Civil Appeal Nos 450O and 4501 of 1984
Appeals by Special leave from the Judgment and order dated the 18th January and 18 January 1984 of the Punjab and Haryana High Court in Civil Writ Nos 33OO of 1981 aud 4757 of 1982
HK Puri MP Jha and Sanjeev Walia for the Appellants
SK Bagga for the Respondent
LN Sinha AK Panda and Ashwani Kumar for the Respon
dent The Judgment of the Court was delivered by CINNABAR REDDY J
The appellants who are traders engaged in the purchase and sale of agricultural produce appear to be a determined lot
For over a decade they or those similarly placed have been litigating and impeding the levy and collection of Market fee by the Market Committees constituted under the Punjab Agricultural Produce Markets Act
Sometimes they have been successful sometimes they have not
One of the occasions when they appeared to be successful was when this Court in Kewal Krishan Puri vs State 75 Of Punjabl declared that the enhancement of the fee from 2 to 3  was illegal
The court while striking down the enhancement of the fee laid down no new principles but made certain general observations which we regret to say have been so misunderstood and misinterpreted as to lead to some confusion and public mischief
The misunderstanding and confusion have also naturally led to more litigation
Fortunately in Srinivsa General Trader
vs Slate of Andhra Pradesh2 this Court has removed much of the misunderstanding cleared many of the cobwebs and retrieved the situation
Before we proceed to consider the question at issue in present case it will be fair to recall the object and purpose of the Punjab Agricultural Produce Markets Act and similar enactments in force in other States Far back in 1953 Rajamannar CJ and TL Venkatarama Aiyar J in Kutti Keya vs The State of Madras3 considered the provisions of the Madras Commercial Crops Markets Act 1933 one of the fore runner of the Punjab Agricultural Produce Markets Act and other similar enactments elsewhere
The general nature of the legislation was explained by Venkatarama Aiyar J as follows  the Subject matter of the impugned Act is marketing and legislation on marketing is now a well recognised feature of all commercial countries The need for such a legislation arises whenever societies pass d on from the stage of self supporting economic unit producing only articles for its own consumption to that of a commercial community producing articles for sale in outside areas for profit
While in the former stage transactions would be generally settled directly between the seller and the purchaser the price being paid and delivery of the commodity taken at the time of the deal the conditions would be different when commercial crops are begun to be raised
The ultimate purchasers of these commodities would generally be persons outside the area of production a merchant residing in another State and even in a foreign country To bring about a deal between the local producers and the outside purchasers there emerged a class of 1  2 AIR 1983 SC 1246
3 AIR 1954 Mad
76 middlemen
Even in well organised and economically advanced countries like England it was found that the agrIculturist producer had not facilities for disposing of the goods to his best advantage vide the statement of Dr Addison Minister for Agriculture quoted at page 80 of the Indian Central Banking Enquiry Committee Report Vol
r Part II
It is these conditions that have led up to the enactment of marketing laws in all countries having a large volume of trade in commercial crops The object of this legislation is to protect the producers of commercial crops from being exploited by middlemen and profiteers and to enable them to secure a fair need for their produce
The need for such legislation is even greater in India as the producers are as a class illiterate and economically dependent and unstable
This question had engaged the attention of several committees which had been constituted to report on various economic matters
Indian Cotton was a commodity greatly in demand in England and other countries and in the Central Provinces and Berar open markets for cotton were established through legislation
In 1919 the Indian Cotton Committee observed in their report that the marketing system afforded great protection to the producers and that special legislation should be undertaken to establish such markets in every cotton growing area
The Royal Commission on Agriculture in India recorded a considerable body of evidence on the state trade in food crops and it showed the need for legislative action for safeguarding the interests of the producers vide report dated 1928
In 1931 the Indian Central Banking Enquiry Committee considered in Chapter VII of its report the conditions with reference to marketing
It is therein pointed out that the village producer was seldom able to get a proper price because he was chronically indebted to the middlemen who advanced loans on the security of the crops to be grown and were thus in a position to dictate their own terms and that the bargains were seldom fair to the seller
It was also observed that for want of facilities for ware housing the produce the grower was not in a position to wait and sell the commodities for proper price vide 77 pages 78 and 79
In 1933 the Act now under consideration A was passed with the object of providing for the better regulation of buying and selling of commercial crops
It must be mentioned that at that time the only products which had become commercial crops having an international market were cotton groundnuts and tobacco and the definition of commercial crops as enacted originally corn prised only these three crops            Various suggestions were made for improving the market conditions vide pp 92 and 63
In the report of the Planning Comission published in 1952 Chapter XVII Vol l deals with agricultural marketing and after referring to the working of the regulated markets in Bombay Madras Hyderabad and Madhya Pradesh it throws out several suggestions for future improvements
It must be added that there has been legislation on lines similar to those of the Madras Act in several of the States in India
It will be clear from the above survey of the market ing legislation that its object is to enable producers to get a fair price for their commodities and that it has been generally adopted in all commercial States Such laws have been held in America to be within the Police Power of the State as tending to promote general welfare Vide Parker vs Brown 1942 87 Law ED 315 D Under the Indian Constitution they must be upheld under article 19 6 as reasonable and enacted in the interests of the general public The decision of the Madras High Court in Kutti Keva vs The State was affirmed by a Constitution Bench of The Supreme Court in Arunachala Nadar vs State of Madrasl Subba Rao J referring to the background of the Act observed There is a historical background for this Act
Market ing legislation is now a well settled feature of all commercial countries
The object of such legislation is to protect the producers of commercial crops from being exploited by the middlemen and profiteers and to enable them to secure a fair return for their produce
In Madras State as in other l AIR l959 SC 30O 78 parts of the country various Commissions and Committees have been appointed to investigate the problem to suggest ways and means of providing a fair deal to the growers of crops particularly commercial crops and find a market for selling their produce at proper rates
