Dixit C.J.
1. By this application under Articles 226 and 227 of the Constitution of India the petitioner challenges the validity of Rule 55 of the Central Provinces and Berar Motor Vehicles Rules, 1940 (hereinafter referred to as the Rules), imposing a fee in respect of the grant and renewal of a permit, and prays for the issuance of a writ of certiorari for quashing a demand made on him by the Secretary, Regional Transport Authority, Raipur, by letter dated 6th January 1964 asking him to pay a permit fee of Rs. 50/- for each of the six regions where he has been permitted to ply his trucks under permits.
2. The applicant had obtained extension of the permits held by him for the plying of trucks in the entire State of Madhya Pradesh. When he applied for a renewal of the permits, the Secretary, Regional Transport Authority, informed him that he was required to pay a permit fee of Rs. 50/- for renewal of the permit for each region and that ho had also to pay Rs. 120/- as permit fee for the six regions for which his permits were extended originally.
3. Shri Dharmadhikari, learned counsel for the petitioner, argued that Rule 55 imposing fees in respect of the grant and renewal of a permit was saved when Section 68(2) (g) of the Motor Vehicles Act, 1939, gave to the State Government the power to make a rule with respect to 'the fees to be paid in respect of permits, duplicate permits, plates and badges 'that for this clause a new Clause (g) was substituted by Section 61 of the Motor Vehicles (Amendment) Act, 1950 (Act 100 of 1956) in the following terms:
'the fees to be paid in respect of applications for permits, duplicate permits and plates;'
that after this amendment fees could be prescribed by a rule in respect of applications for permits but not for permits themselves; and that, therefore, Rule 55 became ultra vires after the amendment of Section 68(2) (g) in so far as it prescribed fees in respect of the grant and renewal of a permit. Learned counsel also submitted in the alternative that in any case as Clause (d) of the amended Rule 55 laid down that there shall be no fee for the countersignature of a permit, the applicant could not be called upon to pay a permit fee for all the six regions for which a renewal of extension of permits was sought and that be could be asked to pay a permit fee only for one region, namely, the Raipur region.
4. In reply. Shri Bhave, Learned Government Advocate, said that even under the amended Clause (g) of Section 68(2) a rule could be made prescribing a fee for permits as the expression ''in respect of applications for permits' covered permits also. Learned Government Advocate, however, founded strongly upon Section 68(1) of the Act which provides that 'the State Government may make rules for the purpose of carrying into effect the provisions of this Chapter'', that is Chapter IV. It was argued that Sub-section (2) of Section 68 gave to the Government the power to make rules with regard to the matters specified in the various clauses of that sub-section without prejudice to the generality of the rule making power conferred by Sub-section (1); that Sub-section (2) was in no way restrictive of Sub-section (1); that, therefore, even if the levy or imposition of a fee in respect of permits was not a matter enumerated in Sub-section (2), still the Government by virtue of its rule making power under Sub-section (1) could make a rule with regard to fees in respect of the grant and renewal of permits; and that the validity of Rule 55 was in no way affected by the substitution of a new Clause (g) in Section 68(2) by the Amendment Act of 1956. Learned Government Advocate frankly and rightly conceded that under Clause (d) of Rule 55 the petitioner could be asked to pay a permit fee only for one region and not for all the regions for which be sought a renewal of extension of his permits.
5. In our judgment, the contention of learned counsel for the petitioner that as a result of the amendment made in Section 68(2) (g) the State Government's power to prescribe trees for permits has been taken away and Rule 55 in so far as it levies fees in respect of the grant and renewal of a permit cannot now be treated as a valid rule, must be given effect to. The old Clause (g) of Section 68(2) permitted the State Government to make a rule for 'the fees to be paid in respect of permits, duplicate permits, plates and badges'. The new Clause (g) speaks of 'the fees to be paid in respect of applications for permits, duplicate permits and plates' The substitution of the words 'applications for permits' for the word 'permits' which occurred in the old Clause (g) itself emphasizes the difference between a permit and an application for a permit and clearly shows that the expression 'fees to be paid in respect of applications for permits'' cannot be taken as including fees for permits themselves. The power given to the Government tinder Section 68(2)(g) to levy fees in respect of applications for permits, duplicate permits and plates is an instance of delegated legislation. It is settled law that where the statute provides that a subordinate authority run levy an imposition, then that authority cannot impose a tax or a fee on a basis or in a manner other than prescribed by the statute. Therefore, when Clause (g) authorizes the State Government to make a rule for fees to be paid in respect of applications for permits, then on the basis of this rule-making power a rule cannot be made prescribing fees for permits themselves. A rule made in the exercise of powers conferred under Section 68(2) (g) prescribing fees on permits would be totally out side the limits of the power conferred on the State Government by Clause (g).
