Imarti Lakdi Vyapari Sansthan,Jodhpur vs. State Of Rajasthan And Anr.

Held

The Court held that the levy under Section 17 of the Act of 1961 is a 'fee', not a 'cess'. It is settled law that states can levy market fees under such statutes, and the Supreme Court in Sreenivasa General Traders & Ors. vs. State of Andhra Pradesh & Ors. held that market fee is exigible on agricultural produce brought into the notified area, irrespective of whether the dealer operates within the market yard or avails its services. The Court found that timber is specifically enumerated as an agricultural produce at Serial No. 9 of the Schedule appended to the Act of 1961, thus making it liable for the market fee. Regarding the GST argument, the Court observed that the Constitution (One Hundred and First Amendment) Act, 2016, aimed to subsume various indirect taxes, cesses, and surcharges. However, Section 174 of the CGST Act and RGST Act only abolished levies explicitly listed therein. The market fee under the Act of 1961 is leviable under a separate enactment based on the State's legislative power under Entry 66 of List-II of the VIIth Schedule and is not mentioned in the repeal and saving provisions. Therefore, the levy continues to be valid. The writ petition was dismissed.

Facts

The petitioner, Imarti Lakdi Vyapari Sansthan Jodhpur, a society representing timber traders, filed a writ petition challenging the Rajasthan Agriculture Produce Marketing Act, 1961 (the 'Act of 1961'). The petitioner's members operate shops and godowns outside the Mandi yard and do not utilize facilities provided by the Agriculture Market Committee. They argued that the cess levied on the purchase and sale of timber is illegal as timber is not an agricultural produce and that the levy cannot continue after the introduction of Goods and Services Tax (GST). The petitioner also contended that the levy is arbitrary and violates their constitutional rights to trade and business.

Key Issues

1. Whether the levy under Section 17 of the Rajasthan Agriculture Produce Marketing Act, 1961, is a 'cess' or a 'fee' and if it is legally exigible from the members of the petitioner society, particularly those trading timber outside the Mandi yard. 2. Whether timber ('Imarti Lakadi') is considered an agricultural produce under the Act of 1961, making it liable for the market fee. 3. Whether the levy of market fee under the Act of 1961 can continue after the introduction of the Goods and Services Tax (GST) regime. Petitioner's arguments: The petitioner contended that the levy is an illegal 'cess' and not a 'fee'. They argued that timber is not an agricultural produce and that the levy is arbitrary and violates Articles 14 and 19(1)(g) of the Constitution, as their members do not use Mandi facilities. They also asserted that the introduction of GST should subsume all such levies. Revenue's arguments: The judgment does not record specific arguments from the respondents. However, the Court's findings indicate that the respondents would have relied on the Act of 1961 and relevant Supreme Court judgments.