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TMI Blog2009 (10) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... bitant, arbitrary or shockingly disproportionate to the extent of service being provided in connection with the steps for renewal of registration and as such, no interference is called for. With regard to the maintainability of the writ petition, even though it has been stated in the opening paragraph of the writ petition that the same has been preferred in a "representative capacity " (for and on behalf of more than 800 dealers enlisted in exhibit P2), absolutely no document has been produced before this court to show that the petitioners have been authorised by all such persons to file the proceedings on their behalf as well. Merits having already been answered against the petitioners, the writ petition fails - W.P. (C) No. 10332 of 2004 - - - Dated:- 8-10-2009 - RAMACHANDRA MENON P.R. , J. P.R. RAMACHANDRA MENON J. Constitutional validity of sub-section (5A) of section 14 of the Act 15 of 1963 as amended by the Kerala Finance Bill, 2004, whereby the dealers having registered under the Kerala General Sales Tax Act, 1963 and those having registered under both the Kerala General Sales Tax and Central Sales Tax Acts are required to pay a fee of Rs. 500 and Rs. 1,500, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of initial registration, were set aside as ultra vires the Constitution. It is contended by the petitioners that the same logic and reasoning, as applied in exhibit P3 verdict passed by the Division Bench of this court, is squarely applicable to the situation resulted herein, because of the introduction of sub-section (5A) to section 14, as well. The main grounds of challenge raised by the petitioners are: (i) Renewal fee, though labelled as a fee , is actually a tax in disguise, which hence is not liable to be acted upon. (ii) By virtue of the principle of quid pro quo , no such levy is possible, as absolutely no service is being rendered by the State in connection with the registration or renewal of registration. (iii) There is a clear finding rendered by a Division Bench of this court in exhibit P3 judgment that no service is being rendered by the State with regard to the registration of the dealers and as such, no registration fee can be sought to be realised under sub-section (5A). (iv) The same logic and reasoning given by the Division Bench of this court in exhibit P3 judgment, while setting aside sub-sections (1A) and (5) of section 14, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to be set aside as ultra vires the Constitution; having been legislated without any competence or authority, but just as a measure to generate funds/ revenue, without any regard to the service to be rendered. A great measure of emphasis is laid on the specific observation made by the Division Bench of this court while passing exhibit P3 verdict setting aside sub-sections (1A) and (5) of section 14 and contended that in view of the clear finding therein, the provisions incorporated by the State as per exhibit P5 to collect renewal fee stand rather forbidden. But this court does not consider it necessary to go into the various decisions cited by the learned counsel for the petitioners, but for confining the discussion to the specific observations made by this court in exhibit P3 judgment, which was a case filed by the first and third petitioners themselves and where almost the same nature of contentions was taken, challenging the sustainability of sub-sections (1), (1A) and (5) of section 14 of the Kerala General Sales Tax Act, 1963. Obviously section 14(1) of the Kerala General Sales Tax Act provides for collections of fees for granting registration at different levels ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o impose registration fees from dealers under the Central Sales Tax Act. Accordingly, as observed in paragraph 6 of exhibit P3 verdict, sub-section (1A) of section 14 was declared as unconstitutional. In paragraph No. 7 of exhibit P3 verdict, the Division Bench reiterated the legislative competence of the State for enacting section 14(1) (prescribing fees for registration) and section 14(5) (prescribing fees for renewal of registration). However, considering the contentions taken from the part of the petitioners as to the necessity to have quid pro quo and exorbitant nature of the charges for renewing registration at the same rate as payable for the purpose of initial registration and also taking note of the contentions raised from the part of the State as to why such imposition of renewal fee was sought to be justified, notwithstanding sub-section (5), in the light of the binding judicial precedents rendered by the apex court, relied on by either side, it was observed in paragraph No. 12 that all the petitioners were registered dealers; that when a person applies for registration, the State may have to incur expense for verification depending upon the turnover; that the initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear in paragraph No. 13 of exhibit P3 verdict that there was nothing wrong for renewing licence as year-wise registration could be given and that the State was free to charge nominal fees for covering up expenses, if any, incurred for renewal of registration. This being the position, the challenge raised by the petitioners in the present writ petition as to the legislative competence of the State to impose fees on renewal of registration is no more open to be considered, but for the quantum. With regard to the quantum of renewal of registration fees, the respondents have sought to sustain the stipulation in sub-section (5A) referring to the course and events pursued, as explained in paragraphs 7, 8, 9 and 11 of the counter-affidavit which are extracted below: 7. It is submitted that for renewal of registration the dealer has to file application under rule 5(16) in the prescribed form 1B of the Kerala General Sales Tax Rules along with the proof of payment of fee. The registering authority has to verify the entire records relating to the dealer and has to decide his eligibility to get the registration renewed. In appropriate cases, the authority can even refuse renewal aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, has come a long way and the Government is providing various service to the dealers as above, the existence of which aspect has rather been conceded by the petitioners as well, in paragraphs 4A and 9 of the amended writ petition, though they dispute the actual expense for issuance of the electronic identity card. This is more so, in view of the law declared by the apex court in State of H.P. v. Shivalik Agro Poly Products [2004] 8 SCC 556 holding that there is no generic difference between a tax and fee as on date and the dictum in City Corporation of Calicut v. Thachambalath Sadasivan AIR 1985 SC 756 holding that the principle of quid pro quo has been watered down and that there is no question of any mathematical exactitude with regard to the fees and service . Further, it has also been made clear by the apex court that the fee collected does not contemplate any service to the particular dealer and that the service provided by the State in general, will definitely constitute quid pro quo . As discussed hereinbefore, the Division Bench of this court, while sustaining section 14(1) of the Kerala General Sales Tax Act prescribing fees for registration at different l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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