2003 (11) TMI 524 - SC - Customs

Appeal - Pre-deposit amount - Writ petition against order-in-appeal pending - Remand - Justification of

Issues Involved:
1. Legality of the levy of market fee on the appellant's transactions.
2. Validity of the assessment and imposition of market fee and penalty.
3. Applicability of the Supreme Court judgment in Belsund Sugar Company Ltd. v. State of Bihar.
4. Refund of the market fee deposited by the appellant.
5. Recovery of the balance market fee by the Market Committees.
6. Refund of the penalty amount deposited by the appellant.

Detailed Analysis:

1. Legality of the Levy of Market Fee:
The appellant, a company with a sugar factory, challenged the levy of market fee on the purchase of sugarcane and sale of sugar and molasses under the Bihar Agricultural Produce Markets Act, 1960. The appellant initially obtained an interim injunction against the market fee, which was later decreed in their favor. However, the Market Committee's appeal was allowed, and the matter went through various appeals and remands.

2. Validity of the Assessment and Imposition of Market Fee and Penalty:
During the pendency of appeals, the Market Committee issued assessment notices for the years 1977-78 to 1995-96, resulting in a best judgment assessment and imposition of a penalty amounting to Rs. 1,85,51,658/-. The appellant's appeals against these assessments were dismissed by the Appellate Authority and the Revisional Authority, leading to the filing of writ petitions in the High Court.

3. Applicability of the Supreme Court Judgment in Belsund Sugar Company Ltd. v. State of Bihar:
The Supreme Court in Belsund Sugar Company Ltd. v. State of Bihar held that the Market Act provisions do not apply to the transactions of purchase of sugarcane and sale of sugar and molasses by sugar mills. The judgment was made prospective, meaning future transactions would not be subjected to market fee, but past transactions and collected fees would not be refunded.

4. Refund of the Market Fee Deposited by the Appellant:
The appellant argued that the deposit of one-third of the market fee as a pre-condition for filing an appeal should not be considered as "fee paid" and thus should be refunded. The Court examined various precedents and concluded that the deposit made under Section 27B of the Act is a part of the assessed fee and is considered paid unless the appeal succeeds. Since the appeals were dismissed, the amount deposited was not refundable.

5. Recovery of the Balance Market Fee by the Market Committees:
The Market Committees sought to recover the balance two-thirds of the market fee. However, the Supreme Court's judgment in Belsund Sugar Mill's case precluded the recovery of unpaid market fees for past transactions. Therefore, the High Court correctly held that the balance amount was not recoverable.

6. Refund of the Penalty Amount Deposited by the Appellant:
The appellant contended that the penalty imposed for delayed payment of market fee should not be retained, especially since the market fee itself was no longer applicable for future transactions. The Court agreed that the penalty, being an integral part of the fee liability, should not be retained. Consequently, the Court ordered the refund of the 10% penalty amount deposited by the appellant.

Conclusion:
The appeals filed by the Sugar Mills for the refund of the market fee were dismissed, but the Court ordered the refund of the penalty amount. The appeals filed by the Market Committees for the recovery of the balance market fee were also dismissed. The parties were directed to bear their own costs.

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