Judgment :- 1. The question in this case is whether the insistence by the second respondent, the Meppadi Panchayat, Meppadi that a licence fee at the rates specified in Ext. P-1, by the Panchayat, 'for machines used for any industrial purposes driven by power; other than electricity', under item 83 thereof, and 'for the storage of oil', should be paid and licences taken, is justified under the provision of the Kerala Panchayats Act, 1960. Shortly stated, the submission on behalf of counsel for the petitioner is that the provisions of the Act and the rules framed thereunder only justify the imposition of a licence fee; a fee that must be related and commensurate with the services to be rendered by the Panchayat in relation to the activity which is sought to be supervised by the insistence for a licence and grant of the same. It is contended that no services at all are rendered by the Panchayat in relation to the activities of the petitioner and therefore the levy is absolutely unjustified. 2. It is unnecessary for us to refer to various decisions of the Supreme Court ranging from the one in The Commissioner, Hindu Religious Endowments, Madras v. Sri. Lakshmindra Thirtha Swamiar of Sri. Shirur Mutt (AIR. 1954 SC. 282) to that in The Delhi Cloth and General Mills Co. Ltd. v. The Chief Commissioner Delhi and others (AIR. 1971 SC. 344) which have been cited before us by counsel, for it is fairly settled that a fee is distinct from tax and that the fee must be related to the services to be rendered by the authority imposing the fee. Indeed it has not been contended before us that any other view is possible. Counsel for the Panchayat and the State Government however urged that the condition enunciated in the decisions referred to has been satisfied in this case. 3. We may briefly refer to the provisions of the Act and the Rules. S.96 empowers the Panchayat to notify with the approval of the Director that no place in the Panchayat area shall be used for any of the purposes specified in the rules made in that behalf being purposes which in the opinion of Government, are likely to be offensive or dangerous to human life or health or property, without a licence issued by the executive authority. Rule making power in regard to this matter is conferred under S.98 of the Kerala Panchayats Act and the rules framed in this regard are called The Kerala Panchayats (Licensing of Dangerous and Offensive Trades and Factories) Rules, 1963. Schedule.1 to these rules specifies the purposes which the Government considered likely to be offensive or dangerous to human life or health or property. Item 83 in the 1st Schedule is 'machinery used for industrial purposes' and item 93 is 'oil-storing, preparing or manufacturing'. The owner or occupier of every such place used for the purposes mentioned in Schedule I is obliged by virtue of R.5 to apply within 30 days of publication of a notification under R.4 of the rules to the Executive Authority for a licence. Licence is to be granted as provided by R.5 and under R.7 the applicant is obliged to pay the fees fixed by the Panchayat. The fees have been fixed by the Panchayat under Ext. P1. 4. On the basis of the above provisions a notice Ext. P3 was issued to the petitioner by the Executive Officer of the Panchayat on the 1st April, 1969 demanding that the petitioner should take licence for the year 1969-70 paying the appropriate fees for the running of three gas engines of horse power 60, 40 and 45 and for storing furnace oil. The petitioner replied by stating that in view of the decision of a Full Bench of this Court in O.P. Nos. 1384 and 1406 of 1966 the petitioner is not obliged to pay any fees and the petitioner further claimed that a licence should be issued without the payment of the licence fee. This request was rejected by Ext. P5 and it is stated in the petition that due to coercion the amounts were later paid and one of the prayers in this petition is that the amount paid may be directed to be refunded. 5. In Para.3 of the counter-affidavit filed by the 1st respondent, the Executive Officer of the Panchayat, though not so specifically stated, it is mentioned that services are rendered. These may be grouped under two beads: education, and getting rid of stray dogs and the destruction of bugs in the rooms in the lines. 5. In Para.3 of the counter-affidavit filed by the 1st respondent, the Executive Officer of the Panchayat, though not so specifically stated, it is mentioned that services are rendered. These may be grouped under two beads: education, and getting rid of stray dogs and the destruction of bugs in the rooms in the lines. It may be noticed that there is a statutory duty on the part of the Panchayat under S.57 to make reasonable provision for carrying out the requirements of the Panchayat in relation to the supervision and improvement of education and for the maintenance of public health and sanitation generally and specifically for the disposal of stray and ownerless dogs under S.57 (2) (v) 0). All the activities of the Panchayat relied on the counter affidavit fall squarely within one or the other items specified under S.57. These should normally be considered as statutory duties imposed on the Panchayat which they are bound to discharge on the