NAGAR MAHAPALIKA VARANASI versus DURGA DAS BHATTACHARYA & ORS.

Citation: [1968] 3 S.C.R. 374 · Decided: 04-03-1968 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

NAGAR MAHAPALJKA VARANASI 
A 
v. 
DURGA DAS BHAITACHARYA I: ORS. 
March 4, 1968 
[J. C. SHAH, V. RAMAswAMI AND G. K •. Mrm!1t, 11.] 
I 
U.P. Municipalities Act (II o/ 1916) Chapters V, VIII t:nd JX~e 
fees from ownerr of rickshaws and rickshaw drivers-I/ in tlu 1ltlltlH of 
t@-Whether quid pro quo in tlu form of ttrVices by munic/palit;y _.,_ 
saey. 
Under a. 294 of the U.P. Municipalities Act, 1916 a Municipal Boord 
may charae a fee, to be Hxed by byHaw. for any Ii~ and, s. 298 m-
ables the Board to make the bye-laws. Purporting to act UDder s. 298(2) 
and List 1-H, of the Act, the appellant (Municipal Boord, 
Varanui) 
framed certain by~aws relating to the plying of ricbbawa. Wlder which, 
the owner Of each rickshaws had to pay an annual licence fee of Ra. 30/-
and each rickshaw driver an annual licence fee of Ra. SI-. The ricbbaw 
owners and drivers challenged the validity of the bye-laws ill a 111it on the 
groUDd that the licence fem were not comme111uh1te with the services and 
advantages rendered or provided by the appellant. 
The trial court dismi'8ed the suit. The High Court, on -1. Jield 
that the Imposition of licence fees at the1rates of Ra. 30/· and Ra. SJ• was 
ultra vires and illegal, because, after excluding certain items of expenditme 
the balanoe did not constitute sullicient quid pro quo for the amount of 
licence fees charged. 
In appeal to this Court, it was contended: (i) that the fee charaed 
was not for rendering any serviC<ll but waa in the nature Of a tax; (2) that 
s. 294 of the Act contemplates the charge of a fee not only in the reatricclld 
senae of a fee for which a quid pro quo is provided but also in the seme 
of a fee in which the taxation element is predominant, that such a licence 
fee could be imPo9ed by enacting a bye-law for that purpooo under a. 298, 
and that the licence fee in the present case was of that cateaory and (3) 
that even if it was held to be a fee in the restricted seMe for services 
renderd by the appellant, there was sufiici•nt quid pro quo. 
HELD : (I) The fees mentioned in Chapter VIII, which contains a. 
294, are meant for the purpose of regulation of certain trades and profes-
siOlll, for rendering services and for tho maintenance of public ufety and 
convenience of the inhabitants of the municipality, and, it ia not contem-
plated that they should be merged in the public revenues Of the municipality 
or should go for the upkeep of the roads and other matters of aeneral 
public utility. Therefore, the fees impooed under a. 294, are onlf fees in 
the restr;cted sense of a fee for which a quid pro quo is pl'OVlded and 
cannot be considered to be an impost in the nature of a tax. (384 E-GJ 
The 
Co1nmissioner~ Hindu Religious Endowments. Madras 
v. Sri 
Lokshmindra Thirtha SIWJmiar of Sri Slrur Mutt, [19S4] S.C.R. 1005, 1042, 
followed. 
c 
D 
E 
F 
G 
(2) The Act contemplates only two cateaories of impost, that is, ·taxes 
H 
enumerared in Chapter V and fees mentioned in as. 293, 293.A and 294 
of Chapter VIII. If a levy is a tax the imposition could be lawfully made 
only after following the mandatory procedure prescribed under as. 131 to 
13S. 
Under s. 128(1) (iii) and (Iv), which aro in Chapter V, it is 
B 
c 
D 
E 
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II 
MAffAPALIKA v. BHATTACHARYA (Ramaswami, J.) 
375 
competent to a municipality to impose a tax on rickshaw drivers and 
rickshaw owners. If ·it is assumed that the tax element was predominant 
in the present ca"Se and that therefore the licence fee was in the nature 
of a tax, the imposition would be u/Jra virer because the procedure under 
ss. 131 to 135 was not followed. 
There is no third category of impost 
of licence fee which is in the nature of a tax for which the procedure 
prescribed by ss. 131 to 135 is not applicable, but the procedure contem-
plated by Chapter IX, which contains s. 298, is applicable. [383 G-H; 
384 D-El 
I 3) The items disallowed by the High Coun could not be CGnsidered 
as ~ving been spent in rendering any servioos to rickshaw owners and 
drivers. because they were spent over paving bye-lanes suitable for rick-
shaws and for the lighting of stteets and lanes; and, under s. 7(a) and (h) 
of the Act, it was the statutory duty of the municipal board to light public 
streets and places and to cdnstruct and maintain public streets, culverts 
etc. A licence fee cannot be imposed for re-imbursing the cost of ordinary 
municipal services perf<*med in the discharge of its statu:ory duty to pro-
vide for the aener

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