TION Civil Appeal Nos
1 3  14 Of 1971 From the Judgment  Order dated 2
68 of the Kerala High Court at Ernakulam in Writ Petition NOS
107  10868
F A section Nabiar and P Parmeswaran for the Appellant
N Sudhakaran
P K Pallai V J Francis N M Popli A C Pudissary for the respondents
DESAI J
The respondents in these two appeals filed Original Petitions Nos
2892 3073 of 1965 challenging the validity of the licence fee levied by the appellant The City Corporation of Calicut  to be paid for use of the land or premises for soaking of coconut husks
The appellant Corporation by its resolution dated January 25
1963 levied licence fees in respect of various items set out in 1010 Schedule IV of the Calicut City Municipal Act 190l subsequently restyled as Kerala Municipal Corporation Act 1964  Corporation act  for short including for use of premises and land for soaking coconut husks
The respondents are admittedly carrying on the trade of soaking coconut husks and they had not taken out a licence for carrying on the trade
The Commissioner of the appellant Corporation issued a notice to each of the respondents calling upon him to show cause why within three days of the receipt of the notice the respondents should not be prosecuted for using premises for soaking coconut husks without obtaining a licence as required by law
The respondents challenged the validity and legality of the afore mentioned notices issued by the Corporation and served upon them in the afore mentioned two writ petitions on diverse grounds inter alia contending that if the licence fee Is levied as a fee no service is rendered or special advantage or favour is conferred by the Corporation on the respondents for collecting such fee and that there is no quid pro quo and that the relevant provisions of the Act do not enable the Corporation to levy such a fee
Alternatively it was contended that if it is levied as a tax it is beyond the taxing powers of the Corporation
The Corporation filed its counter affidavit and sought to justify the fee as a licence fee or in the alternative it was contended that the Corporation had the power to levy a tax of the nature levied by it
Both the petitions came up before a learned Single Judge of the high Court who held that the levy of the impugned licence fee is not legal in the absence of conferment of special benefit on the petitioners and other persons who soak coconut husks
The alternative submission that the Corporation had the power to levy it as a tax was negatived observing that the power to levy the various taxes conferred on the Corporation under Chapter V of the 1964 Act does not comprehend the impugned levy and accordingly held that as a tax it was not valid and legal
Accordingly both the writ petitions were allowed and the impugned notices were quashed
The Corporation after unsuccessful Writ Appeals Nos
107 108 of l967 filed these Appeals by special leave
Mr A section Nambiar learned counsel who appeared for the appellant Corporation urged that the levy of licence fee as fee is fully justified and the High Court was In error in rejecting it as 1011 such on the ground that the respondents do not enjoy any special A service or benefit for paying the fees on the traditional view of law more or less than prevailing that for a fee there must necessarily be quid pro quo
He submitted that the trend revealed by recent decisions of this Court would show that traditional view about fee has undergone a sea change and that the demarcating line between tax and fee has become so blurred as to become almost invisible
It w s alternatively submitted that even according to traditional view the Corporation has placed enough evidence on record to show that the respondents have been and are receiving special service or benefit in return for the fees levied and paid It is not necessary to examine the alternative submission save saying in passing that the respondents do enjoy certain benefits from the functions discharged by the Corporation
The first limb of the contention must prevail in view
of the three resent decisions of this Court
in Municipal Corporation of Delhi  Ors
vs Mohd Yasin  Anr1 after a review of the earlier decisions it was observed as under What do we learn from these precedents We learn that there is no generic difference between a tax and a fee though broadly a tax is a compulsory exaction as part of a common burden without promise of any special advantages to classes of tax payers whereas a fee is a payment for services rendered benefit provided or privilege conferred
Compulsion is not the hallmark of the distinction between a tax and a fee
That the money collected does not go into a separate fund but goes into the consolidated fund does not also necessarily make a levy a tax
Though a fee must have relation to the services rendered or the advantages conferred such relation need not be direct a mere casual relation may be enough
Further neither the incidence Or the fee nor the service rendered need be uniform
that others besides those paying the fees are also benefited does not detract from the character of the fee
In fact the special benefit or advantage to the payers of the fees may even be secondary as compared with the primary motive of regulation in the public interest
Nor is the court to assume the role of a cost accountant
It is neither necessary nor expedient to weigh too meticulously the coat of the services rendered etc
against the amount of fees collected so as to evenly balance the two
