Shivani Enclaves Pvt. Ltd. and Another Vs. State of Rajasthan and Others - Court Judgment

Excerpt:
- section 2(k), 2(1), 7 & 40 & juvenile justice (care and protection of children) rules, 2007, rule 12 & 98 & juvenile justice act, 1986, section 2(h): [altamas kabir & cyriac joseph, jj] determination as to juvenile - appellant was found to have completed the age of 16 years and 13 days on the date of alleged occurrence - appellant was arrested on 30.11.1998 when the 1986 act was in force and under clause (h) of section 2 a juvenile was described to mean a child who had not attained the age of sixteen years or a girl who had not attained the age of eighteen years - it is with the enactment of the juvenile justice act, 2000, that in section 2(k) a juvenile or child was defined to mean a child who had not completed eighteen years of a ge which was given prospective prospect - appellant was about sixteen years of age on the date of commission of the alleged offence and had not completed eighteen years of age when the juvenile justice act, 2000, came into force - juvenile act, of 2000 has been given retrospective effect by rule 12 of juvenile justice rule, 2007 - as such, accused has to be treated as juvenile under the said act. - , (7), license fee collected to give various service like scavenging etc. - the information sought by the appellants could have been supplied by the respondents because matters like the date of constitution of the fund, the annual salary budget of the commissioner's establishment at different places and the total number of institutions to which services were rendered would be within their special knowledge. the further and better particulars asked for by the appellants under order vi, rule 5 of the civil procedure code, would have driven the court, had the particulars been supplied, to a laborious and fruitless inquiry into minute details of the commissioner's departmental budget. a vivisection of the amounts spent by the commissioner's establishment at different places and for various purposes and the ad hoc allocation by the court of different amounts to different heads would be best have been speculative. 5,000/- immediately before issuing the impugned notification was reasonable fee prescribed by the respondents itself which was 10 times more than the prior notification of 1986 and in such situation the impugned notification, even though already revoked by the state government is held to be bad and the petitioner shall be entitled to the refund of the amount in question after adjusting the maximum registration fee of rs.orderverma, j. (1). the petitioners in the present case are praying to declare the notification f2(8) fd/tax div./96 dated 14.3.1997 and notification no. f2(3)fd/gr.iv/93/1/98 dated 7th of march, 1994 (annexure 5 and 6), issued by the stateof rajasthan in exercise of powers conferred under section 78 of the indian registration act, 1908 (hereinafter referred to as the 'act'), as ultravires with further direction to the state to refund the amount of rs. 10,24,280.00, recovered from the petitioners as registration charges vide receipt dated 15th may, 1997, alongwith interest and further a direction to the respondents not to charge the registration fee as per notification dated 14th of march, 1997, on the document which has been submitted for the purposes of registration before the registering authority.(2). the petitioners had purchased the properly known as food catering institute building, m.i. road, jaipur, from the state of rajasthan by way of auction held under the rajasthan nazul building (disposal by public auction) rules, 1971. being the highest bidders of the property in question for the bid of rs. 22,601/- per sq. meter, the petitioners' bid was accepted. the sale was confirmed by the government on 14th of december, 1996. they are said to have deposited the amount of rs. 10,24,27,732.00 with the government treasury. in pursuance of the said auction and in consideration as purchasers, a sale deed was executed on 15th may, 1997, between the governor of the state of rajasthan and the petitioners vide annexure 1. the petitioners has also got a stamp affixed worth rs. 61,45,670/- on the registered deed. the deed was presented for registration. a demand was made by the sub-registrar for a sum of rs. 10,24,280a as registration charges and rs. 270/- as other charges, totalling to rs. 10,24,555.00. the amount was paid by the petitioners vide receipt annexure 2. the sub-registrar had demanded the said amount as registration charges at the rate of 1 % of the total sale consideration as per notification dated 14th of march, 1997, issued by the state of rajasthan (annexure 6 attached with the writ petition), exercising the powers conferred under sec. 78 of the act w.e.f. 1.4.1997. the petitioners are aggrieved against collection of the said registration charges to the tune of rs. 10,24,280.00 on the said sale deed being violative of article 265 of the constitution of india and the act and rules framed thereunder by the government of rajasthan and pray that the same be declared ultravires by powers conferred under section 78 of the act.