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K.M. Chandrasekhar Vs. State of Karnataka - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberW.P. Nos. 3404 of 1984 etc.
Judge
Reported inILR1985KAR2401
ActsKarnataka Rice and Paddy Procurement Levy Order, 1983
AppellantK.M. Chandrasekhar
RespondentState of Karnataka
Appellant AdvocateL.S. Venkatakrishna, Adv.
Respondent AdvocateS. Udayashankar, Adv.
DispositionWrit petition allowed
Excerpt:
.....by the millers and on that basis they have gone on issuing the notice to the millers that the levy surrendered by them is less than the quantum fixed. such a course is not permissible under the provisions of the levy order 83 ... the liability to surrender levy either by a miller or by a dealer arises only when the conditions mentioned in clauses 3, 4 and 6 of the levy order 83 are satisfied and not otherwise. - karnataka sales tax act, 1957 sections 13 & 15: [d.v.shylendra kumar,j] liability - property auctioned by karnataka state financial corporation under section 29 of the state financial corporations act, 1951 - notice to auction purchaser towards sales tax due from erstwhile owners of the auctioned property liability held, an auction purchaser is not a person who steps..........81 or is only a miller who mills only customer's paddy and is therefore not liable to surrender levy paddy has necessarily to be examined by the authorities in the light of the discussions made in w.p. 7251/81 and connected cases. but under the levy order 83 there is a restriction regarding movement of paddy. even if a grower wants to have his paddy milled, there is a restriction on the quantity of the paddy to be hulled. further he is required to obtain and produce the certificate from the village accountant or from the concerned revenue inspector, and produce it before the miller. on production of such a certificate only the miller has to undertake the milling of paddy belonging to the grower. as far as the dealer is concerned there is no difficulty at all. he has to sell to the.....
Judgment:
ORDER

K.A. Swami, J.

1) In all these Petitions, the petitioners are the Millers. They have sought for quashing the notices issued to them as per Annexures A-l to A-11 in W.P. Nos. 3404 to 3414/84 and Annexures Al-to A-8 in W.P. Nos. 3422 to 3429/84 respectively.

2) By the aforesaid notices the Tahsildar has demanded delivery of certain quantity of paddy or rice, as the case may be, towards the levy on the basis that the levy so far surrendered by them does not commensurate with the paddy hulled by them, having regard to the units of electricity consumed by them.

3.1.) The case of the petitioners is that they are customary millers ; that they do not purchase and sell paddy nor do they hull their own paddy in the mills ; that they only hull the paddy brought by others, in their mills and collect the hulling charges ; that they are not even the dealers within the definition of the word 'dealer' as defined in the Karnataka Food grains (Wholesale) Dealers Licensing Order, 1964 (hereinafter referred to as the Licensing Order, 1964) inasmuch as they do not hold paddy or rice for the purpose of their business ; that they are the customary millers as such they are not also liable to surrender levy in respect of the paddy hulled in their mills as the said paddy does not belong to them ; that it is only the miller who hulls his own paddy in his mill is liable to surrender levy; that as the petitioners are not purchasing the paddy and are not hulling their own paddy in their mills they are not liable to surrender levy.

3.2.) The further case of the petitioners is that the very basis is vulnerable because the units of consumption of electrical energy cannot form a safe basis for arriving at the conclusion that the paddy milled in the mills of the petitioners is more than what is shown in the Registers maintained by them ; that the electricity supplied through the meters installed at the mill premises is also consumed for several other purposes such as domestic, office, water supply etc.; therefore the consumption of electrical energy shown in the meter installed in the mill premises cannot be attributed solely to the operation of the mill only.

4) On the contrary it is the case of the respondents that the petitioners, under the guise of claiming that they are customary millers, are in fact hulling their own paddy and using their nomenclature as customary millers for the purpose of covering their activities carried out in contravention of the provisions of the Karnataka Rice & Paddy Procurement Levy Order 1983 (hereinafter referred to as the 'Levy Order 83') ; that a customary miller is also a miller and he cannot claim immunity from the enforcement authorities, that if a customary miller is found to contravene the provisions of the Levy Order 83, it is open to the enforcing authority to seize the rice or paddy found in the premises of the petitioners and to proceed under Section 6A of the EssentialCommodities Act, 1955 (hereinafter referred to as the Act) ; therefore, they cannot claim immunity from the provisions of the Levy Order 83 ; that consumption of electrical energy is also an indicator of the fact that the mill has been operated for certain hours during certain period and this in turn helps to arrive at a conclusion as to the total quantity of paddy hulled in the mill on the basis of an average hulling capacity of the mill to hull the paddy per hour. Therefore, it is submitted that it is on this basis only the Tahsildar has arrived at the quantity of rice each one of the petitioners is liable to surrender. Hence, the notices issued by the Tahsildar demanding surrender of levy cannot, according to learned Government Pleader be considered to be illegal.

