APHC010254452022 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI WRIT PETITION No.15429 of 2022 along with W.P.Nos.15437 & 18078 of 2022 Bench Sr.No:- [3584] 1. W.P.No.15429 of 2022:- M/s. Akshay Food Impex Private Limited and others ...Petitioners Vs. The State of Andhra Pradesh and others ...Respondents 2. W.P.No.15437 of 2022:- M/s.BMR Exports and others ...Petitioners Vs. The State of Andhra Pradesh and others ...Respondents 3. W.P.No.18078 of 2022:- M/s. Sandhya Aqua Exports Pvt. Ltd. and others ...Petitioners Vs. The State of Andhra Pradesh and others ...Respondents ********** Reserved for orders on : 17.08.2026 Pronounced on : 18.09.2026 Whether only operative part : of the judgment is pronounced or whether full judgment is pronounced Full CORAM : THE CHIEF JUSTICE LISA GILL SRI JUSTICE CHALLA GUNARANJAN DATE : 18th September, 2026. 2 WP_15429_2022 & Batch Present : Advocate for Petitioners : Mr. P.Durga Prasad Advocate for Respondents : Learned Additional Advocate General, Mr.Gangisetty Rajeswara Rao and Ms.G.N.Uma Rani, learned Standing Counsel for Agricultural Marketing Committees. LISA GILL, CJ. Above said three writ petitions were taken up together for hearing and adjudication at request and with consent of learned counsel for parties as question for consideration in all writ petitions is identical. 2. Petitioners in all writ petitions have challenged action of respondent No.1 in revising market fee on prawns/shrimp from 0.25% to 1% vide G.O.Ms. No.27, Agriculture & Cooperation (MKTG-II) Department, dated 22.04.2022, which was published in official gazette on 26.04.2022. Petitioners also challenge action of respondents in amending bye-law 24(1) of Agricultural Market Committees (for short, „AMC‟) for enhancement of market fee on paddy and prawns/shrimp vide notification, dated 27.04.2022, limited to its application qua prawns/shrimp (domestic & export) being illegal, arbitrary, dehors legislative competence and contrary to provisions of Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966, (for short, “Act of 1966”) and Rules framed thereunder. 3. Learned counsel for parties submitted that individual facts in each of the cases regarding demand raised from petitioners is not in dispute and that 3 WP_15429_2022 & Batch there is no necessity to refer to specific facts of each case, as questions involved for adjudication in all writ petitions are identical i.e., i) whether State Government has legislative competence to levy market fee in question which is in fact in nature of a tax because of absence of element of quid pro quo? ii) whether even on assumption of legislative competence of the State, impugned notification is liable to be set aside in view of same not being in accordance with provisions of Act of 1966? iii) whether shrimps/prawns (frozen) are exigible to market fee not being raw material / livestock? 4. Brief facts necessary for adjudication of the matter are that petitioners are statedly classified as exporters registered under provisions of Marine Products Exports Development Authority, Ministry of Commerce, Government of India. They are involved in business of seafood product preparation, packaging and exports throughout world, including inter-state and intra-state trade and commerce for a number of years. 5. Section 33 of Act of 1966 empowers the State Government to make rules for giving effect to purposes of Act, either generally or with respect to any notified area or areas. Rule 74 of A.P. (Agricultural Produce and Livestock) Market Rules, 1969 (for short, Rules of 1969) empowers imposition of market fee. In terms of Section 34 of said Act, bye-laws for market committee can be promulgated. 6. A Market Committee in terms of Section 12(1) of Act of 1966 is competent to levy fee on notified agricultural produce, livestock or products of 4 WP_15429_2022 & Batch livestock purchased or sold in a notified market area at a rate specified in bye- laws subject to a ceiling of Rs.2/- per Rs.100/- of aggregate consideration. As per Section 3 of Act of 1966 & Rules of 1969, in Schedule - II under Group – IV, fish including prawns is described as a notified commodity at Serial No.3. Prior to 25.03.1998, market fee for all notified agricultural commodities was 1%. Thereafter, pursuant to representation by aqua exporters, Bye-law 24(1) of AMC was substituted by providing 1% market fee on all notified agricultural commodities, livestock and products of livestock except fish and prawns, 0.50% market fee was levied on fish and prawns. 7. G.O.Ms.No.38, dated 06.02.2004, was issued exempting market fee on aqua products (prawns) meant for purpose of export from the State for a period of two years with effect from 01.02.2004. G.O.Ms.No.247, dated 13.08.2007 was issued whereby market fee at the rate of 0.25% on prawns meant for export from the State to other countries on export value of prawns with effect from 01.02.2006, was imposed. For prawns sold in domestic markets, market fee of 0.50% was continued. 8. Thereafter, Farmers‟ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, was enacted by Government of India wherein Section 6 thereof provided that no market fee or cess or levy by whatever name called under any State APMC Act or any other State law, shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers‟ produce in a trade area. However, this legislation was admittedly withdrawn by Government of India on 01.12.2021. 