(3). it is submitted that the registration fee is the fee under article 265 of the constitution of india and there is a clear distinction between a tax and a fee. a tax is a compulsory extraction of money by public authority for purposes enforceable by law and not a payment for services rendered, whereas, a fee is charged for special service rendered to individuals by some government agency as such a charge has an element of quid pro quo. it is submitted that for purposes of levy of fee, two essential elements are necessary, firstly it must be levied in consideration of certain services and secondly the amount collected must be earmarked to meet the expenses of rendering services and must not go to the state's general revenue to be spent for general public purposes. the registration of the document is consolidated in the indian registration act, 1908 as amended by the act of 1953. rules are also framed under the act. in exercise of the powers conferred under section 78 of the act the state government prepares tables of registration fee and other fees from time to time. initially in the year 1976, the state government published a table of fee payable under the act for the registration of documents and other matters enumerated in section 78 of the act as per annexure-3. the maximum registration fee on the document was prescribed as rs. 250/- and different registration fees were provided in the said table annexure 3 as fee for various types of documents. in the case of an instrument of lease, registration fee was required to be calculated on the amount on which stamp duty was payable, whereas on will and certain other documents, the registration fee was chargeable as per article 9. however, the maximum, registration fee at that time was rs. 250/- only. another notification was issued on 28th march, 1986, when the maximum registration fee was subject to a maximum of rs. 500/- only. this notification was again substituted by another notification dated 7th of march, 1994, when the maximum fee fixed was rs. 5,000/- by enhancing it to ten times from the earlier notification. attention is invited to annexures 4 and 5 in this regard.(4). vide annexure 6 - notification dated 14th of march 1997, the table of registration fee has been provided on the basis of which registration fee is payable under the act, wherein it is mentioned that except as otherwise provided in the table in respect of specific document or class of documents, fee for the registration of all documents is charged @ 1% of the value of consideration. it further provides that the value of consideration shall be deemed as being equal to the market value of the property except for leases for a period of less than five years. for the purposes of instrument lease, the registration fee is to be calculated on the amount on which stamp duty is payable.(5). on the sale deed presented by the petitioners, registration fee was charged (a) 1% and the petitioners had to deposit an amount of rs. 10,24,280/-. it is the submission that the levy of registration fee @ 1% of the value or consideration of the sale deed is too exorbitant, highly excessive and disproportionate to the service rendered by the registration department to the petitioners and as a matter of fact it amounts to a tax, whereas it is not disputed that the registration fee as a matter of fact is a 'fee'.(6). the petitioners have also narrated the history of levy of the registration fee on the sale deeds to the fact that initially the registration fee was rs. 100/- only and thereafter the maximum was raised to rs. 250/ and again to rs. 500/- and then to rs. 5,000/- in various years are reproduced as under:-year of levy of feemaximumregistration fee for sale deedprior to 1976rs. 100.001976rs 250.001986rs,500.001994rs.5000.001997 onwards@ 1% of the value or consideration(7). it is the submission of the counsel that there is no difference in the service which the registration office renders in the matter of lease deeds or sale deeds or other deeds which are compulsorily registerable and, therefore, the registration fee at the rate of 1% on the value is discriminatory, arbitrary and in violative of the article 14 of the constitution of india. it is also one of the submission that as a matter of fact, there is neither substantial increase in the man power nor there is any substantial increase in the office establishments, rather, there is a substantial increase in number of documents which are presented for registration and more revenue has to be paid to the state exchequer than the entire expenses of the registration establishment and in the year 1997, the registration charges far exceeded the expenses incurred in the registration department. the petitioners submit that notification no. f. 2(8)tax.div/96 dated 14th march, 1997 and notification no.f/2(3) fd/gr. iv/93 dated 7th of march, 1994, are ultravires the provisions of the registration act 1908 and are violative of article 265 of the constitution of india on the ground that as per the provisions of section 78 of the registration act, the fee must have an element of quid pro quo.(8). in the written statement filed on behalf of respondents, it is submitted that the petitioners had deposited the charges as per the provisions of notification dated 14th march, 1997, without any protest or objection and therefore, the petitioners can not challenge the same in the writ petition. it is submitted that the impugned notifications are neither violative of article 265 of this constitution of india nor section 78 of the act. it is admitted that the fee had not been imposed under article 265 but has been levied under the provisions of section 78 of the act. it is further submitted that the fee is uniform and at present it is being charged on all the documents of sale deeds tomeet the expenses of the registration department. the respondents also stated that notification dated 14th march, 1997, was further amended by notification dated 21st of march, 1998, by fixing the maximum fee upto 25,000/- vide annexure r/1.