Tarun Agarwala, J.
1. The short question, which arises for consideration in this group of writ petition is, whether Sub-clause (3) of Clause (b) of Sub-section (iii) of Section 17 of Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964, (hereinafter referred to as the Adhiniyam) is attracted in the instant case or not? The facts leading to the filing of the writ petitions is, that the petitioner is a Public Limited Company and has a factory at Saharanpur in the State of Uttar Pradesh and is engaged in the manufacture of paper. The raw material required for the manufacture of paper is wood which is purchased by the petitioner from various deposits of the U.P. Forest Corporation (hereinafter referred to as the U.P.F.C.) through various allotment orders. These depots, according to the petitioner, are located in the 'reserved area' as notified under Section 20 of the Indian Forest Act, 1927. It is contended that in the reserved area, only such activities can be carried out which are permitted under the said Act.
2. The present group of writ petitions is an inter se dispute between the petitioner and the Mandi Samitis relating to the period 1986 to 1998. For facility, the facts of Writ Petition No. 24998 of 2008 is taken into consideration and is being made the leading case.
3. It transpires that in the year 1986, a notice was issued by the Mandi Samiti directing the petitioner to pay the market fee on the purchase of wood made by them from the U.P.F.C. The petitioner subsequently filed a Writ Petition No. 6710 of 1986, challenging the imposition of the demand of Mandi fee made by the Mandi Samiti. An interim order dated 17th of October, 1986 was granted directing the petitioner to deposit a sum of Rs. 15,000, upon which, the respondents were restrained from realising the market fee on the transactions made between the U.P.F.C. and the petitioner. During the pendency of the writ petition, further demands were made, which resulted in the filing of Writ Petition No. 3290 (MB) of 1991.
4. The aforesaid writ petitions were dismissed eventually by a judgment dated 11th December, 1998, holding that the purchase of wood by the petitioner was for the manufacture of paper and was not for personal consumption, as envisaged under Rule 70 of the Rules and that the petitioner was a trader and was engaged in the processing of agricultural produce and that the wood was an agricultural produce. The Court dismissed the writ petition on the ground that the petitioner has an efficacious, alternative remedy by filing an objection before the Mandi Samiti after paying the Mandi fee as per the provisional assessment order, upon which the Mandi Samiti would pass a final order. Against this order, the petitioner preferred a special leave petition, which was admitted, and eventually, the civil appeal was disposed of by a judgment dated 19th September, 2006 affirming the decision of the High Court and directing the petitioner to avail the statutory remedy by filing an objection before the authority. The Supreme Court, however, while disposing of the civil appeal, directed that the Mandi authorities would not recover any amount till the final adjudication of the matter.
5. Based on the aforesaid direction, the petitioner filed detailed objections, and the Secretary, Mandi Samiti, after considering the objections, passed an order dated 14.11.2006 assessing a sum of Rs. 61,55,900.40 as Mandi fee, and further imposed a sum of Rs. 1,48,238.95 as development cess. The Secretary, Mandi Samiti also imposed interest @ 2% per month or 24% per annum on the aforesaid Mandi fee and cess, payable w.e.f. 1st April, 1990 onwards. The petitioner, being aggrieved by the aforesaid assessment order, filed a revision under Section 32 of the Adhiniyam before the Director, Mandi Samiti, which was eventually transferred to the Deputy Director, who by the impugned order dated 15th September, 2008 dismissed the revision and affirmed the order of the Mandi Samiti.
6. The petitioner, being aggrieved by the aforesaid orders, has filed the present writ petitions praying for the quashing of the order of the Mandi Samiti and of the order of the revisional authority, and has further prayed for a writ of mandamus commanding the Mandi Samiti not to levy, impose or demand or collect the Mandi fee, development cess or interest from the petitioner in respect of the wood purchased from the depots of the Forest Corporation. Similar assessment orders were passed in the connected writ petitions, and since similar issues has been raised, all the writ petitions are being decided together by a common judgment.
7. Heard Shri S.P. Gupta, the learned senior counsel, assisted by Shri Rahul Agrawal, the learned Counsel for the petitioner, Shri B. D. Mandhyan, the learned senior counsel, assisted by Shri Satish Mandhyan, the learned Counsel for the Mandi authorities (respondent Nos. 1, 2 and 3) and Shri V.K. Singh, the learned senior counsel, assisted by Shri S. Shekhar, the learned Counsel for the U.P.F.C., who was made a party in the writ proceedings but was not a party in the proceedings before the Mandi authorities.