5 WP_15429_2022 & Batch 9. In supersession of earlier G.O.Ms.No.247, dated 13.08.2007 and memo dated 12.03.2010, G.O.Ms.No.27 dated 22.04.2022 was issued enhancing market fee from 0.25% to 1% on prawns meant for purpose of export from State to other countries on export value of prawns. An amendment to Bye-law 24(1) of Agricultural Market Committee‟s Bye-laws was consequently approved. Aggrieved therefrom, present writ petitions were filed. Arguments on behalf of petitioners: 10. Learned counsel for petitioners argued that firstly, it is beyond legislative competence of State to impose a tax on supply in the course of export. Said levy cannot be considered to be a fee and is in the nature of a tax as there is no element of quid pro quo involved. It is submitted that petitioners do not use any of the facilities in the market yard as such. Shrimp/prawn is moved from pond to processing factory using exporters‟ own preservation, packaging and transport arrangements without use of any market yard services. Learned counsel for petitioner submitted that this levy lacks any correlation with services provided by respondent - Market committees. 11. It was further submitted that even if it is accepted that action was within legislative competence of State, action is not sustainable for the reason that proper procedure as envisaged under Section 33 of Act of 1966 has not been followed. Publication of rules has not been carried out. It was also contended that product in question i.e., frozen shrimp and prawns cannot be considered to be livestock and thus is not exigible to market fee. It was thus prayed that these writ petitions be allowed. 6 WP_15429_2022 & Batch Arguments on behalf of respondents: 12. Learned Additional Advocate General and counsel representing other respondents opposed the arguments as raised on behalf of petitioners. While supporting levy in question, it was submitted that action taken is very well within legislative competence of State in accordance with applicable provisions of law. Reference has been made to Section 34 of Act of 1966. 13. Learned Additional Advocate General submitted that in terms of Sections 34 and 12 of Act of 1966 and Rules of 1969 made thereunder, there is a specific power to amend bye-laws of Market Committees as well as revise levy of market fee subject to maximum of 2%. Mere insistence on appearance of Section 33 in notification by itself cannot takeaway legislative competence of State to take action as has been done. 14. It was further submitted that petitioners had continued to deposit market fee at the rate of 0.25% on prawns meant for purpose of export and 0.50% for prawns sold in domestic market without demur. It is only upon enhancement of the rate to 1% that present writ petitions came to be filed. Furthermore, with withdrawal of Central Legislation, plea of petitioners that action of respondents is in teeth thereof, does not survive. 15. Learned Additional Advocate General further submitted that levy was initially introduced with effect from 25.03.1998 at the rate of 0.50% vide Andhra Pradesh Gazette No.7. It is subsequently in year 2004 that aqua products meant for purpose of export from the State were exempted from levy 7 WP_15429_2022 & Batch of market fee for a period of two years w.e.f. 01.02.2004. Thereafter, vide G.O.Ms.No.247, dated 13.08.2007, levy of 0.25% was imposed on prawns meant for purpose of export with effect from 01.02.2006, with the said concession remaining subject to production of proof of export by seafood exporters. For prawns sold in domestic markets, market fee of 0.50% was directed to be continued. 16. It was further submitted that market fee, which is collected, is used for creation of infrastructure facilities in market yards and primary processing facilities to farmers, laying and improving connectivity from farm gate to marketplaces and private markets as well as for development of Rythu Bazars in State. It is denied that levy is bad on account of no quid pro quo. It was thus prayed that present writ petitions be dismissed being devoid of any merit. Analysis & Conclusion: 17. We have heard learned counsel for parties at length and have perused the files with their able assistance. 18. Factual narration of facts as detailed in foregoing paras is not in dispute. At the outset, it is useful to refer to Section 12 of Act of 1966, which reads as under: “12. Levy of fees by the market committee:- (1) The market committee shall levy fees on any notified agricultural produce, livestock or products of livestock purchased or sold in the notified market area at such rate, not exceeding two rupees as may be specified in the bye-laws for every hundred rupees of the aggregate amount for which the notified agricultural produce, livestock or products of livestock is purchased or sold, whether for cash or deferred payment or other valuable consideration. 8 WP_15429_2022 & Batch (1 – A) The Market Fee under sub-section (1) shall be single point levy on notified Agricultural Produce, Live Stock and Product of Livestock. If the Market Fee is levied and collected by any Market Committee in the State, and such Agricultural Produce, Live stock and Product of live stock sold or processed within the State are exported outside the State, it shall be exempted from the levy of Market Fee subject to production of evidence of payment of Market Fee as may be prescribed. Explanation I- For the purposes of this section, all notified agricultural produce, livestock or products of livestock taken out of a notified market area shall, unless the contrary is proved, be presumed to have been purchased or sold within such area. Explanation II- In the determination of the amount of fees payable under this Act, fractions of ten paise equal to or exceeding five paise shall be counted as ten paise and other fractions of ten paise shall be disregarded. (2) The fees referred to in sub-section (1) shall be paid by the purchaser of the notified agricultural produce, livestock or products of livestock: Provided that where the purchaser cannot be identified the fees shall be paid by the seller.” 