Kewal Krishan Puri & ANR Vs. State of Punjab & Ors [1979] INSC 103 (4 May 1979)
UNTWALIA, N.L.
UNTWALIA, N.L.
CHANDRACHUD, Y.V. ((CJ) BHAGWATI, P.N.
FAZALALI, SYED MURTAZA PATHAK, R.S.
CITATION: 1980 AIR 1008 1979 SCR (3)1217 1980 SCC (1) 416
CITATOR INFO:
E 1980 SC1037 (1,6) C 1980 SC1124 (3,10,11,24,36) RF 1981 SC1127 (7) E 1981 SC1863 (25) RF 1982 SC1012 (6) R 1983 SC 634 (20) R 1983 SC1246 (26,27,28,29,32,37) R 1984 SC1870 (16) F 1985 SC 218 (1,7,8,10,12,13,15) R 1989 SC 100 (16) RF 1992 SC1383 (12,13) RF 1992 SC2084 (8)
ACT:
Punjab Agricultural Produce Market. Act, 1961 Ss. 23, 26 and 28 & Punjab Agricultural Produce (General) Rules, R 29-Marketing Development Fund & fee-Validity-Principles for satisfying the rest for a valid levy of market fees.
HEADNOTE:
Punjab Agricultural Produce Markets Act, 1961 Ss. 23, 26 and 28 & Punjab Agricultural Produce (General) Rules, R 29-Marketing Development Fund & Marketing Committee Fund- Utilisation of market fees-Validity of purposes enumerated in clauses of Ss. 26 and 28 examined The Punjab Agricultural Produce Markets Act, 1961 which was passed by the composite State of Punjab is an Act for the better regulation of the purchase,sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in the State. Section 3 envisages the establishment of the State Agricultural Marketing Board for the entire State and it is provided in sub-sec (9) that "The Board shall exercise superintendence and control over. the committees" Section 6(1 ) provides for "declaration of notified market area" and the State Government is empowered to declare the area notified under s. S or any portion thereof to be a notified market area for the purpose of the Act in respect of the agricultural produce notified under s. 5 or any part thereof. The market areas and market yards were declared. putting restriction on the traders to carry on their trade under a licence granted by the various Markets Committees established and constituted within the specified boundaries or areas. After the declaration of the notified market area no person can establish or continue any place for the purchase, sale, storage and processing of the agricultural produce except under a licence granted in accordance with the provisions of the Act, the Rules and the Bye-laws. Section 23 empowers the committee to levy the fees subject to such rules as may be made by the State Government in this behalf on the agricultural produce bought or sold by licensees in the notified market area at a certain percentage. Under s. 27(1), all Moneys received by a Committee shall be paid into a fund to be called the Market Committee Fund and all expenditure incurred shall be defrayed out of such fund, while under s. 25 all receipts of the Board are to be credited into a fund to be called the Marketing Development Fund and the purposes for which it may be expended are enumerated in s. 26 viz. better marketing of agricultural produce on co-operative lines, collection and dissemination of market rates and news. grading and standardisation of agricultural produce etc. Section 28 catalogues the purposes for which the Marketing Committee Fund may be utilised viz.
acquisition of sites for the market. maintenance and improvement of the market, construction and repair of buildings which are necessary for the purpose of the market etc.
In the composite State of Punjab and even after the bifurcation of the State for about a period of three years the maximum rate of market fee which could 1218 be levied by the various market communities under s. 23 was 50 paise for every one hundred rupees. the fee was thereafter raised from time to time.
A number of writ petitions were Filed in the High Court challenging the power of the Board to incease the levy of fee. All the writ petitions were heard together and the increase Ind levy of fee upto Rs. 2/- by the various Market Committees in the State of Haryana was upheld and the writ petition of the Haryana dealers were dismissed while those of the Punjab dealers were allowed and the increase of u-a e brought about by Act 13 of 1974 to the extent of Rs, 2.25 Was struck down. [M/s. Hanuman Dall & General Mills, Hisar v. State of Haryana & others AIR 1976 P & H 1] In Punjab, by amendment Act 14 of 1975, s. 23 of the Act was again amended authorising the imposition of market fee at a rate not exceeding Rs. 2.20 per hundred rupee only, and this increase in the rates of fee was again challenged in the High Court and a Full Bench upheld the increase.
[Kewai Puri & Anr. v. State of Punjab & Ors., AIR 1977 P & H 347]. This view was challenged in the appeal to this Court.
Both in the State of Punjab and the State of Haryana the rate of market fee was further raised from Rs. 2/- to Rs. 3/-. It was unsuccessfully challenged in the High Court by the dealers of each of the States, who thereafter preferred appeals to this Court against the Judgment of the High Court and also challenged the increases in fee, in writ petitions in this Court.
In the appeals and writ petitions it was contended that the levy of the market fee realised from the buyers under s.
23 of the Act could not be correlated I with the service to be rendered to the payers of the fees, and therefore cannot be justified and sustained on the well known concept of fee as pointed out by this Court in several decisions, and that the items of expenditure authorised and enumerated in ss. 26 and 28 of the Act, go beyond the scope of the purpose of the utilisation of the market fees.
On the question of the validity of the fixation of market fee under s. 23 of the Act from time to time and the scope and the purpose of the utilisation of such fees:
HELD: 1. The impost of fee and the liability to pay it is on a particular individual or a class of individuals.
They are under the obligation to submit accounts, returns or the like to The authorities concerned in cases where quantification of the amount of fee depends upon the same. I hey have to undergo the botherations and harassmentss, sometimes justifiably and sometimes even unjustifiably, in the process of discharging their liability to pay the fee.
The authorities levying the fee deal with them and realise the fee from them. By operation of the economic laws in certain kinds of imposition of fee the burden may be passed on to different other persons one after the other. [1229H- 1230B] In the instant case, the Market Committees and the Market Board assumed to themselves the liberty of utilising and spending the realisations from market fees to a considerable extent. as if it was a tax, although in reality it was not so. [1240D]
2. Rendering some service, however remote the service may be, cannot strictly speaking satisfy the element of quid pro required to be established in cases 1219 of the impost of fee. Registration fee, however has to be taken to stand on a different footing altogether. In the case of such a fee the test of quid pro quo is not to be satisfied with such direct close or proximate relationship as in the case of many other fees. By and large registration fee is charged as a regulatory measure. [1241B]
3. This Court in a large number of cases had the occasion to examine the nature of fee and tax and from a conspectus of the various authorities the following, principles for satisfying the test for a valid levy of market fees on the agricultural produce bought or sold by licences in a notified market area are deducible :- (i) That the amount of fee realised must be earmarked for rendering services to the licencees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose. [1243H] (ii) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce. [1244B] (iii) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on The licensees but some special benefits must be conferred on them which `have a direct, close and reasonable correlation between the licensees and the transactions.
