JASWANT RAI & BROS. Vs. STATE OF HARYANA

JUDGEMENT

(1.) Petitioners are manufacturers of carpets having their factories at Panipat. They import raw material i.e. wool from abroad and bring the same to Panipat in their factories situated within the notified market area of Market Committee, Panipat and after due process, carpets are manufactured which are exported out of India. When the petitioners bring such raw wool to Panipat, they are being subjected to levy of market fee by the Market Committee under the Punjab Agricultural Produce Markets Act, 1961 as applicable in Haryana (for short the Act'). By amendment of the Act in 1988, by Haryana State, the definition of "processing" contained in Section 2(nn) of the Act has been amended so as to include manufacturing out of an agricultural produce. On that basis, it is alleged that levy of market fee under the State Act would be hit by the provisions of Articles 246 and 286 of the Constitution as it is only the Parliament which can enact laws relating to trade and commerce with foreign countries; import and export across customs frontiers as mentioned in Entry No. 41 of List 1 of the Seventh Schedule attached to the Constitution read with Entry No. 96 of the aforesaid list providing legislation for charging fees in respect of any of the matters in that list, but not including fees taken in any Court. Further, reference has been made to Entry 26 of List II of the Seventh Schedule attached to the Constitution empowering the State to legislate on trade and commerce within the State, subject to the provisions of Entry 33 of List 111, read with Entry 66 providing for changing of fees in respect of any of the matters in this list, but not including fees taken in any Court. The contention of learned counsel for the petitioners in this respect cannot be accepted. Section 23 of the Act as applicable to the State of Haryana, authorises the Committee to charge fee on ad valorem basis on the agricultural produce bought or sold or brought for processing by licensee in the notified area at a rate not exceeding Rs. 2/- for every hundred rupees. This charging section does not talk of any sale transaction which might have earlier taken place abroad. Incidence of charging fee is not on trade or commerce with any foreign country or import and export cross the custom barrier. At this stage, it may be pointed out that when carpets manufactured by the petitioners are exported, the Market Committee does not levy any fee. The argument is only limited to the word "import" as occurring in Entry 41 of List I of the Seventh Schedule attached to the Constitution. It may be emphasised that bringing of any agricultural produce within the market area has nothing to do with the import of goods from foreign countries. The act of trade and commerce in respect of import stands completed, the moment the goods are imported either at the airport or at the harbour. Subsequently, if the goods are taken to any market area, fees for services rendered or to be rendered by the Market Committee within that area could legitimately be levied under the provisions of the Article. The aforesaid Act does not contravene the provisions of Articles 246 and 286 of the Constitution, which and reproduced below :-

(2.) The respondent-Committee charges fee for the services rendered in the market area. Entry 66 of List II of the Seventh Schedule attached to the Constitution authorises the State Legislature to levy fee in respect of any of the matters enumerated in this list, but not including fee taken in any Court. Entry 14 authorises the State Legislature to legislate in respect of agricultural including agricultural education and research, protection against pests and prevention of plant diseases and Entry 28 relates to market and fares. The Punjab Agricultural Produce Markets Act, 1961 has been enacted by the Legislature for better regulation of the purchase, sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in the State.

(3.) Somewhat similar matter came up for consideration before this Court in M/s. Sohela Mal Dayal Singh and others v. The State Agricultural Marketing Board, Punjab and another, 1973 PunLJ 410. The fruits grown outside the State were brought within the market area. Being agricultural produce it was subjected to market fee. The State Legislature had completely regulated their sale/storage under section 5 of the Act. This would show that as and when any agricultural produce is brought within the market area, market fee could be levied without further considering as to whether such agricultural produce was produced within the market area or not, or the same was imported from other States. Likewise, it is immaterial, as is projected in the present case, as to whether agricultural produce was imported from abroad and brought into the market area.