8. Shri S.P. Gupta, the learned senior counsel submitted that no market fee is payable by the petitioner on the purchase of wood in view of Section 17 (iii)(b)(3) of the Adhiniyam, inasmuch as the petitioner is a trader and has purchased the wood from the U.P.F.C, who is also a trader as per Section 2(y) of the Adhiniyam, and therefore, the selling trader, namely, the U.P.F.C. was liable to pay the Mandi fee. In support of his submission, the learned Counsel has placed reliance upon various decisions of the Supreme Court namely, Prince Traders, Baheri Bareilly through partner Manzoor Ahmad v. Krlshi Utpadan Mandi Samiti, Tanakpur, District Nainital and Ors. 1992 (2) AWC 678; Mahaluxmi Rice Mills and Ors. v. State of U.P. and Ors. : AIR1999SC147 ; Krishna Rice and Dal Mills and Anr. v. Union of India and Ors. : 1999(4)AWC2934 and Director Krishi Utpadan Mandi Samiti and Anr. v. Ram Kishan Daya Ram and Co. : (2007)10SCC56 . It was also urged that the Mandi authorities had also started realising Mandi fee from the U.P.F.C, which led to a dispute inter se between the Mandi authorities and the U.P.F.C, and eventually, a compromise was arrived at between them in which it was agreed that the Mandi Samiti would not recover Mandi fee from the U.P.F.C. from such transactions made by them prior to 25th November, 1993. The learned senior counsel submitted that this compromise further corroborated the fact that the Forest Corporation was a trader and was required to take a licence and realise Mandi fee from the purchaser and to remit such Mandi fee from 25th November, 1993 onwards. This compromise is reflected in the decision of the Supreme Court in Director, Krishi Utpadan Mandi Samiti and Anr. v. Ram Kishan Daya Ram and Co. : (2007)10SCC56 . The learned senior counsel for the petitioner further submitted that in the absence of any service being rendered by any Mandi Samiti in the reserved forest area under the Forest Act, no Mandi fee could be levied on the transaction of sale or purchase of wood, which takes place at the depots of the U.P.F.C. and which are located in the reserved area under the Forest Act. Shri S.P. Gupta, the learned senior counsel submitted that since no service whatsoever was being rendered by the Mandi Samiti, consequently, the Mandi authorities were not entitled to levy or collect the Mandi fee. The learned Counsel further submitted that the burden was upon the Mandi Samiti, which has not been discharged by them in the counter-affidavit. In support of his submission, the learned Counsel placed reliance on various decisions, namely, Ram Chandra Kailash Kumar and Co. and Ors. v. State of U.P. and Anr. : [1980]3SCR104 ; Shree Mahalakshmi Vyapar Kendra v. Krishi Utpadan Mandi Samiti Powayan, District Shahjahanpur, through its Chairman 1984 UPLBEC 282; U.P. Forest Corporation, Lucknow v. Krishi Utpadan Mandi Samiti and Ors. 1985 UPLBEC 1192; Vtjayalakshmi Rice Mill and Ors. v. Commercial Tax Officers, Palakol and Ors. : 2006(201)ELT329(SC) ; Jindal Stainless Ltd. and Anr. v. State of Haryana and Ors. : [2006]283ITR1(SC) and Hardev Motor Transport v. State of M.P. and Ors. : AIR2007SC839 .
9. Shri S.P. Gupta, the learned senior counsel further submitted that the imposition of interest was wholly unwarranted and ex facie illegal. No interest could be levied from 1990 onwards. The learned Counsel submitted that interest becomes payable only when a tax is assessed and a demand is raised and which is not paid within a stipulated period. In the present case, the assessment was made by the Mandi Samiti only on 14th November, 2006 when the Mandi Samiti passed the final order. Consequently, the demand of interest w.e.f. 1st September, 1990 was wholly illegal and without jurisdiction. The learned Counsel further submitted that the liability to pay interest is provided under Section 17(iiia) of the Adhiniyam, which is subject to the calculation as prescribed in the bye-laws. The learned Counsel submitted that there is no provision in the bye-laws which provides the calculation for the payment of the interest. Consequently, the levy of interest was wholly illegal. The learned Counsel in support of his submission has placed reliance upon the decision in J.K. Synthetics Limited v. Commercial Taxes Officer : 1994ECR329(SC) ; Ranchi Club Ltd. v. Commissioner of Income Tax and Ors. : [1996]217ITR72(Patna) and Buland Motor and Land Finance Pvt. Ltd. v. Assistant Commissioner of Income Tax and Ors. : [2001]247ITR701(All) .