Several Commit tees in their reports considered this question and suggested that a satisfactory system of agricultural marketing should be introduced to achieve the object of helping the agriculturists to secure a proper return for the produce grown by them The learned Judge then referred to the report of the Royal Commission on Agriculture in India the report of the Expert Committee appointed by the Government of Madras and proceeded to observe With a view to provide satisfactory conditions for the growers of commercial crops to sell their produce on equal terms and at reasonable prices the Act was passed on 25th July 1933
The preamble introduces the Act with the recital that it is expedient to provide for the better regulation of the buying and selling of commercial crops in the Presidency of Madras and for that purpose to establish market and make rules for their proper administration
The Act therefore was the result of a long exploratory investigation by exports in the field conceived and enacted to regulate the buying and selling of commercial crops by providing suitable and regulated market by eliminating middlemen and bringing face to face the produces and the buyer so that they may meet on equal terms thereby eradicating or at any rate reducing the scope for exploitation in dealings
Such a statute cannot be said to create unreasonable restrictions on the citizens and right to do business unless it is clearly established that the provisions are too drastic unnecessarily harsh and over reach the scope of the object to achieve which it is enacted                     
Shortly stated the Act Rules and the Bye laws framed thereunder have a long term target of providing a net work of markets where in facilities for correct weighment are ensured storage accommodation is provided and equal 79 powers of bargaining ensured so that the growers may t bring their commercial crops to the market and sell them at reasonable prices 1 11 such markets are
established the said provisions by imposing licensing restrictions enable The buyers and sellers to meet in licensed premises ensure correct weighment make available to them reliable market information and provide for them a simple machinery for settlement of disputes
After the markets are built or opened by the marketing committees within a reasonable radius from the market as prescribed by the Rules no licence is issued thereafter all growers will have to resort to the market for vending their goods
The result of The implementation of the Act would be to eliminate as far as possible the middlemen and to give reasonable facilities for the growers of commercial crops to secure best prices for their commodities  In Immedisetti Ramkrishnaiah Sons vs State of Andhra Pradeshl the nature of the duties of a Market Committee was explained Another unfounded assumption of the learned counsel was that the activities of the Market Committee and the facilities provided by it were confined by the Act to the market area only
The establishment maintenance and improvement of the market is one of the purposes for which the Market Committee Fund might be expended under Sec
I S of the Act
The other Services such as the pro vision and maintenance of standard weights and measures the collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect of noticed agricultural produce livestock and pro ducts of livestock schemes for the extension or cultural improvement of notified agricultural produce including the grant of financial aid to scheme for such extension on improvement within such area undertaken by other bodies or individuals propaganda for the improvement of agriculture livestock and products of livestock and thrift the promotion of grading services measures for the preservation of the foodgrains etc
are not services which are 1 AIR 1976 AP 193
80 confined to the market area only
They area services which are required to be performed by the Market Committe and which may be rendered throughout the notified market area without being confined to the market
Further the facilities provided in the market are available for the use of every grower of agricultural produce and owner of live stock within the notified market area
It is too much to expect the Market Committee to provide the same facilities as are available in the market area in every nook and corner of the notified market area
It is up to the growers of agricultural produce and owners of livestock to avail themselves of the facilities afforded in the market
None can complain against the levy of licence fees on the ground that some may not avail themselves of the facilities available in the market
 Immedisetti Ramakrishnayya Sons vs State of Andhra Pradesh supra was approved by this Court in Sreenivasa General Traders vs State of AP1 where it was observed It is obviously in the interests of the producers of agricultural produce that they can get the best competitive prices in an open market and that they have not to pay the middlemen
Sale or purchase of agricultural produce in h such a market under the supervision and control of the market committee is likely to be in ready cash and there fore advantageous to the producers and the use of standard weights must eliminate the possibility of his being victimized by malpractices
Supervision of the operations in the notified market area can be more conveniently done if business is carried on in a specified area or areas intended for that purpose
The Act is an integrated one and it regulates the buying and selling of notified agricultural produce livestock and products of livestock from a centralized place                         The contention that there is no liability cast on the petitioners to pay market fee on transactions of sale and purchase of notified agricultural produce livestock and 1 ATR1983 SC 1246
81 product of livestock proceeds on a wrongful assumption that they can still carry on such trade from their premises in the notified market area but outside the market in that area
In view of the express prohibition contained in subsection 6 of Sec 7 the petitioners cannot carry on such trade by not resorting to the market proper
 There is a fallacy underlying the argument that since the services are rendered by market committees Within the market proper there is no liability to pay a market fee on purchase or sale taking place in the notified market area but outside the market
The contention does not take note of the fact that establishment of a regulated market for the purchase or sale of notified agricultural produce livestock or products of live stock is itself a service rendered to persons engaged in the business of purchase or sale of such commodities
The duty of a market committee constituted under sub section 1 of sec
4 of the Act does not end with establishing such number of markets in the notified market area under the first part of sub section 3 but also extends to the providing of such facilities in the market as the Government may from time to time by general or special order specify under the second part of sub section 3
In exercise of their powers under sec
33 of the Act the State Government have framed the Andhra Pradesh Agricultural Produce and Livestock Markets Rules 1969
Chapter V relates to Regulation of trading 