(9). from the discussions and pleadings, the following points are required to be determined:-(1) that the registration fee is in the nature of fee and, therefore, there has to be an element of quid-pro-quo between the fee and the service's rendered by the department. the element of quid-pro-quo is sort of justifying the imposition of fee. (2) it must be levied in consideration of certain services and should be in the nature of quid-pro-quo and must be collected and earmarked to meet the expenses of rendering the services and can not been levied for the purposes of levying general revenue. (3) fee can not be charged on advolorem basis for the reason that the registration of the documents involve the same services irrespective of the value of the deed/document to be registered. (4) the fee can not be excessive, exorbitant and disproportionate to the services rendered and in case there is any increase in the fee, it has to be proved that due to the increase in the charges, the fee has been increased and it has to be in proportion of increase in the cost of service. it can not be increased without any basis. (5) that the provisions are to be laid down by the legislature and power to levy a fee/tax should exist under the act and both the sources are to flow from the authority of statute as mandated in article 265 for levy/collection; no fee can be levied by way of administrative decision. (6) that in regard to the registration of other type of documents, there can not be discrimination for sale deeds. all kinds of documents i.e. sale-deed, gift, will or adoption deed, there is no difference in the services which are to be rendered by the registration document. (10). it is the further contention that as per the written statement the expenses of the registration department as in the year 1985-86 were rs. 81.18 lacs, whereas in the year 1994-95 had increased to rs. 372.87 lacs and at the most there was increase for about four times and in that situation the registration fee could have been increased upto two to three times i.e. from rs. 500/- to rs. 2,000/- only.(11). it is submitted that in case or instrument of lease, registration fee is being calculated on the amount on which the stampt duty was payable and notification dated 7.3.1998, whereby the registration charges were reduced to the maximum of rs. 5,000/- has further been amended vide notification dated 21st march, 1998, whereby it has been further reduced to rs. 100/- and it is a clear example that the fee is co-relevant with the services rendered.(12). a division bench of punjab & haryana high. court in the case the delhi cloth and general mills co. ltd. and others vs. the chief commissioner, delhi and another (1), had held that the fee is not deposited in a separate head or account but is merged in the general revenue of the state. it is not solely used for the maintenance of the registration department but goes into a consolidated fund which is utilised for various other governmental functions; the registration act, 1908 has no correlation with the capacity of an individual to pay the registration fee as was demanded under the notification on the debenture trust-deed of the company who had floated a debenture loan of rs. 2.5 crores. the company, to secure the repayment of the loan, had executed a debenture trust-deed mortgaging some of its properties for the consideration of rs. 2.5 crores in favour of trustees for debenture-holders, under the said debenture trust deed the sub-registrar for registration had demanded an amount of rs. 1,25,157.50 as registration fee. in pursuance of the notification issued by the government on 15.12.1952 u/s 78 and 79 of the registration act, 1908. the trustees filed a writ petitionwhile maintaining that they were prepared to pay any reasonable fee for registration of the document, that the fee demanded from them for registration had no correlation with the services to be rendered under the registration act and was so excessive that it was merely a pretence for fee, that it was not fee and in reality was a tax.(13). the aforesaid judgment of the delhi cloth and general mills co. ltd. and others (supra) was challenged in the supreme court and the supreme court had confirmed the judgment of punjab & haryana high court and had dismissed the appeal in the judgment reported in chief commissioner, delhi vs. the delhi cloth and general mills co. ltd. (2), that the fee in order to be a legal fee must satisfy the following conditions:(i) there must be an element of quid pro quo that is to say, the authority levying the fee must render some service for the levied however remote the service may be; (ii) that the fee realised must be spent for the purposes of the imposition and should not form pan of the general revenues of the state. (14). the above-said judgment was again based on the case-state of maharashtra & ors. vs. the salvation army, western india territory (3). in the case of state of maharashtra & ors. vs. salvation army (supra) it was held that two elements are essential in order to determine that the payment may be regarded as a fee. in the first place it must be levied in consideration of certain services which the individuals accept either willingly or unwillingly and in the second place, the amount collected must be earmarked to meet the expenses of rendering these services and must not go to the general revenue of the state to be spent for general public purposes.(15). in similar terms the decision handed over by allahabad high court in state of up vs. district registrar meerut (4), wherein it was held that the registration amounted to imposition of tax and was ultravires of the act and was inoperative as the notification aforesaid to the extent to which the table of fee contained therein relate for the registration of document are ultra vires of the act and are inoperative.(16). in the state of kerala vs. madras rubber factory ltd. (5), it was held that the charge under the taxing statute can only be under the act and not under the rules or the notification. the rules normally provide for the procedure to be following for the realisation of the statutory dues.(17). in the case of om prakash agrawal & others vs. giri raj kishori & others (6), it was held that the levy of cess under the act is not a fee but it is a tax not leviable by state as it does not fall under any of the entries in list ii of the seventh schedule to the constitution under which the state legislature can levy a tax. the primary meaning of taxation is raising money for purposes of government by means of contributions from individual persons, a compulsory exaction of money by a public authority for public purposes, at law and not a payment for services rendered. a tax has three principal characteristics : (i) it is imposed under statutory power with out the tax payer's consent and the payment is enforced by law; (ii) it is an imposition made for public purposes without reference to any special benefit to be conferred on the payer of the tax; (iii) it is a pan of the common burden, the quantum of imposition upon the tax payer depending generally upon the capacity of the tax payer to pay.