2001 (4) TMI 951 - HC - Indian Laws

Summary

Issues Involved:
1. Constitutionality of Rule 21(7) of the Assam Agricultural Produce Market (General) Rules, 1975.
2. Authority of the Assam Agricultural Marketing Board to levy and collect cess.
3. Legality of collecting cess at various check gates in Assam.
4. Refund of cess already collected.

Analysis:

Issue 1: Constitutionality of Rule 21(7)
The primary question was whether Rule 21(7) of the Assam Agricultural Produce Market (General) Rules, 1975, was ultra vires. The rule expanded the scope of the presumption of sale or purchase of agricultural produce within a notified area based on additional factors such as the agreement of sale, weighing, or delivery within the area. The court found that this rule widened the scope of the presumption laid out in Explanation 1 of Section 21 of the Assam Agricultural Produce Market Act, 1972, which was limited to the movement of agricultural produce out of the market area. Citing the Supreme Court's decisions in Ram Chandra Kailash Kumar & Co. v. State of U.P. and Shalimar Chemical Works Ltd., the court held that such an expansion was beyond the legislative policy and could only be enacted by the legislature, not by a delegate. Therefore, Rule 21(7) was declared ultra vires.

Issue 2: Authority of the Assam Agricultural Marketing Board
The court examined whether the Assam Agricultural Marketing Board had the authority to levy and collect cess on agricultural produce. Section 21 of the Act clearly vested this power in the Market Committee, not the Board. The court held that a resolution by the Board could not transfer this statutory power from the Market Committee to the Board. Therefore, the Board or its employees did not have the authority to levy or collect cess on agricultural produce.

Issue 3: Legality of Collecting Cess at Check Gates
The court scrutinized the legality of collecting cess at various check gates like Srirampur and Jagiroad. It was found that the agricultural produce purchased outside Assam and transported into the state did not involve any sale or purchase transactions at these check gates. The court held that levying cess at these points would amount to double taxation, which is not permissible under the law. The statutory presumption regarding sale or purchase did not apply as no transactions took place at these locations. The court thus ruled that neither the Board nor the Market Committee had the authority to levy and collect cess at these check gates.

Issue 4: Refund of Cess Already Collected
While the court acknowledged the illegality of the cess collected at the check gates, it refused to order a refund of the cess already realized. However, it directed that further realization of the cess at these check gates be stopped immediately.

Conclusion:
1. Rule 21(7) of the Assam Agricultural Produce Market (General) Rules, 1975, is ultra vires.
2. The Assam Agricultural Marketing Board does not have the authority to levy and collect cess on agricultural produce.
3. Collecting cess at check gates like Srirampur and Jagiroad is illegal as no sale or purchase takes place at these locations.
4. Refund of the cess already collected is refused, but further collection at the check gates must cease immediately.