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2004 DIGILAW 844 (GUJ)

Ahmedabad Motor Transport v. UNION OF INDIA

2004-12-28

D.N.PATEL

body2004
D. N. PATEL, J. ( 1 ) THE present petition has been preferred for declaration that the provisions of the National Highways (Rate of Fees) rules, 1997 and the National Highways (Fees For the Use of National Highways section and Permanent Bridge - Public funded Project), Rules, 1997 are violative of and beyond the provisions of the National highways Act, 1956 and for further declaration that the levy of fees permanently made and sought to be made under the aforesaid Rules for Sarkhej Bridge constructed on Sabarmati river at National highway No. 8-A at K. M. 4/100 to 5/400 is bad in the eye of law and hence the respondents are not entitled to collect the same. ( 2 ) LEARNED advocate for the petitioner submitted that the respondents are collecting the fees for the use of Sarkhej bridge constructed on Sabarmati river, near vishala Hotel, Ahmedabad in violation of the provisions of the National Highways Act, 1956 (hereinafter referred to as "the Act, 1956") and the Rules framed thereunder for collection of the fees, are de-hors, the provisions of the National Highways Act, 1956. It is also submitted by the learned advocate for the petitioner that as per section 7 of the Act, 1956, the Central government may levy the fees at such rates which may be laid down by the Rules, for the services or benefits rendered in relation to the use of the permanent bridges. Sarkhej bridge in question is a permanent bridge, within the meaning of rule 2 (j) of the National Highways (Fees for the use of national Highways Section and Permanent bridge Public Funded Project), Rules 1997) having construction cost of more than 25 lacs and is open to the general traffic, on or after, first day of April 1976 and therefore, the bridge in question is covered under Section 7 of the Act, 1956. It is also submitted by the learned advocate for the petitioner that what is permitted under section 7 of the Act, 1956 is to levy the fees, in commensurate with the services or benefits rendered. It is also submitted that initial cost of the bridge and its approaches (Rs. in crores ) cars/ jeep tolls Rates (Rs. per Vehicle) light Commercial vehicles Minibuses trucks/buses and Multi Axle Vehicles Initial cost of the bridge and its approaches (Rs. in crores ) Cars/ jeep Tolls Rates (Rs. It is also submitted that initial cost of the bridge and its approaches (Rs. in crores ) cars/ jeep tolls Rates (Rs. per Vehicle) light Commercial vehicles Minibuses trucks/buses and Multi Axle Vehicles Initial cost of the bridge and its approaches (Rs. in crores ) Cars/ jeep Tolls Rates (Rs. per Vehicle) Light Commercial vehicles Minibuses Trucks/buses and Multi Axle Vehicles Below 50 5 10 15 50 - 75 10 10 25 75 - 100 10 15 30 100 - 125 15 20 40 125 - 150 15 20 40 150 - 200 15 25 50 Above 200 20 30 60 (2) The Fee under sub-rule (1) for projects involving conversion into four-lanes Sr. No. Type of Vehicle Rate 1. Car or Jeep or Van Rs. 0. 40 per k. m 2. Light commercial vehicles Rs. 0. 70 per k. m 3. Truck or bus Rs. 1. 40 per k. m 4. Heavy construction machinery Rs. 3. 00 per k. m And earhmoving euipment (3) The rate of Fee fixed under sub-rule (1) and sub-rule (2) may be reviewed after every five years based on wholesale price index and fixed in multiple of rupees five by the central Government over the rates notified) ( 3 ) THE impugned bridge, has incurred cost of construction less than 50 crores. Therefore, figures given in Rule 3 (1) contractors to levy the fees and such contracts are paying the fixed amounts to the respondents and substantial additional amounts go in private corpus. The amount of fees collected by the respondents is, in fact, highly disproportionate to the expenditure and there is no "fair correspondence" between the fees charged and the cost of services rendered. There is no "co-relationship" between the figures of expenditure and income. As per the affidavit dated 9-8-2004 filed by the respondents reveals that the costs incurred towards the constructions of the bridge in question is at rs. 8. 42 crores and total cost of expenditure towards construction of the approaches of the bridge is Rs. 68. 00 lacs (total expenditure of Rs. 7. 1 crores, and the total levy of the fees is at Rs. 28. 14 crores. Thus, there is lot of difference between the expenditure and income. 8. 42 crores and total cost of expenditure towards construction of the approaches of the bridge is Rs. 68. 00 lacs (total expenditure of Rs. 7. 1 crores, and the total levy of the fees is at Rs. 28. 14 crores. Thus, there is lot of difference between the expenditure and income. Collection of the fees is having neither "the broad co-relationship" nor the "fair correspondence" between the fees charged and cost of services rendered to the fees payers, The amount collected may not be mathematically commensurate with the expenses but the collection of the fees cannot be so exorbitant that it looses "fair correspondence" or "broad co-relationship" between the fees charged and the cost of services. In the present case, looking to the figures of the income and expenditure, it is clear that collection of the fees is at much higher rate. Even if the fees is not collected for several years, the bridge in question can be maintained by the respondents. In the present case- the fees has taken character of tax which is not permissible as per Article 265 of the Constitution of India, because the power to tax is neither incidental nor subsidiary to the power to legislate on a matter or topic. Since there is no specific entry allowing the respondents to tax the use of the