| SooperKanoon Citation | sooperkanoon.com/708388 |
| Subject | Direct Taxation |
| Court | Delhi High Court |
| Decided On | Dec-18-2000 |
| Case Number | Income-tax Reference Nos. 37 and 88 to 97 of 1999 |
| Judge | Arijit Pasayat, C.J. and; D.K. Jain, J. |
| Reported in | (2001)165CTR(Del)298; [2001]250ITR369(Delhi) |
| Acts | Delhi Agricultural Market Produce Marketing (Regulation) Act, 1976 - Sections 2, 5, 5(7), (9), (10) and (14), 8, 9, 10, 25, 26, 27, 28, 29, 34, 35, 39 and 65; Income-tax Act, 1961 - Sections 10(20) and 256(1); General Clauses Act, 1897 - Sections 3(31); Delhi Agricultural Produce Marketing (Regulation) General Rules, 1978; Constitution of India - Article 239; Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966; Land Acquisition Act, 1894; Delhi Development Act - Sections 3, 4, 5, 30, 37, 52, 56 and 59; Gujarat Agricultural Produce Markets Act, 1963 |
| Appellant | Commissioner of Income-tax |
| Respondent | Agricultural Marketing Produce Comcommittee |
| Appellant Advocate | Sanjiv Khanna and; Ajay Jha, Advs |
| Respondent Advocate | G.C. Sharma, ; Avnish Ahlawat and ; J. Kathuria, Advs. |
| Cases Referred | Patel Premji Jiva v. State of Gujarat |
Arijit Pasayat, C.J.
1. All these references under Section 256(1) of the Income-tax Act, 1961 (in short 'the Act'), involve identical questions, refer red at the instance of the Revenue, by the Income-tax Appellate Tribunal, Delhi Bench (in short 'the Tribunal'). As self-evident from the questions, the main issue is whether the assessed is a 'local authority' within the meaning of Section 10(20) of the Act and thereby making its income non-taxable under the Act. The questions arc as follows :
'1. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that Agricultural Produce Marketing Comcommittee, Azadpur, Delhi, is a 'local authority' within the meaning of Section 10(20) of the Income-tax Act read with Section 3(31) of the General Clauses Act, 1897 ?
2, Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding the income of Agricultural Produce Marketing Comcommittee, Azadpur, Delhi, is not taxable under the Income-tax Act, 1961 ?'
2. For determination of the questions reference to the factual aspects, as detailed in the statements of cases are, without unnecessary details, as follows :
3. The assessed-comcommittee was formed under the Delhi Agricultural Market Produce Marketing (Regulation) Act, 1976 (in short 'the Marketing Act'). It was entrusted with the duty of providing facilities for marketing of agricultural produce in Azadpur, Subzi Mandi, Delhi, and to do other acts in relation to the superintendence, direction and control of marketsfor regulating marketing of agricultural produce. The Assessing Officer was of the view that it was not a local authority as claimed but was an association of persons. Accordingly, the claim that its income was exempt from tax was turned down. The matter was carried in appeal before the Commissioner of Income-tax (Appeals) (in short 'the CIT(A)'). The said authority confirmed the views of the Assessing Officer. The matter was carried in appeals for various years before the Tribunal. Considering the factual aspects highlighted by the parties, the Tribunal came to hold that the assessed was a local authority and thereforee, its income was exempt from tax. Various clauses of the Act were referred to for coming to such a conclusion. The conclusion was followed in respect of the dispute for several years and the matter was decided in favor of the assessed. On being moved, as aforestated, references have been made.
4. Mr. Sanjiv Khanna, learned counsel for the Revenue, submitted that the tests and attributes of local authorities have been highlighted by the apex court in several judgments. The assessed does not fulfilled the requirements and, thereforee, the conclusions of the Tribunal are untenable. Mr. G. C. Sharma, learned counsel for the assessed, on the other hand, submitted that various courts have considered identical provisions under various Acts dealing with similar subject and there is unanimity on the point that comcommittees like the assessed are local authorities.
5. In order to appreciate the rival submissions, it is necessary to take note of several clauses of the Marketing Act. At this juncture, it is necessary to take note of the expression 'local authority'. The said expression has not been defined under the Act but has been defined under Section 3(31) of the General Clauses Act, 1897 (in short, 'the General Clauses Act') and reads as follows :
''Local authority' shall mean a municipal comcommittee, 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.'
6. The aforesaid definition has been examined by the apex court in various' cases. The first important decision on the point is Union of India v. R.C. Jain : (1981)ILLJ402SC . The tests indicated in the said judgment are as follows :
(i) An authority, in order to be a local authority, must be of like nature and character as a Municipal Comcommittee, District Board or Body of Port Commissioners, possessing, thereforee, many, if not all, of the distinctive attributes and characteristics of a Municipal Comcommittee, District Board or Body of Port Commissioners.
(ii) It should possess one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund.
(iii) It must have a separate legal existence as a corporate body.
(iv) It must not be a mere governmental agency but must be a legally independent entity.
(v) It must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area.
(vi) It must enjoy a certain degree of autonomy, with freedom to decide for itself questions of policy affecting the area administered by it.
