LAHORE, March 17: The Lahore High Court on Wednesday observed that under Article 189 of the constitution, it could not transgress judgments of the Supreme Court and other superior courts in cases challenging the levy of market fee by market committees.
The observation was made in response to Advocate Shahid Karim's arguments on the jurisdiction of market committees constituted and governed by the Punjab government.
Mr Karim, who concluded his arguments on Wednesday, submitted that the market fee was a kind of sales tax which could only be levied by the federal government in accordance with the Federal Legislative List.
This list, the counsel submitted, spelled out that taxes on sale and purchase of all goods - exported, imported, produced, manufactured and consumed - fell within federal government's jurisdiction. The levy of market fee by market committees was illegal, he maintained.
As many as 16 industries producing sugar, textile and jute bags, had challenged the Punjab Agriculture Produce Market Ordinance 1978 on the touchstone of Fourth Schedule of the constitution, with the plea that sales tax was not a provincial subject.
The full bench of Lahore High Court, comprising Justice Javed Buttar, Justice Chaudhry Ijaz Ahmad and Justice Syed Jamshed Ali, which is proceeding on the dispute on a daily basis, adjourned further debate on the issue until Thursday when Advocate Ejaz Awan concluded his arguments.
Market committees throughout the Punjab levied the market fee in 1978 on issuance of licences for services and facilities extended for marketing agricultural produce. The same levy was later imposed on sugar, textile and jute industries. With the passage of time, the amount thus received piled up to millions of rupees.
The industries challenged the ordinance and the levy also on grounds that it should have been imposed on agricultural produce, as market committees provided facilities for its storage, transportation, brokerage, sale and purchase. Since the industries were not using these facilities, the levy was unlawful.
The industries prayed to the court that the levy by market committees be declared illegal and the collected millions refunded. The market committees had been collecting the market fee from 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 manage and regulate all agriculture-related activities from the crop-sowing stage to the sale of produce in the market.
The committees are obliged under the law to issue licences for agricultural activities upon receipt of market fee in return for facilities like storage, farm-to-market roads, transportation of agricultural produce and creation of markets for its sale and purchase. The market fee is also charged from brokers, commission agents and sellers and buyers.
The industries had been pleading that they were in no way involved in any agriculture-related activity. They were also not using any of the market committee facilities.
They also did not purchase agricultural produce from markets as brokers or commission agents in markets created by market committees. They were making such purchases either directly from farmers or through imports, like that of jute from Bangladesh. The levy of market fee on their purchases, particularly that of the imported jute, was in no way justified.
The impugned market fee was challenged in superior courts soon after the ordinance was promulgated 26 years ago. The Lahore High Court gave different judgments during the period.
The issue was again taken up with the Lahore High Court in the early 90s. Justice Malik Mohammad Qayyum, referred the matter to the chief justice on April 10, 2000, with the request that a larger bench be constituted for hearing the petitions.
