LAHORE, March 25: A full bench of the Lahore High Court asked the provincial government on Thursday whether it had enforced by-laws under the Punjab Agriculture Produce Market Ordinance, 1978.

The question arose when Advocate Ijaz Ahmad Awan, representing nine sugar and textile mills, submitted that the Punjab government had failed to formulate and enforce bylaws even after 25 years of the ordinance promulgation.

The court adjourned till March 29 the proceedings when Advocate Awan concluded his arguments. Advocate-General Syed Shabbar Raza Razvi will explain the Punjab government's point of view during the next hearing.

As many as 16 industries producing sugar, textile and jute bags, had challenged the vires of the Punjab Agriculture Produce Market Ordinance, 1978, on the touchstone of the Fourth Schedule of the Constitution and on the plea that sales tax was not a provincial subject.

Advocate Awan contended that in the absence of such bylaws, the levy of market fee by market committees was unlawful even for the purpose of regulating grain markets.

He submitted that sugar mills were governed by special laws like the Sugarcane Act of 1934, the Agricultural Produce Act of 1939 and the West Pakistan Sugar Factories Control Act of 1950. The market committees had no jurisdiction over the sugar industry.

He submitted that the market fee was a sales tax which could only be levied by the federal government in accordance with entry number 49 of the Federal Legislative List of the Constitution.

According to the list, levy of taxes on sale and purchase of goods - exported, imported, produced, manufactured and consumed - fell within the federal government's jurisdiction and the market fee, levied by the market committees, was an illegal tax.

The counsel also pointed out anomalies in the 1978 law which, according to its provision 2(a)(IX) listed poultry, including turkey, fish and livestock products such as beef, mutton, hides and skins, bones, wool, hairs, poultry feeds, eggs, cheese, butter, 'desi ghee', milk and curd as agriculture produce and charged a levy of 50 paisa per kilogramme as market fee.

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. The petitioner industries challenged the ordinance and the levy by market committees also 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 services. Since the industries were using no such facilities, the levy was unlawful.