AGRICULTURAL MARKET COMMITIEE A.P. ETC.versusM/S M.K. EXPORTS, A.P. ETC. ETC.

                         (2011] 5 S.C.R. 990


A       AGRICULTURAL MARKET COMMITIEE A.P. ETC.
                                   v.
               M/S M.K. EXPORTS, A.P. ETC. ETC.
          (Criminal Appeal Nos. 1048-1049 etc. of 2011)
                           APRIL 29, 2011 ·
B
      [R.M. LODHA AND SURINDER SINGH NIJJAR, JJ.)

         A.P. Agricultural (Produce and Livestock) Markets Act,
    1966- ss. 12, 12-8(5) and 23- Non-payment of market fees
C   re-assessed u/s. 12-8(5) by traders - Initiation of criminal
    proceedings - Petition u/s. 482 Cr. P. C. -Criminal
    proceedings quashed by the High Court holding that the non-
    payment of market fees re-assessed u/s. 12-8(5) is not
    punishable u/s. 23 - On appeal, held: As per the Scheme of
D   the Act, the assessment of market fee u/s. 12-8(1) or re-
    assessment uls. 12-8(5) results in levy of fee uls. 12(1) - Non-
    payment of the market fees assessed in the original
    proceedings u/s. 12-8(1) or in the proceedings for re-
    assessment uls 12-8(5) would mean default in payment of fee
E   levied under sub-section (1) of s. 12 - s. 23 provides for
    penalty to be imposed against a person who contravenes the
    provisions of s. 7 or who fails to pay fees levied under sub-
    section (1) of s.12 - Thus, the High Court erred in quashing
    the criminal proceedings against the traders - Order passed
F   by the High Court set aside - Code of Criminal Procedure,
    1973 - s. 482.

      Criminal proceedings were initiated against the
  respondents-traders for non-payment of market fee
  assessed under Section 12-8(5) of the A.P. Agricultural
G (Produce and Livestock) Markets Act, 1966. The
  respondents filed petitions under Section 482 of the
  Code of Criminal Procedure, 1973 seeking quashing of
  the criminal proceedings. The Single Judge of the High

H                                990
 AGRICULTURAL MARKET COMMITTEE A.P. ETC. v.            991
         M.K. EXPORTS, A.P. ETC. ETC.

 Court allowed the petitions holding that non-payment of      A
 market fees re-assessed under Section 12-8(5) is not
 punishable u/s. 23 of the Act. Therefore, the appellants
 filed the instant appeals.

     Allowing the appeals, the Court                          B
     HELD: 1.1 Section 12-A of the A.P. Agricultural
 (Produce and Livestock Markets Act, 1966 is self-
 contained. Section 23 of the Act provides for penalty to
 be imposed against a person who contravenes the
 provisions of Section 7 or who fails to pay fees levied      C
 under sub-section (1) of Section 12. [Paras 17, 18 and 20]
 [999-C-D; 1000-C]
        1.2 The fee is levied by the market committee on sale
  or purchase of any notified agricultural produce or o
  livestock or products of livestock in the notified market
. area by virtue of Section 12(1) of the Act. For levy of fee,
  it is necessary that amount of market fees payable by the
  trader is assessed by the assessing authority. The·
  procedure for assessment is provided in Section 12-8. E
  The assessment of market fees is done under sub-
  section (1). Sub-section (5) of that Section, however,
  provides that if, for any reason, the whole or any part of
  the turnover of the trader has escaped assessment to
  market fees or has been under-assessed or assessed at
  a rate lower than the correct rate, the assessing authority F
  may, at any time within a period of three years from the
  date on which the assessment order was served on the
  trader, inter alia, assess the correct amount of market fees
  payable on the turnover that has been under-assessed
  after issuing notice to the trader and after making such G
  inquiry as it may consider necessary. The assessing
  authority, under Section 12-8(5) may also direct the trader
  to pay penalty, equal to two times the market fees,. in
  addition to the market fees so assessed. As per the
  Scheme of the Act, it is the assessment of market fee H
    992      SUPREME COURT REPORTS              [2011] 5 S.C.R.


