KRISHI UTPADAN MANDI PARISHAD AND ANR. versus I.T.C. LTD.

Citation: [2006] SUPP. 9 S.C.R. 132 · Decided: 16-11-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

A 
KRISHI UTPADAN MANDI PARISHAD AND ANR. 
v. 
I.T.C. LTD. 
NOVEMBER 16, 2006 
B 
[ ARIJIT PASAYA T AND S.H. KAP AD IA, JJ.] 
Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964: 
Ss. 26-1, 32 and 33-Market fee on cut tobacco-'-Cigarette 
C manufacturing company-Processing raw tobacco at its factory in one State 
and sending the same at its other factOJy in another State as also to contract 
manufacturers for manufacturing cigarettes-Levy of market fee-Jn the year 
1998 President Mandi Samiti holding that market fee not to be paid on cut 
tobacco sent to company's own factOIJ' and as regards cut tobacco sent to 
D contract manufacturers matter referred to Director-Director ordering 
President to take fresh decision-Held, there is no power of reopening 
assessment in the Act-Complaint having been made on 10.8.1998, factual 
position has to be considered subsequent to 1.8.1998. 
Respondent-company having its registered office at Calcutta owned 
E several factories in the country including the one at Saharanpur (UP) within 
the jurisdiction of the appellant-Mandi Parishad. The respondent for 
manufacturing cigarettes purchased tobacco in raw form from Toba'-CO Board 
and processed it at the factory in Saharanpur. Thereafter the cut tobacco 
was sent to different factories of the company including the one at Calcutta. 
Some of the cut tobacco was also sent to certain contract- manufacturers who 
F were paid manufacturing charges by the respondent-company. 
In view of the U.P. (Amendment) Act No. 12 ofl987, in the Uttar Pradesh 
Krishi Utpadan Mandi Adhiniyam 1964 w.e.f. 31.3.1987, the appellant-Mandi 
Parishad raised a demand of market fee from the respondent on cut tobacco 
G transported by it for use in its factory at Calcutta or to be used by the contract 
manufacturers for manufacturing cigarettes. The respondent represented 
against the demand and the President of the Mandi Samiti, by his order dated 
28.10.1998 held that the respondent-company was not liable to pay market 
fee on the consignment of cut tobacco dispatched to its Calcutta factory; and 
with regard to the cut tobacco sent to contract manufacturers, he sought 
H 
132 
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KRISHI UTPADAN MANDI PARISHAD v. l.T.C. LTD. 
133 
direction from the Director, Mandi Parishad, who rejected the case of the A 
respondent and asked the President, Mandi Samiti to take fresh decision in 
the matter. The respondents challenged the order of the Director in a writ 
petition before the Higlj. Court which held that the order of the Director was 
without jurisdiction as h.e could not have exercised the power of revision under 
s.32 of the Act. Aggrieved, the Mandi Parishad filed the present appeal. 
Disposing of the appeal, the Court 
HELD: 1. In the ~tatute admittedly there is no power of reopening of 
assessments. In the inst~nt case, transactions for the assessment year 1997-
B 
98 fell for consideration.' The complaint was made on 20.10.1998. Therefore, C 
the factual position could have been determined with effect from 01.08.1998 
onwards. The stand of ~he respondent that the office of the Director came 
into effect in 1977 is not correct. In fact the office of the Director came into 
existence in 1973 but n.ot as an officer of the Board. The delegation was 
done on 21.3.1974 to the' Director. [141-F-G) 
2.1. Under Section 32 of the Uttar Pradesh Krishi Utpadan Mandi D 
Adhiniyam, 1964, after t973 there is a substantive power of revision. After 
1991 under two provisions i.e. Section 26-1 and Section 33 power of delegation 
could be exercised. While Section 26-1 is supervisory in character, Section 
33 confers the revisional i;>ower of the Board on the Director. The manner of 
delegation is in terms of the "Regulation" and, therefore, it precludes any E 
other mode. Prior to 1991, Section 26 -I did not pertain to power of revision. 
It operated de hors Sections 32 and 33. The revisional power went out of the 
domain of the State Government and the same remained with the Board. 
[141-G-H; 142-A) 
2.2. After 1991 the situation is that Section 33 deals with aspects other F 
than those covered under Section 32. That is because the revisional power 
was already with the Boa,rd. Post 1991, the delegation could be done only 
under the Regulation. Th.at being so, the High Court's conclusions vis-a-vis 
Section 32 of the Act are not correct. [142-B] 
3. On merits, there i~ no scope for interference with the High Court's G 
order because there was n~ power to reopen. The responde

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