KRISHNA COCONUT CO. & ANR versus EAST GODAVARI COCONUT & TOBACCO MARKET

Citation: [1967] 1 S.C.R. 974 · Decided: 27-10-1966 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

KRISHNA COCONUf CO. & ANR. 
v. 
EAST GODAVARI COCONUf & TOBACCO MARKET 
COMMITTEE 
October 27, I 966 
[K. SUBBA RAo, C. J., M. HIDAYATULLAH, S. M. SIKRI, 
R. S. BACHAWAT AND J. M. SHELAT, JJ.j 
Madras Comt11'1rcial Crops Market Act, 1933, ss. 2( I) (a), and 11 (I)-
Goods declared under s. 2(l)(a) as comt11'1rcial crops-levy of fee under 
A 
B 
s. 11(1) on goods "bought and sold" In notified area-whether refe"ed to 
single transaction of purchase and corresponding sale-er applied to subse-
C 
quent sale by purchaser-whether object of the Act to be considered-
whether levy valid. 
By a notification in June 1949, the State Government, in exercise of a 
power under s. 2(1)(a) of the Madras Commerical Crops Market Act. 
1933, declared coconuts and copra to be 'commercial crops" within tho 
meaning of the Act. The respondent Market Committee levied in respect 
of the dcclared commerical crops, a fee on the goods 'bought and Sold' 
D 
within the notified area under s. 11 (I) of the Act, read with Rule 28 (I) 
of the Rules made under the Act. Tho appellants filed various suils con-
testing the levy on the ground that they sold coconuts and copra to cus-
tomers outside the notified area and in some cases outside the State; conso-
quently, they sought refund of the fees collected by the respondent com-
mittee. 
The suits filed were tried together and the trial Judge held that tho 
levy, though called a "fee'', was really a "tax", and that the Committee 
was only empowered to impose such tax when the goods were bought and 
sold within the notified area. He therefore passed decrees in all the suits 
for refund of the fees collected. 
The first appeal by the respondent Commillcc was dismissed by 
the 
Sub-Judge who further held that the fee in substance being a tax, such tax 
on sales completed outside the State would also offend Art. 286 of the 
Constitution. 
However, a second appeal to the High Court was allowed 
on the view that the transactions which were the subject-matter of tho 
levy under Section II (I) were transactions consisting of the purchase of 
the goods by the appellants and the corresponding sales to them by Hr. pro-
ducers and not the subsequent sales effected by the appellants to their cus-
tomers outside the notified area or the States; therefore the transactions on 
which the said fee was levied were effected and completed inside the notifi-
«I area and fell within the expression "bought and sold" in section 11 ( 1). 
lo the appeal before this court it was contended on behalf of the appel-
lants that the transactions effected by them consisted in th-~ir purchasing 
the goods and stopped at the stage of $Oods "bought" so that no fee could 
be levied .in the absence of the other mgredient, i.e., sale within the noti-
fied area. 
HELD : The construction placed on s. 11 ( 1) by the High Court was 
correct and the respondent Committee had therefore rightly charged the 
fee. 
(983 B] 
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G 
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A 
B 
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D 
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G 
H 
KRISHNA co. v. MARKET COMMITTEE (She/at, 1.) 
975 
The words "bought and sold" used in s. 11 (I) aim at those transactions 
whereunder a dealer buys from a producer who brings to the market his 
goods for sale. The transaction aimed at must be viewed in the sense in 
which the legislature intended it to be viewed, that is, as one transaction 
resulting in buying on the one hand and selling on the other. Such a 
construction is commendable because it is not only in consonance with 
the words used in s. 11 (I) but is consistent with the object of the Act 
as expressed through its various provisions,, i.e., to prevent the mischief of 
exploitation of producers of commercial crops such as coconuts and copra 
and to see that such producers got a fair price for their goods. [982 A-B, 
E-F] 
Kutti Koya v. State of Madras A.I.R. 1954 Mad. 621; Satyanarayana 
.and Venkataraju Firm v. Godavari Market Committee A.I.R. 1959 Andh. 
Pra. 398; M.C.V.S. Arunachala Nadar v. The State of Ma4ras [1959] 
Suppl. I S.C.R. 92; Louis Drevfus & Co. v. 
South Arcot Groundn111 
Market Committee A.I.R. 1945 Mad. 383; referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 858 to 
861 of 1964. 
Appeals by special leave from the judgment and order of the 
Andhra Pradesh High Court in Second Appeals Nos. 720 and 724 
to 726 of 1957. 
C.B. Agarwala and T. V. R. Tatachari, for the appellants 
(in all the appeals). 
P. Ram Reddy and K. R. Sharma for the respondent (in all 
the appeals. ) 
The Judgment of the Court w

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