A under Section 12-8(1) or re-assessment under Section
  12-8(5) which ultimately results in levy of fee under
  Section 12(1). The reasoning of the High Court is strange
  when it says that further assessment of market fees
  made under Section 12-8(5) is not covered under Section
B 12(1 ). The High Court overlooked the explanation
  appended to Section 12-A which clearly provides that for
  the purposes of Sections 12-A to 12-G, 'market fees' shall
  mean fees levied under sub-section (1) of Section 12.
  Section 12-8 and the explanation appended to Section
c 12-A taken together would leave no manner of doubt that
  assessment of market fees - whether it is done under
  Section 12-8(1) or 12-8(5) - is covered by the expression
  'levy fees' in Section 12(1 ). In other words, whether
  assessment of market fees payable by a trader is made
  under Section 12-8(1) or Section 12-8(5), the market fees
0
  so assessed means the fees levied under sub-section (1)
  of Section 12. The provisions being clear, non-payment
  of the market fees assessed in the original proceedings
  under Section 12-8(1) or in the proceedings for re-
  assessment under Section 12-8(5) would mean default in
E payment of fee levied under sub-section (1) of Section 12
  of the Act. [Para 21] [1000-0-H; 1001-A-D]

       1.3 The High Court was clearly in error in quashing
  the criminal proceedings against the respondents. The
F judgment of the High Court is set aside. {Paras 23 and ·
  24) (1001-G]
      B. Youdhister vs. The Secretary, Agricultural Market
  Committee, Jogipet and Anr. (1991) Cri. L.J. 277 -
G disapproved.
                          Case Law Reference:
          (1991) Cri. L.J. 277     Disapproved        Para 22


H
  AGRICULTURAL MARKET COMMITTEE A.P. ETC. v. 993
          M.K. EXPORTS, A.P. ETC. ETC.

      CRIMINAL APPELLATE JURISDICTION: Criminal ApP,eal             A
 No.. 1048-1049 of
                .
                   2011 etc.
     Fr~m the Judgment & Order £~J~d .21.04.201 O of the High
 Court of Andhra Pradesh at Hyderabad in Crl. Petition Nos.
 3535 & 3537 of 2010.       ·                                       B
                                WITH

 Crl. A. Nos. 1050-1052, 1053-1054 & 1055 of 2011.

      D. Bharathi Reddy for the Appellant.                          c
     Srinivas R. Rao, Abid Ali Beeran P. (for Sudha Gupta), D.
 Mahesh Babu, Ramesh Allanki, Savita Dhand.ha for the
 Respondent.

    . R.M. LODHA, J. 1. Leave granted.                              D
       2. The Agricultural Market Committee, Bhimavaram have
  preferred these eight appeals, by special leave, against the
· common judgment dated April 21, 2010 passed by the High
  Court of Andhra Pradesh whereby the Single Judge of that
  Court allowed the petitions filed by the private respondents      E
  under Section 482 of the Code of Criminal Procedure, 1973
  (for short 'Code') and quashed the criminal proceedings against
  them for non-payment of market fee assessed under Section
  12-8(5) of the A.P. Agricultural (Produce and Livestock)
  Markets Act, 1966 (for short, 'the Act').                         F

      3. For the sake of convenience, we shall notice the facts
 from one of the appeals, viz., Agricultural Market Committee,
 A.P. Vs. Mis M.K. Exports, A.P. The respondents - M/s M.K.
 Exports in that appeal are traders and were given licence by       G
 the appellants for doing business in prawns, a notified
 commodity under the Act. For the assessment years 1998-99
 and 1999-2000, the assessment of market fees was done after
 giving exemption to a certain turnover on purchases effected
 outside the notified area of the appellants on the basis of the    HI
    994      SUPREME COURT REPORTS                (2011) 5 S C.R.


A   returns submitted by the respondents L1nder the Act.

         4. On May 29, 2002, the appellants issued notices to the
    respondents to produce books of accounts for the years 1998-
    99 and 1999-2000 within 7 days of the receipt of the notices
8   to enable them to assess the correct amount of market fees.
    The notices were issued on the ground that the assessment for
    that period was done after giving exemption to certain turnover
    thereby resulting in under-assessment of market fees.

       5. The respondents failed to produce the books of
C accounts. The notices were then issued to the respondents on
  June 27, 2002 to show cause as to why the exemption given
  earlier on certain turnover for the assessment years 1998-99
  and 1999-2000 be not disallowed; the re-assessment for these
  two years be not done and the market fees be not collected
D under Section 12-8(5) of the Act.