(18). it was further held that in determining a levy as a fee the true test must be whether its primary and essential purpose is to render specific services to a specified area or class it being of no consequence. it was held that the fact that the fund is created under the act is a mere cloak to cover the true character of the levy in question. there is practically no difference between the consolidated fund which vests in the state and the fund which also vests in the state. both the funds can be spent practically on any public purpose almost throughout the state. there was no co-relation between the amount paid by way of cess under the act and the services rendered to the personsfrom whom it is collected. the cess partakes of the character of a pan of the common burden which has to be levied and collected only as a lax. levying of cess was quashed by the supreme court.(19). in very recent judgment of secunderabad hyderabad hotel owners association & ors. etc. vs. hyderabad municipal corporation, hyderabad & anor., (7), license fee collected to give various service like scavenging etc., it was held that it is now settled law that the license fee may be either regulatory or compensatory. when a fee is charged for rendering specific services, a certain element of quid pro quo must be there between the service rendered and the fee charged so that the licence fee is commensurate with the cost of rendering the service although exact arithmetical equivalence is not expected. the fee which is charged for such activity would be validly classifiable as a fee and not a tax although such fee cannot be excessive. it was further held that the fees although credited in the common fund, are earmarked for the purposes for which they are collected; doubling the licence fee after 9 years could not be considered an excessive increase.(20). in the case of h.h. shri swamiji of shri amar mutt and others vs. commissioner, hindu religious and charitable endowments department and others (8), it was held by the supreme court that for the purpose of finding whether there is a correlationship between the services rendered to the fee payers and the fees charged to them, it was necessary to know the cost incurred for organising and rendering the services; but the matters involving consideration of such a correlationship are not required to be proved by a mathematical formula. what has to be seen is whether there is a fair correspondence between the fee charged and the cost of services rendered to the fee payers as a class. each case has to be judged from a reasonable and practical point of view for finding out the element of quid pro quo. it was held as under:-'the information sought by the appellants could have been supplied by the respondents because matters like the date of constitution of the fund, the annual salary budget of the commissioner's establishment at different places and the total number of institutions to which services were rendered would be within their special knowledge. for the purpose of finding whether there is a correlationship between the services rendered to the fee payers and the fees charged to them, it is necessary to know the cost incurred for organising and rendering the services. but matters involving consideration of such a correlationship are not required to be proved by a mathematical formula. what has to be seen is whether there is a fair correspondence between the fee charged and the cost of services rendered to the fee payers as a class. the further and better particulars asked for by the appellants under order vi, rule 5 of the civil procedure code, would have driven the court, had the particulars been supplied, to a laborious and fruitless inquiry into minute details of the commissioner's departmental budget. a vivisection of the amounts spent by the commissioner's establishment at different places and for various purposes and the ad hoc allocation by the court of different amounts to different heads would be best have been speculative. it would have been no more possible for the high court if the information were before it, than it would be possible for us if the information were before us, to find out what part of the expenses incurred by the commissioner's establishment at various places and what part of the salary of his staff at those places should be allocated to the functions discharged by the establishment in connection which the services rendered to the appellants. we do not therefore think that any substantial prejudice has been caused to the appellants by reason of the non-supply of the information sought by them.'(21). vide notification annexure-3 dated 17.2.1976 table of registration fee was prescribed in schedule i from the fee ranging from rs. 2.50 p. to the maximum of rs. 250/- and fixed fee was also prescribed for the purpose of registration in regard to the will, adoption deed, general power of attorney etc. etc.