JUDGMENT M.S. Menon, C.J. 1. These are appeals, by the petitioners in O.P. Nos. 1315, 1316 and 1317 of 1959 against the dismissal of those petitions. The only question for consideration is whether they are liable to pay a licence fee during the period from 1st October 1957 to 1st April 1958 under rule 21 of the General Sales Tax Rules, 1950, as contended by the respondents, and held in the common judgment under appeal. 2. Rule 21 as substituted by a notification, dated 28th September 1957 and published in the Kerala Gazette Extraordinary, No. 108, dated 30th September 1957, provides that every person who deals in goods specified in Schedule I of the Act or in goods partly exempted by notification under section 6 shall, in case the turnover of any such person in any year in respect of the goods mentioned above is not less than Rs. 7,500, submit an application in Form VIII for a licence in respect of each of his places of business. Form VIII specifies the goods as: "all other goods exempted under sub-section (vii) of section 5 and partly exempted by notification under section 6 of the Act.'' 3. The commodity with which we are concerned is tea, item No. 10 in column 2 of Schedule I. The fee for the grant or renewal of a licence is prescribed by rule 22 (5). It is a fee varying according to the turnover and subject to a maximum of Rs. 5,000. 4. Section 5 (vii) of the Act provides that the sale of goods specified in column 2 of Schedule I shall be liable to tax only at such single point in the series of sales by successive dealers as may be specified by the Government by notification in the Gazette, and that where the taxable point so specified is a point of sale, the seller shall be liable for the tax on the turnover for which the goods are sold by him at such point and where the taxable point so specified is a point of purchase, the buyer shall be liable for the tax on the turnover for which the goods are bought by him at such point. The relevant notification specified that the taxable point in respect of tea shall be the first sale in the State by a dealer who is not exempt from taxation under section 3 (3) of the Act. The contention of the appellants is that they are dealers not exempt from taxation under section 3 (3), that they effect the first sale in the sale, that they have paid sales-tax at the Agricultural taxable point specified in the notification and as they have derived no benefit whatsoever, they cannot be compelled to pay and obtain a licence under rule 21 of the General Sales Tax Rules, 1950. In other words, their contention is that the stipulation for a licence in rule 21 is only a condition precedent to the earning of a benefit and as the appellants derived no benefit, they do not belong to the class of persons who are expected to pay the licence fee. 5. Section 7 of the Act deals with the consequences that flow from a licence not being taken out or renewed by a dealer. All that it says is that the sales of a delinquent dealer will be assessed to tax under section 3 as if the provisions of section 5 or the notification under section 6 did not apply to such sales. This, we think, indicates that the compulsion to take out a licence is confined to those who by non-compliance can forfeit a benefit under section 5 or a notification under section 6. 6. The petitioners derived no benefit under section 5 or a notification under section 6, and it is not unreasonable to say, as contended by the appellants, that section 7, rule 21 and Form VIII should be read together and the amplitude of rule 21 confined to cases where a benefit is derived. It is common ground that the Government has excluded the first seller of tea from the liability to pay any licence fee on and from 1st April 1958. 7. The further contention of the appellants is that if the above interpretation is not accepted as we have done the fee concerned will have to be construed as a tax as far as they are concerned and struck down as such. Section 24 of the Act deals with the power to make rules. 7. The further contention of the appellants is that if the above interpretation is not accepted as we have done the fee concerned will have to be construed as a tax as far as they are concerned and struck down as such. Section 24 of the Act deals with the power to make rules. It provides that the Government may make rules to carry out the purposes of the Act, and in particular and without prejudice to the generality of that power, such rules may provide for "the licensing of persons engaged in the sale of goods and the imposing of conditions in respect of the same for the purpose of enforcing the provisions of this Act and fees for licences ". This does not mean, the appellants contend, that the State can impose a further tax by the simple expedient of calling it a licence fee. 8. As pointed out by the Supreme Court in Hingir-Rampur Coal Co. Ltd. v. State of Orissa A.I.R. 1961 S.C. 459: "In regard to fees, there is, and must always be, co-relation between the fee collected and the service intended to be rendered. Cases may arise where under the guise of levying a fee, legislature may attempt to impose a tax ; and in the case of such a colourable exercise of legislative power, courts would have to scrutinise the scheme of the levy very carefully and determine whether, in fact, there is a co-relation between the service and the levy, or whether the levy is either not co-related with service or is levied to such an excessive extent as to be a pretence of a fee and not a fee in reality." What we are concerned with is not the exercise of a legislative power but of a rule making power. In the absence of a quid pro quo, a fee should be considered as amounting to a tax and it is impossible to say that any tax can be introduced by the exercise of a rule-making power. 9. Our attention was drawn to Guruviah Naidu and Brothers v. State of Madras (1957) 8 S.T.C. 690 . The contentions urged before us did not arise for consideration in that case and it affords little guidance for the decision of these appeals. 10. 9. Our attention was drawn to Guruviah Naidu and Brothers v. State of Madras (1957) 8 S.T.C. 690 . The contentions urged before us did not arise for consideration in that case and it affords little guidance for the decision of these appeals. 10. In the light of what is stated above, these appeals have to be allowed and we do so, though in the circumstances of the case without any order as to costs.