HIND RICE MILL Vs. STATE OF U P

JUDGEMENT

(1.) A common question arises in this batch of 12 writ petitions. They can be disposed of under a common order. For the sake of convenience, we shall refer to the facts in C.M.W.P. No. 9579 of 1987. The 15 petitioners in this writ petition are licensed traders within the Market Area, Bareilly. For Bareilly District, a market Committee has been constituted under the U. P. Krishi Utpadan Mandi Adhiniyam, 1964. All the petitioners also happen to be millers. They purchase paddy both within the Bareilly Market area and from outside Bareilly Market Area, which they mill in their respective rice mills.

(2.) UNDER section 3 of the Essential Commodities Act, the State of U. P. issued the U. P. Rice and Paddy (Levy and Regulation of Trade) Order, 1981 which was replaced in the year 1985 by another similar order. UNDER the aforesaid Control Orders, Rice Mills are obliged to deliver 60 per cent of the rice milled by them to the State by way of levy. The remaining 40 per cent they are free to sell in open Market. The levy rice has to be delivered to the State on the price notified by the State Government.

(3.) IN the year 1986, the Market Committee issued notices to the petitioners calling upon them to remit the market fee in respect of levy-rice- sales effected by them. According to the Committee, the sales effected by the petitioners fell under sub-clause (3) and hence they being the selling traders, are liable to pay the market fee. This demand was questioned by the petitioners in a batch of writ petitions in this court. Two contentions were mainly urged by the petitioners in those writ petitions, namely ; (i) That delivery of levy rice in pursuance of the statutory order (levy order) does not amount to a 'transaction of sale' within the meaning of section 17 (iii) (b) ; (ii) That the State Government is not a trader and, if so, the transaction of sale (assuming that delivery of levy rice to the State amounts to a transaction of sale) does not fall under sub-clause (3), but under sub-clause (4), in which event the levy is upon the purchaser. Both these contentions were repelled by a Division Bench of this court and the writ petitions dismissed. The judgment of the Division Bench is M/s. Mahalaxmi Rice Mills, Nainital Road, Bareilly v. State of U. P., 1987 UP LB EC 749. The Division Bench held that the delivery of levy rice in pursuance of the levy order does amount to a transaction of sale within the meaning of section 17 (iii) (b) of the Mandi Adhiniyam. It also found that the Government is a trader and, whether such trader is licenced or not, the transaction fails under sub-clause (3), and hence the liability to pay the market fee lies upon the selling trader, namely, the writ petitioners. The attention of the Division Bench was also drawn to the letter dated 5-2-1986 written by the Assistant Secretary Food and Civil Supplies Department, Government of U. P., to the Regional Food Controllers asking them to pay the market fee on the said transactions to the concerned Market Committee. Dealing with this submission, the Court made the following observations, which constitute the sheet anchor of the petitioners' case in the present batch of the writ petitions :-