5) Having regard to these contentions the following points arise for consideration :-

1) Whether a miller on the ground that he is a customary miller can claim immunity from the provisions of the Levy Order 83?

2) Whether the consumption of electricity can be held to be the sole and sure criteria for determining the quantity of paddy hulled in the mill ?

3) What order ?

6) Point No. 1 :-

Levy Order 83 defines 'custom milling' and 'miller'. It does not define the expression customary miller. 'Custom milling' according to sub-clause (a) of Clause 2 of the Levy Order 83 means milling of paddy, not belonging to the miller, into rice in his rice mill on payment of milling charges in cash or in kind. 'Miller' according tosub-clause (f) of Clause 2 thereof means a person who engages himself in rice milling operations in a rice mill under a licence granted under the Rice Milling Regulation Act, 1958 (Central Act 21/50) and includes a person or the authority which has the ultimate control over the affairs of such mill and when the said affairs are entrusted to a Manager or a Managing Director or a Managing Agent. Thus from the aforesaid two definitions it is clear that a customary miller is also a miller. It may be that he may mill the paddy belonging to others and not of his own on payment of milling charges in cash or in kind. But he is not prevented, and there is no law preventing him, from hulling his own paddy also. Therefore, it is not possible to hold on the basis that a particular miller is a customary miller, because he undertakes to mill or mostly mills, the paddy belonging to others, therefore, he is immuned from the provisions of the Levy Order 83. But it also does not follow that he is liable to surrender levy unless the other requirements of the Levy Order are complied with. Clause 3, of the Levy Order 83 further provides that every miller shall sell every day beginning with the date of commencement of the Levy Order 83 to the State Government or the purchase agent at the purchase price of 50% of the total quantity of the rice obtained by milling paddy owned by him in his rice mill every day conforming to Fair average quality. The expression 'paddy owned' used in sub-clause (1) of Clause 3 of the Levy Order 83 is very material to be noticed in this regard. If a miller mills in his mill the paddy owned by him, then only he is liable to surrender 50% of the rice conforming to fair average quality, obtained by milling such paddy. On the contrary, if a miller whether he is or not a customary miller, mills paddy belonging to others on collecting milling charges in respect of such paddy he cannot be considered to be liable to surrender levy of the 50% of the rice obtained from milling such paddy. Therefore, a miller whether he is or not a customary miller before is held liable to surrender 50% of the total quantity of rice obtained by milling paddy, it must be shown that he has milled in his mill the paddy owned by him and not the paddy which is owned by others. The liability to surrender levy is commensurate with the quantity of paddy owned and hulled by him in his mill.

7) The enforcing authorities are empowered under Clause 13 of the Levy Order 83 to enter into the premises to effect seizure and search in order to find out whether theprovisions of the Levy Order 83 have been scrupulously obeyed by the persons who are governed by it. Therefore, whether one is, or not a customary miller cannot prevent the enforcing authorities from entering the premises and making the search and seizure provided they are prima facie satisfied that the provisions of the Levy Order 83 are being disobeyed.

8) In W.P. 7252/81 ILR (Karnataka) 1982(2) 1146 - J.H. Rice Mill - v. - State. decided on 5-4-1982, Levy Order 81 came up for consideration. In that Petition the Petitioners claimed to be customary millers. On considering the relevant provisions of the Levy Order 81, this Court has held as follows :-

'Among the millers that have challenged the levy order, some claim that they are exclusively engaged in milling the paddy of consumers only. So far as this class of millers, the order does not require them to surrender any levy to the Government or its nominees. While according its approval to the levy order Government of India had also expressed that this class of millers should not be subjected to surrender levy. Unfortunately, some of the officers without full comprehension of the provisions have issued notices to these millers also. The levy order does not provide for levy on such millers to surrender levy.'

