Supreme Court of India · 2012

It is the specific contention of the respondents that in view of the legal fiction created by Section 21 of the Market Act as upheld by the Divi sion Bench of this Court in Assam Roller Flour Mills Association’s case, levy of cess on the petitioner is legal, valid and justified. According to the responde nts, the authorities are under statutory obligation to levy and collect cess fro m traders like the petitioner. Collection of cess from the petitioner has been j ustified in terms of the judgment dated 12-09-2008 passed in the case of Assam R oller Flour Mills Association and the order of the Hon’ble Supreme Court dated 3 0-03-2010. Respondents have, however, stated that the letter dated 21-07-2011 is not a demand notice but a communication to the petitioner to pay arrear cess an d that demand notice under Form P has not yet been issued. Supari is a specified agricultural produce and was delivered in the factory of the petitioner within the market area of respondent No.3. Therefore, the deeming provision of Explanat ion 1 to Section 21 of the Market Act is attracted, making the petitioner liable to pay cess.

14. The case was admitted on 29-09-2011. Consideration of the interi m prayer was taken up on 25-10-2011. After hearing the parties, this Court passe d the following interim order. (cid:28) The petitioner shall submit the return in Form M, without prejudice its right as claimed in the present writ petition, to the concerned market committee befor e 4(four) days of the date of bringing the goods within the market area with all necessary documents. The Market Committee, thereafter, would take a decision wh ether any cess is leviable on such goods within the meaning of the provisions of 1972 Act and the Rules framed thereunder. In case the Market Committee decides to levy any cess, the same shall be paid to the concerned Market Committee and t hen only to bring the goods within the market area, for which proper account sha ll be maintained. It is needless to say that in the event the writ petition is u ltimately allowed and it is held that the petitioner is not required to be licen sed and also not required to pay any cess, any cess that may be levied and reali zed has to be refunded to the petitioner with interest. (cid:29)

15. Petitioner thereafter filed rejoinder affidavit denying the cont entions of the respondents and generally reiterating the averments made in the w rit petition. Petitioner contends that it is relying on the judgment of the Divi sion Bench of this Court dated 12-09-2008 to show that it is not liable to pay c ess. The contention advanced is that the realization of cess is not as per the m andate of the said judgment, particularly paragraph 94 thereof. Hon’ble Supreme Court has permitted realization of cess only as per judgment dated 12-09-2008. I f the realization is in violation of the said judgment, as in the present case, it would be illegal. Petitioner has also contended that realization of cess by r espondent No.4 is illegal for the further reason that Rule 21(8) of the Market R ules provides that cess is payable to the Market Committee within whose jurisdic tion the specified agricultural produce is delivered. Since the goods were deliv ered at Guwahati within the market area of respondent No.3, therefore, responden t No.4 had no authority to collect cess. Petitioner has contended that documents to show stock transfer of supari were produced whenever respondents demanded bu t notwithstanding that, respondents have forced petitioner to pay cess. Accordin g to the petitioner, the issue in the present writ petition is different from th e issue raised in the earlier writ petition as in the present round, the challen ge to the levy of cess is on the ground that there is violation of the judgment of this Court while levying the cess. It is the case of the petitioner that its manufactured products are excisable goods and not specified agricultural produce and, therefore, outside the ambit of the Market Act. Petitioner has also denied existence of any adequate and efficacious alternative remedy against illegal le vy and collection of cess by the respondents. Question of refund would arise onl y when levy and collection of cess is legal. Petitioner has stressed that the de eming provision under explanation 1(iii) to Section 21 of the Market Act cannot be invoked as because petitioner has produced the documentary evidence to rebut the legal fiction. Voluminous documents have been placed on record by the petiti oner in this regard. Petitioner has stated that as per the interim order dated 25-10-2011, it has been submitting Form M alongwith other documents before the concerned Market Committee but no demand as yet has been raised.

16. Petitioner has also filed a supplementary rejoinder affidavit pl acing on record documents relating to stock transfer of supari from its unit at NOIDA to its unit at Guwahati for the period from April, 2007 to September, 2007 . Heard Mr. N.Jain, learned Senior Counsel assisted by Mr. Sanjay 17. Pathak and Mr. A.K.Sharma, learned advocates for the petitioner. Also heard Mr. K.N.Choudhury, learned Senior Counsel and Senior Additional Advocate General, As sam assisted by Mr. S.Saikia, learned counsel for the respondents.

18. Mr. N.Jain, learned Senior Counsel for the petitioner submits th at levy of cess on the transaction of the petitioner is without jurisdiction sin ce the very ingredients of such levy are absent in the present case. He submits that the demands raised after disposal of the earlier writ petition are illegal being violative of the provisions prescribed under the Market Rules as well as b eing in violation of the principles of natural justice. Insistence on petitioner obtaining license under the Market Act is wholly illegal and untenable as petit ioner doesnot fall within the definition of market functionary under the Market Act. Learned Senior Counsel contends that no sale or purchase of specified agric ultural produce takes place within any market area in the transactions of the pe titioner. He argued that there is infact stock transfer of supari from the petit ioner’s NOIDA unit to its Guwahati unit and, therefore, there can be no levy of cess on such stock transfer. Processed supari, stock transferred from NOIDA to G uwahati, is used as raw material / ingredient for the petitioner’s finished prod ucts like pan masala etc., which are not specified agricultural produce but exci sable goods attracting levy of excise duty. He submits that the manner in which cess has been realized from the petitioner, it is in violation of the Division B ench judgment in the Assam Roller Flour Mills Association’s case, particularly t he law laid down in paragraphs 93 and 94 thereof and, therefore, he contends tha t the impugned action of the respondents is illegal. Mr. Jain, learned Senior Co unsel for the petitioner, places reliance on the following decisions:-

