M/S Mahaveer Trading Company vs. State Of Karnataka

Smt.Shilpa Rani, learned counsel for petitioner submitted, petitioner was doing business in spices outside APMC Market yard from 2018-21, which would not attract market fee under Section 65 of Karnataka Agricultural Produce Marketing (Regulation & Development) Act, 1966. However, a notice was issued to petitioner on 26.12.2023 to produce GST returns from financial years 2018-19 to 2022-23. On petitioners submitting same, respondents alleged that petitioner had transacted in notified agricultural produce attracting levy of Market fee and penalty of Rs.1,18,05,776/-. Petitioner was issued with demand notice dated 10.07.2024 at Annexure-D and final notice dated 19.08.2024 at Annexure-E. HC-KAR NC: 2025:KHC:34110 Same was challenged by petitioner in appeal before respondent no.3, but which was rejected by resolution dated 27.06.2025, leading to issuance of demand notice at Annexure-K dated 02.07.2025. Same was challenged by petitioner before this Court in W.P.no.22578/2025, wherein on 29.07.2025 an interim order was granted as per Annexure-S, directing petitioner to pay market fee of Rs.18,87,87,815/- with interest at 12% p.a. taking note of admitted transactions attracting market fee. In terms thereof, petitioner paid Rs.12,75,375/- with interest at 12% p.a. Despite same, respondent no.3 had issued impugned demand notice at Annexure-J.

It was submitted, learned Single Judge of this Court in WP.no.16327/2002 disposed of on 16.07.2002 and Division Bench of this Court in WA no.30029/2013 disposed of on 13.04.2016 had held respondent could only levy one time penalty as per Section 65(A) of Karnataka Agricultural Produce Marketing (Regulations and Development) Act, 1966 and there was no provision for levy of interest. Therefore, demand of interest by respondent was contrary to law and sought for quashing same. HC-KAR NC: 2025:KHC:34110

Relying on decision of this Court in KM Chandrashekar v. State of Karnataka, reported in ILR 1985 Kar. 2401, it was submitted based only on GST returns, transactions cannot be assumed and demand for market fee cannot be made. It was further submitted, alleging non- compliance with interim order passed by this Court and demand at Annexure-T, respondents were not permitting petitioner's goods to enter shop premises, therefore sought for indulgence.

On other hand, Sri T Swaroop, learned counsel for respondent no.3, at outset submitted, present writ petition was untenable and abuse of process of Court as impugned demand notice at Annexure-T was consequent to interim order passed by this Court in W.P.no.22578/2025 on 29.07.2025. If petitioner was aggrieved by any conditions imposed in interim order, petitioner ought to have questioned same before appropriate forum and could not file separate writ petition. It was submitted, payment made by petitioner at Annexure-S was not in compliance with interim order and therefore demand notice was issued for deficit. Learned counsel further submitted, on receipt of payment at Annexure-S, respondent HC-KAR NC: 2025:KHC:34110 had taken steps for restoration of licence and issuance of Gate passes to petitioner. On above grounds sought for dismissal of petition.

Heard learned counsel for parties and perused writ petition.

Petitioner's grievance in this writ petition is against notice at Annexure-T. Bare perusal thereof would reveal that same is issued in pursuance of interim order dated 29.07.2025 granted by this Court in WP no.22578/2025 filed by petitioner assailing demand notice at Annexure-K dated 02.07.2024 and official memorandum dated 23.07.2025 at Annexure-R and not independent of same.

thus grounds urged by petitioner herein are in nature of challenge to conditions in interim order, for which separate writ petition would not be permissible. Moreover, there is partial compliance. Merely on ground of partial compliance with interim order, petitioner cannot seek for any further interim protection that too in a separate writ petition. HC-KAR NC: 2025:KHC:34110 In view of above, petition is misconceived and apparent abuse of process of Court and is dismissed imposing cost of Rs.10,000/- payable to 'Advocates' Welfare Fund' within four weeks. (RAVI V HOSMANI) JUDGE