LAHORE, July 7: The Lahore High Court has held that any industrial unit engaged in the sale and purchase of agricultural produce, even in the shape of raw material , is a 'dealer' in legal terms and is under an obligation to obtain a licence by paying necessary market committee fee.

The LHC, however, adjudged that market fee was not applicable on the sale of the end product. It explained that mills were obliged to pay market fee at the stage of the purchase of sugarcane from growers, but it was not applicable on the sale of sugar that the mills produced.

These observations are part of the judgment which, on June 17, dismissed the writ petitions of 16 industries producing sugar, textile products, jute bags and poultry feeds, and challenged the levy of market fee.

The high court also observed that the provision of obtaining a licence under the Punjab Agricultural Produce Marketing Ordinance was projected at regulating all trading transaction within the jurisdiction of a market committee.

Any place, under the law, be it the premises of a mill or any other place set up for the trading of agricultural produce, was a market area and a fee was leviable.

The high court also said in the judgment, approved for reporting as a case law, that the law was aimed at discouraging parallel trading of agricultural produce and if mills were exempted, this would amount to permit another set of market in a notified market area.

Upholding the levy, a full bench of the high court comprising Justice M Javed Buttar, Justice Chaudhry Ijaz Ahmad and Justice Syed Jamshed Ali saw no illegality in market committees charging the industries to obtain licences to carry out their activity.

The judgement quoted the Supreme Court as saying while dismissing similar appeals that the objective of the law would be frustrated if everybody was allowed to indulge in business outside a market committee limits.

The judgment, however, pointed out to the levy of market fee on agricultural produce that was purchased as raw material from outside the country or the Punjab. The point was raised in response to the contention of a jute bag producing industry, which said it purchased jute from Bangladesh.

Also a textile mills opposed the levy on cotton purchased from Sindh. The court held that this question required a factual inquiry upon the claim of exemption by such a mills from the area market committee.

The mills would have to satisfy the market committee that it had not purchased the raw material within the notified market area and the consignment was not weighed within its premises either.

The judgment said even the category of persons exempted from obtaining a licence under the ordinance, were licensees under the Punjab Act No V of 1939. Thus the scope of exemptions was narrow and the mills did not fall in any of the categories, which could claim exemption.

The point raised by some petitioners that any levy, including the market fee, was a tax which was part of the Federal Legislative List of the constitution and the Punjab government had no jurisdiction to impose it, was rejected by the judgment in the light of a Supreme Court decision.