New Delhi: The Punjab Government has moved the Supreme Court alleging Centre’s refusal of the reimbursement of the statutory charges (Market Fees and the Rural Development Fees), levied by the state, on the acquisition/ procurement of food grains, carried out by it on behalf of the Centre for ensuring food security in India.
The original suit, filed through advocate Ajay Pal, said: “The Defendant (Centre) is refusing to pay the Market Fees and RDF, even though it is constitutionally validly imposed/ levied by the Plaintiff State under Article 246(3) of the Constitution of India read with matters enumerated under List III (State List) of the Seventh Schedule, including inter-alia the determination of fees to be levied in respect of agriculture produce and markets/ fairs”. The suit contended that RDF (Rural Development Fees) to the tune of Rs 3637 crores is due from 2021 and market fees to the tune of over Rs 2400 crores is due from 2022.
The state government said it contributed 21% of rice and 31% of wheat in the central's food grains procurement during 2021 – 22. The suit contended that as part of the procurement/ acquisition costs to be reimbursed by the defendant, there are certain statutory charges which are levied by the plaintiff for the purposes of meeting the demands of its robust agricultural network.
“(a) As per Section 5 of the Punjab Rural Development Act, 1987 (“Punjab Rural Act”), Rural Development Fees/ RDF @ 3% of the Minimum Support Price (“MSP”) is levied in respect of the agricultural produce; and (b) As per Section 23 of the Punjab Agriculture Produce Markets Act, 1961 (“Punjab Agriculture Act”), Market Fee @ 3% of the MSP is levied in respect of the agricultural produce,” said the suit.
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The Punjab government said these levies enable effective functioning of the acquisition/ procurement process, and ensure the financial viability of the acquisition process . “In the absence of these levies, it is not possible to maintain an appropriate infrastructure, certainly not of the kind that is present in the Plaintiff State to ensure that crops grown are acquired with the least amount of transition losses,” said the suit.
The suit said: “The Plaintiff has the prerogative in determination of rates for levying the Market Fees and the RDF for the purposes of procurement/ acquisition of foodgrains. The same is recognized under the Constitution of India and supported by the Fixation Principles.”
The suit said the Centre with letters dated January 5, 2023, March 27, 2023, and June 2, 2023, has without addressing the status of the outstanding payments of the statutory charges, in turn overstepped into the domain of plaintiff’s legislative competence, and insisted that the state government should reduce its statutory charges to a total of 2% of the MSP, as opposed to market fees @ 3% of the MSP and RDF @ 3% of the MSP.
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“The actions of the Defendant in its refusal of payment of the abovementioned statutory charges and insistence on capping the statutory charges to a total of 2% of the MSP is an outright transgression of Plaintiff’s exclusive legislative powers under the Constitution of India, which empowers it to determine the rate of fees to be levied in respect of agriculture and market/ fairs. The Defendant is obligated to pay the fee which is constitutionally levied by the Plaintiff State,” the suit said.
The state government said Centre’s actions are also in violation of the Modified Fixation Principles that recognize the autonomy of the plaintiff to determine the fees to be levied and subsequently reimbursed with by the defendant. “The reduction of the statutory charges at this stage would adversely affect the rural infrastructure and economy. Further, the Punjab State Agricultural Marketing Board/ Punjab Development Board will not be able to pay the loans/ liabilities created for development of rural infrastructure in respect of the outstanding payments accrued on account of the market fees and RDF,” it stated.