1. AIR 1961 SC 1506 A.V. Venkateswaran, Collector of Customs, Bombay Ramchand Sobhraj Wadhwani & Another -Vs-

2. (1997) 5 SCC 516 Agricultural Market Committee Shalimar Chemical Works Limited -Vs-

3. (2000) 6 SCC 264 Edward Keventer Pvt. Ltd. -Vs- Bihar State Agricultural Marketing Board and others

4. (2004) 3 SCC 1 Ashok Leyland Limited -Vs- State of TN and another

5. (2006) 12 SCC 33 Siemens Limited -Vs- State of Maharashtra and others

6. -Vs- (2006) 12 SCC 468 Orient Paper and Industries Limited State of MP & others

9. (2008) 8 SCC 305 Kesarwani Zarda Bhandar -Vs- State of UP & others (2009) 2 SCC 630 Committee of Management and another -Vs- Vice Chancellor and others (2011) 4 SCC 658 Kumaon Seeds Corporation and others -Vs- Krishi Utpadan Mandi Samiti, Kashipur and others

19. Per contra, Mr. K.N.Choudhury, learned Senior Counsel and Senior Additional Advocate General, Assam appearing for the respondents raises prelimi nary objection as to the maintainability of the writ petition. He submits that p etitioner had earlier filed a writ petition on similar issue, being W.P.(C) No.4 47/2002, which was disposed off by order dated 18-03-2009 in terms of the Divisi on Bench judgment in Assam Roller Flour Mills Association’s case. Therefore, the issue having already been raised and answered, the present writ petition would be barred by the principle of constructive res-judicata. Mr. Choudhury further s ubmits that petitioner has alternative remedy by way of approaching the assessin g authority and seeking refund. In any case, he contends that the impugned lette rs are only intimation to the petitioner to obtain license and to pay cess. Writ petition against such letter / notice is not maintainable. Since petitioner has not availed the alternative remedy available, writ petition should not be enter tained. On merits, Mr. Choudhury submits that in view of the deeming provision c ontained in Section 21 of the Market Act, there is a presumption as to sale taki ng place within the market area and the constitutionality of Section 21 of the M arket Act having been upheld by this Court in Assam Roller Flour Mills Associati on, levy of cess on the petitioner is fully justified. He further submits that t he market cess is a levy under entry 28 of list-II of the seventh schedule to th e Constitution of India and, therefore, must be given the widest possible amplit ude. Mr. Choudhury, learned Senior Additional Advocate General refers to and rel ies on the following decisions :-

1. (1997) 2 SCC 496 Himachal Pradesh Marketing Board and others -Vs- Shankar Trading Corporation Private Limited and others

3. (2001) 3 SCC 405 G.Giridhar Prabhu and others -Vs- Agricultural Produce Market Committee (2009) 1 GLR 1 Assam Roller Flour Mills Association -Vs- State of Assam and others

20. Mr. Jain in his brief reply generally reiterated the submissions made at the outset. In addition, he submits that the preliminary objections rai sed by the respondents are devoid of any substance and should be rejected outrig ht. He submits that fresh forcible realization of cess from the petitioner in vi olation of the law laid down by this Court in Assam Roller Flour Mills Associati on has given rise to a fresh cause of action and, therefore, the present writ pe tition would be maintainable. He also submits that there is no adequate and equa lly efficacious alternative remedy available. Moreover, when the levy itself is totally without jurisdiction, it is perfectly legitimate for the petitioner to i nvoke the writ jurisdiction of this Court under article 226 of the Constitution of India, even assuming that alternative remedy is available. In any case, the r espondents having already spelt out their stand in unequivocal terms, it would b e a futile exercise to approach the respondents. Learned Senior Counsel for the petitioner submits that it is the transaction and not the person on which the ce ss is levied. Therefore, the nature of the transaction is of vital importance. T he transaction of the petitioner is stock transfer of processed supari to itself and there is no element of sale or purchase within the market area. The presump tion of sale under the deeming provision of Explanation 1 to section 21 of the M arket Act is rebuttable and the petitioner by producing documents evidencing sto ck transfer has clearly rebutted such presumptive sale.

21. The submissions made have been considered. Before proceeding to adjudicate on the rival contentions, a brie 22. f reference to some of the relevant provisions of the Market Act and the Market Rules is considered necessary. The Market Act was enacted by the State Legislature of Assam aft 23. er obtaining previous sanction of the President of India under article 304 of th e Constitution of India to provide for better regulation of buying and selling o f agricultural produce in the State of Assam and establishment of regulated mark ets for agricultural produce. As indicated above, some of the relevant provision s of the Market Act are extracted hereunder for ready reference:-

2.(1)(i) (cid:28)Agricultural Produce (cid:29) means and includes any produce whether, processe d or non-processed of Agriculture, Horticulture, Animal Husbandry, Pisciculture, Sericulture and Forest as specified in the Schedule; (xvi) (cid:28)Market (cid:29) means a regulated market established under this Act for the marke t area and includes a market proper, a principal market yard and a sub market ya rd or yards, if any; (xvii) (cid:28)Market area (cid:29) means any area declared to be a market area under Section 5 ; (xxxvi) (cid:28)Trade (cid:29) means any kind of transaction of sale and purchase or any kind o f remuneration of sale and purchase of any agricultural produce; (xxxvii) (cid:28)Trader (cid:29) means a person ordinarily engaged in the business of buying an d selling of agricultural produce as a principal or a duly authorised agent of o ne or more principals and includes a person ordinarily engaged in the business o f processing of agricultural produce; (XLV) (cid:28)Processing (cid:29) means any one or more of a series of treatment relating to po wdering, crushing, decorticating, dehusking, parboiling, polishing, ginning, pre ssing, curing or any other manual, mechanical, chemical or physical treatment to which raw agricultural produce or its product is subjected to; (XLVIII) (cid:28)transportation (cid:29) means taking of agricultural produce by pushcart, bull ock-cart, truck, any other type of vehicle or railway wagon in course of busines s before sale or after sale has taken place in the market area or outside, for m arketing, trading or processing from one place to another; (L) (cid:28)Market Functionary (cid:29) means a trader, a commission agent, buyer, Hamal, Proce ssor, a stockist, a transporter and such other person as may be declared, under the rules or bye-laws, to be market functionary;