It would appear that Rules 48 to 53 are the machinery provisions for controlling the trade in notified agricultural produce livestock and products of livestock in a notified area while Rules 54 to 73 impose restrictions on the carrying on of all such trade in such area
It is clear from the provisions of sec
15 of the Act that the services to be rendered by the market committee and facilities to be provided are not confined to the market proper but extend throughout the notified area
 The general scheme of the Punjab Agricultural Produce
Markets Act and the Act as amended and in force in Haryana 82 are broadly on the same lines as the Madras and the Andhra Pradesh Acts and similar enactments in other States
Though we do not consider it necessary to refer to all the provisions of the Punjab and Haryana Acts we think it may be appropriate to mention here those provisions of the Act which enumerate some of the duties and powers of the Market Committees constituted under the Acts and the purposes for which the Marketing Development Fund and the Market Committee Fund may be expended
We may mention that while there is to be a State Agricultural Marketing Board for the entire State for performing the functions and duties assigned to the Board by the Act the State Government may declare specified notified areas as market areas for each of which there shall be a market committee
The Board is vested with powers of superintendence and control over the committees
Section 13 prescribes the duties and powers of market committees and is in the following terms 13 Duties and powers of Committee 1 It shall be the duty of a Committee a to enforce the provisions of this Act and the rules and bye laws made thereunder in the notified market area and when so required by the Board  to establish a market therein providing such facilities for persons visiting it in connection with the purchase sale storage weighment and processing of agricultural produce concerned as the Board may from time to time direct b to control and regulate the admission to the market to determine the conditions for the use of the market and to prosecute or confiscate the agricultural produce belonging to person trading without a valid licence c to bring prosecute or defend or aid in bringing prosecuting or defending any suit action proceeding application or arbitration on behalf of the Committee or otherwise when directed by the Boards
2 Every person licensed under sec
10 or sec
13 and every person exempted under sec
6 from taking out licence shall on demand by the Committee or any person 83 authorised by it in this behalf furnish such information and returns as may be necessary for proper enforcement A of Act or the rules and bye laws made thereunder
3 Subject to such rules as the State Government may make in this behalf it shall be the duty of a Committee to issue licences to brokers weighmen measurers surveyors godown keepers and other functionaries for carrying on their occupation in the notified market area in respect of 
agricultural produce and to renew suspend or cancel such licences
4 No broker weighman measurer surveyor godown keeper or other functionary shall unless duly authorised by licence carry on his occupation in a notified market area in respect of agricultural produce Provided that nothing in sub sections 3 and 4 shall apply to a person carrying on the business of warehouse man who is licensed under the Punjab Warehouses Act l957 Punjab Act No2 of 1958
Section 25 provides for the creation of a Marketing Development Fund out of which the Board has to defray its expenditure
Sections 27 provides for the creation of Market Committee Fund out of which the Committee has to defray its expenditure
The purpose for which the Marketing Development Fund may be expended are specified in sec
26 as follows 26 The Marketing Development Fund shall be utilised out of following purposes i Better marketing of agricultural produce ii Marketing of Agricultural produce on co operative lines iii collection and dissemination of market rates and news iv grading and standardisation of agricultural produce v general improvements in the markets or their respective notified vi maintenance of the office of the Board and construction and repair or its office buildings rest house and staff quarters 84 vii giving aid to financially weak Committees in the shape of loans and grants viii payment of salary leave allowance gratuity corn passionate allowance compensation for injuries or death resulting from accidents while on duty medical aid pension or provident fund to the persons employed by the Board and leave and pension contribution to Government servants on deputation ix travelling and other allowances to the employees of the Board its members and members of Advisory Committees x propaganda demonstration and publicity in favour of agricultural improvements xi production and betterment of agricultural produce xii meeting any legal expenses incurred by the Board xiii imparting education in marketing or agriculture xiv construction of godowns xv loans and advances to the employees xvi expenses incurred in auditing the accounts of the Board xvii with the previous section of the State Government any other purpose which is calculated to promote the general interests of the Board and the Committees or the national or public interests Provided that if the Board decides to give aid of more than five thousand rupees to a financially weak Committee under clause vii the prior approval of the State Government to such payment shall be obtained
The purposes for which the Market Committees Fund may be expended are specified in sec
28 as follows 28 Purposes for which the Market Committee Funds may be expended
Subject to the provisions of section 27 the Market Committee Funds shall be expended for the following purposes 1 AIR 1983 SC 1246 85 i acquisition of sites for the market A ii maintenance and improvement of the market iii construction and repair of buildings which are necessary for the purposes of the market and for the health convenience and safety of the persons using it iv provision and maintenance of the standard weights and measures v pay leave allowances gratuities compassionate allowances and contributions towards leave allowances compensation for injuries and death resulting from accidents while on duty medical aid pension or provident fund of the persons employed by the Committee vi payment of interest on loans that may be raised for purposes of the market and the provisions of a sinking fund in respect of such loans vii collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect of the agricultural produce concerned viii providing comforts and facilities such as the shelter shade parking accommodation and water for the per sons draught cattle vehicles and pack animals link roads I coming or being brought to the market or on construction and repair of approach roads culverts bridges and other such purposes ix expenses incurred in the maintenance of the offices and in auditing the accounts of the Committees x propaganda in favour of agricultural improvements and thrift xi production and betterment of agricultural produce xii meeting any legal expenses incurred by the Committee xiii imparting education in marketing or agriculture xiv payments of travelling and other allowances to the members and employees of the committee as prescribed 86 xv loans and advances to the employees xvi expenses of and incidental to elections and xvii with the previous sanction of the Board any other purpose which is calculated to promote the general interest of the Committee or the notified market area supra or with the previous sanction of the State Government any purpose calculated to promote the national or public interest