basis of the general revenue and we conceive that an imposition of 'fee' for carrying out the general purposes for which the Panchayat is constituted is unjustified. We think the matter is concluded by the observations of the Supreme Court in the decision in Nagar Mahapalika, Varanasi v. Durga Das Bhattacharya and others (AIR. 1968 SC. 1119). A similar argument advanced before the court on the basis of alleged services rendered to rickshaw owners obliged to take licence on payment of fees was negatived by the Supreme Court and it is sufficient to read Para.10 of the judgment in that case, "(10) we pass on to consider the next question raised in this appeal, namely, whether there was a quid pro quo for the licence fees realised by the appellant, and whether the impost was a fee in the strict sense as contemplated by S.294 of the Act, A finding has been recorded in the present case by the trial court that a sum of Rs. 1,43,741/7/0 was spent by the Municipal Board for providing facilities and amenities to owners and drivers of rickshaws. This sum of Rs. 1,43,741/7/0 is made up of the following items: "Rs. 68,000 spent over the paving of bye-lanes, in these the only conveyance that can operate is a rickshaw. R. 20,000 spent as expenses for lighting of streets and lanes. Rs. 47,741/7/0 spent in making provision for parking grounds. Rs. This sum of Rs. 1,43,741/7/0 is made up of the following items: "Rs. 68,000 spent over the paving of bye-lanes, in these the only conveyance that can operate is a rickshaw. R. 20,000 spent as expenses for lighting of streets and lanes. Rs. 47,741/7/0 spent in making provision for parking grounds. Rs. 8,000 spent on payment of salary to the staff maintained for issuing licences and inspecting rickshaws." The High Court was of the opinion that the amount of Rs. 68 000 spent for paving of bye-lanes and Rs. 20,000 for lighting of streets and lanes cannot be considered to have been spent in rendering services to the rickshaw owners and rickshaw drivers. The reason was that under S.7 (a) of the Act it was the statutory duty of the Municipal Board to light public streets and places and under Clause (h) of to the same section to construct and maintain public streets, culverts etc. The expenditure under these two items was incurred by the Municipal Board in the discharge of its statutory duty and it is manifest that the licence fee cannot be imposed for reimbursing the cost of ordinary municipal services which the Municipal Board was bound under the statute to provide to the general public. (See the decision of the Madras High Court in India Sugar and Refineries Ltd. v. Municipal Council Hospet, ILR- (1943) Mad. 521: (AIR. 1943 Mad. 191). If these two items are excluded from consideration the balance of expenditure incurred by the Municipal Board for the benefit of the licensees is Rs. 55,741/7/0, In other words, the expenditure constituted about 44 per cent of the total income of the Municipal Board from the licensees. In our opinion there is no sufficient quid pro quo established in the circumstances of this case and the High Court was therefore right in holding that the imposition of the licence fees at the rate of Rs. 30 on each rickshaw owner and Rs. 5/- on each rickshaw driver was ultra vires and illegal." Apart from this, we must also refer to the Kerala Panchayats (Spread of Education) Rules, 1964, and specifically, R.3 thereof, brought to our notice by counsel for the petitioner. 30 on each rickshaw owner and Rs. 5/- on each rickshaw driver was ultra vires and illegal." Apart from this, we must also refer to the Kerala Panchayats (Spread of Education) Rules, 1964, and specifically, R.3 thereof, brought to our notice by counsel for the petitioner. This rule provides that a School Fund should be constituted for every Panchayat and that to that Fund shall be credited all sums granted to the Panchayat by the Government, annual contribution from the general funds of the Panchayat and the proceeds of any surcharge on building tax, and all other sums of money which may be contributed or received by the Panchayat for the purposes of Panchayat Schools. This gives an indication that the education at any rate at the schools has to be managed from this particular fund and it is, we think, unsustainable that funds for such purposes should be augmented or created by the imposition of a fee for a licence which can be insisted upon under S.96. 6. The imposition of the fee under item 83 and under item 93 of Schedule I of the Kerala Panchayats (Licensing of Dangerous and Offensive Trades and Factories), Rules, 1963 is not justifiable under the provisions of the Act, We therefore set aside Exts. P-3 and P-5 and direct that no demand will be made for the payment of any fees as stipulated in Ext. P-1 for the grant of the licence under S.96 and R.7 of the rules in relation to the purposes mentioned in Schedule I, item 83 and item 93 'storage of oil'. We further direct that the sum of Rs. 292.50 collected from the petitioner towards licence fee for the year 1969-70 and a sum of Rs. 72.62 collected as penalty for belated payment of fees be refunded to the petitioner by the 1st and 2nd respondents. This petition is ordered as above. We direct the parties to bear their respective costs.