(vii) The autonomy may not be complete and the degree of the dependence may vary considerably but an appreciable measure of autonomy must be there.
(viii) It must be entrusted by statute with such governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitant of the locality, like health and education services, water and sewerage, town planning and development roads, markets, transportation, social welfare services, etc.
(ix) Broadly, it may be entrusted with the performance of civic duties and functions which would otherwise be governmental duties and functions.
(x) It must have the power to raise funds for the furtherance of its activities and the fulfillment of its projects by levying taxes, rates, charges or fees which may be in addition to moneys provided by Government or obtained by borrowing or otherwise.
(xi) The control or management of the fund must vest in the authority.
7. In Calcutta Stale Transport Corporation v. CIT : [1996]219ITR515(SC) , tests as indicated in R. C. Jain's case : (1981)ILLJ402SC were applied. Additionally, certain additional tests were indicated. It was held that it should have an element of popular representation in its constitution. Its powers and functions should bear relation to the powers and functions of a municipal comcommittee, district board or body of port commissioners. It should have the indicia of governmental power--the power to affect persons and their rights even where they do not choose to deal with it, the power of compulsion. In that background, it was held that a road transport organisation has no such power. Unless one chooses to deal with it or avail of its services--it cannot affect him or his rights.
8. Somewhat in similar terms were the observations of the apex court in Housing Board of Haryana v. Haryana Housing Board Employees Union : (1996)ILLJ833SC . It was specifically held in addition to what has been stated in R. C. Jain's case : (1981)ILLJ402SC , as under :
`'(i) Its personnel should be elected by the people and there should be an element of people's choice being represented in its Constitution. Itshould not consist only of persons appointed by the State Government on salary basis.
(ii) It should function independently and not directly under the supervision and control of the Government.
(iii) It should hold or possess a local fund.
(iv) The extent of control of the Government, under which the local authority has to function should not be so prominently pervasive that it is almost destructive of its independence. The mere power to levy taxes, rents, etc., or recover them as arrears of land revenue could not be sufficient to clothe the authority with the status of a local authority.'
9. Haryana Housing Board was held not to be a local authority as :
(a) it had no popular representation ;
(b) it did not have a local fund ; and,
(c) it did not function independently.
10. Thereafter came the decision of the apex court in CIT v. U. P. Forest Corporation : [1998]230ITR945(SC) . Again the principles in R. C. Jain's case : (1981)ILLJ402SC were reiterated and by way of illustration certain other parameters were indicated as under :
'(v) 'Other authority' referred to in Section 3(31) of the General Clauses Act must be similar or akin to municipal comcommittee, district board or body of port commissioners.
(vi) Such an authority must have control or management of a municipal or local fund.
(vii) The members of the local authority should be wholly or partly, directly or indirectly, elected by the inhabitants of the area.
(viii) Local authority must have functions and duties which are usually entrusted to the municipal bodies, such as providing, civic amenities to the inhabitants of the locality like health, education, town planning, markets, transportation, etc.
(ix) It must have the power to raise funds by levy of taxes, rates, charges or fees.
(x) The expression 'local fund' occurring in Section 3(31) of the General Clauses Act would mean the fund of a local self-Government. The fund should consist of any funds flowing directly from any taxing power vested in the local authority.'
11. The corporation was not held to be a local authority as several decisive ingredients were absent. They were primarily (a) it did not have functions which are usually entrusted to municipal bodies, e.g., providing civic amenities like health, education and market, etc. ; (b) it did not have power to raise funds by levying taxes, rates, charge fees, etc.; and (c) members were not directly or indirectly elected by inhabitants of the area.
12. The stand of the Revenue is that the autonomy, which is required to be present to constitute a local authority, is absent and over all dominionof power lies with the board or the administrator. The above being the position, one of the major ingredients required to make a body a local authority is absent. Reference in this context is made to Sections 25 and 28 of the Marketing Act. It is stated that the market comcommittee is a toothless body having no control or entrustment over any fund. It does not enjoy the degree of freedom, autonomy and independence normally associated with local self-Government bodies. The board constituted under Section 5 of the Marketing Act has the power to exercise superintendence and control over the market comcommittee. The budget of the board is sanctioned by the administrator. The market comcommittees are constituted under Section 8 of the Marketing Act. Under Section 9, the administrator has the power to nominate various members of the market comcommittee. The chairman of the market comcommittee is nominated by the administrator. Under Section 25, the market comcommittee has to provide facilities for marketing as directed by the board. The power to collect fee is provided under Section 28, but is hedged with a condition that it shall not be less than the amount determined by the administrator as specified in the bye-laws under Section 65 of the Marketing Act. The bye-laws require the sanction of the board which has power under the said Section to amend the bye-laws. Under Section 29, the marketing comcommittee can borrow only after previous sanction of the board though it is mandatory for every market comcommittee to have a secretary whose appointment is made by the board, His services are lent by the board to the comcommittee on such terms and conditions as the board may provide. All the cheques issued by the comcommittee requires the signatures of the secretary. All these are under the Delhi Agricultural Produce Marketing (Regulation) General Rules, 1978 (in short 'the Rules'). Finalisation of budget requires previous sanction of the board for approval. Thus, according to learned counsel for the Revenue, it is established beyond a shadow of doubt that the market comcommittee is not a local authority.