It will be seen that sections 26 and 28 cover a vast range of topics and are so wide as to take in a multitude of direct and indirect ways of achieving the principal object of the Act namely the better regulation of the purchase sale storage and processing of agricultural produce and the establishment of markets for agricultural produce
Some of the purposes for which the funds maybe expended may on a first impression appear to be municipal or govemental functions but a closer scrutiny will reveal that they are clearly associated with providing better facilities for marketing of agricultural produce
In fact some of them may be municipal or governmental functions but may yet be purpose for which the funds of the marketing board and marketing committees may be usefully lawfully and perhaps necessarily expended
For example it is of fundamental importance that there should be a network of roadways if effective aid is to be given to farmers to transport and market their produce
Section 23 of the Act enables the Committee subject to such rules as may be made by the State Government in that behalf to levy on ad volorem basis fee on the agricultural produce bought or sold by a licensee in the notified market area at a rate not exceeding the rate mentioned in sec
23 from time to time for every one hundred rupees
The fee which was originally 50 paise per 100 was raised to Re
l per 100 in 1969 thereafter to Rs 150 in 1973 and to Rs 225 in 1974
Later the fee was raised to Rs 3 per 100
It was this enhancement of fee to Rs 3 per 100 that was challenged by several dealers from Punjab and Haryana in Kewal Krishan vs State of Punjab Supra
A Constitution Bench of this Court after referring to the principles laid down in the leading cases of Shirur Malt1 Hingir Rampur Coal Co Ltd vs State of Orissa2 Corporation of Calcutta vs Liberties Cinema etc
thought that in all the 1 2 119621 2 SCR 537 87 circumstances of the case an increase of the license fee beyond Rs 2 A per 100 was not justified
The court noticed that each of the market Committees had huge surpluses and had made large donations to educational institutions and expended funds for other purposes wholly unconnected with the purpose stipulated by the Act
It appeared that the increase from Rs Z to Rs 3 in the year 1978 was made largely to compensate the market committees for having contributed the huge sum of Rs One crore to the Medical College Faridkot
Having regard to the huge surpluses and unanthorised items of expenditures the court came to the conclusion on the facts of the case that the increase of fee above Rs 2 per 100 was not justified
In the course of the discussion Untwalia J who spoke for the Court made certain observations which when turn out of context appear to give rise to some misunderstanding
For example at page 1016 of AIR he said  But generally and broadly speaking it must be shown with some amount of certainty reasonableness or preponderance of probability that quite a substantial portion of the amount of the fee realised is spent for the special benefit of its payers
This sentence should not be read in isolation
It must be read in the context of the facts of the case
In fact in the very sentence preceding the one quoted it was said It may be so intimately connected or interwoven with the services rendered to others that it may not be possible to do a complete dichotomy and analysis as to what amount of special service was rendered to the payers of the fee and what proportion went to others
That was why Sen J in Sreenivasa General Traders vs State of Andhra Pradesh Supra took immense pains to explain the observations of Untwalia J and place them in their proper setting
He observed very rightly indeed G In the ultimate analysis the Court held in Kewal Krishan Puri s case supra that so long as the concept of fee remains distinct and limited in contrast to tax such expenditure of the amounts recovered by the levy of a market fee cannot be countenanced in law
A case is an authority H 88 only for what it actually decides and not for what may logically follow from it
Every judgment must be read as applicable to the particular facts proved or assumed to be proved since the generality of the expressions which may be founded there are not intended to be expositions of the whole law but governed or qualified by the particular facts of the case in which such expressions are to be found
It would appear that there are certain observations to be found in the judgment in Kewat Krishan Puri s case supra
which were really not necessary for purposes of the decision and go beyond the occasion and therefore they have no binding authority though they may have merely persuasive value
The observation made therein seeking to quantify the extent of correlation between the amount of fee collected and the cost of rendition of service namely At least a good and substantial portion of the amount collected on account of fees may be in the neighborhood of two thirds or three fourths must be shown with reason able certainty as being spent for rendering services in the market to the payer of fee
appears to be an obiter
obviously Untwalia J did not purport to lay down any new principles and could not have intended to depart from the series of earlier case of this Court
For instance in H H Sudhundra Thirtha Swamiar vs Commissionerl the Court had said  nor is it a postulate of a fee that it must have direct relation to the actual services rendered by the authority to individual who obtains the benefit of the service
If with a view to provide a specific service levy is imposed by law and expenses for maintaining the service are met out of the amounts collected there being a reasonable relation between the levy and the expenses incurred for rendering the service the levy would be in the nature of a fee and not in the nature of a tax but a levy will not be regarded as a tax merely because of the absence of uniformity in its incidence or because of compulsion in the collection thereof or because some of the contributories do not obtain the same degree of service as others may
1 1963 Supp 2 SCR 302 89 In Hingir Rampur Coal Co Ltd vs State of orissa Supra the A Court had said If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee         It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business in the last analysis such services may indirectly form part of services to the public in general
If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefiting the specified class or area the State as a while may ultimately and indirectly be benefited would not detract from the character of the levy as a fee
Where however the specific service is indistinguishable from public service and in essence is directly a part of it different considerations may arise
In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve
Its primary object and the essential purpose must be distinguished from its ultimate or incidental results or consequences
That is the true test in determining the character of the levy Again in HH Shri Swamiji vs Commissioner Hindu Religious and Charitable Endowments Department 1 Chandracud CJ said For the purpose of finding whether there is a correlationship between the services rendered to the fee payers and the fees charged to them it is necessary to Know the cost incurred for orgainsing and rendering the services
