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TMI Blog1972 (11) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... filed Writ Petition No. 1743 of 1964 on the question of court-fee payable on the intended suit, praying that the High Court may be pleased to issue a writ of mandamus or other direction order declaring Rule I of the High Court Fees Rules, 1956, and the provisions of the Madras Court Fees and Suits Valuation Act (Madras Act XIV of 1955) to be invalid and ultra vires insofar as they relate to the levy of fees on ad valorous scale. It was contended that Rule 1 of the High Court Fees Rules, 1956, was void and ultra vires because the Madras Court Fees and Suits Valuation Act (XIV of 1955) which had been applied in these Rules was void and ultra vires. Various reasons were given in the petition for alleging that the impugned Rule was void. It was stated inter alia that there was no justification at all for the increase of court-fees in 1955 and 1956 on the basis of civil litigants being made to pay fees covering the expenditure on civil litigation. It was alleged that 'whenever an increase is contemplated, it is for the authority to justify by facts and figures such increase by showing that actual expenditure at the time exceeds the fee income. The petitioner alleged that judged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I of Schedule 1 of the Madras High Court Fees and Suits Valuation Act, 1955, in its application to the High Court. As it was not contended before the High Court 'that the result of striking down article 1 of schedule 1 in its application to the High Court would necessitate the declaration of the invalidity of the entire Court Fees Act, it refrained from examining the position. The State having obtained certificate of fitness filed the appeal which is now before us. We may mention that the petitioner was not interested in pursuing the appeal and it prayed that if the appeal is decided against it no order may be made against it for costs in the circumstances of the case. We issued notice to the Advocates-General and a number of States have appeared before us. The first question that arises out of the arguments addressed to us is : What is the nature of fees taken in court in entry 3 List II Schedule VIII of the Constitution ? Are they taxes or fees or are they suigeneris ? It is necessary that there should not correlationship between 'fees taken in Court' and the cost of administration of civil justice? Dr. Syed Mohammed has on behalf of the State of Kerala urg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s usually remains, these fees being paid into the fund out of which the salaries of the officers are defrayed. In the Supreme Court they are collected by means of stamps under the Judicature Act, 1875, s. 26, and order of 1884, and the Supreme Court Fees Order, 1930 (as amended). The mode of collecting fees in a public office is under the Public Office Fees Act, 1879 (repealing and replacing, the Public Office Fees Act, 1866), by stamps or money, as the Treasury may direct. At present the Lord Chancellor has also power, with the consent of at least three judges of the Supreme Court and the concurrence of the Treasury, to fix fees to be, taken in the High Court and the Court of Appeal or in any court created by the commission. Under the powers referred to, the Rules of the Supreme Court, 1883 and the Supreme Court Fees Order, 1.930, were made(1). The English history shows that a very close connection existed between fees and cost of administration of civil justice. In the beginning, they were directly appropriated by the court officials. The existing law shows that fees are not taxes. It is not usual to delegate taxing powers to judges. (1) vide Halsbury's Laws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that the experience gained of their (stamp fees) working during the two years in which they have been in force, seems to be conclusive as to their repressive effect on the general litigation of the country . It is, therefore, thought expedient to make a general reduction in the rates now chargeable on the institution of Civil suits, and to revert to the principle of maximum fee which obtained under the former law. Later it is stated : As some measure of compensation for the loss of revenue which is expected to result from the general reduction of is proposed to discontinue the refund of any portion of the amount levied on the first institution of suits, and also to raise the heretofore chargeable on probates and letters of administry granted under the Indian Succession Act, and on certificates issued under Act XXVII of 1860, to the ad valorem rates leviable under the English law in like cases . The Bill was designed to contain in one enactment the were of the existing law relative to fees leviable in all Courts of Justice, whereas previously fees were, leviable under various acts. This brief resume of the history shows that the court fees was levied sometimes wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng fees taken in any court. List III Entry 13 : Civil procedure, including, all matters included in the Code of Civil Procedure at the commencement of this Constitution, limitation and arbitration. List III Entry 47 : Fees in respect of any of the matters in this List, but not-including fees taken in any court . It will be noticed that the 'fees taken therein i.e. in Supreme Court' in List I Entry 77 have been excluded from List I Entry 96. Similarly the 'fees taken in all courts' included in List 11 Entry 3 have been excluded from List 11 Entry 66. In List III Entry 47 'fees taken in any court' have been excluded. What is the significance of this exclusion ? Does the Constitution regard 'fees taken in court' as being different from 'fees leviable under List I Entry 96, List II Entry 66 and in List III Entry 47'? It seems to us that the, separate mention of 'fees taken in court' in the Entries referred to above has no other significance than that they logically come under Entries dealing with administration of justice and courts. The draftsman has followed the scheme designed in the Court Fees Act, 1870 of dealing with fees ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute, the