Judgment A. K. SARKAR, JJ. ( 1 ) SARKAR J. (with him Raghubar Dayal and Mudholkar JJ.) : The appellant Corporation was constituted by the Calcutta Municipal Act, 1951, an Act passed by the Legislature of the State of West Bengal. The act was intended to consolidate and amend the law relating to the Municipal affairs of Calcutta and it defined the duties, powers and functions of the Corporation in whose charge those affairs were placed. The respondent is a firm owning a cinema house and carrying on business of public cinema shows. ( 2 ) SECTION 443 of the Act provides that no person shall without a licence granted by the Corporation keep open any cinema-house for public amusement. It, however, does not say that any fee is to be paid for the licence. But sub-section (2) of S. 548 says that for every licence under the Act, a fee may, unless otherwise provided, be charged at such rate as may from time to time be provided. In 1948 the Corporation had fixed the scale of fees on the basis of the annual valuation of the cinemahouses made by a method which does not appear on the record. The respondent had under these sections obtained a licence for its cinema house and had been paying a licence fee calculated on the aforesaid basis. The fee so calculated was Rs. 400. 00 per year. ( 3 ) BY a resolution passed on 14/03/1958 the Corporation changed the basis of assessment of the licence fee with effect from 1/04/1958. Under the new method the fee was to be assessed at rates prescribed per show according to the sanctioned seating capacity of the cinema houses. The respondent s cinema house had 551 seats and under the changed method it became liable to a fee of Rs. 5 / - per show. In the result it became liable to pay a fee of Rs. 6,000/ - per year. ( 4 ) THE respondent then moved the High Court at Calcutta under Art. 226 of the Constitution for a writ quashing the resolution. The application was first heard by Sinha J, who allowed it. This order was confirmed by an appellate Bench of the same Court consisting of Bose C. J. and G. K. Mitter J. on appeal by the Corporation. Hence the present appeal. The application was first heard by Sinha J, who allowed it. This order was confirmed by an appellate Bench of the same Court consisting of Bose C. J. and G. K. Mitter J. on appeal by the Corporation. Hence the present appeal. ( 5 ) IN this Court the levy was challenged on three grounds, the first of which may be disposed of at once. That ground was that the levy amounted to expropriation and was, therefore, invalid as violating cls. (f) and (g) of sub Art. (1) of Article 19. Sinha J. rejected this contention as on the materials on the record it could not be said that the new rate was so high as to make it impossible for the respondent to carry on its business. The learned Judges of the appellate Bench do not appear to have taken a different view of the matter. It seems to us that a fee at the rate of Rs. 5. 00- per show in a house with a seating capacity of 551 cannot in any sense be said to be unreasonably high. With that seating capacity the respondent would at a reasonable estimate be collecting about Rs. 1,000. 00 per show and paying the sum of Rs. 5. 00 per show. No doubt the increase in the rate of fee from Rs. 400/ - to Rs. 6,000/ - per year was large. But at the same time the circumstances obtaining in our country had undergone an immense change between 1948, when the fee was earlier fixed, and 1958. The challenge to the levy on the ground that it amounted to expropriation is wholly unfounded and was rightly rejected in the High Court. Substantially the same argument was advanced from a different point of view. It was said that Arts. 19 (1) (f) and (g) were violated in any case as S. 548 gave an arbitrary power of taxation. This contention found favour with the learned Judges of the High Court but, with respect to them, we are unable to agree. In our view, for reasons to be later stated, no arbitrary power of taxation was conferred by S. 548. 19 (1) (f) and (g) were violated in any case as S. 548 gave an arbitrary power of taxation. This contention found favour with the learned Judges of the High Court but, with respect to them, we are unable to agree. In our view, for reasons to be later stated, no arbitrary power of taxation was conferred by S. 548. ( 6 ) THE second challenge to the levy was put in this way : The levy authorised by Sections 443 and 548 was a fee in return for services to be rendered and not a tax and it had therefore to be commensurate with the costs incurred by the Corporation in providing those services. The present levy of Rs. 6,000. 00 per year was far in excess of those costs and was for that reason invalid. The Corporation s answer to this contention is that the levy was a tax and not a fee taken in return for services and no question of its being proportionate to any costs for services arose. The Corporation does not dispute that if the levy was a fee in the sense mentioned, it would be invalid. The only question on this part of the case, therefore, is, was the levy a fee in return for services? Another subsidiary question is, what is the nature of the services which makes a levy in respect of them, a fee ? It is not disputed that a levy made in return for services rendered would be a fee. It is, therefore, unnecessary to consider what a fee is or the tests by which it is to be determined. Nor is it necessary to discuss whether in order that a levy may be a fee the statute imposing it must intend primarily to confer the benefits of the services on those who pay it and benefits received from those services by the public at large, if any, must be secondary. A discussion of these aspects of fees, will be unprofitable and will only cloud the point really in issue. ( 7 ) NOW, on the first question, that is, whether the levy is in return for services, it is said that it is so because S. 548 uses the word fee . But, surely nothing turns on words used. A discussion of these aspects of fees, will be unprofitable and will only cloud the point really in issue. ( 7 ) NOW, on the first question, that is, whether the levy is in return for services, it is said that it is so because S. 548 uses the word fee . But, surely nothing turns on words used. The word fee cannot be said to have acquired a rigid technical meaning in the English language indicating only a levy in return for services. No authority for such a meaning of the word was cited. However that may be, it is conceded by the respondent that the Act uses the word fee indiscriminately. It is admitted that some of the levies authorised are taxes though called fees. Thus, for example, as Mitter J, pointed out, the levies authorised by Sections 218, 222 and 229 are really taxes though called fees, for no services are required to be rendered in respect of them. The Act, therefore, did not intend to use the word fee as referring only to a levy in return for services. ( 8 ) THIS contention is not really open to the respondent for S. 548 does not use the word fee ; it uses the words licence fee and those words do not necessarily mean a fee in return for services. In fact in our Constitution fee for licence and fee for services rendered are contemplated as different kinds of levy. The former is not intended to be a fee for services rendered. This is apparent from a consideration of Art. 110 (2) and Art. 199 (2) where both the expressions are used indicating thereby that they are not the same. In Shannon v. Lower Mainland Dairy Products Board, 1938 AC 708 : (AIR 1939 PC 36) it was observed at pp. 721-722 (of AC) : "if licences are granted, it appears to be no objection that fees should be charged in order either to defray the costs of administering the local regulation or to increase the general funds of the Province or for both purposes. . . . . . . . . . It cannot as their Lordships think, be an objection to a licence plus a fee that it is directed both to the regulation of trade and to the provision of revenue. . . . . . . . . . It cannot as their Lordships think, be an objection to a licence plus a fee that it is directed both to the regulation of trade and to the provision of revenue. " IT would, therefore, appear that a provision for the imposition of a licence fee does not necessarily lead to the conclusion that the fee must be only for services rendered. ( 9 ) IT may also be stated that a statute has to be read so as to make it valid and, if possible, an interpretation leading to a contrary position should be avoided; it has to be construed ut res magis valeat quan parent: see Broom s Legal Maxims (10th Ed.) p. 361, Craies on Statute (6th ed.) p. 95 and Maxwell on Statutes ( 11th ed.) p. 221. Therefore again the word "fee in S. 548 should be read as meaning a tax, for, as we shall show later, it made no provision for services to be rendered; any other reading would make the section invalid. A construction producing that result has to be avoided. We do not also think that by reading the word as referring to a tax we would be doing any violence to the language used. ( 10 ) IF the word fee is not conclusive of the question that it must be in return for services, as we think it is not, then the question whether the fee contemplated in S. 548 is a fee in return for services, can only be decided by reference to the terms of the section and for this purpose we have to consider that section along with s. 443. We have earlier summarised the sections but now propose to set them out so far as material. SECTION 443.-No person shall, without or otherwise than in conformity with the terms of a licence granted. . . . . : keep open any. . . . . . . cinema house. . . . . . . SECTION 548.- (1) Every licence. . . granted under this Act. . . . . . shall specify. ( 11 ) BUT it was said that the services to be provided for the levy of the fee are set out in the by-laws made under S. 527, item 43. . . . cinema house. . . . . . . SECTION 548.