13. The major tests which can be carved out from the decision in R. C. Jain's case : (1981)ILLJ402SC and subsequent decisions are essentially as follows :
(i) The authorities must have separate legal existence as corporate bodies and autonomous status.
(ii) Must function in a defined area and must ordinarily, wholly or partly, directly or indirectly elected by the inhabitants of the area.
(iii) It performs governmental functions such as running a market, providing civic amenities, etc.
(iv) They must have power to raise funds for the furtherance of their activities and the fulfillment of their projects by levying taxes/fees, this may be in addition to money provided by Government. Control and management of the fund must vest with the authority.
14. A few provisions of the Act which throw some light on the controversy need to be noted. As the preamble to the Act shows, it was enacted to provide for better regulation of purchase, sale, storage and processing of agricultural produce and establishment of markets for agricultural produce and for matters connected therewith or incidental thereto. A few definitions contained in Section 2 are relevant and they read as follows :
'2. Definitions-- (1) In this Act, unless the context otherwise requires,--(a) 'administrator' means the administrator of the Union territory of Delhi appointed by the President under article 239 of the Constitution ;... (d) 'Board' means the Delhi Agricultural Marketing Board constituted under Section 5 ; . . .
(h) 'director' means a person appointed as the Director of Agricultural Marketing for the Union Territory of Delhi.
(i) 'local authority' means in relation to an area within the local limits of-
(i) the municipal corporation of Delhi, that Corporation ;
(ii) the New Delhi Municipal Comcommittee, that Comcommittee ;
(iii) the Delhi Cantonment Board, that Board ;'
15. Constitution of the Delhi Marketing Board is provided in Chapter II. Sections 5(7), 5(9), 5(10) and 5(14)(a)(b) read as follows :
'5. (7) The administrator may remove from office any non-official member of the board who has become subject to any of the disqualifications specified in Sub-section (5) or who in his opinion, is remiss in the discharge of his duties or has ceased to represent the interest to represent which he was nominated.
(9) The administrator shall exercise superintendence and control over the board and its officers and may call for such information as he may deem necessary and, in the event of his being satisfied that the board is not functioning properly or is persistently making default in the performance of the duties imposed on it by or under this Act or is abusing its powers or is guilty of corruption or mismanagement, may suspend the board till such time as a new board is constituted and make such arrangements for the exercise of the functions of the board as he may think fit.
(10) The board shall exercise superintendence and control over the Market Comcommittees.
(14)(a) Subject to the rules made under this Act, an estimate of the annual income and expenditure of the board for the ensuing year shall he prepared and passed by the board and submitted every year, not later than the prescribed date to the administrator for his sanction.
(b) The administrator may sanction the budget of the board with such alterations or modifications as he may think fit and the budget so altered or modified by the administrator shall be the budget of the board for the year.'
16. Sections 8 and 9 deal with constitution of the market comcommittee and composition of market comcommittee. Section 10 deals with incorporation of the market comcommittee and reads as follows :
'10. Incorporation of market comcommittees--Every market comcommittee shall be a body corporate by such name as the administrator may, by notification, specify and shall have perpetual succession and a common seal and may, in its corporate name, sue and be sued and shall, subject to such restrictions as are imposed by or under this Act, be competent to contract and to acquire, hold and dispose of property, both movable and immovable, and to do all other things necessary for the purposes for which it is constituted.'
17. Clause (4) deals with powers and duties of the market comcommittee and Section 25 reads as follows :
'25. Powers and duties of market comcommittee.--(1) Subject to the provisions of this Act, it shall be the duty of a market comcommittee-
(i) to implement the provisions of this Act, and of the rules and bye-laws made there under for the market area ;
(ii) to provide such facilities for marketing of agricultural produce therein as the board may, from time to time direct.
(iii) to do such other acts as may be required in relation to the superintendence and control of markets, or for regulating marketing of agricultural produce in any place in the market area and for purposes connected with the matter aforesaid and, for that purpose, may exercise such powers and perform such duties and discharge such functions as may be provided by or under this Act.
(2) Without prejudice to the generality of the foregoing provisions, a market comcommittee may-
(a) regulate the entry of persons and of vehicular traffic into the market ;
(b) supervise the conduct of those who enter the market for transacting business ;
(c) grant, renew, refuse, suspend or cancel licenses ;
(d) provide for settling disputes arising out of any kind of transactions connected with the marketing of agricultural produce and all matter ancillary thereto ;
(e) prosecute persons for violating the provisions of this Act and of the rules and bye laws made there under ;
(f) maintain and manage the market, including the regulation of admissions to, and conditions for use of, the market ;
(g) regulate the marketing of agricultural produce in the market area of the market, and the weighment or delivery of, or payment for, such agricultural produce ; . . .'
