' SABIHUDDIN AHMED, J.--The petitioners in both these petitions appear to be aggrieved by notices from market Committee and functionaries of the Provincial Government requiring them to pay Market fee in terms of the provisions of the Sindh Agricultural Produce Markets Act, 1939, and have, inter alia, called in question the power of the Provincial Legislature to levy such fee.
2. The facts in C.P. No,392 of 1994 appear to be that the petitioner owned a Sugar Mill in Taluka Matiari District Hyderabad. The aforesaid Taluka was established in 1988 and was raised to the level of a Sub-Division in 1992. Prior to 1988 the area where the petitioner's mill is located fell within the territorial limits of Taluka Hala. On 17-7-1993, the petitioner received a notice from the respondent No,2, i,e, the Market Committee, Hala, requiring them to obtain a licence under section 6 of the Agricultural Produce Market Act, 1939 hereinafter mentioned as the Act) and to make payment of Market fee at the rate of 0.25 Rupee per 40 k.g. In respect of the purchase of Sugarcane made by the petitioner from 1991 to 1993 under section 19 of the Act and Rule 29(11) of the Rules made thereunder. The petitioners were at the same time required to communicate their objections, if any, within three days of the receipt of such notice. Petitioner responded to the notice contending that to the best of their knowledge the respondent No,2 had done nothing to establish a Mandi for the purpose of sale and purchase of agricultural produce at any place within the area allocated to it and requested that if such Mandi had been established the same may be communicated to the petitioners. The respondent replied that the entire Matiari Taluka fell within the notified area of Hala Market Committee and the petitioners being "dealers" in terms of the provisions of the Act, they were liable to pay market fee in terms of the provisions of the Act and Rules and bye-laws made thereunder. It appears that a great deal of correspondence took place between the petitioners and respondent No,2 and respondent No,3 (who after the supersession of the Market Committees in November, 1993, assumed the function of the Committee) wherein both parties stuck to their respective positions. Having failed to persuade the respondents to accept their point of view, the petitioners filed this petition, claiming the following relief:-- "(i) To strike down section 19 of the Agricultural Produce Markets Act, 1939 and Rule 29 of the Agricultural Produce Markets Rules, 1940 or any other provisions therein imposing a levy as void ab initio, illegal, unconstitutional and of no legal effect;
(ii) To strike down the Agricultural Produce Markets Act, 1939, as void ab initio and of no legal effect or alternatively hold the same to be inapplicable to the petitioner;
(iii) To strike down the impugned notification under section 4 of the 1939 Act, or any other allied notification;
(iv) To declare and hold the respondents insistence to the petitioner to obtain licence and pay the Market Committee fee as illegal;
(v) To hold that the Market Committee fee is exorbitant, expropriatory and confiscatory in nature and hence unconstitutional;
(vi) To stay proceedings and demand (if any) pending disposal of this Constitutional' Petition;
3. In Constitution Petition No,D-2161 of 1996 the petitioner No,1 claims to be an Association of individuals and corporate entities owing Flour Mills and the petitioner No,2 is a private company owning a flour mill in S.I.T.E.. Karachi. On 19-8-1982 the respondent No,1 i,e, Government of Sindh issued a Notification under section 4 of the Act, declaring the 'limits of Karachi Cantonment Board and Karachi Metropolitan Corporation, as notified area for the purpose of the Act. Apparently the owners. Of Flours Mills in Karachi, were called upon to pay market fee under the Act and some negotiations took place between the petitioner No,1 and functionaries of the Government. On 19-9- 1996 the Director-General Agricultural Extention Sindh addressed a letter to the Chairman of the petitioner No,1, stating that no positive steps had been taken by the petitioners towards payment of market fee on sale and purchase of wheat and its bye-products and requiring them to ensure such payment on the part of their members as early as possible. Aggrieved thereby the petitioners moved this Court claiming the following reliefs:-- "(i) making a declaration that the provisions of section 19 of the Agricultural Produce Markets Act, 1939 read with Rule 29 of the Agricultural Produce Markets Rules, 1940 and all other provisions in the said Act and the said Rules supporting the levy of market fee as provided under the said section 19 and the said Rule 29, are ultra vires the powers of the respondents and are therefore, without the authority of law and of no legal effect;
(ii) directing the respondents to refrain from claiming, demanding or recovering any sum as market fee under the said section 19 read with said Rule 29 and all other sections and Rules supporting the levy of market fee as provided under the said section 19 and the said Rule 29 and all other provisions of the said Act, and of the said Rules; iii) directing the respondents to refrain from requiring or compelling the members of the petitioner No,1 including the petitioner No,2 to apply for and obtain licences as dealers under the said Agricultural Produce Markets Act, 1939 and the said Agricultural Produce Markets Rules, 1940; and
(iv) making such other or furiher declarations and giving such other or further directions as may appear to this Hon'ble Court just and proper in the circumstances of the case."