6. The Government cannot also claim under the rule-making power conferred by Sub-section (1) of Section 68 in general terms, the power to impose fees on permits. The proposition that Sub-section (2) of Section 68 does not in any way control the power conferred by Section 68 (1) cannot be doubted in view of the Privy Council decision in Emperor v. Sibnath Banerji AIR 1945 PC 156. The use of the expression 'without prejudice to the generality of the foregoing power' in Sub-section (2) makes It clear that with reference to the items included in the various clauses in Section 68(2) it is not necessary for the Court to examine further whether any of those items comes within the scope of the general provision of Sub-section (1) of Section 68. In regard to the enumerated matters in Section 68(2), there is a statutory recognition that the State Government has power to make rules with regard to them. The question is whether the expression 'for the purpose of carrying into effect the provisions of this Chapter', that is Chapter IV, occurring in Section 68(1) can be taken to confer on the Government the power to make a rule with respect to fees for permits. This Chapter does not contain any provision to the effect that a fee shall be payable in respect of the grant or renewal of a permit or that ft permit shall be granted or renewed only on payment of the fee prescribed for it.
It cannot, therefore, be contended that the Government has the power under Section 68(1) to make a rule prescribing fees for permits for carrying into effect any such provision of Chapter IV. That Chapter deals with control of transport vehicles and contains provisions about necessity for permits, applications for them, the procedure to be followed in considering applications for permits, the matters to be taken into consideration in granting application for a permit, cancellation, suspension and transfer of permits, etc. It is for carrying into effect these provisions contained in Sections 42 to 66 that the rule-making power conferred by Section 68(1) can be exercised. The power to impose a fee or a lax cannot be claimed as an ancillary power.
7. It is now a firmly settled canon of taxation that no tax or fee can be levied by an instrument of subordinate legislation unless the statute specifically authorizes its imposition in the plainest terms. This principle flows directly from Article 265 of the Constitution which provides. 'No tax shall be levied or collected except by authority of law'. As pointed out by the Supreme Court in Muhammadbhai v. State of Gujarat, AIR 1962 SC 1517 at p 1530 the word 'tax' as used in this article includes 'fees' The general principle enunciated in Article 265, put in a positive form, implies that any tax can be levied or collected provided it is levied or collected by authority of law This means that a tax, which includes fees, of a particular kind or specific nature and description can be levied or collected only by authority of law. It is important to note that Article 265 uses the word 'tax' and not the word 'taxation' and does not say that there shall be no taxation except by authority of law. The term 'taxation' covers every conceivable exaction: whereas the word 'tax' as used in Article 265 means a tax of any particular kind or nature or description and not a collection of taxes. Therefore, it is only if the statute specifically authorizes the imposition of a tax of a particular kind, nature or description that the particular tax can be imposed. This principle is discernible in many cases where it has been held that where a law authorizes the imposition of a tax, the imposition will he 'by authority of law' only if the imposition is made strictly within the terms and conditions prescribed by the law; or if the statute prescribes a certain basis for the tax, then it cannot be imposed on a different basis; or, again, if the statute specifies certain taxable things and commodities, then the subordinate authority cannot make additions to the list of taxable items.
8. It follows from the principle that no tax can he levied or collected except by authority of law that if the power to impose and assess a tax is delegated by the Legislature to a subordinate authority, then the delegation must be specific and not in general terms; and a subordinate authority cannot impose any tax by a rule or regulation or a bye-law unless the statute under which the subordinate authority claims the power to tax specifically authorizes the imposition of the particular tax. Parliament and the Legislature of any State has no doubt the power to make laws with respect to 'mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied (Entry No. 35 of List III, Schedule VII to the Constitution) and with respect to fees in respect of this subject-matter (see Entry No. 47 of List III). The power to impose and assess a tax or a fee is no doubt essentially a legislative function. For the purpose of this petition it is not necessary to consider whether the Legislature can delegate to a subordinate authority the power to impose and assess a tux as distinguished from a fee; and it so, within what limits. Here, we are concerned with the delegation of the power to impose fees which are levied essentially for services rendered in which there is an element of quid pro quo.