[1244C] (iv) That while conferring some special benefits on the licensees it is permissible to render such service in the market which may be in the general interest of all concerned with the transaction taking place in the market. [1244D] (v) That spending the amount of market fees for the purpose of augmenting the agricultural produce. its facility of transport in villages. and to provide other facilities meant mainly or exclusively for the benefit of agriculturist is not permissible on the ground that such in services in the long run go to increase the volume of transaction, 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. [1244E-F] (vi) 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 I; must be established by the authorities who charge the fees that the amount is being spent for rendering services to these on whom falls the burden of the fee. [1244G] (vii) 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. [1244 H] The Commissioner Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, [1954] SCR 1005; Matthews v. Chicorv Marketing Board, 60 CLR. 263;
Attorney General for British Columbia & Esquimalt & Nanaimo Railway Co. & Ors., (1950) Appeal Cases. 87: H. H. 1220 Sudhundra Thirtha Swamiar v. Commissioner for Hindu Religious & Charitable Endowment, Mysore [1963 Suppl. 2 SCR 302; Mahant Sri Jagannath Ramanuj Das & Anr. v. The State of Orissa & Anr., [1954] SCR 1046; Ratilal Panachand Gandhi v. The State of Bombay and ors. [1954] SCR 1055; The Hingir- Rampur Coal Co. Ltd. & ors. v. The State of Orissa & Ors., [1961] 2 SCR 537; Parton v. Milk Board (Victoria) 80 CLR 229; Corporation of Calcutta & Anr. v. Liberty. Cinema [1965] 2 SCR 477; Har Shankar & ors. etc. etc. v. The Dy. Excise & Taxation Commr. & ors. [1975] 3 SCR 254; Nagar Mahapalika Varanasi v. Durga Das Bhattacharya & ors., [1968] 3 SCR 374; The Delhi Cloth & General Mills Co. Ltd. v. Chief Commissioner Delhi & Ors.,1970] 2 SCR 348; Indian Mica & Micanite Industries Ltd. v State of Bihar & Ors. [1971] Suppl. SCR 319; Secretary Government of Madras Home Department & Anr. v. Zenith Lamp & Electrical Ltd. [1973] 2 SCR 973; State of Maharashtra & Ors. v. The Salvation Army, Western India Territory,[1975] 3 SCR 475; Govt. of Andhra Pradesh & Anr. v. Hindustan Machine Tools Ltd. [1975] Suppl. SCR 394; The Municipal Council Madurai v. R. Narayanan etc., [1976] 1 SCR 333; The Chief Commissioner Delhi and Anr. v. The Delhi Cloth & General Mills Co. Ltd. & Anr. AIR 1978, SC 1181; P P. Kutti Keya & Ors. v. The State of Madras & Ors., AIR 1954 Madras, 621; MCVS Arunachala Nadar etc. v. The State of Madras & Ors., [1959] Suppl. 1 SCR 92; Mohmmad Hussain Gulam & Anr. v. State of Bombay & Ors., [1962] 2 SCR 659;Lakhan Lal & Ors. etc. v. The State of Bihar & Ors., [1968] 3 SCR 534; referred to.
4. (i) A dispute arose between the parties as to whether the licence is granted for the whole of the area or for particular places therein. On examining Form in the Rules meant for grant of licence under s. 10, it is found that the licence is granted for one or more places of business specified in col. 6 situated in a particular notified market area named at the top of the licence. There will be no sense in specifying the place of business in the licence if the licensee is to be permitted to establish his place of business any where in a notified market area which is too big and extensive for the control and supervision of a particular Market Committee. Market yards are declared under s. 7. For each notified market area there can be one principal market yard and one or more sub-market yards as may be necessary. The marginal note of sec 8 is, "No private market to be opened in or near places declared to be markets." [1246D-E] (ii) There is no special provision in this statute for an establishment of markets or markets proper as per the definition contained in cl. (i) and (k) of s. 2 of the Act, it is reasonable to assume that the intention of the legislature is to constitute the market yards as the market proper and ordinarily and generally the market would be the same but may include some other places where transactions of purchase of agricultural produce by the traders from the producers has been allowed in order to avoid rush in the precincts of the market proper. But one thing is certain that the whole of the market area in no sense can be equated with market or market proper. Nobody can be' allowed to establish a purchasing centre of his own at any place he likes in the market area without there being such a permission or authority from The Market Committee. After all the whole object of the Act is the supervision and control of the transactions of purchase by the traders from the agriculturists in order to prevent exploitation of the latter by the former. [1240H-1247A] 1221
5. The whole object of the Act is the supervision and control of the transactions of purchase by the traders from the agriculturists in order to prevent exploitation of the latter by the former. The supervision and control can be effective only in specified localities and places and not throughout the extensive market area. [1247B]
6. Rule 24(1) in both the States framed under the Act provides that "all agricultural produce brought into the market for sale shall be sold by open auction in the principal or sub-market yard", which indicates that market is generally the principal and sub-markets yards. The benefit of market fee, therefore, has to be correlated with the transactions taking place at the specified place in the market area and not in the whole of the area.[1247D]
7. The duties and powers of a market committee are enumerated in s. 13 and this indicates that the Committee is primarily concerned with the establishing of a market in the notified area and with providing facilities in the market for persons visiting it and in connection with the transactions taking place there. [1247F]
8. Reading s. 23 along with r. 29 it would be noticed that the power of the Committee to levy fees is subject to the Rules as may be made by the State Government. The fee is levied on ad valorem basis at a rate which cannot exceed the maximum mentioned in s. 23 by the legislature. But the power to fix the rate from time to time within the maximum limit has been conferred on the Board and the Committee is merely bound to follow it. [1248G-H]
9. Section 23 in express language controls the power of the Committee to levy fees subject to the rules. The power given to the Board to fix the rate of market fees from time to time under rule 29 is not ultra vires the provisions of the Act, as sub-sec.(a) of s. 3 confers power on the Board to exercise superintendence and control over the committees, which power, in the context and the scheme of the marketing law, will take within its ambit the power conferred on the Board under rule 29(1). [1249C] State of Punjab & Anr. v. Hari Krishan Sharma, [1966] 2 SCR 982; distinguished
10. The fee levied is not on the agricultural produce in the sense of imposing any kind of tax or duty on the agricultural produce. Nor is it a tax on the transaction of purchase or sale. The levy is an impost on the buyer of the agricultural produce in the market in relation to transactions of his purchase. The agriculturists are not required to share any portion of the burden of this fee. In case the buyer is not a licensee then the responsibility of paying the fees is of the seller who may realise the same from the buyer. But such a contingency cannot arise in respect of the transactions of sale by an agriculturist of his agricultural produce in the market to a dealer who must be a licensee. Probably such an alternative provision was meant to be made for outside buyers who are not licensees when they buy the agricultural produce from or through the licensees.[1249D-E] 11. Every Market Committee is obliged under sub-sec.
