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Balawantrai Bhikabhai Parekh and ors. Vs. the South Kanara Market Committee and anr. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKarnataka High Court
Decided On
Case NumberWrit Petn. (M) No. 2 of 1956
Judge
Reported inAIR1959Kant29; AIR1959Mys29
ActsConstitution of India - Articles 14, 19(1), 19(6), 226 and 301; Madras Commercial Crops Markets Act, 1933 - Sections 2, 3, 4, 4(1), 4-A, 5, 5(1), 5(3), 11, 11(1) and 17; Madras Commercial Crops Markets Rules - Rules 23, 23(3) and 36; Madras Commercial Crops Markets (Amendment) Act, 1955; Madras General Sales Tax Act, 1939
AppellantBalawantrai Bhikabhai Parekh and ors.
RespondentThe South Kanara Market Committee and anr.
Appellant AdvocateG.K. Govinda Bhat, Adv.
Respondent AdvocateAdv. General and ;D.M. Chandrasekhar, Government Pleader
Excerpt:
- section 149; [ram mohan reddy, j] compensation - claimants were passengers in the goods carriage and not loaders appeal against fastening liability on the insurance company held, the motor vehicle in question, indisputably a goods carriage, meant for carrying goods and not passengers in which the 1st respondent /claimant travelled and sustained injuries. it is for the insured owner of the vehicle to make good the compensation and no liability could be fastened on the appellant / insurer. - it was an act to provide for the better regulation of buying and selling of commercial crops and the establishment of markets for commercial crops in the presidency of madras. whereas it is expedient to provide for the better regulation of buying and selling of commercial crops in the presidency.....s.r. das gupta, c.j. 1. the petitioners before us are merchants from gujarat having their office at mangalore bunder. the 1st respondent is the south kanara market committee. the 2nd respondent is the collector of customs, mangalore. the present petition has been made for relief against imposition of fee under the madras commercial crops markets act, 1933 (madras act xx of 1933) and against the requirements under the said act to take out licence for use of any place for the purchase or sale of notified commercial crops and for the storage, weighment, pressing or processing etc., of such crops. 2. the matter arises in this way : -- on the 25th of july, 1933 the said act being the madras commercial crops markets act, 1933, carne into force. it was an act to provide for the better regulation.....
Judgment:

S.R. Das Gupta, C.J.

1. The Petitioners before us are merchants from Gujarat having their office at Mangalore Bunder. The 1st Respondent is the South Kanara Market Committee. The 2nd Respondent is the Collector of Customs, Mangalore. The present petition has been made for relief against imposition of fee under the Madras Commercial Crops Markets Act, 1933 (Madras Act XX of 1933) and against the requirements under the said Act to take out licence for use of any place for the purchase or sale of notified commercial crops and for the storage, weighment, pressing or processing etc., of such crops.

2. The matter arises in this way : -- On the 25th of July, 1933 the said Act being the Madras Commercial Crops Markets Act, 1933, carne into force. It was an Act to provide for the better regulation of buying and selling of commercial crops and the establishment of markets for commercial crops in the Presidency of Madras. The preamble of the said Act reads as follows:

'Whereas it is expedient to provide for the better regulation of buying and selling of commercial crops in the Presidency of Madras and for that purpose to establish markets and make rules for their proper administration;

'And whereas the previous sanction of the Governor-General has been obtained to the passing of this Act; It is hereby enacted as follows :--'

Commercial Crop has been defined in Sub-section (i-a) of Section 2 as follows : --

'commercial crop' means cotton, groundnut or tobacco and includes any other crop or product notified by the (State) Government in the Fort St. George Gazette as a commercial crop for the purposes of this Act;'

Section 3 of the said Act provides that the State Government may, by notification in the Official Gazette, declare their intention of exercising control over the purchase and sale of such commercial crop Or crops and in such area as may be specified in the notification. Such notification shall state that any objections or suggestions which may be received bv the State Government, within a period to be specified in the notification, will be considered by them.

