SEN, J. - (1.) THESE six writ petitions raise common questions and therefore they are disposed of by this common order.
(2.) THE petitioners, who are commission agents and grain merchants, challenge the validity of the levy of the market fee and the requirement of licensing of dealers by the Krishi Upaj Mandi Samiti, Chhabra, under sections 14 and 17 of the Rajasthan Agricultural Produce Markets Act, 1971. The writ petitions fell into three groups. Writ petition Nos. 956, 959 and 960 of 1976 are directed against an order of the Krishi Upaj Mandi Samiti, Chhabra, dated April 28, 1975 requiring the licensing of dealers engaged in the business of purchase and sale of agricultural produce in the market area making a demand for payment of market fees i. e. , before the establishment of the principal market yard at Chhabra or a sub-yard at Chhipabarod. Writ petitions Nos. 136 and 137 of 1977 challenge the validity of Notification No. F. 10 (24)/agr. Gr.-2/75 dated October 14, 1976, issued by the State Government under sec. 9 (2) (b) of the Rajasthan Agricultural Produce Markets Act, 1971 (hereinafter referred to be "the Act") for the establishment of the principal market yard at Chhabra and sub-market yard at Chhipabarod. The petitioners in these writ petitions also claim refund of the market fee already paid for various periods. Writ petition No 154 of 1977 by a trader, challenges the levy of market fee, because there is at village Sarthal neither a principal market yard nor is a sub yard and also because no services are rendered to him by the Mandi Committee. Writ Petitions Nos. 956, 959 and 960 of 1976 were filed during the course of arguments in M/s Karamchand & Co. vs. The State of Rajasthan S. B. Civil Writ Petition No 624 of 1975 and 189 other connected writ petitions before Joshi J. and were based on the ground that Krishi Upaj Mandi Samiti, Chhabra, had established no principal market yard or sub market as required by law. On the strength of that averment, the petitioners secured an ad interim stay order restraining the Mandi Committee from recovering the market fee. In its reply filed in these writ petitions, the Mandi Committee controverted the facts that it had not established market-yard or sub-market-yard in the area, or that it was not providing any services. It placed on record Notification dated 14-10-1976 showing that the principal market yard at Chhabra and a sub market yard at Chhipabarod had been established for the area. The Mandi Committee asserted that it was rendering various services to the licensees who are doing their business in the principal market yard at Chhabra and the sub-market-yard at Chhipabarod and was providing services to the petitioners agriculturists and other businessman of that area. It further asserted that it had prepared a scheme for development of the Mandi, the site had been approved by the Authorities and it wa3 trying to purchase land for the construction of a market-yard. On 18-11-1976, the Mandi Committee applied for dismissal of the writ petitions. The matter came up before Joshi J on 25-9-1976 when the petitioners wanted time to file a reply. Despite the fact they were repeatedly given time, they have filed no reply. The case was adjourned to 16-11-1976 then to 23-11-1976 again to 8-8-1977 and to 25-7-1977. It is obvious that by the establishment of the principal market yard and sub-market yard by the Notification of the State Government dated 14-10 1976, the writ petitions have become infructuous. Writ petition No. 154 of 1977 by M/s Madanlal Radhey Ballabh is not by a trader at Sarthal, as asserted. It is averred in paragraph No. 1 of the petition that the petitioner is a partnership firm having its headquarters at Chhi-pabarod. The petition is supported by an affidavit sworn in by Radha Ballabh, one of the partners of the firm, to that effect. Respondent No. 2, in paragraph No. l of its reply, has admitted the fact. There is, therefore, no controversy that M/s Madan lal Radha Ballabh is a trader of Chhipabarod, i e. at the place where the principal market yard is located. The contention that the establishment of a market yard or principal market yard at