JUDGMENT Hon’ble Amitava Lala, A.C.J.—The petitioners, 36 in number, who are commission agents/ whole-sellers of vegetables and carrying on their business within the market area of Mandi Samiti, Barua Sagar, District, Jhansi (hereinafter in short called as the ‘Mandi Samiti’) after obtaining necessary licences under the provisions of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter in short called as the ‘Act, 1964’) and are also paying the requisite market fee as prescribed by Section 17(3)(b) of the said Adhiniyam, have preferred the present writ petition seeking following reliefs: “A- An order, direction or writ in the nature of certiorari quashing the public notice dated 31.3.2001 and the order dated 31.3.2001 of the Chairman, Nagar Palika Parishad, Barua Sagar, District Jhansi. B- An order, direction or writ in the nature of Mandamus commanding the Respondent No. 1 not to realise any weighment tax from the petitioners on the basis of the bye-laws dated 12.2.1945 published in the official Gazette on 17.2.1945. C- An order, direction or writ in the nature of Mandamus declaring the above mentioned bye-laws as ultra vires the provisions of Section 128 of the U.P. Municipalities Act and Section 10 of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 and the rules framed thereunder. D- Such other and further order, direction or writ of suitable nature which this Hon’ble Court may deem fit and proper in the circumstances of the case. E- An order awarding cost of this petition to the petitioners.” 2. By the impugned order as well as public notice dated 31st March, 2001 Nagar Palika Parishad, Barua Sagar, Jhansi, the respondent No. 1 herein, (hereinafter in short called as the ‘Nagar Palika Parishad’) has directed that the commission agents/whole-sellers are liable to pay weighment tax on every transaction of sale or purchase of vegetables within the municipal limits. 3. Mr. A.B. Saran, learned Senior Counsel appearing for the petitioners, has contended that Section 10 of the Act, 1964 prohibits realisation of any trade charges other than those prescribed by the rules or bye-laws made under this Act in respect of any transaction or sale or purchase of the specified agricultural produce. For the purpose of better understanding Section 10 of the Act, 1964 is quoted below: “10. For the purpose of better understanding Section 10 of the Act, 1964 is quoted below: “10. No trade charges permissible except as prescribed by Rules or byelaws.—(1) As from the date to be notified by the State Government in the Gazette, no person shall, in a Principal Market Yard or Sub-Market Yard, levy, charge or realise, any trade charges, other than those prescribed by rules or bye-laws made under this Act, in respect of any transaction of sale or purchase of the specified agricultural produce and no Court shall, in any suit or proceeding arising out of any such transaction, allow in any claim or counter claim, any trade charges not so prescribed. (2) All trade charges shall be payable by the purchaser.” 4. Mr. Saran has also drawn our attention to Rule 79 of the Uttar Pradesh Krishi Utpadan Mandi Niyamawali, 1965 (hereinafter in short called as the ‘Rules, 1965’), framed under the Act, 1964, in respect of the trade charges. Such Rule-79 is also reproduced as below: “79. Trade charges [Section 10].—(1) As from the date notified by the State Government under Section 10 of the Act, no person shall, in a Principal Market Yard or Sub-Market Yards, levy, charge or realize, in respect of any transaction of sale or purchase of the specified agricultural produce, any trade charges, other than those specified by the Market Committee under sub-rule (2). (2) The Market Committee keeping in view the public interest shall specify in its bye-laws the trade charges that may be charged or realised by a trader, a commission agent, a broker, a weighman, a measurer or a palledar holding licence under these rules. (3) All trade charges shall be payable by the purchaser: Provided that weighment or measuring or cleaning or handling charges, if any, before auction, as may be specified by the Market Committee in its bye-laws, shall be payable by the seller. (4) Without prejudice to the provisions of Section 37 of the Act, any trader or his servant, any commission agent or his servant, any broker, warehouse man, weighman or measurer, soliciting or receiving fees other than those prescribed under the bye-laws mentioned in sub-rule (2) or sub-rule (3), as the case may be, shall be liable to cancellation of his licence.” 