Section 4 of the said Act provides that after the expiry of the period specified in the notification under Section 3 and after considering such objections and suggestions as may be received before such expiry, the State Government may, by notification published in the Official Gazette and in any other manner prescribed by rules made under the Act, declare the area specified in the notification under Section 3 or any portion thereof to be notified area for the purposes of this Act.

Section 1-A of the said Act enjoins the State Government to establish a market committee for every notified area, and provides that it shall be the duty of the market committee to enforce the provisions of this Act and the rules and by-laws made thereunder. Sub-sections (1) and (3) of Section 5, which are important for our present purpose, read as follows : --

'5. (1) No person shall, within a notified area, set up, establish or use, or continue or allow to be continued, any place for the purchase or sale of a notified commercial crop, except under and in accordance with the conditions of a licence granted to him by the Collector.'

'(3) No person shall within a notified area, set up, establish or use, continue or allow to be continued, any place for the storage, weighment, pressing or processing of any notified commercial crop except under and in accordance with the conditions of a license granted to him by the Collector.' The only other section, which we need consider, is Section II. Sub-section (1) of the said section reads as follows :

'The market committee shall, subject to such rules as may be made in this behalf, levy fees on the notified commercial crop or crops bought and sold in the notified area at such rates as it may determine :

Provided that until the market committee has determined the rates of such fees, it shall levy fees at the rates specified in the schedule to this Act or in the case of any crop or product notified by the (Slate) Government as commercial crop for the purposes of this Act, at the rates specified in this behalf in such notification.

'Explanation : -- For the purposes of this Subsection, all notified commercial crops leaving a notified area shall, unless the contrary is proved, be presumed to be brought and sold within such area.' It is not necessary to set out the rest of the said section.

3. By virtue of the provisions contained in the said Act, which authorises the Government by notification to declare a particular area to be notified area, and by virtue of the power given to the Government to notify any particular crop or product as a commercial crop for purposes of this Act, the State Government of Madras issued two notifications.

By the first notification issued on 27th June, 1949 cocoa nut and its by-products and arecanuts were mentioned as commercial crops for purposes of this Act. By the second notification issued on 1st November, 1949 it was notified that the area situated within the limits of each of the districts of Malabar and South Kanara shall be a notified area for the purpose of the said Act in respect of cocoanut and its by-products and arecanut.

4. By virtue of the powers conferred by the Aca. Rules and By-laws come to be framed. Bylaw 23 inter alia provides that fees on the notified commercial crops under Section 11 (1) shall be levied on all quantities bought and sold within the Notified Area at the rates shown therein. Sub-clause (3) (a) of the said Rule 23 inter alia provides that consignments of any commercial crop leaving the notified area shall be accompanied by a permit issued by or on the authority of the Secretary as provided for in Rule 36.

Clause (b) of the said Sub-rule (3) provides that the permit referred to in by-law 23 (3) (a) above shall ordinarily be issued from any of the offices under the control of the Committee on applications made to it in Form MCF 6-A, accompanied by a remittance covering the fee due on the quantity proposed to be taken out of the Notified Area. The permit applied for will not be issued until the tee thus due has also been paid.

It is not necessary for lire to set out any other by-law for the present except Sub-clause (6) of Bylaw 25 which provides that the licensee shall maintain regular accounts of all his transactions in each kind of Commercial Crop in a form or forms approved by the Secretary and shall send to the Secretary such reports and returns as may from time to time be required in such forms as may be specified by him. The said clause also provides that any employee of the committee, not lower in rank than a Supervisor, may enter without prior notice any licensed premises or other place suspected to be used for storage, processing, weighing etc. of any commercial crop for inspection of accounts, verification of stocks or detecting any other contravention under the Act.

5. I should have mentioned that under Section 17 of the Act whoever contravenes the provisions of Section 5 shall be punishable with fine which may extend to five hundred rupees, and in the case of a continuing contravention with a further tine which may extend to one hundred rupees for every day during which the contravention is continued after conviction therefor. Each of the by-laws makes provision for penalty in case the provisions thereof are violated. These are all the provisions of the Act which I need consider for the present.