- (1) Every licence. . . granted under this Act. . . . . . shall specify. ( 11 ) BUT it was said that the services to be provided for the levy of the fee are set out in the by-laws made under S. 527, item 43. Item 43 permits by-laws to be framed regulating the inspection, supervision and control, among others, of cinema houses. It does not however make it obligatory on the Corporation to make any by-law. If the by-laws are not made, there would, ex hypothesi, be no services to render. No doubt S. 443 contemplates that the cinema shows shall be conducted in conformity with the terms of the licence but it again seems to us that it is optional for the Corporation to impose terms; it is not bound to do so. In any case, those terms need not be for rendering of services by the Corporation. They may, for example, provide that the shows will not be continued after a certain hour in the evening ( 12 ) IN fact, however, certain by-laws, called Theatre By-laws, were framed by the Corporation. Those by-laws were not produced before us excepting one which states. "the Chairman may cause all such premises to be inspected at least twice yearly and if as the result of such inspection any defect or disorder be not iced in such premises in connection with and relating to any of the matters or things referred to in these by-laws, the Chairman may by written notice require the owner or lessee of such premises to make good such defects. " It is quite clear that the words "the matters or things referred to in these by-laws" occurring in the by-law quoted, contemplate things to be done by the licensee and not by the Corporation. Those matters or things cannot be services which the Corporation is required to render. It would, therefore, appear that even the by-laws the terms of which might have been incorporated in the licence do not contemplate the rendering of any service by the Corporation to the licensee. It may be stated that the licence granted to the respondent does not appear in the records of this case. It would, therefore, appear that even the by-laws the terms of which might have been incorporated in the licence do not contemplate the rendering of any service by the Corporation to the licensee. It may be stated that the licence granted to the respondent does not appear in the records of this case. ( 13 ) IT is however said that the by law earlier quoted requires inspection of the cinema houses by the Corporation and that that was the service that the Corporation had to render in return for the licence fee. We are unable to accept this contentions. The inspection was not certainly a service to the licensee; it was necessary only to make sure that he carried out the conditions on which the licence had been granted to him. It was something to be done to control the licensee s activities and to make him observe the conditions of the licence on pain of cancellation of the licence. This is clear from sub-sec. (3) of S. 548 which states that "any licence. . . granted under this Act. . . . , may at any time be suspended or revoked. . . . . if any of its restrictions or conditions is infringed or evaded by the grantee". This non-observance of the conditions of the licence would expose the licensee to penalty under S. 537 of the Act. The inspection was therefore necessary also for enforcing the conditions of the licence by penalising a breach of them by the licensee. We cannot imagine that an inspection by the Corporation for such purposes can at all be said to be rendering of service to the licensee. ( 14 ) THE nature of services to be rendered in return for a levy so as to make it a fee has been considered by this Court in several cases and in all of them it has been said that the services must confer some benefit on the person paying the fee. ( 14 ) THE nature of services to be rendered in return for a levy so as to make it a fee has been considered by this Court in several cases and in all of them it has been said that the services must confer some benefit on the person paying the fee. The earliest case on the subject appears to be Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, 1954 SCR 1005 : ( AIR 1954 SC 282 ) where it was said at page 1042 (of SCR): "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". It was again said at p. 1048 (of SCR) : that in the case of fees for services "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. " This case was concerned with a statute which imposed a levy on religious institutions expressly said to be in return for services. The services mentioned in the statute consisted among others in the Government supervising the management of the institutions, auditing their accounts and seeing that their income was duly appropriated to the purposes for which they were founded. Though it did not expressly say so, this Court was presumably of the view that these were services to the institutions making the levy a fee, for it declared the levy invalid on the ground it was not correlated to the costs of those services and therefore was a tax which was byond the competence of the Madras Legislature which had enacted the statute. It would appear that the services here considered were not for controlling the institutions but for doing work which secured to them their funds and the proper application of them. The statute might have involved a check on the conduct of the Mathadipatis who managed the institutions but that control also was for the benefit of the institutions. It has to be remembered, as was said in another case to which we shall presently refer, that the Mathadipatis were in the position of trustees of the institutions. The statute might have involved a check on the conduct of the Mathadipatis who managed the institutions but that control also was for the benefit of the institutions. It has to be remembered, as was said in another case to which we shall presently refer, that the Mathadipatis were in the position of trustees of the institutions. It would follow that control of their wrongful activities must result in special benefit to the institutions for their funds would not then be frittered away. ( 15 ) AFTER this judgment the section imposing the levy was amended but the amended section was also challenged on similar grounds. The matter again came up to this Court in the case of H. H. Sudhundra Thirtha Swamiar v. Commr. for Hindu Religious and Charitable Endowments, Mysore, (1963) Supp 2 SCR 302 : ( AIR 1963 SC 966 ). This time the validity of the section was upheld. The reasons for this decision are not relevant to the present discussion. As to the nature of services however, this Court reiterated the view stated in the earlier case. It said at p. 323 (of (1963) Supp 2 SCR) :. "if with a view to provide a specific service, levy is imposed by law and expenses for maintaining the service are met out of the amounts collected there being a reasonable relation between the levy and the expenses incurred for rendering the service, the levy would be in the nature of a fee and not in the nature of a tax". IT was further said : "a fee being a levy in consideration of rendering service of a particular type, correlation between the expenditure by the Government and the levy must undoubtedly exist. " THE act was the same as the earlier one in regard to the services to be rendered by the Government and the view expressed in the earlier judgment as to the nature of the services required by the statute to be performed was endorsed in this judgment. It was said at p. 312, that the Mathadipati "is by virtue of his office under an obligation to discharge the duties as a trustee and is answerable as such". It would follow that a service resulting in the control of the Mathadipati would confer special benefit on the institution which alone paid the levy. It was said at p. 312, that the Mathadipati "is by virtue of his office under an obligation to discharge the duties as a trustee and is answerable as such". It would follow that a service resulting in the control of the Mathadipati would confer special benefit on the institution which alone paid the levy. ( 16 ) BOTH these cases discussed other tests besides the requirement of the rendering of services for determining whether a levy is a fee, but with these we are not concerned in the present case. These cases also discussed the correlation of the costs of the services to the levy but with that also we are not concerned as it is not sought to uphold the present levy on the ground of such correlation. We have referred to these cases only for showing that to make a levy a fee the services rendered in respect of it must benefit, or confer advantage on, the person who pays the levy. ( 17 ) THE other case to which we wish to refer in this connection is Hingir Rampur Coal Co. Ltd. v. State of Orissa, (1961) 2 SCR 537 : ( AIR 1961 SC 4 59 ). There the imposition by a certain statute of a levy on lessees of coal mines in a certain area and the creation of a fund with it, was called in question. It was held that the levy was a fee in return for services and was valid. It was there said at p. 549 (of SCR):. "if the special rendered is distinctly and primarily meant for the benefit of a specified class or area, the fact that in benefiting the specified class or area the State as a whole may ultimately and indirectly be benefited would not detract from the character of the levy as a fee. " It may be mentioned that the levy there went to meet expenditure necessary or expedient for providing amenities like communication, water supply and electricity for the better development of the mining area and to meet the welfare of the labour employed and other persons residing or working in the area of the mines. Here again there is no element of control but the services resulted in real benefit specially accruing to the persons on whom the levy was imposed. Here again there is no element of control but the services resulted in real benefit specially accruing to the persons on whom the levy was imposed. These decisions of this Court clearly establish that in order to make a levy a fee for services rendered the levy must confer special benefit on the persons on whom it is imposed. No case has been brought to our notice in which it has been held that a mere control exercised on the activities of the persons on whom the levy is imposed so as to make these activities more onerous is service rendered to them making the levy a fee. ( 18 ) IT was also contended that the levy under S. 548 must be a