1988 (9) TMI 346 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutional validity of the fee imposed u/r 21 of the Textiles Committee Rules, 1965.
2. Whether rayon yarn and nylon yarn fall within the definition of "textiles" u/s 2(g) of the Textiles Committee Act, 1963.
3. Whether there is a correlation between the fee charged and the services rendered by the Textiles Committee.

Summary:

Issue 1: Constitutional Validity of the Fee Imposed u/r 21 of the Textiles Committee Rules, 1965
The Supreme Court upheld the constitutional validity of the fee imposed u/r 21 of the Textiles Committee Rules, 1965. The fee was levied by the Textiles Committee constituted u/s 3 of the Textiles Committee Act, 1963, on the production of rayon yarn and staple fibre. The Court concluded that the fee was valid and constitutionally permissible, dismissing the appeals filed by various textile mills.

Issue 2: Definition of "Textiles" u/s 2(g) of the Textiles Committee Act, 1963
The Court rejected the appellants' contention that rayon yarn and nylon yarn, being filaments and not fibres, did not fall within the definition of "textiles" u/s 2(g) of the Act. The Court held that rayon yarn and nylon yarn are species of man-made fibres, also known as artificial silk, and thus fall within the definition of "textiles" as per the Act. The Court emphasized a broad and liberal construction of the term "textiles" to include man-made fibres, aligning with the legislative intent to support the textile industry.

Issue 3: Correlation Between the Fee Charged and the Services Rendered
The Court found a reasonable relationship between the fee levied and the services rendered by the Textiles Committee. The fee collected was used to finance the Committee's activities, including inspection, quality control, and promotion of textile exports. The Court noted that the entire proceeds of the fee were utilized for the benefit of the textile industry, establishing sufficient quid pro quo. The Court cited the principles laid down in previous judgments, emphasizing that the correlation need not be of mathematical exactitude but should be reasonable.

Conclusion:
The Supreme Court dismissed the appeals and writ petitions filed by the textile mills, upholding the validity of the fee imposed by the Textiles Committee. The Court also allowed the appeal by the Textiles Committee against the Kerala High Court's judgment, affirming the levy of the fee as constitutionally valid.