19. Section 12A of Act of 1966 deals with submission of returns relating to turnover of trader; Section 12B thereof deals with assessment of market fee and Section 12C thereof is in regard to payment of market fees and other dues payable under Act. 20. Section 33 of Act of 1966 provides power to Government to make rules either generally or specially for any notified area or areas for carrying out purposes of the Act. “33. Power to make rules - (1) The Government may, either generally or specially for any notified area or areas, make rules for carrying out the purposes of this Act. 20. Section 33 of Act of 1966 provides power to Government to make rules either generally or specially for any notified area or areas for carrying out purposes of the Act. “33. Power to make rules - (1) The Government may, either generally or specially for any notified area or areas, make rules for carrying out the purposes of this Act. (2) In particular and without prejudice to the generally of the foregoing power, such rules may provide for- (i)[the nomination] and removal of members of a market committee; (ii) [the nomination] of the chairman and vice-chairman of a market committee and their term of office; 9 WP_15429_2022 & Batch (iii) The filling of casual vacancies in the office of the chairman, vice-chairman or member of a market committee;] (iv) regulating the methods of recruitment and conditions of service of officers and other employees of the market committee; (v) the procedure to be adopted by the market committee for the issue of passes to enter into a market area and for the publication of information with regard to the proceedings of the market committee and the arrivals, prices and stocks of notified agricultural produce, livestock or products of livestock; (vi) arrangements to be made for the functioning of the markets, discharge of duties of a market committee and its chairman, in case they are prevented from discharging their duties under any lawful order; (vii) the acquisition of land by a market committee for the purposes of the Act under the Land Acquisition Act, 1894; (viii) the issue by a market committee of licences under section 7, the forms in which, and the condition under which such licences shall be issued or renewed, the annual fees that may be levied for such licences and the recovery of such fees; (ix) the maximum rates of subscriptions which may be levied by the market committee under section 13 and the recovery of such subscriptions; (x) the issue by a market committee of licences to commission agents, weighmen, measures, surveyors and other persons operating in the market the form in which, and the conditions under which, such licence shall be issue or renewed, the fees to be charged therefor the suspension or cancellation of such licences and the appeal to be made to the Government against the suspension or cancellation of such licences; (xi) the trade allowances which may be made or received by a person in transactions governed by this Act in a notified area; (xii) the provision of facilities for the settlement of any dispute between a buyer and seller of notified agricultural produce, livestock or products of livestock or their agents including in the case or notified agricultural produce and products of livestock, disputes regarding the quality or weight of the article the allowances for wrappings, dirt or impurities or deductions from any cause; (xiii) the prohibition of commission agents from acting in any transaction on behalf of both the buyer and seller of any notified agricultural produce, livestock or products of livestock; (xiv) the provisions of accommodation for livestock and for strong any notified agricultural produce or products of livestock brought into the market; (xv) the preparation of plans and estimates for works proposed to be constructed partly or wholly at the expense of the market committee and the grant of sanction to such plans and estimates; 10 WP_15429_2022 & Batch xvi) the procedure to be followed by a market committee in respect of financial matters generally including the manner in which and the restrictions and conditions subject to which expenditure may be incurred by it; (xvii) the form in which the accounts of a market committee shall be kept, the audit and publication of such accounts] and charges, if any, to be made for such audit; (xviii) the powers to disallow and surcharge items and the recovery of sums so disallowed and surcharged; (xix) the institution of provident funds; (xx) the preparation and submission for sanction of an annual budget and the reports and returns to be furnished by a market committee; (xxi) the investment and disposal of the surplus funds of a market committee; xxii) the inspection of the accounts and stocks of the traders;] (xxiii) the prevention of adulteration of notified agricultural produce and products of livestock; (xxiv) the maintenance of standards of notified agricultural produce, livestock and products of livestock; (xxv) [regulation] of market charges such as commission, weighment