various steps necessary in the prosecution of a suit or matter, the entiry cost of the upkeep of courts and officers administering civil justice the vexatious nature of a certain type of litigation and other relevant matters. It is free to levy a small fee in some cases, a large fee in others, subject of course to the provisions of Art. 14. But one thing the Legislature is not competent to do, and that is to make litigants contribute to the increase of general public revenue In other words, it cannot tax litigation, and make litigations pay say for road building or education or other beneficial schemes that a State may have. There must be a broad correlationship with the fees collected and the cost of administration of civil justice. We may now dispose of other arguments addressed to us. We are not able to interpret the phrase 'fees taken in court' to mean that it described fees which were actually being taken before the Constitution came into force. If this was the meaning, no fees could be levied in the Supreme Court because the Supreme Court did not exist before the Constitution came into force and no fees were being taken therein. This would render part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the whole society, all the different members contributing as nearly as possible in proportion to their respective abilities . These, as he afterward explains, are taxes. On the other hand,, he speaks of certain outlays, as for justice, for persons who give occasion to this expense, and, who are, most immediately benefited by this expense. The expenditure, therefore, he thinks, m ay very properly be defrayed by the particular contributions of these persons , that is, by fees of court. And he extends this principle to tolls of roads and various other expenses. This point of view helps us out of a difficulty as to the line of cleavage between fees and taxes. Thus, if a charge is made for the cost of judicial process, the payment is a fee, because of the special benefit to the litigant.' If no charge is made, the cost of the process must be defrayed by general taxation; and the litigant pays his share in general taxes. If the charge is so arranged as to bring in a considerable net revenue to the government, the payment by the litigant is a tax not a general tax on all taxpayers, but a special tax on litigants, like the tax on law suits in some of our Southern Commonwealt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her it was a compulsory levy. In Bachappasubran v. Shidappa Vankatrao (I.L.R. 43 Bom. 507 ) before the Privy Council for the first time objection was raised that the suit, out of which the appeal arose, was not triable by the First Class Subordinate Judge. It was argued that this was the result of provisions contained in the Court Fees Act 1870 and the Suits Valuaation Act,, which, it was said, imposed notional value on the property as distinct from its real value and that this notional value was less than ₹ 5000/-. It was in this context that the Privy Council observed: Their Lordships are of opinion that they would not be justified in assisting an objection of this type, but more than that, they hold that even the technicality on which the defendant relies cannot prevail. The Court-Fees Act was passed not to arm a litigant with a weapon of technicality against his opponent, but to secure revenue for the benefit of the, State. This is evident from the character of the Act, and is brought gut by section 12, which makes the decision of the First Court as to value final as between the parties and enables a Court of appeal to correct any error as to this, only where the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k, from the, fact that the fees or other money taken by the Supreme Court or a High Court are to be credited to the Consolidated Fund that such fees cannot be fees of the kind which the Supreme Court had under consideration; for an essential characteristic of such a fee is that it shall be set apart and not merged in the general revenue of the State. It accordingly appears that there exists another class of imposition, also called a fee in the Constitution which differs from the type of fee which the Supreme Court had under consideration and that the definition of fee to he found in the three Supreme Court decisions of 1964 is not exhaustive . With respect,. the fees taken in courts and the fees mentioned in Entry 66 List I are of the same kind. They may differ from each other only because they relate to different subject matters and the subject matter may dictate what kind of fees can be levied conveniently, but the overall limitation is that fees cannot be levied for the increase of general revenue. For instance if a State were to double fees with the object of providing money for road building or building schools, the enactment would be held to be void. Dayal J. correctly obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue for the general purposes of the State predominates, then the taxing element takes hold of the levy and it ceases to have any relation to the cost of administration of the laws to which it relates; it becomes a tax. Its validity has then to be determined with reference to its character as a tax and it has to be seen whether the Legislature has the power to impose the particular tax. When a levy is impugned as a colorable exercise of legislative power, the State being charged with raising a tax under the guise of levying a fee, Courts have to scrutinize the scheme of the levy carefully, and determine whether, in fact, there is correlation between the services and the levy, or whether the levy is excessive to such an extent as to be a presence of a fee and not a fee in realilty. If, in substance, the levy is not to raise revenues also for the general purposes of the State, the mere absence of uniformity or the fact that it has no direct relation to the actual services rendered by the authority to each individual who obtains the benefit of the service, or that some of the contributories do not obtain the same degree of service as others may, will not change the essential character o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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