       6. The respondents challenged the show cause notices
  dated June 27, 2002 by filing writ petitions before the High
  Court of Andhra Pradesh. The High Court disposed of the writ
E petitions on June 14, 2007 and directed the respondents
  (petitioners therein) to respond to the show cause notices and
  the appellants were asked to pass appropriate order after
  considering their replies.

        7. The respondents filed their reply and raised certain
F   objections to the re-assessment proceedings initiated under
    Section 12-8(5) of the Act.

       8. The appellants considered the reply submitted by the
  respondents and vide order dated November 26, 2007 re-
G determined the turnover for that period and, consequently, re-
  assessed the market fees. In that order, the appellants also
  levied penalty equal to two times the market fees due, in
  addition to market fees so assessed.

          9. The respondents challenged the order dated November
H
AGRICULTURAL MARKET COMMITTEE A.P. ETC. v. 995
 M.K. EXPORTS, A.P. ETC. ETC. [R.M. LODHA, J.]
26, 2007 by filing revision applications before the Director of         A
Marketing under Section 12-F of the Act. These revision
applications were dismissed on March 26, 2008.

     10. Thereafter demand notices were issued by the
appellants to the respondents to pay the market fees
                                                                        8
determined under Section 12-8(5). The respondents did not
comply with the demand notices. Notices were then issued to
the respondents to show cause as to why criminal proceedings
be not initiated against them. under Section 23 of the Act. The
respondents did not respond to the show cause notices nor
made any payment of outstanding market fees. The appellants             C
were then constrained to file criminal complaints against the
respondents in the Court of the II Additional Judicial First Class
Magistrate, 8himavaram, West Godavari District, A.P. ,

      11. The respondents questioned the complaints in the              D
petitions under Section 482 of the Code before the High Court
of Andhra Pradesh and prayed for quashing the criminal
proceedings.

     12. The only reason that weighed with the High Court in            E
quashing the criminal proceedings against the respondents
was that non-payment of market fees re-assessed under
Section 12-8(5) is not punishable under Section 23 of the Act.
Whether or not the view of the High Court is right in this regard
is a question for determination in these appeals.
                                                                        F
      13. Section 7 of the Act is a regulatory provision. It provides
that in a notified area, the trading in a notified agricultural
produce, livestock and products of livestock shall be done only
after obtaining the licence from the concerned market
committee and in accordance with the conditions of such                 G
licence. Sub-section (5) thereof provides that a person to whom
a licence is granted shall comply with the provisions of the Act,
the rules and the bye-laws made thereunder and the conditions
specified in the licence.
                                                                        H
    996          SUPREME COURT REPORTS                [2011) 5 S.C.R.


A       14. The provision in relation to levy of fees by the market
    committee Is made in Section 12 of the Act. Section 12 reads
    as under:-·

          "Section 12 - Levy of fees by the market Committee
          -(1) The market committee shall levy fees on any notified
B
          agricultural produce, live stock or products of live stock
          purchased or sold in the notified market area at such rate,
          not exceeding two rupees as may be specified in the bye-
          laws) for every hundred rupees of the aggregate amount
          for which the notified agricultural produce, live stock or
c         products of live stock is purchased or sold, whether for
          cash or deferred payment or other valuable consideration.

          Explanation 1:- For the purposes of this section, all notified
          agricultural produce, livestock or products of livestock
D         taken out of a notified market area shall, unless the contrary
          is proved, be presumed to have been purchased or sold
          within such area.

          Explanation If: In the determination of the amount of fees
          payable under this Act, fractions of ten paise equal to or
E
          exceeding five paise shall be disregarded".

         15. Sections 12-A to 12-G were inserted in the Act by Act
    4 of 1987. Section 12-A reads as under:-

F         "12-A. Every trader in the notified area, who is liable to pay
          fees under Section 12, shall submit such return or returns
          relating to his turnover in such manner, within such period
          and to such authority, as may be specified by the market
          committee in its bye-laws.
G         Explanation: For the purposes of Sections 12-A to 12-G
          (both inclusive) the terms, -

           (i)     "market fees" shall mean the fees levied under sub
                   section (1) of Section 12;
H
 AGRICULTURAL MARKET COMMITTEE AP. ETC. v. 997
 . M.K. EXPORTS, AP. ETC. ETC. [RM. LODHA, J.]