18. Section 26 empowers it to appoint sub comcommittees and under Section 27 it is empowered to open collection centres ; Section 28 empowers themarket comcommittee to levy fees. Section 29 empowers it to borrow money required for carrying out purposes for which it is established on the security of any property vested in it and of any fees livable by it under this Act. For the purpose of meeting expenditure on lands, buildings and equipment required for establishing the market, it can obtain loan from the administrator on such terms and conditions as he may determine. The market comcommittee with the previous approval of the Board can obtain loans from other market comcommittees subject to such conditions as may be made. Section 35 deals with execution of contracts. Clause 5 deals with officers and servants of the comcommittees. Section 34 provides for the market comcommittee's power to grant licenses under the said provision. No person shall operate in the market without a license. There is compulsion to obtain a license and similarly a power to suspend a license. Section 39 deals with market fund, its custody and investment. Sub-sections (1) and (2) read as follows :
'(1) All fees and other money received by a market comcommittee under this Act (except the amount of such fee credited to the election fund under Section (12)) all sums realised by way of penalty (otherwise than by way of a fine in a criminal case), all loans raised by the administrator to the comcommittee shall form part of a fund to be called the market fund.
(2) The amount to the credit of a market fund shall be kept or invested in such manner as may be prescribed.'
19. Section 40 deals with the purpose for which the market fund may be expended.
20. It may be noted that in Krishi Utpanna Bazar Samiti v. ITO : [1986]158ITR742(Bom) , the Bombay High Court examined the question whether the market comcommittee constituted under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, to which reference has been made, was a local authority. After examining various clauses of the Act, it was held that the comcommittee was a local authority. Reliance was placed on certain observations in R. C. Jain's case : (1981)ILLJ402SC to hold so. We shall deal with the corresponding provisions of the two Acts, i.e., the Maharashtra Act and the Act to show parity between the provisions. It may be noted that in the Maharashtra Act, there is a provision that it shall, for all practical purposes, be deemed as a local authority. Similar provision is there in the Gujarat Act. Only the Act and the Punjab Act do not contain such a provision.
21. Similarly, in CIT v. Agricultural Market Comcommittee : [1983]143ITR1020(AP) and in Budha Veerinaidu v. State of Andhra Pradesh : [1983]143ITR1021(AP) (Appx.), the Andhra Pradesh High Court considered the provisions in the agricultural market comcommittee functioning under the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. It was held that the market comcommittee was a local authority. Reliance was placedon R. C. Jain's case : (1981)ILLJ402SC for the conclusion. The Tribunal referred to a decision of the Gujarat High Court (unreported) where it was held that a market comcommittee is a local authority, i.e., Special Civil Application No. 4070 of 1985, disposed of by a judgment dated July 1, 1994.
22. At this juncture, it is also necessary to take note of the decision in Patel Premji Jiva v. State of Gujarat : (1971)3SCC815 . Examining the provisions of the Land Acquisition Act, 1894, it was held that the market comcommittee constituted under the Gujarat Agricultural Produce Markets Act, 1963, was a local authority. As the expression 'local authority' is not defined in the Land Acquisition Act, reference was made to the General Clauses Act. We shall also make a comparison of various provisions of the Gujarat Act with the Act to show the parity.
23. As indicated above, it may be fruitful to compare the provisions of the Act with similar acts of Punjab, Gujarat and Maharashtra. The relevant provisions of the Act vis-a-vis those contained in Maharashtra, Gujarat and Punjab Act can be summarised as follows :
The Delhi Agricultural Produce Marketing (Regulation) Act, 1976The Gujarat Agricultural Pro-duce Markets Act. 1963(1)(2)(3)
I. The functions of administrator/ director/the State Government byway of control, etc.(i) Administrator by notifica-tion to declare his intention of regulating marketing of agricultural produce unspecified area (section 3(1)(i) Declaration of intention by notification for regulating purchase and sale of agricultural produce by the director (section 5).(ii) Establishment of markets by the director (section 6)(ii) Declaration of market areas by the director (section 6).(iii) Constitution of market comcommittees by the administrator (section 8)(iii) Director to declare market, market yards and market proper (section 7).(iv) Nomination of persons by the administrator in certain circumstances (section 14)(iv) Director to establish a market comcommittee for every market area (section 9).(v) Removal of members for misconduct by the administrator on the recommendation of the market com-committee (section 15)(v) Acceptance of resignation of members of the market com-committee (section 12).(vi) The market comcommittee to levy and collect such fee not being in excess of or less than an amount deter-mined by the administrator by notification(vi) Removal of any member of the market comcommittee by the director on the recommendation of the market comcommittee (section 13).
