VARSHA SPINNING MILLS LTD Vs. STATE OF HARYANA

JUDGEMENT

(1.) M/s. Varsha Spinning Mills Ltd. (for short, the Company) is a public limited company having a unit at Bawal in District Rewari where it is manufacturing yarn out of cotton gin and other raw materials. It is registered as a dealer under the Haryana General Sales Tax Act as also under the Punjab Agricultural Produce Markets Act, 1961 as applicable to the State of Haryana (hereinafter called the Act). For manufacturing yarn, the Company is buying cotton gin from three sources, namely, (i) market committees/yards outside the State of Haryana, (ii) from the market committees/yards within the State of Haryana other than Rewari and (iii) from the market committee, Rewari. The raw material purchased from the first two sources is brought within the area of market committee/yard of Rewari for processing. In this petition, we are concerned with the raw material which the Company is buying from the market committees within the State of Haryana and brings the same to Rewari. It is common case of the parties that the Company has paid market fee to the committees within the State of Haryana from where the raw material was purchased and it appears that it did not submit Form-LL to the market committee, Rewari within the time prescribed by Rule 30(5) of the Punjab Agricultural Produce Markets (General) Rules, 1962 (referred to hereinafter as the Rules). The grievance of the Company is that having paid fee to the market committees from where the raw material was purchased, it is not liable to pay market fee again for the second time when the raw material is brought for processing within the limits of market committee, Rewari. This plea is resisted by the market committee, Rewari on the ground that the company did not give the required certificate in Form-LL only attested by the Secretary of the Committee where fee had already been paid within twenty days of the bringing of the agricultural produce within its notified area. What is contended is that the provisions of the proviso to sub-rule (5) of Rule 30 of the Rules framed under the Act were not complied with and, therefore, the Company is not entitled to the exemption which it claims.

(2.) Under S. 23 of the Act, a committee may, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on agricultural produce bought or sold or brought for processing by dealers in the notified market area at a rate not exceeding three rupees for every one hundred rupees. It is clear that the levy of market fee is subject to the rules. Sub-rule (5) of Rule 30 of the. Rules which is relevant, reads as under :-

(3.) We have heard learned counsel for the parties and in our opinion, the stand of the committee is not tenable. Mere delay in the submission of Form-LL showing that the market fee has already been paid in some other committee within the State of Haryana from where the raw material was purchased cannot deprive the dealer of his substantive right to claim exemption which is granted by sub-rule(5) of Rule 30 of the Rules. The intention under lying this Rule is that a purchaser is not to be made to pay market fee twice and the period of twenty days prescribed by the proviso for producing Form-LL is not to be treated that sacrosanct so as to deprive the purchaser of his right to claim exemption as given by the main provision of the sub-rule. The period of twenty days as prescribed by the proviso is only directory and not mandatory. The Company is, therefore, entitled to the exemption claimed.