     (ii)   "turnover" shall mean the aggregate amount for           A
            which the notified agricultural produce, livestock or
            products of lievestock, are purchased or sold,
            whether for cash or deferred paymeht or other
            valuable consideration".
                                                                     B
     16. The entire machinery for assessment of market fees
is provided in Section 12-B. The said Section is as follows:-

    "12-B. Assessment of market fees: (1) If the assessing
    authority is satisfied that any return submitted under
    Section 12-A is correct and complete, it shall assess the        C
    amount of market fees payable by the trader on the basis
    thereof; but if the return appears to it to be incorrect or
    incomplete, it shall, after giving the trader an opportunity
    of providing the correctness and completeness of the
    returns submitted by him and after making such inquiry as        D
    it considers necessary, assess to the best of its judgment
    the amount of market fees due from the trader. An
    assessment under this section shall however, be made
    only within a period of three years from the expiry of the
    year to which the assessment relates.                            E

     (2) Where the return submitted by a trader includes the
   . turnover or any of the particulars thereof which would not
     have been disclosed but for an inspection of accounts,
     registers or other documents of the trader made by an
     officer authorized under this Act before the submission of      F
     such returns, the Assessing authority may, after giving an
     opportunity to the trader for making a representation in this
    behalf, treat such return to be an incorrect or incomplete
    return within the meaning of sub-section (1) and proceed
    to take action on that basis.                                    G
                                               ,. . ': .:
                                                     ·~';;


    (3) While making an assessment to the best:ofJudgment
     under sub-section (1) the assessing authority may also
    direct the trader to pay, in addition to the market fees
    assessed a penalty equal to two times the market fees due        H
    998           SUPREME COURT REPORTS                  [2011] 5 S.C.R.


A         on the turnover that was not disclosed by the trader in his
          return.

          (4) Where any trader liable to pay market fees under this
          Act,-                                          .
B          (i)      fails to submit return before the date specified in that
                    behalf; or

           (ii)     produce the accounts, registers and other
                    documents after inspection; or
c          (iii)    submits a return subsequent to the date of
                    inspection;

          the assessing authority may, at any time within a period of
          three years from the expiry of the year to which the
D         assessment relates, after issuing a notice to the trader, and
          after making such inquiry as it considers necessary,
          assess to the best of its judgment, the amount of market
          fees due from the trader, on his turnover for that year and
          may direct him to pay in addition to the market fees so
E         assessed, a penalty equal to two times the market fees
          due.
          (5) Where for any reason, the whole or any part of the
          turnover of the trader has escaped assessment to market
          fees or has been under assessed or assessed at a rate
F         lower than the correct rate, the assessing authority may,
          at any time within a period of three years from the date on
          which any order of assessment was served on the trader,
           (a)     determine to the best of its judgement the turnover
G                  that has escaped assessment and assess the
                   turnover so determined;
           (b)     assess the correct amount of market fees payable
                   on the turnover that has been under assessed;
H          (c)     assess at the correct rate the turnover that has been
 AGRICULTURAL MARKET COMMITTEE A:P. ETC. v. 999
  M.K. EXPORTS, A.P. ETC. ETC. [R.M. LODHA, J.]

            assessed at a lower rate, after issuing a notice to      A
            the trader and after making such inquiry as it
            considers necessary. The assessing authority, in
            addition to the market fees so assessed, also
            direct the trader to pay a penalty equal to two times
            the market fees".                                        B

     17. It would be, thus, seen that Section 12-A is self-
contained. If assessing authority is satisfied that return submitted
under Section 12-A is correct and complete, it shall assess the
market fees payable by the trader on the basis thereof. Sub- C
section (5) of Section 12-8, however, provides for,
reassessment, inter alia, where the whole or any part of the
turnover of the trader has escaped assessment to market fees
or has been under- assessed or assessed at a rate lower than
the correct rate.
                                                                     D
     18. Section 12-C(1) provides that market fees assessed
under the Act and the penalty levied shall be paid by the trader.
in such manner and within such time as may be specified in ·
the notice. Sub-section (5) thereof provides that the penalty.
payable under the Act shall be without prejudice to the institution E ·
of any proceedings for an offence under the Act.