(vii) Provision for expending the market fund for pur-poses other than those specified in section 40 with the previous approval of the administrator (sub-section (n) of section 40)(vii) Appointment of secretary of a market comcommittee by the market comcommittee with the approval of the director (section 22).(viii) Supervision of market comcommittee by the administrator (section 48) (viii) Issue of general or special directions by the director providing for performance of duties of common nature where more than one com-committee exists (section 24).(ix) The power of constitution of one or more Tribunals for recovery of dues to the market comcommittee -with the administrator (section 60(4)].(ix) Suspension or cancellation by the director of any license granted or renewed (section 27(4)).-(x) Power of administrator to delegate power (section 61)(x) Director to hold enquiry into the affairs of a market com-committee (section 44).(xi) Power of administrator to make rules (section 63)(xi) Director to fix a period for performance of duties in case of default by the market com-committee (section 45).(xii)The role of the administrator with regard to the bye laws by the market commit-tee (section 65)(xii) The State Government to supersede market commit-tee (section 46).(xiii) Power of administrator to amend the schedule (section 66)(xiii) Director to call for proceedings etc. (section 47).(xiv) Power of administrator to transfer assets etc. in certain cases (section 67)(xiv) State Government to dissolve and constitute a market comcommittee (section 54).(xv) Approval by the administrator for write off of irrecoverable fees, etc., in certain cases (section 68)(xv) State Government to make rules (section 59).(xvi) Director to register or refuse registration of bye laws made by a market com-committee (section 60).(xvii) Director to call upon the market comcommittee to make bye laws, or amend or rescind existing bye laws (section 61).
(xviii) State Government to amend the Schedule (section 62).2. Control by the board(i) Money to be borrowed by a market comcommittee with the previous sanction of the board (section 29)(i) Co-ordinating the function- ing of the market commit- tees (section 39J(i)). (ii) Grant of allowance for regulation of marketing produce by the director who is ex-officio secretary of the board when a market com-committee has not been constituted or has not started functioning (section 33(a))(iii) Suspension or cancellation of license by the director (section 35(2))(iv) Appeal to the board (section 36(a)) payment of contribution to the board by a market comcommittee out of the market fund (section 39(3)(a))(v) Inspection enquiry by the board and submission of statements to the board (section 43)(vi) Duty of officers, servants and members of market comcommittee to furnish information to the board (section 44).(vii) Board to call for proceedings of the market commit-tee and to pass orders thereon (section 46)(viii) Compounding of offence's with the previous approval of the chairman of the board (section 70)3. The measure of popular represen tation in a market comcommittee(i) Composition of market com- committee o (0 Every market comcommittee shall consists of the following :
(a) Six members to be elected by the agriculturists residing in the market area and holding agricultural land in the Union Territory of Delhi with the provision for nomination of 50 per cent, of such members by the administrator in certain cases.(a) Eight agriculturists to be elected by members of man-aging comcommittees of co-operative societies dispensing agricultural credit in the market area(h) Two members to be elected by the traders and commission agents holding licenses to operate as such in the market area.(b) Four members to be elected in the prescribed manner from amongst themselves by the traders holding general licenses.(c) The chairman of the co-operative society engaged in the business of processing or marketing of agricultural produce in the market area with the provision that in the absence of such co-operative society the administrator to nominate a member to represent the persons doing the business of processing or marketing of agricultural produce in the market area(c) Two representatives of the co-operative marketing societies situated in the market comcommittee by election.(d) One member to be elected by the members of other local authority within the local limits of whose jurisdiction the principal market in relation to that market comcommittee is constituted(d) One member to be nominated by other local author ity in the event of vacancy of members, etc., one member to be nominated by the administrator.(c) One member to be elected by the licensed weigh-men and measurers.(e) Two members to be nominated by the State Government.(f) one member of the Metropolitan Council of Delhi to be elected by that council from amongst its members to represent the interests of consumers.(g) In case of there being no election of a market commit-tee the director to nominate members of the respective class qualified to be elected as members of the respective class, with the previous approval of the State Government.
(g) Two members to be nominated by the administrator of whom one shall represent the interests of consumers(1) Nomination by director in the case of where an election does not result in the return of required number of qualified persons to take office.ii) When the market commit-tee is constituted for the first time all the members thereof, including chairman and the vice-chairman to be nominated by the administrator from among the members of the comcommittee(iv) The market comcommittee to elect one of its elected members to be its vice-chairman (section 9)The Delhi Agricultural Produce Marketing (Regulation) Act. 1976The Maharashtra agricultural Produce Markets (regulation) Act, 1963(1)(2)(3)1. The functions of administrator/director/the State Government by way of control, etc.(i) Administrator by notifica-tion to declare his intention of regulating marketing of agricultural produce in specified area (section 3(1))(i) Notification of intention by the State Government to regulate the marketing of agricultural produce in such area as may be specified in the notification (section 3).(ii) Establishment of markets by the director (section 6)(ii) Declaration by the State Government by notification of regulation of marketing of specified agricultural pro-duce and market area (section 4).(iii) Constitution of market comcommittees by the administrator (section B)(iii) Establishment of markets by the director (section 5).(iv) Nomination of persons by the administrator in certain circumstances (section 14)(iv) Regulation of marketing of agricultural produce (section 6). license to be granted hy the director when a market comcommittee has not yet started functioning (section 6).