bridge like in question, levy of fees by the respondents is violative of Article 265 of the Constitution of India. ( 4 ) LEARNED advocate for the respondents No. 1 and 2 submitted that the respondents have all power, authority and jurisdiction to collect the fees for the use of the bridge in question, permanently and perpetually under Rule - 11 of the National highways (Fees For the Use of National highways Section and Permanent Bridge public Funded Project) Rules, 1997. He has submitted that the amount so collected is going to the Consolidated Fund of India and budget allocation is made for the development and maintenance of the national highways in the entire State of gujarat. Generally, allocation of budget is as far as equal to the amount of fees which is collected in a particular State. He has submitted that the amount so collected is going to the Consolidated Fund of India and budget allocation is made for the development and maintenance of the national highways in the entire State of gujarat. Generally, allocation of budget is as far as equal to the amount of fees which is collected in a particular State. In support of his aforesaid submissions, the learned advocate for the respondents No. l and 2 has relied on the paragraphs No. 3 and 5 of the affidavit dated 9-8-2004 filed by Shri C. R. Gangadhar, Superintending Engineer, Union of India. It is also submitted by the learned advocate for the respondents No. 1 and 2 that even interest on the cost of construction is to be recovered and therefore, looking to the expenditure the fees collected by the respondents cannot be said to be highly disproportionate. On the contrary, there is fair correspondence or broad relationship between the fees charged and the cost of services rendered and therefore, collection of the fees by the respondents under the aforesaid Rules, 1997 is not violative of the act, 1956. Therefore, there is no substance in the present petition and hence the same may kindly be dismissed. ( 5 ) I have heard the leaned advocate for the petitioner, learned advocates including Addl. Central Govt. Standing counsel for respondent No. 1. and learned a. G. P. for the respondents Nos. 2 and 3. ( 6 ) THE main question raised in this petition is whether the respondents can impose and levy the fees at the rate which is exorbitant and so highly disproportionate to the expenditure that the fees collection tantamounts to imposition and levy of the tax and whether the National Highways (Rates of Fee) Rules, 1997 and the National highways (Fees for the use of National highways Section and Permanent Bridge- public Funded Project) Rules, 1997 permits the imposition and levy the fees, toll at such exorbitant and excessive rate so as to make both the Rules 1997 violative of the National highways Act, 1956, Entry No. 23 read with entry No. 96 of List I (Union List) of schedule-VII to be read with Article 265 of the Constitution of India. ( 7 ) ENTRY Nos. ( 7 ) ENTRY Nos. 23 and 96 of List - I (Union List) of Schedule-VII of the constitution of India, read as under:-"entry No. 23 - Highways declared under the law made by the Parliament to be Highways" "entry No. 96 - Fees in respect of any of the matters in this List, but not including the fees taken in any Court" ( 8 ) UNDER Entry No. 23 the National highways Act, 1956 has been enacted by the central Government which has come into force from 15th April, 1957. Section-7 of the national Highways Act, 1956 provides the powers for levy of the fees. Section 7 of the national Highways Act, 1956 reads under:- "sec. 7 - Fees for services or benefits rendered on national highways :- (1) The central Government may, by notification in the Official Gazette, levy fees at such rates as maybe laid down by the rules made in this behalf for services or benefits rendered in relation to the use of ferries, (permanent bridges, the cost of construction of each of which is more than rupees twenty-five lakhs and which are opened to traffic on or after the 1st day of April, 1976) temporary bridges and tunnels on national highways (and the use of sections of national highways ). (2) Such fees when so levied shall be collected in accordance with the rules made under this Act. (3) Any fee leviable immediately before the commencement of this Act for services or benefits rendered in relation to the use of ferries, temporary bridges and tunnels on any highway specified in the schedule shall continue to be leviable under this Act, unless and until it is altered in exercise of the powers conferred by subsection (1): provided that if the Central government is of opinion that it is necessary in the public interest so to do, it may, by like notification, specify any bridge in relation to the use of which fees shall not be leviable under this section. The Central Government has all powers under Entry No. 96 of List-1 (Union list, to draft the law for the levy of the fees in respect of any subjects referred in union List of Schedule-VII of the constitution of India and therefore, National highways (Rates of Fee) Rules, 1997 and the national Highways (Fees for the use of national Highways Section and Permanent bridge-Public Funded Project) Rules, 1997 were drafted by the Legislature for levy of the fees in respect of subject at Entry No. 23 of List-I (Union List) of Schedule-VII of the constitution of India. ( 9 ) THE Central Government may levy the fees for the services or benefits rendered in relation to use of the permanent bridges, cost of constructions of which is more than Rs. 25. 