10. The learned senior counsel also submitted that the delegation of the revisional jurisdiction to the Deputy Director was wholly illegal and that the Deputy Director was not competent to decide the revision under Section 32 of the Act. The learned Counsel further submitted that the Board has the power to decide the revision and that the Board could delegate its powers to the Director, but there was no provision whereby the powers of the Board could further be delegated to the Deputy Director. The learned Counsel further submitted that in any case, judicial powers, which the Board exercises, could not be delegated either under Section 33 or under Section 26-1 of the Adhiniyam. In support of his submission, the learned Counsel placed reliance on two decisions of the Supreme Court, namely, Bombay Municipal Corporation v. Dhondu Narayan Chowdhary. : [1965]2SCR929 and Krishi Utpadan Mandi Parishad and Anr. v. I.T.C. Ltd. (2006) 12 SCC 460 : 2007 (5) AWC 5244 (SC).
11. The learned Counsel for the petitioner in the end submitted that the 'forest area' was not covered under the 'market area' as defined under the Adhiniyam. Under the Forest Act, only such activities could be carried out in the reserved area, which was permitted under the said Act. The learned Counsel submitted that the depots are located in the forest area which is outside the 'market area' as contemplated under the Adhiniyam and that the 'market area' could not include the 'reserved area', as notified under the Forest Act. This issue was touched upon by the learned Counsel for the petitioner, who contended that the petitioner reserved its right to raise this issue at a subsequent stage, if required.
12. Shri B.D. Mandhyan, the learned senior counsel for the Mandi Samiti submitted with full vehemence that the petitioner was not entitled for any relief whatsoever and that the present writ petition was barred by the principles of res judicata. The learned senior counsel submitted that in an earlier round of litigation, inter se between the same parties, the petitioner was held to be a purchaser and was liable to pay the Mandi fee, which was affirmed by the Supreme Court, and therefore, the same controversy could be allowed to be raised over and over again. The same issue has been raised once again in the present writ petition, which was barred by the principles of res judicata and that the petitioner should be estopped once and for all from raising these issues. In support of his submission, the learned Counsel has placed reliance upon the decision in Atma Ram Raton Lal and Ors. v. State of U.P. and Ors. 1979 ALJ 126 and the Constitutional Bench judgment of the Supreme Court in the matter of Ram Chandra Katlash Kumar and Co. and Ors. v. State of U.P. and Anr. : [1980]3SCR104 .
13. The Supreme Court in the aforesaid Constitutional Bench judgment held that the petitioner was a purchaser of the wood and was liable to pay the Mandi fee and that the owner of the jungle was a producer. Shri Mandhyan further submitted that the U.P.F.C. was in existence when the Supreme Court gave its decision in Ram Chandra's matter (supra), in the year 1980 and submitted that the wood was purchased by the petitioner from U.P.F.C. at that moment of time, and even today, the petitioners are purchasing wood from U.P.F.C. The learned Counsel submitted that the transaction was the same and that the decision of the Supreme Court is binding upon the petitioner in which the petitioner has been held to be a purchaser. In support of his submission, the learned Counsel placed reliance upon two decisions of the Supreme Court in Ishwar Dutt v. Land Acquisition Collector and Anr. : AIR2005SC3165 and Saroja v. Chtnnusamy (Dead) by L.Rs. and Anr. : AIR2007SC3067 .
14. Shri Mandhyan, the learned senior counsel further submitted that even otherwise the liability to pay the Mandi fee always remained with the purchaser and even if the Mandi fee has not been realised by the U.P.F.C, the petitioner, being a purchaser, was liable to pay the Mandi fee. In support of his submission, the learned Counsel placed reliance upon the decision of the Supreme Court in Krishi Utpadan Mandi Samiti, Hcddwani and Ors. v. Indian Wood Products Ltd. and An. : [1996]2SCR1021 and Krishi Utpadan Samiti, Dudhi and Anr. v. Rajesh Kumar Jaiswal (2005) 11 SCC 427. The learned Counsel further submitted that the decision of the Supreme Court in the case of Indian Wood Products (supra), has not been overruled and has been followed by the Supreme Court itself in the subsequent judgment in the year 2005, and that the subsequent judgment was not per incuriam. The learned Counsel further submitted that, in any case, the High Court could not hold that a decision of the Supreme Court was per incuriam and that the Supreme Court alone could settle the controversy finally.