It was not disputed before us that the Legislature could delegate to the Stale Government the power to impose fees with respect to matters dealt with by the various provisions contained in Chapter IV of the Motor Vehicles Act, 1939. What the learned Government Advocate asserted was that though express power or authority to impose by a rule a permit fee bad not been given by the Act to the Government, still on a fair construction of the expression 'may make rules for the purpose of carrying into effect the provisions of this Chapter' to be found in Section 68(1), it must be held that the Legislature did intend that the Government should exercise such power and authority for the imposition of a permit fee This argument which runs counter to Article 265 of the Constitution cannot be accepted Merely because the Legislature has the power to impose permit fees and it is competent to delegate that power to the Stale Government, it cannot be inferred that the Legislature conferred that power on the Government by just saying that the Government may make rules for the purpose of carrying into effect the provisions of Chapter IV. In order to enable the State Government to make a rule imposing a permit fee, a specific provision conferring on the Government the power to impose a permit fee by a rule was necessary in the Motor Vehicles Act, 1989.
9. The view that no tax or fee can be imposed by any rule or regulation or a bye-law unless the statute, under which the subordinate authority imposing it is created, specifically authorizes the imposition is fully supported by the decision of the Supreme Court in Mohammad Yasin v. Town Area Committee, Jalalabad 1952 SCR 572 : (AIR 1952 SC 115). In that case the validity of two bye-laws framed by the Town Area Committee of Jalalabad was challenged. One of them provided that no person shall sell or purchase any vegetables or fruits within the prescribed limits of the Town Area Committee by wholesale or auction, without paying the fees prescribed by the bye-laws to the licensee appointed by the Town Magistrate. The other bye-law laid down that any person can sell in wholesale at any place in the town area provided he pays the prescribed fees to the licensee. The Supreme Court held that these bye-laws were ultra vires the powers of the Committee as Section 293(1) and Section 298 (3)(J) (d) of the U.P. Municipalities Act, 1916, did not empower the Town Area Committee to make any bye-law authorizing it to charge any fees otherwise than for the use and occupation of any property vested in or entrusted to the management of the Town Area Committee including any public street. It was observed by the Supreme Court:
'These bye-laws do not purport to fix a fee for the use or occupation of any immovable properly vested in or entrusted to the management of the Town Area Committee including any public street or place of which it allows the use or occupation whether by allowing a projection thereon or otherwise. Sections 293 (1) and 298 (2) (J) (d) of the United Provinces Municipalities Act. 1916, as amended at the time they were extended to the town areas in the United Provinces do not empower the Town Area Committee in make any bye-law authorising it to charge any fees otherwise than for the use or occupation of any property vested in or entrusted to the management of the Town Area Committee including any public street. Therefore, the bye-laws prima facie go much beyond the powers conferred on the respondent Committee by the sections mentioned above.... '
The Supreme Court then rejected the contention of the Town Area Committee that the fees were charged for use of 'public street' by saying
'From the was the case was formulated by the learned counsel, it is quite clear that if anybody uses the public street it is the growers of vegetables and fruits who come to the petitioner's shop to gel their produce auctioned by the petitioner and the petitioner cannot be charged with fees for use of the public street by those persons.'
Then the Supreme Court staled its conclusion thus
'In our opinion, the bye-laws which impose a charge on the wholesale dealer in the shape of the prescribed fee, irrespective of any use or occupation by him of immoveable property vested in or entrusted to the management of the Town Area Committee including any public street, are obviously ultra vires the powers of the respondent Committee and, therefore, the bye-taws cannot he said to constitute a valid law .. .. . .. '
Mohammad Yasin's Case 1952 SCR 572 : (AIR 1952 SC 115) (supra) clearly lays down that for the imposition of a fee of a particular kind by a subordinate authority, there must be in the Act governing the authority a specific authorization for the imposition.
10. A reference may also be made to the decision of the House of Lords in Attorney-General v. Wills United Dairies, (1922) 91 LJKB 897. Thai was a case where the Food Controller, purporting to act in pursuance of his powers and duties under the New Ministries and Secretaries Act, 1910, Section 4, and the Defence of the Realm Regulations made under the Defence of the Realm, (Consolidation) Act, 1914 with regard to the supply, regulation and consumption of food, prohibited persons dealing in milk from buying milk in one area for export to another area except under licence and imposed a charge of 2d. per gallon as a condition of the granting of a licence. The House of Lords held that the charge of 2d. per gallon was in essence a lax imposed without the authority of Parliament and was, therefore, a tax ultra vires the Food Controller. During the course of his speech Lord Buckmaster said:
'There are only two sources from which those powers can possibly he derived. One is the Act creating the Ministry, and the other the Regulations under the Defence of the Realm Act, Neither of these either directly or in my opinion, by inference, enabled the Food Controller to levy the payment of any sums of money from any of His Majesty's subjects. The statute of 1916 confines his duties to regulating the supply and consumption of food and taking the necessary steps for maintaining a proper supply of food. The powers so given are no doubt very extensive and very drastic, but they do not include the power of levying upon any man payment of money which the Food Controller must receive as part of a national fund and can only apply under proper sanction for national purposes. However the character of this payment may he clothed by asking your Lordships to consider the necessity for its imposition, in the end it must remain a payment which certain classes of people were called upon to make for the purpose of exercising certain privileges, and the result is that the money so raised can only be described as a lax the levying of which can never be imposed upon subjects of this country by anything except plain and direct statutory means.'
