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CASE NO.: Appeal (Civil) 8274-8292 of 2001 PETITIONER: Harinagar Sugar Mills Ltd.                       

RESPONDENT: State of Bihar & Ors.                            

DATE OF JUDGMENT: 19/11/2003

BENCH: Brijesh Kumar & Arun Kumar.

JUDGMENT: JUDGMENT

BRIJESH KUMAR, J.

The appellant, in  the above noted Civil Appeals  No.8274-8292 of 2001 is a ’Company’ registered under the Indian  Companies Act, 1956 and has a sugar factory situate in Harinagar,  District West Champaran in the State of Bihar.  For the purposes of  manufacture of sugar, the appellant had been purchasing sugarcane  and the sugar produced would be sold as per provisions under the law.   The molasses collected as one of the by-products was also sold by the   appellant.  By means of a Notification dated 21.7.1976 issued under  Bihar Agricultural Produce Markets Act, 1960 (for short ’the Act’),  Ram Nagar Agricultural Produce Market Area was constituted.  A  licence under the provisions of the Act was issued by the concerned  market committee viz. the Bagha Agricultural Produce Marketing  Committee to the appellant as a result of which the transactions of  purchase of sugarcane and sale of sugar and molasses became subject  to payment of market fee.  The connected Civil Appeal Nos.8293- 8311 of 2001 have been filed by the Bagha Agricultural Produce  Marketing Committee aggrieved by the part of the judgment of the  High Court holding that they would not be entitled to recover the  balance two third amount of market fee which remained unpaid.  For  the sake of convenience in this judgment wherever we have referred  "the appellant", it is referred for the appellant in Civil Appeals  No.8274-8292 of 2001, namely Harinagar Sugar Mills Ltd. The appellant filed a suit in the court of the Subordinate  Judge, Bettiah challenging the levy of market fee raising different  grounds.  By means of an interim injunction the market committee  was restrained from realizing the market fee from the appellant.  The  suit was ultimately decreed in favour of the appellant in the year 1985.  An appeal was preferred against the decree by the Market Committee,  which was allowed on 28.8.1993 by        the 2nd Additional District  Judge.  The second appeal preferred by the appellant was admitted  and the judgment and order passed by the First Appellate Court was  stayed.    The  second appeal was disposed of in the year 1994  remanding the matter to the First Appellate Court for consideration of  the  points   which  remained  undisposed  of. The  appellant   approached this Court by filing a Special Leave Petition in which  leave was granted and it was numbered as Civil Appeal No.1282 of  1995.  However, in 1996 the learned single Judge dismissed the  Second Appeal no.516 of 1993 which was filed by the appellant in the  High Court against which also a special leave petition was filed  (S.L.P.(C) No.9811 of 1996) in this Court. During the pendency of the above matters before this  Court, the Market Committee issued  notices to the appellant for  assessment for the years 1977-78 to 1995-96.  The appellant was  called upon to produce the relevant records before the Assessment  Sub Committee.  In all 19 notices were issued for the period 1977-78  to 1995-96 for each year separately.  This Court had also dismissed