15. The learned Counsel further submitted that the High Court in the decision in Varanasi Tendu Patta Vyavasayee Sangh, Varanasi, through its Members v. Krishi Utpadan Mandi Samiti, Duddhi, District Mirzapur and Ors. 1990 (1) UPLBEC 33, held that selling dealer was liable to pay the mandi fee, which judgment was overruled by the Supreme Court in Civil Appeal Nos. 4359 and 4307 of 1997, Krishi Utpadan Mandi Samiti v. Varanasi Tendu Patta Vyavasayee Sangh, decided on 7th July, 1997 and submitted that in view of the consistent pronouncements by the Supreme Court, the petitioner, being a purchaser of the wood, was liable to pay the Mandi fee.
16. Shri Mandhyan contended that Mandi Samiti has rendered service and that a similar plea was raised earlier by the petitioner which was rejected, and therefore, the same plea could not be raised again. In support of his submission, the learned Counsel placed reliance upon the decision of the Supreme Court in R.S. Muthuswami Gounder v. A. Annamalal and Ors. AIR 1981 Mad 220 (FB); Sreenivasa General Traders and Ors. v. State of A.P. and Ors. : [1983]3SCR843 ; Amar Nath Om Prakash and Ors. v. Amar Nath Om Prakash and Ors. : [1985]2SCR72 ; Krishi Upaj Mandi Samiti and Ors. v. Orient Paper and Industries Ltd. : (1995)1SCC655 and Agriculture Market Committee, Rajam and Anr. v. Rajam Jute and Oil Millers Association, Rajam : [2003]2SCR320 .
17. The learned Counsel for the respondents further submitted that the Adhiniyam provides the delegation of powers and the Deputy Director was duly competent to hear the revision and that this controversy has been finally settled by the Supreme Court in Krishi Utpadan Mandi Parishad and Anr. v. I.T.C. Ltd. (2006) 12 SCC 460 : 2007 (5) AWC 5244 (SC). The learned Counsel further submitted that the interest was payable under Section 17 (iiia) of the Adhiniyam and that the bye-laws only prescribed the method of the calculation of interest of the Mandi fee. The learned Counsel further submitted that the demand of Mandi fee was raised as far back as in the year 1990 which demand was not paid, and therefore, the interest became payable from that date itself. The learned senior counsel further submitted that the 'market area' under the Adhiniyam covers the 'reserved area', defined under the Forest Act, and that, the Mandi fee can also be realised even if the transaction had taken place in the reserved area under the Forest Act. The learned Counsel further submitted that Section 4 of the Adhiniyam overrides the provision of any other Act or law which would include the Forest Act.
18. Shri V.K. Singh, the learned senior counsel for the U.P.F.C. admitted that the Corporation is a trader as defined under Section 2(y) of the Adhiniyam but submitted that the petitioner alone is liable to pay the Mandi fee under Section 17(iii)(b)(iv) of the Adhiniyam inasmuch as the petitioner is not a trader and is only a purchaser of wood and was, therefore, liable to pay the Mandi fee under the aforesaid clause. The learned Counsel further submitted that as per the agreement executed between the U.P.F.C. and the Mandi Samiti, no market fee could be realised from U.P.F.C. prior to 25th November, 1993. The learned Counsel further submitted that no market fee could be charged or levied on transactions madq in the reserved area, as notified under the Forest Act.
19. Having heard the rival contentions of the parties, the controversy which boils down in the present writ petition is, whether the petitioner and the U.P. Forest Corporation are traders within the meaning of Section 2(y) of the Adhiniyam and whether the petitioner is liable to pay the Mandi fee on the purchase of wood made from the depots of the U.P.F.C. Before proceeding further, it would be appropriate if one peruses the provision of Section 17(iii)(b) of the Adhiniyam, which has undergone various changes from time to time.
20. The provisions of Section 17(iii)(b), as originally enacted, read as under:
17. Powers of the Committees.--A Committee shall, for the purposes of this Act, have the power to:
(i) ... ... ... ...
