9911796707
TMI Blog1971 (4) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... is sufficient quid pro quo for the levy in question. The appellant is a consumer of denatured spirit. It purchases denatured spirit from the wholesalers or the manufacturers for the purpose of manufacturing micanite. The Bihar and Orissa Excise Act, 1915 (Bihar & Orissa Act 2 of 1915) came into force on January 19, 1916. In pursuance of the provisions of that Act the impugned Rule was framed by the Board of Revenue for levying licence fee. The fee for the licence to possess denatured spirit in 1919 was only Rs. 2 per annum irrespective of the quantity in the possession of a person. This' rate continued to be in force till 1937. At this stage it may be remembered that under sub-section (2) of Section 143 of the Government of India Act, 1935, the Provinces were authorised to continue to levy tax, duties, cesses or fees which were being lawfully levied prior to the commencement of that Act. Under the 1935 Act as under our present Constitution, the power to levy duties on alcoholic liquor fit for human consumption was allocated to the Provincial Legislature whereas the power to levy duty on alcoholic liquor not fit for human consumption was allocated to the Central Legislature. De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 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. If, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should on the face of the legislative provision, be correlated to the expenses incurred by government in rendering the services." The same view was reiterated by this Court in Mahant Sri Jagannath Ramanuj Das and anr. v. The State of Orissa and anr. [1954] S.C.R. 1046 and in Ratilal Panchand Gandhi v. The State of Bombay and ors. ([1954] S.C.R. 1055). The nature of "a fee" again came up for consideration before this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, nor is it a postulate of a fee that it must have direct relation to the actual service rendered. Absence of uniformity is not a criterion on which alone it can be said that the levy is of the nature of a tax. In Corporation of Calcutta and anr. v. Liberty Cinema the validity of the levy made under Section 548 ([1965] 2 S.C.R. 477) of the Calcutta Municipal Act 1951 came up for consideration. Therein this ,Court held that the levy in question is not a "fee and return for services" as the Act does not provide for any services of a special kind being rendered resulting in benefits to the person on whom it 'is imposed. Section 527 (43) permits by-laws to be framed for regulating the inspection, supervision and control, among others, of cinema houses but it is not obligatory to make such by-laws and therefore, there maybe no services to render. Even the bylaw made provides only, for inspection, and the work of inspection done by the appellant was only to see that the terms of the licence were observed by the licensee-, It was not a service to him,. and so, no question arises of correlating the, amount of levy to the costs. of any service. The levy therefore is not a fee and must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l character and not as of arithmetical exactitude. Let us now proceed to consider whether the levy under the impugned rule can be justified as a fee on the basis of the law as enunciated by this Court. But before doing so, it is necessary to dispose of one of the grounds on which the High Court upheld the levy. In paragraph 8 of the High Court's judgment, it is observed: "........ when a manufacturer wants to keep in his possession large quantity of denatured spirit for manufacturing purposes, he wants a special privilege or concession of immunity from prosecution. For that purpose he has to obtain a licence or a pass on payment of requisite fees. 'There is thus a quid pro quo element and the immunity from prosecution is in the nature of a special benefit or privilege." The implication of this observation is somewhat astounding. These observations imply that the government can barter away its duty to prosecute an offender for consideration. The requirement to take a licence is prescribed to safeguard public interest and not as a source to gather revenue. What is made punishable is either a person's failure to take the required licence ,or the breach of the conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Manual, Volume III (page 67-71) for the process of denaturing and issue of denatured spirit to the licensees. State Government have to employ supervisory staff and chemical examiner to carry out these obligations of Supervision and control. It may be added that Excise Department does not only supervise and control these intoxicating liquors in the interest of public policy but renders services to the petitioner by getting alcohol manufactured at the distillery by supplying raw materials like molasses and coal to these distilles at controlled cheap rates. This is the only reason of getting spirit distillery at a very cheap cost by the licensees including the petitioner. And hence levy of fee by the Excise authorities is not a duty or tax but it is clearly fee in return for services rendered as well as for proper supervision, control and regulation of an activity which the legislature desires to control." According to the finding of the High Court the only services rendered by the Government to the appellant and to other similar licensees is that the Excise Department have to maintain an elaborate staff not only for the purposes of ensuring that denaturing is done properly by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule cannot be justified. In this Court Counsel for the State prayed for an opportunity to place material to show that the levy in question is not disproportionate to the value of the services rendered by the State. Ordinarily we would not have acceded to that request coming at such a late stage, particularly in view of fact that the legal position had been clarified by a long chain of decisions of this Court. There is no doubt that the State has failed to place the necessary material before the Court to justify the levy. But the fact remains that because of the negligence of those in-charge of the defence of the State, the State may suffer considerable, financial loss, if we hold that the impugned Rule is void. Hence we are constrained to give the State a further chance to prove its case. In the result we allow the appeal, sat aside the order of the High Court and remit the case to the High Court for disposal according to law in the light of this decision. A further opportunity be given to the State to place material before that court to show that the value of the services rendered by the State has reasonable correlationship with the fee charged. If the State adduces additional ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
