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TMI Blog1998 (3) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... 31, 1970. Subsequent thereto it was enhanced to Rs. 25 with effect from April 1, 1970. With effect from April 1, 1981 it was further enhanced to Rs. 50 and it was so up to March 31, 1984 and from April 1, 1984 till March 31, 1995 it was Rs. 200. Thereafter from April 1, 1995 it was enhanced to Rs. 250 and later with effect from April 1, 1997 the respondent enhanced the registration fee to Rs. 500. The said enhancement is challenged in this proceeding by the petitioners on various grounds. 2.. To begin with, it has to be borne in mind that the challenge made is in regard to the quantum of the registration fee. There is no challenge as such, as to whether the respondents are entitled to levy any licence fee at all on the ground that any such levy assumes the character of tax and not fee. There is no prayer made in these writ petitions to strike down the levy as it partakes of the character of tax. Nevertheless, in view of the forceful arguments advanced by Mr. B.P. Gandhi, learned counsel for the petitioners in this behalf as well, I would consider the said contention as well. 3.. Mr. B.P. Gandhi, learned counsel for the petitioners, strenuously contended that the levy of tax and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the petitioners. 6.. To begin with, he cited the decision of the Supreme Court in Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt reported in AIR 1954 SC 282. Therein their Lordships considered the question in detail and laid down as follows: "(44) Coming now to fees, a 'fee' is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay, vide Lutz on 'Public Finance' P. 215. These are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. (45) As regards the distinction between a tax and a fee, it is argued in the first place on behalf of the respondent that a fee is something voluntary which a person has got to pay if he wants certain services from the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them. (6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee. (7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above." 7.. Again when we come to the still later decision reported in Krishi Upaj Mandi Samiti v. Orient Paper Industries Ltd. reported in (1995) 1 SCC 655 their Lordships elaborately considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the levy. In the case of a tax, the particular advantage if it exists at all, is an incidental result of State action. A fee is a sort of return or consideration for services rendered and hence it is primarily necessary that the levy of fee should on the face of the legislative provision be correlated to the expenses incurred by Government in rendering the services. As indicated in article 110(2) of the Constitution ordinarily there are two classes of cases where Government imposes fees upon persons. The first is of grant of permission or privilege and the second for services rendered. In the first class of cases, the cost incurred by the Government for granting of permission or privilege may be very small and the amount of imposition levied is based not necessarily upon the costs incurred by the Government but upon the benefit that the individual receives. In such cases, the tax element is predominant. If the money paid by privilege-holders goes entirely for the expenses of matters of general public utility, the fee cannot but be regarded as a tax. In the other class of cases, the Government does some positive work for the benefit of persons and the money is taken as the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for a fee. The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general corelationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services. It is immaterial that the general public may also be benefited from some of the services if the primary service intended is for the payers of the fees. (8) Absence of uniformity is not a criterion on which alone it can be said that the levy is of the nature of a tax. The Legislature has Page No: 473power to enact appropriate retrospective legislation declaring levies as fees by denuding them of the characteristics of tax. (9) It is not necessary that the amount of fees collected by the Government should be kept separately. In view of the provisions of article 266, all amounts received by the Government have to be credited to the Consolidated Funds and to the public accounts of the respective Governments." Now keeping in mind these principles enunciated we will examine the question raised by the petitioners and decide as to whether the present l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining the correctness of collection of the tax is the duty of the dealer. That he has done so, is established with the aid of the department and that is the service rendered to the dealer by the department. In this case it is to be noted that the department is maintaining certain forms with respect to dealer to ascertain whether he is correctly collecting the sales tax and the department verifies whether the purchaser is paying tax to the dealer for the purchase effected in conformity with the statute. That verification has to be made only with reference to accounts, forms, etc., maintained by the dealer. Certain forms are being maintained by the dealer and the department has to cross-check all the details. It is to be remembered that no sale/purchase can be effected without paying the tax due and that the dealer is in the position of an intermediary between the purchaser and the Revenue and on whom statutory liability is cast to collect the tax; if so it is thus the duty of such an "intermediary" to establish that he has collected the statutorily stipulated tax. This functioning of the intermediary has to be verified by the department and such verification, which is essential for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erhead charges have increased; in view of these circumstances necessarily the levy of fee has to be enhanced to support the department. As there is quid pro quo to a substantial extent, the levy of Rs. 500 is justified. 11.. The next contention of the learned counsel for the petitioners is that section 10A(5) of the Act providing an identical amount for renewal is illegal and unconstitutional. According to him there is no service being rendered while granting a renewal. I am afraid that this contention is made without reckoning as to what exactly is meant by renewal. Virtually granting renewal under section 10A(5) is granting a new licence after expiry of the old licence. The similar question was considered by the Madras High Court in the decision in Tuticorin Cinema Co. (Private) Ltd. v. Messrs. Charles Missier Sons, Tuticorin reported in AIR 1957 Mad. 684 wherein the court states as follows: "16. The learned Advocate-General urged that despite the use of the expression 'renewal' in the rules, e.g., rule 7(1)(b) and rule 11, the issue of a certificate in form D would really be a fresh grant each time it is made. That grant depends upon the electrical apparatus, etc., coming up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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