(2) (a) of s. 27 to pay out of its funds to the Marketing Board as contribution such percentage of its income derived from licence fee, market fee and fines levied by the 1222 courts as specified in sub-cl. (i) and (ii). The purpose of this contribution as mentioned in sub-sec.(2) (a) is to enable the Board to defray expenses of the office, establishment of the Board and such other expenses incurred by it in the interest of the Committees in general. The income of almost all the Market Committees were several lakhs of rupees per year and, therefore, each is required to pay 30 per centum of its income to the Board by virtue of the amendment brought about by Punjab Act 4 of 1978. Under s. 25 all receipts of the Board are to be credited into a fund to be called the Marketing Development Fund. Purposes for which the Marketing Development Fund may be expended are enumerated in s. 26 and the purposes for which the Market Committee Funds may be expended are catalogued in s. 28[1250A-C]
12. No serious objection to the items of expenditure mentioned in clauses (xii), (xiv), (xv) and (xvi) can be taken. Clause (x) and clause (xi) cannot form the items of expenditure of the market fees. The whole of the State is divided into market areas. The propaganda in favour of agricultural improvement and expenditure for production and betterment of agricultural produce will be in the general interest of agriculture in the market area. So long as the concept of fee remains distinct and limited in contrast to tax such expenditure out of the market fee cannot be countenanced in law. [1252F-G]
13. The first part of cl. (xiii) may be justified in the sense of imparting education in marketing to the staff of the Market Committee. But imparting education in agriculture in general cannot be correlated with the market fee. [1252H]
14. How ill-conceived the second part of clause (xvii) is ? Is it permissible to spend the market fees realised from the traders for any purpose calculated to promote the national or public interest ? Obviously not. No market Committee can be permitted to utilise the fund for an ulterior purpose howsoever benevolent, laudable and charitable the object may be. The whole concept of fee will collapse if the amount realised by market fees could be permitted to be spent in this fashion. [1253A-B] Technically and legally, one may not have any objection to the expenditure of such money for the purposes mentioned in clauses (x), (xi), (xiii) and (xvii). [1253D]
15. It is not necessary to strike down any clauses of s. 28 as being unconstitutional merely on the ground that the expenditure authorised therein goes beyond the scope of the purpose of the utilisation of the market fees. The authorities have to bear this in mind and on a proper occasion the matter will have to be dealt with by courts in the light of this Judgment where a concrete case comes of raising of a loan, spending the money so raised which cannot be reasonably connected with the purposes for which the market fee can be spent, as to whether such a loan can be repaid or interest on it can be paid out of the realisations of the market fees. [1253G]
16. The Board in the State is the Central Controlling and superintending authority over all the Market Committees, the primary function of which is to render service in the market. Parting with 30% income by a Market Committee in favour of the Board is not so excessive or unreasonable so as to warrant any interference with the law in this regard on the ground of violation of the principle of quid pro quo in the utilisation of the market fee realised 1223 from the traders in the market area. Emphasised that the Marketing Development Fund can only be expended for the purposes of the Market Committees in a general way, or to be more accurate, as far as practicable, for the purposes of the particular Market Committee which makes the contribution. [1254C-D]
17. Section 26 of the Act provides for purposes for which the Marketing Development Fund may be expended. The Marketing Development Fund constituted primarily and mainly out of the contributions by the Market Committees from realisation of market fee can also be expended for the purposes of the market in the notified market area in relation to the transactions of purchase and sale of agricultural produce and for no other general purpose or in the general interest of the agriculture or the agriculturists. The purposes mentioned in clauses (i), (ii), (iii), (iv), first part of clause (v), clauses (vi), (vii), (viii), (ix), (xii), first part of clause (xiii), clauses (xiv), (xv) and (xvi) held valid. The Marketing Development Fund constituted out of the Market fees cannot be expended for the purposes mentioned in second part of clause (v), clauses (x), (xi), second part of clause (xiii) and clause (xvii). As the purpose of the law will be served by restricting the operation of s. 26, it is not necessary to strike down those provisions as being constitutionally invalid. [1254E, 1255F-1256A]
18. The High Court has extracted s. 28 of the Act but has failed to scan the effect of the various purposes in some of the clauses. [1256H-1257A]
19. The High Court seems to be of the view that since transportation is very essential for the development of a market and to enable the growers of the agricultural produce to bring the same to the market, the construction of link roads becomes an essential purpose of the market committees.
It may be so but the purpose cannot be allowed to be achieved at the cost of the market fee realised from the dealers. [1257G]
20. The impost must be correlated with the service to be rendered to the payers of the fees in the sense and to the extent pointed out. [1260A]
21. Everybody seems to have allowed himself to be carried too far by the sentiment of the laudable object of the Act of doing whatever is possible to do under it for the amelioration of the conditions and the uplift of the villagers and the agriculturists. Undoubtedly the Act is primarily meant for that purpose and to the extent it is permissible under the law to achieve that object of utilising the money collected by the market fee, it should be done. But if the law does not permit carrying on the sentiment too far for achieving of all the laudable objects under the Act, then primarily it becomes the duty of the Court to allow the law to have an upper hand over the sentiment and not vice versa. [1263G-H]
22. If insecticides and pesticides are for use at the place where actually the marketing operations are carried on it would be a justifiable expenditure. But if they are meant to be supplied to the agriculturists for use at their village homes or in their fields surely they cannot be valid expenditure out of the collections of the market fee.