(ii) ... ... ... ...
(iii) levy and collect:
(b) market fee on transaction of. sale or purchase of specified agricultural produce in the principal market yard and sub-market yard from such persons and at such rate as may be prescribed, but not exceeding one-half percentum of the 'Price of the specified agricultural produce sold or purchased therein.
21. Rule 66 of the Mandi Rules, 1966 provided for the realisation of market fee from the seller. Rule 68 provided for the realisation of the market fee in the following manner:
(i) if the specified agricultural produce is sold through the Commission Agent or directly to the trader, the Commission Agent or trader, as the case may be, shall charge market fee from the seller in sale voucher in Form No. VI and deposit the amount of market fee so realised with the market committee in accordance with the directions of the committee issued in this behalf;
1. If the specified agricultural produce is sold directly by the seller to the consumer, the market fee shall be realised by the servant of the market committee authorised by it in this behalf.
22. By the U.P. Act No. 13 of 1973, as re-enacted by the U.P. Act No. 20 of 1974, the burden of payment of market fee, which was earlier on the seller, shifted on the purchaser, and the amended provision reads as hereunder:
(b) market fee, which shall be paid by purchaser on transaction of sale of specified agricultural produce in the principal market yard or sub-market yard at such rates, being 'not less than one percentum and not more than one and-a-half percentum of the price of the agricultural produce so sold, as the State Government may specify by notifications in the Gazette.
23. By the U.P. Act No. 6 of 1977, with effect from 20.12.1976, in Clause (b) of Section 17(iii) of the Mandi Act, the words 'principal market yard or sub-market yard' were substituted by 'market area' and as a result thereof, theoretically, the market fee became leviable in the entire market area on the sale of specified agricultural produce.
24. Section 17 (iii)(b) of the Mandi Act was again amended by the U.P. Act No. 7 of 1978 with retrospective effect, i.e., from 12.6.1973 and the amended provisions reads as follows:
17. Powers of the Committees.--A Committee shall, for the purposes of this Act, have the power to:
(b) market fee, which shall be payable on transactions of sale of specified agricultural produce in the market area at such rates, being not less than one per centum of the price of the agricultural produce so sold, as the State Government may specify by 'notification, and as such fee shall be realised in the following manner:
(1) if the produce is sold through a commission agent, the commission agent may realise the market fee from the purchaser and shall be liable to pay the Committee;
(2) if the produce is purchased directly by a trader from a producer, the trader shall be liable to pay the market fee to the Committee;
(3) if the produce is purchased by a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the
Committee; and
(4) in any other case of sale of such produce the purchaser shall be liable to pay the market fee to the Committee.
25. This provision as amended by the U.P. Act No. 7 of 1978 is an important one insofar as the controversy involved in the present writ petitions are concerned as it embodies an integrated scheme fixing the liability regarding the payment of the market fee. The provision of Section 17(iii)(b) as amended by U.P. Act No. 7 of 1978 is the present bone of contention between the parties, wherein, the liability is fixed with regard to the payment of the Mandi fee.
26. A perusal of Section 17(iii)(b) indicates that a trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the Committee. Shri Mandhyan submitted that in view of this provision, the ultimate liability to pay the Mandi fee was upon the purchaser, le., the petitioner and that the Mandi Samiti was within its rights to demand the Mandi fee from the petitioners.
27. In my opinion, the submission of the learned Counsel for the Mandi Samiti is bereft of merit. The liability for the payment of Mandi fee under Sub-clause (1) and Sub-clause (3) is upon the seller and differs from that under Sub-clauses (2) and (4). Under Sub-clauses (1) and (3), the Mandi fee has to be paid by the seller or the selling agent even though the trader selling the produce may realise it from the purchaser. It does not create any liability for the payment of the market fee upon the purchaser.
