ORDER
P. Venkatarama Reddi, J.
1. In this batch of writ petitions, the petitionerswhich are Agricultural Market Committees constituted under the provisions of the A.P. (Agricultural Produce and Live-stock) Markets Act, 1966, hereinafter referred to as the 'Markets Act' have questioned the demand notices issued either by the Mandal Revenue Officer or the Mandal Revenue Inspector under the provisions of the A.P. Non-Agricultural Land Assessment Act, 1963, herein after referred to as 'NALA Act'. The tax demanded pertains to several years/faslies. In almost all the cases, notices demanding the tax were straight-away issued without issuing show cause notice or without holding any enquiry as contemplated by the A.P. Non-Agricultural Land Assessment Rules. In some of the cases, the notices issued demanding the tax arc so bald that even the extent of land on which the assessment is made is not furnished. The petitioners made representations either to the Mandal Revenue Officer concerned or in some cases to the Revenue Divisional Officer, but there was no favourable response. Hence, the present writ petitions.
2. Apart from pointing out the procedural infirmities, the foremost contention raised by the petitioners is that the land held by the Market Committees is exempt from tax by virtue of Section 12 of the NALA Act. Section 12 insofar as it is relevant is extracted below:
'Section 12: Act not to apply to certain lands :--Nothing in this Act shall apply to-
(a) .....
(b) land owned by the State Government or the Central Government other than
(i) the land leased out for any commercial, industrial or other non-agricultural purpose; or
(ii) the land vested in a local authority and used for any commercial, industrial or other non-agricultural purpose deriving income therefrom;
(c) and owned by a local authority and used for any communal purpose so long as no income is derived in respect thereof;'
It is contended that the land which is at the disposal of the Market Committees stands excluded either under Clause (ii) of Section 12(b) or Clause (c) of Section 12.
3. The learned Government Pleader while not seriously disputing the legal position that Agricultural Market Committee is a 'local authority', has raised the contention that the Market Committees derive income from the land held by them and therefore, they are not within the scope of exemption envisaged by Section 12.
4. Thus, primarily the question is whether the Market Committee qualifies for exemption under one of the said two provisions. As far as sub-clause (ii) of clause (b) of Section 12 is concerned, there is some ambiguity. It is possible to contend that basically the land contemplated by the said provision should be the land owned by the State Government or the Central Government and when such land is kept at the disposal of the local authority, then, subject to the fulfilment of other conditions, the exemption will apply. In other words, it could possibly be contended that the private lands purchased by the Market Committee is made available to it by resorting to acquisition under the Land Acquisition Act does not come under the scope of clause (b). Be that as it may, there is no reason why clause (c) should not come into play provided the other requirements are satisfied. It can very well be said that the user of land occupied by the Office of the Market Committee and the market yards which bring agriculturists and the traders together for conducting the sales and purchase ofagricultural produce without the intervention of middlemen is for a communal purpose. The word 'communal purpose' is sufficiently elastic and wide enough to cover the activities of a Market Committee which undoubtedly benefits a substantial section of the public, namely, the growers or ryots and even the trading community. The preamble of the 'Markets Act' says that it is meant to regulate purchase and sale of agricultural produce, livestock and products of livestock and the establishment of markets in connection therewith. The Market Committee renders various services as provided for by the Act, Rules and the Bye-laws. Thus, promotion of a communal purpose is writ large on the face of the provisions of the Markets Act and the subordinate Legislation framed thereunder.
5. The next question whether it is a 'local authority' need not detain us much in view of the undisputed position. However, we would only reinforce the conclusion that the Market Committee is a 'local authority' by making reference to some decided cases. 'Local authority' is not defined under the Act. The definition under Section 3 (31) of the Andhra Pradesh General Clauses Act should, therefore, determine the connotation of the expression 'local authority'. Section 3(31) of the General Clauses Act defines 'local authority' as follows:
'Local Authority' shall mean a Municipal Committee; District Board, Body of Port Commissioners or other Authority legally entitled to, or entrusted by the Government with the control or management of a Municipal or local fund.'
It is well settled that the principle of 'ejusdem generis' can be resorted to in understanding the expression 'other authority' mentioned in Section 3(31). (vide the decision of Supreme Court in Commissioner of Income Tax, Lucknow v.U.P.Forest Corporation, : [1998]230ITR945(SC) . There are two direct Division Bench decisions of this Court in which it was held that the Market Committee is a local authority within the meaning of Section 3(31) of the General Clauses Act. The first judgment is reported in Budha Veerinaidu v. State of A.P. : [1983]143ITR1021(AP) . There the question arose whether the Market Committee is a local authority within the meaning of Section 6 of the Land Acquisition Act. The learned Judges relied on the following observations of the Supreme Court in Patel Preniji Jiva v. State of Gujarat 1970 (2) SCWR 460 :
'A local authority being by virtue of Section 3(26) of the Bombay General Clauses Act, 1904, a body which is entrusted by Government with control or management, inter alia, of a local fund, there is no scope for the argument that the market committee constituted under the Gujarat Agricultural Market Act, 1963, is not a local authority within the meaning of Section 6 of the Land Acquisition Act.'