charges, godown charges and other incidental charges; (xxvi) inspection and administration of market committees; (xxvii) the manner in which and the purposes for which the Central Market Fund shall be administered and applied; (3) Any rule made under this section may provide that any contravention thereof or of any of the conditions of any licence issued or renewed thereunder shall on conviction be published with the imprisonment for a term which shall not be less than six months but which may extend to one year or with fine or with fine which may extend to five thousand rupees or with both. (4) The power to make rules conferred by this section shall be subject to the condition of the rules being made after previous publication for a period of not less than one month. (5) Every rule made under this section shall immediately after it is made be laid before each House of the State Legislature if it is in session and if it is not in session, in the session immediately following for a total period of fourteen days which may be comprise in one session or in two successive sessions and if before the expiration of the session in which it is so laid or the session immediately following, both the Houses agree in making any modification in the rule or in the annulment of the rule, the rule shall thereafter have effect only in such modified form or shall stand annulled, as the case may be, so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.” 11 WP_15429_2022 & Batch 21. Section 34 of Act of 1966 which provides for promulgation of bye-laws reads as under: 34. Bye-laws- (1) Subject to any rules made by the Government under section 33 and with the previous sanction of the Director of Marketing, a market committee may, in respect of the notified area for which it was constituted, make by-laws for the regulation of the business and the conditions of trading therein: Provided that it shall be competent for a market Committee to adopt the bye-laws of any other market Committee by a resolution and the bye-laws so adopted shall come into force in respect of the market committee adopting the same on the publication of the resolution in the Andhra Pradesh Gazette and it shall not be necessary to publish the adopted bye-laws in the said Gazette Provided further that where a market committee fails to make bye- laws or adopt the bye-laws of some other market committee under this sub-section] within two months from the date of its constitution, the Director of Marketing may make such bye-laws as he thinks fit, and the bye-laws so made shall remain in operation until the market committee has made bye-laws under this sub-section. (2) Every bye-law made under this section shall be published in English and Telugu in the Andhra Pradesh Gazette and it shall come into operation on [on the date of its publication in English in the Andhra Pradesh Gazette] from the date of its publication in the Andhra Pradesh Gazette. (3) Any bye-law made under this section may provide that any contravention thereof shall be punishable with fine which may extend to five hundred rupees. 22. The question of legislative competence of State to impose this levy on ground that the same is in form of tax and not a fee, is no longer res integra. It has been conclusively settled in a number of judgments of this High Court as well as Hon‟ble the Supreme Court that such a levy is permissible by State. Merely because there is no quid pro quo stricto sensu, it cannot be held that there is no liability on petitioners to deposit market fee on transactions of sale and purchase of notified agricultural produce, livestock, and products of livestock, which may be taking place from their business premises in the notified market area though outside marketplace; thus the levy is in fact a tax 12 WP_15429_2022 & Batch which cannot be levied by the State. This aspect is no longer res integra and stands decided against the petitioner. Furthermore, gainful reference can be made to judgment of Hon‟ble the Supreme Court in Sreenivasa General Traders and Ors v. State of Andhra Pradesh 1 as well as Full Bench decision in Kommisetty Nammalwar and Co v. the Agricultural Market Committee and Ors2 of this Court. Judgment of Full Bench of this Court in Kommisetty Nammalwar (supra) was upheld by Hon‟ble Supreme Court in Sangam Milk Producer Company Ltd v. the Agricultural Market Committee and Ors 3. Hon‟ble the Supreme Court while considering the controversy which had arisen in regard to a levy of market fee under Section 12(1) of 1966 Act, held as under: “21. The contention that there is no liability cast on the petitioners to pay market fee on transactions of sale and purchase of notified agricultural produce, livestock and products of livestock proceeds on a wrongful assumption that they can still carry on such trade from their premises in the notified market area, but outside the market in that area. In view of the express prohibition contained in Sub-section (6) of Section 7, the petitioners cannot carry on such trade by not resorting to the market proper. It is pertinent to observe that a contravention of the provisions of Sub-section (6) of Section 7 by persons engaged in the business of purchase and sale of notified agricultural produce, livestock and products of livestock is a penal offence under Sub-section (1) of Section 23 of the Act. The petitioners cannot be heard to say by committing a breach of Sub- section (6) of Section 7 that since they effect their transactions in the notified market area, but outside the market, there is no liability to pay market fee because there is no quid pro quo i. e. services are not rendered outside the market. 