00 lacs and which are open to the traffic on and after 1st April, 1976. Thus, the amount of fee being levied must have "fair correspondence" between the fees charged and cost of services rendered to the fees payers as a ""class or it should have "broad co-relationship" between the fees charged and cost of services rendered to the fee payers. Of course, mathematical accuracy and statistical niceties may not be given weightage while comparing the amount of fees collected and the amount of expenditure incurred for rendering the services. The court is not a Cost Accountant. But the fact remains that the fees must remain as fees and it cannot partake character of tax. ( 10 ) HONble Supreme Court making distinction clearer between the tax and fees in the case of the COMMISSIONER HINDU religious ENDOWMENTS, MADRAS VI s. SRI LAKSHMIDRA THIRTHA SWAMIAR of SRI SHIRUR MUTT, REPORTED IN AIR 1954 SC 282 , has observed as under:-"the distinctive characteristics of a tax and fee were laid down, As far as fee is concerned, it is held that :- (A) fee is generally defined to be a charge for a 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. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. . . 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. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. . . These are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. " ( 11 ) SARKHEJ Bridge situated on national Highway No. 8a at KM 4/800 to 5/ 400, which is constructed on Sabarmati river incurred cost of Rs. 842. 71 lacs and cost of constructions of approaches to the bridge of rs. 68. 76 lacs. Thus, approximately the amount of Rs. 911. 00 lacs was incurred as per the paragraph- No. 2 of the affidavit-in-reply dated 9-8-2004 filed by Shri C. R. Gangadhar-, Superintending Engineer of the respondent No. 1, Year wise income and expenditure is mentioned at paragraph 3 of the said affidavit-in-reply, which reads as under : Year Income collected in Rs. Expenditure uncurred in Rs. 01/02/1998 to 31/12/98 39924098,00 2989136. 00 01/01/1999 to 31/12/99 38411553,00 1829630. 00 01/01/2000 to 31/12/00 40362397. 00 0020219. 00 01/01/2001 to 31/12/01 38311932. 00 0080635. 00 01/01/2002 to 31/12/02 36574620. 00 0746128. 00 ( 12 ) THUS, looking to the aforesaid figures mentioned in the Table of Income and Expenditure, it is clear that during the period of First Three years, total cost of construction of the bride in question has already been recovered. From 1-1-2001 inwards, the collection of fees is highly disproportionate to the expenditure incurred. ( 13 ) IT is contended by the learned advocate for the respondents that the respondents have all powers to collect the fees all times in perpetuity under Rule 11 of the National Highways (Fees for the use of National Highways Section and permanent Brides-Public Funded Project), rules, 1997, which reads as under : rule 11 - Tenure of fee collection :- the fee shall be collected in perpetuity by the executing agency. " ( 14 ) IN view of aforesaid Rule 11, the respondents have power to collect the fees even after recovery of the amount, equivalent to the cost of construction, but such fees must have fair correspondence with cost of services rendered in respect of the bridge in question. The contention of the respondents based upon Rule - 11, appears to be very attractive but not very helpful to the respondents. It is true that after recovering the cost of construction of the bridge in question, collection of levy of fees can be continued and for that the legislature has provided Rule 11 as referred hereinabove. The respondents have to meet with the expenses of maintenance of the bridge in question and the expenditure of maintenance has to be incurred year by year and permanently and therefore, collection of fees is required to be allowed, in perpetuity, under aforesaid Rule 11, but this does not give, any authority, or power, to the respondents to levy the fees at unreasonably, excessive and exorbitant rate.) rate of fees should be in commensurate with the expenditure incurred by the respondents for the services and benefits rendered to the fee payers. There ought to be "fair correspondence" between the fees charged and the costs of services rendered or there must be "broad co-relationship" between the fees collected and the expenditure incurred. : The must be co- ielationship between levy imposed and cost of services or benefits rendered. However, co-relationship between levy and the services is one of general character and not of mathematical exactitude. All that is necessary is that there should be reasonable "relationship" between levy of fees and services rendered. In the present case there is no such co-relationship between levy of fees and services rendered. In the robe of the fees, in fact, tax is collected looking to highly disproportionate collection of amount on and from 2001 onwards. In the present case, if we look at the aforesaid statement of the income as well as expenditure incurred for construction of the bridge in question and towards the construction of approach roads to the bridge is Rs. 911. 00 lacs. THE SAID AMOUNT, WITH THE maintenance OF THE BRIDGE- IN question, HAS ALREADY BEEN recovered DURING FIRST THREE years. During 1-1-2001 to 31-12-2001 against total expenditure of Rs. 80635/-, the fees collected under aforesaid both the rules, 1997 is at Rs. 911. 00 lacs. THE SAID AMOUNT, WITH THE maintenance OF THE BRIDGE- IN question, HAS ALREADY BEEN recovered DURING FIRST THREE years. During 1-1-2001 to 31-12-2001 against total expenditure of Rs. 80635/-, the fees collected under aforesaid both the rules, 1997 is at Rs. 3,83,11,932/- which is 47. 8 times more than, the expenditure. Thus, within one year for the period from 1-1-2001 to31-12-2001 i. e. after total collection of cost of construction of bridge and approach roads and maintenance thereof, huge amount of fees has been collected by the respondents. The income which is 47. 