6. In the light of the above observations made by the Supreme Court, the Division Bench came to the conclusion that the Market Committee having been entrusted by the Government with the control and management of 'local fund', it would be a local authority within the meaning of Clause (31) of Section 3 of the General Clauses Act. No doubt, the learned Judges held that the principle of 'ejusdem generis' is not applicable because there is no genus to be found in the definition under Clause (31) of Section 3. But, this part of the reasoning cannot be accepted in view of the later decisions of Supreme Court. But, the ultimate conclusion reached by the learned Judges is not thereby affected. The decision in Budha Veerinaidu (supra) was followed in the case of CIT v.Agricultural Market Committee, Cuddapah (supra), wherein it was decided that a market committee is a local authority within the meaning of Section 10(20) of the Income Tax Act, 1961. It may be mentioned that the definition in the Central General Clauses Act is almost the same.
7. In the case of Union of India v.R.C. Jain, : (1981)ILLJ402SC , the SupremeCourt laid down the tests to determinewhether a statutory or public body is alocal authority. It was held therein that theDelhi Development Authority is a localauthority. Chinnapa Reddy, J., speaking forthe Supreme Court succinctly enunciatedthe tests in the following words:
'It was held therein that the fact that budget and annual returns have to be submitted to the Central Government and that the DDA was bound to carry out the directions given by the Central Government, does not divest it of its autonomy. The powers of the Central Government were described as usual supervisory powers.'
8. In Commissioner of Income Tax v, U.P. Forest Corporation, (supra), Kirpal, J., speaking for the Supreme Court, after referring to the decision in R.C. Jain's case (supra) observed thus:
'To put it differently 'other authority' referred to in Section 3(31) must be similar or akin to Municipal Committee, district board or body of Port Commissioners. In R.C. Jain's case, atleast five attributes or characteristics of an authority falling under Section 3(31) of the General Clauses Act have been mentioned. Atleast three of the five attributes mentioned in the passage quoted above from R.C. Jain's case are absent here.'
It was then observed:
'In the case of respondent Corporation U.P. Forest Corporation, the Act doesnot enable it to levy any tax, cess or fee. It is the income from the sale of the forest produce which goes to augment its funds. It has no power under the Act of compulsory exaction such as taxes, fees, rates or charges. Like any commercial organisation it makes profit from sale of forest produce and it has been given the power to raise loans. Whereas municipal or local funds are required to be spent for providing civic amenities there is no such obligation on the respondent to do so. Merely because Section 17 of the U.P. Forest Corporation Act states that the fund of the Corporation 'shall be a local fund' would not make it a local fund as contemplated by Section 3(31) of the General Clauses Act.'
9. Applying the tests laid down in the case of Union of India v. R.C. Jain (supra) and V.P. Forest Corpn. case (supra), independent of the decisions of this Court, we have no doubt in mind that the Market Committee conforms to the definition of local authority. The various provisions and features of the Markets Act unerringly indicate that it is a statutory body confided with quasi-governmental functions in the interests of public having substantial autonomy in administering the provisions of the Act subject of course to certain amount of control by the Government. It is also administering and defraying the expenses from the fund known as 'Market Committee Fund'. It has power to levy fees. It frames the budget and spends it for the purposes laid down by the Act. The Markets Act itself lays down the powers, duties and functions of Market Committee. The provision of various services and amenities in the market yards etc., for the benefit of growers, traders and workers is undertaken by the Market Committee. True, the Committee does not consist of elected members but that by itself does not detractfrom the character of being a local authority. The Market Committee consists of members nominated from various sections such as growers, traders etc., and it is truly a representative body. There cannot be an escape from the conclusion that the tests laid down by the Supreme Court in the aforementioned decisions arc substantially fulfilled and the Market Committee can legitimately be treated as a 'local authority'.
10. Thus, having held that the Market Committee is a local authority and its land is broadly put to use for a communal purpose which the statute itself spells out, the remaining and perhaps the only controversial question is whether any income is derived in respect of the land owned by the Market Committee. While the Counsel for the Market Committees submit that no income is being derived even in respect of the godowns constructed, the learned Special Government Pleader vehemently submits that the Market Committees are in fact deriving income from the land by constructing godowns'and shops thereon. The learned Government Pleader is right in saying that to the extent that any part of the land is being so used as to derive income therefrom in any form, that land is assessable to tax under the NALA Act at the appropriate rate. But, whether the income is being actually derived from the land put to use, is a debatable and disputed question which involves ascertainment of facts. Whether any income is being derived from any part of the land or the constructions made thereon and if so what is the extent of such land has to be determined on the basis of the factual data to be furnished by the petitioner-Market Committees, of course, the data or details furnished by the Market Committees are subject to scrutiny and verification either on the basis of personal inspection or on the basis of record. But, an enquiry is indispensable in the process ofdetermination of the question whether the whole or any part of the land is exempt from tax under Section 12 of the NALA Act. If no income is derived from the whole or any part of the land, it is made clear that tax under NALA Act shall not 'be imposed and collected on that land. To this extent, we clarify and leave it to the concerned authorities tinder the Act to ascertain the details and to take a final decision in the matter in the light of the observations made supra.
11. As already noticed, the assessments were made and demands raised in a very slip-shod manner and in violation of the mandatory procedural requirements. In the normal course, we would have directed the primary assessing authority namely, the Revenue Inspector to redo the assessment after giving notice, but instead of prolonging the litigation, it is desirable that the Mandal Revenue Officer who is already seized of the appeals in most of the cases, to decide the crucial issue in the light of the observations made herein. For this purpose, we direct the petitioners-Market Committees to submit the relevant details about the utilisation of the land and the income, if any, derived within a period of three months together with a petition which shall be treated as appeal and the same shall be disposed of by the Mandal Revenue Officer concerned after giving opportunity of hearing to the petitioners. Till the final decision is taken, the impugned demands shall not be enforced.
12. Accordingly the writ petitions are disposed of. We make no order as to costs.