1 (1983) 4 SCC 353 2 2009 (4) ALT 431 3 (2024) 19 SCC 556 13 WP_15429_2022 & Batch 22. There is a fallacy underlying the argument that since the services are rendered by the market committees within the market proper, there is no liability to pay a market fee on purchase or sale taking place in the notified market area but outside the market. The contention does not take note of the fact that the establishment of a regulated market for the purchase or sale of notified agricultural produce, livestock or products of livestock is itself a service rendered to persons engaged in the business of purchase or sale of such commodities. The duty of a market committee constituted under Sub- section (1) of Section 4 of the Act does not end with establishing such number of markets in the notified market area under the first part of Sub-section (3) but also extends to the providing of such facilities in the market as the Government may from time to time by general or special order specify under the second part of Sub-section (3). In exercise of their powers under Section 33 of the Act, the State Government have framed the Andhra Pradesh (Agricultural Produce & Live stock) Markets Rules, 1969. Chapter V relates to `Regulation of trading'. It would appear that Rules 48 to 53 are the machinery provisions for controlling the trade in notified agricultural produce, livestock and products of livestock in a notified area while Rules 54 to 73 impose restrictions on the carrying on of all such trade in such area. It is clear from the provisions of Section 15 of the Act that the services to be rendered by the market committee and facilities to be provided are not confined to the market proper but extend throughout the notified area. We find that Chinnappa Reddy, J. speaking for himself and Jeevan Reddy, J. in Immidisetti Ramakrishnaiah & Sons, Anakapalli, represented by I. Ramakrishana Rao & Ors. v. The State of Andhra Pradesh, represented by its Secretary, Food & Agricultural by Penta Kota Sitaram & Ors. I.L.R. [1976] A.P. 878 repelled a similar contention and observed: The argument proceed on the assumption that sales and purchases of notified agricultural produce, livestock and products of livestock in a notified market area could take place even outside the market. That is an unfounded assumption. Section 7 (6) of the Act prohibits sales or purchases of notified agricultural produce, livestock and products of livestock outside the market. It says 14 WP_15429_2022 & Batch "notwithstanding anything in Sub-section (1), no person shall purchase or sell any notified agricultural produce, livestock and products of livestock in a notified market area outside the market in that area." Another unfounded assumption of the learned counsel was that the activities of the market committee and the facilities provided by it were confined by Act to the market area only. The establishment, maintenance and improvement of the market is one of the purposes for which the market committee fund might be expanded under Section 15 of the Act. The other services such as the provision and maintenance of standard weights and measures, the collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect of notified agricultural produce, livestock and products of livestock, schemes for the extension or cultural improvement of notified agricultural produce including the grant of financial aid to schemes for such extension or improvement within such area undertaken by other bodies or individuals, propaganda for the improvement of agricultural produce, livestock and products of livestock and thrift, the promotion of grading services, measures for the preservation of the foodgrains, etc., are not services which are confined to the market area only. They are services which are required to be performed by the market committee and which may be rendered throughout the notified market area without being confined to the market.” 23. This question is thus answered against the petitioners. 24. The argument then raised by learned counsel for petitioners was that even in case legislative competence of State to levy market fee is accepted, non-compliance with provisions of Section 33 of Act of 1966 renders 15 WP_15429_2022 & Batch impugned notification and action to be illegal, void and thus liable to be set aside. 25. In our considered opinion, there is no merit in this argument, which is hence rejected. Power to promulgate bye-laws is specifically provided in Section 34 of Act of 1966. Section 34 (2) of Act of 1966 specifically states that every bye-law made under this Section shall be published in Andhra Pradesh Gazette and shall come into operation on date of its publication. This step was admittedly taken by State. It is rightly pointed out by learned Additional Advocate General that mere mention of Section 33 in G.O.Ms.No.27, dated 22.04.2022, cannot render the notification a nullity in view of specific power conferred upon respondents to carry out the action. 