Decided on November 05,1952

Subbaiah Maistry Appellant
The Corporation Of Madras Respondents


Ramaswami, J. - (1.) THE point taken by Mr. Mohan Kumaramangalam in this case is whether the fee of Rs. 5/ - levied upon every dhoby inside the Madras Corporation is a licence fee or a tax.
(2.) THERE is no dispute before me that if this levy is construed as a tax this revision has got to be allowed and if this is construed as n licence fee this revision has got to be dismissed. In order to determine whether this sum of Rs. 5/ - levied is a licence fee or a tax - -I need not point out that this sum of Rs. 5/ - is levied as a licence fee - - we have got certain tests which have been elaborately gone into and laid down by my Lord the Chief Justice in - - 'Varadachari v. : AIR1952Mad764 (A). The learned Chief Justice has reviewed the entire case -law on the subject and has delimited the boundary line between a licence fee and a tax.
(3.) THE learned Chief Justice points out: "It is now well established that there is a fundamental difference between a tax and a licence fee. The issue of licences to regulate particular branches of business or specified trades or occupations and other matters is part of what in American Constitutional law is called the 'police power' of the State. See - - Anantakrishnan v. : AIR1952Mad395 (B). For the grant of a licence a fee may be charged to cover probable expenses; which may have to be incurred for the regulation of the particular trade or business or calling in respect of which the licence is required. The licence fee is not intended to raise revenues for the general purpose of the authority levying the fee. For such purposes the levy should be in the shape of a tax. The licence fee must be reasonable, whereas, a tax need not be.";

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