28. In Krishi Utpadan Mandi Samiti Haldwani and Ors. v. Indian Wood Products Ltd. and Anr. : [1996]2SCR1021 , the Supreme Court held that even where the selling dealer did not realise the Mandi fee from the purchaser under Section 17(iii)(b), even then the selling dealer was under no obligation to pay the market fee to the Committee and that the liability to pay such Mandi fee always remained with the purchasing trader. The said judgment was passed by two Judges of the Supreme Court and was again followed by the Supreme Court in Krishi Utpadan Mandi Samiti v. R.K. Jaiswal (2005) 11 SCC 427, which was passed again by two Judges of the Supreme Court. The Supreme Court however disagreed with its own decision given in Indian Wood Products (supra), in Mahaluxmi Rice Mills and Ors. v. State of U.P. and Ors. : AIR1999SC147 , which was passed by a Bench of three Judges of the Supreme Court. The Supreme Court held that the reasoning adopted in the decision of Indian Wood Products (supra), was not agreeable and that it was imperative for the selling trader to pay the Mandi fee under Section 17(iii)(b)(3) of the Adhiniyam. The Supreme Court held:
9. It is significant to note that the word used for the seller to realise market fee from his purchaser is 'may' while the word used for the seller to pay the market fee to the Committee is 'shall'. Employment of the said two monosyllables of great jurisprudential import in the same clause dealing with two rights regarding the same burden must have two different imports. The legislative intendment can easily be discerned from the frame of the sub-clause that what is conferred on the seller is only an option to collect market fee from his purchaser, but the seller has no such option and it is imperative for him to remit the fee to the Committee. In other words, the Market Committee is entitled to collect market fee from the seller irrespective of whether the seller has realised it from the purchaser or not.
10. In Krishi Utpadan Mandi Samtti v. Indian Wood Products Ltd. : [1996]2SCR1021 , the learned Judges were persuaded by the ratio laid down by this Court in Krishi Upqj Mandi Samitt v. Orient Paper and Industries Ltd. : (1995)1SCC655 , wherein provisions of a similar Act which is in force in the State of Madhya Pradesh were considered and held that the primary liability to pay the fee is placed upon the buyer. But the corresponding provision in the Madhya Pradesh Act is differently worded and hence the question of the liability to pay market fee as per Sub-clause (3) of Section 17(iii) of the Act could not have been solely based on the ratio in the said decision. It is difficult for us to agree with the reasoning that 'the use of the word 'shall' in the said clause means that where the selling trader collects fees from a purchasing trader he is under an obligation to make over the fee to the Market Committee and where the selling trader does not collect the fee from the purchasing trader the liability to pay the market fee remains to be that of the purchaser.
12. The aforesaid observations of the Constitution Bench makes the position clear that the Market Committee is fully entitled to collect the market fee from the seller and it is for the seller to pass the burden on the purchaser if he so chooses. It is not the lookout of the Market Committee to see that the seller gets the amount of fee paid by the purchaser. Thus, the appellants cannot shirk the responsibility to pay the market fee to the Market Committee when the transaction falls within the purview of Sub-clause (3) of Section 17(iii)(b) of the Act and then it would be open to them to recover the same from the purchaser-Government.
29. The said decision was again followed by the Supreme Court in Director, Krishi Utpadan Mandi Samiti and Anr. v. Ram Kishan Daya Ram and Co. : (2007)10SCC56 , wherein, the Supreme Court has held as under:
11. Relying on and/or on the basis of the various decisions rendered by this Court M/s. Dikshit submitted before us that a trader should have a licence. A bare perusal of the definition of the said term, in our opinion, does not envisage that all traders must be licensed traders for the purpose of realisation of the market fee. The proviso appended to Clause (3) of Sub-section (iii) of Section 17 of the Act, although was enacted by Act 4 of 1999, the same had been given retrospective effect and retrospective operation. In no uncertain terms it provides that the trader would be bound to pay the market fee and shall not be absolved from such liability on the ground that he has not realised it from the purchaser.
12. In that view of the matter, we are of the opinion that U.P. Forest Corporation could not have escaped its liability from payment of the market fee, only because the appellant as also the State of U.P., lost the writ petition filed by U.P. Forest Corporation before the High Court, which by itself, in our opinion, does not entitle the appellant herein to fall back upon the respondent for the purpose of realisation of market fee.