5. On the basis of the aforesaid provisions, Mr. On the basis of the aforesaid provisions, Mr. Saran submitted that a combined reading of the aforesaid provisions makes clear that except for the trade charges provided under the Act, 1964, Rules, 1965 and the bye-laws framed thereunder no other realisation of any kind can be made from a person carrying on business in the principal market yard or sub-market yard. He further submitted that bye-laws in accordance with the provisions of Section 298 (2) F (d) of the U.P. Municipalities Act, 1916 (hereinafter in short called as the ‘Act, 1916’) have been framed by the erstwhile Town Area Committee, Barua Sagar for the purpose of realisation of weighment taxes at the rates specified therein and as per the said bye-laws, which is annexed as Annexure-2 to the writ petition, 50 Anna percent has to be paid as weighment tax by the whole-seller/ commission agent while 50 Anna percent is to be realised as tax from the purchaser, which is liable to be recovered as a tax in case of failure to pay the same. According to Mr. Saran, such bye-laws have become obsolete and redundant after the enforcement of the Act, 1964 and as such, no realisation of any tax can be made by the Nagar Palika Parishad. Therefore, when the petitioners are regularly depositing the market fee, no further amount whatsoever is liable to be charged from the petitioners in the form of weighment tax in view of the clear prohibition provided under Section 10 of the Act, 1964. Section 4 of the Act, 1964 has been given an overriding effect over any other Act, custom, usage or agreement, which is inconsistent with the provisions of the Act, 1964, therefore, in view of this the bye-laws framed under the provisions of the Act, 1916 will have no application whatsoever in respect of any transaction of sale or purchase of any item within the market yard. Mr. Saran has also relied upon the notification/order dated 7th January, 1978 passed by the Commissioner & Secretary, Agriculture, Govt. of U.P., whereby realisation of any other charge except those provided under the Act, 1964 and the Rules, 1965 has been prohibited. With reference to the aforesaid notification dated 7th January, 1978 an order has also been issued by the Secretary, Krishi Utpadan Mandi Samiti, Barua Sagar, Jhansi on 30th January, 2001 to the same effect. of U.P., whereby realisation of any other charge except those provided under the Act, 1964 and the Rules, 1965 has been prohibited. With reference to the aforesaid notification dated 7th January, 1978 an order has also been issued by the Secretary, Krishi Utpadan Mandi Samiti, Barua Sagar, Jhansi on 30th January, 2001 to the same effect. The copies of the aforesaid notification dated 07th January, 1978 and order dated 30th January, 2001 have been annexed to the writ petition as Annexures 4 and 3 respectively. However, despite aforesaid prohibitions the Nagar Palika Parishad is insisting for realisation of weighment taxes in accordance with the bye-laws published in the official Gazette on 12th February, 1945 and it is with the aforesaid intent that Nagar Palika Parishad has issued the impugned order and notice for realisation of weighment tax from all the whole-sellers/commission agents operating within the municipal limits irrespective of the fact that they are carrying on business in the market yard of the Mandi Samiti and also mentioning therein that in case of failure in payment of such tax, realisation would be made in accordance with the provisions of the Act, 1916 as arrears of land revenue and further stating that the provisions of Section 10 of the Act, 1964 have no application in respect of taxes imposed by the Nagar Palika Parishad. The petitioners have also made a representation on 31st March, 2001 before the Chairman, Nagar Palika Parishad, stating that no amount is liable to be realised from them as weighment taxes. He further contended that even otherwise imposition and realisation of tax can be made by a Municipal Board only in accordance with the provisions of Section 128 of the Act, 1916 and no tax can be imposed or realised, which is outside the purview of the aforesaid provision. Such provision indicates that although the Municipal Board is entitled to impose and realise tax from persons carrying on trade or business within the municipal limits but such imposition or realisation is subject to certain conditions i.e. where certain benefit or liability is imposed upon the Municipal Board. He further submitted that imposition of tax under the nomenclature of weighment tax is outside the purview of Section 128 of the Act, 1916 and in view of which the same is clearly ultra vires the provisions of the Act, 1916. He further submitted that imposition of tax under the nomenclature of weighment tax is outside the purview of Section 128 of the Act, 1916 and in view of which the same is clearly ultra vires the provisions of the Act, 1916. In further, the aforesaid bye-laws have been framed by the erstwhile Town Area