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the SLP (C) No.9811 of 1996 in limini preferred against the judgment  of the High Court dismissing the Second Appeal No.516 of 1993.  Ultimately market fee was assessed on the basis of best judgment  assessment in respect of the 19 years, namely, from 1977-78 to 1995- 96. Besides the market fee, penalty was also imposed to the tune of  Rs.1,85,51,658/-.  The respondent, after making adjustment of the  payments made, issued demand notices for depositing the market fee  and the amount of penalty. Feeling aggrieved by the order of assessment, the  appellant filed 19 separate appeals for each year under Section 27-B  of the Act before the Regional Director, Bihar Agricultural Produce  Marketing Board.  As per provisions contained under Section 27-B of  the Act, the appellant deposited 1/3rd amount of the tax liability  amounting to Rs.1,84,06,973.20ps. and the amount of penalty as well,  as per requirement. By order dated 29.5.1998, the Appellate Authority  dismissed all the appeals preferred by the appellant confirming the  levy of market fee and penalty.  The appellant filed revision petitions  before the Managing Director of the Bihar Agricultural Produce  Marketing Board against the order dismissing the appeals.  The  Revisional Authority dismissed all the revisions preferred by the  appellant by order dated 23.3.1999.  The appellant thereafter preferred  19 writ petitions before the Patna High Court with a prayer for  quashing of the assessment orders dated 16.5.1997.  In the meantime,  on 10.8.1999 Civil Appeal No.1282 of 1995 filed by the appellant  along with Civil Appeal No.398 of 1977 filed by Belsund Sugar  Company Ltd. was allowed by a Constitution Bench of this Court. This Court, by means of the aforesaid judgment reported  in AIR 1999 SC P.3125, Belsund Sugar Company Ltd. Vs. State of  Bihar, held that provisions of the Market Act do not apply to the  transactions of purchase of sugarcane and sale of sugar and molasses  by the  sugar mills situate in the market area of the Market  Committee.  The judgment of this Court was however, made  prospective in application and the relevant part having bearing on the  merits of the matter in hand may be perused which is quoted  hereunder : "\005\005.keeping in view the peculiar facts and  circumstances of these cases, we deem it fit to  direct in exercise of our powers under Article 142  of the Constitution of India that the present  decision will have only a prospective effect.   Meaning thereby that after the pronouncement of  this judgment all future transactions of purchase of  sugarcane by the sugar factories concerned in the  market areas, as well as the sale of manufactured  sugar and molasses produced therefrom by  utilizing this purchased sugarcane by these  factories will not be subjected to the levy of  market fee under section 27 of the Market Act by  the market committees concerned.  All past  transactions up to the date of this judgment, which  have suffered the levy of market fee will not be  covered by this judgment and the collected market  fees on these past transactions prior to this  judgment will not be required to be refunded to  any of the sugar mills which might have paid these  market fees.

107.    However, one rider has to be added to this  direction. If any of the market committees has  been restrained from recovering market fee from  the writ petitioners in the High Court or if any of  the writ petitions in the High Court has, as an  appellant before this Court, obtained stay of the  payment of market-fee then for the period during  which such stay has operated and consequently

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market fee was not paid on the transactions  covered by such stay orders there will remain no  occasion for the market committee concerned to  recover such market fee from the concerned sugar  mill after the date of this judgment even for such  past transactions.  In other words, market fees paid  in the past shall not be refunded.  Similarly, market  fees not collected in past also shall not be collected  hereafter.  The impugned judgments of the High  Court in this group of sugar matters will stand set   aside as aforesaid.  The Writ Petition directly filed  before this Court also will be required to be  allowed in the aforesaid terms."    

A perusal of the above judgment indicates that the judgment has been  made prospective in effect and the market fee paid prior to the  judgment in respect of past transactions was not liable to be refunded  to the sugar mills.  At the same time where market fee was not paid on  past transactions in view of any stay order granted by the Court those  dues would not be recoverable from the sugar mills.  The petitioners,  while filing appeals under Section 27-B of the Act, had deposited one  third of the market fee levied and the required amount of penalty with  the market committee in view of provision of Section 27-B of the Act,  which reads as under : "27.B. Appeal \026 (1) Any person dissatisfied with  the order passed on assessment may appeal to the  Regional Director of Agriculture Marketing of the  Area concerned.

(2) No appeal under sub-section (1) against the  order or assessment under sub-section (7) or  against the order of penalty passed under sub- section (8) of section 27A, or assessment under  section 27AA shall be entertained unless the  appellate authority is satisfied that the appellant  has deposited with the Market Committee :

(a)     In case of an appeal against the order of  assessment and levy of market fee under sub- section (7) of section 27A or section 27AA one  third of the fee assessed as due against him or  the admitted amount of fee whichever is  higher.

