SHYAM LAL Vs. MUNICIPAL BOARD FEROZABAD

JUDGEMENT

(1.) These two petitions are on behalf of two applicants who are owners and proprietors of brick-kilns situate within the municipal limits of Ferozabad, district Agra.

(2.) A bye-law was framed by the Municipality of Ferozabad levying a licence fee of Rs. 500/-per year on every brick kiln. The case of the-petitioners is that the Municipality does not incur any expenditure and there are many brick kilns and the licence fee that has been realised is out of all proportion to the expenditure incurred in this connection and is exorbitant; and on that ground they challenge the validity of the bye-law enforcing this licence fee. Learned counsel for the Municipal Board has. tried to support the fee imposed as being reasonable and has urged that the Municipal Board has to spend a large amount of money on account of these brick kilns and further that this. fee is not only charged for the purpose of immediate expenses which the Municipal Board has to meet but it is also for the purpose of meeting any likely expenditure of an emergent nature, for example, spread of malaria or of any other kind of disease, and therefore, they should be seen not from the point of view of the actual expenditure incurred in the year but what are likely expenditures that may be incurred by the Municipal Board if such emergency arises. The distinction between a tax and a licence fee has been decided by their Lordships of the Supreme Court in more than one case. In --'Rati Lal Panachand v. State of Bombay', AIR 1954 SC 388 (A), their Lordships of the Supreme Court have given the distinction as follows:

(3.) According to this decision of their Lordships it must be established before a fee can be justified that it was for some special services rendered or some special work done for the benefit of those from whom the payments are demanded', It may be levied in consideration of some services and the third and most essential qualification of a fee is that it must be ear-marked to meet the expenses of rendering these services and must not go to the general revenue of the said year as in the present case, and the Municipal Board should not spend it for general public purposes.