(22). vide annexure-4, the table of registration fee was regularised with effect from 1.4.1986 and the registration fee was enhanced ranging from rs. 5/- to the maximum of rs. 500/- and similarly fixed fee on certain documents was also enhanced which enhancement was quite nominal. in about 10 years time vide annexure-5 amendment was made in the notification annexure-4 and the registration fee was enhanced from rs. 100/- to rs. 5,000/- i.e. the minimum fee was enhanced 20 limes and the maximum 10 times, however, the maximum was kept at rs. 5,000/- for the value or consideration where it exceeded rs. 10 lacs and above. vide impugned notification annexure-6, the amendment has been made in the earlier notification w.e.f. 1.4.1997 and the fee has been prescribed at 1% of the value or consideration for all type of sale-deeds. this very notification has been further amended after about a year on 21.3.1998 by reducing the maximum fee upto rs. 25,000/r vide annexure r/1; meaning thereby the government had by realised that 1% fee on the consideration value on the documents for the purpose of registration was perhaps not proper. the maximum fee chargeable in various notification right from 1976 to 1998 are as under:-prior to 1976us. 100a1976rs. 250/-1986rs. 500/-1994rs. 5000/-19971 % of the value or considerationof sale-deed.1998rs. 25000/-(23). for the 10 years from 1976 to 1986, the increase was cent- percent. for the period from 1986 to 1994 for about 8 years, the increase was 10 times and again for 1997 after about 3 years without fixing the maximum an ad valoram fee was fixed which has now been amended in the year 1998 to the maximum of rs. 25,000/- i.e. from 1994 to 1998 it has been increased to 5 times i.e. from rs. 5,000/- to rs. 25,000/-.(24). it has been repeatedly held as discussed above that the fee which is to be collected for the various services, involve the element of quid pro quo. in the present case, the services to be rendered for the purpose of registration of all type of sale-deeds or even for registration of the lease-deed is identical irrespective of the fact whether a sale consideration is rs. 100/- or to any higher amount. the services required for registration of the sale-deeds are equal and similar in respect of the amount consideration mentioned in the sale-deed. the quantum of amount makes no difference so far the services or documentation for the purpose of service is concerned. there seems to be valid reasons for providing the minimum or maximum fee. a person presenting the registration document for less consideration be not burdened with a higher fee but the vice versa is not correct. the state is bound to reveal the approximate expenditure for meeting out and for rendering such services for which the registration fee is to be collected. in the present case, in the written statement filed by the respondents, it has been specifically mentioned that from the year 1986 to 1995, the expenses in me registration department had increased from approx. rs. 81 lacs to rs. 372 lacs, it comes to the increase by 4-1/2 limes. the total income has not been mentioned but even if the ratio of increase as per the expenses is to be maintained as has been held by the hon'ble supreme court in the case of sikandarabad hyderabad hotels association (supra) where the doubling of the service charges after 8 years ofperiod was held to be valid. in such situation, it is to be seen by the courts, as has been held by the supreme court in the case of h.h. swamiji 1979 (4) scc 642 (supra), whether the amount being charged for rendering the services is reasonable and not arbitrary and correlates to the services so being rendered. it does without saying that the charging of fee at 1% irrespective of the amount even though now stood revoked, was unreasonable. the maximum or minimum fee ought to have been prescribed. it is un-imaginable that by fixing 1% of fee in the impugned notification, the respondents would have charged rs. 1/- only if the sale consideration is rs. 100/- and without any limit if there is higher sale consideration as in the present case by charging more than 10 lacs. as mentioned above, from 1986 to 1995 and as per written statement the increase of expenses are stated to be 4.6% approx. the maximum fee prescribed in the year 1986 was rs. 500/- , the fee could have been increased by six or seven times taking the base year to be 1986. but in the year 1994 instead of increase to seven times it was increased by 10 times i.e. from rs. 500/- to rs. 5,000/-. but in the year 1998 vide notification it has again been raised to 50 times (base 1986) without there being any proportionate increase of the expenses brought out on record. for the reason that the notification annexure r/1 fixing the fee as rs. 25,000/- has not been challenged, i may not go into this aspect to adjudicate whether the latest notification of 21.3.1998 is valid or not, but by no stretch of imagination the impugned notification can be held to be in accordance with law. the petitioner had to pay a registration fee of rs. 10,24,280/-apart from the stamp duty he was liable to pay. this amount of rs. 10,24,280/- collected as registration fee for the registration of the sale-deed cannot be held a correlationship with the element of quid pro quo. it goes without saying that the respondents are entitled to charge reasonable fee to meet the expenses of the services which are to be rendered but such charging of fee cannot be left to be whimsical or too highside which should look arbitrary in itself. in my opinion, the prescription of maximum fee of rs. 5,000/- immediately before issuing the impugned notification was reasonable fee prescribed by the respondents itself which was 10 times more than the prior notification of 1986 and in such situation the impugned notification, even though already revoked by the state government is held to be bad and the petitioner shall be entitled to the refund of the amount in question after adjusting the maximum registration fee of rs. 5,000/- as per the previous notification of 1994. the refund of the amount is to be made within two months failing which the petitioner shall be entitled to interest @ 12% from the date of collection till the date of payment.(25). for the above-said reasons, the writ petition is allowed. the impugned notification annexure 6 even though revoked by a subsequent notification is set aside with a direction that the illegal registration fee charged from the petitioner shall be refunded to the petitioner within two months after adjustment of rs. 5,000/- maximum registration fee as per 1994 notification and in case the order is not complied with within two months, the petitioner shall be entitled to interest @ 12% p.a. from the date of payment at the time of registration of sale-deed till the date of realisation. no order as to costs.

