1994 (10) TMI 306 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of provisions regarding market fee exemption for agricultural produce under the Punjab Agricultural Produce Markets Act and Rules.
2. Compliance with submission requirements for exemption certificates under the Act and Rules.
3. Applicability of the Haryana Rural Development Fund Act on agricultural produce fees.

Analysis:
1. The case involved a public limited company, engaged in manufacturing yarn, challenging the requirement to pay market fee twice for raw materials purchased from market committees within the State of Haryana. The company contended that since it had already paid fees to the committees of purchase origin, it should be exempt from paying again at the processing location. The dispute centered around the submission of Form-LL, as mandated by Rule 30(5) of the Punjab Agricultural Produce Markets (General) Rules, 1962, within 20 days of bringing the produce for processing. The court interpreted the provisions of the Act and Rules to determine the company's entitlement to exemption based on compliance with submission requirements.

2. The court analyzed Section 23 of the Act, which allows market committees to levy fees subject to rules, and Rule 30(5) which outlines the exemption criteria for agricultural produce already subject to market fees in other areas of the State. The court emphasized the importance of submitting Form-LL, duly attested, within the prescribed timeframe to claim exemption under the proviso of Rule 30(5). Despite the company's delay in submitting the form, the court held that the substantive right to exemption should not be denied solely based on procedural delays. The court deemed the 20-day period for submission as directory rather than mandatory, ensuring the company's entitlement to the claimed exemption.

3. Additionally, the court addressed the company's challenge regarding the Haryana Rural Development Fund Act, 1986, which imposed a fee on agricultural produce bought or processed within the State. The company argued that it had already paid the fee to the assessing authority in the purchase area and should be exempt from double payment. The court referred to Rule 3(12) of the Haryana Rural Development Rules, 1987, which required submission of Form-E for exemption within a week of bringing produce to the notified area. Despite the company's failure to submit Form-E within the prescribed period, the court ruled in favor of the company, emphasizing that procedural lapses should not override substantive rights to exemption.

4. Ultimately, the court allowed both writ petitions, quashing the notices requiring the company to pay market fee and Haryana Rural Development fee for the second time. The judgments highlighted the importance of substantive rights to exemption under the Acts and Rules, emphasizing that procedural delays in form submission should not hinder legitimate claims for fee exemptions.

Judgment:
- Both writ petitions allowed, impugned notices quashed.
- No order as to costs.