(b)     In case of an appeal against the order passed   under sub-section (8) of section 27A, ten  percent of the levy of penalty due from him."

The above noted provision requires the appellate  authority to be satisfied that the deposit of one third of the fee  assessed as due, against the assessee and ten per cent of penalty is also  deposited by the assessee with the market committee failing which the  appeal would not be entertainable at all.   At the time when the judgment was pronounced in  Belsund Sugar Mill’s case (supra) on 10.8.1999, the writ petitions  preferred by the appellant impugning the assessment and imposition  of  fee and fine were pending in the High Court.  The Division Bench  disposed of all the 19 pending writ petitions saying that the matter had  become academic only. However, in view of the observations made  by this Court in paragraphs quoted above in Belsund Sugar Mill’s  case (supra), the appellant made a prayer before the High Court that  the amount which they had deposited before filing of appeals may be  ordered to be refunded to the appellant. The market committee on the  other hand made a request that they may be allowed to recover the

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balance amount of the market fee which remained due against the  appellant.  The High Court refused the prayers of both the parties.  It  was held by the High Court that since the appellant had already  deposited the amount of fee assessed on filing of the appeal, the said  amount was not liable to be refunded in terms of the order passed in  Belsund Sugar Mill’s case (supra).  As it concerns the refund of the  amount of 10% of the penalty deposited by the appellant, the High  Court observed that it was integral part of the fee as the same was  imposed for default on the part of the petitioner in payment of the  market fee.  Therefore, it was also not liable to be refunded.  It was  also found that, according to the judgment of this Court, the balance  amount of the assessed fee was also not liable to be recovered by the  market committee from the appellant.  This is how both parties have  filed appeals against the judgment of the High Court. The main contention raised by Shri Shanti Bhushan,  learned senior counsel appearing on behalf of the appellant, the sugar  mills, is that one third amount of the market fee as due, was deposited  in compliance of the statutory provisions, according to which, it was a  condition to be complied with before filing an appeal.  Therefore,  such a deposit cannot be taken to be payment of amount of market fee.   It is submitted that there is no element of voluntary payment.  Hence,  it cannot amount to "fee paid" which may absolve the liability of  market fee as assessed and found due against the appellant.                          The relevant provision for refund made in the judgment  of this Court in the case of Belsund Sugar Mill’s case (supra) is  "\005..  the collected market fees on these past transactions prior to this  judgment will not be required to be refunded to any of the sugar mills  which might have paid these market fees."  In the next paragraph  again it is provided "\005\005In other words, market fees paid in past  shall not be refunded\005..".  The question, therefore, which falls for  consideration is as to whether the amount deposited with the market  committee in view of the provisions of Section 27-B of the Act,  before filing an appeal, would amount to ’amount of fee paid’ by the  appellant or not.  In support of the contention that it would not be  payment of the amount of fee assessed, reliance has been placed on a  decision reported in, 1964 (7) SCR 579, J.Dalmia Vs. Commissioner  of Income Tax, New Delhi, so as to indicate the meaning of the word  ’paid’. It is in context with Section 16(2) of the Income Tax Act,  1922.  The appellant before the Court held some shares in a company  which had declared interim dividends in respect of which the  appellant had also received a dividend warrant for a certain amount, as  a shareholder in the company.  The said amount of interim dividend  was sought to be included in the income of the appellant in a  particular assessment year.  It was held that declaration of a dividend  by a company may give rise to a debt but it would not be enforceable  as the Directors may rescind the resolution before actual payment of  the dividend. It has been observed that dividend may be said to be  paid within the meaning of Section 16(2) of the Income Tax Act,  when the company discharges its liability and makes the amount  unconditionally available to the member entitled thereto.  On the basis  of the above observation, it is submitted that the deposit made with  the market committee in pursuance of the provisions contained under  Section 27-B of the Act was not unconditionally available to the  market committee.  Nor it can be said that on such a deposit the  liability of the appellant stood discharged to the extent of the payment  made.  The case referred to by the appellant noted above discussed  and related to the provisions of the Income Tax Act.  The  interpretation was also made accordingly. In the case in hand, it was  not merely a question of making an assessment and keeping the  demand as due, on the other hand, one third of the amount of the fee  assessed was actually deposited with the market committee, though,  of course in pursuance of the provisions contained under Section 27-B  of the Act. It is obvious that ultimately it would depend upon the  result of the appeal as to whether the amount so deposited was liable

