2001 (9) TMI 1105 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of levying fees on cooling tower components and accessories manufactured from imported pine-wood.
2. Definition of "agricultural produce" under section 2(1)(a) of the West Bengal Agricultural Produce Marketing (Regulation) Act, 1972.
3. Definition and obligations of a "trader" under section 2(t) of the Act.
4. Jurisdiction and authority of the Market Committee to levy fees and demand returns.
5. Determination of the location of purchase transactions for imported pine-wood.

Detailed Analysis:

1. Legality of Levying Fees on Cooling Tower Components and Accessories:
The petitioner challenged the memo issued by the Secretary, Alipore Sadar Regulated Market Committee, demanding fortnightly returns for calculating market levy on cooling tower components and accessories made from imported pine-wood. The petitioner argued that these products do not fall within the definition of "agricultural produce" under section 2(1)(a) of the Act, 1972, and thus, the levy is illegal.

2. Definition of "Agricultural Produce":
Section 2(1)(a) of the Act defines "agricultural produce" as any product of agriculture, horticulture, pisciculture, sericulture, forestry, or animal husbandry, including any related product specified in the Schedule. Timber is listed as an agricultural produce in the Schedule by a notification dated December 11, 1991.

3. Definition and Obligations of a "Trader":
Section 2(t) defines a "trader" as a person engaged in the business of purchasing and selling agricultural produce, including processing or preservation of such produce. The petitioner, by purchasing pine-wood (a notified agricultural produce) and manufacturing cooling tower components, is considered a trader. The Supreme Court in G. Giridhar Prabhu v. Agricultural Produce Market Committee (2001) 3 SCC 405 clarified that a trader encompasses the entire transaction of purchase, processing, manufacturing, and selling of notified agricultural produce.

4. Jurisdiction and Authority of the Market Committee:
The Market Committee has the authority under section 13 to require traders within the market area to obtain licenses and comply with the Act's provisions. Section 17 mandates the levy of fees on agricultural produce sold in the market area, with specific provisions for fee collection and return submission. The petitioner's factory being within the notified market area, and engaging in processing timber, is subject to these regulations.

5. Determination of the Location of Purchase Transactions:
The petitioner contended that the pine-wood was purchased outside the notified market area (Gandhidham, Gujarat) and thus should not be subject to the Market Committee's levy. The court held that this issue involves disputed facts requiring evidence and should be determined by the statutory authority (Secretary under section 17-A) rather than in a writ proceeding.

Conclusion:
The court dismissed the writ petition regarding the reliefs sought in prayers (a), (b), and (c), finding no legal infirmity in the Market Committee's notice requiring fortnightly returns. However, for prayer (d), the court granted the petitioner liberty to raise the issue of the location of purchase transactions before the Secretary, who must consider it and pass appropriate orders within two months. The writ petition was disposed of without costs, and interim orders were vacated.