6. On 2nd June, 1951 a circular was issued to the Petitioners calling upon them to take out licence under Section 5 (1) and (3) of the Act and pay cess on arecanuts to be exported out of Mangalore. On 2nd July, 1951 another circular was Mint to the Petitioners reminding them about the previous circular issued on 2nd June, 1951. On 16th September, 1951, further notice was issued definitely calling upon the Petitioners to pay cess on arecanuts exported; the Petitioners refused to comply with any of those circulars.

Thereupon the first Respondent, the South Kanara Market Committee, filed charge-sheets against the Petitioners before Sub-Divisional Magistrate for contravention of the by-laws. The trial Court convicted the Petitioners. But on appeal the Sessions Court set aside the conviction on 20-10-1952 holding that South Kanara was not validly notified under Section 4 of the Act. The Customs Officer, however, in spite of the said acquittal refused to issue a clearance certificate in respect of the arecanuts to be exported by the petitioners.

On 25th March. 1952 the Collector, Central Excise, Madras, made an order that until further orders all exporters of arecanuts from South Kanara will be permitted to ship their goods from the ports of South Kanara on payment of a deposit at the rate of two annas per Govt. of arecanut shipped by them. This amount, according to the said order, will be held in suspense account by the Customs Department until the question of the validity of the Rules aid Notification issued under the Commercial Crops Markets Act is decided by competent authority.

A copy of this order was forwarded to the Advocate for the Petitioners and also to the Customs Collector. Mangalore, and to the Assistant Collector of Central Excise, Kozhikode. By virtue of this circular, the petitioners deposited the amount required to be deposited under the said circular and began to export arecanuts. The said deposits are Lying in the Customs Department in suspense account until the question of the validity of the Rules and Notifications issued under the Commercial Crops Markets Act is decided by competent authority.

Thereafter, on 27th May, 1952 further prosecution was launched by Respondent 1 against the Petitioners for not taking out licence. The petitioners, however, were acquitted by the Sub-Divisional Magistrate. Thereafter, the State Government of Madras on 15th September, 1054 passed an Act being Act XXVI of 1954, amending the parent Act, particularly Section 4 thereof and validating the notifications published in the official gazette under Section 3 or under Sub-section (1) of Section 4 notwithstanding any irregularity or defect in the publication thereof.

Thereafter a notification was issued on 29-10-1954 by the Secretary of the South Kanara Market Committee addressed to the first Petitioner wherein it was inter alia stated that the said petitioner had failed to obtain licence as required by Section 5 of the Madras Commercial Crops Markets Act for the years 1952, 1953 and 1954 and without such license the said petitioner has set up, established, used or continued or allowed to be continued places within the notified area for the purchase or sale or store, weight or process the notified commercial crop, namely, arecanuts and thereby contravened Section 5 of the Madras Commercial Crops Markets Act, 1933, as amended by Madras Act XXVI of 1954.

The said petitioner was called upon to take notice that if he failed to apply and obtain the necessary licence for the relevant periods at least within a week from the date of receipt of the notice, appropriate proceedings for enforcing penal provisions under the Act would be instituted against him. Thereafter the present petition was filed on 6-1-1955 for the reliefs, viz. that a writ of mandamus or any other appropriate writ, order or direction directing the Respondents to forbear from levying or collecting the fees under By-law 18 or in any other manner enforcing the provisions of the Madras Commercial Crops Markets Act, 1933 as amended by Act XXVI of 1954 and the Rules and By-laws framed thereunder against the Petitioners or their firms and for grant of costs of their petition.

7. Two matters are involved in this petition; first relating to levy of fees under Section 11 of the Act and by-law 23 of the By-laws and the second relating to licence required to be obtained under Sections 5(1) and 5 (3) of the Act. The first matter can be disposed of shortly. As I have already mentioned, pursuant to the order of the Collector, Central Excise, Madras dated 25th March, 1953 the petitioners have been going on depositing amounts at the rate mentioned in the said order in respect of arecanuts shipped by them.

The amounts so deposited are held in suspense account by the Customs Department until the question of the validity of the Rules and Notifications issued under the Commercial Crops Markets Act is decided by competent authority. That being so, all that the petitioners will have to do is to gel a declaration in a competent Court, if they are entitled to it. that the Rules and Notifications issued under the Commercial Crops Markets Act requiring the payment of fees on arecanuts shipped by them are invalid and thereupon to get an order for refund of these amounts deposited by them. Such a relief can be obtained in an appropriate Civil Court.