fee and not a tax, for all provisions as to taxation are contained in Part IV of the Act, while this section occurred in Chapter XXXVI headed "procedure" in Part VIII which was without a heading. It was pointed out that Part V dealt with "public Health, Safety and Convenience" and, S. 443 which was included in Chapter XXVI contained in this Part was headed "inspection and Regulation of Premises, and of Factories, Trades and Places of Public Resort". A cinema house, it is not disputed, is included in the words "places of public resort". It was, therefore, contended that a levy outside Part IV could not be a tax and hence must be a fee for services. This contention was sought to be supported by the argument that S. 443 occurred in a Part concerning public health, safety and convenience and therefore the intention was that the levy authorised by the section would be in return for work done for securing public health, safety and convenience and was hence a fee. We are wholly unable to accept this contention. Whether a particular levy is a fee or tax has to be decided only by reference to the terms of the section as we have earlier stated. Its position in the Act cannot determine its nature; an imposition which is by its terms a tax and not a fee, which in our opinion the present imposition is, cannot become a fee by reason of its having been placed in a certain part of the statute. Its position in the Act cannot determine its nature; an imposition which is by its terms a tax and not a fee, which in our opinion the present imposition is, cannot become a fee by reason of its having been placed in a certain part of the statute. The reference to the heading of Part V can at most indicate that the provisions in it were for conferring benefit on the public at large. The cinema house owners paying the levy would not as such owners be getting that benefit. We are not concerned with the benefit, if any, received by them as members of the public for that is not special benefit meant for them. We are clear in our mind that if looking at the terms of the provision authorising the levy, it appears that it is not for special services rendered to the person on whom the levy is imposed, it cannot be a fee wherever it may be placed in the statute. A consideration of where Sections 443 and 548 are placed in the Act is irrelevant for determining whether the levy imposed. by them is a fee or a tax. ( 19 ) THE last argument in this connection which we have to notice was based on Sections 126 and 127 of the Act. S. 126 deals with the preparation by the Chief Executive Officer of the Corporation called Commissioner, of the annual budget. The budget has to include an estimate of receipts from all sources. These receipts would obviously include taxes, fees, licence fees and rents. Under S. 127 (3) the Corporation has to pass this budget and to determine, subject to Part IV of the Act, the levy of consolidated rates and taxes at such rates as are necessary to provide for the purposes mentioned in sub-section (4 ). Sub-section (4) requires the Corporation to make adequate and suitable provision for such services as may be required for the fulfillment of the several duties imposed by the Act and for certain other things to which it is not necessary to refer. The first point made was that these sections showed that the Act made a distinction between fees and taxes. It does not seem to us that anything turns on this as the only question now is whether the levy under S. 548 is a fee. The first point made was that these sections showed that the Act made a distinction between fees and taxes. It does not seem to us that anything turns on this as the only question now is whether the levy under S. 548 is a fee. The other point was that clauses (3) and (4) of S. 127 showed that the Corporation could fix the consolidated rates and taxes and that the determination of rates for these had to be in accordance with the needs for carrying out the Corporation s duties under the Act. It was said that as the licence fee leviable under S. 548 did not relate to any duty of the Corporation under the Act, it being optional for the Corporation to impose terms for grant of licences for cinema houses, the rate for that fee was not to be fixed in reference to anything except rendering of services. We are unable to accept this argument and it is enough to say in regard to it that it is not right that S. 443 does not impose a duty on the Corporation. We think it does so, though in what manner and when it will be exercised it is for the Corporation to decide. It is impossible to call it a power, as the respondent wants to do, for it is not given to the Corporation for its own benefit. The Corporation has been set up only to perform municipal duties and its powers are for enabling it to perform those duties. Furthermore there is no doubt that an estimate of the licence fee has to be included in the budget and therefore the word tax in S. 127 (3) must be deemed to include the levy under S. 548. The words "subject to the provisions of Part IV" in S. 127 (3) must be read with the addition of the words "where applicable". If that levy cannot be a fee because there is no provision for service being rendered in respect of it, it would indisputably be a tax. As such again, its rate can be determined under S. 127 (3) to provide for the discharge of at least the other undisputed duties of the Corporation. We would, therefore, reject this last argument also. As such again, its rate can be determined under S. 127 (3) to provide for the discharge of at least the other undisputed duties of the Corporation. We would, therefore, reject this last argument also. ( 20 ) 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 services of special kind being rendered resulting in benefits 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 licencee 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. It is not disputed, it may be stated, that if the levy is not a fee, it must be a tax. ( 21 ) IT was then said that if S. 548 authorised the levy of a tax as distinct from a fee in return for services rendered, it was invalid as it amounted to an illegal delegation of legislative functions to the Corporation because it left it entirely to the latter to fix the amount of the tax and provided no guidance for that purpose. We wish to point out here that the contention now is that the section is invalid while the contention that we have just dealt with proceeded on the basis that the section was valid as it provided for the levy of a fee in return for services and as this necessarily implied a limit of the levy, namely, that it had to be commensurate to the amount of the costs of the services, no guidance for fixing the amount of the fee to be levied was required to be provided. That argument only challenged the resolution on the ground that it fixed the amount of the fee at a figure much in excess of the costs for the services rendered. ( 22 ) HERE again there is no dispute that a delegation of essential legislative power would be bad. It was so held by this Court first in In re The Delhi Laws Act, 1951 SCR 747 : ( AIR 1951 SC 332 ). ( 22 ) HERE again there is no dispute that a delegation of essential legislative power would be bad. It was so held by this Court first in In re The Delhi Laws Act, 1951 SCR 747 : ( AIR 1951 SC 332 ). The principle there laid down has been summarised by Bose J. in Rajnarain Singh v. Chairman, Patna Administration Committee, (1955) 1 SCR 290 at p. 301 : ( AIR 1954 SC 5 69 at p. 574) in these terms : "in our opinion, the majority view was that an executive authority can be authorised to modify either existing or future laws but not in any essential feature. Exactly what constitutes an essential feature cannot be enunciated in general terms, and there was some divergence of view about this in the former case, but this much is clear from the opinions set out above; it cannot include a change of policy". ( 23 ) ON the basis that S. 548 is a piece of delegated legislation, it has been contended on behalf of the Corporation that the rate of a tax is not an essential feature of legislation and the power to fix it was properly delegated to the Corporation as sufficient guidance for that purpose was given in the Act. It is not in controversy, and this indeed has been held by this Court that if that is so, the section would be unexceptionable. The question first is whether the power to fix the rate of a tax can be delegated by the legislature to another authority, whether it is of the essence of taxing legislation. The contention of the Corporation that fixation of rates is not an essential part of legislation would seem to be supported by several judgments of this Court to some of which we now proceed to refer. ( 24 ) FIRST, there is Pandit Benarsi Das Bhanot v. State of Madhya Pradesh, 1959 SCR 427 : ( AIR 1958 SC 909 ). That case was concerned with a Sales Tax Act which by S. 6 (1) provided that no tax would be payable on any sale of goods specified in a schedule to it. Item 33 of that Schedule read, "goods sold to or by the State Government". S. 6 (2) of the Act authorised the State Government to amend the schedule by a notification. Item 33 of that Schedule read, "goods sold to or by the State Government". S. 6 (2) of the Act authorised the State Government to amend the schedule by a notification. In exercise of this power the Government duly substituted by a notification for item 33 the following: "goods sold by the State Government". The amendment of the schedule by the notification was challenged on the ground that S. 6 (2) was invalid as it was a delegation of the essential power of legislation to the State Government. Venkatarama Aiyar J. delivering the judgment of the majority of the Court sitting in a Constitution Bench, rejected this contention and after having read what we have earlier set out from the judgment of Bose J. in Rajnarain Singh's case, 1955-1 SCR 290 : ( AIR 1954 SC 5 (9) observed at p. 435 (of SCR) : "on these observations, the point for determination is whether the impugned notification relates to what may be said to be an essential feature of the law, and whether it involves any change of policy. Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like". THE Act was a statute imposing taxes for revenue purposes. This case would appear to be express authority for the proposition that fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority, for we see no distinction in principle between delegation of power to fix rates of taxes to be charged on different classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated. No doubt Pandit Benarsi Das's case, 1959 SCR 427 : ( AIR 1958 SC 909 ) was not concerned with fixation of rates of taxes; it was a case where the question was on what subject matter, and therefore on what persons, the tax could be imposed. No doubt Pandit Benarsi Das's case, 1959 SCR 427 : ( AIR 1958 SC 909 ) was not concerned with fixation of rates of taxes; it was a case where the question was on what subject matter, and therefore on what persons, the tax could be imposed. Between the two we are unable to distinguish in principle, as to which is of the essence of legislation; if the power to decide who is to pay the tax is not an essential part of legislation, neither would the power to decide the rate of tax be so. Therefore, we think that apart from the express observation made, this case on principle supports the contention that fixing of the rate of a tax is not of the essence of legislative power. (( 25 ) IN regard to the observations in Pandit Benarsi Das's case, 1959 SCR 427 : (AIR1958 SC 909) earlier quoted, it has been said that the authorities on which they appear to have been based do not support them. It has been contended that as the observations do not form part of the actual decision in the case, they need not be given that weight which they would otherwise have been entitled to. In the High Court this contention appears to have been accepted. The acceptance of the contention would result in by passing a judgment of this Court and that is something which cannot in any case be supported. We are furthermore of opinion that the authorities to which Venkatarama Aiyar J. referred fully support his observations. The first case relied upon by him was Powell v. Apollo Candle Co. Ltd. , (1885) 10 AC 282. That case upheld the validity of a statute passed by the legislature of New South Wales which conferred power on the Governor of that Province to impose duty on certain articles in the circumstances prescribed. The Governor under this power imposed the tax and this was challenged. The Judicial Commitee rejected the contention that the tax had not been imposed by the Legislature which alone could do it in the view that "the duties levied under the Order in Council are really levied by the authority of the Act". See p. 291. Here, therefore, a power conferred on the Governor by the Legislature to levy a tax was upheld. See p. 291. Here, therefore, a power conferred on the Governor by the Legislature to levy a tax was upheld. It would follow that a power conferred to fix rates of taxes has equally to be upheld. The next case was Syed Mohamed and Co. v. State of Madras, (1952) 3 STC 367 : ( AIR 1953 Mad 105 ). There a power to an authority to determine who shall pay the tax was upheld. On the same principle a power to determine at what rate he will have to pay the tax has to be upheld. The last case was Hampton Jr. and Co. v. United States, (1928) 72 Law Ed. 624 in which the power conferred by a statute on the President to make an increase or decrease in the rate of customs duty was upheld. There it was said at p. 630. "it is conceded by counsel that Congress may use executive officers in the application and enforcement of a policy declared in law by Congress and authorise such officers in the application of the Congressional declaration to enforce it by regulation equivalent to law. But it is said that this never has been permitted to be done where Congress has exercised the power to levy taxes and fix customs duties. The authorities make no such distinction. The same principle that permits Congress to exercise its rate making power in inter-State commerce by declaring the rule which shall prevail in the legislative fixing of rates, and enables it to remit to a rate-making body created in accordance with its provisions the fixing of such rates, justifies a similar provision for the fixing of customs duties on imported merchandise. " This therefore is clear authority that the fixing of rates may be left to a non-legislative body. ( 26 ) NO doubt when the power to fix rates of taxes is left to another body, the legislature must provide guidance for such fixation. The question then is, was such guidance provided in the Act? We first wish to observe that the validity of the guidance cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate. The question then is, was such guidance provided in the Act? We first wish to observe that the validity of the guidance cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate. It is said that the delegation of power to fix rates of taxes authorised for meeting the needs of the delegate to be valid, must provide the maximum rate that can be fixed or lay down rules indicating that maximum. We are unable to see how the specification of the maximum rate supplies any guidance as to how the amount of the tax which no doubt has to, be below the maximum, is to be fixed. Provision for such maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance. ( 27 ) IT seems to us that there are various decisions of this Court which support the proposition that for a statutory provision for raising revenue for the purposes of the delegates, as the section now under consideration is, the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid. We proceed now to refer to these cases. ( 28 ) THE Western India Theatres Ltd. v. Municipal Corporation of the City of Poona, (1959) Supp (2) SCR 71 : ( AIR 1959 SC 586 )was concerned with a statute under which the respondent Corporation had been set up and which gave that Corporation power to levy any other tax". It was contended that such a power amounted to abdication of legislative function as there was no guidance provided. This contention was rejected. One of the grounds of this view was that the state authorised the municipality to impose taxes therein mentioned for the purposes of the Act and that this furnished sufficient guidance for the imposition of the tax. Again, no doubt, this was not a case dealing with rates of taxes, but if a power on the Corporation to impose any tax it liked subject to the guidance mentioned was valid that would include in it the power to fix the rates of the tax, subject of course to the same guidance. Again, no doubt, this was not a case dealing with rates of taxes, but if a power on the Corporation to impose any tax it liked subject to the guidance mentioned was valid that would include in it the power to fix the rates of the tax, subject of course to the same guidance. Such a power has to be held to be good. It is true, as was pointed out by learned advocate for the respondent, that other grounds were mentioned in support of the view taken in the Western India Theatres case, (1959) Supp (2) SCR 71 : ( AIR 1959 SC 586 ) but that surely is irrelevant, for it cannot make the ground of the decision there which we have earlier set out devoid of all force. ( 29 ) THEN there is Vasanlal Maganbhai Sanjanwala v. State of Bombay, (1961) SCR 841 : ( AIR 1961 SC 4 ). The provision of the statute there attacked gave the Government power to fix a lower rate of maximum rent payable by the tenants. The validity of this provision was upheld on the ground that the material provisions of the Act including its preamble were intended to give relief to tenants by fixing the maximum rent payable by them. It was in the light of this policy of the Act that the validity of the impugned provision was really upheld. ( 30 ) THE last case which we wish to notice in this connection is the Union of India v. Bhana Mal Gulzari Mal, (1960) 2 SCR 627 : ( AIR 1960 SC 475 ). S. 3 of the Essential Supplies (Temporary Powers) Act, 1946 came up for consideration there. That section gave power to the Government to make necessary orders for maintaining or increasing supplies of any essential commodities or for securing their equitable distribution and availability at fair prices. In Harishankar Bagla v. State of Madhya Pradesh, (1955) 1 SCR 380 : (AIR1954 SC 465) the validity of the delegation of power contained in that section had been upheld as it laid down the policy as to how that power was to be exercised by the delegate, that is, the Government. In Harishankar Bagla v. State of Madhya Pradesh, (1955) 1 SCR 380 : (AIR1954 SC 465) the validity of the delegation of power contained in that section had been upheld as it laid down the policy as to how that power was to be exercised by the delegate, that is, the Government. In Bhana Mal Gulzari Mal's case, (1960) 2 SCR 627 : ( AIR 1960 SC 475 ) the validity of an order made under S. 3 reducing the price at which steel could be sold was challenged. This challenge was rejected on the ground that the order fixing the price carried out the legislative object prescribed in S. 3. It was observed at p. 638 (of SCR) : , "it is not difficult to appreciate how and why the Legislature must have thought that it would be inexpedient either to define or describe in detail all the relevant factors which have to be considered in fixing the fair price of an essential commodity from time to time. In prescribing a schedule of maximum prices the Controller has to take into account the position in respect of production of the commodities in question, the demand for the said commodities, the availability of the said commodities from foreign sources and the anticipated increase or decrease in the said supply or demand. Foreign prices for the said commodities may also be not irrelevant. Having regard to the fact that the decision about the maximum prices in respect of iron and steel would be depend on a rational evaluation from to time of all these varied factors the Legislature may well have thought that this problem should be left to be tackled by the delegate with enough freedom, the policy of the Legislature having been clearly indicated by