4.(1) The State Government may, by notification in the Official Gazette, declare its intention of [developing and] regulating the purchase and sale of [specifie d] agricultural produce in such areas as may be specified in the notification. A copy of the notification under this section shall also be published in the area concerned in the manner prescribed: * * * * * * 5.(1) After the expiry of the period specified in the notification issued under section 4 and after considering such objections and suggestions as may be receiv ed before such expiry and after holding such enquiry as may be necessary the Sta te Government may, by notification in the Official Gazette, declare the area spe cified in the notification under section 4 or any portion thereof to be a market area for the purpose of this Act in respect of all agricultural produce specifi ed in the said notification. A copy of the notification under this section shall * * * * also be published in the area concerned in the manner prescribed. (2) [On and after the date of the publication of the notification under sub-sect ion (1) or at such later date as may be specified therein, no person shall, exce pt in accordance with the provisions of this Act, the rules and the bye-laws fra med thereunder- (i) use any place in the market area for the marketing of specified agricultural produce; or (ii) operate in the market area as a market functionary;]

7.(1) The State Government shall establish a Market Committee for every area dec lared to be a market area under sub-section (1) of Section 5. It shall be the du ty of the Market Committee to enforce the provisions of the Act and the rules an d bye-laws framed thereunder in such market area.

13.(2) [Where a Market Committee is established in any area, no person shall, su bject to the provisions of section 5A, 5B, 5C, 5D, 5E and 5F, use any place for buying and selling of specified agricultural produce and function as a trader, c ommission agent, broker, weighman, measurer, surveyor, warehouseman, transporter , processor or in any other capacity as market functionary within the Market Are a unless a licence is issued to such person by the Market Committee on payment o f such fee and subject to such conditions as may be prescribed.]

14. [Subject to the provisions of sections 5A, 5B, 5C, 5D, 5E and 5F of the Act, ] functions of a Market Committee shall be as follows :- * * * * * * * * * * (ii) to regulate and control transactions in the market and to deal with licence holder who default to open, close and suspend trade in any [specified agricultu ral produce], to settle disputes, levy and recover market charges fees on an agr icultural produce, licence and other fees, to impose fines and penalties;

21.(1) Every Market Committee shall levy and collect a cess on the agricultural produce bought or sold in the market area at a rate not exceeding two rupees for every one hundred rupees of the aggregate amount for which a specified agricult ural produce is bought or sold whether for cash or for deferred payment or other valuable considerations. (2) The Assam State Agricultural Marketing Board shall also have the power to le vy and collect cess for any or all of the Market Committee(s) in the market area s in addition to the powers of the Market Committee (but not both), whenever fel t necessary with approval of the State Government, on the agricultural produce b ought or sold in such market area(s) at a rate not exceeding two rupees for ever y one hundred rupees of aggregate amount for which a specified agricultural prod uce is bought or sold whether for cash or for deferred payment or other valuable considerations. (3) No cess will be levied on goods manufactured from the agricultural produce o n which cess is proposed to be levied and which are ultimately exported out of t he Country. Explanation-1. [For the purpose of this section all Specified Agricultural Prod uce shall unless the contrary is proved be deemed to be bought or sold in notifi ed market area if- (i) Such produce is taken out or proposed to taken out of the said area, or (ii) entered into the said area; or the agreement of sale or purchase thereof in respect of such produce is (iii) in pursuance of sale or purchase or the agreement of sale or purchase su ch produce is delivered in the said area to the purchaser or to some other perso n on behalf of the purchaser.] Explanation-2. The cess referred to in Section 21 shall be paid by the purchaser of the specified agricultural produce concerned. 21A.(1) For prevention of the evasion of cess on Specified Agricultural Produce the Market Committee shall establish checkgates at different points within the M arket Area whenever felt necessary with the proper approval of the Board.

24. gricultural produce under the heading (cid:28)Condiments and spices. (cid:29) In the schedule to the Act, betel nut has been specified as an a

25. extracted hereunder:- Similarly, the relevant provisions of the Market Rules are also

