ASSOCIATION Vs. UNION OF INDIA

JUDGEMENT

(1.) The present petition has been preferred for declaration that the provisions of the National Highways (Rate of Fees) Rules, 1997 and the National Highways (Fees For the Use of National Highways Section and Permanent Bridge - Public Funded Project), Rules, 1997 are violative of and beyond the provisions of the National Highways Act, 1956 and for further declaration that the levy of fees permanently made and sought to be made under the aforesaid Rules for Sarkhej Bridge constructed on Sabarmati river at National Highway No.8-A at K.M. 4/100 to 5/400 is bad in the eye of law and hence the respondents are not entitled to collect the same.

(2.) Learned advocate for the petitioner submitted that the respondents are collecting the fees for the use of Sarkhej bridge constructed on Sabarmati river, near Vishala Hotel, Ahmedabad in violation of the provisions of the National Highways Act, 1956 (hereinafter referred to as "the Act, 1956") and the Rules framed thereunder for collection of the fees, are de-hors, the provisions of the National Highways Act, 1956. It is also submitted by the learned advocate for the petitioner that as per Section 7 of the Act, 1956, the Central Government may levy the fees at such rates which may be laid down by the Rules, for the services or benefits rendered in relation to the use of the permanent bridges. Sarkhej bridge in question is a permanent bridge, within the meaning of rule 2 (j) of the National Highways (Fees for the use of National Highways Section and Permanent Bridge Public Funded Project), Rules 1997) having construction cost of more than 25 lacs and is open to the general traffic, on or after, first day of April 1976 and therefore, the bridge in question is covered under Section 7 of the Act, 1956. It is also submitted by the learned advocate for the petitioner that what is permitted under Section 7 of the Act, 1956 is to levy the fees, in commensurate with the services or benefits rendered. It is also submitted that Initial cost of the bridge and its approaches (Rs. in crores ) Cars/ jeep Tolls Rates (Rs. per Vehicle) Light Commercial vehicles Minibuses Trucks/Buses and Multi Axle Vehicles <FRM>JUDGEMENT_317_GHJ8_2005Html1.htm</FRM> (3) The rate of Fee fixed under sub-rule (1) and sub-rule (2) may be reviewed after every five years based on wholesale price index and fixed in multiple of rupees five by the Central Government over the rates notified)

(3.) The impugned bridge, has incurred cost of construction less than 50 crores. Therefore, figures given in Rule 3(1) contractors to levy the fees and such contracts are paying the fixed amounts to the respondents and substantial additional amounts go in private corpus. The amount of fees collected by the respondents is, in fact, highly disproportionate to the expenditure and there is no "fair correspondence" between the fees charged and the cost of services rendered. There is no "co-relationship" between the figures of expenditure and income. As per the affidavit dated 9-8-2004 filed by the respondents reveals that the costs incurred towards the constructions of the bridge in question is at Rs.8.42 crores and total cost of expenditure towards construction of the approaches of the bridge is Rs.68.00 lacs (total expenditure of Rs.7.1 crores, and the total levy of the fees is at Rs.28.14 crores. Thus, there is lot of difference between the expenditure and income. Collection of the fees is having neither "the broad co-relationship" nor the "fair correspondence" between the fees charged and cost of services rendered to the fees payers, The amount collected may not be mathematically commensurate with the expenses but the collection of the fees cannot be so exorbitant that it looses "fair correspondence" or "broad co-relationship" between the fees charged and the cost of services. In the present case, looking to the figures of the income and expenditure, it is clear that collection of the fees is at much higher rate. Even if the fees is not collected for several years, the bridge in question can be maintained by the respondents. In the present case- the fees has taken character of tax which is not permissible as per Article 265 of the Constitution of India, because the power to tax is neither incidental nor subsidiary to the power to legislate on a matter or topic. Since there is no specific entry allowing the respondents to tax the use of the bridge like in question, levy of fees by the respondents is violative of Article 265 of the Constitution of India.