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Judgment
Mohan Shantanagoudar, J.—Petitioners have sought for following reliefs:
(i) Declaration that the collection of levy under Clause 3 and 4 of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999, cannot be made from the job-hulling millers who take hulling charges for hulling paddy belonging to others so far as Petitioners are concerned.
(ii) Declaration that the Respondents or their enforcement officers have no authority to insist levy from the customers mills or the job-hulling mills of the Petitioners.
According to the Petitioners they are engaged only in the business of Custom Milling of paddy, which is not owned by them and that therefore the Respondents did not have authority to insist levy from the Petitioners inasmuch as the Petitioners cannot in turn insist levy from the customers.
It is the case of the Petitioners that though they are engaged only in custom milling and though they are not either the agents or dealers of any nature, Respondents are insisting that the Petitioners should surrender Levy Rice under Clause 3 arid 4 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999.
It is no doubt true that Clause 3 and 4 of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999, can be enforced on any miller or dealer within the definition of Clause 2(c) & 2(i) of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999.
The definition of ''Dealer'' as found under Clause 2(c) of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order. 1999, clarifies that
Dealer is a person holding a valid wholesale dealers license for dealing in food grains, which means the dealer deals with the food grains belonging to others and also doing business.
The definition of ''Miller'' as found under Clause 2(i) of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order. 1999, clarifies that
Miller means, a person who engages himself in rice milling operations in a rice mill and doing business.
Whereas the Miller who is doing custom milling does not deal with business of food grains as defined under Clause 2 & (i) of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999.
As could be seen from Clause 2 (a) of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999, it Is clear that Custom Milling means milling of paddy not belonging to the miller, into rice in his rice mill on payment of milling charges in cash or in kind.
Custom Miller means, a person who engages exclusively in custom milling.
Thus the custom miller will not purchase or sell paddy. He does not indulge in business. He simply mills the paddy into rice, which is belonging to his customers who would be either the agriculturist or others on payment of the milling charges. According to the Petitioners though they are engaged in custom milling they are being treated as millers and dealers doing the business of purchasing and selling of rice and paddy.
It is relevant to note that these Petitioners had approached this Court earlier by filing writ petition Nos. 38975-982/1998 for almost similar reliefs the same was disposed of on 1.3.1999 by observing thus:
A rice miller who undertakes custom milling is thus required to maintain an account of the quantity of paddy that is brought by customers and full particulars of the customers and furnish the particulars to the Enforcement Officer or person authorised by him. This is obviously to ensure that the Miller and Dealer does not mill his paddy by showing it as belonging to a customer (that is an agriculturist who is neither a miller nor dealer) and thereby escape the liability to surrender the corresponding Levy Rice. If a miller doing customer Milling is not able to furnish full particulars of the customers, it is open to the authorities to draw an adverse inference that the paddy milled belonged to millers/dealers who are liable to surrender levy Rice under Clause 3 and 4 and demand surrender of levy in regard to the same.
In view of above, this petition is allowed as follows:
It is declared that the Petitioner millers who undertake only custom milling, that is milling of paddy not owned by them, are not liable to surrender any levy rice under the provisions of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1984 in regard to paddy milled to rice in their mills, subject to the fulfillment of the requirements of Clause (5) of the Levy Order by such Petitioners.
The Respondents are directed not to demand or receive any levy rice under the Levy Order from Petitioner-Millers, in regard to custom milling (milling of paddy of customers) subject to the Petitioners fulfilling and complying with Rule 5 of the levy order
In the above matter itself this Court has clearly observed that if a miller doing custom milling is not able to furnish full particulars of the customers to the Enforcement Officer, it is open for the authorities to draw adverse inference that the paddy milled belongs to millers/dealers who are liable to surrender Levy Rice under Clause 3 and 4 and demand surrender of levy in regard to the same. Ultimately this Court held that in case of Petitioners undertaking only custom milling i.e., milling of the paddy not owned by them, are not liable to surrender any Levy Rice under the provisions of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1984, in regard to paddy milled into rice in their mills, subject to fulfillment of the requirements of Clause 5 of the Levy Order by such Petitioners. Which means that the Respondents were directed not to demand or receive any levy rice under the Levy Order from Petitioner-millers, subject to Petitioners to fulfilling and complying with Rule 5 of the Levy Order.
Now in the place of 1984 order, the State Government has bought into effect the Karnataka Rice Milling Regulation and Rice and Paddy Procurement (Levy) Order 1999. Clause 5 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999 reads thus:
Maintenance of records and furnishing of monthly reports.
Sub-clause 5 of Clause 5 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999 reads thus:
5.5. Every Miller shall also furnish a monthly statement in Part C of Form-III, giving details of farmers or agricultural labourers on whose account any paddy was hulled by way of Custom Milling.
From the above it is clear that every miller doing custom milling shall furnish monthly statement giving details of farmers or agricultural labourers on whose account any paddy was milled by way of custom milling. In other words the Petitioners should comply with Sub-clause (5) of Clause 5 of the Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999. Such compliance should be made by the Petitioners by producing relevant records before the concerned authorities. The Petitioner has produced a document at Annexure-B showing that he is not doing any type of milling work other than custom milling. The same may not be sufficient compliance of Sub-clause (5) of Clause 5 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999. Since the Petitioners have to comply with Sub-clause (5) of Clause 5 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999, they should do so by producing the records before the concerned authority. Accordingly following order is passed:
Petitions stand disposed of as under:
If the Petitioners undertake only custom milling as defined under Clause 2(a) of the order 1999 they are not liable to surrender any levy rice under the provisions of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999 subject to fulfillment of requirements of Clause 5 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999.
The Petitioners shall comply with Sub-clause 5 of Clause 5 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999 before the concerned authorities by producing the relevant records to satisfy Sub-Clause 5 of Clause 5 of Karnataka Rice Milling Regulation and Rice & Paddy Procurement (Levy) Order, 1999 within four weeks from this date. On perusal of such records, appropriate directions may be issued against the Petitioners. Till such time no coercive steps shall be taken