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1995 DIGILAW 602 (RAJ)

Timber Vyapar Sanchalan Samiti, Alwar v. State of Rajasthan

1995-07-13

V.K.SINGHAL

body1995
JUDGMENT 1. :- The only submission in the present writ petition is that the respondents are realising the market-fee and license fee and no services are rendered. On the principles of quid pro quo there must be some services rendered on the basis of which the fee is to be realised. No other point was raised or pressed before me. The decision of Apex Court in the case of Kewal Krishan Puri & anr. Vs. State of Punjab, AIR 1980 Supreme Court 1008, had drawn a distinction between tax and fee and it was held that substantial portion of amount of fees realised must be spent for special benefit of its payers. In this case the test of levy of market fee and market produce bought or sold by licensee in market area were held as under: "(1) That the amount of fee realised must be earmarked for render- ing services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purposes. (2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce. (3) That while rendering services in the market area for the purpose of facilitating the transaction of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions. (4) That while conferring some special benefits on the licensee, it is permissible to render such service in the market which may be in the general interest of all concerned with transactions taking place in the market. (5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them. Such an indirect and remote benefit to the traders is in no sense a special benefit to them. (6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee. (7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three fourths must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above." 2. Reliance has also been placed on Full Bench decision of Kerala High Court in the case of City Corporation of Calicut Vs. Thachambalath Sadasivan and others AIR 1969 Kerala 99, wherein it was observed that without a special benefit accruing to the payer in return, the levy cannot be justified. The fee collected must have correlation to the expenses incurred in issuing the same. It was further held as under: "In the cases before us we are not told that the fee collected from the petitioners for soaking husks is setapart for the purpose of meeting the expenses of the license. Nor is there any data placed before us by which the expenses incurred could be gauged. It was argued before us that for a simple fee for licence granted for carrying on an activity, no quid pro quo is needed. In such cases the fee will in fact be a tax and thus we are taken to the third category namely fee in the nature of a tax. The Corporation, in our view, cannot impose a tax in the guise of a fee. 3. Reliance has also been placed on the decision of Sri Jagannath Ramanuj Das and another Vs. State of Orissa and another, AIR 1954 Supreme Court 400 . It was observed that the fees, on the other hand, are payments primarily in the public interest but for some special service rendered or some special work done for the benefit of those from whom payments are demanded. In this case the judgment of Commr. Hindu Religious Endowments Madras Vs. Sri Lakshmindra Thirtha Swamiar, AIR 1954 Supreme Court 282, , was also relied. 4. In this case the judgment of Commr. Hindu Religious Endowments Madras Vs. Sri Lakshmindra Thirtha Swamiar, AIR 1954 Supreme Court 282, , was also relied. 4. Reliance has also been placed on the decision of Nagan Mahapalika Varanasi Vs. Durga Das Bhattachrya and others, AIR 1968 Supreme Court 1119, wherein it was observed that there is no genetic difference between a tax and a fee; both are compulsory exaction of money but public authorities; but whereas a tax is imposed for public purposes and is not 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. 5. The decision in the case of The Government of Andhra Pradesh and another Vs. Hindustan Machine Tools Ltd., AIR 1975 Supreme Court 2037 , has also been relied wherein it was observed by the Apex Court that the expenses incurred by a Gram Panchayat or a Municipality in discharging its obligatory functions are usually met by the imposition of variety of taxes. For justifying the imposition of fees the public authority has to show that services are rendered or intended to be rendered individually to the particular person on whom the fee is imposed. The Gram Panchayat here has not even prepared an estimate of what the intended services would cost it. 6. Learned counsel for the respondents has raised certain preliminary objections, but those objections need not be decided because the argument for refund of amount of fees etc. is not raised and the petitioner has not pressed other point and the only point raised is that since no service is rendered, there- fore, the respondents are not entitled for realisation of licence fee/market fee. 7. I have considered over the matter. The Rajasthan Agricultural Produce Market Act, 1961 provided for the better regulation of buying and selling of market produce and establishment of market for the agriculture produce in the State of Rajasthan. Under Section 3, the notification for intention of exercising control over purchase and sale of market produce in specified area has to be issued. Section 7 prescribes the constitution of market committee. Under Section 14, a power has been given to the market committee for issue of license on the payment of prescribed fee. Under Section 3, the notification for intention of exercising control over purchase and sale of market produce in specified area has to be issued. Section 7 prescribes the constitution of market committee. Under Section 14, a power has been given to the market committee for issue of license on the payment of prescribed fee. Under Section 17, the market committee is authorised to collect market fee from the licensee under the prescribed manner. The other powers and functions of the market committee have also been given. 