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to be retained by the market committee or the same was liable to be  refunded in the event appeal  succeeded.  It can thus be said that at the  time of the deposit of the amount in pursuance of the requirement of  Section 27-B of the Act the amount was actually paid but it would be  subject to result of appeal. Thus the crucial stage which would be  relevant is  the stage of decision of the appeal.  Yet another case relied  upon so as to ascertain the meaning of the word ’paid’ is   reported in   1988(3) SCC page 553, Commissioner of Income Tax, U.P.-II,  Lucknow Vs. Bazpur Co-operative Sugar Factory Ltd., Bazpur, Distt.  Nainital.  The question for consideration in the above noted case was  as to whether the deductions made  from the amount payable to its  members on account of supply of sugarcane could be included in  taxable income or not.  It was held that it is immaterial as to under  what head the deposits are entered, on the other hand what would be  material is the purpose for which they are to be utilized.  The  deductions were for the "Loss Equalisation and Capital Redemption  Reserve Fund".  But it was first liable to be used in adjusting the  losses of the society and thereafter for payment of initial loan from  Industrial Finance Corporation and then for redeeming the  government share and only in the event of balance being left it was  liable to be converted into share capital.  So the primary purpose was  to discharge the liability of the society.  Hence they were liable to be  included in the taxable income as amount paid.  We don’t think that  the said decision helps the appellant  in any manner.  Similarly, a  decision referred to in the case of State of M.P.& Ors. Vs. Indore Iron  & Steel Mills Pvt. Ltd., (1998) 6 SCC 416 also has no application to  the question involved in the present case.  The next case referred to is  reported in 1993(66) E.L.T.557 (Cal.), Super Cassettes Industries Ltd.  Vs. Collector of Customs.  In this case as a pre-condition for filing an  appeal the petitioner had made deposit of disputed amount as per  requirement of Section 129E of the Customs Act, 1962. The appeal  was allowed.  The petitioner in that case applied for refund of the  amount deposited as a pre-condition of filing an appeal.  The same  was not refunded and an argument seems to have been raised that it  was amount of  duty deposited by the petitioner hence, not liable to be  refunded.  The High Court repelled the argument and held as follows : "Such deposit should not be treated as payment of  duty.  The Section itself speaks of the payment as  "deposit with proper officer".  Therefore,  provisions of Section 27 cannot  stand in the way  of refund of deposit made by the petitioner for  preferring an appeal to CEGAT.  Section 27  applies only to the case of persons who are  claiming refund of any duty paid in pursuance to  an order of assessment or any duty borne by that  person. But when an amount equivalent to duty is  deposited with ’proper officer’ for the purpose of  preferring an appeal, such deposit cannot be  treated as duty paid by the petitioner in pursuance  to an assessment order.  The amount deposited  remained merely as deposit till the disposal of the  appeal by the Tribunal.  Now the petitioner has  succeeded in the appeal.  The petitioner is entitled  to obtain refund of the amount deposited." (emphasis supplied)

It is to be noted that the deposit made as a pre-condition of filing an  appeal has been though held cannot be treated as duty paid by the  petitioner in pursuance of the assessment order and it was held that it  remained as a deposit till the disposal of the appeal.  Since the  appellant had succeeded in the appeal the amount was liable to be  refunded.  Therefore, what has been held is that during the pendency  of the appeal such a deposit equivalent to the duty remains only a  deposit and not the duty paid.  But as it is evident the character of the  deposit would change on decision of the appeal.  Another case relied