30. In Krishna Rice and Dal Mills and Anr. v. Union of India and Ors. : 1999(4)AWC2934 , a Division Bench of this Court held that the decision of the Supreme Court in Indian Wood Products (supra) was not approved by the Supreme Court by a three Judges Bench in Mahalaxmi Rice Mills (supra). The Division Bench held as under:
4. In our view the question urged on behalf of the petitioner stands answered authoritatively by the Hon'ble Supreme Court in Krishi Utpadan Mandi Samiti, Barellly (supra), the relevant part of which reads thus:
The precise question, which we have noticed above came up for consideration by a three Judges Bench of this Court in Mahaluxmi Rice Mills and Ors. v. State of U.P. and Ors. : AIR1999SC147 , wherein it was held that the Market Committee was entitled to collect the market fee from the seller and it is for the seller to pass the burden on the purchaser, if he so chooses. The Bench went on to say that the respondents cannot shirk the responsibility to pay the market fee to the Market Committee when the transaction falls within the purview of Sub-clause (3) of Section 17(iii)(b) of the Act and that it would be open to them to receive the same from the purchaser Government.
The judgment of the three Judges Bench (supra), has answered the precise question. We are not persuaded to take a different view, we may, at this stage, also point out that the judgment relied upon by the High Court in the case of India Wood Products Ltd. (supra) was considered by the three Judge Bench in Mahaluxmi Rice Mills case (supra) and not approved.
31. In Prince Traders, Baheri areilly through Partner Ma.nz.oor hmed v. Krishi Utpadan Mandi amiti, Tanakpur, District Nainital, 992 (2) AWC 678, a Division Bench f this Court held as under:
7. It cannot be gainsaid, on the admitted facts of the instant case, that the petitioners are buying agricultural produce from the Corporation and the latter is selling the same to the petitioners both in the ordinary course of business. Since the words 'buying or selling' have been used disjunctively and not conjunctively, both the petitioners and the Corporation must, therefore, answer the description of 'trader' within the meaning of Section 2(y) and that necessarily means that the cases in hand squarely fall under Clause (3) of Section 17(iii)(b) of the Act. Consequently, the petitioners as purchasers are under no obligation to pay market fee to the Mandi Samitis who are operating in the areas where the depots of the Corporation are situate and wherefrom the purchases are being made by the petitioners.
32. In view of the aforesaid, it is difficult for this Court to agree with the submission of Shri B. D. Mandhyan, the learned senior counsel for the respondents to the effect that the decision in Indian Wood Products (supra), is still being followed and has not been overruled. In my opinion, it is clear that the decision in the Indian Wood Products (supra), has been disapproved by the Supreme Court itself in the three Judges decision in the case of Mahalaxmi Rice Mills (supra). Insofar as the decision of the Supreme Court in Krishi Utpadan Mandi Samiti, Dudhl and Anr. v. Rajesh Kumar Jaiswal 2005 (11) SCC 427, Is concerned, this Court is of the opinion that the said decision did not refer to the decision of the three Judge Bench of the Supreme Court in the case of Mahalaxmi Rice Mills (supra), and consequently, the said decision is per incuriam. In any case, a decision of three Judges Bench of the Supreme Court will have precedence over a decision given by a Bench of two Judges of the Supreme Court. The Supreme Court in the case of Central Board of Dawoodi Bohra Community and Anr. v. State of Maharashtra and Anr. : AIR2005SC752 , has held that a judgment of a Bench of a larger strength is binding.
33. The question which now remains to be answered is, whether the transaction falls within the meaning of Section 17(iii)(b) of the Act or not? In this regard, the essential ingredients is that the purchaser and the seller both are required to be traders. The expression 'trader' under Section 2(y) of the Adhiniyam reads as under:
(y) 'Trader' means a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorized agent of one or more principals and includes a person, engaged in processing of agricultural produce.
34. The petitioner has categorically averred in Para 28 of the writ petition that the U.P.F.C. is a trader. This relevant fact has not been denied by the Mandi Samiti in Paragraph 25 of their counter-affidavit. U.P.F.C. has also filed a counter-affidavit and has not disputed this fact in Para 18 of their counter-affidavit. Shri V.K. Singh, the learned senior counsel for the respondents has also admitted that the Corporation is a trader within the meaning contemplated under Section 2(y) of the Adhiniyam. The Supreme Court in Director, Krishi Utpadan Mandi Samiti and Anr. v. Ram Kishan Daya Ram and Co. : (2007)10SCC56 . held that 'indisputably U.P.F.C. was a trader'. Further, this Court finds that the said agreement executed between the U.P.F.C. and the Mandi Samiti indicates that U.P.F.C. was required to take a licence since U.P.F.C. was found to be a trader and was to realise the Mandi fee from the purchasers of the wood. This agreement makes it apparently clear that the U.P.F.C. is a trader.
