ARYA VAIDYA PHARMACY LTD Vs. HEALTH OFFICER ERNAKULAM

JUDGEMENT

(1.) A common question arises for decision in these cases and we propose to dispose of them by a common judgment. The question is whether the imposition of what is called a fee by the Council of the Ernakulam Municipality in purported exercise of the powers of the Council under S.284 and 363(3) of the Kerala Municipalities Act, 1960, is sustainable at law.

(2.) It is not urged before us that the fee impose is as a quid pro quo for services rendered; so the fees cannot be sustained as a licence fee. Nor is it urged that this is a tax imposed as a tax by following the provisions contained in S.96 to 128 of the Kerala Municipalities Act, 1960. However it is urged that the levy is sustainable even if it amounts to a tax because of the distinction between a fee for licences and a licence fee. What is contended is, a fee for licence need not be confined to the actual cost of the issue of the licence under which alone a particular activity can be carried on and the necessary expenses involved in supervising whether the activity is carried on in accordance with the terms and conditions of the licence issued, but can provide general funds to augment the general revenue of the Municipality. In other words, it is urged that by acting under S.284 and 363(3) of the Act, a tax can in fact be imposed though this is called a licence fee, and that without complying with the provisions contained in S.96 to 128 of the Act. Support is sought to be gained for this contention from the observations of the Supreme Court in The Corporation of Calcutta and another v. Liberty Cinema reported in 1965 SC 1107. This question has recently been considered in two sets of cases by a Full Bench of this Court. The earlier batch of Writ Appeals, 107 and 108 of 1967 was disposed of on the 2nd July this year, and the later decision in Writ Appeal No. 148 of 1967, on the 12th July. The later decision largely depended on the pronouncement in the earlier batch of cases.

(3.) The Full Bench relied on a passage from the judgment of the Supreme Court in Civil Appeal 558 of 1967. We shall read that passage: