LexA.P. PAPER MILLS LTD. ETC. ETC versus GOVERNMENT OF A.P. AND ANR.
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/ A.P. PAPER MILLS LTD. ETC. ETC. A v. GOVERNMENT OF A.P. AND ANR. ,:; SEPTEMBER 28, 2000 [K.T. THOMAS, D.P. MOHAPATRA AND R.C. LAHOTI, JJ.] B Labour Laws : Factories Act, 1948-Section 6(/)(d)-The Andhra Pradesh Factories c Rules, 1950-Rule 5-Licencefee-Applicability of the principle of quid pro quo-Held, since it is a regulatory fee and not a fee for special services rendered the principle of quid pro quo does not apply. Andhra P.radesh Factories Rules, 1950-Government Order enhancing the licence fee from Rs. 10, 000 to Rs. 18, 00, 000-Whether valid-Held, it is D grossly high and excessive and therefore arbitrary. Appellants filed Writ Petitions before the High Court challenging the - steep increase in licence fees levied by the respondents, through a Government Order under the provisions of the Andhra Pradesh Factories Rules, 1950. The appellants contended, among various grounds before the High Court, that E there is no quid pro quo in the revision of fees and the services rendered by the respondents. The appellants further contended that the revision of fees is too high and arbitrary. Respondent-Government submitted that the licence fee was compensatory in nature and there was a nexus between the fee collected and the services rendered by various departments under the Factories Act, 1948. High Court, while dismissing the Writ Petitions, concluded that the F major part of the amount received as licence fees has been spent for services rendered to the factories under the Act. In appeal to this Court, the appellants contended that since the licence fee is a fee and not a tax, the respondents has not satisfied the principal of G quid pro quo for its validity and sustainability. ~ Allowing the appeals, this Court HELD: 1.1. From the provisions of the Factories Act, 1948 and the - provisions of the Andhra Pradesh Factories Rules, 1950 relating to grant of H 513 514 SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R. A licence it is clear that the licence fee in this case is a regulatory fee and not a fee for special services rendered. Indeed there is no mention of any special service to be rendered to the payer of the licence fee in the provisions. The purpose of the licence is to enable the authorities to supervise, regulate and monitor the activities relating to factories with a view to secure proper B enforcement of the provisions. Thus it is clear that the impugned licence fee is regulatory in character. Therefore, stricto senso the element of quid pro quo does not apply. (521-E; 529-B) 1.2. On a first look it appeared that the enhancement from Rs. 10, 000 to Rs. 18,00,000 (maximum), was too high. No material was placed on record C to show that there was justification for the enhancement of the fee to the extent prescribed. There was also no material on record to show existence of co- relation between the expenditure incurred by the Government for enforcement of the Act and the Rules and the enhanced levy. When this Court enquired the State Government about any reconsideration and fresh decisions taken regarding the extent of the licence fees, it stated that some.decisions have D been taken regarding revision of the licence fee particularly the maximum licence fee/renewal fee to be levied on factories using power of 20, 000 HP and engaging 20,000 workers and above shall be limited to Rs. 2,50,000 per annum as against the present limit of Rs. 18,00,000 per annum. (529-E-G) 1.3. The statement made by the Government gives a sort of assurance E for revising the fee structure by adopting slab rates. But the decision does not set out the slabs so as to find out the exact scaling down of the fee. No notification has yet been issued and no time is appointed within which such notification shall be issued. Further the statement made by the Government does not make it clear whether it will be prospective or retrospective with F effect from the date of the impugned enhancement. In such circumstances the information contained in the statement is of little avail for deciding the case. [529-H; 530-AJ 1.4. The revision of licence fee introduced by the Government Order is quashed. It is made clear that this judgment will have only prospective G operation and no amount collected as licence fee unde,r the impugned Government Order shall be refunded. [530-C) The Commissioner Hindu Religious Endow_ments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, (1954) S
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