We feel that in exercising our Jurisdiction under Article 226 of the Constitution we would not be justified in making an order for the refund of the amounts so deposited with the Customs Department, even if we accept the contention of the learned Advocate for the Petitioners that the Rules and Notifications issued under the said Act are invalid. In fact, the learned Advocate appearing for the petitioner also made it quite clear that his clients are not asking in this application for such refund.

That being so, the only thing that we can do is to make a mere declaration as to the validity or otherwise of the Rules and Notifications issued under the Commercial Crops Markets Act. In our opinion, in exercising our jurisdiction under Article 226 of the Constitution it would not be proper, even if it be possible, to make a mere declaration to that effect, and on being apprised of our view, the learned Advocate stated that he would not press the matter any further.

8. I now come to the second matter involved in this petition. It relates to the question of obtaining licence under Sections 5(1) and 5(3) of the Act. I have already stated that Section 5(1) requires that no person shall within a notified area set up, establish or use, or continue or allow to be continued any place for the- purchase or sale of a notified commercial crop, except under and in accordance with the conditions of a licence granted to him by the Collector.

Section 5(3) provides that no person shall within a notified area, set up, establish or use, continue or allow to be continued, any place for the storage, weighment, pressing or processing of any notified commercial crop except under and in accordance with the conditions of a licence granted to him by the Collector.

It is not disputed before us that the petitioners have a place where they score commercial crops; the Petitioners' case, being that such storage is onlyfor the purpose of exporting their goods to Bombay and to other places. The authorities concerned wanted that the Petitioners should obtain a licenceunder the said section. The petitioners refused to obtain such licence.

9. Before us it was urged by the learned Advocate appearing for the Petitioners that his clients cannot be compelled to take out such licence. Ho based his contention on three grounds. In the first place, the learned Advocate argued that the entire Act and the notifications issued by the Government whereby arecanuts was mentioned as a commercial crop for purposes of this Act violate the provisions of Article 19(i)(g) of the Constitution as imposing restrictions upon the Petitioners to carry on their trade or business, and such restrictions cannot be said to be reasonable restrictions on the exercise of such right under Clause (6) of the said Article.

The second ground urged by the learned Advocate for the Petitioners was that the said notifications offended the provisions of Article 14 of the Constitution, inasmuch as by the said notification a discrimination has been made in respect of arecanuts and the traders dealing with such com-modify there being no logical basis for such discrimination and such discrimination having no reasonable relationship to the object of the Act. The third contention urged by him was that the Act in question, and in particular the By-laws made thereunder, affected Inter-State trade and commerce and as such it was beyond the Legislative competence of the State to do so. I shall take up these grounds one by one.

10. On the question as to whether or not the Act and the notifications made thereunder offended the provisions of Article 19(l)(g) of the Constitution, the precise contention of the learned Advocatefor the Petitioners was that the restriction imposed by the Act was not reasonable restriction inasmuch as it has no reasonable relationship with the object sought to be achieved by the Act. In other words, his contention was that the object which was sought to be achieved by the said Act was to ensure that growers get adequate price from buyers.

The provision in the Act, whereby a licence has to be obtained for keeping a place for storing arecanuts has nothing to do with the said object and as such the restriction which is imposed upon the trade of the petitioners by such a provision cannot be said to be a reasonable restriction. In other words, it was contended by the learned. Advocate that by insisting on licences for storing such goods, no benefit would accrue to the powers in the matter of getting adequate price in respect of arecanuts which they have to sell.

11. In my opinion, this contention, although it seems attractive at the first sight, cannot be said to be sound. In order to determine whether or not this provision contained in Section 5 of the Act has any reasonable relationship with the object of the Act, it would be necessary to examine the scheme of the Act. The scheme of the Act, as it appears from its different provisions, is to ensure that nobody buys or sells in the notified area the commodities mentioned in the notification; e.g., arecanuts, without paying the fee which is imposed by the Act on such sales or purchase.

