In a significant judgment, the Supreme Court has ruled that market fee and rural development fee are distinct levies that cannot be equated or assumed to be the same for the purposes of exemption under industrial policies. The Court allowed appeals filed by the State of Punjab against orders of the Punjab and Haryana High Court in a case involving exemption from these fees.
The respondent company, M/s Punjab Spintex Ltd., had sought exemption from payment of market fee and rural development fee under the Punjab Industrial Policy, 2003. The Punjab and Haryana High Court had initially dismissed their petition based on a statement by the state counsel that market fee exemption would cover rural development fee as well. Later, when the state sought modification of this order, the High Court rejected it.
Key Legal Issues:
1. Whether exemption from market fee under the 2003 Industrial Policy automatically includes exemption from rural development fee
2. Interpretation of various government communications regarding fee exemptions
3. Scope and purpose of the Punjab Agricultural Produce Markets Act, 1961 and the Punjab Rural Development Act, 1987
Court’s Observations and Ruling:
1. On distinction between fees:
The Court held: “Market fees and Rural Development fees are distinct and, there being no exemption from Rural Development fees mentioned in the 2003 Policy, it only encompasses exemption from Market fees in its ambit.”
2. On interpretation of policy:
Justice Vikram Nath observed: “The 2003 Policy does not specifically exempt Rural Development fees and therefore, such an argument by the Respondent is highly presumptive, far-fetched and a clear attempt at over-reaching the scope of the 2003 Policy.”
3. On statutory framework:
The Court noted: “It is apparent that no unit, other than those approved as Mega Project, has been allowed exemption from the payment of Rural Development fee, unless explicitly provided by the authorities.”
4. On earlier government communications:
The judgment clarified that certain earlier letters relied upon by the respondent had been withdrawn or superseded by subsequent clarifications from the government.
The Supreme Court allowed the appeals, set aside the High Court orders, and dismissed the original writ petition filed by M/s Punjab Spintex Ltd.
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Case Details:
– Civil Appeal Nos. 10970-10971 of 2014
– State of Punjab & Ors. vs M/s Punjab Spintex Ltd.
– Bench: Justice Vikram Nath and Justice Prashant Kumar Mishra
– Date of Judgment: July 15, 2024
