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Issues Involved:
1. Nature of the levy: Fee vs. Tax. 2. Validity of the increased levy. 3. Improper delegation of legislative power. 4. Violation of fundamental rights under Article 19(1)(g) of the Constitution. 5. Applicability of Article 277 of the Constitution. 6. Applicability of Article 276(2) of the Constitution. Detailed Analysis: 1. Nature of the Levy: Fee vs. Tax The primary issue was whether the levy imposed by the Corporation of Calcutta under Section 548(2) read with Section 443 of the Calcutta Municipal Act, 1951, was a fee or a tax. The court noted that Section 443 requires a license to run a cinema house, and Section 548(2) allows the Corporation to fix the license fee. The distinction between a tax and a fee is well-established: a tax is a compulsory exaction for public purposes without quid pro quo, whereas a fee is a charge for a specific service rendered, implying a quid pro quo. The court concluded that the imposition in question was a license fee, not a tax, as it was intended to cover the costs of services related to public health, safety, and convenience. 2. Validity of the Increased Levy The court found that the increased license fees (from Rs. 800 to Rs. 18,000) were excessive and unreasonable. The Corporation failed to establish a correlation between the increased fee and the services rendered, thus failing the quid pro quo test. The court observed that no resolution or evidence was provided to justify the need for such a significant increase in fees. Therefore, the increased demand was deemed illegal and struck down. 3. Improper Delegation of Legislative Power The court addressed the argument that Section 548(2) of the Act involved an improper delegation of legislative power to the Corporation without laying down any rational basis or policy. The court held that the provision was unconstitutional as it granted unlimited power to the Corporation without any guidelines or restrictions, amounting to an improper delegation of legislative functions. 4. Violation of Fundamental Rights under Article 19(1)(g) The petitioners argued that the excessive levy violated their fundamental right to carry on any occupation, trade, or business under Article 19(1)(g) of the Constitution. The court agreed, stating that the arbitrary and excessive imposition could lead to the extinction of the petitioners' business, thus constituting an unreasonable restriction on their fundamental rights. 5. Applicability of Article 277 of the Constitution The respondents argued that the levy was saved by Article 277 of the Constitution, which allows pre-Constitution taxes to continue until altered by Parliament. The court rejected this argument, stating that Article 277 applies only to taxes that were lawfully levied before the Constitution came into force. The increased levy under the 1951 Act was a new imposition and not covered by Article 277. 6. Applicability of Article 276(2) of the Constitution The court briefly addressed Article 276(2), which limits the total amount payable by way of taxes on professions, trades, callings, and employments to Rs. 250 per annum. However, since the petitioners were willing to pay the amount they were paying before the increase, the court did not find it necessary to decide on this issue. Conclusion: The court held that the increased license fee was a fee and not a tax. It was excessive and unreasonable, lacking the necessary quid pro quo, and thus illegal. The provision under Section 548(2) was also found to involve improper delegation of legislative power and violated the fundamental rights of the petitioners under Article 19(1)(g). The increased levy was not saved by Article 277, and the court did not need to decide on the applicability of Article 276(2). The impugned resolution and notices were quashed, and the respondents were directed not to enforce the increased fees.
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