In order to achieve that result, the Legislature has bid down the method to be followed which would enable the authorities to realize such fees. The mode prescribed by the Act and by the rules made thereunder is that before a Person exports his goods -- it would be noted that arecanut at Managalore is mostly utilised for the purpose of export --he must satisfy the authorities concerned that necessary fees for the purchase of the goods in question has been paid by the exporter.

In this connection reference may be made to the Explanation to Sub-section (1) of Section 11 of the Act which provides that for the purpose of this sub-sec-tion, all notified commercial crops leaving a notified area shall, unless the contrary it proved, be presumed to be brought and sold within such area. This being the presumption, the authorities concerned get themselves satisfied at the point of time when the goods in question are exported that the necessary fees enjoined by the Act to be paid had been paid.

Of course it is open to the party concerned to show that the goods have not been bought and sold within such area. If the party satisfies the authorities on that matter, then there would be no question of imposing any fees on the said goods. This being thy scheme provided for in the Act and in the live-laws for the realisation of the fees imposed by the Act, the provisions contained in Sub-sections (1) and (3) of Section 5 are necessary provisions for the purpose of giving effect to the said scheme and for achieving the object of the Act.

In other words, it would be necessary in order to enforce the provisions of the Act and in order to ensure that the fees payable under the Act for the sales and purchases of the commodities in the notified area have been paid, that some control would be kept over the places where such goods are stored, and it is with that object in view that Section 5 seems to have been enacted.

In other words, unless a control is maintained over the place where the notified goods arc stacked, it would be difficult for the authorities to find out whether or not fees payable on all such goods purchased or sold in the notified area have been paid. In my opinion, such a provision has a reasonable relationship to the object of the Act.

If imposition of such fees is necessary to achieve the object of the Act, i.e., to ensure that growers get adequate price from buyers, then the provisions contained in Sub-sections (1) and (3) of Section 5 have also got reasonable relationship to the said object. As I have already mentioned, they form part of the general scheme which has been indicated in the Act ant! in the bye-laws for realisation of the fees imposed by the Act. This being my view, I hold that this contention of the learned Advocate for the Petitioners must fail.

12. I now come to the next contention urged by the learned Advocate for the petitioner viz. that the Act in question offends the provisions of Article 14 of the Constitution. The learned-Advocate contended before us that in selecting only some of the commercial crops including arecanuts, there has been discrimination and, therefore, the provisions of the said Article have been offended.

The precise contention of the learned Advocate for the petitioners on this point was as follows: A discrimination can he made in an Act where there is a logical basis for such classification and where such classification has reasonable relationship with the object of the Act. He relied on the several decisions of the Supreme Court in support of this proposition.

13. In the latest decision of the Supreme Court on this point given on 17-9-1957 in Macherla Hanumantha Rao v. State of Andhra Pradesh, : 1957CriLJ1463 , the same principle was reiterated by their Lordships of the Supreme Court. Their Lordships held that two conditions must be fulfilled viz. (1) that the classification must be founded on an intelligible differentia, which distinguishes persons or things that are grouped together from others left out of the group and (2) that that differentia must have a rational relation to the object sought to be achieved by the statute in question.

The learned Advocate for the petitioners contended before us that neither the classification in this case is founded on an intelligible differentia distinguishing arecanuts from other commercial crops nor has the differentia any rational relation to the object sought to be achieved by the statute in question. The learned Advocate argued that there is no reason or any intelligible basis for differentiating arecanuts from other commercial crops which have not been made the subject-matter of the Act and/or of the notification.

He further argued that even if there be a basis for such differentiation, such differentiation has no reasonable relationship to the object sought to be achieved. The object sought to be achieved according to him, is to provide for adequate price to the growers for their crops and this difference which has been made has no reasonable relationship to that object.

14. I are unable to accept this contention of the learned Advocate for the petitioners. Arecanut, in my opinion, can well be said to form a class by itself and the traders dealing in arecanut can also be said to be a class and such classification, in my opinion, can be well regarded as based on intelligible differentia. In my opinion, there is a reasonable and/or an intelligible basis for differentiating arecanut from other commercial crops which have not been mode the subject-matter of the Act and/or of the notification.