8. The purpose for which the Act of 1961 was enacted was to rehabilitate a market for purchase and sale of market produces is to protect farm producers from being exploited by the middlemen and profiteers and also to secure fair return of their produce. All the amounts which are collected by way of market fee are to be taken into the fund for market and the expenditure has to be incurred by the market committee for the purpose specified under the Act out of the said fund. The submission of the learned counsel for the petitioner is that the respondents have not provided the shops and for that the association has made a representation. The copy of the said representation has been placed on record has been perused from which it is evident that the representation was made by the association and no application was moved by any individual trader. A question was raised in the case of Lakhan Lal Vs. State of Bihar & Ors., AIR 1968 Supreme Court 1408 , that the market committee had not established any market, and therefore, had no power to levy the market fee. The levy of market fee was upheld by the Apex Court. The question with regard to co-relation between fee and services rendered was considered by this court in the case of Narain Hari Shanker Vs. State of Rajasthan 1977 RL W 485 wherein it was observed that the fee may not be arithmetically commensurate with the service rendered. The levy of market fee was upheld by the Apex Court. The question with regard to co-relation between fee and services rendered was considered by this court in the case of Narain Hari Shanker Vs. State of Rajasthan 1977 RL W 485 wherein it was observed that the fee may not be arithmetically commensurate with the service rendered. Under the scheme of the Act, number of services are to be rendered by the market Committee and not only that a fund is created under section 18, the scheme contemplates that all the money receipts by the Market Committee will come into the fund to be tailed Market Committee Fund and all expenditure incurred by the Market Committee under and for the purposes of the Act, shall be defrayed out of the said fund. The purpose of the Act has been specified under section 19 which is as under: "19. Purposes for which the fund shall be expended-Subject to the provisions of Section 18, the market committee fund shall be expended for the following purposes, namely:- (1) the acquisitions of a site or sites for the market; (2) the maintenance and improvement of the market; (3) the construction and repair of buildings necessary for the pur- poses of such market and for the health, convenience and safety of the person using it; (4) the provision and maintenance of standard weights and measures; (5) the pay, pensions, leave allowances, gratuities, compensation for injuries resulting from accident, compassionate allowance and contribution towards leave allowances, pensions or provident funds of the officers and servants employed by it; (6) the expenses of and incidental to elections; (7) the payment of interest on the loans that may be raised for the purposes of the market committee and the provision of sinking fund in respect of such loans; (8) the collection and dissemination of information regarding matters relating to crop statistics and marketing in respect of the agricultural produce notified under section 4; (9) the payment of the cost referred to in sub-sections (3) and (4) of section 18". 9. It has not been denied that the amount which have been so collected are not put into the funds as contemplated by section 18 nor it is stated that the expenditure is made contrary to the provisions of section 19. 9. It has not been denied that the amount which have been so collected are not put into the funds as contemplated by section 18 nor it is stated that the expenditure is made contrary to the provisions of section 19. Once the manner in which the expenditure has to be incurred has been specified in the Act for rendering the service i.e. the amount of fee realised is expended from the funds so created in the manner stated in the Act, it will not be necessary to measure the service rendered to a particular licensee. Besides that the market committee has to regulate buying and selling the market produce which is also a service for the benefit of agriculturists. 10. The words 'market area' would even include the other places where that transaction of sale of purchase of market produces by the traders are carried on. The notification in the present case has been issued for declaring the timber as agriculture produce. The validity of the said notification is not in dispute. Similarly, the power to collect the market fee is exercised under section 17 and no provision of the Act or Rule have been disputed. Reliance has been placed on para 8 of the reply submitted by the respondents, wherein they have stated that the members of the petitioner association have not applied for a licence for doing their business in Mandi area and Mandi yard as such these facilities cannot be given at their residence or other place of business. In the reply it has been stated that 'however, it is further submitted that the facilities in rest of the market area are provided by the Municipal Board'. This reply has been given in view of the averment of the petitioner that for sale and purchase of wood and furniture no facilities are being provided. Neither shops or go-downs have been constructed nor provided to the members. The contention of the learned counsel for the respondents is that whatever facilities are available in the area those facilities cannot be provided at other places. 11. As observed above, the levy of market fee/licence fee in the present case, cannot be said to be without the element of the quid proquo. The contention of the learned counsel for the respondents is that whatever facilities are available in the area those facilities cannot be provided at other places. 11. As observed above, the levy of market fee/licence fee in the present case, cannot be said to be without the element of the quid proquo. Providing of shops and godowns is one of the manner in which the amount collected has to be spent and not the only manner and as such under the Act a procedure for spending the amount of fee so collected is provided then a legal presumption arises that the principle of quid pro quo is satisfied. From the record, it has not been proved that the petitioner's association applied for the allotment of shops/godown. It may be possible that no shop is available or could be allotted to any of member but for that reason alone it cannot be said that the services are not rendered by the respondents. The contention, therefore, raised by the learned counsel for the petitioners has no force. 12. It may also be observed that in the present case the petitioner has filed the writ petition on behalf of unregistered association. Though the list of members have been given, but there is no resolution authorising it to file the writ petition. The writ petition, therefore, by the members through unregistered association is not maintainable in view of the Full Bench decision in the case of RSEB Accounts Association Vs. RSEB, Full Bench Case No.338/1991, decided on 30.6.1995 [1995 (1) RLR 117 (F. B.)] and, therefore, the writ petition is liable to be dismissed. 13. In view of the above observations, the writ petition having no substance is dismissed.Petition dismissed *******