SECUNDERABAD HYDERABAD HOTEL OWNERS ASSOCIATION AND OTHERS Vs. GOVERNMENT OF ANDHRA PRADESH AND ANOTHER

JUDGEMENT

(1.) Under Sec. 521 of the Hyderabad Municipal Corporation Act, 1955, carrying on of trade and business of eating house in the area of Hyderabad Municipal Corporation requires a licence to be obtained from the Commissioner of the Hyderabad Municipal Corporation Sec. 521(1)(e)(i) says that, except under and in conformity with the terms and conditions of a licence obtained from the Municipal Commissioner, no person should carry on or allow to be carried on, in or upon any premises any of the trade or operations connected with any trade specified in Part IV of Schedule P. Schedule 'P' mentions keeping of eating houses as one of the trades that requires such a licence. Sec. 622(1) of the Act provides for the granting of a licence under the signature of the Commissioner or of an authorised municipal officer. Under Sub-section (2) of Sec. 622, the Municipal Corporation is authorised to charge, for the grant of such licence, a fee at such rate as shall from time to time be fixed by the Commissioner with the sanction of the Corporation. The Corporation has been charging for long the hoteliers, running aid keeping eating houses fees under the aforesaid provisions of law. The hoteliers have been paying the same, without demur or protest. Now, the Special Officer of the Corporation by his proceedings dated 6.4.1981 revised upwards the existing licence fees chargeable for the issuance of licences for the keeping of eating houses with effect from April, 1981. The revised schedule of rates is appended to the writ petition. According to these revised rates, the fee chargeable for the issuing of licence varies from Rs. 100.00 to Rs. 5000.00 depending upon the rental value of the building in which the eating houses are located. The writ petition has been filed in the name of 35 hoteliers and their association, challenging the position of the above revised rates of fee. The relief, which the petitioners have asked for in this writ petition, is for a declaration that Sec. 622(2) of the Act is ultra vires and the levy of enhanced licence fee on the petitioners-hoteliers is without the authority of law. The petitioners have argued vaguely that Sec. 622(2) of the Act, which authorises the imposition and collection of the licence fee by the Commissioner, is ultra vires of Art. 14 of the Constitution. The consideration of this point will be postponed to a later part of this judgment. I will consider here and now a point which is almost the central to argument of the petitioners. That point is that, under Sec. 622(2) of the Act, the Commission can only charge a fee and what has been charged in this case is not a fee, but a tax and that, therefore, the imposition of the charge is ultra vires of the powers of the Commissioner.

(2.) The first question that, therefore, arises is whether the word "fees" used in Sec. 622(2) of the Act is used in contradistinction to the word "tax" or whether it is used as a synonym for the word "tax" itself. For the purpose of this part of the discussion, I assume that quid pro quo is an essential and internal element of fee.

(3.) Chapter VIII of the Municipal Act deals with various types of taxes, which can be imposed upon lands, buildings, profession, trades, callings and employment etc. A special procedure has been provided under that Chapter for the imposition of those taxes. The argument of the writ petitioners is that the impost in this case, which the Act itself calls a fee cannot be treated as a tax. According to the argument of the petitioners, the word fee should be understood as having been used in contradistinction to tax and as there is no relationship of quid pro quo between "issuing a licence and charging a fees, no fees can be imposed under Sec. 622(2) of the Act. In my opinion, it does not necessarily follow from the above that the levy that is authorised to be imposed under Sec. 622(2) can only be a fee within the strict sense of the quid pro quo conspectus. This argument of the petitioner if given effect to would reduce the power of the Commissioner under Sec. 622(2) to utter futility. If levying and collection of the impost under Sec. 622(2) cannot have any correlation of quid pro quo with the services rendered, the authority which the Legislature has given to the Corporation for levying are collecting of fees on the issuance of a licence, becomes for all practical purposes in executable. The legislative mandate will then fail. It is for that reason I am impelled to read the word "fee" as tax. In my opinion, the word "fee" in Sec. 622 must be understood only as an authorisation for levying and collecting of taxes. In other words, Sec. 622(2) of the Act must be understood as authorising the imposition of an additional tax besides those taxes which have been enumerated in Chapter VIII of the Act. The language used in Sub-section (2) of Sec. 622 of the Act providing for charging of a fee for the issuance of very such licence, cannot be otherwise be given effect to. There can be, no doubt, that the Legislature intends, by the donation of its authority to impose and collect 'fee' that an impost should be collected from the hoteliers on the licences issued. If the levy of such an impost becomes impossible because of the very fact it is called fee, it becomes necessary for the courts, in order to save the law, and to give effect to statutory provision, to hold that what is authorised is the imposition of tax itself. Ul res magis valeat quam pareat (See Broom's legal maxim 10th Edn. P. 361) : The purpose of a statutory provision should not be allowed to be defeated easily. A statutory provision should not be reduced to a dead letter.