35. On the other hand, the Mandi Samiti, in Paras 3, 19 and 25 of the counter-affidavit has admitted that the petitioner is a trader. In Writ Petition No. 3290 (MB) of 1991, decided on 11.12.1998, a Division Bench of this Court held that the petitioner is a trader and was engaged in the processing of the agricultural produce. This judgment was affirmed by the Supreme Court in the civil appeal which was disposed of vide judgment dated 19th September, 2006. Further, the Supreme Court in the case of Ram Chandra Kailash Kumar (supra), had raised an issue in Para 9 Sub-clause (13) as under:
(13) Wood cut and brought from the jungle by a manufacturer of paper such as Star Paper Mills, Saharanpur could not be subjected to levy of fee.
36. The answer to the said query was given by the Supreme Court in Para 24 which is quoted hereunder:
24. This item presented some difficulty in solution. A licence is granted to a Paper Mill and to other kinds of dealers for cutting wood from the jungle and bringing it to their factories for manufacture of various articles such as paper etc. It was argued that there was no transaction of sale and purchase involved in the above operation. Moreover the wood is cut from the jungle area which although has been roped in the market area but no service is rendered in that jungle area by any Market Committee. In our opinion in the licence is involved sale of wood and a right to go to that land to cut that wood. The wood may be used by the manufacturer for manufacturing furniture or may be used in the manufacture of paper or any other commodity. That is immaterial. The owner of the Jungle where-from the wood is cut and brought will be a producer within the meaning of the Act and the licensee-producer of that wood would be a purchaser of an agricultural produce within the meaning of Sub-clause (2) of Section 17(iii)(b) of the Act liable to pay market fee. It matters little what use is made of the wood by him. The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held by this Court in Kewal Krishan Puri's case. The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee.
37. The Supreme Court found that the status of the petitioner was that of a purchasing trader and was, therefore, liable to pay the Mandi fee since the owner of the jungle, namely, the State of U.P., was the producer.
38. In the light of the aforesaid, it is clear that the petitioner having purchased wood from the Corporation is a trader. Likewise, the Corporation, having sold the wood to the petitioner is also a trader. Consequently, the transaction would fall under Section 17(iii)(b)(3) of the Adhiniyam. In the light of the judgment of the Supreme Court in the case of Mahalaxmi Rice Mills (supra), and other decisions, it is clear that the liability to pay the Mandi fee was upon the selling trader, namely, the U.P.F.C. Consequently, the imposition of demand raised by the Mandi Samiti from the petitioner who is a purchasing trader was totally unjustified. No such demand could be raised, levied or collected from the petitioner on the transactions in question made by the petitioner. Since no Mandi fee could be charged, the question of imposition of development cess or interest does not arise.
39. The submission of the learned Counsel for the Mandi Samiti that the petitioner was held to be a purchaser in the earlier round of litigation and was required to pay the Mandi fee, which had been affirmed by the Supreme Court and, therefore, the petitioner could not be allowed to raise the same issue, and was consequently barred by the principles of res judicata, is bereft of merit. The submission that the petitioner had earlier purchased the wood from U.P.F.C. is patently erroneous and is not borne out from the record. Para 24 of the Supreme Court judgment in Ram Chandra Kattash Kumar (supra), clearly indicates that the wood was purchased by the petitioner from the owner of the Jungle, i.e., the State Government. The wood was not purchased from U.P.F.C. There is nothing on record to hold that the wood was purchased from U.P.F.C. in the transactions that was before the Supreme Court in Ram Chandra Kailash Kumar's case (supra). The judgment of the Supreme Court further reveals that the State Government was held to be a producer, and therefore, the transaction had fallen under Section 17(iii)(b)(2) of the Adhiniyam.
40. In the present case, the transaction is different. The wood has been purchased from U.P.F.C. who has been held to be a trader and therefore, the transaction now falls in Section 17(iii)(b)(3) of the Adhiniyam.
41. In view of the aforesaid, this Court finds that the impugned orders levying the demand of Mandi fee from the petitioner, who is a purchasing trader, was wholly illegal and without jurisdiction. The impugned orders, consequently, cannot be sustained and, on this ground itself, the writ petition is liable to be allowed. Consequently, it is not necessary for this Court to give a finding on the other issues raised.
For the reasons stated aforesaid, the impugned orders are quashed. The writ petition is allowed. In the circumstances of the case, there shall be no order as to costs.