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upon on behalf of the appellant is reported in 1996(82) E.L.T.177  (Bom.), Suvidhe Ltd. Vs. Union of India.  In this case also it has been  held that deposit made as a pre-condition to avail of the right of  appeal is not payment of duty but it is only a deposit and on the appeal  being allowed the same was liable to be refunded.  In this case also it  is to be noted that the result of the appeal has an important bearing on  the nature of the deposit.  1999(112) E.L.T. (Del.), Voltas Limited Vs.  Union of India, has also been relied upon.  In this case also deposit  was made in terms of Section 35F of the Central Excise Act, 1944  while filing an appeal.  The order under appeal was set aside and  while allowing the appeal the case was remanded.  It was held that in  such circumstances there was no reason to retain the deposit which  was liable to be refunded.  It was observed that once the order was not  found to be satisfactory and set aside, a fresh decision on the matter  was awaited after adjudication.  There was no such provision  providing for deposit during pendency of adjudication in absence of  any order assessing  liability, the one which was appealed against  ceased to exist on being set aside in appeal.  According to the relevant  provision it was deposit pending appeal.  It is thus observed in the  judgment as follows:   "\005..It is clear that the amount so deposited  remains a deposit pending appeal and is thereafter  available for appropriation or disbursal  consistently with the final order maintaining or  setting aside the order of adjudication."

All the above noted cases of different High Courts are those  where  the order fixing the liability has been set aside and the appeal had  been allowed.  No case has been cited wherein it may have been held  that even though the appeal is  dismissed the amount so deposited  would not be treated as a deposit towards the tax liability.                  On the other hand, Shri S.B.Sanyal, learned senior  counsel appearing for the market committee in these appeals submits  that the amount deposited in view of Section 27-B of the Act before  filing an appeal is nothing else but the amount of market fee as  assessed and due against the assessee which is paid.  Once it is a  payment of part of the fee,  paid before the judgment of this Court in  the Belsund Sugar Mill’s case (supra) it is not liable to be refunded. It  has also been submitted that the amount so deposited is not from the  coffers of the petitioner mill but the amount which was realized by  them from other parties to be passed on to the market committee.  He  has further indicated that the revisional court in its order while  dismissing the revisions, directed the committee to take steps to  realize the balance amount of market fee and the penalty from the  appellant.  On this basis it is submitted that the amount already  deposited, namely, one third of the amount due on account of fee  while filing an appeal was treated as an amount of fee and by itself  liability of the petitioner to that extent was discharged. He has also  drawn our attention to some of the observations made by the appellate  authority to show that amount deposited was treated to have been  "paid". In support of his contention that the amount was not liable to  be refunded, he has drawn our attention to the provisions of the  Customs Act and the Central Excise Act that the amount deposited is  amount relating to demand.  Section 129E of the Customs Act  mentions deposit of the amount pending appeal, out of the demand or  penalty levied.  He has also referred to Section 35F of the Central  Excise Act to strengthen the argument.  We, however, do not deem it  necessary to refer to the provisions under the other Act, and may  peruse the provisions as contained under the Bihar Agricultural  Produce Markets Act.  It has also been submitted on behalf of the  respondents that on dismissal of the appeal there was no occasion to  ask for the refund of the amount paid out of the liability assessed and  due.  The revision preferred against the order of dismissal of  appeal  was already dismissed and the pendency of the writ petitions against  the orders passed in revision would be of no relevance as writ