[1267G-H] In the instant cases the authorities took full liberty to treat the realisation from market fee as a general realisation of tax which they were free to spend in any manner they liked for the purposes of the Act, the development of the area, for giving a fillip to agricultural production and so forth and so on. The 1224 sooner the authorities are made to realise the correct position in law the better it will be for all concerned.
23. Taking a reasonable and practical view of the matter and on appreciation of the true picture of justifiable and legal expenditure in relation to the market fee income, even though it had to be done on the basis of some reason- able guess work, the court did not disturb the raising of an imposition of the rate of market fee upto Rs. 2/- per hundred by the various Market Committees and the Boards both in the State of Punjab and Haryana. After all, considerable development work seems to have been done by many Market Committees in their respective markets. The charging of fee @ Rs. 2/- therefore, is justified and fit to be sustained. [1269G-1270A]
24. The dealers of Haryana did not feel aggrieved when the High Court maintained the raising of the market fee to the extent of Rs. 2/- per hundred rupees. The court did not uphold the raising of the fee from Rs.2/- to Rs. 3/-as on the materials placed before it, it is clear that this has been done chiefly because of the wrong impression of law that the amount of market fee can be spent for any development work in the notified market area and especially for the development of agriculture and the welfare of the agriculturists. The High Court was wrong in maintaining this use on an erroneous view of the matter.[1270B-C]
25. In future if the market fee is sought to be raised beyond the rate of Rs.2/- per hundred rupees, proper budgets, estimates, balance-sheets showing the balance of the money in hand and in deposit, the estimated income and expenditure, etc. should carefully be prepared. On drawing the correct balance sheets and framing of the correct estimates and budgets the authorities as also the State Government will be able to know the correct position and to decide reasonably as to what extent the raising of the market fee can be justified taking an over-all picture of the matter and keeping in view the reason behind the restrictions of sales tax laws concerning the transactions of foodgrains and the other agricultural produce. Then, and then only, there may be a legal justification for raising the rate of the market fee further to a reasonable extent.[1270E-G]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1083 of 1977.
(Appeal by Special Leave from the Judgment and Order dated 28-1-1977 of the Punjab Haryana High Court in Civil Writ No. 5697/75) CIVIL APPEAL NO: 1616 OF 1978 (Appeal by Special Leave from the Judgment and Order dated 18-9-1978 of the Punjab & Haryana High Court in CWP No. 3849/78) CIVIL APPEAL NOS;1700-1761 OF 1978 (Appeals by Special Leave from the Judgment and Order dated 30-8-1978 of the Punjab & Haryana High Court in Civil Writ Petition Nos. 3351, 2662, 3094, 3221, 3303, 3330, 3347, 3348, 3349, 3350, 1225 3384, 3390, 3393, 3459, 3460, 3489, 3517, 3533, 3548, 3551, 3563, 3570, 3576, 3598, 3615, 3665, 3673, 3773, 3775, 3776, 3826, 3827, 3883, 4024, 4171/77, 37/78, 178, 212, 283, 335, 381, 423, 483, 577, 666, 751, 887, 976, 1021, 1058, 1104, 1164, 1280, 1469/78, 2625/77, 1556/78, 1578/78, 1635, 1859, 1980, 1997 and 2095/78.
CIVIL APPEAL NOS. 1762-1773 OF 1978.
(Appeals by Special Leave from the Judgment and Order dated 30-8-1978 of the Punjab & Haryana High Court in Civil Writ Petition Nos. 45/78, 888, 1251 1451, 1556 3300, 3330, 3293/77, 3292, 3337, 3385 and 3426/77) CIVIL APPEAL NOS.1626-1627 OF 1978.
(Appeals by Special Leave from the Judgment and Order dated 30-8-1978 of the Punjab & Haryana High Court in Civil Writ Petition Nos. 4171/77 and 1356/78) AND WRIT PETITION NOS. 4436, 4470, 4472, 4481, 4485,4564, 4420, 4450, 4460, and 4484 OF 1978 (Under Article 32 of the Constitution) For the Appellants in CA No. 1083/77:A. K. Sen Mr.
Ravinder Bana, and Bhal Singh Malik For the RR. 1-2 in CA No. 1083/77: S. N. Kackar, Sol. Genl., Hardev Singh and R.
S. Sodhi, For the Intervener-State Agricultural Market Board and Market Committee, Nai Mandi in CA No. 1083/77: V. M. Tarkunde, and S. C. Patel. For the Applicant Intervener: in CA No. 1083/77 Mrs. Urmila Kapoor. For the Respondent No. 3 in CA No. 1083/77 H. L. Sibbal, G. G. Garv and Mr. Atma Ram.
For the Petitioner in the W.P. except in WPs. Nos. 4481, 4470, 4564 Bhal Singh Malik, B. Datta and K. K. Manchanda.
For the Petitioners in W.P. Nos.4481, 4564, and for the Appellants in CA No. 1616/78 S.K. Walia, and Mr. M.P. Jha.
For the Petitioner in W.P. No.4470/78 Sarva Mitter. For the Respondents in WP.4430, 4472, 4481, 4485/78 and CA 1616/78 W.P.4564/78: Hardev Singh, G. C. Garg and R. S. Sodhi. For the Appellants in CA Nos. 1700-1761/78 Anil Diwan, (1703) Adarsh Kumar Goel (in all appeals) Praveen Kumar, Adv.
(1703) Miss Bina Gupta, Adv. (1703) Madan Gopal Gupta (1703 to 1752) Sarva Mitter (1751-1761 and all other) For the Petitioners in W.P. Nos. 4420, 4450, 4460, 4484/78: A. K. Sen, (4420) Dr. L. M. Singhvi, (4460) B. Dutta, K. K. Manchanda and Bhal Singh Malik, For R. 1 in Appeal Nos.
1700-1761/78 and WP Nos. 4420, 4450, 4460 and 4484/78:
1226 P. N. Lekhi, (FP 4420) and R. N. Sachthey, For RR. 2-3 in Appeal Nos. 1760-1761/78 and WP Nos. 4420, 4450, 4460 and 4484/78:V. M. Tarkunde, (in CA 1700 and WP 4420) Gian Singh, (WPs. 4420, 4450 4460, 4484 and CAs 1760-1761) S. C. Patel.
