National Pure Food Suppliers, Jabalpur and ors. Vs. State of M.P. and ors. - Court Judgment

Excerpt:
- u.l. bhat, c.j. 1. petitioners, who are owners of roller flour mills, carry on separate business of manufacture and sale of wheat flour, aata, maida and rawa. they obtain supply of wheat from the food corporation of india, third respondent. third respondent pays mandi fees on the wheat sold by it to customers under section 19 of the m. p. krishi upaj mandi adhiniyam, 1972 and collects the same from the petitioners. petitioners contend that mandi fee is not leviable in regard to these transactions and in any event, the liability is on the petitioners as buyers and not on the third respondent as seller. it is also pointed out that at the relevant time thepetitioners could not purchase wheat from the open market and were required compulsorily to take supplies from the third respondent. the supreme court has held that even such compulsory sales are 'sales' for the purpose of the sales tax law. (see 14 stc 31 and 14 stc 316). 2. section 19(1) of the m. p. krishi upaj mandi adhiniyam, 1972 deals with power to levy market fee. every market committee shall levy market fees on notified agricultural produce brought fqr sale or bought or sold in the market area at such rates as may be fixed by the state government from time to time. sub-section (2) states that the market fees shall be payable by the buyer of the notified agricultural produce and shall not be deducted from the price payable to the seller. the second proviso to sub-section (2) of section 19 reads thus: 'provided further that in case of commercial transaction between traders in the market area, the market fees shall be collected and paid by the seller.' there is no dispute that the transaction between the petitioners and the third respondent are commercial transactions. but the contention is that since the petitioners only buy wheat but do not sell or process the wheat, they are not traders and the transactions are not between third respondent and traders. 3. section 2(p) of the 1972 act as it stood at the relevant time read as under: '(p) 'trader' means a person who in his normal course of business buys or sells any notified agricultural produce, and includes a person engaged in processing of agricultural produce.' petitioners buy wheat which is a notified agricultural produce and are therefore, traders. even as persons engaged in processing agricultural produce, they are traders. therefore, the transactions involved in this case are transactions between the traders and these transactions take place in the market area, therefore, the seller has to pay market fee. the seller can undoubtedly collect thesame from the buyer, for under sub-section (2) of section 19, primary liability is on the buyer and he is prevented from deducting the same from the price payable to the seller. 4. there is no merit in the petition. the same is accordingly dismissed with cost of rs.250/-. the security deposit will be ad-justed towards costs.