Judgment:
ORDER

Verma, J.

(1). The petitioners in the present case are praying to declare the Notification F2(8) FD/Tax Div./96 dated 14.3.1997 and Notification No. F2(3)FD/Gr.IV/93/1/98 dated 7th of March, 1994 (Annexure 5 and 6), issued by the Stateof Rajasthan in exercise of powers conferred under Section 78 of the Indian Registration Act, 1908 (hereinafter referred to as the 'Act'), as ultravires with further direction to the State to refund the amount of Rs. 10,24,280.00, recovered from the petitioners as registration charges vide receipt dated 15th May, 1997, alongwith interest and further a direction to the respondents not to charge the registration fee as per Notification dated 14th of March, 1997, on the document which has been submitted for the purposes of registration before the registering authority.

(2). The petitioners had purchased the properly known as Food Catering Institute Building, M.I. Road, Jaipur, from the State of Rajasthan by way of auction held under the Rajasthan Nazul Building (Disposal by Public Auction) Rules, 1971. Being the highest bidders of the property in question for the bid of Rs. 22,601/- per sq. meter, the petitioners' bid was accepted. The sale was confirmed by the Government on 14th of December, 1996. They are said to have deposited the amount of Rs. 10,24,27,732.00 with the Government Treasury. In pursuance of the said auction and in consideration as purchasers, a sale deed was executed on 15th May, 1997, between the Governor of the State of Rajasthan and the petitioners vide Annexure 1. The petitioners has also got a stamp affixed worth Rs. 61,45,670/- on the registered deed. The deed was presented for registration. A demand was made by the Sub-Registrar for a sum of Rs. 10,24,280A as registration charges and Rs. 270/- as other charges, totalling to Rs. 10,24,555.00. The amount was paid by the petitioners vide receipt Annexure 2. The Sub-Registrar had demanded the said amount as registration charges at the rate of 1 % of the total sale consideration as per notification dated 14th of March, 1997, issued by the State of Rajasthan (Annexure 6 attached with the writ petition), exercising the powers conferred under Sec. 78 of the Act w.e.f. 1.4.1997. The petitioners are aggrieved against collection of the said registration charges to the tune of Rs. 10,24,280.00 on the said sale deed being violative of Article 265 of the Constitution of India and the Act and Rules framed thereunder by the Government of Rajasthan and pray that the same be declared ultravires by powers conferred under Section 78 of the Act.

(3). It is submitted that the registration fee is the fee under Article 265 of the Constitution of India and there is a clear distinction between a tax and a fee. A tax is a compulsory extraction of money by public authority for purposes enforceable by law and not a payment for services rendered, whereas, a fee is charged for special service rendered to individuals by some government agency as such a charge has an element of Quid Pro Quo. It is submitted that for purposes of levy of fee, two essential elements are necessary, firstly it must be levied in consideration of certain services and secondly the amount collected must be earmarked to meet the expenses of rendering services and must not go to the State's General Revenue to be spent for general public purposes. The registration of the document is consolidated in the Indian Registration Act, 1908 as amended by the Act of 1953. Rules are also framed under the Act. In exercise of the powers conferred under Section 78 of the Act the State Government prepares tables of Registration Fee and other fees from time to time. Initially in the year 1976, the State Government published a Table of Fee payable under the Act for the registration of documents and other matters enumerated in Section 78 of the Act as per Annexure-3. The maximum registration fee on the document was prescribed as Rs. 250/- and different registration fees were provided in the said table Annexure 3 as fee for various types of documents. In the case of an instrument of lease, registration fee was required to be calculated on the amount on which stamp duty was payable, whereas on Will and certain other documents, the registration fee was chargeable as per Article 9. However, the maximum, registration fee at that time was Rs. 250/- only. Another Notification was issued on 28th March, 1986, when the maximum registration fee was subject to a maximum of Rs. 500/- only. This Notification was again substituted by another Notification dated 7th of March, 1994, when the maximum fee fixed was Rs. 5,000/- by enhancing it to ten times from the earlier notification. Attention is invited to Annexures 4 and 5 in this regard.

(4). Vide Annexure 6 - Notification dated 14th of March 1997, the table of registration fee has been provided on the basis of which registration fee is payable under the Act, wherein it is mentioned that except as otherwise provided in the table in respect of specific document or class of documents, fee for the registration of all documents is charged @ 1% of the value of consideration. It further provides that the value of consideration shall be deemed as being equal to the market value of the property except for leases for a period of less than five years. For the purposes of instrument lease, the registration fee is to be calculated on the amount on which stamp duty is payable.

(5). On the sale deed presented by the petitioners, registration fee was charged (a) 1% and the petitioners had to deposit an amount of Rs. 10,24,280/-. It is the submission that the levy of registration fee @ 1% of the value or consideration of the sale deed is too exorbitant, highly excessive and disproportionate to the service rendered by the Registration Department to the petitioners and as a matter of fact it amounts to a tax, whereas it is not disputed that the registration fee as a matter of fact is a 'Fee'.

