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                                                     REPORTABLE

               IN THE SUPREME COURT OF INDIA

                CIVIL APPELLATE JURISDICTION

                  CIVIL APPEAL NO. 5779 of 2005

M/s. Dharampal Satyapal Ltd. and another             .... Appellants

           Versus

State of Bihar and others                            .... Respondents

                                WITH

                  CIVIL APPEAL NO. 5782 of 2005

M/s. Agricultural Produce Market Committee, Muzzarfarpur                                         .... Appellant

           Versus

M/s. Prabhat Zarda Factory (India) Ltd. and others   .... Respondents

                                AND

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                   CIVIL APPEAL NO. 5785 of 2005

M/s. Prabhat Zarda Factory (India) Ltd. and another         .... Appellants

            Versus

State of Bihar and others                                  .... Respondents

                            JUDGMENT

S.B. SINHA, J..

1.    These three appeals involve a question as to whether the levy of

market fee on Zafrani Zarda in terms of the provisions of Bihar

Agricultural Produce Market Act, 1960 (for short the Act) is valid which

arise out of a common order dated 7th October, 2002 passed by the High

Court of Patna in three writ petitions filed by the appellants.

2.    Writ petitioners are manufacturers of Zafrani Zarda.             It is

indisputably a manufactured form of tobacco.

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     The question as to whether Zafrani Zarda is manufactured item of

tobacco or not came up for consideration before this Court in

Agricultural Produce Market Committee and others v. M/s. Prabhat

Zarda Factory and another, [1994 Supp (2) SCC 514].               This Court

noticed that the definition of ‘agricultural produce’ has undergone a

change so as to include the ‘manufactured goods’ therefrom by way of

amendment on 30th April, 1982. This Court noticed that the judgment of

the High Court did not take into consideration the changed definition of

‘agricultural produce’ with effect from 30th April, 1982 but upheld the

judgment of the High Court in respect of levy of market fee prior thereto.

3.    Indisputably again with effect from 30th April, 1982 Zafrani Zarda

was inserted in the Schedule appended to the said Act, by reason of a

Notification dated 31st July, 1991, issued by the State of Bihar which

reads thus:-.

               "No. 6/Misc. 13/91 - 6386 .... Governor of                 Bihar in exercise of its powers conferred under                 Section 39 of Bihar Agricultural Produce                 Marketing Act, 1980 (Bihar Act 16 of 1960)                 makes the following amendment in the                 Schedule of the abovementioned Act :-                                  AMENDMENT                 In the said list -Heading 11 - following heads                 should be added or included after head 1 under                 Narcotic - Tobacco.

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2.    Zarda 3.    Zafrani Zarda etc.

            The effect of this amendment shall be              considered to be in force from the date of              implementation of Bihar Agricultural Produce              Marketing Act, 1960.

            By order of Governor of Bihar

            Nagendra Tiwari              Joint Secretary to Govt."

4.    The State Government issued another Notification being S.O. 220

dated 31st August, 1992 for regulation of sale, purchase, storage and

process of all agricultural produce mentioned in the Schedule of the Act

in the areas covering 122 market committees including the respondent

Market Committee.

5.    Questioning the orders of assessment of market fee relying on and

on the basis of the said G.Os., by the Assessing Authority, the Writ

Petitioners filed writ applications before the Patna High Court inter alia

for the following reliefs :-

     "i)    issue Rule NISI calling upon the respondent to              show cause as to why the notice No.569 dated              08.06.2001, 638 dated 26.06.2001 and 770

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            dated 24.07.2001 as contained in Annexure 6,              7, 9 and issued by the respondent Secretary,              Agricultural Produce Market Committee should              not be set aside and quashed and upon return of              the rule and after hearing the parties make the              rule absolute.

ii)    Issue rule in the nature of mandamus restraining the        respondents from enforcing the provisions of Bihar        Agriculture Produce Market Committee Act and the        Rules thereunder in respect of the petitioners dealing        in zafrani zarda and spices and demanding any fee in        respect thereof and upon return of the rule and after        hearing the parties make the rule absolute.

iii)   Issue Rule NISI in the nature of writ of mandamus        calling upon the respondents to show cause as to why        the notification issued under section 39 published in        the Bihar Gazette Extra Ordinary dated 31.07.2001        (Annexure-2) be not declared invalid, illegal without        jurisdiction and unenforceable and upon return of the        rule and after hearing the parties make the rule        absolute.

iv)    Issue such other writ(s) order(s) direction(s) as your        Lordships may deem fit and proper."

6.     In the said writ petitions, inter alia it was contended on behalf of

the respondent-Market Committee, that the market fee would be assessed

from the date of coming into force of the Amendment i.e. 30th April,

1982 from which date the definition of ‘agricultural produce’ had been

amended.

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7.    The High Court by reason of the impugned judgment did not go

into other contentions raised by the parties. It was held that the market

fee would be leviable with effect from 31st August, 1992. It failed to take

into consideration the important question raised by the petitioners that

the Notifications were ultra vires the Act and/or would have no

application in relation to Zafrani Zarda.       It also did not take into

consideration the contention of the Market Committee that having regard

to the provisions of Section 4-A of the Act, Sections 3 and 4 thereof were

not required to be complied with.

8.    The questions raised by the parties are of significance.       They

should have been dealt with by the High Court.

9.    We, therefore, are of the opinion that the impugned judgment

cannot be sustained.      They are set aside accordingly and the matters

are

remitted to the High Court for consideration and disposal thereof afresh as

expeditiously as possible and preferably within a period of six months

from the date of receipt of a copy of this order.

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     If any application is filed by the parties hereto raising additional

contentions, the same may be considered by the High Court on their own

merits.

10.   The appeals are disposed of accordingly with no order as to costs.

                                      ........................................J.                                        ( S.B. SINHA)

                                     ..........................................J.                                        (LOKESHWAR SINGH PANTA) New Delhi May 14, 2008