For the Appellants in CA Nos. 1626-1627/78: Mrs. Urmila Kapoor, For the Appellants in CA Nos. 1762-1773/78: K. K. Mohan.
For the other appearing RR. in CA Nos. 1762-1763: S. C. Patel, The Judgment of the Court was delivered by UNTWALIA, J.-In these groups of Civil Appeals and Writ Petitions, broadly speaking, the question which falls for determination is the validity of certain provisions of the Punjab Agricultural Produce Markets Act, 1961 (Punjab Act No. 23 of 1961). hereinafter referred to as the Act, and the Rules framed by the State of Punjab and Haryana under the said Act as also the validity of the fixation of market fees from time to time by the various Market Committees in the States aforesaid under the direction of the Punjab State Agricultural Produce Marketing Board and the Haryana State Agricultural Produce Marketing Board. All these cases have been heard together and are being disposed of by a common judgment.
In the erstwhile composite State of Punjab the Act was passed in the year 1961 to consolidate and amend the law relating to the better regulation of the purchase, sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in the State. Under section 3 of the Act the State Agricultural Marketing Board was constituted for the entire area of the composite State, which later, in the year 1966 came to be bifurcated into the States of Punjab and Haryana. Under the various provisions of the Act, which will be noticed shortly hereinafter, market areas and market yards were declared putting restrictions on the traders to carry on their trade under a licence granted by the various Market Committees established and constituted in accordance with sections 11 and 12, within the specified boundaries or areas. The traders were required to take out licences on payment of a licence fee. Under section 23 of the Act a Market Committee was required and authorised to levy on ad-valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding the rate mentioned in section 23 from time to time for every one hundred rupees.
1227 In the composite State of Punjab and even after the bifurcation of the States for about a period of three years the maximum rate of market fee which could be levied under section 23 was 50 paise for every one hundred rupees.
Various Market Committees levied a fee of 50 paise per hundred rupees and no dealer made any murmur of grievance of it. In the bifurcated State of Punjab by Act 25 of 1969 the rate of 50 paise was raised to Re. 1/-. It was further raised to Rs. 1.50 by Act 28 of 1973. Thereafter by Ordinance 4 of 1974 which was replaced by Act 13 of 1974 the rate was raised to Rs. 2.25. Several dealers filed a number of Writ Petitions in the High Court of Punjab and Haryana challenging the increase in the rate of market fee from time to time, the last one being by Act 13 of 1974. Similarly in the State of Haryana the rate of 50 paise was raised to Re. 1/- by Haryana Amendment Act 28 of 1969. It was further raised to Rs. 1.50 by Act 21 of 1973. By Ordinance 2 of 1974 which was replaced by Act 17 of 1974 in the State of Haryana the fee was raised to Rs.2/- for every one hundred rupees, as against the rise of Rs. 2.20 in the State of Punjab.
Several dealers of the State of Haryana also challenged in the High Court the levy and increase of market fee from time to time. All the Writ Petitions were heard together. The increase and levy of fee upto Rs. 2/- by the various Market Committees in the State of Haryana was upheld and the Writ Petitions of the Haryana dealers were dismissed while those of the Punjab dealers were allowed and the increase of rate brought about by Ordinance 4 and Act 13 of 1974 to the extent of Rs. 2.25 was struck down. This decision of the High Court is reported in M/s. Hanuman Dall & General Mills, Hissar v. The State of Haryana and others. The date of the decision is November 8, 1974. In Punjab by Amendment Act 14 of 1975 section 23 of the Act was again amended authorising the imposition of market fee at a rate not exceeding Rs. 2.20 per hundred rupees. Telegraphic instructions were issued by the Punjab Board to the various Market Committees directing them to charge Rs. 2/- only with effect from August 23, 1975 after the passing of the Act 14 of 1973 on August 8, 1975. The increase in the rates of fee, the last one being in August, 1975, were again challenged in the High Court. But the Full Bench which finally heard the Writ Petition upheld the increases by its judgment delivered on January 28, 1977, which is reported in Kewal Krishan Puri and another v. The State of Punjab and others. Civil Appeal 1083 of 1977 has been preferred in this Court from the said judgment of the High Court.
1228 Both in the State of Punjab and the State of Haryana the rate of market fee was further raised from Rs. 2/- to Rs.3/-. It was unsuccessfully challenged in the High Court.
The dealers have preferred appeals from the judgments of the High Court has also filed Writ Petitions in this Court. In the State of Punjab the fee was raised to Rs. 3/-by Ordinance 2 of 1978 which must have been replaced by an Act.
The Ordinance was promulgated on April 28, 1978. The Writ Petition 4436 of 1978 has been filed in this Court challenging the previous increases in the fee along with the last increase of Rs. 3/-. The High Court upheld it by its judgment dated May 18, 1978. Special Leave Petition (Civil) 2768 of 1978 was preferred from this judgment. Writ Petition No. 3849 of 1978 was filed in the High Court by a large number of dealers, which was dismissed in limine by order dated September 18, 1978. Civil Appeal 1616 of 1978 arises out of this Writ Petition. Several other dealers have filed separate Writ Petitions also being Writ Petitions 4470, 4472, 4481, 4485 and 4564 of 1978 challenging in the increase of market fee in the State of Punjab.
In the State of Haryana the rate of fee was raised from Rs. 2/- to Rs.3/- with effect from September 5, 1977 by Ordinance 12 of 1977 replaced by Act 22 of 1977. The Haryana State Marketing Board directed all the Market Committees in that State to collect market fee @ Rs. 3/- with effect from 5-9-1977. A number of Writ Petitions were filed in the High Court challenging the said increase and the High Court dismissed all the Writ Petitions by its judgment dated August 30, 1978. Civil Appeals 1700 to 1773 of 1978 and Civil Appeals 1626 and 1627 of 1978 are from the judgment of the High Court dated August 30, 1978. The said increase has also been challenged by filing Writ Petitions in this Court and they are Writ Petitions 4420, 4450, 4460 and 4484 of 1978.
Although by now there is a catena of cases of this Court pointing out the difference between "tax" and "fee" with reference to the constitutional provisions and otherwise also, the problem before us has presented some new angles and facets. We, therefore, think it advisable and necessary to review many of the earlier decisions to pin- point the precise difference as far as practicable in order to resolve the rival contentions of the parties. The arguments of the learned counsel for the parties whenever thought necessary would be referred to at the appropriate places hereinafter in this judgment.