(6). The petitioners have also narrated the history of levy of the registration fee on the sale deeds to the fact that initially the registration fee was Rs. 100/- only and thereafter the maximum was raised to Rs. 250/ and again to Rs. 500/- and then to Rs. 5,000/- in various years are reproduced as under:-

Year of levy of fee

Maximum

registration fee for sale deed

Prior to 1976

Rs. 100.00

1976

Rs 250.00

1986

Rs,500.00

1994

Rs.5000.00

1997 onwards

@ 1% of the value or consideration

(7). It is the submission of the counsel that there is no difference in the service which the registration office renders in the matter of lease deeds or sale deeds or other deeds which are compulsorily registerable and, therefore, the registration fee at the rate of 1% on the value is discriminatory, arbitrary and in violative of the Article 14 of the Constitution of India. It is also one of the submission that as a matter of fact, there is neither substantial increase in the man power nor there is any substantial increase in the office establishments, rather, there is a substantial increase in number of documents which are presented for registration and more revenue has to be paid to the State Exchequer than the entire expenses of the registration establishment and in the year 1997, the registration charges far exceeded the expenses incurred in the registration department. The petitioners submit that Notification No. F. 2(8)Tax.Div/96 dated 14th March, 1997 and Notification No.F/2(3) FD/Gr. IV/93 dated 7th of March, 1994, are ultravires the provisions of the Registration Act 1908 and are violative of Article 265 of the Constitution of India on the ground that as per the provisions of Section 78 of the Registration Act, the fee must have an element of quid pro quo.

(8). In the written statement filed on behalf of respondents, it is submitted that the petitioners had deposited the charges as per the provisions of Notification dated 14th March, 1997, without any protest or objection and therefore, the petitioners can not challenge the same in the writ petition. It is submitted that the impugned Notifications are neither violative of Article 265 of this Constitution of India nor Section 78 of the Act. It is admitted that the fee had not been imposed under Article 265 but has been levied under the provisions of Section 78 of the Act. It is further submitted that the fee is uniform and at present it is being charged on all the documents of sale deeds tomeet the expenses of the registration department. The respondents also stated that Notification dated 14th March, 1997, was further amended by Notification dated 21st of March, 1998, by fixing the maximum fee upto 25,000/- vide Annexure R/1.

(9). From the discussions and pleadings, the following points are required to be determined:-

(1) That the registration fee is in the nature of fee and, therefore, there has to be an element of quid-pro-quo between the fee and the service's rendered by the department. The element of quid-pro-quo is sort of justifying the imposition of fee.

(2) It must be levied in consideration of certain services and should be in the nature of quid-pro-quo and must be collected and earmarked to meet the expenses of rendering the services and can not been levied for the purposes of levying general revenue.

(3) Fee can not be charged on advolorem basis for the reason that the registration of the documents involve the same services irrespective of the value of the deed/document to be registered.

(4) The fee can not be excessive, exorbitant and disproportionate to the services rendered and in case there is any increase in the fee, it has to be proved that due to the increase in the charges, the fee has been increased and it has to be in proportion of increase in the cost of service. It can not be increased without any basis.

(5) That the provisions are to be laid down by the Legislature and power to levy a fee/tax should exist under the Act and both the sources are to flow from the authority of statute as mandated in Article 265 for levy/collection; no fee can be levied by way of administrative decision.

(6) That in regard to the registration of other type of documents, there can not be discrimination for sale deeds. All kinds of documents i.e. sale-deed, gift, will or adoption deed, there is no difference in the services which are to be rendered by the registration document.

(10). It is the further contention that as per the written statement the expenses of the registration department as in the year 1985-86 were Rs. 81.18 lacs, whereas in the year 1994-95 had increased to Rs. 372.87 lacs and at the most there was increase for about four times and in that situation the registration fee could have been increased upto two to three times i.e. from Rs. 500/- to Rs. 2,000/- only.

(11). It is submitted that in case or instrument of lease, registration fee is being calculated on the amount on which the stampt duty was payable and Notification dated 7.3.1998, whereby the registration charges were reduced to the maximum of Rs. 5,000/- has further been amended vide Notification dated 21st March, 1998, whereby it has been further reduced to Rs. 100/- and it is a clear example that the fee is co-relevant with the services rendered.