But matters involving consideration of such a correlation ship are not required to be proved by a mathematical formula
What has to be seen is whether there is a fair correspondence between the fee charged and the cost of 1  90 services rendered to the fee payers as a class
The further and better particulars asked for by the appellants under order 6 Rule S of the Civil Procedure Code would have driven the Court had the particulars been supplied to a laborious and fruitless inquiry into minute details of the Commissioner s departmental budget
A vivisection of the amounts spent by the Commissioner s establishment at different places and for various purposes and the ad hoc allocation by the Court of different amounts to different heads would at best have been speculative
It would have been no more possible for the High Court if the information were before us than it would be possible for us if the information were before us to find out what part of the expenses incurred by the Commissioners establishment at various places and what part of the salary of his staff at those places should be allocated to the functions discharged by the establishment in collection with the services rendered to the appellants
We do not therefore think that any substantial prejudice has been caused to the appellants by reasons of the non supply of the information sought by them
 On a consideration of these cases Sen J concluded as follows in Sreenivasa General Traders vs State of Andhra Pradesh Supra The traditional view that there must be actual quid pro quo for a fee has undergone a sea change in the subsequent decisions
The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest In determining whether a levy is a feethe true test must be whether its primary and essential purpose is to render specific services to a specified area or class it may be of no consequence that the State may ultimately and indirectly be benefited by it
The power of any legislature to levy a fee is conditioned by the fact that it must be by and large 91 a quid pro quo for the services rendered
However correlationship between the levy and the services rendered A expected is one of general character and not of mathematical exactitude
All that is necessary is that there should be a reasonable relationship between the levy of the fee and the services rendered
 Referring to the catena of these cases it was observed by this Court in Municipal Corporation Delhi vs Mohd Yasin 1 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 taxpayers 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 causal relation may be enough
Further neither the incidence of 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 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 cost of his service reinduced etc
not against the amount of fees collected so as to evenly balance the two
A broad correlationship is all that is necessary
Quid pro quo the strict sense is not the one and only true index of a fee nor is it necessarily absent in tax
 Earlier on a question of interpretation it was pointed out  A word on interpretation
Vicissitudes of time and necessitudes of history contribute to changes of philosophical attitudes concepts ideas and ideals and with them the meanings of words and phrases and the language itself
The philosophy and the language of the law are no excep 1  H 92 tions
Words and phrases take colour and character from the context and the times and speak differently in different contexts and times
And it is worthwhile remembering that words and phrases have not only a meaning but also a content a living content which breathes and so expands and contracts
This is particularly so where the words and phrases properly belong to other disciplines Tax  and fee  are such words they properly belong to the world of Public Finance but since the Constitution and the laws are also concerned with Public Finance these words have often been adjudicated upon in an effort to discover content
 In Sreenivasa General Traders vs State of Andhra Pradesh supra Sen J had also pointed out that there was no generic difference between a tax and a fee that both were compulsory exactions of money by public authorities and that a levy in the nature of a fee did not cease to be of that character merely because there was an element of compulsion or coerciveness present in it nor was it a postulate of a fee that it must have direct relation to the actual service rendered by the authority to each individual who obtains the benefit of the service
He also drew attention to the increasing realization that the element of quid pro quo in the strict sense was not always sine quo non for fee
Nor was the element of quid pro quo necessarily absent in every tax
He further pointed out that an insistence upon a good and substantial portion of an amount collected on account of fee say in the neighbourhood of two thirds or three forths being shown with reasonable certainty as having been spent for rendering services in the market to the payer of fee could not be a rule of universal application and that it was a rule which had necessarily to be confined to the special facts of Kewal Krishan Puri s case
Otherwise it would affect the validity of marketing legislations undertaken throughout the country during the past half a century
We agree with the view of Sen J that the observations extracted by him from Kewol Krishan Puri s case were not really necessary for that case and we also agree with the clarification of the observation made by Sen J
There is one other significant sentence in Sreenivasa General Traders vs State of AP Supra with which we must 93 express our agreement
It was said 
with utmost respect these observations of the learned judge are not to be read as Euclid s A theorems nor as provisions of the statute
These observations must be read in the context in which they appear
 We consider it proper to say as we have already said in other cases that judgments of courts are not to be construed as statutes
To interpret words phrases and provisions of a statute it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define
Judges interpret statutes they do not interpret judgments
They interpret words of statutes their words are not to be interpreted as statutes
In London Graving Dock Co Ltd vs Horton 1 Lord Mac Doormat observed The matter cannot of course resettled merely by treating the ip sesame verba of Willes J as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto
This is not to detract from the great weight to be given to the language actually used by that most distinguished judge
 D In Home office vs Dorset Yacht Co2 Lord Reid said Lord Atkin s speech is not to be treated as if it was a statutory definition
It will require qualification in new circumstances
 Megarry J in 19711 WLR 1062 observed one must not of course construe even a reserved judgment of even Russell L J as if it were an Act of Parliament
And in Herington vs British Railways Board
2 Lord Morris said There is always peril in treating the words of a speech or judgment as though they are words in a legislative P enactment and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case
There are a few other observations in Rewal Krishan Puri s case to which apply with the same force all that we have said above
