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TMI Blog1962 (1) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... tion stood amended as a result of the Constitution Sixth Amendment Act. The amended Article 286(3) which is relevant for our purpose reads thus: "Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify." It is in pursuance of the amended provisions contained in clauses (2) and (3) of Article 286 that Parliament enacted "the Act". Goods specified in section 14 of that Act were declared to be goods of special importance in inter-State tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The next relevant section is section 8. In this case we are mainly concerned with sub-section (2) of section 8 which reads: "(2) The tax payable by any dealer in any case not falling within sub-section (1) in respect of the sale by him of any goods in the course of inter-State trade or commerce shall be calculated at the same rates and in the same manner as would have been done if the sale had, in fact, taken place inside the appropriate State, and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be liable under that law." The underlining is ours. It is neither the case of the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Here italicised. under the appropriate State law, had they not taken the licences, is not open to dispute. Therefore, in these cases the only question that need be considered is whether the licence fee imposed on the petitioners was in reality a tax. The Tribunals below have come to the conclusion that the fee levied on the petitioners is not tax and, therefore, they are liable to be taxed afresh. Is this conclusion correct? It is well established that the mere fact that the Legislature labels a particular levy as "fee" is not conclusive in the matter. The licence fee levied on a dealer under the Mysore Sales Tax Act, 1948, is based on his turnover. The maximum fee leviable is Rs. 1000. It is not alleged or proved that the State rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue, which when collected forms part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the taxpayer and the public authority: see Findlay Shirras on 'Science of Public Finance,. Vol. I, page 203. Another feature of taxation is that as it is a part of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay. Coming now to fees, a 'fee' is generally defined to be a charge for a special service rendered to individuals by some govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally not upon the costs incurred by the Government but upon the benefit that the individual receives. In such cases, according to all writers on public finance, the tax element is predominant, vide Seligman's Essays on Taxation, page 409, and if the money paid by licence holders goes for the up keep of roads and other matters of general public utility, the licence fee cannot but be regarded as a tax... But the material fact which negatives the theory of fees in the present case is that the money raised by levy of the contribution is not earmarked or specified for defraying the expenses that the Government has to incur in performing the services. All the collections go to the consolidated fund of the State and all the expenses have to be met ..... X X X X Extracts X X X X X X X X Extracts X X X X
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