8 times more than the expenditure is highly excessive and exorbitant in nature and it takes away all the characters of the fees. The word fees used by the respondents is, in fact, is tax in veil. From the Fair face of the "fees the tyrant face of tax can be seen through. The respondents have no power to collect the fees in the form of take under Article 265 of the Constitution of India to be read with entry No, 23 and Entry No. 96 of List-I (Union List) of Schedule-VII. The levy of fees which is highly disproportionate to the cost of services or benefits rendered, is violative under Article 265 of the Constitution of india, It must be kept in mind that power to tax is neither incidental nor subsidiary to the power of the Legislature of matter or topic. Since, there is no specific entry in the Constitution of India, allowing the respondents to tax for the usage of the bridge in question, the levy of fees which is, in fact, tax, due to its highly disproportionately figure is not permissible to be levied by the respondents. ( 15 ) SIMILARLY, for the year 2002 i. e. from 1-1-2002 to 31-12-2002, against the expenditure of Rs. 7,46,128/-, total fees collected is Rs. 3,65,74,626/- which is 49 times more than the expenditure incurred. Thus, during the period of one year, amount of fees, collected by the respondents , is so large and high, that for the coming many more years, expenditure can be incurred from the amount collected. ( 16 ) IN the same way; in the year 2003 i. e. from 1-1-2003 to 31.-12-2003 against the expenditure of Rs. 9,38,379/- the fees collected by the respondents is Rs. 4,38,32,119/- which is also 46 times, more than the expenditure incurred. ( 16 ) IN the same way; in the year 2003 i. e. from 1-1-2003 to 31.-12-2003 against the expenditure of Rs. 9,38,379/- the fees collected by the respondents is Rs. 4,38,32,119/- which is also 46 times, more than the expenditure incurred. Thus, for next 46 years, from the amount of fees collected, the expenditure can be incurred. This is how the rates of fees have been fixed and the fees have been collected by the respondents The said rates of fees are disproportionate, excessive and exorbitant. The rates of fees which are unnecessary excessive, will always lead to unproportionately high collection with respect to expenditure incurred for rendering the benefits or services to the fee payers and therefore, will have no "co- relationship" or have no "fair correspondence" with the expenditure. ( 17 ) SIMILARLY, for the period from 1 1-2004, to 16-6-2004 the expenditure incurred is Rs. 78,267/- and income for the said period of about 1/2 year is rs,2,40,69,705/- which is 308. . . . . . . . . . times more, than the expenditure incurred. ( 18 ) THUS, every year i. e. on and from 1-1-2001 to 16-6-2004, the fees collected by the respondents is highly disproportionate and exorbitant looking to the figures of expenditure as stated herein above, Cost of the bridge along with the approach roads as stated hereinabove from the affidavit-in-reply dated 9-8-4002 filed by the respondent no. 1 is Rs. 911. 00 lacs. Collection of fees has been started from 1998 and within first three years collection of fees is approximately Rs. 1186. 00 lacs against the expenditure of Rs. 911. 00 lacs. Thus, total cost of bridge and approach roads and maintenance thereof has already been recovered within three years. ( 19 ) EVEN the Government of gujarat, in its communication dated 28-1-2004 to the petitioner (Annexure-B to the petition) has brought to the notice of the ministry of Road, Transport and Highways (M. O. R. T and N-) to stop the collection. Thus, this is a view even expressed, in writing by the State Government, which is one of the limb of the Union of India, in quasi-federal constitution. Looking to the amount already recovered, a request was made by the State government to Union of India, to stop the collection of fees in respect of the Sarkhej highway in question. Thus, this is a view even expressed, in writing by the State Government, which is one of the limb of the Union of India, in quasi-federal constitution. Looking to the amount already recovered, a request was made by the State government to Union of India, to stop the collection of fees in respect of the Sarkhej highway in question. ( 20 ) FROM the statement of income and expenditure, it reveals that from 2001 onwards the income of levy of fees is highly exorbitant unreasonable and excessive than the expenditure incurred for the services rendered to the fees payers. From the aforesaid table given in paragraph No. 10 of the judgment even ostensibly without looking to the figures like cost-accountant , it is clear-that the income of levy of fees at an existing rate, is highly disproportionate due to excessive and exorbitant rates of fees. ( 21 ) ARGUMENT canvased, by the union of India, is that they have power to collect the fees, permanently and in perpetuity. It is rightly said by Shakespeare in "othelo" that ; "0 ! It is excellent to have giants strength, but, it is tyrannous to use it like giant". Thus, the power is vested in the respondents to impose levy of fees for the use of the bridge, in the present case, the words "permanent bridge" are used under section 7 of the National Highways Act, 1956 to be read with the aforesaid both the rules, 1997, but this strengh, power permits not the respondents, to convert, totally, the nature and texture of fees so as to make it equivalent to tax. What is not permitted by the law, cannot be achieved by the respondents, by indirect method. ( 22 ) THIS Court struck down Sec. 76 on the ground that annual contribution was a tax as