Case: Municipal Corporation Of Delhiand Others Vs. Mohd. Yasin Etc

1. By a notification dated 31.1.68, the Delhi Municipal Corporation purported to enhance the fee for slaughtering animals in its slaughter houses from Rs. 00.25 p to Rs. 2.00 for each animal, in the case of sheep, goats and pigs, and from Rs. 1.00 to Rs. 8.00 for each animal, in the case of buffaloes. The notification was quashed by the High Court of Delhi on the ground that the Corporation was really proposing to levy a tax under the guise of enhancing the fee. The original rates were fixed in March 1953 and the revised rates were to take effect from February 1, 1968. Some butchers of the city questioned the revision of rates on the ground that the proposed enhanced fee was wholly disproportionate to the cost of the services and supervision and was in fact not a fee, but a tax. The High Court accepted the contention of the butchers on what appears to us a superficial view of the facts and principles. Fortunately, the High Court has certified the case as a fit one for appeal under Art. 133(l)(c) of the Constitution and the matter is now before us.

Reasoning:
9. 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 a 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 hall mark 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 cuasal 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 be secondary as compared with the primary motive of regulation in the public interest. Nor is the Court to assume the role of cost accountant. It is neither necessary nor expedient to weigh too meticulously the cost of the services rendered etc. against the amount of fees collected so as to evenly balance the two. A broad co-relationship is all 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.10. What do we have in the present case? True, the Municipal Corporation has realised a sum of Rs. 4,24,494 by way of fees at the rate of Re. 00.50 p. per animal in the case of sheep, goats and pigs and Rs. 2.00 per animal in the case of buffaloes, whereas the budget of the Municipal Corporation showed under Item XIV-B that an amount of Rs. 2,56,000 was expended in connection with slaughter houses. But as explained in the affidavit of Dr. A.C. Ajwani, Deputy Health Officer (Public Health) of the Municipal Corporation of Delhi, the amount of Rs. 2,56,000 covers only those items of expenditure as are reflected in Item XIV-B of the Municipal Budget. The items of expenditure covered by items XIV-B of the municipal budget are evidently those Item of expenditure which are incurred directly and exclusively in connection with slaughter houses. In addition there are several other items of expenditure connected with slaughter houses but which are not included in Item XIV-B. To name a few, there is the expenditure involved in the purchase, maintenance and the use of trucks and other vehicles for the removal of filth and refuse from slaughter houses. These expenses, though attributable to slaughter houses, are debited in the municipal budget under other heads such as transport, conservancy, petrol and oil etc. There is also the expenditure incurred in connection with the maintenance of supervisory staff like a full time Veterinary Officer, and a Municipal Health Officer, Deputy Health Officer, Zonal Health Officer etc., a considerable part of whose duties are connected with slaughter houses. There is then the cost of depreciation of the buildings and fittings in the slaughter houses. There is also the provision for expansion and improvement of slaughter house facilities. There are several other items of expenditure the whole or part of which is attributable to slaughter houses. Unfortunately, the High Court refused to look at any of these formidable items of expenditure on the ground that the Corporation could not ask the Court to look at any figures other than the figure mentioned under Item XIV-B of the municipal budget. Apparently the High Court was under the impression that the fees collected should be shown to be related to expenditure incurred directly and exclusively in connection with the slaughtering of animals in its slaughter houses and also shown as such in the Municipal budget. This was a wholly erroneous approach, in the light of what we have said earlier. We have explained earlier that the expenditure need not be incurred directly nor even primarily in connection with the special benefit or advantage conferred. We have also explained that there need not be any fastidious balancing of the cost of the services rendered with the fees collected. It appears to have been common ground before the High Court that the price of meat had gone up about 10 to 12 times since the rates were originally fixed. If so, one wonders how the ‘Municipal Corporation could be expected to effectively discharge its obligations in connection with the supervision of the slaughtering of animals in the slaughter houses maintained by it by merely raising the rates two-fold and three-fold. The increase from Re 00.50 p to Rs. 2.00 per animal in the case of small animals and from Re. 1.00 to Rs. 8.00 in the case of large animals appears to us to be wholly justified in the circumstances of the case.