(v) Removal of members for misconduct by the administrator on the recommendation of the market com-committee (section 15)(v) First meeting of a market comcommittee to be held on a date fixed by the director (section 15).vi) The market comcommittee to levy and collect such fee not being in excess of or less mined by the administrator by notification(vi) Provision for appointment by director of administrator after normal or extended expires (section 15).(viij Provision for expending the market fund for purposes other than those Specified in section 40 with the previous approval of the administrator (sub-section (n) of section 40)the State Government in certain circumstances (section 16).(viii) Supervision of market comcommittee by the administrator (section 48)(viii) Removal of member by the State Government for misconduct (section 17).(ix) The power of constitution for recovery of dues to the market comcommittee with the administrator (section 60(4))(ix) Procedure for election of chairman and vice-chair-man and the role of the director therein (section 22).(x) Power of administrator to delegate power (section 61)(x) Provision for issue of directions by the director to the to time (section 29).(xi) Power of administrator to make rules (section 63)(x) Co-option of any person on the sub-comcommittee with the approval of the director (section 30).(xii)The role of the administrator with regard to the bye laws by the market commit-tee (section 65)(xii) Fees to be levied by the be fixed by the State Government (section 31).(xiii) Power of administrator to amend the schedule (section 66)(xiii) Power to raise money by a market comcommittee with the previous sanction of the director (section 32(1))(xiv) Power of administrator to transfer assets, etc. in certain cases (section 67)(xiv) Inspection and enquiry by the director and submission(section 40).
(xv) Approval by the administrator for write off of irrecoverable fees, etc., in certain cases (section 68)(xv) Furnishing of information to director/State Government (section 41).xvi) Seizure of account books and other documents on the orders of the director (section 42).(xvii) Power of State Government to call for proceedings of market comcommittee to pass orders thereon (section 43).(xviii) Supersession of market comcommittee by State Government (section 45).(xix) State Government to make rules (section 60).(xx) The market comcommittee make bye laws with the pre-vious sanction of the direc turn (section 61).(xxi) Slate Government to amend the schedule (section 62).2. Control by the board(i) Money to be borrowed by a market comcommittee with the previous sanction of the board (section 29)(i) Powers and functions of board (section 34). Section 34(i), (ii), (iv), (v), (vi), (viii). (ix)-(ii) Grant of allowance (or regulation of marketing who is ex-officio secretary of the board when a market comcommittee has not been constituted or has not started functioning- (section 33(a)ii! Inspection of construction works undertaken by market comcommittees (section 34K).(iii) Suspension or cancellation of license by the director (section 35(2))(iii) Payment of contribution to the board by every market comcommittee (section 34M).(iv) Appeal to the board (section 36(a)) payment of contribution to the board by a market comcommittee out of the market fund (section 39(3)(a))(iv) The board to make regulations with the previous approval of the State Government (section 59A).
(v) Inspection enquiry by the board and submission of statements to the board (section 43)(vi) Duty of officers, servants and members of market information to the board (section 44).(vii) Board to call for proceedings of the market commit-tee and to pass orders thereon (section 46)(viii] Compounding of offences with the previous approval board (section 70)3. The measure o popular represen tat ion in a market comcommittee(i) Composition of market comcommittee:a} Every market comcommittee shall consist of following 18 members (19 members in respect of Bombay marketarea)(a) Six members to be elected by the agriculturists residing in the market area and holding agricultural land in the Union Territory of Delhi with the provision for nomination of 50 per cent, of such members by the administrator in certain cases(i) Ten agriculturists residing in the market area seven of whom shall be elected by members of the managing multipurpose co-operative societies(b) Two members to be elected by the traders and commission agents holding licenses to operate as such in the market area.(ii) Three shall be elected by traders and commission agents holding licenses to operate as such in the mar ket area(c) The chairman of the co-operative society engaged in the business of processing or marketing of agricultural produce in the market area with the provision that in the absence of such co-operative society the administrator to nominate a member to represent the persons doing the business of pro-(iii) One shall be the chairman of the co-operative society doing business of processing1 or marketing of agricultural produce.
processing or marketing of agricultural produce in the market area(d) One member to be elected by the members of other local authority within the local limits of whose jurisdiction the principal market in relation to that market comcommittee is consitituted(iv) One shall be chairman of the panchayat samiti Within whose jurisdiction the marketing area is situated.(e) One member to be elected by the licensed weigh-men and measurers.(v) One shall be the president or sarpanch of the local authority within whose jurisdiction the principal market is situated.(f) One member of the Metropolitan Council of Delhi to be elected by that council from amongst its members to represent the interests of consumers(vi) The Deputy Registrar of Co-operative Societies-with no right to vote.(g) Two members to be nominated by the administrator of whom one shall represent the interests of con-sumers(vii) The Assistant Cotton Extension Officer-with no right to vote.(ii) When the market commit-tee is constituted for thethereof, including chairman and the vice-chairman to be nominated by the administrator from among the members of the comcommittee(b) When a market comcommittee is constituted for the first time all the members thereof and the chairman and vice-chair-man shall be nominated by the State Government.(iii) The chairman of a market comcommittee to be nominated by the administrator from among the members of the comcommittee(c) On the failure to elect members within the stipulated period by the co-operative society, panchayat samiti local authority etc. the director shall appoint on behalf of such persons the required number of persons qualified to be elected (section 13).elect one of its elected members to be its vice chairman (section 9)
The Delhi Agricultural Produce Marketing (Regulation) Act, 1976The Punjab Agricultural Pro-duce Marketing Act, 1961(1)(2)(3)1. The functions of administrator/ director/the State Government by way of control, etc.(i) Administrator by notifica-tion to declare his intention of regulating marketing of agricultural produce in specified area (section 3(1))(i) Notification of intention of chase, sale, storage and produce in specified area, by the State Government (section 5).(ii) Establishment of markets by the director (section 6)(ii) Declaration of notified market area by the State Government (section 6).(iii) Constitution of market comcommittees by the administrator (section 8)(iii) Declaration of market yards by the State Government (section 7).the administrator in certain circumstances (section 14)(iv) Market comcommittees to be established by the State Government (section 11).(v) Removal of members for misconduct by the administrator on the recommendation of the market comcommittee (section 15)(v) Secretary of the board shall be the authority for granting licenses required under section G (section 9).(vi) The market comcommittee to levy and collect such fee not being in excess of or less than an amount deter-mined by the administrator by notification(vi) Removal of members of a market comcommittee by the State Government (section 15).(vii) Provision for Expending poses other than those specified in section 40 with the previous approval of the administrator (subsection (n) of section 40)(vii) Filling of vacancies by the State Government (section 17).(viii) Supervision of market comcommittee by the administrator (section 48)(viii) Fees to be levied by the market comcommittee subject to such rules as may be made by the State Government (section 23).(ix) The power of constitution for recovery of dues to the market comcommittee with the administrator (section 60(4))(ix) Surplus of market commit-tee fund to be invested in such manner as may be prescribed (section 27).