A broad co relationship is all 1 1012 that is necessary quid pro quo in the strict sense is not the one and only true index of a fee nor is it necessarily absent in a tax This view was reaffirmed in Sreenivasa General Traders and Others vs State of Andhra Pradesh and Othersl observing that it is increasingly realized that the element of quid pro quo in the strict sense is not always a sine qua non for a fee
However co relationship between the levy and the services rendered or expected is one of general character and not of mathematical exactitude
All that is necessary is that there should be a reasonable co relationship between the levy of the fee and the services rendered
In a very recent decision in Ms Amarnath Om Prakash and Others vs State of Punjab  Ors
2 the Court reiterated the principle laid down in Mohd Yasin s case
It is thus well settled by numerous recent decisions of this Court that the traditional concept in a fee of quid pro quo is under going a transformation and that though the fee must have relation to the services rendered or the advantages conferred such relation need not be direct a mere casual relation may be enough
It is not necessary to establish that those who pay the fee must receive direct benefit of the services rendered for which the fee is being paid
If one who is liable to pay receives general benefit from the authority levying the fee the element of service required for collecting fee is satisfied It is not necessary that the person liable to pay must receive some special benefit or advantage for payment of the fee
Applying the ratio of these decisions it is incontrovertible that the appellant corporation is rendering numerous services to the persons within its areas of operation and that therefore the levy of the licence fee as fee is fully justified Soaking coconut husks emit foul odour and contaminates environment
The Corporation by rendering scavenging services carrying on operations for cleanliness of city to make habitation tolerable is rendering general service of which amongst others appellants are beneficiaries
Levy as a fee is thus justified
1  2 1985 I SCC 345 1013 In this view of the matter it is not necessary to consider the A alternative submission that the levy as a tax is legal
Accordingly both the appeals are allowed and the decision of the learned Single Judge as well as the decision of the Division Bench in writ appeals are set aside and the writ petitions filed by the petitioners are dismissed with no order as to costs
N V K Appeal allowed


Summary:
The appellant Corporation levied licence fee for use of premises and land for soaking coconut husks under Schedule IV of the Calicut City Municipal Act 1961 Subsequently restyled as the Kerala Municipal Corporation Act 1961
The respondents were carrying on the trade of soaking coconut husks and as they had not taken out the requisite licence the Commissioner of the Corporation issued notices to show cause why they should not be prosecuted
The respondents challenged the validity and legality of the notices in Writ Petitions to the High Court contending that if the licence fee is levied as a fee no service is rendered or special advantage or favour is conferred by the Corporation for collecting such fee and that there is DO quid pro quo and that the relevant provisions of the Act do not enable the Corporation to levy such a fee
It was further contended that if the levy is treated is a tax it is beyond the taxing powers of the Corporation
The Corporation contested the Writ Petitions justifying the fee as licence fee and that it had the power to levy a tax of the nature levied by it
A Single Judge of the High Court allowed the Writ Petitions and quashed the impugned licence fee as not legal in the absence of conferment of special benefits in respect of persons who soak coconut husks
It was further held that the power to levy the various taxes conferred on the Corporation under Chapter V of the 1961 Act did not comprehend the impugned levy and consequently the tax was not valid and legal
The writ appeals of the Corporation were dismissed
1009 Allowing the Appeals this Court  HELD By numerous recent decisions of this Court it is well settled that the traditional concept in a fee of quid pro quo is undergoing a transformation and that though the fee must have relation to the services rendered or the advantages conferred such relation need not be direct a mere casual relation may be enough
It is not necessary to establish that those who pay the fee must receive direct benefit of the services tendered for which the fee is being paid
If one who is liable to pay receives general benefit from the authority levying the fee the element of service required for collecting fee is satisfied
It is not necessary that the persons liable to pay must receive some special benefit or advantage for payment of the fee
1012E F In the instant case it is incontrovertible that the appellant Corporation is rendering numerous services to the persons within its areas of operation and that therefore the levy of the licence fee as fee is fully justified
Soaking coconut husks emit foul odour and contaminates environment
The Corporation by rendering scavanging services carrying on operations for cleanliness of the city to make habitation tolerable is rendering general service of which amongst others respondents are beneficiaries
a The decisions of the Single Judge and of the Division Bench are set aside and the Writ Petitions of the respondents are dismissed
1012 G H Municipal Corporation of Delhi  Ors
vs Mohd Yasin Others vs State of Andhra Pradesh and Others   Ms Amarnath Om Prakash and Others vs State of Punjab  Ors
1985 I SCC 345 referred to