2024 (7) TMI 861 - SC - Indian Laws

Exemption from payment of Market fee and Rural Development fee - whether the exemption from payment of Market fee granted under Clause (i) of 11.4.2 of 2003 Policy of the Punjab Government can be said to include exemption from Rural Development fee as well or not? - HELD THAT - It is clear that the issue as to whether the 2003 Policy only grants exemption from the Market fees as levied under the 1961 Act and does not grant exemption from the Rural Development fees under the 1987 Act, has not been adjudicated by the High Court on merits. The said adjudication could not happen as the Counsel for the State had stated before the High Court that Market fee will also cover Rural Development fee and the High Court dismissed the petition as not pressed. This is pertinently where the trail of errors began - The High Court, only recorded the submissions of the State counsel and thereafter referring to the three notes/letters of 2001 of the Agriculture Department and dismissed the application. Neither the arguments were discussed and analysed nor the contents of three notes/letters were discussed. Scope of exemption under the 2003 Policy - HELD THAT - The 2003 Policy does not specifically exempt Rural Development fees and therefore, such an argument by the Respondent is highly presumptive, far-fetched and a clear attempt at over-reaching the scope of the 2003 Policy. If such an assumption is allowed, it would considerably broaden the canvas of the incentives available under the 2003 Policy, which was never intended. In fact, such a loose interpretation of the State policies would lead to an ambiguity to the State s intent and render it opposite to the public policy - the exemption from Market fees is inclusive of Rural Development fees shall be contrary to the statutory provisions and objective behind both the Acts as well as the 2003 Policy. Thereby, the two fees cannot be equated or assumed to be same or similar for the purposes of exemption. Effect of communication made by the State via various notes/letters - HELD THAT - From an in-depth analysis of the statutes and policies produced, it is apparent that no unit, other than those approved as Mega Project, has been allowed exemption from the payment of Rural Development fee, unless explicitly provided by the authorities. The Respondent herein, M/s Punjab Spintex Limited, has admittedly not been approved as a Mega Project and, therefore, not eligible for such exemption from Rural Development fee. The Market fees and Rural Development fees are distinct and, there being no exemption from Rural Development fees mentioned in the 2003 Policy, it only encompasses exemption from Market fees in its ambit. The two fees under the two different statutory frameworks cannot be equated as one by the Respondent and they cannot assume that exemption from Market fees would subsume in itself Rural Development fees also. The impugned order set aside - appeal allowed.

Summary

Issues Involved:
1. Exemption from payment of Market fee and Rural Development fee.
2. Interpretation of the 2003 Industrial Policy regarding fee exemptions.
3. Validity and impact of various communications and letters issued by the State.

Detailed Analysis:

Exemption from Payment of Market Fee and Rural Development Fee:
The core issue is whether the exemption from payment of Market fee under the 2003 Industrial Policy also includes an exemption from Rural Development fee. The Respondent sought exemption from both fees, claiming similarity with another company, M/s Partap Furane Pvt. Ltd., which was granted exemption from Market fee.

Interpretation of the 2003 Industrial Policy:
The 2003 Policy under Clause 11.4.2(i) states that no market fees shall be levied on purchases made by agro and food processing units for agricultural commodities other than wheat and paddy. The Respondent argued that this exemption should also cover the Rural Development fee, citing various communications from the State's Agriculture Department. However, the Appellant contended that Market fee and Rural Development fee are levied under different statutes (the 1961 Act and the 1987 Act, respectively) and serve different purposes. Thus, the 2003 Policy does not automatically extend to Rural Development fee.

Validity and Impact of Various Communications and Letters Issued by the State:
The Respondent relied on letters dated 09.10.2001, 28.08.2001, and 10.09.2001, which suggested that exemption from Market fee also covered Rural Development fee. The High Court initially dismissed the petition based on these letters. However, the Appellant later clarified that these letters were not issued with the approval of the Competent Authority and were subsequently withdrawn by letters dated 02.11.2010 and 21.02.2011. The latter communication explicitly stated that exemption from Market fee does not automatically apply to Rural Development fee unless specifically notified.

Conclusion:
The Supreme Court held that Market fee and Rural Development fee are distinct and governed by different statutes. The 2003 Policy does not explicitly exempt Rural Development fee, and the assumption that exemption from Market fee includes Rural Development fee is unfounded. The Court set aside the High Court's orders dated 27.01.2010 and 24.09.2010 and dismissed Civil W.P. No. 14847 of 2009, ruling that the Respondent is not entitled to exemption from Rural Development fee. The appeals were allowed, and any pending applications were disposed of.