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APMC Yashwanthapura v. M/s Selva Foods

Civil Appeal · 2021 INSC 887Decided 14 Dec 2021
Civil Appeal No. 7706 of 2021
Justice R. Subhash Reddy · Justice Sanjiv Khanna

Background

M/s Selva Foods imported raw spices like methi and mustard seeds from outside Karnataka, cleaned and processed them, and then sold the processed goods within the market area regulated by the Agricultural Produce Marketing Committee (APMC), Yashwanthapura. The APMC found that Selva Foods had not paid the market fee on these sales and cancelled its licence; Selva Foods challenged this, and the High Court ruled in its favour, holding that no market fee was payable since the goods were "imported" and merely processed before sale.

Decision Breakdown

The Supreme Court disagreed with the High Court and allowed the APMC's appeal. Interpreting Section 65 of the Karnataka Agricultural Produce Marketing Act, the Court held that while agricultural produce brought into a market purely for processing (without selling it there) is exempt from market fee, that exemption does not apply once the processed produce is actually sold within the market area. Since Selva Foods did sell its processed spices within the APMC's market area, it was liable to pay the market fee, and the order confirming non-liability was set aside.

Lesson Learnt

Businesses that import raw agricultural produce, process it, and then sell the processed goods within a regulated market area cannot claim exemption from market fees merely because the goods were originally "imported": the fee exemption only protects processing that does not end in a local sale.

Official source (sci.gov.in)View Judgment (PDF)

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