15. I am equally of the opinion that such a differentia has a reasonable relation to the object sought to be achieved by the Act in question. As already mentioned, the object of the present Act is to secure the best possible price for the growers of the notified area for their commodities.

It has not been disputed before us that arecanut is grown in a very large quantity in this part of the country and if the object of the Act is to secure the best possible price for the growers in the notified area for their commodities, then the differentiation made in respect of arecanut by putting restriction on its sale and purchase Gin be said to have a rational relationship to the object sought to be achieved by this Act.

16. I now come to the last of the grounds raised by the learned Advocate for the Petitioners on this part of his client's case. He urged before us that it is beyond the Legislative competence of the State of Madras to make such a legislation, inasmuch as it affects the inter-State trade and commerce. Inter-State trade and commerce is an item which can be dealt with only by the Central Legislature. There is no dispute on this point. The question, however, is, does this Act in any way affect inter-State trade and commerce?

In the first place, it should he noted that Section 11 of the Act which imposes tax on all sales and purchases does so only on crops bought and sold in the notified area. It does not contemplate any imposition of fees on crop or crops bought or sold in an area outside the notified area.

The by-laws framed under the Act, and on which the learned Advocate relied for the purpose' of his present contention also do not show that there has to be any such imposition on the sales and purchases taking place outside the notified area. I have gone through the said bye-laws for the purpose of determining the validity of this contention and it appears to me that there is no bye-law except perhaps bye-law/ 25(14) to which I shall presently refer which can in any way be said to relate to inter-State sales.

Bye-law 25(14) provides that 'every trader in any commercial crop shall keep regular accounts of all his transactions and shall furnish to the licensees of places or to Superintendent'; of Regulated Markets, where he may be transacting business such information as required of him to ensure compliance with the provisions under the Act and more specifically the provisions in this bye-law'. Such account shall be produced for inspection us laid clown in Clause (6) of the said bye-law.

17. It was contended on behalf of the Petitioners that this live-law applies also to the case of sales which are made outside the notified area. In other words, an account has to be kept not only of the inter-Slate sales in respect of the said commodity but also of the sales which took place outside the notified area, that is to say, in respect of arecanuts exported out of the notified area.

That may be so, but because of that reason it cannot be said that the said bye-law affects inter-State trade or commerce. That provision was necessary for the purpose, as I have mentioned, of keeping a check on all sales and purchases that are made within the notified area. The provision was not meant to affect any sales that will take place outside the notified area. In other words, in order to ensure compliance with the provisions of the Act and in order to ensure that the fees payable under the Act on all purchases and sales within the notified area are duly paid this bye-law had to be enacted.

18. Coining to the question of license to be token for keeping a place for storage of the notified goods as provided in Sub-sections (l) and (3) of Section 5 of the Act, I am also of the opinion that the said provisions cannot be said to relate to or affect inter-State trade and commerce. What it provides is that every person if he wants to keep at any place a notified commercial crop either for purchase or sale thereof, or for storage, pressing or processing etc. has to take out a licence.

It does not put any restriction on the export of the said goods to places outside the notified area. It only requires that a licence has to be taken if a place is to be used for purchase, sale or storage of a notified commercial crop. The learned Advocate for the Petitioners contended before us that it imposes restriction at the initial stage of inter-State trade and commerce.

His contention was that his clients were shippers of arecanuts from Mangalore and their business was entirely export business. If, therefore, they have to take out a licence for storing of their goods, which are meant to be exported, then there is a restriction at that stage upon their export trade and, therefore, this provision can be said to interfere with inter-State commerce.

In support of that proposition he relied on certain American decisions reported in 66 Lawyers' Edition pages 458 and 735 and 69 Lawyers' Edition page 909, and contended that a restriction at any stage on inter-State trade and commerce would be beyond the legislative competence of the State Legislature. In my opinion, it is difficult to accept this contention of the learned Advocate for the Petitioners.

