TMI Blog2005 (7) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... 1959 (Kerala Act 10 of 1960), is valid. ii. The fee payable as per the Notification S.R.O. No. 226/2002 published in the Kerala Gazette Extraordinary No. 420 dated April 5, 2002, has to be on the amount of the tax in dispute. iii. Such fee is payable only on appeals/revisions arising from assessment orders issued in relation to and from the assessment year in which the said notification was issued on April 5, 2002. iv. The circular issued by the Chairman of the Sales Tax Appellate Tribunal will be read subject to the aforesaid modifications. v. The levy as per S.R.O. No. 226/2002 shall be in terms of the declarations contained herein. It is so directed. vi. The mode of collection shall be such that it is ensured that the amounts collected as per S.R.O. No. 226/2002 shall be credited to the legal benefit fund, since such credit is provided for. The writ petitions are disposed of in the above terms, with the declarations and directions as aforesaid. The levy as per S.R.O. shall be in terms of the declarations contained herein. It is so directed. Writ petitions disposed of. - HON'BLE T.B. RADHAKRISHNAN, J. For the Appellant : K.B. Muhamed Kutty and B.S. Krishnan, Sr. Advs., K.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of providing an efficient legal service for the people of the State and to provide social security measures for the legal profession. (4) The mode and manner in which legal service to the people may be made more efficient and social security measures for legal profession may be provided, shall be as prescribed by rules made by Government. 4. Though the aforesaid is part of the CF Act that came into force on February 1, 1962, the Kerala Legal Benefit Fund Rules, 1991 were made by the Government in exercise of power conferred by subsection (4) of section 76, only with effect from May 23, 1991. The Kerala Legal Benefit Fund contemplated by section 76(2) of the CF Act was constituted and notified as per S.R.O. No. 225/2002 in the Kerala Gazette Extraordinary No. 419 dated April 5, 2002. 5. By S.R.O. No. 226/2002 published in the Kerala Gazette Extraordinary No. 420 dated April 5, 2002, hereinafter referred to as the Notification , the Government authorised levy of additional court fee in exercise of power under sub-section (1) of section 76 of the CF Act. The said notification with explanatory note is as follows: Notification S.R.O. No. 226/2002 (Published in Kerala Gazette Extra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 76 of the Kerala Court Fees and Suits Valuation Act, 1959, the Government have constituted the published as S.R.O. No. 225/2002 dated April 5, 2002. Sub-section (1) of section 76 of the Act empowers the Government to levy additional court fee in respect of the appeals or revisions to Tribunals and appellate authorities, by notification in the Gazette. Government have decided that an additional court fee is to be levied at the rate of 0.5 per cent of the amount involved in the dispute in cases where it is capable of valuation and in other cases at the rate of rupees fifty in each case. The additional court fee so levied by Tribunals and appellate authorities on appeals or revisions as the case may be shall be credited to the legal benefit fund. In the light of the above notification, and clarification issued vide Government letter No. 16527/G3/200/Law dated March 24, 2003 by the Law Secretary, appeals and revisions to the Kerala Agricultural Income-tax and Sales Tax Appellate Tribunal will attract additional court fees under the Court Fees and Suits Valuation Act, 1959. For this purpose, on the basis of Government letter third cited, the following guidelines for levying addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The levy flows directly into the gross revenue of the State and is, therefore, a tax proper. (g) Even assuming that it is a fee, it is disproportionately high and thereby it partakes the characteristics of a tax rather than a fee. It is a piece of colourable legislation and when its veil is pierced, it would easily be seen to be an unauthorised imposition. (h) The imposition is confiscatory in nature since there is no power of even refund of additional court-fee or for payment of costs and the State gets automatically enriched by even a per se erroneous and illegal order by a Government servant exercising statutory authority under the Act. Even if the appellate authority or the Tribunal reverses a perverse and groundless assessment order, the assessee is deprived of the fee that he would pay before the appellate authority or the Tribunal for having such an order reversed. (i) The imposition is shocking to conscience and infracts Wednesbury principles and the doctrine of proportionality. (j) Schedule I of Act 10 of 1960 relates more to private law litigations, while Schedule II thereof relates more to public law litigations. Law has always contemplated different yardsticks of cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that each of the entries in the three Lists in the Seventh Schedule to the Constitution is a separate legislative head and the only limit is that the law cannot be so couched to go beyond the legislative competence. It is a well recognised rule of construction that the items in a legislative List in a Constitution should be read and understood in the full sense of the terms used, so as to give them the widest scope permissible by the context in which these terms have been used. [See State of Bihar v. Shree Baidyanath Ayurved Bhawan (P) Ltd. AIR 2005 SCW 515, Godfrey Phillips India Ltd. v. State of U.P. [2005] 139 STC 537 (SC)]. 