S. 3 in that behalf. " AGAIN it was said at p. 640 (of SCR) : , "in deciding the nature and extent of the guidance which should be given to the delegate Legislature must inevitably take into account the special features of the object which it intends to achieve by a particular statute. . . Having regard to the nature of the problem which the Legislature wanted to attack it may have come to the conclusion that it would be inexpedient to limit the discretion of the delegate in fixing the maximum prices by reference to any basic price". . . Having regard to the nature of the problem which the Legislature wanted to attack it may have come to the conclusion that it would be inexpedient to limit the discretion of the delegate in fixing the maximum prices by reference to any basic price". ( 31 ) THE portion in the judgment in Bhana Mal Gulzari Mal's case, (1960) 2 SCR 627 : ( AIR 1960 SC 475 ) quoted in the preceding paragraph will show that the validity of the guidance required to make delegation of power good cannot be judged by a stereotyped rule. With respect, we entirely agree with this view. The guidance furnished must be held to be good if it leads to the achievement of the object of the statute which delegated the power. The validity of the power to fix rates of taxes delegated to the Corporation by S. 548 of the Act must be judged by the same standard. Now there is no dispute that all taxes, including the one under this section can be collected and used by the Corporation only for discharging its functions under the Act. The Corporation, subject to certain controls with which we are not concerned, is an autonomous body. It has to perform various statutory functions. It is often given power to decide when and in what manner the functions are to be performed. For all this it needs money and its needs will vary from time to time with the prevailing exigencies. Its power to collect tax, however, is necessarily limited by the expenses required to discharge those functions. It has, therefore, where rates have not been specified in the statute, to fix such rates as may be necessary to meet its needs. That, we think, would be sufficient, guidance to make the exercise of its power to fix the rates valid. The case is as if the statute had required the Corporation to perform duties A, B, and C give power to levy taxes to meet the costs to be incurred for the discharge of these duties and then said that, "provided, however, that the rates of the taxes shall be such as would bring into the Corporation's hands the amount necessary to defray the costs of discharging the duties. " We should suppose, this would have been a valid guidance. " We should suppose, this would have been a valid guidance. We think the Act in the present case impliedly provides the same guidance : see S. 127 (3) and (4 ). It would be impracticable to insist on a more rigid guidance. In the case of a self-governing body with taxing powers, a large amount of flexibility in the guidance to be provided for the exercise of that power must exist. It is hardly necessary to point out that, as in the cases under Essential Supplies (Temporary Powers) Act, 1946, so in the case of a big municipality like that of Calcutta, its needs would depend on various and changing circumstances. There are epidemics, influx of refugees, labour strikes, new amenities to be provided for, such as hospitals, schools - and various other such things may be mentioned - which make it necessary for a colossal municipal Corporation like that of Calcutta to have a large amount of flexibility in its taxing powers. These considerations lead us to the view that S. 543 is valid legislation. There is sufficient guidance in the Act as to how the rate of the levy is to be fixed. ( 32 ) WE may at the end point out that Entry 62 in List II of the Senventh Schedule to the Constitution gives power to the State Legislatures to impose taxes on entertainment and amusement and therefore on cinema shows. It was hence not said, -- if the question was relevant, - that the State Legislature delegated a power to the Corporation it itself did not possess. ( 33 ) IT remains now to notice an argument advanced by Mr. Pathak on behalf of the Corporation. It is that even if it be assumed that no guidance for the taxation has been prescribed, the provision for taxation in the Act would be valid. He said that the Act may be said to have been passed under entry 5 of List II in the Seventh Schedule to our Constitution. That entry authorises the passing of a law concerning the constitution and powers of a municipal corporation. Mr. Pathak contended that the powers of a corporation contemplated in this entry must necessarily include power to levy tax, for no municipal corporation could work without its own funds. That entry authorises the passing of a law concerning the constitution and powers of a municipal corporation. Mr. Pathak contended that the powers of a corporation contemplated in this entry must necessarily include power to levy tax, for no municipal corporation could work without its own funds. He pointed out that this has been the base with the municipal corporations created before and after the Constitution. He, therefore, said that the present was not a case of delegation of taxing power which might be bad if no guidance to the exercise of that power had been furnished by the Act, it is a case where under the Constitution independent power to tax had been conferred on the Corporation. The conferment of such power did not require any guidance for its exercise to make it valid. He pointed out that delegation of power necessarily meant delegation of the power of the delegator. On such delegation the delegated power could only be exercised by the delegatee for the use of the delegator. That was not the case of power concerned under entry 5. In such a case the power of taxation conferred was for the purpose of the corporation itself. The amount collected by taxation belonged to the corporation. This is what had happened here. As at present advised, we think that this contention of Mr. Pathak deserves consideration. It is unnecessary, however, for us to pronounce finally on it, for in either view the taxing power challenged must be held to be good. ( 34 ) IN the result we would allow the appeal with costs throughout. This is what had happened here. As at present advised, we think that this contention of Mr. Pathak deserves consideration. It is unnecessary, however, for us to pronounce finally on it, for in either view the taxing power challenged must be held to be good. ( 34 ) IN the result we would allow the appeal with costs throughout. ( 35 ) AYYANGAR, J. (for himself and Subba Rao J.) : We regret out inability to agree :- ( 36 ) SECTION 443 of the Calcutta Municipal Act, 1951 (West bengal Act XXXIII of 1951) which will hereafter be referred to as the Act, enacts : "no person shall, without or otherwise than in conformity with the terms of a licence granted by the Commissioner in this behalf, keep open any theatre, circus, cinema-house, dancing hall or other similar place of public resort, recreation or amusement : PROVIDED that this section shall not apply to private performances in any such place" and S. 548 (2) : "except when it is in this Act or in any rule or bye-law made thereunder otherwise expressly provided, for every such lincence or written permission a fee may be charged at such rate as may from time to time be fixed by the Corporation and such fee shall be payable by the person to whom the licence or written permission is granted". ( 37 ) THE respondent before us is the owner and licensee of a cinema theatre known as the Liberty Cinema situated in Calcutta within the Municipal limits of the city. Under the provisions of the Calcutta Municipal Act, 1923 which had been repealed and re-enacted with modifications by the Act of 1951, the respondent was paying for his theatre Rs. 800. 00 per annum as licence fee under provisions corresponding to Sections 443 and 548 (2) of the Act. While so, by a resolution of the Municipal Council dated 14/03/1958, the licence fee payable by theatres under S. 443 was raised with the result that instead of Rs. 800. 00 which the respondent was paying previously he was required to pay a sum of Rs. 6,000 / - per year. While so, by a resolution of the Municipal Council dated 14/03/1958, the licence fee payable by theatres under S. 443 was raised with the result that instead of Rs. 800. 00 which the respondent was paying previously he was required to pay a sum of Rs. 6,000 / - per year. As the Corporation insisted upon the amount being paid and threatened to cancel the licence and take appropriate penal action in the event of the demand not being met, the respondent filed a petition before the High Court under Art. 226 of the Constitution praying for appropriate writs of certiorari, mandamus etc. to quash the said resolution and to prevent the Corporation from enforcing the said demand. It was stated in the petition that the respondent had been paying besides the consolidated rate for the property, a fee of Rs. 250. 