4. Since common questions of law were involved. Both these petitions were directed to be heard together. Dr. Farough Nasim, learned counsel for the petitioner in C.P.
No,D-392 of 1994 took the burden of addressing us on the legal questions involved and Mr. Muhammad Farid adopted his arguments. The respondents were represented by Mr. Munib Ahmad Khan, Additional Advocate-General.
5. Dr. Farough Nasim pressed before us the following contentions:--
(i) That the Act was inoperative inasmu ch as it was extended to the area then forming the Province of Sindh only through a West Pakistan Ordinance promulgated in 1964 and the aforesaid Ordinance not having been approved by the Provincial Assembly shall be deemed to have been repealed after six months from its promulgation in terms of Article 79 of the 1962 Constitution;
(ii) That the levy of market fee under section 19 of the Act, was ultra vires the legislative powers of the Provincial Assembly inasmuch as such fee amounted to a tax on sale and purchase of goods, which could only be levied by the parliament in terms of Article 142 of the Constitution read with item 49 of the First Schedule.
(iii) That even otherwise the Notification under section 4 of the Act declaring the area of the petitioner mill as part of the territorial limits of the Market Committee Hala having been issued without following the mandatory requirement of section 3 of the Act, was void and inoperative.
(iv) That in any event the respondent No,3 had no power to levy, demand, or collect market fee as the power to do so had not been delegated to the aforesaid respondent upon the supersession of Market Committees in November, 1993.
6. Tracing the legislative history of the Act as operative in this Province Dr. Farough Nasim pointed out that prior to the merger of the Provinces into One Unit in 1955, separate laws relating to regulation of Agricultural Produce Market were operating in different Provinces. However, on 1st December, 1964, the Governor of West Pakistan promulgated Ordinance, XXII of 1964, amending the Punjab Agricultural Produce Markets Act, extending the aforesaid Act, to the entire Province of West Pakistan except the tribal area through amendments in sections 1 and 2 of the Punjab Act.
Consequently a new section 32 was also added, whereby N.-W.F.P. Agricultural Produce Market Act, 1939, the Sindh Agricultural Produce Markets Act, 1940 and the Bahawalpur Agricultural Produce Market Act, 1947, were repealed. Article 79 of 1962 Constitution like Article 128 of the present Constitution, required that an Ordinance promulgated by the Governor shall be laid before the Provincial Assembly and in case it was not approved by the Assembly within 42 days of the first meeting of the Assembly following promulgation of the Ordinance or within 180 days after such promulgation it would cease to have effect and be deemed to have been repealed. Learned counsel argued that the provisions of Article 79 of the 1962 Constitution were similar to those of Article 128 of the present Constitution and Ordinance by its very nature being temporary legislation acquires permanence on the statute book only when it assumes the form of an Act of the Provincial Assembly or the Parliament as the case may be. He pointed out that no Act, of the Provincial Assembly, adopting the provisions of the 1964 Ordinance, appears to be available on the statute book. He argued that we should take judicial notice of the same and thereupon hold that the Ordinance, ceased to remain operative with effect from 1st June, 1965.
7. While learned counsel appears to be correct to the extent that under the present Constitutional dispensation an Ordinance promulgated by the Governor or the President only remains operative for a limited duration and only an act of legislature acquires permanence on the statute book. He is also correct in contending that the position was cimilar even under the 1962 Constitution to the extent that an Ordinance, without being approved by the legislature remained operative only for a limited period. The argument nevertheless overlooks a fundamental distinction between the relevant provisions of the two Constitutions. Article 128(3) requires that an Ordinance laid before the Provincial Assembly shall be deemed to be a Bill introduced in the Assembly, and therefore, it is given the status of permanent law after carrying out the procedural requirement of passing a Bill and obtaining assent of the Governor. On the other hand Article 79(3) of the 1962 Constitution only required the Provincial Assembly to approve or disapprove an Ordinance promulgated by the Governor and the elaborate procedure for passing a Bill was not required to be followed and upon such approval the Ordinance was deemed to have become an Act of the Provincial Assembly.
Therefore, the mere fact that a separate Act of the Assembly was not passed, does not by itself establish that the Ordinance was never approved. We requested the learned Additional Advocate- General to ascertain whether the Ordinance in question had in fact met the approval of the Assembly and he placed before us a Gazette Notification, dated 31-12-1964, showing that such approval had been accorded by the Provincial Assembly through a Resolution. In view of the above position Dr. Farough Nasiin was unable to press his contention further and we find no merit in the same.