19. It has been held in a series of cases that in order to determine whether or not a particular legislation regulates inter-State trade and commerce, the object and substance of the Act has to be taken into consideration. In other words, it is the pith and substance of the legislation which has to be taken into consideration in order to determine the real character of the legislation, that is to say, whether it is a legislation which interferes with inter-State trade and commerce or a legislation which regulates trade within a particular State.

In the case reported in Bhuwalka Bros. Ltd. v. Dunichand, : AIR1952Cal740 (SB) their Lordships of the Calcutta High Court, in a Special Bench, accepted with approval the proposition laid down in Gallagher v. Lyen, (1937) AC 863 to the effect that

'if, on the view of the statute as a whole, you find that the substance of the legislation is within the express powers, then it is not invalidated if incidentally it affects matters which are outside the authorised field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field.'

Following this dictum, their Lordships of the Calcutta High Court in that case observed :

'We have to determine as to what the pith and substance of the Ordinance is, its true nature and character.....It is quite clear, therefore that thereal character of the Ordinance was to regulate the jute trade within the province. This is the pith and substance of the Ordinance. It was necessary to pass the Ordinance to meet the situation brought about by devaluation. The provisions in the Ordinance relating to contracts are only incidental.'

20. The same view was taken in a subsequent decision of the same High Court in Albion Jute Mills Co. v. Jute and Gunny Brokers Ltd., : AIR1953Cal458 (SB). Chief Justice Chakravarthi in his judgment reiterated the same proposition and observed that the Act in question does not aim at affecting export of any raw jute by means of controlling the export and that the control of export of raw jute was not the subject-matter of the Act, though some indirect control may he an incidental result in certain cases.

His Lordship concluded by saying that it was quite clear that the Act in question, in its pith and substance, was legislation in respect of trade and commerce within the State which belongs to item 26 of List II and as such it was within the competence of the State Legislature.

21. Their Lordships of the Madras High Court in A.M.S.S.V.M. and Co. v. State of Madras, AIR 1954 Mad 291, also upheld the view that the real object of the Act has to be taken into consideration, that is the pith and substance of the legislation, in order to determine whether or not it affects inter-State trade and commerce, and it would not be sufficient to show that such a legislation affects matters only incidental.

In my opinion, applying this test, which has been accepted by their Lordships of the different High Courts and with which I also respectfully agree, it would appear that the pith and substance of this legislation is to provide for better regulation of buying and selling within a State although it may have a remote or incidental bearing on some matters affecting the export of notified commodities cut of the said area.

Even if it can be said that Sub-sections (1) and (3) of Section 5 of the Act in some way affect the export trade of the Petitioners, it would be merely an incidental matter and has nothing to do with the main object of the Act. That being my view, I am of opinion that this contention of the learned Advocate for the Petitioners must also fail.

22. Before I conclude my judgment I should mention that there has been a subsequent Act passed by the Madras Legislature, being Madras Commercial Crops Markets Amendment Act No. XXXIII of 1955. The said Act inter alia provides that notwithstanding anything contained in the Madras General Sales Tax Act, 1939 (Madras Act IX of 1939), the market committee shall, subject to such rules as may be made in this behalf, levy a cess by way of sales tax on any commercial crop bought and sold in the notified areas at such rates as the State Government may, by notification, determine.

This provision substituted Sub-section (1) of Section 11 of the old Act; and after this Act came into force, the levy to be made on any commercial crop bought and sold in the notified area is to be regulated by the provisions of this Act. But it is found, and that fact is not denied by the learned Advocate-General, that no notification has been issued by the State Government determining the rates at which the said levy has to be made.

Therefore, so far as the levies made after Act XXXIII of 1955 came into operation, the same must be held to be invalid. The learned Advocate-General on behalf of the State also conceded before us that in the absence of any such notification, no levy can be made on any commercial crops bought and sold in the notified area after the date when the said amending Act came into operation.

That being so, the petitioners became entitled to export their goods without payment of any fees under the said Act since the date when the amending Act came into force. If the Government at any time hereafter issues a notification in accordance with the said provision, the effect thereof, if questioned will then be determined in due course.

23. In the result, therefore, this petition is dismissed. In the circumstances of the case, the parties will bear their own costs.

A.R. Somnath Iyer, J.

24. I agree.

25. Petition dismissed.


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