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Market fee can be imposed on tanned leather: SC

Our Legal Correspondent

NEW DELHI, Feb. 21

THE Supreme Court has held that `tanned leather' can be subjected to market fee, payable under the provisions of the Uttar Pradesh Agricultural Produce Market Act, 1964.

A Division bench comprising Mr Justice V.N. Khare and Mr Justice S.N.Variava, made this ruling, while dismissing an appeal in the case of M/s Park Leather Industry (P) Ltd and another vs State of UP & Others.

The appeal was made against an Allahabad High Court judgement of July 10, 1996 dismissing a batch of writ petitions questioning the validity of the fee.

The petitioners were all engaged in the business of preparing tanned and finished leather. The question raised in the petitions was whether the term `hides and skins' would include `tanned leather.

The contention of the counsel for the appellants was that the term `tanned leather' had not been used either in the Act or in the Schedule of the Act. He said tanned leather was not `hide or skin' and was not derived by processing `hide or skin', but it was a manufactured commodity. It was, therefore, not subject to levy of market fee under the Act, since it was not an `agricultural produce'.

The respondents contended that the term `agricultural produce' had been given a wide meaning in section 2(a) of the Act. It was a definition which was not exhaustive but an inclusive definition. Any items would be an `agricultural produce' if it was spec ified in the schedule or if it was an admixture of two or more items specified in the schedule or if it was in a processed form of any of the items specified in the schedule.

The Supreme Court, in its ruling, said a perusal of section 2(a) of the Act made it clear that an agricultural produce would be a product which was specified in the Schedule or one which was an admixture of two or more items and would also include any su ch item in a processed form.

``In our view it makes to difference for the purposes of the Act that the concerned item is a different commodity from the one which is included in the schedule. It is possible that by virtue of an admixture of two or more items or by virtue of processin g a different commodity nor item may come into existence. Even though a different commodity may come into existence, it would still be an `agricultural produce','' the judges observed.

The court said in the Hindi version of the schedule, the word used was `chamra'. ``There can be no dispute that the term `chamra' would include `leather' in all its form. In this view of the matter the appeal stands dismissed,'' the court said.