Clause (2) of Article 110 and clause (2) of Article 199 of the Constitution, the former occurring in the Chapter of Parliament and the 1229 latter in relation to the State Legislature, are in identical terms as follows:- "A Bill shall not be deemed to be a Money Bill by reason only that it provides...........for the demand or payment of fees for licences or fees for services rendered.......
The Constitution, therefore, clearly draws a distinction between the imposition of a tax by a Money Bill and the impost of fees by any other kind of bill. So also in the Seventh Schedule both in List I and in a distinction has been maintained in relation to the entires of tax and fees.
In the Union List entries 82 to 92A relate to taxes and duties and entry 96 carves out the legislative field for fees in respect of any of the matters in the said list except the fees taken in any Court. Similarly in the State List entries relating to taxes are entries 46 to 63 and entry 66 provides for fees in respect of any of the matters in List II but not including fees taken in any Court. Entry relating to fees in List III is entry 47. Our Constitution, therefore, recognises a different and distinct connotation between taxes and fees.
The leading case of this Court which has been referred and followed in many subsequent decisions is the case of The Commissioner, Hindu religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt. The point decided therein was that the provision relating to the payment of annual contribution contained in section 76(1) of the Madras Hindu Religious and Charitable Endowments Act, 1951 is a tax and not a fee and so it was beyond the legislative competence of the Madras State Legislature to enact such a provision. The meaning given to the word "tax" by Latham C.J. of the High Court of Australia in Matthews v. Chicory Marketing Board has been quoted with approval at page 1040 and has been often repeated in many other decisions. Generally speaking a fee is defined to be a charge for a special service rendered to individuals by some governmental agency. A question arises-"special service" rendered to whom which kind of individuals? Mr. V.M. Tarkunde who appeared for the Haryana Marketing Board stressed the argument that service rendered must be correlated to those on whom the ultimate burden of the fee falls. In our opinion this argument is neither logical nor sound. The impost of fee and the liability to pay it is on a particular individual or a class of individuals. They are under the obliga- 1230 tion to submit accounts, returns or the like to the authorities concerned in cases where quantification of the amount of fees depends upon the same. They have to undergo the botherations and harassments, sometimes justifiably and sometimes even unjustifiably, in the process of discharging their liability to pay the fee. The authorities levying the fee deal with them and realize the fee from them. By operation of the economic laws in certain kinds of impositions of fee the burden may be passed on to different other persons one after the other. A few lines occurring at page 119 in the judgment of the Privy Council in the case of Attorney-General for British Columbia and Esquimalt and Nanaimo Railway Company and others may be quoted with advantage. They are as follows:- "It is probably true of many forms of tax which are indisputably direct that the assessee will desire, if he can, to pass the burden of the tax on to the shoulders of another but this is only an economic tendency. The assessee's efforts may be conscious or unconscious, successful or unsuccessful; they may be defeated in whole or in part by other economic forces.
This type of tendency appears to their Lordships to be something fundamentally different from the "passing on" which is regarded as the hall-mark of an indirect tax." The authorities, more often than not, almost invariably, will not be able to know the individual or individuals on whom partly or wholly the ultimate burden of the fee will fall. They are not concerned to investigate and find out the position of the ultimate burden. It is axiomatic that the special service rendered must be to the payer of the fee. The element of quid pro quo must be established between the payer of the fee and the authority charging it. It may not be the exact equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee. It may be so intimately connected or interwoven with the service rendered to others that it may not be possible to do a complete dichotomy and analysis as to what amount of special service was rendered to the payer of the fee and what proportion went to others. But generally and broadly speaking it must be shown with some amount of certainty, reasonableness or preponderance of probability that quite a substantial portion of the amount of fee realised is spent for the special benefit of its payers.
1231 We may now extract some very useful and leading principles from the decision of this Court in Shirur Mutt's (1954 S.C.R., 1005, supra) pointing out the difference between tax and fee. At pages 1040-41 says Mukherjea J., as he then was:
"The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit 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 tax-payer and the public authority...." "a 'fee' is generally defined to be a charge for a special service rendered to individuals by some governmental agency." At page 1042 the learned Judge. enunciates-"The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives." After pointing out the ordinarily there are two classes of cases where Government imposes 'fee' upon persons, the first being the type of cases of the licence fees for Motor Vehicles or the like and 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 for the work done or services rendered" (vide page 1043), it is said further-"If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax. There is really no generic difference between the tax and fees and as said by Seligman, the taxing power of a State may manifest itself in three different forms known respectively as special assessments, fees and taxes.
"Finally at page 1044 the striking down by the High Court of the imposition of fee under section 76. Of the Madras Act was upheld on the ground-"It may be noticed, however, that the contribution that has been levied under section 76 of the Act has been made to depend upon the capacity of the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution." Benefit conferred or any particular religious institution would have been undoubtedly benefit conferred on the payer of the fee.
1232 After the decision of this Court in Shirur Mutts case (supra) section 76 of the Madras Act was amended. The effect of the amendment came to be considered by this Court in the case of H. H. Sudhundra Thirtha Swamiar v. Commissioner for Hindu Religious & Charitable Endowments. Mysore.(1) Pointing out the various differences between the earlier law and the amended one at pages 320-21 the imposition of fee was upheld.
In two other cases of this Court following the ratio of Shirur Mutt's decision the imposition of fee was upheld, vide, Mahant Sri Jagannath Ramanuj Das and another v. The State of Orissa and another and Ratilal Panachand Gandhi v. The State of Bombay and other . (3) We now proceed to consider. some more decisions of this Court in which apparently some different phrases were used for explaining the meaning of the word 'fee' and its distinction from 'tax'. Both sides placed reliance upon those decisions. But if the phrases are understood in the context they were used and with reference to the facts those cases it would be noticed that the leading principle has not basically undergone any change.
