LAHORE, March 15: The justification of levying market fee on ancillary agricultural produce used by various industries across the Punjab is the legal question that is being heard by a full bench of the Lahore High Court.
The court, who is proceeding on the dispute on a daily basis, has adjourned further debate on the issue till Tuesday. The petitioners counsel continued their arguments on Monday before the adjournment was ordered by the full bench comprising Justice M Javed Buttar, Justice Chaudhry Ijaz Ahmad and Justice Syed Jamshed Ali.
Market committees throughout the Punjab levied in 1978 a market fee upon issuance of licences for services and facilities extended to marketing agricultural produce. Later, the same levy was imposed on the sugar, textile and jute industries.
With the passage of time, the amount thus received has accumulated to millions of rupees, which these industries have been paying. As many as 10 sugar, textile and jute mills of Tandlianwala and Jaranwala challenged the levy on the ground that such a tax had to be imposed on agricultural produce for the facilities that the market committees provided for storage, transportation, brokerage, sale, purchase and other facilities. Mills didn't use such facilities and, as such, the levy was unlawful.
These industries have requested the court that the levy by the market committees be declared illegal and they be ordered to refund their millions of rupees collected by the committees.
The market committees started collecting the market fee from the sugar, textile and jute industries since the Punjab Agricultural Produce Market Ordinance was promulgated in 1978.
Section 19 of the ordinance provides that market committees will be the bodies to manage and regulate all agriculture related activities from the crop sowing stage to the sale of produce in market.
The committees are obliged under the law to issue licenses for agricultural activities upon receipt of a market fee in return of facilities like storage, farm-to-market roads, transportation of agricultural produce to market and creation of markets for sale and purchase of all agricultural produce.
The market fee is also to be charged from brokers, commission agents and actual sellers and buyers at markets. The industries have been pleading that they are in no way involved in any agriculture related activities and not using any of the market committees facilities and help.
They also did not purchase agricultural produce from markets as brokers or commission agents in markets created by market committees.
Rather they are making such purchases either directly from farmers or through imports like jute from Bangladesh. The levy of a market fee on their purchase, particularly imported jute, was in no way justified.
Advocate Ijaz Awan submitted in court that the market fee was also unjustified on the basis of the legal maxim, spelled out by superior courts in a number of cases in the past, that a duty or a tax could not be paid twice. He submitted that the mills were paying a fee at the time of the purchase and were not required under the law to pay another market fee to market committees.
The impugned market fee was challenged in the superior courts soon after the ordinance was promulgated about 26 years ago. The Lahore High Court gave different judgments during the period some of which were in conflict. The issue was again raised with the Lahore High Court during early 1990s, seeking clear instructions.