Lord Wrenbury expressed himself thus--'The Crown in my opinion cannot here succeed except by maintaining the proposition that when statutory authority has been given to the Executive to make regulations controlling acts to be done by His Majesty's subjects, or some of them, the Minister may, without express authority so to do, demand and receive money as the price of exercising his power of control in a particular way, such money to be applied to some public purpose to be determined by the Executive. It is impossible to maintain the proposition. At any rate, in the absence of express words giving the Executive power to make such a demand, this is the assertion of a right in the Executive to impost taxation.' The case of (1922) 91 L. J. K. B. 897 (supra) clearly lays down the proposition that a subordinate authority cannot by a regulation impose a fax unless it is authorized to do so by the parent Act in the, plainest terms and that the authority cannot claim the power to tax merely because it has been given power to make regulations controlling certain acts.
11. There is also a decision of the Bombay High Court which lays down that if the Legislature is competent to delegate to the State Government its power to impose a particular type of lax, then the conferment of the power must be in clear terms. In S. S. Miranda Ltd. v. State of Bombay 57 Bom. LR 29 the question that was considered was whether Section 19 of the Bombay Abkari Act. 1878, empowered the Government to levy an excise duly upon an excisable article more than once. Chhagla C.J., while holding that Section 19 did not so empower the Government stated:
'It was contended before the learned Judge below that the Legislature has the competence to impose excise duty at more points than one. It was pointed out that the very nature of excise is that an article is liable to pay that type of duty at all stages from the stage where the article is manufactured till it is ultimately consumed by the consumer--and it is perfectly competent to the Legislature, not only to impose excise duly at one point of lime, but to impose it at several points of time. Now, that proposition is undoubtedly correct and it is beyond challenge. But what the learned Judge below has overlooked with very great respect to him is that we are not concerned in this case with the competency of the Legislature, but with the question as to whether the Legislature being competent it has delegated the power to the Stale Government to impose excise duly more than once. What Mr. Bhabha wants us to hold is that, if we assume that there is competency in the Legislature, then we must infer that that power has been conferred upon the Government. Now, such an inference would be contrary to all canons of interpretation of a taxing statute. It is elementary and it need not be repealed--that a taxing statute must always he construed in favour of the subject: and if Government claims any power of taxation, it must satisfy the Court that such a power is clearly conferred upon by the Legislature. The mere fact that the Legislature was competent to impose a particular type of tax cannot lead to the necessary or inevitable inference that that power was conferred upon the delegated authority. We must, therefore, find in Section 19 any indication--and the indication must be clear and beyond doubt that the Legislature delegated to the State Government the very important power of levying excise duly more than once and at more than one point during the progress of the excisable goods from the time that they left the bonded warehouse till the time that they reached the consumer. Now, there is absolutely nothing in Section 19 which justifies any such suggestion about the power of the State Government. Section 19 in terms does not empower the Government to levy an excise duty upon an excisable article more than once.''
12. In our judgment, Section 68(1) of the Motor Vehicles Act, 1989, does not confer on the State Government the power to make a rule imposing a permit fee. As neither under Section 68(1) nor under Section 68(2)(g), after it was amended in 1956, the Government has the power to make a rule with respect to a permit fee. Rule 55 of the Central Provinces and Berar Motor Vehicles Rules, 1940, prescribing certain fees in respect of the grant and renewal of a permit, though it was a valid rule before Section 68(2) (g) was amended, can no longer be regarded as valid. In this view of the matter the petitioner, cannot also be called upon to pay a permit fee for each of the regions for which he sought a renewal of extension of his permits. The petitioner cannot, therefore, be asked to pay any permit fee under the aforesaid rule and the demand made by the Regional Transport Authority, Raipur, on him for payment of permit fees stated in his letter dated 6th January 1964 is illegal.
13. We accordingly allow this petition, declare Rule 55 of the Central Provinces and Berar Motor Vehicles Rules, 1940, to be invalid, and quash the demand made on the applicant by the Regional Transport Authority, Raipur, for payment of permit fees. The opponents are restrained from recovering from the petitioner any permit fee in respect of the permits held by him and referred to in the letter dated 6th January 1964 of the Secretary, Regional Transport Authority, Raipur.
14. In the circumstances of the case, we leave the parties to bear their own costs ofthis petition. The outstanding amount of security deposit shall be refunded to the petitioner.