00 as profession tax for carrying on the trade or calling of cinema exhibitor as well as other taxes and fees. He characterised the licence fee which was demanded from him as not in reality a fee which alone the Municipal Corporation was entitled to charge. Stating that it was out of all proportion to the service rendered or the costs involved in ensuring the observance of the conditions of the licence, he contended that the fee demanded from him was really a tax which the Corporation was not entitled to levy under the provisions quoted and therefore sought the relief which he prayed for in the petition. ( 38 ) THE learned Single Judge who heard the petition on the first instance held on an analysis of the provisions of the Calcutta Municipal Act, that what the Municipality was entitled to levy under S. 548 (2) read with S. 443 was really "a licence fee" and not a tax and that viewed as a licence fee it did not pass the test of legality on account of there being no correlation between the amount charged on the theatre owners and the services rendered to them or the expenses incurred by the Municipality in regard to the issue of licences. Dealing with the alternative contention urged before him by the Corporation that S. 548 (2) of the Act authorised the Corporation to levy a tax, the learned Judge held that the section would be unconstitutional as suffering from the vice of excessive delegation in that it laid down no principle, indicated no policy and afforded no guidance for determining the basis or the rate on which the tax was to be levied and was therefore void. In consequence he allowed the pettion saying however the right of the Corporation to recover the fee at the rate in force prior to 14/03/1958 on the ground that the levy at this rate was saved by Art. , 277 of the Constitution. The Corporation preferred an appeal to a Division Bench and the learned Judges on practically the same line of reasoning as the learned Single Judge dismissed the appeal. Their conclusions were as follows. The imposition permitted to be made by S. 548 (2) read with S. 443 of the Act as charged was only a fee as distinguished from a tax. Regarded as a fee the levy was invalid as there was no quid pro quo. If, however, it be held that the provisions qouted authorised the levy of a tax, the provisions were unconstitutional because they involved an improper delegation of legislative power. They also held that the levy was not to any extent saved by Art. 277 of the Constitution. The Corporation desiring to prefer an appeal sought a certificate of fitness from the learned Judges and the same having been granted, the appeal is now before us. ( 39 ) AS one of the questions involved in the appeal related to the constitutional validity of the provisions of a State enactment, notice of this appeal was served on the State. ( 40 ) MR. Pathak learned Counsel for the appellant Corporation did not contest the finding and decision of both the learned Single Judge as well as the learned Judges in appeal, that if what S. 548 (2) of the Act authorised was only a fee in the technical sense. viz. , a payment for service rendered as distinguished from a tax, the impugned levy was unvalid inasmuch as there was admittedly no correlation between the amount of the levy and the cost of the service, if any rendered to the fee-payer. viz. , a payment for service rendered as distinguished from a tax, the impugned levy was unvalid inasmuch as there was admittedly no correlation between the amount of the levy and the cost of the service, if any rendered to the fee-payer. His submissions in support of the validity of the impugend levy were: (1) An analysis of the several provisions of the Act showed that the Act employed the word "fee " and particularly in the context of a fee for licences granted for carrying on an activity, in the sense of a tax (2) The fee permitted to be charged from licences by S. 548 (2) of the Act was not a fee but a tax as it was not a quid pro quo for services which the Corporation was required by or under the Act to render or did render to the licensee. (3) A fee charged for a licence other than a fee for services rendered is in reality a tax and no quid pro quo is necessary to sustain its validity beyond the grant of the licence and a permission to carry on the activity which the licence authorises. (4) If what was permitted to be charged by S. 548 (2) were a tax, the provision is not unconstitutional for the reason that the rate of the fee was not specified in the Act. The non-specification in the Act of the rate of the licence fee to be charged is not open to the objection of excessive delegation of legislative power for two reasons: (1) For considering whether there has been an excessive delegation, regard must be had not merely to the section conferring the power but to the other provisions of the Act as well which might throw light upon the topic and from which sufficient enunciation of principle or guidance could be gathered. In the present case there was sufficient guidance available and proper standards laid down in the other provisions of the Act as to uphold the validity of the delegation. (2) When a delegation of legislative power including legislative power to impose a tax is conferred upon a Municipal Corporation, no question of excessive delegation arises as the Constitution itself permits and authorises such devolution of legislative power. (2) When a delegation of legislative power including legislative power to impose a tax is conferred upon a Municipal Corporation, no question of excessive delegation arises as the Constitution itself permits and authorises such devolution of legislative power. ( 41 ) IN view of these submissions it is necessary to consider and ascertain principally 4 matters: (1) the precise nature of a fee, as distinguished from a tax; (2) Whether on an examination of the several provisions of the Act the charge authorised to be levied by S. 548 (2) read with S. 443 of the Act, is a fee in that sense or is it a tax. (3) If what is permitted to be leveied by S. 548 (2) is not a fee but a tax whether the various provisions of the Act read independently or together enunciate the principles, prescribe the standards, and affords sufficient guidance to the Municipality to fix the rate so as to render, the conferment of the power free, from the vice of excessive delegation; and (4) lastly whether the rule as to excessive delegation of legislative power is inapplicable in those cases where the devolution or conferment of power is on a municipal coropration, or, in any event whether the rule as to excessive delegation needs substantial modification before the same is applied to a case where the donee of the power is a municipal corporation entrusted with local self government. ( 42 ) WE shall take up these questions in that order. ( 43 ) I. The Nature of a Fee as distinguished from a tax.- Mr. Pathak did not dispute that the Constitution had drawn a distinction between "fees" and "taxes,' and that while "fees" could be charged as incidential to the exercise of legislative power on topics set out in the several entries in the three legislative lists in Schedule VII, the powers of taxation by the Union or by the State was conferred to particular species or types of taxes distinctively specified as such list I or II respectively. In the context of such a distinction the question necessarily arose as to what were the ingredients or characteristics of a "fee" as distinguished from a"tax". Mr. Pathak submitted that "fees" as envisaged by the Constitution was the exaction of compensation permitted by a statute to be imposed for a special service rendered to the payer. In the context of such a distinction the question necessarily arose as to what were the ingredients or characteristics of a "fee" as distinguished from a"tax". Mr. Pathak submitted that "fees" as envisaged by the Constitution was the exaction of compensation permitted by a statute to be imposed for a special service rendered to the payer. In other words, unless by or under an enactment it was obligatory on an authority, be it a municipal authority or any other to render some special service to the payer of the fee as distinguished from the benefit conferred on every member of the general public by the performance of statutory duties, and the levy is permitted to be made for meeting the cost of such service, the charge imposed would not be a "fee". In all other cases, where no special service is directed to be or is rendered to a particular individual out of the ordinary, the fee imposed for the licence or permission granted for the carrying on of any activity is really in the nature of a tax in regard to which no question of quid pro quo arises. ( 44 ) IT is common ground that the Constitution recognises a clear distinction between a tax and a fee. The several entries in the Lists in the Seventh Schedule which enumerate the legislative powers and distribute them between Parliament and the State Legislatures point to this distinction. The scheme underlying the Lists may shortly be summarised thus. Each of the Union and the State Lists which are Lists I and II start by enumerating first the Entries conferring general legislative power as distinct from taxation powers. In other words, the taxation entries, that is entries conferring taxing power, are separately enumerated after entries conferring general legislative power. Thus items I to 81 of List I deal with the exclusive general legislative powers of Parliament while 82 to 92 enumerate the taxes which Parliament may impose. Item 96 empowers Parliament to legislate in respect of "fees in respect of any of the matters in this List, but not including fees taken in any Court". Thus items I to 81 of List I deal with the exclusive general legislative powers of Parliament while 82 to 92 enumerate the taxes which Parliament may impose. Item 96 empowers Parliament to legislate in respect of "fees in respect of any of the matters in this List, but not including fees taken in any Court". This would clearly demontrate that while "fees" may be levied in respect of or as insidental to legislation on the topics set out in the other entries in the list, the power to levy a tax is not to be taken as conferred by entries conferring general legislative lower. Thus though a fee may be levied as incidental to legislation be it general as in respect of entries 1 to 81 or the entries conferring taxing powers- Entries 82 to 92, or in respect of the miscellaneous matters enumerated by such an entry like 94, no taxes may be imposed by virtue of the general legislative power under entries 1 to 81. This matter has been the subject of consideration by this Court though from a slightly different angle in M. P. V. Sundararamier and Co. v. State of Andhra Pradesh, 1958 SCR 1422 at pp. 1479-80 : ( AIR 1958 SC 468 ) at pp. 493-494 ). Venkatarama Ayyar, J. speaking for the Court said : "in List I, Entries 1 to 81 mention the several matters over which Parliament has authority to legislate. Entries 82 to 92 enumerate the taxes which could be imposed by a law of Parliament. An examination of these two groups of Entries shows that while the main subject of legislation figures in the first group a tax in relation thereto is separately mentioned in the second. Thus, Entry 22 in