there was total absence of any correlation between the expenses incurred by the Government and the amount raised by contribution under the provision of section 76 and in these circumstances the theory of a return or counter-payment or quid pro quo cannot have any possible application to this case. " (para 49) as per the decision rendered by the Honble supreme Court in the case of the commissioner, HINDU RELIGIOUS endowments, MADRAS V/s. SRI lakshmindra THIRTHA SW1amiar OF sri SHIRUR MUTT, REPORTED IN AIR 1954 SC 282 . " (para 49) as per the decision rendered by the Honble supreme Court in the case of the commissioner, HINDU RELIGIOUS endowments, MADRAS V/s. SRI lakshmindra THIRTHA SW1amiar OF sri SHIRUR MUTT, REPORTED IN AIR 1954 SC 282 . The test of ; "correlationship" or "correspondence" has been repeatedly used by the Honble Supreme Court either to uphold the fee holding that it was reasonable for the requirement of the authority for fulfilling its statutory obligation (B. S. E. BROKERS FORUM V/s. SECURITIES AND EXCHANGE BOARD OF india (2001) 3 SCC 482 at P. 503, secuderabad HYDERABAD HOTEL owners ASSOCIATION V/s. HYDERABAD MUNICIPAL CORPORATION, (1999) 2 SCC 274 at P. 286; STATE OF tripura V/s. SUDHIR RANJAN NATH (1997) 3 SCC 665 ; and SHRI BILESHUAR khand UDYOG KHEDUT SAHAKARI mandali LTD. V/s. STATE OF GUJARAT (1992) 2 SCC 42 ; and GUJCHEM distillers INDIA LTD. V/s. STATE OF gujarat (1992) 2 SCC 399 or to strike it down on the ground that the fee charge was not established to be so commensurate (INDIA MICA AND MICANITE industries V/s. STATE OF BIHAR, (1971) 2 SCC 236 , SCC AT P. 243 and A. P. PAPER mills LTD. V/s. GOVT. OF U. P. (2000) 8 scc 167 ). ( 23 ) THUS, under the garb of fees imposing Rules. 1997, the levy and imposition of the fees, with perpetuity, in substance, has no connection with cost or expenses for the services or benefits rendered in relation to use of the permanent bridge. Such imposition and levy cannot be treated, as fees but in reality it, is a tax under the garb of fee. Section 7 of the national Highways Act. 1956, empowers the central Government to levy, at such rates, the fees, as may be laid down by the Rules made in that behalf for services or benefits rendered in relation to the use of the permanent bridges. Thus, the Rules have been framed under the National Highways act. 1956 are as follows : 1. The National Highways Rates (Rates of Fee) Rules. 1997, and ii. The National Highways (Fees for the use of National Highways Section and permanent Bridge - Public Funded Project) rules, 1997. Rule 12 of the National Highways (Fees for the Use of National Highways section and Permanent Bridge Public funded Project, Rules. 1956 are as follows : 1. The National Highways Rates (Rates of Fee) Rules. 1997, and ii. The National Highways (Fees for the use of National Highways Section and permanent Bridge - Public Funded Project) rules, 1997. Rule 12 of the National Highways (Fees for the Use of National Highways section and Permanent Bridge Public funded Project, Rules. 1997 imposes duty upon the Executing Agency to submit month-wise consolidated statement showing the amount collected and month-wise, break-up of expenditure incurred. For ready reference rule 12 of the said Rules. 1997 is produced hereunder : "12 - Submission of returns : (1) The executing agency concerned in case of departmental fee collection shall furnish returns in the first week of July, october, January and April of every year to the Pay and Accounts Officer containing : (a) Month wise consolidated statement showing the amount collected and remitted on account of fees proceeds in respect of each. National Highway Section or permanent bridge along with the details of number and date of demand draft by which the amount has been remitted, and (b) Month wise- break up of expenditure incurred on each National highway section or permanent bridge by the executing agency required to be reimbursed on account of collection of the fees on the basis of actual expenditure incurred. (2) The Executing Agency concerned in case of fees collection through franchisee shall furnish to the Pay and accounts Officer, National Highways, government of India, Ministry of Surface transport, New Delhi or any other officer so authorised, the details regarding the franchise, the amount and the period for which the franchise has been awarded immediately, after the auction for fee collection through such franchise. ( 24 ) THUS, there is inbuilt mechanism in the Highways (Fees for the use of national Highways Section and Permanent bridge - Public Funded Project) Rules. 1997, especially with the help of Rule 12 thereof, to keep a watchful eye upon the month wise break up of the income and expenditure. As per Rule 3 (3) of the national Highways (Rate of Fee) Rules, 1997, rates of fee are fixed as per Sub-Rule (1) and (2) is allowed to be reviewed after every five years. 