Committee in accordance with the provisions of Section 298 (2)F(d) of the Act, 1916, which is clearly not applicable to the facts and circumstances of the present case and no bye-laws can be framed for imposition of any tax from any trader or whole-seller under the aforesaid provisions. Since the petitioners are already paying market fee to the Mandi Samiti, they are not liable to the payment of any other form of tax and the realisation of the same by the Nagar Palika Parishad is clearly illegal and contrary to law. Mr. Saran has also submitted that on one hand Mandi Samiti is insisting not to realise any other charges except trade charge, on the other hand, Nagar Palika Parishad is insisting for realisation of weighment tax, therefore, it is clearly a dispute between Mandi Samiti and Nagar Palika Parishad as regards realisation of weighment tax and such dispute should be referred to the State Government as per Section 325 of the Act, 1916 whose decision shall be final. When on one hand the dispute is not being referred to the State Government, on the other hand the Nagar Palika Parishad is insisting for realisation of the same, failing which the said tax is to be realised from the petitioner as arrears of land revenue, such action is per se illegal. 6. Mr. P.R. Ganguli, learned Counsel appearing for the Nagar Palika Parishad-respondent No. 1, has contended that levy of weighment dues by the Nagar Palika Parishad is in law imposition of tax. Levy or recovery of such a tax is not barred by Section 10 of the Act, 1964 or any provision thereof. Section 10 regulates the levy of trade charges and provides that no person can levy any trade charge other than those prescribed by the rules or bye-laws made under this Act, and that trade charges shall be payable by the purchaser. The levy, with which present controversy relates, is not a levy, which can be termed as a trade charge as defined in Section 10 of Act, 1964. The levy, with which present controversy relates, is not a levy, which can be termed as a trade charge as defined in Section 10 of Act, 1964. He further submitted that impugned publication/notice was issued in pursuance of the bye-laws. According to him, after the enforcement of the Act, 1964 the bye-laws have not become obsolete and redundant. Section 4 of the Act, 1964 provides that provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in other law, custom, usage or agreement. He has submitted that there is no provision under the Act, 1964 prohibiting any other local body or authority from levying a tax on transaction, upon which a Committee (Mandi Samiti) may charge the market fee, as such the Nagar Palika Parishad is authorised to realise weighment tax. Imposition of weighment tax is in accordance with Section 128 of the Act, 1916. Nagar Palika Parishad is empowered to levy all those taxes which the State Government levy under Section 128 (1) of the Act, 1916. Clause (xiv) of Section 128 (1) provides “any other tax which State legislature has power to impose in the State under the Constitution”, therefore, it cannot be said that imposition of weighment tax is outside the purview of Section 128 of the Act, 1916. According to him, it cannot be said that the impugned bye-laws are not applicable in the facts and circumstances of the present case and no bye-laws can be framed for imposition of tax from the traders or whole-sellers. A plain reading of Section 298 (2)(F)(d) and Section 128(1)(xiv) of the Act, 1916 will show that the Nagar Palika Parishad could impose any tax, which State legislature can impose under the Constitution. List-II of Seventh Schedule of the Constitution of India enumerates various fields of legislature, upon which State legislature could make laws. Entry-52 of such list provides “taxes on the entry of goods into a local area for consumption, use or sale”, whereas Entry- 54 thereof provides “taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92-A of List I”. Therefore, in view of Entries 52 and 54, the Nagar Palika Parishad has authority to impose and realise the tax on the entry of the goods as well as on sale and purchase of the goods within its territorial limits. Therefore, in view of Entries 52 and 54, the Nagar Palika Parishad has authority to impose and realise the tax on the entry of the goods as well as on sale and purchase of the goods within its territorial limits. The order dated 31st January, 2001 has been issued by the Secretary of the Mandi Samiti with a purpose which is not in pursuance of the order dated 7th January, 1978 issued by the Commissioner & Secretary, Agriculture Department, which is purported to have been issued under Section 10 (1) of the Act, 1964, to create confusion in the matter of realisation of tax and which has got no relevance on