Chhipabarod renders no benefit to the traders of village Sarthal, therefore, does not arise. The Constitutional validity of the Act is beyond question. Their Lordships of the Supreme Court and different judges of this Court have on more occasions than one, upheld the validity of similar legislations in Mohammad Hus-sain Gulam Mohammad vs. State of Bombay (l) Lakhan Lal vs. State of Bihar (2) M/s Bhanwarlal Sohanlal vs. State (3) Kundanmal Bastimal vs. State of Rajas-than (4) and M/s H. Paras Ram vs. State of Rajasthan (5) and M/s Karamchand & Company vs. State of Rajasthan (6 ). Shri C. K. Garg, learned counsel for the petitioners, does not seek to travelse the same grounds over again. He was indeed, frank enough to concede that no question of Constitutional invalidity arises. He confines his challenge to the validity of the licensing of dealers by the Mandi Committee and the levy of market fee by it, principally on the following, namely, - (1) The so-called market fee is, in reality, not a fee but a tax. It is said that the distinction between a fee and a tax is well settled according to the several decisions of their Lordships of the Supreme Court and there must be a definite co-relation between the fee charged and the services rendered i. e. , there is no quid pro quo. The submission is that when the Mandi Committee seeks to recover a market fee without rendering any service, there is, in effect, deprivation of property of the petitioners without the authority of law. On the contrary, the licensing of the dealers amounts to harassment and therefore is an impediment to free trade and commerce; (2) even assuming that the levy of market fee was valid, it is not recoverable as a fee in view of the surplus funds created in the hands of the Mandi Committee, and therefore, it partakes the nature of a tax; (3) the licensing of dealers of the Mandi Committee offends against the fundamental rights guaranteed under Article 19 (1) (f) of the Constitution ; (4) till October 14, 1975 i. e. the date of establishment of the principal market yard, the Mandi Committee had no authority or jurisdiction to levy any market fee or require the licensing of the dealers; (5) the requirements of section 3 (1) of the Act were not fulfilled because the Municipal Board, Chhipabarod, was not consulted ; (6) the increase of market fee from 25 paise per Rs. 100/- worth of agricultural produce to Rs. 1/- per Rs. 100/- worth of agricultural produce was not justified; and (7) the services as contemplated by section 19 of the Act are, in fact, not being provided. There is, in my opinion, no substande in any of the contentions. The petitioner averment that the Mandi Committee has not established any market; nor any principal market yard or a sub-market yard; and that, in fact, it is not rendering any services whatsoever. Though the averment that the Mandi Committee was rendering 'various services" in its reply filed in the writ petitions Nos. 956 959 and 960 of 1976, lack in particulars The particulars have been furnished by the Mandi Committee in its reply in writ petitions Nos 136, 137 and 154 of 1977. Along with the reply, the Mandi Committee has also filed detailed account of its income and expenditure for the financial year 1976-77 showing gross receipts of Rs. 2,36,069/68 against total expenditure of Rs 1,08,374/97, leaving a surplus of Rs. 1,27,694/70. It is vehemently argued that if the surplus in one year amounts to Rs. 1,27,694/70, there is no need of mainlining the levy of market-fee because the Mandi Committee has sufficient funds to carry out the objects of the Act. I am afraid, I cannot appreciate this line of reasoning. When the Mandi Committee has been established, it has to consolidate its funds for carrying out the various purposes and objects of the Act. I am informed by Shri Rastogi, learned counsel for respondent No. 2, Mandi Committee, that the development plan framed by the Mandi Committee would alone cost Rs. 60. lacs. Section 18 of the Act contemplates the creation of Market Committee Fund and all expenditure incurred by the Market Committee under and for the purposes of the Act have to be defrayed out of the said fund.
