TMI Blog2006 (8) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Nos. 19213, 19299, 19384, 19385, 19387, 19388, 19389, 19523, 19526, 19707, 19709, 19915, 22448 of 1998 - - - Dated:- 7-8-2006 - ASHOK BHAN AND MARKANDEY KATJU JJ. Rakesh Dwivedi, Senior Advocate (Manoj Saxena, Rajnish Kr. Singh, Ms. Sameena Ahmed, Rahul Shukla, T.V. George for Mohanprasad Meharia, Advocates, with him) for the respondents. M.N. Rao, Senior Advocate (Y. Raja Gopala Rao, A. Ramesh, Y. Ramesh, R.N. Keshwani, Ram Lal Roy and Mrs. B. Sunita Rao, Advocates, with him) for the appellants. -------------------------------------------------- The judgment of the court was delivered by MARKANDEY KATJU J.- Civil Appeals Nos. 5120-5132 of 1999 have been filed against the judgment and order dated September 25, 1998, of the High Court of Andhra Pradesh passed in Writ Petitions Nos. 19213, 19299, 19384, 19385, 19387, 19388, 19389, 19523, 19526, 19707, 19709, 19915 and 22448 of 1998 See [1999] 112 STC 418 (SC)., by which the constitutional validity of the Andhra Pradesh Rural Development Act, 1996, has been upheld. Heard Shri M.N. Rao, learned Senior Counsel for the appellants, and Shri Rakesh Dwivedi, learned Senior Counsel for the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re facilities, so that the economic activities in the rural areas will increase and thereby contribute for the growth of the economy. With a view to generating funds for the purpose of development of the rural areas, it is considered desirable to levy a cess at 5 per cent on the ad valorem basis on the quantity of the purchase of goods specified in the Schedule appended to the Bill. Section 3 of the Act empowers the State Government by notification to establish the Andhra Pradesh Rural Development Board. Section 7(1) states: There shall be levied and collected by the Government a cess at 5 per cent on the ad valorem on the quantum of purchase of goods . Section 8 establishes a fund to be called the Andhra Pradesh Rural Development Fund which vests in the Board. The purpose of this fund has been mentioned in section 9 which states: 9. Purpose for which the fund may be applied. -The fund shall be applied for the purposes herein specified: (i) to provide and accelerate comprehensive rural development including the construction of rural roads and bridges; (ii) to augment storage facilities for storing agricultural produce; and (iii) for maintaining and streng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, and is not a payment for some specific services rendered. On the other hand, a fee is generally defined to be a charge for a special service rendered by some governmental agency. In other words there has to be quid pro quo in a fee vide Kewal Krishan Puri v. State of Punjab AIR 1980 SC 1008. The earlier view of the Supreme Court was that to sustain the validity of a fee some specific service must be rendered to the particular individual from whom the fee is sought to be realised. However, subsequently, in Sreenivasa General Traders v. State of Andhra Pradesh AIR 1983 SC 1246, Supreme Court observed: The traditional view that there must be actual quid pro quo for a fee has undergone a sea change in the subsequent decisions. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest. If the element of revenue for general purpose of the State predominates, the levy becomes a tax. In regard to fees there is, and must always be, correlation between the fee collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystem. All that has been alleged by the petitioner in para 5 of the affidavit to the writ petition is that no specific benefit is given to the dealer from whom the cess is collected. Thus, the factual averment in the writ petition is limited to the plea that there is no specific service rendered to a particular dealer from whom the fee is realised. There is no factual averment that there is no broad correlation between the total amount of cess realised and the total value of the service being rendered to the people living in the rural areas. As already stated above, the concept of fee has undergone a sea change, and hence the writ petition is liable to fail on the mere ground that the writ petition was drafted under a total misconception about the legal position. As already stated above, the concept of fee has undergone a sea change, while the writ petition has been drafted in the light of the old concept of fee and not the new concept which was subsequently developed by the Supreme Court. In Sona Chandi Oal Committee v. State of Maharashtra AIR 2005 SC 635, this court observed as under: . . . . . The traditional concept of quid pro quo in a fee has undergone considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement with the view taken by the Punjab and Haryana High Court in the aforesaid decision. A similar view was also taken by the Supreme Court in Kishan Lal Lakhmi Chand v. State of Haryana [1993] Suppl. 4 SCC 461. Learned counsel for the appellant has relied on the Constitution Bench decision of this court in Jindal Stainless Ltd. v. State of Haryana [2006] JT 4 SC 611; [2006] 145 STC 0544; [2006] 6 RC 457 and he relied on para 39 of the said judgment which refers to the principle of equivalence . In our opinion the aforesaid decision cannot be interpreted to mean that the sea change which has taken place in the concept of fee (as noted above) has vanished, and that by this decision the old concept of fee has been restored, and that now it has to be established that the particular individual from whom the fee is being realised must be rendered some specific services. It may be noted that the decision in Jindal Stainless [2006] JT 4 SC 611; [2006] 145 STC 0544; [2006] 6 RC 457 was given in connection with article 301 of the Constitution, and it was not regarding the nature of a fee. Hence, it cannot be regarded as an authority explaining the nature of a fee. In our opinion t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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