AP High Court Dismisses Plea Alleging “Double Taxation” On Sale Of Basmati Rice, Says Fees Collected By Agricultural Market Committee For Its Services Is Not Tax
The Andhra Pradesh High Court has dismissed a petition alleging that cess levied by State's Agricultural Market Committee on sale of 'Basmati rice' amounts to “double taxation”.One of the petitioners, a trader of Basmati rice, claimed that it sources the rice from Punjab where it already pays agricultural market committee tax and thus contended that if the State of Andhra Pradesh imposes...
The Andhra Pradesh High Court has dismissed a petition alleging that cess levied by State's Agricultural Market Committee on sale of 'Basmati rice' amounts to “double taxation”.
One of the petitioners, a trader of Basmati rice, claimed that it sources the rice from Punjab where it already pays agricultural market committee tax and thus contended that if the State of Andhra Pradesh imposes tax on the very same stock, it amounts to double taxation.
The Market Committee argued they are not collecting any tax from the petitioners and they are only collecting fee under Section 12 of the AP (Agricultural Produce and Live Stock) Markets Act 1966, for providing services to the petitioners.
Agreeing with the Committee, Justice Tarlada Rajasekhar Rao held,
“The respondents herein have levied fee for service rendered to the petitioners...The judgments relied by the learned counsel for the petitioners relates to imposing double taxation and the said judgments are not applicable to the facts in these cases and it trite that levy of tax is for the purposes of general revenue which when collected forms part of the public revenue of the State, that a fee is generally defined to be a charge for a special service rendered to individuals by some Governmental agency.”
Court added that as per plain reading of the provision, the market fee is leviable on purchase or sale of rice by a trader to a trader because there is service rendered by a market committee at each of the stages. Traders were using he premises within the notified area of the agricultural market committee.
Petitioners had also contended that Basmati Rice has not been notified as commodity under Schedule-II of the Act whereas market fee can only be collected on commodities notified thereunder.
They contended that “Basmathi rice does not come under raw and boiled rice” and hence sought to set aside the impugned order.
The respondent filed the notified Schedule of the Agricultural Produce Market Act, for the State of Punjab and Haryana stating that there is no difference of Basmati Rice, raw rice or boiled rice and neither is their any exemption, and hence the market fee levied is reasonable.
“Rice‟ means every variety of dehusked polished, raw and parboiled rice and includes rice equivalent of paddy held in stock. Basmati rice can be anything either raw or boiled rice. Unless the basmati rice is specifically exempted, it shall be construed as either raw or boiled rice.” Court held.
It relied on M/s. Motipur Jamindary Co. Ltd. v. State of Bihar (1962) where Supreme Court held that in a taxing statute, words of everyday use must be construed not in their scientific or technical sense, but as understood in common parlance.
Accordingly, the petitions were dismissed.
Appearance: Advocate- N ASHWANI KUMAR for petitioners, Govt Pleader for State, Advocate-V PRAKASH for Commissioner and Director of Agricultural Marketing, Advocate-B PRAKASAM for Committee
Case title: SAKTIMATA TRADERS v. STATE OF ANDHRA PRADESH & Ors.
Case No.: WRIT PETITION Nos.31279, 33067, 33069, 33071, 33074, 33077, 33078, 33079 & 33080 of 2023 AND 736, 738, 740, 745, 747, 757, 758, 760, 761, 763, 764 & 766 of 2024