8. The main contention of Dr. Farough Nasim, learned counsel for the petitioner however, was that the Agricultural Produce Markets Act, 1939, was itself ultra vires the legislative powers of the Provincial Legislature and as such void and unenforceable. In support of his contention Dr. Nasim referred to Item No,49 of Part I of the Fourth Schedule to the Constitution describing the subjects in respect of which only the Parliament is empowered to make laws. The aforesaid item 49 reads as under:-- "Taxes on the sales and purchases of goods, imported, exported, produced, manufactured or consumed."
9. Learned counsel contended that in its pith and substance market fee leviable under section 19 of the Act, was nothing but tax on sale of goods produced within a notified market area. While conceding that agricultural produce could not be taken as manufactured goods learned counsel argued that the words "produced" were used in the above-quoted item in the Fourth Schedule in contradistinction to the expression "manufactured" and there was no warrant for assuming that it could only be confined to artificially produced goods and not to natural products. In support of his contention learned counsel referred to the comments of Dr. Durgadas Basu in his Shorter Constitution of India (10th Edition) interpreting similar provisions in the Indian Constitution, to the following effect:-- "the word 'produce' in this context contemplates some expenditure Human skills and labour but does not necessarily involve the transformation of raw material into an altogether different commodity."
From the same commentary it appears that the Supreme Court of India in Empire Industries v.
Union of India (AIR 1985 SC 662), proceeded to hold that a natural product like coal was also covered by a similar stipulation in the Indian Constitution. He appears correct and we are persuaded to observe that natural products are not altogether excluded from the ambit of the abovementioned Constitutional provisions particularly when it is settled law that item specified in a legislative list of Constitution ought to be liberally construed. Learned counsel also attempted to distinguish the nature of this levy from octroi by contending that whereas octroi was in essence a tax on import of goods into a particular local area, for the purpose of consumption, use or sale within such area the dominant incidence of tax in case of market fee was sale of goods and not the use thereof, and was therefore, covered by the aforementioned item No .49 .
10. The argument is indeed attractive and does not appear to have been raised in the three Supreme Court judgments (mentioned in the later part of this Judgment). Nevertheless it could succeed only on the hypothesis that the market fee leviable under this Act is a tax simpliciter for general revenue purposes and not a fee for rendition of certain services. For determining this question it may be appropriate to examine the provisions of the Act. The preamble to the Act stipulates that it is expedient to provide for better regulation of purchase and sale of agricultural produce and establish markets, therefore, sections 3 and 4 contemplate that after inviting and considering objections, the Government may declare an area to be a notified market area. Upon such Notification and establishment of a Market Committee no person, unless exempted by the Act can set-up, establish or use any place for purchase, storage or sale of any agricultural produce except in accordance with the terms of a licence. Under section 4-A, agricultural produce in a notified market area is required to be sold through open auction or in a particular manner but not below the minimum price fixed by law (if any). Section 6 requires licensing of dealers in agricultural products and composition of market committees and section 9 describes some of the duties of such committee which include arrangement for open auctions including measures for correct weighment and final payment, establishment of markets, fair price shops, warehouses, cold storage etc. Some functions of market committees are mentioned in other provisions of the Act and statutory rules i,e, collection and dessimination of information regarding crop statistics and marketing of agricultural products, arrangement of agricultural exhibitions, melas, seminars etc., providing facilities and comforts to persons coming to the market and cattle etc. Brought by them, water, shelter, shades, parking accommodation etc. The Act also provides for constitution of Board of Arbitration and resolution of disputes pertaining to transactions involving agricultural products upon payment of nominal fee.
11. The scheme of the aforesaid Act also appears to have been examined by the Honourable Supreme Court in the cases of Noon Sugar Mills v. Market Committee (PLD 1989 SC 449) and Mirpurkhas Sugar Mills v. Government of Sindh (1993 SCM R 920). In the latter case, Sajjad Ali Shah, J.
(as his Lordship then was) observed:-- "Scheme of A.P.M. Act, 1939 shows very clearly that it has been enacted for better regulation for purchase and sale of agricultural produce and establishment of markets for that purpose mainly to give protection to the growers from unscrupulous businessman and to afford facilities to them so that they can obtain a fair price for their produce."
