Ghee is Certainly a Product of Livestock: Supreme Court Upholds 1994 Notification, Validates Market Fee on Ghee

In a landmark judgment, the Supreme Court of India, led by Justices Sudhanshu Dhulia and S.V.N. Bhatti, resolved a longstanding legal debate by declaring 'ghee' as a 'product of livestock' under the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. The Court also validated the Government notification from 1994, which recognized 'ghee' as a livestock product for market regulation.

The judgment hinged on two key legal questions: the classification of 'ghee' as a 'product of livestock' under the Act, and the procedural validity of the 1994 notification by the Government of Andhra Pradesh.

The case centered around the 1994 notification which included 'ghee' in the regulated products list under the Act. The appellants contested the notification, arguing against 'ghee' being a livestock product and alleging non-compliance with the procedural norms of the Act.

In his judgment, Justice Sudhanshu Dhulia stated, "The argument that 'ghee' is not a product of livestock is baseless, and bereft of any logic." The Court recognized 'ghee' as a derivative of milk, categorizing it under 'products of livestock' as defined in the Act.

The Court also clarified the procedural distinction between notifications under Sections 3 and 4 of the Act. It was determined that the 1994 notification, issued under Section 4, did not require the process of a draft notification and public objections as mandated under Section 3.

Dismissing the appeals, the Supreme Court upheld the decision of the Andhra Pradesh High Court. The appellants were ordered to pay market fees from 1994 to 2009. Recognizing the potential financial strain, the Court allowed the fee to be paid over two years in four equal installments. Interim orders that had previously restrained the collection of market fees were lifted.

Date of Decision: March 5, 2024

Sangam Milk Producer Company Ltd. vs. The Agricultural Market Committee & Ors.