List I is "railway", and Entry 89 is "terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway fares and freights". If Entry 22 is to be construed as involving taxes to be imposed, then Entry 89 would be superfluous. Entry 41 mentions "trade and commerce with foreign countries, import and export across customs frontiers". If these expressions are to be interpreted as including duties to be levied in respect of that trade and commerce, then Entry 83 which is "duties of customs including export duties " would he wholly redundant. Entry 41 mentions "trade and commerce with foreign countries, import and export across customs frontiers". If these expressions are to be interpreted as including duties to be levied in respect of that trade and commerce, then Entry 83 which is "duties of customs including export duties " would he wholly redundant. Entries 43 and 44 relate to incorporation, regulation and winding up of corporation. Entry 85 provides separately for Corporation tax. Turning to List II, Entries 1 to 44 form one group mentioning the subjects on which the States could legislate. Entries 45 to 63 in that List form another group, and they deal with taxes. Entry 18, for example, is "land" and Entry 45 is "land revenue". Entry 23 is "regulation of mines' and Entry 50 is "taxes of mineral rights". The above analysis - and it is not exhaustive of the Entries in the Lists - leads to the inference that taxation is not intended to be comprised in the main subject in which it might on an extended construction be regarded as included, but is treated as a distinct matter for purposes of legislative competence. And this distinction is also manifest in the language of Art. 248, Cls. (1) and (2), and of Entry 97 in List I of the Constitution". ( 45 ) THE same pattern of classification and conferment of general legislative as distinguished from taking power is adopted in the State list List II. Entries 1 to 44 of this list deal with general legislative power while items 45 to 63 deal with specific taxes which might be imposed exclusively by the State Legislatures. The last entry in this List is in the same terms as Entry 96 of List I and reads "fees taken in respect of any of the matters in this List but not including fees taken in any Court". So far as the Concurrent List is concerned, it contains no entry conferring the taxation power, but by its last entry, Entry 47, it enables the Legislatures to impose "fees in respect of any of the matters in that List but not including fees taken in any Court" and this is in terms identical with Entries 96 of List I and 66 of List II. It is, therefore, quite obvious that the Constitution proceeds on a basis of clear line of demarcation between the power to tax and the power to levy a fee. ( 46 ) BEFORE proceeding further, one other matter arising out of this scheme might also be noticed. When entries 96 of List I or 66 of List II speak of "any of the matters in this List" they necessarily include also the entries relating to taxation. In other words, a fee may be levied even under an enactment relating to the imposition of a tax. Merely by way of illustration of this type of fee we might refer to fees which are charged for licences which are required to be taken by dealers under the Sales Tax Act in the various States. The exact amount of the licence fees to be charged is most often left to the executive determination, the maximum being sometimes prescribed by the relevant sales tax enactment and sometimes even this maximum is not prescribed. These licences are issued in order to ensure the orderly administration of tax legislation and the proper collection of the tax imposed thereby. The distinction between the tax imposed under Entry 54 of List II "taxes on the sale or purchase of goods" and the fees charged for the licences issued to dealers as a condition of their being permitted to carry on business of buying and selling goods is too obvious to need explanation. The significance of illustration of this kind and its impact upon the submission of Mr. Pathak as regards the nature of a fee under the Constitution we shall reserve for consideration later. ( 47 ) RECOGNISING this well marked distinction which the Constitution makes as between a fee and a tax, the submission of Mr. Pathak was that "fees" in entry 66 of List II were fees for services specially rendered to the payer, and for this construction he relied on two separate lines of reasoning (1) That this had been the sense in which this Court had understood the content of the word "fee". (2) That this construction was required or reinforced by Art. 110 (2) [and the corresponding Art. 199 (2)]. ( 48 ) WE shall first consider the decisions of this Court, which it is stated have thus interpreted the term "fee" as used in the Constitution. (2) That this construction was required or reinforced by Art. 110 (2) [and the corresponding Art. 199 (2)]. ( 48 ) WE shall first consider the decisions of this Court, which it is stated have thus interpreted the term "fee" as used in the Constitution. The first case referred to in this connection was 1954 SCR 1005 : ( AIR 1954 SC 282 ) where this Court had to consider the constitutional validity of certain provisions of the Madras Hindu Religious and Charitable Endowments Act, 1951 in its application to Mutts. Among the provisions considered in that context was S. 76 of that enactment, which directed every religious institution to "pay to the Government annually" such contribution not exceeding 5 per cent of its income as might be prescribed. The validity of this provision was challenged on the ground that what was authorised to be levied was not a fee but a tax, and that as a tax it could not be brought within any of the particular taxes enumerated in List II which the State Legislature was empowered to impose. This Court agreed with this contention, and based its conclusion on the following circumstances. It recognised that a clear distinction existed between taxes and fees under the Constitution. As to what was meant by a tax, Mukherjee, J. , who delivered the judgment of the Court adopted the definition of the term by Latham, C. J. , in Mathews v. Chicory Marketing Board, 60 CLR 263 "a tax is a compulsory exaction of money by a public authority for public purposes enforceable by law and is not payment for services rendered. " The learned Judge enumerated the characteristic of a tax from other forms of compulsory payments, and these were summarised thus :- (1) that taxes were imposed by a statutory power without the tax-payer's consent the payment being enforced by law, (2) that a tax is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax, (3) that a tax was levied for the purposes of general revenue which when collected formed 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 no element of quid pro quo between the taxpayer and the public authority". "as the object of a tax is not to confer any special benefit upon any particular individual there is no element of quid pro quo between the taxpayer and the public authority". On the other hand, a fee was generally stated to be defined to be a charge for 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". The learned Judge then went on to observe : "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. Fee confers a special capacity although the special advantage as for example in the case of registration fees for documents or marriage licences is secondary to the primary motive of regulation in the public interest. Public interest seems to be the basis of all impositions, but in fee it is some special benefit which the individual receives ". IN holding that the contribution imposed by S. 76 (1) was really a tax and not a fee regard was also had to some other factors, viz. , (1) the percentage of contribution leviable was grades according to the income derived by the institution, and (2) the entire collections went into the Consolidated Fund of the State and the expenses for the upkeep of the Board which was a statutory corporation created for the administration of religious endowments in the State was also directed to be met out of the monies in the Consolidated Fund. Reliance was also placed on similar observations of this Court, in other cases of fees charged on religious endowment under other enactments which were heard along with the Shirur Mutt case, 1954 SCR 1005 : ( AIR 1954 SC 282 ) already referred to, though in them the validity of the levy was upheld. Reliance was also placed on similar observations of this Court, in other cases of fees charged on religious endowment under other enactments which were heard along with the Shirur Mutt case, 1954 SCR 1005 : ( AIR 1954 SC 282 ) already referred to, though in them the validity of the levy was upheld. The validity of a contribution levied under the Orissa Hindu Religious Endowments Act was considered by this Court in Sri Jagannath Ramanuj Das v. State of Orissa, 1954 SCR 1046 : ( AIR 1954 SC 400 ) and of a similar levy under the Bombay Public Trust Act Ratilal Panachand Gandhi v. State of Bombay 1954 SCR 1055 : ( AIR 1954 SC 388 ). In these two cases, the validity of the contribution levied under their respective charging provisions was, as stated already, upheld. The ground on which S. 76 (1) of the Madras Act which was struck down in the Shirur Mutt case was distinguished was, that under the other two enactments, a special fund was created to which the collections were to be credited and that the expenses of the administration of the Act were directed to be met out of this fund. Though the concept of a fee as a quid pro quo for particular services rendered to the fee payer as explained in the Shirur Mutt case are also repeated in these two decisions it is worth noticing that the services to be rendered to the Religious Endowment or public trust by the Orissa and the Bombay Acts were exactly similar to the service - which was by way of supervision, regulation and control over the way in which the management by the trustees was conducted under the Madras Act. This consideration is highlighted when one examines the decision of this Court in the Udipi Mutt case, (1963) Supp 2 SCR 302 : ( AIR 1963 SC 966 ) which was a