the other local body. The representation submitted by the petitioners has no legal sanctity and has been filed by the petitioners with the collusion of Secretary of the Mandi Samiti to create hindrance in realisation of taxes by the Nagar Palika Parishad since 1949. There is no dispute between the Municipal Authority and any other authority and as such there is no requirement of any reference of the dispute to the State Government. The petitioners with the collusion of the Secretary of the Mandi Samiti concerned deliberately raised this issue, which in fact is non-existent, with a purpose to defraud the Nagar Palika Parishad. The matter has already been decided and the law has been settled on the question that Town Area Committee or a notified area committee has constitutional authority to levy a fee or tax. Mr. Ganguli further submitted that payment of market fee to the Mandi Samiti has no relation with the payment of weighment tax, as such it cannot be said that the petitioners are not under obligation to pay the weighment tax to the Nagar Palika Parishad. It is heterogeneous in nature. The Nagar Palika Parishad is insisting for realisation of weighment tax in accordance with bye-laws and it cannot be said that the realisation of weighment tax is intrinsically without any authority of law. Hence, the writ petition is liable to be dismissed. 7. Taking almost identical pleas, counter-affidavit has also been filed on behalf of the State-respondent No. 3 herein, therefore, the same need not to be incorporated to avoid unnecessary repetition. 8. Mr. Hence, the writ petition is liable to be dismissed. 7. Taking almost identical pleas, counter-affidavit has also been filed on behalf of the State-respondent No. 3 herein, therefore, the same need not to be incorporated to avoid unnecessary repetition. 8. Mr. B.D. Mandhyan, learned Senior Counsel appearing for the Mandi Samiti- respondent No. 2 herein, has contended that though no relief has been sought against the Mandi Samiti yet since it has been impleaded as party respondent, therefore, he wants to clarify the matter. He has submitted that the trade tax is neither fee nor tax under the Act, 1964. The traders were earlier realizing from producers enumerable customary charges, therefore, the Krishi Utpadan Mandi Parishad made the provision, reduced the trade charges levied to be payable from purchasers and earlier charges before enforcement of the Act, 1964 were from the producers/sellers. He has invited our attention to the definition of trade charges under Section 2(x) of the Act, 1964, and also to Section 10 of the Act, 1964 and Rule 79 of the Rules, 1965 regarding imposition of trade charges. He has also referred to Section 17 of the Act, 1964 and Rules 66 and 67 of the Act, 1965 to show the provision regarding levy of licence fee as well as market fee and cess but said such provisions are not relevant for the purpose of controversy involved herein. However, Mr. Mandhyan agreed that they are receiving annual licence fees, market fees, development fees and weighment charges. Mr. Mandhyan has relied upon two Division Bench judgements of this Court in Aalu Phal Arhati Vyapari Sangh v. Krishi Utpadan Mandi Samiti, 1992 RD 404 and Sri Narain Vijai Narain v. Town Area Committee, Chirgaon, 1972 ALJ 268, to show that levy of charge has been upheld therein. According to him, the trade charges are indication, which were exemplary being charged from the traders that has been restricted and codified. These are neither fee nor tax and further it has been prohibited to charge from the producers. The trade charge would be payable by the purchasers. There is no question of double taxation. Taxing power has been vested in the Municipal Board as under the State List-II there is power to impose tax by the U.P. Legislature and those powers can also be exercised by the municipalities and the Town Area Committee in limited way. The trade charge would be payable by the purchasers. There is no question of double taxation. Taxing power has been vested in the Municipal Board as under the State List-II there is power to impose tax by the U.P. Legislature and those powers can also be exercised by the municipalities and the Town Area Committee in limited way. He said that in view of the aforesaid judgements the matter is fully concluded. 