OM PARKASH AGARWAL Vs. GIRI RAJ KISHORI

JUDGEMENT

(1.) The appellants in the above appeals are dealers in agricultural produce carrying on business in certain notified market areas set up under the Punjab Agricultural Produce Markets Act, 1961 in the State of Haryana. They have questioned in these appeals the constitutional validity of the Haryana Rural Development Fund Act, 1983 (Haryana Act No. 12 of 1983) (hereinafter referred to as 'the Act").

(2.) The Act received the assent of the Governor of Haryana on the 28th Sept., 1983 and was published in the State Gazette under the Notification dated Sept. 30,1983. The Act came into force on its publication. Section 3 of the Act provides that with effect from such date as the State Government may by notification appoint in that behalf, there shall be levied on the dealer for the purposes of the Act, a cess, on ad valorem basis, at the rate of one per centum of the sale proceeds of agricultural produce bought or sold or brought for processing in the notified market area It, however, provides that except in case of agricultural produce brought for processing, no cess shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or sold is not actually made. The cess is payable by the dealer in such manner as may be prescribed to such officer or person as may be appointed or designated by the State Government in that behalf. The dealer is, in his turn, entitled to pass on the burden of the cess paid by him to the next purchaser of the agricultural produce from him. He may, therefore, add the same in the cost of the agricultural produce or the goods processed or manufactured out of it. The arrears of cess are recoverable as arrears of land revenue. The expression 'dealer' is defined by S. 2(c) of the Act 'Dealer' means any person who within the notified market area sets up, establishes or continues or allows to be continued any place for the purchase, sale, storage or processing of agricultural produce, or in the notified area purchases, sells, stores or processes such agricultural produce. A 'notified market area' means any area notified under S. 6 of the Punjab Agricultural Produce Markets Act, 1961 to be a notified market area. 'Agricultural Produce' means all produce whether processed or not, of agriculture, horticulture, animal husbandry or forest as may be prescribed. These definitions are found in S. 2 of the "Act. Section 4(1) of the Act provides for the creation of a fund called the Haryana Rural Development Fund (hereinafter referred to as 'the Fund') which is vested in the State Government. The Fund is to be administered by such officer or officers of the State Government as may be appointed by it in that behalf. Sub-section (3) of S. 4 of the Act provides that the amount of cess paid to the concerned officer by virtue of S. 3 of the Act shall be credited to the Fund within such period as may be prescribed. Sub-section (4) of S. 4 of the Act provides that any grants made by the State Government and local authorities shall also be credited to the Fund. Sub-section (5) of S. 4 of the Act states that the Fund shall be applied by the State Government to meet the expenditure incurred in the rural areas, in connection with the development of roads, hospitals, means of communication, water-supply, sanitation facilities and for the welfare of agricultural labour or for any other scheme approved by the State Government for the development of the rural areas. The Fund can also be utilised to meet the cost of administering the Fund. Section 5 of the Act provides that any person who contravenes the provisions of the Act or the rules framed thereunder shall be punishable with fine which may extend to five hundred rupees or up to the amount of cess which the dealer is liable to pay, whichever is more. By section 6 of the Act the State Government is empowered to make rules to carry into effect the purposes of this Act. Section 7 of the Act grants protection to the State Government or any officer of the State Government or the Haryana State Agricultural Marketing Board or a local authority functioning under the Act against any action that may be taken against it or him in respect of any action taken in good faith under the Act. Section 8 of the Act empowers the State Government to remove any difficulty which may arise in giving effect to the provisions of the Act.

(3.) A reading of the Act shows that it imposes a cess on ad valorem basis at the rate of one per centum of the sale proceeds of the agricultural produce bought or sold or brought for processing in the notified market area on the dealer carrying on business within the notified market area. The cess is in the nature of a compulsory exaction. The arrears of cess, if any, can be recovered as arrears of land revenue, and any person who contravenes the provisions of the Act is liable to be prosecuted for an offence punishable under S. 5 of the Act. The Act, however, provides that the cess collected under it shall be credited to the Fund for being spent as provided in sub-sec. (5) of S. 4 of the Act in the rural areas in connection with the development of roads, hospitals, means of communication, water-supply, sanitation facilities and for the welfare of agricultural labour or for any other scheme approved by the State Government for the development of rural areas. The expression 'rural area' has been defined in S. 2(h) of the Act as an area the population of which does not exceed 20,000 persons. These are the principal features of the Act.