12. Against the above background it may now be appropriate to examine the fiscal provisions in the Act. Before doing so it may be mentioned that according to section 14 a Market Committee is an independent legal entity, being a body Corporate with power to hold property and to sue or be sued in its own name. Section 19(1), enables a Market Committee to levy a fee on agricultural produce bought or sold in a notified market area at rates prescribed by rules. Under Rule 29 a fee of Re.1 is payable on 200 kilograms of sugar-cane and 125 kilograms of refined sugar. Under section 19(2) 15% of such fee is to be credited to a "Market Committee Pool Fund" for being expended for specific purposes laid down in section 19-A. Under sections 20 and 21 the remainder has to be used by the Market Committee itself for defraying its expenses and providing facilities laid down in the Act. Any surplus is to be transferred to the reserve fund of the committee or invested in an approved manner. It is quite clear that not a single penny is appropriated by the Government for general revenue purposes. We are, therefore, of the view that such fee is only levied for services provided by Market Committee and cannot be described as a Tax in any sense.
13. Dr. Farough Nasim then argued that in any event the Notification of the Provincial Government, dated 5-11-1983, declaring the area wherein the petitioner mills is located as notified Market Area in terms of section 4 of the Act, was illegal inasmuch as it had been issued without following the requirements of section 3 i,e, Notifying the intention of the Provincial Government and inviting the objections. From, the plain reading of sections 3 and 4 it appears that a Notification under section 3 is required to precede one under section 4. Nevertheless Mr. Munib Ahmad Khan, learned Additional Advocate-General pointed out that the aforesaid objection had been raised and was repelled by the Honourable Supreme Court in the case of Mirpurkhas Sugar Mills v. Government of Sindh (1993 SCM R 920). Indeed he appears to be correct as the Honourable Supreme Court has held that the provisions of section 3 being procedural are not mandatory and its non-compliance which has caused no prejudice to the petitioner would not vitiate the notification under section 4. Being respectfully bound to follow the law declared by the Honourable Supreme Court we regret that the contention of the learned counsel for the petitioner on this account too cannot be sustained.
14. Finally Dr. Farough Nasim argued that the Market Committee having been superseded by a Notification of the Sindh Government dissolved by a Notification of the Provincial Government, dated 22-11-1993 (Annexure E to the petition) even if the power to levy such fee vested in the Committee, it could not be exercised by the officer appointed to assume the functions of such Committee. In this context he placed strong reliance on an unreported judgment of the Honourable Supreme Court in the case of Fauji Sugar Mills v. Market Committee, Tando Muhammad Khan, deciding Civil Appeal No,K-27 of 1973, K-65 of 1982 and K-5 of 1983, dated 27-8-1986. In the aforesaid case their Lordships drew a distinction between the powers and functions of a Market Committee which could be assumed by the Provincial Government under different provisions contained in section 25-A of the Act. Their Lordships indeed held that the levying market fee was an incident of power and not merely a function which could not be exercised by an officer appointed by the Government. Learned counsel is indeed correct to the extent that under the aforesaid section the functions of a Market Committee, in an emergency can be delegated to any person appointed by the Government but the powers can only be assumed by the Government itself and the levy of tax is an incident of power. Nevertheless it is apparent from the correspondence on the record that the levy was imposed by the Market Committee itself while it was in existence prior to 22-11-1993 and after the appointment of Administrator only the levy imposed by the Committee is being collected. In our humble opinion mere collection of fee as distinguished from levying it could legitimately be treated as a ministerial act falling within the category of functions, and therefore, the principles of law declared by the Honourbale Supreme Court are not attracted to the facts of the present case.
15. Dr. Nasim then attempted to argue that no services were in fact being rendered by the Market Committee, and therefore, there was no justification for levying the fee in question. Indeed the extent of facilities provided by a Committee would depend on its resources but as long as such funds are secure and liable to be expended only for the purpose of the Act, we do not think that the petitioner can justifiably question the legitimacy of the levy of fee itself. In case of wastage or misapplication of such funds the Act itself provides for proceedings under section 21-A to be taken against those responsible for doing so. Learned counsel indeed referred to some judgments in support of the proposition that a fee can only be levied for the purpose of rendition of services but he was unable to refer to any principle of law requiring that a fee levied under statutoy powers must be proportionate to the benefits actually derived by the person liable to pay the same. In any event there is no data placed on record to show that the same is exorbitant or confiscatory. In the case of Noon Sugar Mills v. Market Committee, in almost identical circumstances the Honourable Supreme Court observed that:-- "As regards the contention that the fee should be commensurate with the quantum of services provided, none of the appellants has cared to place any data before us which might indicate that the Market Committees were charging fee at a rate even beyond their legitimate requirements or out of proportion to the services rendered by them in their respective areas. We have, therefore, no hesitation in repelling the contention of the learned counsel."
16. We are therefore, unable to subscribe to this contention as well. In view of the foregoing we are with all deference, constrained to dismiss both these petitions. There shall, however, ben order as to costs.