In the case of The Hingir-Rampurr Coal Co. Ltd. & Ors. v. The State of Orissa and others(4) the challenge was to the cess levied by the orissa Mining Areas Development Fund Act, 1952. The petitioners' stand in the first instance was that the cess levied was not a fee but a duty of excise on coal and hence beyond the competence of the State Legislature. Alternatively they contended that even if it was a fee it was beyond the competence of the State Legislature for some If other reason not necessary to be mentioned here. The cess imposed was upheld as a 'fee' relatable to Entry 23 of List II read with Entry 66. In other words it was upheld as a 'fee' in respect of regulation of mines and mineral development. Gajendragadkar J., as he then was, delivered the judgment on behalf of the majority and discussed the point at some length. At page 545 are to be found a few words which go directly against the contention of Mr. Tarkunde. Says the learned Judge:-"...a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it." 1233 (Emphasis supplied). Mr. Tarkunde, however, relied upon a passage at the same page which runs thus:- "If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee." The above passage does not mean that the service rendered is unconnected with or not meant for the payer of the fee. As pointed out earlier, service rendered to an institution like a Math is a service rendered to the payer of the fee. Similarly services rendered to a specific area or to a specific class of trade or business in any local area must mean, and cannot but mean, that it is for the special benefit of the person operating in that area. The service rendered was to the mining area for the benefit of the mine owners at that area. The area or trade does not pay the fee nor does it get the benefit in vacuum. The fee is paid by the person who is liable to pay it and service to the payer does not mean any personal or domestic service to him but it means service in relation to the transaction, property or the institution in respect of which he is made to pay the fee. Says the learned Judge at page 549:- "It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business, in the last analysis such services may indirectly form part of services to the public in general. If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefitting the specified class or area the State as a whole may ultimately and indirectly be benefitted would not detract from the character of the levy as a fee. Where, however, the specific service is indistinguishable from public service, and in essence is directly a part of it, different considerations may arise. In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve. Its primary object and the essential purpose must be distinguished from its ultimate or incidental results or consequence . That is the true test in determining the character of the levy." (underlining, ours) At pages 549-50 in the decision of The Hingir-Rampur Coal Co. Ltd. (supra), reference has been made in passing to the decision of 1234 the Australian High Court in Patron v. Milk Board (Victoria).(1) The majority which, amongst others, included Dixon J., held the purported levy to be invalid because it was the imposition of a duty of excise, there being no element of quid qua to the person on whom the levy had been imposed. Since a few lines from the judgment of Dixon J., occurring at pages 258-259 will be very helpful in tackling with the problem we are faced with, we may quote them. here.
They are as follows:- "It is an exaction for the purposes of expenditure out of a Treasury fund. The expenditure is by a government agency and the objects are governmental. It is not a charge for service. No doubt the administration of the Board is regarded as beneficial to what may loosely be described as the milk industry.
But the Board performs no particular service for the dairyman or the owner of a milk depot for which his contribution may be considered as a fee or recompense......................On the other hand it is a trading tax. "Customs and excise duties are, in their essence, trading taxes, and may be said to be more concerned with the commodity in respect of which the taxation is imposed than with the particular person from whom the tax is exacted": Attorney General for British Columbia v. Kingcome Navigation Co [1934] A.C. 45, at p. 59.
At page 554 is to be found the final conclusion of Gajendragadkar J., which is the crux of the matter. It runs:- Thus the scheme of the Act shows that the cess is levied against the class of persons owning mines in the notified area and it is levied to enable the State Government to render specific services to the said class by developing the notified mineral area. There is an element of quid pro quo in the scheme, the cess collected is constituted into a specific fund and it has not become a part of the consolidated fund, its application is regulated by a statute and is con fined to its purposes, and there is a definite correlation between the impost and the purpose of the Act which is to render service to the notified area." (underlining, ours).
In the case of Corporation of Calcutta and another v. Liberty cinema(2) the respondent was charged by the Calcutta Corporation a 1235 very high licence fee assessed according to the sanctioned seating capacity of the Cinema house. The High Court quashed the imposition. In appeal to the Supreme Court the stand of the appellant Corporation was that the levy was a tax and section 548(2) of the Calcutta Municipal Act did not suffer from the vice of excessive delegation: while the respondent cinema contended that the levy was a fee and had to be justified as being imposed in return for services to be rendered. Alternatively the respondent submitted that if it was a tax it was invalid as it amounted to an illegal delegation of legislative functions. The majority view was expressed by Sarkar J., as he then was, and the impost was upheld as a tax. In the minority opinion delivered by Ayyangar J., it was held that even in the case of a licence fee a correlation between the fee charged and the service rendered was necessary to be established. It was, therefore, held to be a tax but invalidly imposed under a power suffering from the vice of unconstitutional legislative delegation. In the cases before us the licence fees charged from the various traders in the market areas are not excessive and have not been attacked on any ground whatsoever. We are. therefore, not concerned to find out whether an element of quid pro quo is necessary in cases of all kinds of licence fees. Some licences are imperative to be taken only by way of regulatory measure, some are in the nature of grant of exclusive right or privilege of the State, such as, excise cases noticed by this Court in the case of Har Shankar & ors. etc. etc. v. The Dy. Excise & Taxation Commr. & Ors (1) Some may be cases of licence fees where element of qid pro quo is necessary to be established. But what is important to be pointed out from the case of Liberty Cinema (supra) is that in the case of a fee of the kind with which we are concerned in this case the element of quid pro quo must be established. Otherwise the imposition of fee will be bad. In the majority opinion, it is stated at page 490:- "The conclusion to which we then arrive is that the levy under s.548 is not a fee as the Act does not provide for any service to him. No question here arises of correlating the to the person on whom it is imposed. The work of inspection done by the Corporation which is only to see that the terms of the licence are observed by the licensee is not a service to him. No question here arises of correlating the amount of the levy to the costs of any service. The levy is a tax." 1236 Ayyangar J., also said at page 526 that there being no correlation between the fee charged and the service rendered the impugned levy was not authorised.
