointed out as to in what kind of transaction who is liable to pay the market fee. In the U.P. Act even traders under certain circumstances have been made liable to pay such fees. Similarly the argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is also devoid of any substance.