1994 (11) TMI 421 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutionality of the M.R Krishi Upaj Mandi Adhiniyam, 1973.
2. Requirement of obtaining a license u/s 32.
3. Payment of market fee u/s 19.
4. Justification of market fee based on services rendered by Market Committees.

Summary:

1. Constitutionality of the M.R Krishi Upaj Mandi Adhiniyam, 1973:
The respondent-Mills challenged the constitutionality of the Act and its provisions. However, the Supreme Court noted that the High Court had already upheld the constitutionality of the Act in a previous decision. The Supreme Court did not entertain this issue as it was not raised before them or cross-appealed by the Mills.

2. Requirement of obtaining a license u/s 32:
The Mills had initially challenged the requirement of obtaining a license under Section 32 as unconstitutional. However, this contention was not pursued before the Supreme Court.

3. Payment of market fee u/s 19:
The High Court had held that the market fee was not justified as there was no direct or indirect benefit conferred by the Market Committees on the purchasers or traders of bamboos. The Supreme Court disagreed, emphasizing that the Market Committees provided various services and facilities, which justified the levy of market fees. The Court highlighted that the services rendered by the Committees included covered auction platforms, godowns, office buildings, and other infrastructure necessary for the marketing of agricultural produce.

4. Justification of market fee based on services rendered by Market Committees:
The Supreme Court referred to several precedents to outline the distinction between a tax and a fee. It noted that while a tax is a compulsory exaction for public purposes without a direct quid pro quo, a fee is a charge for a special service rendered to individuals or a class by a governmental agency. The Court found that the Market Committees provided substantial services and infrastructure that benefited the buyers and sellers of agricultural produce, including the Mills. The Court also emphasized that the element of quid pro quo need not be established with arithmetical exactitude but must be broadly and reasonably correlated to the services rendered.

Conclusion:
The Supreme Court concluded that the levy of market fees by the appellant-Market Committees was legal and justified. The appeal was allowed with costs, and the impugned decision of the High Court was set aside.