Summary
The Court upheld market-fee liability on notified spices imported from outside Karnataka, processed and then sold within the appellant committee’s market area. The exemption for produce on which fee had already been collected within the State did not cover these imported goods. The importer had to collect the fee from the purchaser and remit it. The Court expressly distinguished mere import for cleaning or processing without sale of the processed produce within the market area. The committee’s appeal was allowed and the trader’s writ petition dismissed.
Issues
- Whether imported agricultural produce escaped market fee merely because it was processed before sale within the market area.
- Whether import solely for cleaning and processing, without local sale, attracted the fee.
Provisions considered
- Section 65(2), second proviso and Explanation; Section 65(2-A)(ia), Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966Local sale of the notified processed imported produce attracted fee; the importer was responsible for collection from the purchaser and payment to the committee. (¶¶ 7, 11-12, 15)
Held
- The second proviso exempted qualifying produce on which market fee had already been collected within the State. Its Explanation excluded the specified imported produce. Read with subsection (2-A)(ia), the provisions imposed liability on sale of the imported, processed notified items within the market area. (¶ 11-12)
- The importer had to realise the market fee from its purchaser and remit it to the committee. Processing did not itself remove the notified goods from the fee regime where the processed produce was sold locally. (¶¶ 12-13, 15)
- Mere import for cleaning and processing, without sale of the processed produce within the market area, did not attract market fee. It was the local sale, rather than the original purchase outside the market area, that attracted the levy here. The schedule’s validity was not challenged. (¶ 14-15)
Result
Market committee’s appeal allowed without costs; High Court judgment set aside and trader’s writ petition dismissed.