     19. The provision for penalty and prosecution is contained
in Section 23. To the extent it is relevant, it reads as under:- '

     "23. Penalties:- (I) Whoever contravenes the provisions         F
    of Section 7 or fails to pay the fees levied under sub-
    section (1) of Section 12 shall, on conviction be punished
    with imprisonment for a term, which shall not be less than
    six months but which may extend to one year and with fine,
    which may extend to five thousand rupees, and in the case        G,
    of a continuing contravention with further fine which may
    extend to five hundred rupees for every day during which
    the contravention is continued after conviction thereof;

           Provided that the Court may, for adequate and
                                                                     H
    1000     SUPREME COURT REPORTS                  [2011) 5 S.C.R.

A        special reasons to be mentioned in the judgment, impose
         a sentence of imprisonment for a term of less than six
         months.

         2.xxxxxx            xxx                 xxx   xxx
8        3. xxxxxx           xxx                 xxx   xxx
         4.xxxxxx            xxx                 xxx   xxx
         5. xxxxxx           xxx                xxx    xxX'
c       20. Section 23 of the Act, thus, provides for penalty to be
    imposed against a person who contravenes the provisions of
    Section 7 or who fails to pay fees levied under sub-section (1)
    of Section 12.

D        21. The fee is levied by the market committee on sale or
    purchase of any notified agricultural produce or livestock or
    products of livestock in the notified market area by virtue of
    Section 12(1) of the Act. For a levy of fee, it is necessary that
    amount of market fees payable by the trader is assessed by
E   the assessing authority. The procedure for assessment is
    provided in Section 12-8. The assessment of market fees is
    done under sub-section (1). Sub-section (5) of that Section,
    however, provides that if, for any reason, the whole or any part
    of the turnover of the trader has escaped assessment to market
F   fees or has been under assessed or assessed at a rate lower
    than the correct rate, the assessing authority may, at any time
    within a period of three years from the date on which the
    assessment order was served on the trader, inter alia, assess
    the correct amount of market fees payable on the turnover that
    has been under- assessed after issuing notice to the trader and
G   after making such inquiry as it may consider necessary. The
    assessing authority, under Section 12-8(5) may also direct the
    trader to pay penalty, equal to two times the market fees, in
    addition to the market fees so assessed. As per the Scheme
    of the Act, it is the assessment of market fee under Section
H   12-8(1) or re-assessment under Section 12-8(5) which
 AGRICULTURAL MARKET COMMITTEE AP. ETC. v. 1001
  M.K. EXPORTS, A.P. ETC. ETC. [R.M. LODHA, J.]

ultimately results in levy of fee under Section 12(1 ). We find the   A
reasoning of the High Court strange when it says that further
assessment of market fees made under Section 12-8(5) is not
covered under Section 12(1). The High Court overlooked the
explanation appended to Section 12-A which clearly provides
that for the purposes of Sections 12-A to 12-G, 'market fees'         8
shall mean fees levied under sub-section (1) of Section 12.
Section 12-8 and the explanation appended to Section 12-A
taken together would leave no manner of doubt that assessment
of market fees - whether it is done under Section 12-8(1) or
12-8(5) - is covered by the expression 'levy fees' in Section         c
12(1). In other words, whether assessment of market fees
payable by a trader is made under Section 12-8(1) or Section
12-8(5), the market fees so assessed means the fees levied
under sub-section (1) of Section 12. The provisions being clear,
non payment of the market fees assessed in the original               D
proceedings under Section 12-8(1) or in the proceedings for
re-assessment under Secfion 12-8(5) would mean default in
payment of fee levied under sub-section (1) of Section 12 of
the Act.

     22. The learned Single Judge of the High Court relied upon       E
an earlier decision of that Court in the case of 8. Youdhister
Vs. The Secretary, Agricultural Market Committee, Jogipet &
Anr1. wherein it was held that since there was no penal
provision for the violations of Sections 12-A, 12-8 and 12-C,
the violators cannot be prosecuted. The view taken in the case        F
of B. Youdhister1 , in our opinion, is not correct view and does
not lay down the correct law.

     23. The High Court, thus, was clearly in error in quashing
the criminal proceedings against the respondents.
                                                                      G
    24. In the result, appeals are allowed and the judgment of
the High Court dated April 21, 2010 is set aside.

N.J.                                           Appeals allowed.
1.   (1991) Cri. L.J. 277.                                            H