1997, especially with the help of Rule 12 thereof, to keep a watchful eye upon the month wise break up of the income and expenditure. As per Rule 3 (3) of the national Highways (Rate of Fee) Rules, 1997, rates of fee are fixed as per Sub-Rule (1) and (2) is allowed to be reviewed after every five years. The said Sub-Rule of Rule 3 reads as under :" (3) :- The rate of fee fixed under sub- rule (1) and sub-rule (2) may be reviewed after every Five years based on wholesale price index and fixed in multiple of rupees five by the Central Government over the rates notified. " ( 25 ) IT is a duty of Union of India to maintain difference between "fee" and tax and thus, income and expenditure ought to be kept in the mind as per Section 7 of the National Highways Act, 1956 to be read with Rules 11 and 12 of the highways (Fees for the use of National highways Section and Permanent Bridge - Public Funded Project) Rules, 1997 to be read with Rule 3 (3) of the National highways (Rate of Fee) Rules, 1997. Thus, if the collection of fees is too high, looking to the expenses incurred for services or benefits rendered to the fee payers, it is the duty of the respondents to, so revise the rates of fees, under Rule 3 (3) of the rules, 1997, that income and expenditure once again could have achieved "fair correspondence" or "broad relationship". In the present case, Union of India, could have achieved "fair correspondence" or "broad correspondence, between fees collected, and expenditure incurred either by reducing the rate of fees for all the vehicles or by imposing rate of fees only upon the trucks or taxies or upon the vehicles moving or plying on the road for profiteering motive/goal. Which method is to be adopted, is always left to the wisdom of Union Government, but it must be such that, levy of fees must have "fair corelationship" with the expenditure incurred. The aforesaid provisions are to be read with the principles enunciated by the Honble Supreme Court while interpreting the provisions of the constitution of India. Which method is to be adopted, is always left to the wisdom of Union Government, but it must be such that, levy of fees must have "fair corelationship" with the expenditure incurred. The aforesaid provisions are to be read with the principles enunciated by the Honble Supreme Court while interpreting the provisions of the constitution of India. Difference between the tax and fee should be kept in mind by the respondents authorities by following principle "quid pro qua", of course, the traditional concept of quid pro quo", has undergone transformation in the recent cases. Fee must be "correlated" to the services rendered. There must be "fair correspondence" between them or there must "broad co-relationship" between them, the words fee and tax though is having common character i. e. compulsory payment, are not synonyms to each other. Tax is tax and fee is fee. There must be fair correspondence or broad Co-relationship between fees charged and the cost of services rendered to the fee payers. Fees ceases to be fee and it becomes tax in absence of "fair correspondence" and in absence of "broad corelationship". Therefore! correctly the State Government (who is executing agency as per para 3 of the affidavit-in-reply dated 9-8-2004 filed by union of India), had requested, the ministry of Road Transport and Highways (M. O. R. T. and H) to stop the collection in lieu of construction of bridge, but the government of India instructed to continue the collection of toll. (Annexure-E to the petition) This is how, mechanically,. without noticing difference, between "fee" and "tax", collection is going on, at a highly, disproportionate and unreasonable rate. Such relationship is not expected to be a mathematical one and therefore, traditional concept of "quid pro quo" has undergone transformation. In other-words, some deviation is permissible, if the income is slightly higher than the expenditure incurred. Such figures ought not to be seen with binocular or like a cost-Accountant or with the mathematical niceties and statistical accuracy, but total departure from "fee" is not permissible. If the income from the fees, as stated hereinabove, is highly disproportionate, it is not mere deviation, but it tantamounts to the total departure, from the word "fee". In case, fee collected, is at exorbitant rate, it ceases to be fee and partakes character of tax. If the income from the fees, as stated hereinabove, is highly disproportionate, it is not mere deviation, but it tantamounts to the total departure, from the word "fee". In case, fee collected, is at exorbitant rate, it ceases to be fee and partakes character of tax. Even at the cost of repetition, in the year 2001 onwards the amount of fees at the existing rates, collected is 47. 8 times, 49 times 46 times for years from 1-1-2001 to 31-18-2001, 1-1-2002 to 31-12-2002 and 1-1-2003 to 31-12-2003 respectively and for the period from 1-1-2004 to 16-4-2004 income is 308 times than the expenditure. This makes continuation of levy of fees, at an existing rate, bad in law. ( 26 ) CONTENTION of the respondents is that income of fees so collected goes to the consolidated fund of India and it is being used for development and maintenance of National Highways in the entire State of Gujarat. Merely because the amount of fee collected goes to the consolidated fund of India and it is not being misused, permits not, Union of India to impose levy of fees which has "no Co- relationship" or "fair correspondence" or "broad co-relationship" with the expenditure incurred for the services rendered to the fee payers. Such collection of fee is de-hors, Article 265 of the constitution of India. Union of India has power to impose fee for the usage of permanent bridges under the National highways Act, 1956 as per Entry 96 to be read with Entry 23 of List No. 1 (Union list, of Schedule-VII to the Constitution of India, But there is no entry to impose tax nor is there any empowering provision whereby the Union of India can impose and levy tax for the use of permanent bridges. Traditional test or the principle of "quid pro quo" for determination of distinction between fee and tax has not been so diluted or has not gone so much transformation, that now, there is no distinction between fee and tax. Tax and fee are two different connotations used under the Constitution of India, They have their own different meaning and character though both are to be paid compulsory as held by the Honble Supreme Court time and again in