9) The aforesaid decision has been followed in the subsequent Writ Petition Nos. 19147/82 K.R. Krishnamurthy - v. - State of Karnataka DD 25-6-1982 and 1243/83 and connected Petitions. The decision in W.P. No. 19147/82 has further clarified that a miller who mills only customer's paddy is not liable to deliver levy to the State Government or its nominees. It is also further held that whether a person is a miller within the meaning of that term occurring in the Levy Order 81 or is only a miller who mills only customer's paddy and is therefore not liable to surrender levy paddy has necessarily to be examined by the authorities in the light of the discussions made in W.P. 7251/81 and connected cases. But under the Levy Order 83 there is a restriction regarding movement of paddy. Even if a grower wants to have his paddy milled, there is a restriction on the quantity of the paddy to be hulled. Further he is required to obtain and produce the certificate from the Village Accountant or from the concerned Revenue Inspector, and produce it before the miller. On production of such a certificate only the miller has to undertake the milling of paddy belonging to the grower. As far as the dealer is concerned there is no difficulty at all. He has to sell to the State Government 50% of the total quantity of the rice, which he obtains from the paddy he gets milled from the mills conforming to fair average quality. Therefore it follows that a miller who claims to be a customary miller can mill paddy of such persons who produce certificate regarding the paddy brought by them for milling and as far as the dealers are concerned they are required to surrender levy rice at the mill point itself as soon as they get the paddy milled. Therefore, it is clear that the customary millers cannot claim complete immunity from the operation of the provisions of the Levy Order 83. Under Clauses 5 and 11 of the Levy Order 83 every 'miller' which expression includes customary miller also is liable to maintain the accounts in the prescribed form and is required to submit the same at the stated intervals to the concerned authorities.

8) For the reasons stated above, point No. 1 is answered as follows :-

A customary miller is not completely immuned from the provisions of the Levy Order 83 on the ground that he is a customary miller. But he is not liable to surrender levy under the provisions of the Levy Order 83 as long as he hulls the paddy belonging to others on collecting hulling charges and not of his own. He is required to maintain the registers and submit the returns as per Clauses 5 and 11 of the Levy Order 83.

9. Point No. 2 :

The impugned notices cannot be sustained. The same are not issued on the basis of a finding arrived at afteraffording an opportunity to the petitioners though they might have hulled the paddy owned by them without surrendering the levy. The quantity of levy to be surrendered by each one of the Petitioners is arrived at only on the basis of consumption of electrical energy. As stated by thePetitioners the electrical energy supplied through the meter installed at the mill premises is not consumed only for operating the mills; but it is also consumed for several other purposes, such as domestic use, office use and other purposes. It is also further averred by the Petitioners that the electricity is consumed for the purpose of testing the mills; that some times due to the difficulty in the operation of the mill, more electricity is consumed than what is necessary; that the moisture contents of paddy also delay the process of hulling while adding to the consumption of electricity; that the performance of machinery installed in the various mills differ from one mill to another. Some of the petitioners are also having flour mills along with rice mills. The electricity consumed by the flour mills also adds to the totalconsumption of electricity. These are some of the causes which add to the total consumption of electricity. Therefore it is not at all safe to arrive at a conclusion that the miller has milledcertain quantity of paddy only on the basis that he has consumed certain units of electrical energy. No doubt as contended by Sri Udaya Shankar, learned Government Pleaderconsumption of electrical energy is one of the factors to be taken into account for the purpose of arriving at a conclusion regarding the quantum of paddy hulled by a miller. Inaddition to this, it is also curious to notice that what the enforcing authorities have done is that they have fixed in advance the quantum of levy to be surrendered by the millers and on that basis they have gone on issuing the notice to the millers that the levy surrendered by them is less than the quantum fixed. Such a course is not permissible under the provisions of the Levy Order 83. Thus the impugned notices are not sustainable. The liability to surrender levy either by a miller or by a dealer arises only when the conditionsmentioned in Clauses 3,4 and 6 of the Levy Order 83 are satisfied and not otherwise. Therefore, the impugned notices are liable to be quashed.

10) Point No. 2 is answered in the affirmative and in favour of the Petitioners.

11) For the reasons stated above these Petitioners are entitled to succeed. Accordingly the Writ Petitions are allowed. The impugned notices issued to the Petitioners as per Annexures A-l to A-l1 in W.P. Nos. 3404 to 3414/84 and Annexures A-l to A-8 in W.P. Nos. 3422 to 3429/84 are hereby quashed.

However it is made clear that it is open to the enforcement officers to proceed in accordance with law and in the light of the observations made in this order.


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