sequel to the Shirur Mutt case, 1954 SCR 1005 : ( AIR 1954 SC 282 ). After S. 76 (1) was struck down by this Court in the Shirur Mutt case. 1954 SCR 1005 : ( AIR 1954 SC 282 ) the Madras Legislature by Act 27 of 1954 effected certain amendments to that section with a view to rendering it constitutional. After S. 76 (1) was struck down by this Court in the Shirur Mutt case. 1954 SCR 1005 : ( AIR 1954 SC 282 ) the Madras Legislature by Act 27 of 1954 effected certain amendments to that section with a view to rendering it constitutional. S. 76 had been held to be ultra vires of the legislature on the ground that what is imposed was not a fee which was the only thing permitted by Entry 66 but in reality a tax. This decision was based upon several grounds of which the principal were : (1) that no special service had been rendered to the Mutts and other religious institutions so as to justify its being a fee for services rendered, (2) that it was graded according to the capacity of the payer based upon the annual income derived by the institution which rendered it somewhat like an income tax, and (3) that it was paid to the Government and became part of the Consolidated Fund of the State, the expenses incurred in administering the Act being paid out of the General Revenues. S. 76 as amended by Act 27 of 1954 was held to be intra vires and sustained as a fee. The changes that were effected by the Madras legislature were : (1) the graded system was abolished and the maximum percentage of the contribution being fixed by the statute, (2) the contributions payable were collected by the Commissioner and not by the State, (3) that a separate Fund was created into which these collections were credited and moneys for meeting the expenditure for the administration of the Act were drawn from this Fund. One other point to be mentioned is that the services rendered to the institution, as set out in S. 76 and the other relevant provisions of the Act remained exactly the same. This Court held the contribution to be a fee principally for the reason that the moneys that were being paid into a separate Fund were collected not by the Government and were being paid to a different Fund. If one proceeded on the footing that unless the service rendered was a specific service in the sense of a benefit conferred specially upon the payer, the charge levied would be a tax, the contribution levied under S. 76 even after the amendment would have been held to be a tax. If one proceeded on the footing that unless the service rendered was a specific service in the sense of a benefit conferred specially upon the payer, the charge levied would be a tax, the contribution levied under S. 76 even after the amendment would have been held to be a tax. No doubt, the fact that a separate Fund is segregated from the Consolidated Fund of the State and the moneys are received not by the Government as such but by a public authority might show that it is not a tax, still these are not decisive, for as was held by the Privy Council in Attorney-General for British Columbia v. E. and N. Rly. Co. 1950 AC 87 which has been approved by this Court in (1961) 2 SCR 537 : ( AIR 1961 SC 4 59 ) to which we shall refer later the payments were credited to a Fund known as the Authorised Protection Fund to which advances were made from Consolidated revenues. Lord Greene after saying that the levy had the characteristics of taxation observed : "it is suggested, however, that there are two circumstances which are sufficient to turn the levy, into what is called a 'service charge'. They are first, that the levy is on a defined class of interested individuals and, secondly, that the fund raised does not fall into the general mass of the proceeds of taxation but is applicable for a special and limited purpose. Neither of these considerations appears to their relationships to have the weight which it is desired to attach to them". THE segregation of the Fund, therefore, could not have been a decisive factor for determining the nature of the levy. This decision as well as the Orissa and the Bombay cases already cited are, therefore, authority for the position that the word 'services'in this context may have to be understood in a wide sense as including supervision and control over the activity for the exercise of which the fee is charged. ( 49 ) AS contrasted with these three cases, Mr. Pathak submitted that when fees were levied for licences they were taxes. In support he referred to Cooverjee B. Bharucha v. Excise Commr. and the Chief Commr. Ajmer, 1954 SCR 873 : ( AIR 1954 SC 220 ). Under the legislation before the Court, viz. ( 49 ) AS contrasted with these three cases, Mr. Pathak submitted that when fees were levied for licences they were taxes. In support he referred to Cooverjee B. Bharucha v. Excise Commr. and the Chief Commr. Ajmer, 1954 SCR 873 : ( AIR 1954 SC 220 ). Under the legislation before the Court, viz. The Excise Regulation Act 1950 licences were granted to regulate the trade in liquor. The fee to be charged for the grant of the licence was not prescribed by the Act or the rules but the licence was sold in public auction, the highest bidder being granted the licence the amount of the licence fee thus being the amount of the highest bid. This Court held that the fee collected from the highest bidders to whom the licences were granted was really in the nature of a tax though described as a licence fee. It was held that the legislative power for enacting this legislation was to be traced to the Entries in the Seventh Schedule, List II, of the Government of India Act, 1935, "for making laws regarding intoxicating liquors, i. e. the production, manufacture, possession, transport, purchase and sale of intoxicating liquors, and under the powers conferred for raising duties of excise on alcoholic liquors for human consumption; and the pith and substance of the regulation was that it raised excise revenue by imposing duties on liquors". Dealing with the contention that as it was described in the Excise Act as a licence fee the same was invalid as excessive was repelled in these terms. "the next contention that the charge of fee by public auction is excessive and is not in the nature of a fee but a tax ignores the fact that the licence fee described as a licence fee is more in the nature of a tax than a licence fee. One of the purposes of the Regulation is to raise revenue. The grantee is given a licence on payment of the auction price. The Regulation specifically authorises this". We do not see how this decision helps the appellant. The description of the levy as a fee does not of course determine whether it is a fee or a tax. One of the purposes of the Regulation is to raise revenue. The grantee is given a licence on payment of the auction price. The Regulation specifically authorises this". We do not see how this decision helps the appellant. The description of the levy as a fee does not of course determine whether it is a fee or a tax. That taxes may be imposed for effectuating other purposes than raising revenue for protecting some activity which is not subject to tax or to inhibit one which is so subject or to regulate some activity cannot also be disputed. That fees for licences may be by way of , taxes does not, however, mean that every fee for a licence is or must be a tax. ( 50 ) REFERENCE was next made to (1961) 2 SCR 587 : ( AIR 1961 SC 4 59 ) which considered the validity of a cess imposed on owners, among others, of coal-mines by the Orissa Mining Areas Development Fund Act, 1952. The amount of cess was to be determined by the Government but it was not to exceed 5 per cent of the value of the minerals extracted at the pits-mouth which was to be paid into a fund out of which was to be derived the monies for providing the amenities to the mining areas. It was contended for the petitioner coal company who moved this Court under Art. 32 of the Constitution that this cess was really a duty of excise on coal within Entry 84 of List I of the Seventh Schedule. On the other hand, it was contended by the State who opposed the petition that the cess was a fee and not a duty of excise. This Court upheld the validity of the cess on the ground that it was really a fee and in so holding observed, "it is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, 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. 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 such service 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. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas cess levied by way of fees is not intended to be, and does not become, a part of the consolidated fund. It is earmarked and set apart for the purpose of services for which it is levied. In regard to fees there is, and must always be, correlation between the fee collected and the service intended to be rendered. . . The distinction between a tax and a fee is, however, important and it is recognised by the Constitution. Several Entries in the Three Lists empower the appropriate Legislatures to levy taxes, but apart from the power to levy taxes thus conferred each List specifically refers to the power to levy fees in respect of any of the matters covered in the said List excluding of course fees taken in any Court". Reference was then made to the decisions in the Shirur Mutt case, 1954 SCR 1005 : ( AIR 1954 SC 282 ) the Orissa, (1961) 2 SCR 587 : ( AIR 1961 SC 4 59 ) and the Bombay, 1954 SCR 1055 : ( AIR 1954 SC 388 ) cases to which we have already adverted. Mr. Pathak placed considerable reliance on the reference in the Hingir Rampur Coal Co. , (1961) 2 SCR 537 : ( AIR 1961 SC 4 59 ), to the decision of the Privy Council in 1950 AC 87 and to the explanation of the rationale of those decisions of this Court:- "it would thus appear that this decision proceeded on the basis that what was claimed to be a special service to the lands in question was in reality an item in public service itself and so the element of quid pro quo was absent. 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 benefiting the specified class or area the State as a whole may ultimately and indirectly be benefited 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".