Punjab Govt. Files Suit Against Central Govt. In SC Over Non-Reimbursement Of Statutory Fees

The Punjab government has recently initiated legal action by filing a suit before the apex court against the Central government regarding the alleged non-reimbursement of statutory fees amounting to over ₹4,000 crores.

These fees were imposed by the State government on behalf of the Central government during the procurement of food grains.

The plea, which constitutes an original suit under Article 131 of the Constitution, raises a grievance by the State of Punjab against the Central government for its refusal to transfer back the statutory Market Fees and Rural Development Fees imposed by the State on behalf of the Centre during the procurement process.

The suit states, “The defendant (Central government) 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”

The levies in question are essential for covering the expenses associated with procuring food grains with minimal transition losses, as explained by the State government.

Despite various correspondences, the Central government has failed to reimburse an amount exceeding ₹4,000 crores, dating back to 2021, according to the claims made by the Punjab government.

Instead, the State alleges that it was instructed to reduce the levy percentage and allocate it solely to rural and agricultural needs, despite this being within the exclusive authority of the State government.

Furthermore, the actions of the Central government are in violation of the Modified Fixation Principles implemented on February 24, 2020, as stated by the State government.

It has been emphasized that these principles aim to acknowledge the autonomy of the State government in determining the fees to be imposed, which are subsequently reimbursed by the Central government.

” The mere fact that this fee is being in respect of acquisition, which the Plaintiff State is carrying out for the Defendant, does not in any way change this underlying constitutional/legal position,” the suit further asserts.

The suit has been handled by Senior Advocate Dr. Abhishek Manu Singhvi and filed through advocate Ajay Pal, with drafting assistance from the office of the Law Chambers of Advocate Shadan Farasat.