(x) Power of administrator to delegate power (section 61) (x) Supersession of market com-committee by the State Government (section 35).(xi) Power of administrator to make rules (section 63)(xi) Emergency powers to be exercised by the State Government (section 36)(xii) The role of the administrator with regard to the bye laws by the market comcommittee (section 65)(xii) Power to make rules lies with the State Government (section 43).(xiii) Power of administrator to amend the schedule (section 66)(xiv) Power of administrator to transfer assets etc. in certain cases (section 67)(xv)Approval by the administrator for write off of irrecoverable fees. etc. in certain cases (section 68)2. Control by the board(i) Money to be borrowed by a market comcommittee with the previous sanction of the board (section 29)(i) Removal of any office-bearer by a majority of two-thirds of the total members of the comcommittee subject to confirmation by the board (section 16(2))(ii) Grant of allowance for regulation of marketing pro-duce by the director who is ex-officio secretary of the board when a market com-committee has not been constituted or has not started functioning (section 33(a))(ii) Powers of the comcommittee if delegated to one member by the market comcommittee, the resolution shall operate only after its approval by the Board (section 19. proviso)(iii) Suspension or cancellation of license by the director (section 35(2))(iii) Every comcommittee shall have its secretary who is appointed by the board as servant and is lent to the to employ other officers and approval of the secretary of the board (section 27(20))(iv) Appeal to the board (section 36(a)) payment of contribution to the board by a market comcommittee out of the market fund (section 39(3)(a))(iv) Every market comcommittee to pay its contribution to the board out of the market com-committee fund (section 27(2))
(v) Inspection enquiry by the board and submission of statements to the board (section 43)(v) If market comcommittee fund to be expended for any purpose other than those enumerated in section 28, the previous sanction of the board to be obtained (section 28(xii))vi) Duty of officers, servants and members of market comcommittee to furnish information to the board (section 44).(vi) Power to call for inform-attendance to suspend action etc. of comcommittee with the chairman or the secretary of the board (section 33A)(vii) Board to call for proceedings of the market commit-tee and to pass orders thereon (section 46)(vii) Power to order production of accounts and power of entry inspection and seizure with the board (section 33A)(viii) Compounding of offences with the previous approval of the chairman of the board (section 70)(viii) In case the comcommittee fails to make bye-laws within specified period, bye laws to be made by the board (section 44(2)).(ix) Amendment, alteration, rescission of an existing bye law or adoption of a new bye law at the instance of the board and in the event of comcommittee's failure to do the needful, the Board to register the amendment alteration etc. (section 44(3))(x) Offences to be compounded by the market comcommittee with the previous approval and (section 46)3. The measure of popular representation comcommittee(i) Composition of market comcommittee:(1) A market comcommittee shall consist of 9 or 16 members as the State Government may in each case determine our of whom one may be appointed by the State Government (section 12)(a) Six members to be elected by the agriculturists residing in the market area and holding agricultural land inRemaining members to be elected in the following man-ner
the Union Territory of Delhi with the provision for nomination of 50 per cent, of such members by the administrator in certain cases. (b)Two members to be elected by the traders and commission agents holding licenses to operate as such in the market area.(a) Where the comcommittee is to consist of nine members : (i) five members to be elected from producers of the notified area by the panchayat and sarpanches of the gram panchayats situated within the notified area : (ii) towing licenses under section 10 in the market area and (iii) one member to be elected from persons holding license under section 13.(c) The chairman of the co-operative society engaged in the business of processing on marketing of agricultural produce in the market area with the provision that in the absence of such co-operative society the admi-nistrator to nominate a member to represent the persons doing the business of processing of marketing of agricultural produce in the market area(b) Where the comcommittee consists of 16 members : (i) nine members from the producers ; (ii) four members from licensees under section 10.(d) One member to be elected by the members of other local authority within the local limits of whose jurisdiction the principal market in relation to that market(iii) Two members from licenses under section 13.(e) One member to be elected by the licensed weigh-men and measurers.2. During the period of supersession of the commit-tee all powers, duties of the and performed as such by the Gazetted officers as the Government may appoint.