Mr. Tarkunde at one stage of the hearing endeavoured to submit, although the Solicitor-General appearing for the State of Punjab and Mr. H. L. Sibbal for the Punjab Marketing Board had made no such submissions, that the impugned impost could be justified as a tax. There was no lack of legislative competence in imposing a tax of the kind under issue. Counsel further submitted that in almost all the cases in absence of quid pro quo the levy was held to be bad and unsustainable as a tax for want of legislative competence. On the other hand learned counsel for the appellants and the petitioners M/s. A. K. Sen, Anil Dewan, B. S. Malik and A. K. Goel pointed out that at no pointed of time the respondent sought to justify the impost as a tax obviously because it would have then violated the provisions of the Sales Tax law which did not authorise the imposition of such a tax beyond a certain percentage, and as a tax it could not be but a sales tax. Finally this controversy was not pursued when we pointed out that at no stage the question was raised and no attempt any stage was made to justify it as a tax. Obviously the Market Committees could not be competent under the Act to impose any tax: on the sale and purchase of the agricultural produce in the market nor did it ever purport to do so The nature of the impost and the power. under which it was levied squarely and uniformally remained within the realm of the fee and fee of the kind which could not but sustained on the establishment of the element of quid pro quo between the authority charging the fee and its payer.
The next case to be considered is the decision of this Court in Nagar Mahapalika Varanasi v. Durga Das Bhattacharya & ors.(l) in which it was held that the annual licence fee charged from the rickshaw owners and the drivers by the Varanasi Municipal Board could be justified only on the basis of the element of quid pro quo. The fee was held to be ultra vires and illegal because after excluding certain items of expenditure the balance did not constitute sufficient quid pro quo for the amount of the licence fee charged. It could not be sustained as a tax. Certain major items of expenditure incurred by the Municipal Board were attributable to the discharge of its statutory duty and, therefore, at page 386 it was said by Ramaswami J.,-it is manifest that the licence fee cannot be imposed for reimbursing the cost of ordinary municipal serves which the Municipal 1237 Board was bound under the statute to provide to the general public." The expenditure incurred by the Municipal Board for the benefit of the licensees constituted 44% of the total income of the Municipal Board and hence it was held that there was no sufficient quid pro quo established in the circumstances of the case. In Delhi Cloth & General Mills Co. Ltd. v. Chief Commissioner Delhi & ors.(l) the High Court had found the 60% of the amount of licence fees charged from the mills was actually spent on services rendered to the factory owners. On that basis sufficient quid pro was found to exist and the impost was upheld by this Court also. We may, however, add that the rule of 60% cannot be of universal application. It is not a static rule.
The cases of licence fees are, generally speaking, on some different footing. There is a substantial element of regulatory measure involved in them. Over and above that a good portion of the fee, may be in the neighbourhood of 60% or more, must be correlated to the service rendered to the person from whom the fee is charged. But there may be cases where, as in the instant one, the licence fee charged by way of regulatory measure is not exorbitant or excessive. But the other kind of fee charged has got to be justified on the ground of existence of sufficient quid pro quo between the payer of the fee and the authority charging it. In such a case from a practical point of view it may be difficult to find out with arithmetical exactitude as to what amount of fee has gone in incurring the expenditure for the services.
But, broadly speaking, a good and substantial portion of it must be shown as being spent for the services rendered.
Now we come to the decision of this Court in Indian Mica & Micanite Industries Ltd . v. State of Bihar & ors.(2) wherein Hegde J., speaking on behalf of a Constitution Bench of this Court, reviewed all the earlier cases and pointed out at page 323 that-"While a tax invariably goes into the consolidated fund, a fee is earmarked for the specified services in a fund created for the purpose." Concludes the learned Judge at pages 324-25:- "From the above discussion it is clear that before any levy can be upheld as a fee, it must be shown that the levy has reasonable co-relationship with the services rendered by the Government. In other words the levy must be proved to be a qui pro quo for the services rendered. But in these matters it will be impossible to have an exact co-relationship. The co- relationship expected is one of a general character and not as of arithmetical exactitude." 1238 Difference between a licence to regulate a trade, business or profess on in public interest and in a case where a Government which is the owner of a particular property may grant permit or licence to someone to exploit that property for his benefit for consideration has been pointed out at page 325. The State of Bihar had failed to place materials in the High Court to establish the reasonable co- relationship between the value of the services rendered with the fee charged. For some special reasons the case was remanded. But one thing may be pin-pointed from a passage occurring at page 327 that the expenses of maintaining an elaborate staff by the Excise Department were not only for the purposes of ensuring that denaturing is done properly by the manufacturer but also for the purpose of seeing that the subsequent possession of denatured spirit in the hands either of a wholesale dealer or retail seller or any other licensee or permit-holder is not misused by converting the denatured spirit into alcohol fit for human consumption and thereby evade payment of heavy duty. But the appellant before the Supreme Court or other similar licensees had nothing to do with the manufacturing process. They were only the purchasers of manufactured denatured spirit. In that context it was said-"Hence the cost of supervising the manufacturing process or any assistance rendered to the manufacturers cannot be recovered from the consumers like the appellant." When we come to discuss even from the admitted facts in relation to the levy of impugned market fees, we shall point out that the authorities concerned as also the High Court labour under the impression that the fee realized from the traders in the market could be spent for any purpose of development of agriculture by providing all sorts of facilities to the agriculturists including the facilities of link roads for the purpose of trans port of their agricultural produce to the markets how so ever distant these link roads may be from the market proper or any other purchasing centre in the market.
In the case of Secretary, Government of Madras, Home Department and another v. Zenith Lamp & Electrical Ltd.(1) the character of Court fees came up for consideration as to whether they are taxes or fees or whether they are sui generis. Although after referring to the various Entries of the Seventh Schedule in the different lists it was noticed that Court fees were not taxes and they were covered by separate Entries of fees exclusively meant for Courts, yet the broad principles of the requirement of quid pro quo were made applicable in the cases of Court fees also. Even so, Sikri C.J. speaking for the Court pointed out at page 982- "But even if the meaning is the same, 1239 what is 'fees' in a particular case depends on the subject- matter ill relation to which fees are imposed." The learned Chief Justice further observed at the same page-"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 co- relationship with the fees collected and the cost of administration of civil justice." If the view taken by the High Court in the market fee cases were to hold good, then pushing it to the logical conclusion one will have to say that giving all sorts of facilities to the litigants for their travel from the village homes to the Courts would also be a service of them In cases of court fees one has to take broad view of the matter to find out whether there exists a broad co-relationship with the fees collected and the cause of administration of justice. Even mixing the amount of court fee collected with the general fund will be permissible. It may not be kept in a separate fund or earmarked separately. The very fact that in relation to court-fees there are separate Entries in the Seventh Schedule e.g. Entry 77 List I and Entry 3 of List II, indicates that even though the character of the levy is not very much different from that of the general types of fees, in the mat