9. In Krishi Utpadan Mandi Samiti, Moth v. Town Area Committee, Moth and others, 1972 ALJ 595, it has been held by a Division Bench of this Court that there is no provision in the Act, 1964 prohibiting any other local body from levying a fee on transaction upon which the Committee may charge a market fee. In the absence of any such provisions, it is difficult to hold that Section 17(3)(b) of the Act, 1964 would be inconsistent with the provisions of Town Area Committee Act or the bye-laws. The Town Area Committee authorises the levy of a fee. The Court was not impressed therein with the submission of the Mandi Samiti that levy of weighment dues was in law a fee and not a tax. It is within the purview of trade charges as defined in the Act. Under Section 10 of the Act, 1964 trade charges would not be lawfully levied or collected by any person except in accordance with the directions of the Mandi Samiti. 10. According to us, Rule-79 of the Rules, 1965 is authorising the Mandi Parishad to collect certain charges. It speaks that there might be a charge of weighing or measuring, which is the subject-matter of dispute herein. This Rule is arising out of the Act, 1964. Section 10 of the Act, 1964 prescribes that no trade charges are permissible except as prescribed by the Rules or bye-laws made under this Act. Section 2(x) of such Act speaks about the trade charge, which means any charge, by whatever name called, which is realised or may be realised by, or may be payable to, a trader in respect of any transaction of sale or purchase of any specified agricultural produce under or purporting to be under any custom or usage of trade or otherwise. ‘Weighman’, ‘Weighing or Measuring Instrument’ and ‘Weight or Measure’ are part of Section 2 (bb), (cc) and (dd) of the Act, 1964. ‘Weighman’, ‘Weighing or Measuring Instrument’ and ‘Weight or Measure’ are part of Section 2 (bb), (cc) and (dd) of the Act, 1964. On the other hand, the Act, 1916 is required to be seen side by side. Section 2 (9) of the Act, 1916 has defined the Municipality, which means an institution of self-Government referred to in clause (e) of Article 243-P of the Constitution, whereas Section 2 (9-A) defines municipal area, meaning thereby the territorial area of a municipality. Section 128 of the Act, 1916 speaks about imposition of certain taxes. Section 128 is quoted hereunder: “128. Section 128 of the Act, 1916 speaks about imposition of certain taxes. Section 128 is quoted hereunder: “128. Taxes which may be imposed.—(1) Subject to any general rules or special order of the State Government in this behalf, the taxes which a Municipality may impose in the whole or part of a municipality are,— (i) a tax on the annual value of building or lands or of both; (ii) a tax on trades and callings carried on within the municipal limits and deriving special advantages from, or imposing special burdens on municipal services; (iii) a tax on trades, callings and vocations including all employments remunerated by salary or fees; (iii-a) a theatre tax which means a tax on amusements or entertain-ments; (iv) a tax on vehicles and other conveyances plying for hire or kept within the municipality or on boats moored therein; (v) a tax on dogs kept within the municipality; (vi) a tax on animals used for riding, driving, draught or burden, when kept within the municipality; (vii) omitted; (viii) omitted; (ix) a tax on inhabitants assessed according to their circumstances and property; (x) a water-tax on the annual value of buildings or lands or of both; (x-a) a drainage tax on the annual value of buildings leviable on such buildings as are situated within a distance, to be fixed by rule in this behalf for each municipality from the nearest sewer line; (xi) a scavenging tax; (xii) a conservancy tax for the collection, removal and disposal of ex-crementious and polluted matter from privies, urinals, cesspools; (xiii) omitted; (xiii-A) omitted; (xiii-B) a tax on deeds of transfer of immovable property situated within the limits of the municipality; (xiv) omitted; (2) Provided that taxes under clauses (iii) and (ix) of sub-section (1) shall not be levied at the same time nor shall the taxes under clauses (x-a) and (xii) of sub-section (1) be levied at the same time; Provided further that no tax under clause (xiii-B) of sub-section (1) shall be levied on deeds of transfer of immovable property situated within such area of the municipality as forms part of the local area of any Improvement Trust created under Section 3 of the U.P. Town Improvement Act, 1919 (U.P. Act No. VIII of 1919): Provided also that no tax under clause (iv) of sub-section (1) shall be levied in respect of any motor vehicle. (3) Nothing in this section shall authorize the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution: Provided that a Municipality which immediately before the commencement of the Constitution was lawfully levying any such tax under this section as then in force, may continue to levy that tax until provision to the contrary is made by Parliament.” 