16. (1) Sale of Agricultural Produce:- (Section 49(2)(xviii)). All Agricultural Produce brought into the market for sale shall be sold by Open Auction in the Principal or Sub-Market Yard. (2) Nothing in Sub-Rule (1) shall apply to a retail sale as may be s pecified in Bye-laws of the Committee. (3) A Committee shall fix timing for the starting and closing of the auction in respect of any Agricultural Produce. (4) The price of Agricultural Produce shall not be settled by secret signs or secret bid and no deduction shall be made from the agreed price of the consignment. (5) The auction shall not be conducted by any person other than the person engaged by the Committee. Provided that under special circumstances the chairman of the Board may allow a Committee to make or permit any alternative arrangement. (6) The highest bid offered by a buyer at an auction and at which the se ller of the produce give his consent to sell his produce, shall be the sale pric e of the produce. (7) The buyer shall be considered to have thoroughly inspected the Agric ultural Produce for which he has made a bid and he shall have no right to retrea t from it. (8) As soon as the auction for a lot is over the auctioneer shall fi ll in the relevant particulars in a book to be maintained in Form H and shall se cure the signature of both the buyer and the seller or their respective represen tative, whoever may be present at the spot. (9) The buyer shall be responsible to get the Agricultural Produce w eighed immediately after the auction or on the same day the produce is purchased by him and the seller shall be liable for any damage to or loss of or deteriora tion in the produce after the auction and before or after the weighment as the c ase may be. (10) A person engaged by a producer to sell Agricultural Produce on h is behalf shall not act as a buyer either for himself or on behalf of another pe rson in respect of such produce without the prior consent of the producer. (11) weighment is over. The Faria shall make payment to the seller immediately after the (12) Every Faria shall, on delivery of Agricultural Produce to a buye r, execute a memorandum in Form I and deliver the same to the buyer on the same day or the following day, mentioning sale proceeds plus market charges admissibl e under Rules and Bye-laws. The counterfoil shall be retained by the Faria. In the absence of any written agreement to the contrary the sale price of Agricultural Produce purchased under those Rules shall be paid by the (13) buyer to the Faria on delivery of Form I. (14) Delivery of Agricultural Produce after sale shall not be made or taken unless and until the Faria or, if the buyer does not employ a Faria, the buyer has given to the seller a sale voucher in Form J, the counterfoil whereof shall be retained by the Faria or the buyer, as the case may be.

21. Levy and collection of cess on the sale and purchase of the Agricult ural Produces:- (Section 21 and 49(2)(v)- (1) The cess levied on the sale and purchase of Agricultural produce in a notifi ed market area under Section 21 of the Act shall be applicable only once in the same notified market area. (2) The responsibility of paying the cess prescribed under Section 21 of the Act shall be of the buyer and such cess shall be leviable as soon as an Agricultura l Produce is bought or sold by a licensee. (3) The cess shall be paid to the Committee or to a Paid Officer duly authorised by the Market Committee to receive such payment within 4 days of the day of tra nsaction. Explanation:- In computing the period of 4 days specified in Sub-Rule (3) of Rul e 21 the day of transaction shall be included. (4) A receipt in Form-K shall be granted forthwith to the person making payment in respect of any cess paid under these Rules. (5) Every officer or servant employed by a Committee for the collection of cess shall be supplied by the Committee with a badge of office in such forms as may b e prescribed by it. The badge shall be worn by the officer or servant concerned while discharging his duties. (6) Every such officer or servant shall before entering on his duties furnish su ch security as may be prescribed by the Bye-laws of the Committee concerned. (7) * * * * * * * * * * (8) In case of a transaction which involves the performance of one or more of th e acts mentioned in clauses (i) to (iii) of the Explanation 1 of Section 21 of t he Act, within the boundary of two or more notified market area, the Cess shall be payable to the Committee within whose jurisdiction the Specified Agricultural Produce is delivered.

23. Accounts transaction and cess to be maintained:- (1) Every licensed dealer shall submit to the Committee a return in Form M showi ng his purchases and sales of each transaction of Agricultural Produce within 4 days from the date of transaction. Provided that in case the Faria sends one copy of Form J to the Market Committee , the Faria will be exempted from sending Form M to the Market Committee and the buyer shall indicate in Form M only the total quantity and the gross value in r espect of each commodity purchased from each seller. The Committee shall maintain a Register in Form N showing the total purc (2) hases and sales made by traders and the cess recoverable and recovered from them . (3) The Committee shall levy cess payable under Section 21 on the basis of the r eturn furnished under Sub-Rule (1). (4) If any trader fails to submit a return as prescribed in Sub-Rule (1) or the Committee has reason to believe that any such return is incorrect it shall after giving a notice in Form O to the trader concerned to assess the amount of the t rader’s business during the period in question. (5) If a trader habitually makes default in the submission of returns or if in t he opinion of the Committee, the trader habitually submits false returns, the Co mmittee may order for the inspection of the trader’s accounts. (6) After an order under Sub-Rule (5) is made, the Commission shall inform the d ealer of the date and place fixed for the inspection. Provided that if the trader so desires and pays such fees as the Committee may f ix in this behalf the inspection shall be made at the trader’s premises. (7) The Committee may authorise one or more of its members to carry out the insp ection ordered by it under Sub-Rule(5) such member or members shall be assisted by such employees of the Committee as may be deputed by it for that purpose. (8) Such member or members may after inspection prepare a return or may amend th e return already furnished, on the basis of transaction, appearing in the trader s’ accounts books, and the Committee may levy cess, or, as the case may be, an a dditional cess on the basis of such return or amended return, but if the account books are reported to be unreliable, or as not provided sufficient material for proper preparation or amendment of the return or if no such books are maintaine d or produced the Committee may assess the amount of the trader’s business on su ch information as may be available and levy cess on the basis of such assessment . (9) In addition to the cess or additional cess levied under Sub-Rule (8) the Com mittee may recover from the defaulter penalty equal to the cess or additional ce ss so levied. (10) Habitual default in the submission of returns and habitual submission of fa lse returns shall be sufficient ground for suspension or cancellation of or refu sal to renew a licence, and the provisions of this Rule shall apply in addition to and not in derogation of any other law, penal or otherwise applicable to non- compliance, or defective compliance with any duty imposed upon a trader by the A ct or by these Rules, or by any Bye-law or order of a Committee. (11) As assessment order made under Sub-Rules (8) and (9) shall be communicated to him by means of a demand notice in Form P and copy thereof shall be granted t o the trader on his making a written application and paying a sum of rupees two as copying fee to the Committee. Every Committee shall maintain a Register of co pying fees. (12) The copy shall be prepared in the office of the Committee and certified to be correct by the Secretary or in his absence by another person appointed in thi s behalf by the Chairman. Such certificate shall give the dates on which the app lication was received and copy prepared and delivered to the applicant, and shal l be conclusive evidence of the correctness of these dates. (13) (i) An appeal against an assessment order made under Sub-Rules (8) and ( 9) shall lie to the Chairman of the Board. No such appeal shall be entertained u nless the applicant has deposited the amount of cess assessed as due from him in full with the Committee concerned. (ii) The Chairman of the Board after hearing the appellant and also the Committe e making the assessment, or, if he deems necessary after such enquiry as he may think proper, may accept, modify or reject the assessment order appealed against . (iii) The Chairman of the Board may waive the whole or a part of the penalty imp osed under Sub-Rule (9), in a case where such penalty would, in his judgment mea n undue hardship to the appellant. (iv) To order passed by the Chairman shall be final and conclusive.