catena of decisions. Tax and fee are two different connotations used under the Constitution of India, They have their own different meaning and character though both are to be paid compulsory as held by the Honble Supreme Court time and again in catena of decisions. Tax is an imposition made for public purpose without reference to any special services rendered by the State or any specific benefit, to be conferred upon the payers of the tax. Its object is to raise general revenue. So far as the fee is concerned, it is charged for the special services, rendered to the individual by some governmental agency. It is levied, on a principle just opposite to that of tax. While a tax is paid for the common benefits, conferred by the Government. Fee is a payment made for special benefit enjoyed by the payer. Therefore, the Central government is empowered to levy the fee at such rates, rendered in relation to the use of the permanent bridges or section of highways. ( 27 ) LOOKING to the aforesaid facts and circumstances of the case, figures of income and expenditure as stated hereinabove and keeping in mind the principle enunciated by the Honble supreme Court distinguishing feature of the fee and tax, I am of the opinion that in the present case, the Central government has imposed highly excessive, exorbitant and disproportionate rates of fees for the use of Sarkhej Bridge in question situated on National Highway no. 8a, on Sabarmati river, and there is no "corelationship" or "fair correspondence" between fees charged and. the cost of services rendered to the fee payers as a class. Even there is no "broad relationship" between the fees and cost, of services rendered to the fee payers. There is total absence of such co-relationship. In couple of years after 1-2-1998, i. e from 1-2-1998, 81-12-2000, total cost of bridge as well as construction of approach roads and expenditure incurred upon the bridge in question, has been recovered. On and from 1-1-2001 at highly disproportionate rate fee is being collected in comparison with the expenditure incurred towards the use of the bridge in question by the fee payers, as a class. ( 28 ) THE provisions of The National highways (Fees for the use of National highways Section and Permanent Bridge public Funded Project) Rules, 1997 are not violative of the provisions of the National highways Act, 1956. ( 28 ) THE provisions of The National highways (Fees for the use of National highways Section and Permanent Bridge public Funded Project) Rules, 1997 are not violative of the provisions of the National highways Act, 1956. On the contrary, these rules are in consonance with the provisions of the National Highways Act, 1956 mainly for the reason that there is inbuilt mechanism in Rule 12 of The national Highways (Fees for the use of national Highways Section and Permanent bridge - Public Funded Project) Rules, 1997 for submission of returns by the executing Agency so as to keep watch upon the figures of income and expenditure and consequently to maintain rate of fee and to see that the fees nay not be converted into tax. Looking to the provisions of The National Highways Rates (Rates of Fee, Rules, 1997, especially due to Rule 3 (3) thereof, and the National highways (Fees for the use of National highways Section and Permanent Bridge - Public Funded Project) Rules, 1997, the provisions of those Rules, 1997 permit not, the Central Government to covert the fee into tax. Fixing of rate of fee will be by way of separate notification. The detailed method and mode of collection of fees has been given under Rules 7, 8, 9 and Rule 11 of the Rules, 1997, which permit the central Government to collect fee in perpetuity, mainly for meeting with the expenses, towards maintenance of the brides and for meeting with the expenses incurred every year. Merely because fee is to be collected in perpetuity will not render the Rules unconstitutional because the Government has to purchase services for maintenance of the bridge permanently. The National Highways (Rates of Fee) rules, 1997 and The National Highways (Fees for the use of National Highways section and Permanent Bridge Public funded Project) Rules, 1997 are not violative of the provisions of the National highways Act, 1956. In the present case, the rates of fees are prescribed by the union of India which uniformly applicable to the similarly situated vehicles. These rules are not unconstitutional, no violative of the National Highways Act, 1956 mainly for the reason that Sub-Rule 3 of Rule 3 of the National Highways (Rates of Fee) rules, 1997. The rates of fees are revisable, so as to keep "fair correspondence" between fees collected and expenditure incurred. These rules are not unconstitutional, no violative of the National Highways Act, 1956 mainly for the reason that Sub-Rule 3 of Rule 3 of the National Highways (Rates of Fee) rules, 1997. The rates of fees are revisable, so as to keep "fair correspondence" between fees collected and expenditure incurred. On the contrary, the aforesaid Rules, 1997 are in consonance with the National Highways Act, 1956. ( 29 ) INITIALLY, when the rates of fees were fixed they may be so fixed as to meet with the cost of construction of the bridge and cost of approach roads to the bridge and maintenance thereof. In the present case, from 1-2-1998 onwards the respondents are collecting the fees and upto 31-12-2000 the respondents have collected the cost of bridge and approach roads. Surprisingly, in the affidavit filed by the respondent No. 2, dated 1-4-2004 (internal page No. 5 of the affidavit filed by N. A. Barad, Executing Engineer, it is stated that the respondents are entitled to recover the interest upon the cost of