11. In the year 1945 bye-laws were made under such Act, 1916 for recovering certain amount by way of tax, under which the weighment tax has been imposed. The Municipal Authority (Nagar Palika Parishad) is realising weighment tax on the basis of such bye-laws. Both, the State as well as the Nagar Palika Parishad have conjointly stated that payment of market fees to the Mandi Samiti has no relation with the payment of weighment tax. It is not correct to say that the bye-laws have become obsolete and redundant after implementation of the Act, 1964. In Sri Narain Vijai Narain (supra), as relied upon by the Mandi Samiti, a Division Bench of this Court has held that when Act, 1916 confers power to frame bye-laws for regulation of the conduct of business as per Section 298(2)(F)(d) thereof, such regulatory bye-laws have never been held to violate the fundamental right to carry on business. It is true to say that there is no dearth of power of the municipal authorities under the Act, 1916 as well as the Rules and bye-laws framed thereunder, if any, to recover the appropriate fees. Possibly, they wanted to say that the weighment taxes are required to be given being such type of fees. However, a Constitution Bench of the Supreme Court in Jindal Stainless Ltd. (2) and another v. State of Haryana and others, 2006 (7) SCC 241 , has held that these type of taxes are not taxes as such as per the Constitution but are judicially evolved on the strength of the judgement of the Supreme Court in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, 1963 (1) SCR 491 , as a part of regulatory charge. The fallout is that compensatory tax becomes a sub-class of fees. A compensatory tax is levied on an individual as a member of a class, whereas a fee is levied on an individual as such. The fallout is that compensatory tax becomes a sub-class of fees. A compensatory tax is levied on an individual as a member of a class, whereas a fee is levied on an individual as such. When the tax is imposed as a part of regulation or as a part of regulatory measure, its basis shifts from the concept of “burden” to the concept of measurable/quantifiable benefit and then it becomes “a compensatory tax” and its payment is then not for revenue but as reimbursement/ recompense to the service/facility provider. It is then a tax on recompense. Compensatory tax is by nature hybird but it is more closer to fees than to tax as both fees and compensatory taxes are based on the principle of equivalence and on the basis of reimbursement /recompense. 12. Having so, we have to find it out whether the weighment tax or charge, as claimed by the Nagar Palika Parishad, is heterogeneous in nature or homogeneous in nature. There is no dearth of power of the Nagar Palika Parishad/Municipality to levy the fees, charges or taxes, wherever the same are applicable. But when factually the weighment is needed within the campus of the Mandi Samiti from the traders and the weighment is being made by the weighman of the Mandi Samiti as against the cost or charge or expenses taken directly from the traders or purchasers, who are selling and/or purchasing, how can the Nagar Palika Parishad claim the same from such traders, is not known to this Court. The Nagar Palika Parishad can claim so when a vehicle plying or carrying out goods within the municipal area to enter into its area or for selling and trading anywhere else, but when they enter into the campus of Mandi Samiti, where they are doing business upon payment of certain costs, charges and expenses of similar nature and where the municipality is not rendering any such service of weighment, the Nagar Palika Parishad or Municipal Authority cannot be said to be entitled to claim such charges from the traders directly for carrying on the business within the campus of the Mandi Samiti. If it is allowed by this Court, the same will be in the nature of double taxation without rendering any service and also contrary to the ratio of the judgement of the Supreme Court on the principle of such type of compensatory taxes or fees as in the case of Jindal Stainless Ltd. (supra). 13. So far as the question of ultra vires is concerned, in association with the earlier judgements we hold and say that the claim of the weighment tax/charge by the Nagar Palika Parishad cannot be said to be ultra vires but it cannot impose the same within the campus of the Mandi Samiti, where the traders and/or purchasers are under obligation to pay the similar weighment charges to the Mandi Samiti itself. 14. Thus, in totality, the writ petition can be allowed and is allowed. The claim, if any, of the weighment fee or charge or tax by the Nagar Palika Parishad within the campus of the Mandi Samiti cannot be held to be sustainable. Hence, the notice and the order dated 31st March, 2001, impugned in this writ petition, claiming such amount are hereby quashed. However, no order is passed as to costs. Hon’ble S.N.H. Zaidi, J.—I agree. ——————