Industrial Policy Of 2003 Provides Exemption From Market Fees; Rural Development Fees Not Exempted: Supreme Court
The Supreme Court held that the Market fees and Rural Development fees are distinct as there is no exemption from Rural Development fees mentioned in the Industrial Policy of 2003 it only encompasses exemption from Market fees.
A Bench of Justice Vikram Nath and Justice Prashant Kumar Mishra observed, “Holding that the exemption from Market fees is inclusive of Rural Development fees shall be contrary to the statutory provisions and objective behind both the Acts as well as the 2003 Policy. Thereby, the two fees cannot be equated or assumed to be same or similar for the purposes of exemption”
AG Gurminder Singh appeared for the appellants, while Sr. Advocate Aman Lekhi represented the respondents.
Punjab Spintex Ltd. (respondent company) sought an exemption from the payment of market fees and rural development fees under the Industrial Policy of 2003 (2003 Policy). In response to the company's application, the Punjab and Haryana High Court dismissed the Writ Petition and stated, "Learned counsel for the State also states that Market Fee will also cover Rural Development Fee and further action as per above decision will be taken within one month. In view of above, learned counsel for the petitioner does not press this petition at this stage. Dismissed as not pressed."
The Appellant State argued that the Market fees under the Punjab Agricultural Produce Markets Act, 1961 (1961 Act) and Rural Development fees under the Punjab Rural Development Act, 1987 (1987 Act) were two different “fees” levied under two different Acts having different objects and purpose. It was further argued that the 2003 Policy did not specifically exempt Rural Development fees and therefore, such an assumption could not be made by the respondent company.
The Respondent argued that the expression ‘Market fees’ had been used in the Policy of 2003 because both the 1961 Act and the 1987 Act contemplate levy of fees in a notified market area.
The Court had to determine whether the exemption from payment of Market fee granted under Clause (i) of 11.4.2 of 2003 Policy of the Punjab Government can be said to include exemption from Rural Development fee as well or not.
The Supreme Court noted the High Court's reliance on certain letters from 2001, which suggested that exemption from Market fee covered the Rural Development fee. However, these letters were later clarified or withdrawn by the State's Agriculture Department.
“It is not uncommon for different statutes, concerning similar area of law, to have convergence of interests to some degree. However, this would not imply that benefits extended to one statute will be presumed to flow to the other statute as well,” the Bench remarked.
The Court explained that the preamble of 1961 Act clearly stipulated that it was a statute to provide for law relating to better regulation of purchase, sale, storage and processing of agricultural produce and for establishment of markets in the State. Whereas, the 1987 Act was enacted for providing relief for the loss of agricultural produce, accelerating rural development, improve facilities for purchasers of agricultural produce and augment agricultural production.
The Bench explained that “it is clear that the issue as to whether the 2003 Policy only grants exemption from the Market fees as levied under the 1961 Act and does not grant exemption from the Rural Development fees under the 1987 Act, has not been adjudicated by the High Court on merits.”
Consequently, the Court held, “The Market fees and Rural Development fees are distinct and, there being no exemption from Rural Development fees mentioned in the 2003 Policy, it only encompasses exemption from Market fees in its ambit. The two fees under the two different statutory frameworks cannot be equated as one by the Respondent and they cannot assume that exemption from Market fees would subsume in itself Rural Development fees also.”
Accordingly, the Supreme Court allowed the appeal.
Cause Title: State Of Punjab & Ors. v. M/S Punjab Spintex Ltd. (Neutral Citation: 2024 INSC 526)
Appearance:
Appellants: AG Gurminder Singh; DAG Vivek Jain; AOR Karan Sharma
Respondents: Sr. Advocate Aman Lekhi; AOR Rajiv Ranjan Dwivedi; Advocates Sachin Jain, Snehil Sonam and Sachin Pahwa