construction. This cannot be allowed to be recovered by the respondents. Construction of roads and bridges is a part and parcel of welfare activity of the State. in order to promote trade, commerce and free intercourse, in it incumbent upon the state and/or Nation to construct more roads and bridges. With a view to usher era of prosperity and well being, this activity must be continued to be performed by the State. If the road and bridge is constructed by the State from its general revenue, it is not necessary to pay interest to anybody. In making construction, revenues of the State. are being legitimately spent in posturing yell being of the people. Thus, in one affidavit dated 4-2004 filed by the by one Mr. N. A. Barad, on behalf of the respondent No. 1, the respondent No. l has tried to enhance the amount by adding interest on capital amount and has brought to the tune of rs. 1525. 64 lacs from the figure of Rs. 911. 00 lacs (page No. 2. 7 of the present compilation to the memo of the present petition ). It appears that said affidavit dated 1-4-2004 is loosely drafted. The said officer has also pointed out that the project was completed on 31-1-2000. 1525. 64 lacs from the figure of Rs. 911. 00 lacs (page No. 2. 7 of the present compilation to the memo of the present petition ). It appears that said affidavit dated 1-4-2004 is loosely drafted. The said officer has also pointed out that the project was completed on 31-1-2000. Whereas, another officer Shri C,r. Gangadhar, Superintending Engineer of the respondent No. l, in his affidavit dated 9-6-2004 gives figure of Rs. 911. 00 lacs for cost towards construction of the bridge and approach roads of the bridge. It is also stated in the subsequent affidavit that the bridge was started in December, 1989 and was completed in February, 1998 and therefore, collection of fee started from 1-2-1998 onwards under the provisions of national Highways Act, 1956 (pg. 56 of compilation of the present petition ). The figures and dates mentioned in the first affidavit filed by the respondent No. 2 are not correct. If the first affidavit is taken into consideration, the project was completed on 31-1-2000 and the expenditure incurred was to the tune of rs. 911. 00 lacs approximately. From the figures stated hereinabove, it is clear- that rs,911. 00 lacs have already been recovered at the end of year 2000 and therefore, no question of interest whatsoever arises, apart from this aspect of the matter, even otherwise also, as held by the Honble supreme Court in the case of STATE OF u. P. AND OTHERS VS. DEVI DAYAL singh, REPORTED IN AIR 2000 SC 961 and relevant paragraph no. 1. 8 thereof reads as under. "para 18 - The second principle has been enunciated in paragraph 11 of the judgment as "construction of roads and bridges is a part of the welfare activity of the State. In order to promote trade, commerce and free intercourse, it is incumbent on the State to construct, more roads and bridges. With a view to usher an era of prosperity and well being, this activity must continue to be performed by the State. If a road or bridge, as the case may be, is constructed by the State from its general revenues, it is not called upon to pay interest to anybody. With a view to usher an era of prosperity and well being, this activity must continue to be performed by the State. If a road or bridge, as the case may be, is constructed by the State from its general revenues, it is not called upon to pay interest to anybody. In making the constructions, the revenues of the State are being legitimately spent in fostering the well being of the people, There must, be cases where in order to construct a bridge or a road, the Government or its instrumentality borrows money from a financial institution and agrees to pay interest thereon. It is only, in such case that the interest paid by the Government or its instrumentality can be said to be included in the cost of the construction of the bridge, or road. " ( 30 ) IN the present case, it is not on record that the Central Government had constructed the impugned bridge by borrowing money from the financial institutions and other and to them interest is paid. Thus, if expenditure is incurred from general revenue, it is not called upon to pay interest anybody. ( 31 ) HOWEVER, the Fact remains that the amount of fees is taken, as it is, the cost has already been recovered at the end of year 2000 and excessive and exorbitant fees has been collected on and from 1-1-2001 and therefore, continuation of collection of fees, at the existing rates, by the respondents is illegal and unconstitutional and de-hors the provisions of the National Highways Act, 1956 to be read with the National Highways Rates (Rates of Fee) Rules , 1997 and the national Highways (Fees for the use of national Highways Section and Permanent bridge Public Funded Project) Rules, 1997 to be read with Entry No. 23 of List-1 (Union List) of Schedule VII of the constitution of India and thereby there is clear violation of Article 265 of the constitution of India and hence continuation of collection of fees at the existing rates, by the respondents is hereby quashed and set aside and held as unconstitutional and therefore from 1-2-2005 collection of Fees at the existing rats.- by the respondents is hereby stayed permanently, ( 32 ) FOR the roregoing reasons, this petition is partly allowed. Rule is made absolute to the aforesaid extent, with no order as to costs. D. S. is permitted. Rule is made absolute to the aforesaid extent, with no order as to costs. D. S. is permitted. ( 33 ) IN view of the above order passed in the main petition, Civil Application No. 4809 of 2004 does not survive and the same stands disposed of. .