(f) One member of the Metropolitan Council of Delhi to be elected by that council to represent the interest of consumers3. Constitution of comcommittees by nomination for a period by the State Government (section 12B).(g) Two members to be nominated by the administrator of whom one shall represent the interests of con sumers.(ii) When the market comcommittee is constituted for the first time all the members thereof, including chairman and the vice-chairman to be nominated by the-administrator(iii) The chairman of a market by the administrator from among the members of the comcommittee.
24. Under Section 25 of the Act, a local body, constituted under it, is entrusted with certain duties, which are as follows :
(a) To implement the provisions of the said Act and of the rules and bye-laws made there under for the market area ;
(b) To provide such facilities for marketing of agricultural produce therein as the Delhi Agricultural Marketing Board constituted under Section 5 of that Act may, from time to time direct ;
(c) To do such other acts in relation to the superintendence, direction and control of markets, or for regulating marketing of agricultural produce, in any place in the market area and for purposes connected therewith as may be required and for that purpose it may exercise such powers and perform such duties and discharge such functions as are provided by or under that Act.
25. Additionally, the market comcommittee may regulate entries of persons and vehicular traffic into the market, supervise the conduct of persons who enter the market for transacting business, grant, renew, refuse, suspend or cancel licenses, prosecute persons for violating the provisions of that Act and the rules and bye-laws made there under, arrange for collection ofsuch agricultural produce in the market area in which all the trade is to be carried on exclusively by the Government by or under law for the time being in force or arrange for the collection of such other agricultural produce in the market area as the administrator may notify in the official gazette. It is also empowered to take all possible steps to prevent adulteration and to promote grading and standardisation of such agricultural produce as may be prescribed by rules. It is further empowered to enforce the provisions of the said Act. The said comcommittee is further empowered under Section 28 of the said Act to levy and collect market fees, as may be determined by the administrator from every purchaser of agricultural produce sold in the market area.
26. A conspectus of various provisions of the Delhi Development Act, which formed the foundation of R. C. Jain's case : (1981)ILLJ402SC will provide an answer to the question of parity between that case and the issue under examination in this case. A synopsis of the provisions is as follows :
The Delhi Development Act
(i) 'Rule' means a rule made under this Act by the Central Government (Section2(1));
(ii) The Central Government shall appoint the DDA which shall consist inter alias of the following:
A chairman who shall be the administrator of the Union Territory of Delhi. A vice-chairman ; A Finance and Accounts Member ; An engineer--all to be appointed by the Central Government (Section 3) ; Two representatives of Municipal Corporation of Delhi ; Three representatives of Metropolitan Council for the Delhi Government, etc.;
(iii) The Central Government may appoint two suitable persons, as secretary andchief accounts officer of the authority (Section 4);
(iv) Advisory council of the authority shall consist inter alias of the chairman of the authority and representatives having knowledge of town planning and architect to be nominated by the Central Government representative of the Health Services of the Delhi Administration to be appointed by the Central Government (Section 5);
(v) The authority shall have its own fund to which shall be credited all monies received from the Central Government of all monies borrowed by the authority and all fees and charges received by the authority under the Act (Section 23);
(vi) The authority shall prepare a budget in respect of every financial year and shall forward the same to the Central Government. It shall also prepare for each year of its activities and submit the report to the Central Government (Section 24 and Section 26);
(vii) If any development in an area other than the development area has been commenced in contravention of the provisions of the Act, the administrator may direct demolishing of such development and appeal against such order of the administrator will lie to the Central Government whereupon the decision of the Chairman of the Central Government shall be final (Section 3(1));
(viii) The authorities vested with the power of levy of betterment charges (Section 37):
(ix) The administrator of the Union Territory of Delhi is authorised to delegate his power to any other officer (Section 52); (x) The Central Government in consultation with the authority is empowered tomake rules (o carry out the purpose of the Act (Section 56);
(xi) The Central Government has the power to dissolve the authority when it is satisfied that it has fulfilled the purpose (Section 59).
27. On examination of various provisions referred to above the inevitable conclusion is that the assesses is a body corporate having separate autonomous status. Its operational area is defined, its office bearers are elected and are free to take their own decision. The comcommittee runs a market, providing civic amenities in the market and performs judicial, legislative and executive as well as fiscal functions. It can raise funds, control and manage funds, thereforee, the ratio laid down in R. C. Jain's case : (1981)ILLJ402SC us chiselled and honed by oilier decisions referred to above squarely applies to the facts of the case. As the indicated criteria are fulfilled, we have no hesitation in holding that the assessed is a local authority. The mere absence of a provision on the lines of the Maharashtra and Gujarat Acts would not be the decisive criteria in view of the analysis made supra. That being the position, the Tribunal's conclusions are irreversible. The question referred is answered in the affirmative infavor of the assessed and against the Revenue.