The State of Punjab has moved the Supreme Court against the Union government over non-reimbursement of Market Fees and Rural Development Fees running into Rs 4,000 crore levied by Punjab on behalf of the Central government during the procurement of foodgrains.
In an original suit filed under Article 131 of the Constitution, the state government alleged that the Central government had refused to transfer back the statutory Market Fees and Rural Development Fees levied by Punjab on behalf of the Central government during the procurement of foodgrains.
The suit contended that the defendant (Central government) was refusing to pay the Market Fees and RDF, even though it was constitutionally validly imposed/levied by the Plaintiff State under Article 246(3) of the Constitution.
It said the levies were key to bearing the expenses of acquiring food grains with minimum transition losses, adding that despite multiple correspondences, the Union of India has not reimbursed the amount of over Rs 4,000 crore, which date back to 2021.
It further submitted that instead of reimbursing the amount of over Rs 4,000 crore, which date back to 2021, the Union of India asked the Punjab government to reduce the levy percentage and spend it only on rural and agricultural needs, despite this domain being the sole prerogative of the State.
The suit pointed out that the Central government’s actions were also in violation of the Modified Fixation Principles in place since February 24, 2020.
These principles aimed at recognising the autonomy of the State to determine the fees to be levied, which were then subsequently reimbursed by the Union government, noted the Punjab government.
It said the mere fact that this fee was being in respect of acquisition, which the Plaintiff State was carrying out for the Defendant, did not in any way change this underlying constitutional/legal position.
Settled by Senior Advocate Abhishek Manu Singhvi and filed by Advocate Ajay Pal, the suit was drafted by the office of the Law Chambers of Advocate Shadan Farasat.