- (1.) This is a statutory appeal preferred under Section 15Z of the Securities and Exchange Board of India Act, 1992 (for brevity 'the Act') against the judgment and order dated 11th February, 2010 passed by the Securities Appellate Tribunal, Mumbai (for brevity 'the SAT') in Appeal No. 28 of 2009. The dispute between the parties has arisen on account of amended Regulations effective from 1.10.2006 introducing Schedule IIIA into the Regulations. For stock brokers the measure of fee under Schedule III was "turnover of the previous year" on yearly basis and the same has been replaced by concept of monthly fee on the basis of monthly turnover. The dispute is whether the latter would come into effect immediately from the date Schedule IIIA becomes applicable to a stock-broker or the earlier measure of fee on yearly basis would continue for a limited period till fee in accordance with Schedule III and the principle of turnover of the whole year is realized not only as per the previous year's turnover but for the entire up to date turnover till Schedule IIIA comes into effect in respect of a stockbroker.
(2.) According to the impugned judgment and order of the SAT, SEBI was justified in demanding registration fee from the appellant, a stock-broker, not only on the basis of turnover of the previous year but also for the entire turnover earned after the turnover of the previous year and till the implementation of the Schedule IIIA, so that no part of the turnover of the stock-broker escapes from the net of registration fee. According to appellant's case, argued by learned senior counsel Mr. Shyam Divan, such view of the SAT is impermissible in view of specific provisions of the Regulations, particularly clause (IV) to Schedule III and whole of Schedule IIIA which were introduced together by the third amendment to the Regulations with effect from 1.10.2006. Per submissions, the view is also contrary to the distinction between a turnover tax / tax on income in which case the annual turnover is targeted as the subject matter of levy on one hand, and a levy imposed in the present case as registration fee on the other, in which the annual turnover of a stock-broker is only a measure of the levy and not its subject matter.
(3.) On the contrary, the stand of the respondent is that the demand made by SEBI is justified by clause 1(a) & (b) of Schedule III and such demand is saved by clause 4 of Schedule IIIA.;