TMI Blog2015 (12) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... lf of SEBI that clause 4 of Schedule IIIA protects the demand raised by SEBI. Clause 4 of Schedule IIIA along with clause 3 occurs in Part B which relates to charge of fees. It reads as follows : “4 – Nothing in clause 3 shall affect the liability of any stock broker to pay fees under Schedule III, which accrued before this Schedule became applicable to him and such fees shall be paid as per the relevant provisions of Schedule III as if they had not ceased to be applicable to him.” The aforesaid clause is clarificatory in nature. It clarifies that the liability to pay fees as per Schedule III which has already accrued and got fastened to a stock-broker before the Schedule IIIA became applicable, would remain payable as per the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II was turnover of the previous year on yearly basis and the same has been replaced by concept of monthly fee on the basis of monthly turnover. The dispute is whether the latter would come into effect immediately from the date Schedule IIIA becomes applicable to a stock-broker or the earlier measure of fee on yearly basis would continue for a limited period till fee in accordance with Schedule III and the principle of turnover of the whole year is realized not only as per the previous year s turnover but for the entire up to date turnover till Schedule IIIA comes into effect in respect of a stock-broker. 2. According to the impugned judgment and order of the SAT, SEBI was justified in demanding registration fee from the appellant, a st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. It is sufficient to notice that the appellant is a stock-broker trading, inter alia, as a member of the Bombay Stock Exchange Limited since 29.1.2004. It is not in dispute that the appellant and stock-brokers in general are regulated under the provisions of the Act and for conducting their trade or business they are required to be registered with SEBI under the Regulations. Such registration is mandatory in terms of Section 12 of the Act whereas Regulation 10 requires that for obtaining certificate of registration from SEBI, every applicant shall pay such fees and in such manner as specified in Schedule III or IIIA, as the case may be. The part relating to Schedule IIIA was inserted by the SEBI (Stock Brokers and sub-Brokers) Act (third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d had paid the registration fee on monthly basis on monthly turnover. Not only this, SEBI claimed further amount of ₹ 21,60,600/- for the year 2007-08 on the ground that no amount of turnover reached by the appellant till he opted to come under Schedule IIIA should escape from levy of registration fee. Such demands by the SEBI were regardless of the fact that the appellant, without any dispute came to be governed by Schedule IIIA from 1.10.2006 and he paid Registration Fee in accordance with Schedule IIIA for the remaining part of 2006-07, i.e, from 1.10.2006 and for the year 2007-08. 7. As noticed earlier, due to above dispute the appellant preferred appeal No. 28 of 2009 under Section 15T of the Act. The SAT decided against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is futile to contend that such levy would be either a tax or a fee on the turnover. 9. The main contention of Mr. C.U. Singh to support the impugned judgment of the SAT is based upon clause 1(a) (b) of Schedule III. According to him that clause is the charging provision which requires taking note of annual turnover during any financial year for levy of registration fee for each financial year. In reply Mr. Divan has contended that the charging provision is in fact Regulation 10 which requires every applicant for a certificate of registration to pay fees. Only the quantum and manner of payment of such fees has been left to be determined as per Schedule III or Schedule IIIA. 10. Further reply is that in clause 1(a), the annua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to him. The aforesaid clause is clarificatory in nature. It clarifies that the liability to pay fees as per Schedule III which has already accrued and got fastened to a stock-broker before the Schedule IIIA became applicable, would remain payable as per the provisions of Schedule III even after they cease to be effective for subsequent period. 12. This clause in our view does not affect the enforceability of Schedule IIIA from the date it became applicable to the appellant on account of option permitted by the relevant provisions. After Schedule IIIA became applicable, the Registration fee for any future period since 1.10.2006 could not be levied or demanded on the basis of Schedule III. It had to be calculated on the basis of mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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