It is needless to repeat the of quoted truism of Lord Halsbury that 1 at 761 2  3 19721 2 WLR 537 H 94 a case is only an authority for what it actually decides and not for what may seem to follow logically from it
We have said so much about Kewal Krishan Puri s case because the learned counsel placed implicit reliance upon it though as we shall presently show we do not see how a mere declaration that the levy and collection of fee in excess of Rs2 per hundred automatically vest in the dealer the right to get at the excess amount when in fact he did not bear the burden of it and when the moral and equitable owner of it was the consumer public to whom the burden had been passed on
Soon after judgment was pronounced in Kewal Krishan s case the question arose as to what was to be done with the fee in excess of Rs2 per 100 collected by various market committees
Were the Market Committees to be permitted to retain the excess amounts  Were the excess amounts to be refunded to the traders from whom the amounts had been collected notwithstanding the fact that the traders themselves had already passed on the burden to the next purchasers and consumers  In other words were the traders to be allowed to get a refund from the market committees and unjustly enrich themselves  Were they to be allowed to profiteer by ill gotten gains  or were the next purchasers or consumers to be traced and the amounts refunded to them which of course would well nigh be an impossible task in practice If it was not possible to trace the individual consumers who had borne the burden was it not right that the public authority who levied and collected it should be allowed to hold and retain the amount as if it were in trust for their benefit to be used for the purposes for which the statute 
desired the levy of the fee  Some dealers however wanted the monies to be refuned to them and moved this Court
Instead in the circumstances the court in Shiv Shankar Dal Mil1s vs State of Haryana  l gave the following directions I Subject to the directions given below all the sums collected by the various market committees who are respondents in these various writ petitions or appeals shall be liable to be paid into the High Court of Punjab and Haryana within one week of intimation by the Registrar of the amount so liable to be paid into the court
A statement of the amounts collected in excess 1  95 1 shall be put into this Court by the dealers with copies A to the various market committees aforesaid and furnished to the writ petitioners and appellant with 1O days from today and if there is any difference between the parties it shall be brought to the notice of this Court in the shape of miscellaneous petitions
On final orders if any passed thereon by this Court those amounts so as determined shall be treated as final
The Registrar of the High Court shall issue public notice and otherwise give due publicity to the fact that dealers who have not passed on the liabilities to others and others who have contributed to or paid the excess one percent covered by these writ petitions and appeals may make claims for such sums as are due to them from him Within one month or such other period as he may fix
The Registrar shall scrutinise such claims and ascertain the sums so proved
He will thereupon demand of all the market commit tees concerned payment into the Registry of such sums in regard to which proof of claims have been made
On such intimation the market committees shall pay into the Registry the amounts so demanded by the Registrar within one week of such intimation
The amount shall be paid together with interest at 10 per cent per annum from today up to the date of deposit with the Registrar
It shall be open to the Registrar to make such periodical claims on appropriate proof by claimants on the line stated above
V He will devise the mechanics of processing the claims as best as he may and in the event of dispute may refer to the High Court for its decision of such disputes if he thinks it necessary
Otherwise he may dispose of the objections finally
If any further directions regarding the mechanics of the claim of refund or otherwise are found necessary from this Court the High Court will report about such matter to this Court and orders made thereon will bind the parties
N 96 VII
If parties eligible for repayment of amounts do not claim within one year from today the Registrar will not entertain any further claims
It will be open to such parties to pursue their remedies for recovery for any sums that may be due to therm
Each State Marketing Board will deposit within 1O days from today a sum of Rs 5000 before the Registrar for the preliminary expenses of publicity and other incidentals for the implementation of the directions given above
Any unexpended amount at the end of one year will be repaid to the respective State Marketing Board
We further direct that the unclaimed amount if any shall be permitted to be used by the respective Marketing Committees for the purpose falling within the statute as interpreted by this Court in the C A No 108377
Thereafter more or less in tune with the directions given by the Court in ShivShankar Dal Mills case the Punjab Agricultural Produce MarKets Act was amended by the introduction of sec
23 A providing as follows In the Principle Act after Section 23 the following section p shall be inserted namely 23 A1 Notwithstanding anything contained in any judgment decree or order of any Court it shall be lawful for a Committee to retain the fee levied and collected by it from a licensee in excess of that levied under Section 23 if the burden of such fee was passed on by the licensee to the next purchaser of the Agricultural Produce in respect whereof such fee was levied and collected
2 No suit or other proceedings shall be instituted main trained or continued in any court for the refund of whole or any part of the fee retained by a Committee under sub section 1 and no court shall enforce any decree or order directing the refund of whole or any Part of such fee
3 If any dispute arises as to the refund of any fee retained by a Committee by virtue of sub section 1 and 97 the question is whether the burden of SUCH fee was passed on by the licensee to the next purchaser of the concerned agricultural produce it shall be presumed unless proved otherwise that such burden was so passed on by the licensee
If any amount of tee retainable by a Committee under sub section 1 has been refunded to any licensee the same shall be recoverable by the Committee in the manner indicated in sub section 2 of Section 41
The provisions of this section shall not effect the operation of Section 6 of the Punjab Agricultural Produce Markets Amendment and Validation Act 1976
The primary purpose of sec
23 A is seen on the face of it it prevents the refund of license fee by the market committee to dealers who have already passed on the burden of such fee to the next purchaser of the agricultural produce and who went to unjustly enrich themselves by obtaining the refund from the market committee
section 23 A in truth recognises the Consumer public who have borne the ultimate burden as the persons who have really paid the amount and so entitled to refund of any excess fee collected and therefore directs the market committee representing their interests to retain the amount