25. Refund of certain amount (Section 49 (2):- (1) When - (a) t been issued; or any sum has been deposited for the grant of licence which has in fact no (b) icences of the same nature for the same notified market area; or a person has wrongly applied and paid for and been granted two or more l (c) any market fee has been recovered in excess of amount actually due; or (d) any market fee has been recovered on a transaction which is except under this Rules; or (e) any money has been paid by mistake, the Chairman of the Board or the Com mittee as the case may be, shall on written application being made within 6 mont hs of such deposit and after such enquiry as he or it may consider necessary, or der the refund of the appropriate amount, which shall be repaid to person concer ned after preparing a refund bill, out of the Marketing Development Fund or the Market Committee Fund, according as it was credited in the first instance to the Marketing Development Fund or the Market Committee Fund.

2. The powers conferred on the Chairman of the Board by Sub-Rule (1) may al so be exercised by such officer subordinate to him as he may appoint in this beh alf. The application for refund shall contain such particulars as are necessa

3. ry to enable the amount for which is claimed to be traced. 26. The broad scheme of the Market Act and the Market Rules as can b e visualized from a close reading of the aforementioned provisions is that the S tate Government is required to notify a market area to regulate the sale and pur chase of specified agricultural produce therein. A market committee has to be es tablished for every market area. Once a market committee is established for a ma rket area, no person can use any place in the market area for marketing of speci fied agricultural produce or operate in the market area as a market functionary without obtaining a license from the market committee. The functions of a market committee is, amongst others, to regulate and control transactions in the marke t area and to deal with license holders. The market committee has to levy and co llect cess on the specified agricultural produce bought or sold in the market ar ea. Sale and purchase of specified agricultural produce shall be by open auction in the market yard. However, all specified agricultural produce when taken out or proposed to be taken out of the market area or when an agreement of sale or p urchase of such agricultural produce is entered into in such market area or in p ursuance of sale or purchase or agreement of sale or purchase, such agricultural produce is delivered to the purchaser in the market area, those shall be deemed to be bought or sold in the notified market area, unless the contrary is proved (Explanation-1 to section 21). The cess levied is required to be paid by the pu rchaser. To prevent evasion of cess, check gates within the market area are erec ted. Cess is to be paid once only and to the market committee within whose juris diction the specified agricultural produce is delivered. The licensee has to sub mit a return in Form M to the market committee on the basis of which, the market committee has to make an assessment by following a procedure which includes ins pection of books of accounts. Once assessment is made, the assessment order shou ld be communicated to the licensee by means of a demand notice in Form P. Appeal against an assessment order lies to the Chairman of the Marketing Board. Provis ion of refund is also provided in the Market Rules.

27. A number of writ petitions were filed before this Court in the y ear 2001 challenging the constitutional validity of section 3d, 3e, Clauses (ii) and (iii) of Explanation-1 to Section 21 as well as Section 21(1), 21(2), 21(3) , 21a, 23 and 25 (xiii) of the Market Act as amended by the Assam Agricultural P roduce Market (Amendment) Act, 2000 and the Assam Agricultural Produce Market (A mendment) Act, 2006 and also seeking consequential relief of refund of the cess collected thereunder. By the common judgment and order dated 12-09-2008, which h as since been reported in 2008 (4) GLT 366 and (2009) 1 GLR 1 (Assam Roller Flou r Mills Association and others -Vs- State of Assam and Others), this Court uphel d the constitutional validity of the aforesaid provisions. However, this Hon’ble Court held that realization of cess by all means would have to be in scrupulous observance of the necessary pre-conditions embodied in section 21 of the Market Act and rules 21, 22 and 23 of the Market Rules. The levy and collection of ces s on the specified agricultural produce would ensue only on the sale or purchase thereof in the market area. The legal fiction engrafted in section 21 would com e into play only in the absence of any direct evidence of sale or purchase. Thou gh the validity of the legal fiction was upheld, the presumption of sale and pur chase based thereon was construed to be a rebuttable one if proved to the contra ry by the person concerned by producing relevant documents / records. The Court however observed that forceful collection of cess at the check gates irrespectiv e of the ultimate destination of the goods and in contravention of the precondit ions mandated by section 21, if true, would per se be illegal, unauthorized, nul l and void. The relevant portion of the aforesaid judgment is quoted hereunder : - (cid:28)94. The realization of the cess, however, by all means would have to be in scru pulous observance of the necessary preconditions embodied in Section 21 of the A ct and rules 21, 22 and 23 of the Rules as discussed hereinabove. The legal fict ion engrafted in section 21 would apply only in absence of any direct evidence o f sale to the contrary. The levy and collection of cess on the specified agricul tural produce would ensue only on the sale or purchase thereof in the market are a as comprehended therein as well as at the rate specified. The fictional factor s would hold the sway only in absence of any direct evidence of sale or purchase repelling the same. In other words, the legal fiction would operate if the trad er / dealer concerned fails to establish against sale or purchase of the specifi ed agricultural produce in the concerned notified market area. This is so, be th e collector of the cess is the concerned Market Committee or the Board on its be half. In the latter eventuality, the additional pre-requisites as prescribed by Section 21 (2) namely necessity of such realization and approval of the State Go vernment would have to be essentially complied with. The petitioners allegation of forceful collection of cess at the check g 95. ates by the Board through its Marketing Inspectors using the seal of different c ommittees irrespective of the ultimate destinations of the goods and in contrave ntion of the preconditions mandated by Section 21(2), if true, the realization w ould per se be illegal, unauthorized, null and void. The sample documents produc ed by the petitioners to corroborate their stand that the goods intercepted at t he check gates were on transit on completion of their sale outside the State of Assam though prima facie probative of the said plea in respect of the transactio ns referred to therein those are inadequate to be acted upon to return a finding that such an inference is possible in all cases of such detentions and collecti ons at the check gates. Whereas the statutorily stipulated imperatives for the a pplication of the legal fiction are not in doubt, the documents produced by the petitioners, in absence of a probe into the individual facts cannot be accepted as an irrefutable guarantee of completion of sale or purchase of all consignment s of specified agricultural produce halted, scrutinized and subjected to the imp ost under the Act. In exercise of powers under Article 226 of the Constitution o f India, this Court is not equipped to embark on this exercise.

