2003 (11) TMI 560 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Liability to pay market fee under the Bihar Agricultural Produce Markets Act, 1960.
2. Obligation of the seller to collect and deposit market fee.
3. Direction to the respondent-Corporation to pay market fee.

Issue-wise Analysis:

1. Liability to Pay Market Fee:
The appellants challenged the assessment order demanding market fee for the sale of rice in the market area. It was admitted that the appellants purchased paddy, paid the market fee, processed it into rice, and sold it to the respondent-Corporation under a special purchase scheme. The appellants contended that under the Act, the purchaser should pay the market fee, and since the respondent-Corporation is not a licensee, it should bear the fee. The court referred to Section 27 of the Act, which mandates that market fees are levied on agricultural produce bought or sold in the market area at a rate of 1% and are payable by the buyer.

2. Obligation of the Seller to Collect and Deposit Market Fee:
The court examined Rule 82 of the Rules framed under the Act, which specifies that if the seller is a licensee and the buyer is not, the seller must collect the market fee from the buyer and deposit it with the Market Committee within a week. The court emphasized that the seller's obligation to collect and deposit the market fee is mandatory, regardless of whether the fee is actually collected from the buyer. The court cited previous judgments, including the Constitution Bench decision in Mahaluxmi Rice Mills v. State of U.P., which affirmed that the seller must pay the market fee to the Market Committee and can subsequently recover it from the purchaser.

3. Direction to the Respondent-Corporation to Pay Market Fee:
The appellants sought a direction for the respondent-Corporation to pay the market fee, arguing that the sale was made at a special rate considering all expenses, including market fees. The court rejected this contention, noting that the sale was under a special scheme to assist the appellants, and the agreement between the parties included considerations for the market fee. The court agreed with the single judge that no direction could be issued to the respondent-Corporation in this writ application, as it involved interpreting the agreement and factual disputes. The appellants were advised to pursue other legal remedies.

Conclusion:
The appeal was dismissed, upholding the assessment order requiring the appellants to pay the market fee. The court concluded that the seller's obligation to collect and deposit the market fee is mandatory, and no direction could be given to the respondent-Corporation to pay the market fee. The appellants' responsibility to pay the market fee remains intact, and they may seek other legal remedies if necessary.

Appeal dismissed.