It has to be in this form because it would in practice be a difficult and futile exercise to attempt to trace the individual purchasers and consumers who ultimately bore the burden
It is really a law returning to the public what it has taken from the public by enabling the Committee to utilise the amount for the performance of services required of it under the Act
Instead of allowing middlemen to profiteer by illgotten gains the legislature has devised a procedure to undo the wrong item that has been done by the excessive levy by allowing the Committees to retain the amount to be utilised here after for the benefit of the very persons for whose benefit the Marketing legislation was enacted
The constitutional validity of sec
23A was questioned before the High Court of Punjab and Haryana but was upheld in Walati Ram Mahabir Prasad vs State of Punjabl
The correctness of this decision is questioned before us in these two civil appeals
The submission of the learned counsel was that sec
23 A was 1
AIR 1984 PH 120 98 a blatant attempt to validate a levy which had been declared invalid by this court and this according to the learned counsel was not permissible
We entirely disagree with the submission that sec
23 A is an attempt at validating on illegal levy
Section 23 A does not permit any recovery of fee Rs 3 per 100 in respect of any sales of agricultural produce before or after the coming into force of that provision
There is no attempt at retrospective validation of excess collection nor any attempt at providing for future collection at the rate of Rs 3 per 100
All that sec
23 A does is to prevent unjust enrichment by those dealers who have already passed on the burden of the fee to the next purchaser and so reimbursed themselves by also claiming a refund from the Market Committees
We have already explained the true purpose of S 23 A
It gives to the public through the market committee what it has taken from the public and is due to it
It renders into Caesar what is Caesar section We do not see any justification for characterising a provision like Sec
23 A as one aimed at validating an illegal levy
The decision of this Court in A V Nachane and ors
vs Union of lndia1 on which the counsel placed reliance has no application whatsoever
Section 23 A in our view is consistent with the spirit of Kewal Krishan and the letter of Shiva Shankar Dal Mills
Another submission of the learned counsel was that while the legislature was competent to enact a law for the levy of a fee and matters incidental and ancillary thereto it was incompetent to legislate providing for the retention by any authority of fee illegally levied
For this purpose reliance was placed by the learned counsel on the decision of this Court in Abdul Quadar  Co vs Sales tax officera
We are afraid that this decision also is of no avail to the appellants
In orient Paper Mills Limited vs State of Orissa3 a dealer had been assessed to tax and had paid the tax
Later he applied for re fund of tax which was held to be not exigible by this Court in State of Bombay vs United Motors India Ltd  
When the appeals were pending in this Court the orissa Legislature intervened in the matter and introduced sec
14 A in the Principal Act providing that 1 1982 I SCC 206
2  3 19621 1 SCR 549 4 19531 SCR 1069
99 refund could be claimed only by a person from whom the dealer has A actually realised the amount as tax
The vires of the provision was challenged in this Court but it was upheld on the ground that it came within the incidental power arising out of Entry 54 of List II
The matter was considered to be a question of refund and it was held that it could not be doubted that refund of the tax collected was always a matter covered by incidental and ancillary powers relating to the levy and collection of tax
The Constitution Bench held By item 54 of List Il of Schedule 7 to the Constitution the State Legislature was indisputably competent to legislate with respect to taxes on sale or purchase of papersand paper boards
The power to legislate with respect to a tax comprehends the power to impose the tax to prescribe machinery for collecting the tax to designate the offers by whom the liability may be enforced and to prescribe the authority obligations and indemnity of those officers
The diverse heads of legislation in the Schedule to the Constitution demarcate the periphery of legislative competence and include all matters which are ancillary or subsidiary to the primary head
The Legislature of the orissa State was therefore competent to exercise power in respect of the subsidiary or ancillary matter of granting refund of tax improperly or illegally collected and the competence of the legislature in this behalf is not canvassed by counsel for the assesses
If competence to legislate for granting refund of sales tax improperly collected be granted is there any reason to exclude the power to declare that refund shall be claimable only by the person from whom the dealer has actually realised the amounts by way of sales tax or otherwise  We see none
The question is one of legislative competence and there is no restriction either express or implied imposed upon the power of the Legislature in that behalf
 The present case is a case akin to orient Paper Mills case supra
Section 23 A as we have seen disables a dealer from getting a refund of fee paid by him the burden of which he has already passed on to the next purchaser
As we said all that sec
23 A does is to prevent unjust enrichment by means 100 of a refund to which the person claiming it has no moral or equitable entitlement
Abdul Quader  Co vs Sales Tax officer supra on which considerable reliance was placed by the learned counsel for the appellants was an entirely different case
The dealer in that case had collected sales tax from the purchasers in connection with the sales made by him on the basis that the incidence of the tax lay on the sellers and assured the purchaser that after paying the tax to the appellant there would be no further liability on them
After realizing the tax however the appellant did not pay the amount realized to the Government but kept it in a suspense account
When the Sales Tax Department discovered this and called upon the appellant to pay the amount realized he refused to do so
On behalf of the Government reliance was placed upon sec
11 2 of the Hyderabad General Sales Tax Act which laid down that any amount collected by way of tax otherwise than in accordance with the provisions of the Act shall be paid over to the Government and in default of such payment the said amount shall be recovered from such person as if it were arrears of land revenue
The Court held that it was clear that the words otherwise than in accordance with the provisions of this Act included amounts which may have been collected by way of tax though not exigible as tax under the Act
The Court then held that the State Legislature was income tent to enact a provision like sec
112 as it enabled the Government to recover an illegal levy and it could not possibly be said to be an incidental or ancillary power capable of exercise in aid of the main topic of legislation which was a tax on the sale or purchase of goods
The decision in orient Paper Mills case was distinguished on the ground that it dealt with a case of refund and not the collection of tax not really due as a tax under the law