28. Therefore, from a close perusal of the aforesaid judgment, it is evident that levy and collection of cess has to be in strict compliance of the provisions contained in section 21 of the Market Act and rules 21, 22 and 23 of the Market Rules, failing which the realization of cess would be illegal, unauth orized, null and void. The fictional sale envisaged in section 21 is rebuttable. Therefore, when the person concerned produces relevant documents / records to s how that no transaction has taken place or would take place within the market ar ea, the authority of the market committee would be under a legal obligation to s crutinize them and take a decision thereon, failing which no cess would be levia ble. If the person concerned fails to produce the supporting documents, the leg al fiction would come into play and a presumptive sale would be deemed to have t aken place within the market area to attract levy of cess. This Court in the case of Assam Roller Flour Mills Association ( 29. supra), while upholding the constitutional validity of section 21 of the Market Act, held that the said provision is not repugnant to the legally recognized att ributes of sale within the meaning of the Sale of Goods Act, 1930. It was explai ned that the presumption of fictional sale as engrafted in Explanation-1 to sect ion 21 of the Market Act is conspicuously rebuttable and is subject to proof oth erwise. This judgment, particularly paragraph 69 thereof, on which a great deal of emphasis was laid by learned Counsel for the respondents, can be of no assist ance to the respondents as the deliberation was only in the context of examining the constitutionality of section 21 of the Market Act.

30. In the case of Shalimar Chemical Works Limited (supra), the Hon’ ble Supreme Court while considering the provisions of Andhra Pradesh (Agricultur al Produce and Livestock) Markets Act, 1966, held that market fee can be levied under the said Act only on the sale and purchase of notified agricultural produc e within the notified area. Explanation-1 to section 12 of that Act, which is si milar to Explanation-1 to section 21 of the Market Act, creates a legal fiction and provides that if any notified agricultural produce is taken out of a notifie d market area, it shall be presumed to have been purchased or sold within such a rea. This presumption has been held to be a rebuttable presumption and can be sh own to be not correct. The Apex Court held that the policy in enacting this prov ision is only to cover such transaction of sale and purchase for which direct ev idence may not be available.

31. Interpretation of section 6A of the Central Sales Tax Act, 1956 came up for consideration before the Hon’ble Supreme Court in Ashok Leyland Limi ted (supra). Section 6A comes under chapter III of the said Act which is concern ed with inter-state sales tax. It deals with burden of proof etc. in case of tra nsfer of goods claimed otherwise than by way of sale. It provides that where any dealer claims that he is not liable to pay tax under the said Act in respect of any goods on the ground that the movement of such goods from one State to anoth er was occasioned by reason of transfer of such goods to any other place of his business and not by reason of sale, the burden of proving that the movement of t hose goods was so occasioned shall be on the dealer. He has to submit declaratio n in the prescribed form containing the required particulars alongwith evidence of despatch of such goods. If the dealer fails to furnish such declaration, then the movement of such goods shall be deemed to have been occasioned as a result of sale. When a declaration is submitted, the assessing authority is required to pass an order, if he is satisfied by making enquiry, that the particulars conta ined in the declaration submitted by the dealer is true. Thereafter, movement of goods relatable to the declaration shall be deemed to have been occasioned othe rwise than as a result of sale. The Hon’ble Supreme Court observed that if throu gh the means of a legal fiction as embodied in section 6A, it is determined that a transaction is not an interstate sale, then it would amount to a transfer of stock. This finding is made by a statutory authority who has the jurisdiction to do so. The order made by such authority is conclusive and final. It cannot be r e-opened under another statute. It was further held that which defining sale, th e situs of sale can be fixed by Parliament alone. Once the situs of sale either by way of legal fiction or otherwise, is determined, State Legislature will be d enuded of its power to fix another situs. Once a determination is made in terms of section 6A of the said Act, it is final. (paragraphs-79, 83, 84 and 85 of the judgment).