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proceedings are not continuation of the suit or appeal. In support of  his contention, he has referred to certain decisions.  In 1992 Supp.(2)  SCC 312, H.B.Gandhi, Excise and Taxation Officer-cum-Assessing  Authority, Karnal & Ors. Vs. M/s.Gopinath & Sons & Ors., it has  been held that judicial review under Article 226 of the Constitution is  not directed against the decision but is confined to decision making  process.  In exercise of writ jurisdiction re-appraisal of evidence or the  correctness of the decision is not to be gone into.  It is not to be  treated as an appeal against the orders impugned.  (1992) 1 SCC 380,  Chandigarh Administration & Ors. Vs. Manpreet Singh & Ors., has  been referred to for the proposition that the High Court cannot assume  the appellate jurisdiction while exercising power under Article 226.   1995 Supp.(2) SCC 535, State of U.P. & Ors. Vs. Committee of  Management of S.K.M. Inter College & Ors., has also been referred to  for the same proposition that proceedings under Article 226 of the  Constitution are not like appellate proceedings.  On the basis of the  above decisions the contention is that the decision of the statutory  authorities on facts had attained finality and the pendency of writ  petition cannot be said to be continuation of those proceedings.   Hence whatever amount had been deposited as against the fee due  would only be payment towards the discharge of the liability.  Our  attention has also been drawn by the learned counsel to some other  details regarding the manner in which the demand of the balance  amount has been made and to the  fact  as to whether the appellants  had realized the amount from others to be passed on to the appellant  and that the amount deposited with market committees had been spent  by them. We think these points will not materially affect the merits of  the matter nor we propose to enter into those areas of factual disputes.  The main question, however, that needs  to be considered  is whether the amount deposited in view of Section 27-B of the Act is  deposit of  the liability of dues of fee assessed or not.            The amount in respect of which the appellate authority is  to be satified that it has been so deposited, according to Section 27-B  of the Act has to be  in certain proportion of the amount of fee  assessed and due.  That is to say the liability of the assessee is already  fixed and the amount assessed is treated to be amount due to be paid,   it is an ascertained amount out of dues which must be paid to the  committee.  Therefore, there can hardly be any doubt about the fact  that it is a part of the amount out of the total liability outstanding  against the appellant which appellant is required to  pay to the party  viz. the market committee before filing an appeal.  It is not a deposit  in Court or  with appellate authority.  Merely because liability in  certain proportion is ensured to be in deposit before filing of an  appeal,  does not change the character of the deposit of a part of dues  which is also specifically described   to be fee assessed as due.  It is  not provided that the deposit is by way of security which would  generally not be required to be paid to the party.  Such deposits like   security deposits are of different kind which are sometimes found   provided for without reference to any monetary liability involved in  the case,  eg.  In election petition or other proceedings where some  amount of security may be  required to be deposited.  In the present  case, there is no scope to treat the amount deposited as anything else  except part of the fee assessed and due.   It is to be noted that the  provision under Section 27-B  of the Act is that the appellate authority  is to be satisfied that the appellant has deposited with the market  committee one third of the fee assessed before he files an appeal.  It is  quite  obvious that in case the appeal fails what would be required to  be deposited would only be the balance of the amount of the liability,   if that too is not already paid. In case the appeal succeeds,  the amount  paid against assessed liability which is later set aside cannot be  retained and in the normal course,  it is liable to be refunded, unless of  course for some good reasons, it is ordered otherwise.  For example,  where it may amount to undue  enrichment of the appellant.   In the  case of the appeal being unsuccessful,  in the normal course, nothing  more  would be required to be done to the extent of deposit made.