26. Hon‟ble the Supreme Court in Sangam Milk Producer Company Ltd. v. the Agricultural Market Committee and Ors (supra) specifically drew out differences between procedure to be followed under Sections 3 and 4 of Act of 1966. It is specifically held by Hon‟ble the Supreme Court in above noted decision that: “11. .. What has to be done Under Section 3 is a one- time measure where the Government notifies an area where purchase and sale of agricultural produce, livestock and products of livestock can be made. This is a one-time exercise. What happens Under Section 4 of the Act is that the Govt. declares the 'notified market area' in respect of any notified product (products which have already been notified Under Section 3 of the Act). A perusal of Sections 3 and 4 of the Act clearly shows that whereas a draft notification is mandatory Under Section 3 and so is the hearing of objections to the draft notification, there is no similar provision Under Section 4 of the Act. The two Sections of the Act Section 3 and Section 4 are being reproduced below for a comparative analysis: Section 3 Section 4 3. Declaration of notified area: 4 . Constitution of Market Committee and 16 WP_15429_2022 & Batch (1) The Government may publish in such manner as may be prescribed a draft notification declaring their intention of regulating the purchase and sale of such agricultural produce, livestock or products of livestock in such area as may be specified in such notification. (2) Such notification shall state that any objections or suggestions which may be received by the Government from any person within a period to be specified therein will be considered by them. (3) After the expiration of the period specified in the draft notification and after considering such objections and suggestions as may be received before such expiration, the Government may publish in such manner as may be prescribed a final notification declaring the area specified in the draft notification or any portion thereof, to be a notified area for the purposes of this Act in respect of any agricultural produce, livestock and products of livestock specified in the draft notification. (4) Subject to the provisions of Subsections (1), (2) and (3), the Government may, by notification – (a) exclude from a notified area, any area comprised therein; or (b) include in any notified area, any area specified in such notification; or (c) declare a new notified area by separation of area from any notified area or by uniting two or more notified areas or parts thereof or by uniting any area to a part of any notified area; Provided that where, as result of declaration of a new notified area under this clause, the entire area comprised in an existing notified area is united to one or more notified areas, the said existing notified are shall stand abolished. declaration of notified market area : (1) The Government shall constitute, by notification, a market committee for every notified area from such date as may be specified in the notification and the market committee so constituted shall be a body corporate by such name as the Government may specify in the said notification, having perpetual succession and a common seal with power to acquire, hold and dispose of property and may, by its corporate name, sue and be sued: Provided that any market committee functioning immediately before such constitution in respect of a notified area abolished under the proviso to clause(c) of Sub-section (4) of section 3 shall stand abolished. (1-A) Any notification made Under Sub- section (1) for the constitution of a new market committee in respect of any new notified are declared under clause (c) of Sub-section (4) of Section 3, may contain such supplemental, incidental and consequential provisions, including provisions as to the composition of the new market committee or new and existing market committees and the apportionment of the assets and liabilities between the market committees affected thereby]. [ ( 1 - B ) Notwithstanding anything contained in Section 3 and in Subsection (1) and (1-A) of Section 4 of the Act, the Government, may, by notification, also constitution a separate market committee to a special market in a notified area.] (2) It shall be the duty of the market committee to enforce the provisions of this Act and rules and byelaws made thereunder in the notified area (3) (a) Every market committee shall establish in the notified area excluding the scheduled areas such number of markets as the Government may, from time to time, direct for the purchase and sale of any notified agricultural produce, livestock or products of livestock and shall provide such facilities in the market as may be specified by the Government, from time to time, by a general or special order. (b) Every market committee shall also establish in the notified area such number of markets as the Government may, from 17 WP_15429_2022 & Batch time to time, direct for the purchase and sale, solely of vegetables or fruits and shall provide such facilities in the market as may be specified by the Government, from time to time, by a general or special order. [(bb) Every market committee may also establish in the notified area such number of special market as the Government may from time to time direct for the purchase and sale of any notified agricultural produce, livestock or products of livestock or fruits and vegetable and may provide such facilities in the special market as may be specified by the Government from time to time, by a general or special order.] [(bbb) Every Market Committee may also declare in the notified area any warehouse or cold storage or processing unit or any other place as a market by following the procedure as may be prescribed.]3 [(c) The Market Committee shall specify the limits of every market established or declared as a market by it and the Government may notify the market with such limits, to be notified market area for the purposes