1984 (9) TMI 252 - SC - VAT and Sales Tax

Whether the whole includes the parts? Whether legume, whole grain, when notified as a specified agricultural produce within the meaning of the expression in section 2(t) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 ( Act for short), would also comprehend its split folds or parts, commercially called dal so as to enable Mandi Samiti (Market Committee for convenience of reference) to levy market fee under section 17 of the Act on the transaction of sale of dal of legumes specified in the Schedule to the Act? Held that - Appeal allowed by way of remand. If the view taken by the High Court on the question that split grain of legume, that is, dal was not comprehended in the whole grain of legume as set out in the Schedule and therefore, the same was not a specified agricultural (produce) is held not to be correct and accordingly the judgment of the High Court would have to be upset, all the matters may be remitted to the High Court for disposing of other contentions canvassed on behalf of the respondents who were petitioners in the High Court as the High Court declined to examine them, as the writ petitioners were allowed on this one narrow contention which according to the High Court went to the root of the matter.

Issues Involved:
1. Whether "legume, whole grain" includes its split parts (dal) under the U.P. Krishi Utpadan Mandi Adhiniyam, 1964.
2. Whether the Market Committee can levy market fees on the sale of dal.
3. Validity of the High Court's interpretation of the legislative amendments and notifications.
4. Whether the legislative process for specifying agricultural produce was correctly followed.
5. Whether the respondents' other contentions should be reconsidered by the High Court.

Detailed Analysis:

1. Whether "legume, whole grain" includes its split parts (dal) under the U.P. Krishi Utpadan Mandi Adhiniyam, 1964:

The core question was whether the term "legume, whole grain" as specified in the Schedule of the Act includes its split parts (dal). The respondents argued that dal, being a processed form of legumes, is not a specified agricultural produce and thus not subject to market fees. The High Court initially agreed, stating that legume in its split form was not the same as legume specified in the Schedule. However, the Supreme Court disagreed, analyzing the definition of "agricultural produce" in Section 2(a) of the Act, which includes produce in its processed form. The Court concluded that legumes in their split form (dal) are indeed comprehended within the term "legume, whole grain" as specified agricultural produce.

2. Whether the Market Committee can levy market fees on the sale of dal:

The respondents contended that the Market Committee could not levy market fees on dal transactions because dal was not specified agricultural produce. The Supreme Court, however, held that since dal is a processed form of legumes, it falls under the definition of "agricultural produce" and is subject to market fees. The Court noted that the legislative intent was to include both the whole grain and its split parts, making dal a specified agricultural produce.

3. Validity of the High Court's interpretation of the legislative amendments and notifications:

The High Court had relied on a notification dated January 20, 1982, which amended the Schedule to explicitly include both whole and split legumes. The High Court interpreted this as an admission that dal was not previously included. The Supreme Court disagreed, stating that the notification merely clarified what was already implicit in the original Schedule. Therefore, the High Court's interpretation was incorrect.

4. Whether the legislative process for specifying agricultural produce was correctly followed:

The respondents argued that even after the notification dated January 20, 1982, the agricultural produce needed to be notified as specified agricultural produce under Sections 6 or 8 of the Act before market fees could be levied. The Supreme Court held that since the original Schedule already included dal implicitly, no fresh notification was necessary. Thus, the legislative process was correctly followed, and the Market Committee was entitled to levy market fees on dal transactions.

5. Whether the respondents' other contentions should be reconsidered by the High Court:

The respondents raised various contentions before the High Court, most of which were repelled except for the narrow issue of whether dal was specified agricultural produce. The Supreme Court noted that other contentions might not have been examined by the High Court due to its ruling on the primary issue. Therefore, while allowing the appeals, the Supreme Court remitted the matters back to the High Court to examine any other contentions raised in the writ petitions that were not addressed.

Conclusion:

The Supreme Court allowed the appeals, overturning the High Court's decision that dal was not specified agricultural produce. The Court held that dal, as a processed form of legumes, is included in the term "legume, whole grain" and subject to market fees. The matters were remitted to the High Court for reconsideration of any other contentions raised by the respondents. The respondents were not granted any stay against the levy of market fees.

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