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Therefore, merely, because the amount deposited may have to be  refunded in case appeal succeeds that alone  does not mean that the  nature of the deposit is changed or it is anything else except the   amount  of  levy assessed and due, particularly looking to the  language used and provision made under Section 27-B of the Act,   where the appellate authority has only to be satisfied about the  payment made to the committee.  Some observations relating to  deposit of the tax liability while filing an appeal,  though  in a slightly   different context, throw some light as to the nature of the deposit.  In  the Anant Mills Co. Ltd. & Ors. etc.etc. Vs. State of Gujarat & Ors.  etc.etc., (1975) 2 SCC 175 at page 202, this Court observed : "\005..In the absence of any special reasons there  appears to be no legal or constitutional impediment  to the imposition of such conditions.  It is  permissible, for example, to prescribe a condition  in criminal cases that unless a convicted person is  released on bail, he must surrender to custody  before his appeal against the sentence of  imprisonment would be entertained.  Likewise, it  is permissible to enact a law that no appeal shall lie  against an order relating to an assessment of tax  unless the tax had been paid.  Such a provision was  on the statute book in Section 30 of the Indian  Income-tax Act, 1922.  The proviso to that section  provided that "\005..no appeal shall lie against an  order under sub-section (1) of Section 46 unless  the tax had been paid".  Such conditions merely  regulate the exercise of the right of appeal so that  the same is not abused by a recalcitrant party and  there is no difficulty in the enforcement of the  order appealed against in case the appeal is  ultimately dismissed.  It is open to the Legislature  to impose an accompanying liability upon a party  upon whom legal right is conferred or to prescribe  conditions for the exercise of the right.  Any  requirement for the discharge of that liability of the  fulfillment of that condition in case the party  concerned seeks to avail of the said right is a valid  piece of legislation, and we can discern no  contravention of Article 14 in it."                                                 (Emphasis supplied by us)        

It appears that imposition of a pre-condition of deposit of the liability  before filing  an appeal was challenged but it is clearly held that a  party while availing of a right to appeal conferred under a statute can  be required to discharge the tax liability.  Such a deposit made is  described as discharge of liability.    Such a condition imposed, would  not change the nature of the amount paid or deposited out of the  amount as assessed and found due.  No doubt it is true that order  assessing the liability remains under challenge but such a deposit  made discharges the liability of the payment of the amount assessed  and found due,  to the extent of deposit made, subject indeed to the  decision of  the appeal.   We have already noticed that in all the cases cited by the  learned senior counsel Shri Shanti Bhushan on behalf of the appellant,  the appeals were allowed and the amount was held to be refundable.   Even in one of the cases, Voltas case (supra), where after setting aside  the order of assessment the matter was remanded,  it was held that  there was no good reason or any order against which the amount  deposited as a pre-condition to file an appeal,  could be retained.   Fresh order was awaited.    But where amount of liability has been  assessed and fixed and the order exists,  pre-appeal deposit will be  nothing else but payment of a part  of the liability assessed and  discharged to the extent of the amount of liability paid,  subject to the  