32. Petitioner had earlier filed W.P.(C) No.447/2002 before this Cou rt challenging the constitutional validity of various provisions of the Market A ct as amended by the Assam Agricultural Produce Market (Amendment) Act, 2000. On 25-01-2002, this Court while admitting the writ petition, passed an interim ord er to the effect that cess will not be realized on the stock transfer of supari from outside the State of Assam. After the judgment of Assam Roller Flour Mills Association, on submission of both the sides that the issues arising for determi nation in W.P.(C) No.447/2002 would be covered by the decision in Assam Roller F lour Mills Association, W.P.(C) No.447/02 was disposed off by this Court in term s of judgment dated 12-09-2008 passed in Assam Roller Flour Mills Association. Admittedly, in the earlier writ petition, petitioner had challen 33. ged the constitutional validity of certain provisions of the Market Act, which w as disposed off in terms of the judgment rendered in Assam Roller Flour Mills As sociation. In that case, the constitutional validity of the impugned provisions were upheld but it was clarified that any realization of cess would have to be i n scrupulous compliance to section 21 of the Market Act and rules 21, 22 and 23 of the Market Rules. Non-compliance of such provisions would render the realizat ion of cess illegal, unauthorized, null and void. In the present writ petition, petitioner has challenged subsequent demand and realization of cess by responden t Nos. 3 and 4 as illegal, being in violation of the aforesaid provisions of the Market Act and the Market Rules. There is thus a fresh cause of action and the issues raised in the two writ petitions are different. Therefore, the contention of the respondents that the present writ petition is barred by the principles o f estoppel and constructive res-judicata cannot be accepted. The said objection is accordingly rejected.

34. Coming to the other preliminary objection raised by the petition er that there is alternative remedy by way of approaching the Market Committee, it would be relevant to note that respondents have themselves stated in the coun ter affidavit that the impugned letter dated 21-07-2011 is not a demand notice b ut is a communication to the petitioner requesting payment of cess. It is the fu rther stand of the respondents that demand notice under Form P has not yet been issued to the petitioner. The position which thus emerges is that no assessment has been made on the liability of the petitioner to pay cess and consequently, n o demand notice has been issued. Therefore, question of filing appeal before the appellate authority as provided under the Market Rules does not arise.

35. Ordinarily, the writ Court would be reluctant to invoke its juri sdiction when a petition is presented before it challenging the validity of a sh ow cause notice. However, the rule of refusal to invoke jurisdiction when altern ative remedy is available is only a rule of caution and a self imposed limitatio n. When the notice is without jurisdiction or is actuated by malafide, the Court would definitely entertain such a challenge. Also in a case where the authoriti es have already decided the issue, refusal to invoke jurisdiction under article 226 of the Constitution on the plea of availability of alternative remedy would not be justified.

36. In A.V. Venkateswaran, Collector of Customs, Bombay (supra), Hon ’ble Supreme Court held that the rule that the party who applies for the issue o f a high prerogative writ should, before he approaches the Court, have exhausted other remedies open to him under the law, is not one which bars the jurisdictio n of the High Court to entertain the petition or to deal with it, but is rather a rule which Courts have laid down for the exercise of their discretion.

37. The Apex Court in Siemens Limited (supra), after observing that ordinarily a writ Court may not exercise its discretionary jurisdiction in enter taining a writ petition questioning a notice to show cause unless the same inter -alia appears to have been without jurisdiction, held that when a notice is issu ed with pre-meditation, a writ petition would be maintainable. In such an event, even if the Court directs the statutory authority to hear the matter afresh, or dinarily, such hearing would not yield any fruitful purpose. In Committee of Management and another (supra), the Apex Court h 38. as held that it is beyond any doubt or dispute that availability of an alternati ve remedy by itself may not be a ground for the High Court to refuse to exercise its jurisdiction. It may exercise its jurisdiction despite the fact that an alt ernative remedy is available, inter-alia, in a case where the same would not be an efficacious one. Furthermore, when an order has been passed by an authority w ithout jurisdiction or in violation of the principles of natural justice, the su perior Courts shall not refuse to exercise their jurisdiction although there exi sts an alternative remedy.

39. In Kumaon Seeds Corporation and others (supra), the Hon’ble Supr eme Court interfered with the show cause notice on the ground that after the Hig h Court had upheld the validity of the earlier show cause notice, the Market Com mittee ought to have put the petitioner on notice and granted an opportunity of hearing. Thereafter, the matter should have been decided by the Market Committee by a reasoned order after considering the response of the petitioner and other materials. As the above procedure was not followed, the Apex Court set aside the notice directing the petitioner to pay market fee.

40. In the present case, the stand of the respondents is absolutely clear. According to the respondents, petitioner is a market functionary and is, therefore, liable to pay cess. Further, the writ petition having been admitted o n 29-09-2011, it would neither be fair nor just to relegate the petitioner to th e market committee or any other authority under the Market Act and Market Rules, more so when they have already taken the decision as indicated above. Therefore , the objection of the respondents as to the maintainability of the writ petitio n on the plea of availability of alternative remedy is negatived.

41. Now, coming to the substantive issue of levy of cess on the peti tioner, as already noticed in the earlier part of this judgment, the Court had p assed an interim order on 25-10-2011 to the effect that the petitioner shall sub mit the return in Form M with all necessary documents to the concerned market co mmittee four days before bringing the goods within the market committee. It was ordered that the market committee would thereafter take a decision whether cess is leviable or not. In case the market committee decides to levy cess, petitione r shall pay the same. Such levy of cess, if any, was made subject to the outcome of the writ petition. The stand taken by the respondents in the affidavit is th at demand notice under Form P has not yet been issued to the petitioner. A readi ng of rule 23 of the Market Rules, particularly sub-rule (11) thereof, would ind icate that no assessment has been made as issuance of demand notice in Form P pr e-supposes making of an assessment order. The petitioner in paragraph 40 of the rejoinder affidavit has stated that in terms of the interim order dated 25-10-20 11, the petitioner has been submitting Form M alongwith other documents to the c oncerned market committee but no demand has yet been raised after submission of those forms. Petitioner has enclosed copies of Form M and receipts of payment of cess as annexures to the rejoinder affidavit. Respondents have neither conteste d nor challenged the veracity of the above statements and documents.