of this Act.] 4 [(4) As soon as may be after the establishment of a market Under Subsection (3), the Government shall declare by the notification the market area such other area adjoining thereto as may be specified in the notification, to be notified market area for the purpose of this Act in respect of any notified agricultural produce, livestock or products of livestock. (5) Subject to the provisions of Subsections (1), (2),(3) and (4), the Government may, by notification – (a) exclude from a notified market area, any area comprised therein; or (b) include in any notified market area, any area specified in such notification. After discussing provisions of Sections 3 & 4 of the Act, the majority opinion in the Full Bench concluded that procedural compliance is only necessary when there is a declaration or later a merger/de-merger of a notified area and there is no requirement of following any particular procedure while issuing a notification Under Section 4(4) of the Act notifying/de-notifying any already notified products for the purpose of Regulation by any respective Agricultural Market Committee (AMC). In 18 WP_15429_2022 & Batch other words, a prior hearing or prior publication of the draft notification is not a requirement Under Section 4 of the Act, since the notification of the year 1994 is a notification Under Section 4 and not of Section 3 of the Act. Therefore, the argument that the process Under Section 3, has not been followed is totally misconceived. No prior process was required to be followed as contemplated Under Section 3 of the Act for working the scheme Under Section 4 of the Act. Consequently, we hold that there was nothing wrong in the 1994 notification and the challenge to the notification has rightly been turned down by the Full Bench of the Andhra Pradesh High Court.” 27. It is apparent that as per Section 12(1) of Act of 1966, it is permissible for State to levy a market fee at a rate not exceeding Rs.2/- for every Rs.100/- of aggregate amount (2%) for which notified agricultural produce, livestock or products of livestock is purchased or sold. Thus it cannot be held that notification dated 22.04.2022 has been issued in violation of applicable laws. Mere mention of an incorrect provision in the light of actual power to take action being present cannot vitiate the notification. 28. Next argument raised by learned counsel for petitioners was that shrimp/prawn does not fall within the ambit of notifications in question for the reason that respondents can levy cess or tax only on raw material and not on finished goods which is frozen shrimp/prawn. 29. In case of Kommisetty Nammalwar (supra), question raised was as to whether notification issued by State of A.P. to treat ghee as livestock product was valid or not. Full Bench of this Court held that ghee is product of livestock and by virtue of power conferred under Section 3(1) r/w 3(3) of Act of 1966, it is competent for Government to declare ghee as a product of livestock for purpose of regulating its purchase and sale in any notified market area. Ghee was held as exigible to market fee. It was specifically held that: 19 WP_15429_2022 & Batch “12. As already noticed, the terms livestock' and products of livestock', are not defined in restrictive sense. Not only those animals defined as livestock, but all such other animals as may be declared by the Government by notification to be such are to be treated as livestock. Similarly, all such 'products of livestock' as may be declared by the government by notification are to be treated as products of livestock for the purpose of the Act. By reason of Section 2(x) when once a notification is issued under Section 3(3) of the Act, declaring market products, by reason of Section 2(v) and 2(x), all products of cows, buffalo, bullocks, bulls, goats etc., shall have to be treated as products of livestock for the purpose of the Act. Here we may refer to Ram Chandra Kailash Kumar v. State of U.P. MANU/SC/0333/1980 : AIR 1980 SC 1124 Dineshchandra Jamnadas Gandhi v. State of Gujarat MANU/SC/0163/1989 : AIR 1989 SC 1011, Sita Devi v. State of Bihar MANU/SC/0958/1995 1995 Supp (1) SCC 670 and I.T.C Limited v. Person Incharge, Agriculture Market Committee, Kakinada MANU/SC/0077/2004 : AIR 2004 SC 1796: 2004 AIR SCW 792” 30. Hon‟ble the Supreme Court in Sangam Milk Producer Company Ltd (supra) upheld conclusion arrived at by Full Bench of this Court while holding as under: “10. The argument that “ghee” is not a product of livestock is baseless, and bereft of any logic. The contrary argument that “ghee” is indeed a product of livestock is logically sound. Livestock has been defined under Section 2(v) of the Act, where Cows and buffalos are the livestock. Undisputedly, “ghee” is a product of milk which is a product of the livestock. The majority opinion of the Full Bench decision in KommisettyNammalwar (supra) while referring to the judgments of this 2 Vide Order dated 02.01.2024 passed by this Court in IA No.241663 of 2023 in CA No.6493 of 2014 name of appellant is amended as Sangam Milk Producer Company Ltd. Court in Park Leather Industry (P) Ltd. v. State of U.P. (2001) 3 SCC 135; Kishan Lal v. State of Rajasthan, AIR 1990 SC 2269; Ram Chandra Kailash Kumar v. State of U.P. 1980 Supp (1) SCC 27 and Smt. Sita Devi (Dead) by LRs. v. State of Bihar & Ors. v. State of Bihar & Ors. 1995 Supp (1) SSC 670 held that all animal husbandry products would fall within the meaning of „products of livestock‟ as defined under Section 2 (xv) of the