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result of the appeal.  We are not concerned with other kind of cases   where there may be different reasons for deposit of security or any  amount of any other  nature.    Mere filing of the appeal does not  absolve the appellant nor suspends  the liability assessed during  pendency of the appeal. It continues unless paid or set aside. Any  payment made during that period when liability  subsists shall be in  discharge of that liability  as fixed.    As provided under Section 27-B  of the Act the appellate authority has only to be satisfied that a given  part of the fee assessed and due has been paid to the committee before  it entertains the appeal. There is no direction as such for the appellant  to make any payment, under Section 27-B of the Act. It is for the  appellate authority to be satisfied that a part of the liability is in  deposit with the committee.                 Considering the facts of the present case in the light of  what has been observed by us above, we find that orders of  assessment had been made.  The liability had been fixed and the  amount was determined.  The appellate authority was satisfied that   one third amount of the fee assessed and due was paid to the  committee before filing of appeals.   The appeals were dismissed.  The  revisions  preferred thereafter were also dismissed.  All statutory  remedies stood  exhausted.  Writ petitions filed under Article 226 of  the Constitution were pending when the order of this Court was  rendered in the case of Belsund Sugar Mills case (supra).  The writ  petitions were disposed of in the light of the judgment of this Court   without interfering with the orders of assessment and the appellate and  the revisional orders.  In the case of Belsund Sugar Mills (supra)  specific directions have been issued in exercise of powers under  Article 142 of the Constitution as to in what circumstances the amount  paid is to be refunded and not to be refunded.  We have already  quoted earlier the relevant part of the judgment in the Belsund Sugar  Mills case (supra) according to which the judgment was prospective in  effect without affecting the past transactions and the orders,  but  the   amount of the liability of the fee which had already been paid  till the  date of the order was not to be refunded but the balance which  remained unpaid was also not to be recovered. In this case we have  already held that the amount deposited before  filing of appeals  was a  part of the liability assessed and found due and partly in discharge  thereof.    It was, therefore, not liable to be refunded and the High  Court has rightly held so.                 Similarly, we find no force in the appeal preferred by the  market committees for a direction to the assessees to deposit the  balance amount of the fee assessed.  It cannot be done in view of the  judgment of this Court in the case of Belsund Sugar Mills case  (supra).                 Learned counsel for the appellant has submitted that once  it has been found by this Court in the case of Belsund Sugar Mill’s  (supra) that market fee would not be liable to be paid by the sugar  mills, there is no occasion to impose or realize  or retain the amount of  penalty collected/deposited on account of delayed payment of the  market fee.  It is submitted that as a normal consequence of the  judgment in the Belsund Sugar Mill’s case (supra), there would be no  liability to pay the market fee even though covered by past  transactions and orders or in future.  But in exercise of power under  Article 142 of the Constitution of India, this Court provided that the  judgment shall have prospective application and the past transactions  and assessments prior to the date of the judgment shall not be  affected, but further provided that  the amount already paid before the  date of the judgment shall not be required to be refunded to the sugar  mills and the amount which remained unpaid in view of any order of  stay granted by the Court, shall not be liable to be recovered.  Subject  to above arrangement, normally, no amount of fee would have been  liable to be paid. That being the position, the question of penalty on  delayed payment does not arise, more particularly, when there is no  provision made in the order that the amount of penalty already paid  shall also not be refunded. It is further submitted that apart from the

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one third amount of fee which has been deposited while filing the  appeal, the rest of the amount has been held to be not recoverable by  the High Court.  That is to say, two third of the market fee assessed,  realization of which was stayed, is not liable to be paid or recovered.   But the penalty has been imposed considering the whole amount of  fee assessed, even the amount which is not recoverable in pursuance  of the judgment passed in Belsund Sugar Mill’s case (supra).  It would  be completely an anomalous situation that the balance unpaid amount  of two third would not be liable to be paid or recovered but 10% of  penalty on that amount which has been deposited, while filing the  appeal would not be refunded.  The High Court has brushed aside this  claim of the appellant merely by observing that penalty is an integral  part of the tax liability.  We, therefore, find that the amount which was  in fact not liable to be paid but a part of it is being retained in  pursuance of the arrangement made in exercise of powers under  Article 142 of the Constitution of India and the remaining part which  is not recoverable, no penalty is liable to be recovered and retained. In  our view, that the 10% amount of the penalty as  paid by the appellant  is liable to be refunded.                   Learned counsel for the appellant made a submission that  in case the question of refund of market fee deposited is  not  favourably considered, in that event, the  matter may be remanded  to  the High Court so that the appellant may argue the matter before the  High Court on the merits challenging the orders of assessment and on  the question as to whether there was or not any quid pro quo against  the amount paid by the appellant.  We do not think it is possible to  accede to the request made.  The whole matter was before the High  Court. It was always open to the appellant to have argued any point it  wished to argue while matter was under hearing.  Once having not  done so, the matter cannot be remanded to be opened afresh on  disputed questions.                   In the result, the appeals, i.e. Civil Appeal Nos.8274- 8292 of 2001, filed by the Sugar Mills are dismissed but with a  modification to the extent that the respondents shall refund the amount  of penalty which has been paid by the appellants, namely 10% amount  of penalty, within a period of four months from the date of  communication of this judgment.  The appeals, i.e. Civil Appeal  Nos.8293-8311 of 2001, filed by the Market Committees for recovery

of the balance of two third amount from the sugar mills, are also  dismissed.    The parties to bear their own costs.

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