In their precise words they said The matter In orient Paper Mills case dealt with a question of refund and it cannot be doubted that refund of the tax collected is always a matter covered by incidental and ancillary powers relating to the levy and collection of tax
We are not dealing with a case of refund in the present case
What sec
112 provides is that some thing collected by way of tax though it is not really due as a tax under the law enacted under Entry 54 of List II must be paid to the Government
This situation in our 101 Opinion is entirely different from the situation in orient  A Paper Mills case
 The decision in orient Paper Mills case was expressly affirmed by a Bench of Seven Judges of this Court in RS Joshi vs Ajit Millsl and observations to the contrary Ashoka Marketing Company case2 were expressly dissented from
We are therefore
satisfied that sec
23 A of the Punjab Agricultural Produce Markets Act was within the competence of the Punjab Legislature and that it was not also otherwise invalid in any manner
The appeals are therefore dismissed with costs
M LA Appeals dismissed


Summary:
After the decision of the Supreme Court in Kewal Krishan Puri vs State of Punjab  holding that the increase of the market fee from Rs 2 to Rs 3 perhundred leviable on the agricultural produce brought or sold by a licensee in the notified market area under section 23 of the Punjab Agricultural Produce Markets Act was not justified some dealers wanted refund of the market fee in excess of Rs 2 per hundred already collected by various market committees
But the Supreme Court held in Shiv Shankar Dal Mills vs State of Haryana  that dealers who had not passed on the liabilities to others and others who had contributed to or paid the excess one percent were entitled to make claim for such sums as were due to them from the Concerned market committees and directed the market committees to pay the same The Court further directed that the unclaimed amounts if any shall be permitted to be used by the respective market committee for the purposes falling within the statute as interpreted by this Court in CA 1083 of 1977
Thereafter more or less in tune with these directions given by the Court the Punjab Agricultural Produce Markets Act was amended by the introduction of section 23 A It provided inter alia that not with standing anything contained in any judgment decree or order of any court it shall be lawful for a committee to retain the fee levied and collected by it from a licensee in excess of that leviable under section 23 if the burden of such fee passed on by the licensee to the next purchaser of the agricultural produce in respect whereof such fee was levied and collected The appellants challenged before the High Court the constitutional validity of section 23 A and the same was upheld
The appellant contended 1 that Section 23 A was a blatant attempt to validate a levy which had been declared invalid by the Supreme Court and this was not permissible 2 that while the legislature was competent to enact a law for the levy of fee and matters incidental and ancillary thereto it was incompetent to legislate providing for the retention by any authority of fee illegally levied
73 Dismissing the appeals by the appellants 
 HELD 1 The general scheme of the Punjab Agriculture Produce Markets Act and the Act as amended and in force in Haryana are broadly on the same lines as the Madras and the Andhra Pradesh Acts and similar enactments in other States
Sections 13 26 and 28 of the Act covers a vast range of topics and are so wide as take in a multitude of direct and indirect ways of achieving the principal object of the Act namely the better regulation of the purchase sale storage and processing of agricultural produce and the establishment of markets for agricultural produce
Some of the purposes for which the funds may be expended may on a first impression appear to be municipal or governmental functions but a closer scrutiny will reveal that they are clearly associated with providing better facilities for marketing of agricultural produce
81H 86C D 2 The primary purpose of section 23 A is to prevent the refund of licence fee by the market committee to dealers who have already passed on the burden of such fee to the next purchaser of the agricultural produce and who want to unjustly enrich themselves by obtaining the refund from the market committee
section 23 A in truth recognises the consumerpublic who have borne the ultimate burden as the persons who have really paid the amount and so entitled to refund of any excess fee collected and there fore direct the market committee representing their interests to retain the amount
It has to be in this form because it would in practice be a difficult and futile exercise to attempt to trace the individual purchasers and consumers who ultimately bore the burden
It is really a law returning to the public what it has taken from the public by enabling the Committee to utilise the amount for the performance of services required of it under the Act
Instead of allowing middlemen to profiteer by illgotton gains the legislature has devised a procedure to undo the wrong that has been done by the excessive levy by allowing the Committees to retain the amount to be utilised hereafter for the benefit of the very persons for whose benefit the marketing legislation was enacted
97D G 3 There is no substance in the argument that sec
23 A is an attempt at validating an illegal levy
Section 23 A does not permit any recovery of fee at the rate of Rs 3 per hundred in respect of any sales of agricultural produce before or after the coming into force of that provision
There is no attempt at retrospective validation of excess collection nor any attempt at providing for future collection at the rate of Rs 3 per hundred
All that section 23 A does is to prevent unjust enrichment by those dealers who have already passed on the burden of the fee to the next purchaser and so reimbursed themselves by also claiming a refund from the market committees
It gives to the public through the market committee what it has taken from the Public and is due to it
There is no justification for characterising a provision like section
23A as one aimed at validating an illegal levy
It is consistent with the spirit of Kewal Krishan case and the Letter of Shiv Shankar Dal Mills case
98B D Walati Ram Mahabir Prasad vs State of Punjab AIR 1983 P  120  R section Joshi vs Ajit Mills  approved
74 Shiv Shankar Dal Mills vs State of Haryana  followed
orient Paper Mills Limited vs State of Orissa   RS Joshi vs Ajit Mills  relied upon
Kewal Krishan Puri vs State of Punjab   Srinivasa General Traders State of Andhra Pradesh AIR 1983 section C 1246 Kutti Keya vs State of Madras AIR l954 Mad 621 Arunachala Nadar State of Madras AIR 1959 SC 30O Immedisetti Ramkrishnaiah Sons vs State of Andhra Pradesh AIR 1976 AP 193 Sreenivasa General Taaders vs State A P AIR 1983 SC 1246 Shirur Matt   Hingir Rampur Coal Co Ltd vs State of Orissa  Corporation of Calcutta vs Liberties Cinema   H H Sudhundra Thirtha Swamiar vs Commissioner 1963 Supp 2 SCR 302 H H Shri Swamiji vs Commisssioner Hindu Religious and Charitable Fndowments Department 1980 I SCR 368 Municipal Corporation Delhi vs Mohd Yasin   Craving Dock Co Ltd vs Horton at 761 Home office vs Dorset Yacht Co 1970 2 All E R 294 Herington v British Railways Board 1972 2 W L R 537  State OF Bombay vs United Motor
India Ltd  referred to
A V Nachane and Ors
vs Union of India and Abdul Quadar  Co vs Sales tax officer   held inapplicable