Act. Further, the majority decision has also held that the inclusion of “ghee” as a livestock product cannot be faulted merely because it is derived from another dairy product. It was observed by the High Court that even though “ghee” is not directly obtained from milk, which is a product of livestock, it would still be a “product of a product of livestock”. The relevant portion of the judgment of the High Court is as under: “Scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. It would be rather illogical or irrational to say that ghee is not a milk/dairy product or to say that it is not a product of livestock. Ghee is 20 WP_15429_2022 & Batch certainly a product of livestock. It is, therefore, to be seen whether ghee comes within the definition of product of livestock or within the meaning of notified product of livestock. Section 2(x) and 2(xv) of the Act used the plural „products of livestock‟. The legislative intention is very clear that not only a product of livestock like milk (when notified by the Government), butter etc., are products of livestock but even derivative items (derived from a product of livestock) are intended to be product of livestock for the purpose of the Act. We are convinced that the term „ghee‟ has to be interpreted on the basis of expression „products of livestock‟ as defined in Section 2(xv) of the Act. Whatever products are declared as such by the Government by notification, they become products of livestock for purposes of the Act.” Another case of which a reference must be made here is the decision taken by this Court in Park Leather Industry (P) LTD. v. State of U.P. and Others (2001) 3 SCC 135. In this case, the Supreme Court was dealing with the provisions of U.P. Krishi Utpadan Mandi Adhiniyam, 1964, which has a provision dealing with similar issues as are there before this Court. In the U.P. Act, “agricultural produce” was widely defined and it included inter alia produce of animal husbandry which were specified in the schedule. In the schedule, one of the items was prescribed under the head “animal husbandry products” was “hides and skins”. The question was whether tanned leather would come within the term “hides and skins” or not? This Court held that the term “tanned leather” can be included under “hides and skins”, for the purposes of the Act and more importantly for the purposes of payment of “market fee”. The reason being that although while making a leather into “tanned leather” a process of cleaning, curing and adding preservatives may be adopted, yet the finished product which is “tanned leather” though different in physical appearance or even chemical combination and even commercially a different item still remains “leather” and would come under the definition of “hides and skins”. The same reasoning has been adopted by the Full Bench of Andhra Pradesh High Court that „Ghee‟ is derived out of „milk‟ by undergoing a process, yet it still remains a product of livestock, for the purposes of the Act and payment of “market fee”. We are absolutely in agreement with the above reasoning.” 31. Keeping in view the above, it is apparent that there is no merit in the argument raised on behalf of petitioners that frozen shrimp/prawn is not exigible to market fee. 32. It is relevant to note at this juncture that market fee for all notified agricultural commodities was levied at rate of 1% before notification No.7, dated 25.03.1998. Pursuant to representations made by some aqua exporters 21 WP_15429_2022 & Batch and in order to improve aquaculture and aqua exports, market fee was decreased to 0.50% (on fish and prawns meant for both export or domestic use) with effect from 25.03.1998. Thereafter in order to facilitate improvement of aqua exports i.e., prawns/shrimp, exemption from deposit of market fee on such products meant for export was afforded with effect from 01.02.2004. Subsequently, market fee of 0.25% was levied on prawns/shrimp meant for export and 0.50% on domestic sales with effect from 01.02.2006 and said rates continued till issuance of G.O.Ms.No.27, dated 22.04.2022. 33. It is also a matter of record that market fee at said rate was being deposited by writ petitioners. New farm Acts/statutes promulgated by Government of India in June, 2020 were admittedly withdrawn. Levy of market fee in question was well within parameters prescribed under Section 12 of Act of 1966, which prescribes a cap of 2%. Product in question is very well a part of product detailed in Schedule - II under Group –IV. There is thus no ground for interference on grounds as raised on behalf of petitioners. All the questions as raised are thus answered against the petitioners and in favour of respondents. 34. Learned counsel for petitioners was unable to point out any ground whatsoever which calls for interference in this matter in exercise of jurisdiction under Article 226 of Constitution of India. 22 WP_15429_2022 & Batch 35. Present writ petitions are thus dismissed. Respondents are at liberty to take necessary steps for recovery of amount due from writ petitioners in accordance with law. No costs. Consequently, connected miscellaneous applications, if any, shall stand disposed of. LISA GILL, CJ Date: 18.09.2026 CHALLA GUNARANJAN, J akn Uploaded on: 18.09.2026 Whether the order is Speaking/Reasoned : Yes Whether the order is Reportable : Yes 23 WP_15429_2022 & Batch HON’BLE MRS. JUSTICE LISA GILL, CHIEF JUSTICE & HON’BLE MR. JUSTICE CHALLA GUNARANJAN W.P.No.15429 of 2022 along with W.P.Nos.15437 & 18078 of 2022 Dt:18.09.2026 akn