13. By the 42nd Amendment to the Constitution in 1976, administration of justice became a concurrent subject, having been included as entry 11A in List III and necessary modifications having been made to entry 3 in List II. 14. Article 39A introduced by the 42nd Amendment provides, among the directive principles of State policy in Part IV of the Constitution, for equal justice and free legal aid. Article 39A reads as follows: 39A. Equal justice and free legal aid. The State shall secure that the operation of the legal system promotes justice, on a basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to entry 11A of List III and that such entry has an independent standing and therefore, the constitutional validity on account of legislative competence is answerable in the affirmative by reference to that entry alone. Hence, the State Legislature had and continues to have the competence to make law as provided by section 76 of the CF Act. Whether section 76 is an imposition of a tax or fee? 17. This question would take within its sweep, the questions as to whether the person paying such fee, receives any service referable to such fee, thereby, whether there exists any quid pro quo for the levy and as to whether there is nexus, if any, between the person liable to pay and the benefits that may emanate out of the provisions of section 76(2) or whether there is any nexus between the beneficiaries of the provisions under section 76(2) and the persons paying the fee. 18. Though reference to different decisions was made to demonstrate the distinction between fee and tax and as to when a fee would grow to be treated as a tax, in view of the arguments which centered more on the quality of imposition of ad valorem additional court fee as per the impugned legislation, it is sufficient to n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing legal benefit fund, which is the exclusive subject, dealt with in the solitary section in Chapter VIII of Act 10 of 1960 stand by themselves. It is independent of the other provisions of the CF Act, including section 2 thereof. 22. As already noticed, going by the relevant entry in the Seventh Schedule as to the legislative field to which it is referable, Chapter VIII of the CF Act stands on its own. The use of the expression additional court fee in section 76(1) means only that what is payable under section 76(1) shall be in addition to any fee payable on the appeal. This does not, as a corollary, mean that the payment of such fee under section 76 need be made only in matters for which a court fee is prescribed under the other Chapters of the CF Act. In respect of appeals or revisions to Tribunals or appellate authorities other than civil and criminal courts, whether or not a court fee is payable under the provisions of the CF Act and whether or not a fee is payable under the law providing for such appeals, the fee provided by section 76(1) has to be paid on a notification being issued authorising the Government to levy such fee. Vested right of appeal and impairment of it, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing from assessment orders issued in relation to and from the assessment year in which the said notification was issued on April 5, 2002. The impugned notification and the impugned circular issued by the Chairman of the Sales Tax Appellate Tribunal are to be read down to the aforesaid extent. Conclusions: i. Section 76 of the Kerala Court Fees and Suits Valuation Act, 1959 (Kerala Act 10 of 1960), is valid. ii. The fee payable as per the Notification S.R.O. No. 226/2002 published in the Kerala Gazette Extraordinary No. 420 dated April 5, 2002, has to be on the amount of the tax in dispute. iii. Such fee is payable only on appeals/revisions arising from assessment orders issued in relation to and from the assessment year in which the said notification was issued on April 5, 2002. iv. The circular issued by the Chairman of the Sales Tax Appellate Tribunal will be read subject to the aforesaid modifications. v. The levy as per S.R.O. No. 226/2002 shall be in terms of the declarations contained herein. It is so directed. vi. The mode of collection shall be such that it is ensured that the amounts collected as per S.R.O. No. 226/2002 shall be credited to the legal benefit fund, since s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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