(3.) IT cannot be said that the levy of markate-fee at the rate of Re. 1/- per Rs. 100/- worth of agricultural produce is excessive as to be a pretext of a fee and not fee in reality nor can it be said that the levy from the fee leaves a large surplus which is utilised by the Government for general purposes of the administration. No part of the receipts of the Mandi Committee go into the consolidated funds of the State. IT is set apart and earmarked into the Mandi Committee Fund for the fulfilment of the various objects and performance of the functions of the Mandi Committee for the carrying out the various purpose of the Act. The principles are well settled by several decisions of their Lordships of the Supreme Court Mukherjee J. , as he then was, in his classical judgment in Commissioner, Hindu Religious Endownment, Madras vs. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (7) referred to the celebrated dictum of Latham C. J. and observed, - "a neat definition of what 'tax' means has been given by Latham C. J. of the High Court of Australia in - 'matthews vs. Chicory Marketing Board', 60 CLR 263 at p. 276 (M ). 'a tax', according to the learned Chief Justice, 'is a compulsory exaction of money by public authority for public purposes enforceable by law, and is not payment 'for services rendered'. This definition bring out, in our opinion, the essential characteristics of a tax as distinguished from other forms of imposition which, in a general sense, are included within it. " xxx xxx xxx xxx xxx The very eminent Judge laid down the following propositions: - "the distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for special benefit or privilege. " xxx xxx xxx xxx xxx "we think that a careful examination will reveal that the element of compulsory or coerciveness is present in all kinds of imposition, though in different degrees and that it is not totally absent in fees. This, therefore, cannot be made the sole or even a material criterion for distinguishing a tax from fees. " xxx xxx xxx xxx xxx "if as was hold, a fee is regarded a sort of return or consideration for services rendered it is absolutely necessary that the levy of fee should, on the face of the legislative provision, be correlated to the expenses incurred by Government in rendering the services. " xxx xxx xxx xxx xxx "as indicated in Art. 110 of the Constitution, ordinarily there are two classes of cases where Government imposes 'fees' upon persons. In the first class of cases, Government simply grants a permission or privilege to a person to de something, which otherwise that a person would not be competent to do. " xxx xxx xxx xxx xxx "in such cases, according to all the writers on public finance, the tax element is predominant, vide Seligman's Fssays on Taxation, page 409, and if the money paid by licence holders goes for the upkeep of roads and other matters of general. public-utility, the licence fee cannot be but regarded as a tax. " xxx xxx xxx xxx xxx "in the other class of cases, the Government does some positive work for the benefit of persons and the money is taken as the return for the work done or services rendered. If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it cluld be counted as fees and not a tax. " Mukherjee J. , in Ratilal Panachard Gandi vs. State Bombay (6) reiterated these principles and observed, - "it follows, therefore, that although a tax may be levied upon particular classes of persons or particular kinds of property, it is imposed not to confer any special benefit upon individual persons and the collections are all merged in the general revenue of the State to be applied for general public purposes. Tax is a common burden and the only return which the tax-payer gets a participation in the common benefits of the State. Fees, on the other hand, are payments primarily in the public interest, but for some special service rendered or some special work done for the benefit of those from whom the payments are demanded. Thus in fees there is -always an element of 'quid pro quo' which is absent in a tax. St may not be possible to prove in every case that the fees that are collected by the Government approximate to the expenses that are incurred by it in rendering any particular kind of services or in performing any particular work for the benefit of certain individuals. But in order that the collections made by the Government can rank as fees, there must be co-relation between the levy imposed and the expenses incurred by the State for the purpose of rendering such services. This can be proved by showing that on the face of the legislative provision itself, the collections are not merged in the general revenue but are set apart and appropriated for rendering these services. " In Hingir-Rampur Coal Co. vs. State of Orissa (7) the validity of a cess on the lessees of coal mines in a certain area and the creation of a Coal Mines Development Fund with it, was challenged on the ground that the cess levied was not a fee but was, in reality, a tax. In repelling the contention, the Supreme Court observed, - 'if specific services are rendered to a specie fie 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. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess levied by way of fee is not intended to be, and does not become a part of the consolidated fund. It is ear-marked and set apart for the purpose of services for which it is levied. There is, however, an element of compulsion in the imposition of both tax and fee. When the Legislature decides to render a specific service to any area or to any class of persons, it is not open to the said area or to the said class of persons to plead that they do not want the service and therefore they should be exempted from the payment of the cess. Though there is an element of quid pro qun between the tax-payer and the public authority there is no option to the tax-payer in the matter of receiving the service determined by public authority. In regard to fees there is, and must always be, co-relation between the fee collected and the service intended to be rendered. Cases may arise where under the guise of levying a fee, Legislature may attempt to impose a tax; and in the case of such a colourable exercise of legislative power courts would have to scrutinise the scheme of the levy very carefully and determine whether in fact there is a co-relation between the service and the levy or whether the levy is either not co-related with service or is levied to such an excessive extent as to be a pretence of a fee and not a fee in reality In other words, whether or not a particular cess levied by a statute amounts to a fee or tax would always be a question of fact to be determined in the circumstances of each case. " Their lordships, in distinguishing a tax from fee, observed that a tax cllected by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess lavied by way of fee is not intended to be, and does not become a part of the consolidated fund. It is earmarked and set apart for the purpose of services for which it is levied. There is, however, an element of compulsion in the imposition of both tax and fee. Their Lordships further observed that whether or not a particular cess levied of statute amounts to a fee or tax would always be a question of fact to be determined in the circumstances of each case. ;