42. Annexure-2 letter dated 21-07-2011 indicates that respondent No. 3 has determined that an amount of ‘ 6,21,33/- is due as cess to be paid by the petitioner for the period from April, 2007 to September, 2007. Since the respond ents have themselves admitted that this letter is not a demand notice in Form P, which is yet to be issued, it is clear that no assessment has been made under r ule 23 of the Market Rules. There is thus violation of rule 23 of the Market Rul es. Therefore, the quantification of ‘ 6,21,330/- as the amount of cess due from the petitioner for the period from April, 2007 to September, 2007 and the intim ation dated 21-07-2011 are wholly illegal, unauthorized, null and void.

43. In so far realization of ‘ 24,555/- on 28-07-2011 by respondent No.4 as cess on supari is concerned, Form M dated 28-07-2011 filled up by th e Assistant Market Inspector of respondent No.4 (marked as annexure-3 to the wri t petition) explains itself. Name of the commodity is stated as supari. Seller i s shown as (cid:28)NOIDA (cid:29). After stating that cess is leviable and quantified a t ‘ 24,555/-, in the column to indicate name of the buyer, buyer is shown as (cid:28)to self, Guwahati (cid:29) . The Assistant Marketing Inspector remarked that the consignme nt was bound for Guwahati. Petitioner has stated that they had paid the aforesai d amount under protest to ensure that the consignment was not held up. Rule 21 ( 8) of the Market Rules clearly provides that in case of a transaction involving performance of one or more of the acts mentioned in clauses (i) to (iii) of the Explanation-1 to section 21 of the Market Act within the boundary of two or more notified market area, the cess shall be payable to the market committee within whose jurisdiction the specified agricultural produce is delivered. Therefore, e ven proceeding on the assumption that cess is payable, the same would be require d to be paid to respondent No.3 and not to respondent No.4 as the consignment is delivered within the market area of respondent No.3. In view of above provision , there can be no manner of doubt that realization of ‘ 24,555/- as cess from th e petitioner by respondent No.4 is illegal, unauthorized, null and void.

44. That brings us to the moot question as to whether cess is attrac ted at all on the transaction of the petitioner. It is the pleaded case of the p etitioner that it purchases supari from Karnataka by placing purchase orders fro m its NOIDA office. The entire consignment of supari is delivered at its NOIDA o ffice. Thus, the sale transaction is complete at NOIDA. The supari is then cut i nto small pieces, boiled, dried and processed. The processed supari is sent by t he petitioner from its NOIDA office to its various manufacturing units, includin g to its manufacturing unit at Guwahati by way of stock transfer. Petitioner doe snot sell supari but uses the same as raw material in the manufacture of finishe d products like pan masala, gutkha, zafrani zarda etc., which are excisable good s and sold in the market. Admittedly, no sale or purchase of supari takes place in the notified market area within the meaning of rule 16 of the Market Rules. A s per the particulars mentioned in Form M, name of the seller from whom the spec ified agricultural produce has been purchased has to be mentioned. Likewise, the name of buyer to whom it was sold or it is being sold is required to be mention ed. In the instant case, the petitioner has pleaded and has placed on record doc uments in support thereof that the specified agricultural produce i.e. supari ha s been transported from its NOIDA office to its Guwahati office by way of stock transfer. Such assertion and documents have largely remained uncontroverted. App arently, there cannot be sale and purchase in between the same person. The annex ure-3 Form M filled up by respondent No.4 on 28-07-2011 also reflects the said p osition. The seller has been shown as (cid:28)NOIDA (cid:29) whereas the buyer has been shown a s (cid:28)to self, Guwahati (cid:29).

45. Coming to the presumption of sale as envisaged in Explanation 1 (iii) to section 21 of the Market Act, this Court in Assam Roller Flour Mills As sociation while upholding the constitutional validity of the aforesaid provision , held that such presumption of sale is rebuttable. If the person concerned fail s to prove to the contrary by producing documents / records, the presumption of sale would come into play by virtue of the deeming provision. In the present cas e, petitioner has been able to produce documents to show that the specified agri cultural produce i.e. supari has been brought from its NOIDA office to its Guwah ati office by way of stock transfer. Since the petitioner has discharged the onu s by producing evidence rebutting the presumption of sale and as the respondents have failed to take any decision thereon, the deeming provision under Explanati on 1 to section 21 of the Market Act would not be attracted. As has already been noticed above, this Court in its interim order dated 25-10-2011 had directed th e petitioner to submit its return in Form M with all necessary documents. On suc h submission, the Market Committee was directed to take a decision as to whether cess is leviable within the meaning of the Market Act and the Market Rules. Pet itioner has stated in its rejoinder affidavit that as per the above direction of this Court, petitioner has been submitting Form M alongwith other documents to the concerned market committee but no demand as yet has been made.

46. It is thus clear that petitioner has been able to rebut the pres umption of sale as engrafted in Explanation-1 to Section 21 of the Market Act. T hat being the position, petitioner cannot be termed as a market functionary with in the meaning of the Market Act and the Market Rules.

47. In the case of Edward Keventer Private Limited (supra), the ques tion for consideration was whether the products which are ready to serve beverag es under the brand names (cid:28)Frooti (cid:29) and (cid:28)Appy (cid:29) would fall under the description of mango and apple, which are specified agricultural produce in the schedule to th e Bihar Agricultural Produce Market Act, 1960 and consequently liable to pay mar ket fee under the said Act. The Hon’ble Supreme Court held that the products (cid:28)Fr ooti (cid:29) and (cid:28)Appy (cid:29) not being specified in the schedule, the Marketing Board had no authority to demand any fee on the marketing of the said products. In Kesarwani Zarda Bhandar (supra), the Hon’ble Supreme Court wa 48. s considering the question of levy of market fee on zafrani zarda in terms of th e provisions of the U.P. Krishi Utpadan Mandi Adhiniyam