(12). A Division Bench of Punjab & Haryana High. Court in the case The Delhi Cloth and General Mills Co. Ltd. and others vs. The Chief Commissioner, Delhi and another (1), had held that the fee is not deposited in a separate head or account but is merged in the general revenue of the State. It is not solely used for the maintenance of the registration department but goes into a consolidated fund which is utilised for various other governmental functions; the Registration Act, 1908 has no correlation with the capacity of an individual to pay the registration fee as was demanded under the notification on the debenture trust-deed of the company who had floated a debenture loan of Rs. 2.5 crores. The company, to secure the repayment of the loan, had executed a debenture trust-deed mortgaging some of its properties for the consideration of Rs. 2.5 crores in favour of trustees for debenture-holders, under the said debenture trust deed the Sub-Registrar for registration had demanded an amount of Rs. 1,25,157.50 as registration fee. In pursuance of the notification issued by the Government on 15.12.1952 u/s 78 and 79 of the Registration Act, 1908. The trustees filed a writ petitionwhile maintaining that they were prepared to pay any reasonable fee for registration of the document, that the fee demanded from them for registration had no correlation with the services to be rendered under the Registration Act and was so excessive that it was merely a pretence for fee, that it was not fee and in reality was a tax.

(13). The aforesaid judgment of The Delhi Cloth and General Mills Co. Ltd. and others (supra) was challenged in the Supreme Court and the Supreme Court had confirmed the judgment of Punjab & Haryana High Court and had dismissed the appeal in the judgment reported in Chief Commissioner, Delhi vs. The Delhi Cloth and General Mills Co. Ltd. (2), that the fee in order to be a legal fee must satisfy the following conditions:

(i) there must be an element of quid pro quo that is to say, the authority levying the fee must render some service for the levied however remote the service may be;

(ii) that the fee realised must be spent for the purposes of the imposition and should not form pan of the general revenues of the State.

(14). The above-said judgment was again based on the case-State of Maharashtra & Ors. vs. The Salvation Army, Western India Territory (3). In the case of State of Maharashtra & Ors. vs. Salvation Army (supra) it was held that two elements are essential in order to determine that the payment may be regarded as a fee. In the first place it must be levied in consideration of certain services which the individuals accept either willingly or unwillingly and in the second place, the amount collected must be earmarked to meet the expenses of rendering these services and must not go to the general revenue of the State to be spent for general public purposes.

(15). In similar terms the decision handed over by Allahabad High Court in State of UP vs. District Registrar Meerut (4), wherein it was held that the registration amounted to imposition of tax and was ultravires of the Act and was inoperative as the notification aforesaid to the extent to which the table of fee contained therein relate for the registration of document are ultra vires of the Act and are inoperative.

(16). In the State of Kerala vs. Madras Rubber Factory Ltd. (5), it was held that the charge under the taxing statute can only be under the Act and not under the rules or the notification. The rules normally provide for the procedure to be following for the realisation of the statutory dues.

(17). In the case of Om Prakash Agrawal & Others vs. Giri Raj Kishori & Others (6), it was held that the levy of cess under the Act is not a fee but it is a tax not leviable by State as it does not fall under any of the entries in List II of the Seventh Schedule to the Constitution under which the State Legislature can levy a tax. The primary meaning of taxation is raising money for purposes of government by means of contributions from individual persons, a compulsory exaction of money by a public authority for public purposes, at law and not a payment for services rendered. A tax has three principal characteristics : (i) it is imposed under statutory power with out the tax payer's consent and the payment is enforced by law; (ii) it is an imposition made for public purposes without reference to any special benefit to be conferred on the payer of the tax; (iii) it is a pan of the common burden, the quantum of imposition upon the tax payer depending generally upon the capacity of the tax payer to pay.

(18). It was further held that in determining a levy as a fee the true test must be whether its primary and essential purpose is to render specific services to a specified area or class it being of no consequence. It was held that the fact that the fund is created under the Act is a mere cloak to cover the true character of the levy in question. There is practically no difference between the consolidated fund which vests in the State and the fund which also vests in the State. Both the funds can be spent practically on any public purpose almost throughout the State. There was no co-relation between the amount paid by way of cess under the Act and the services rendered to the personsfrom whom it is collected. The cess partakes of the character of a pan of the common burden which has to be levied and collected only as a lax. Levying of cess was quashed by the Supreme Court.

(19). In very recent judgment of Secunderabad Hyderabad Hotel Owners Association & Ors. etc. vs. Hyderabad Municipal Corporation, Hyderabad & anor., (7), license fee collected to give various service like scavenging etc., it was held that it is now settled law that the license fee may be either regulatory or compensatory. When a fee is charged for rendering specific services, a certain element of quid pro quo must be there between the service rendered and the fee charged so that the licence fee is commensurate with the cost of rendering the service although exact arithmetical equivalence is not expected. The fee which is charged for such activity would be validly classifiable as a fee and not a tax although such fee cannot be excessive. It was further held that the fees although credited in the common fund, are earmarked for the purposes for which they are collected; doubling the licence fee after 9 years could not be considered an excessive increase.

(20). In the case of H.H. Shri Swamiji of Shri Amar Mutt and others vs. Commissioner, Hindu Religious and Charitable Endowments Department and others (8), it was held by the Supreme Court that for the purpose of finding whether there is a correlationship between the services rendered to the fee payers and the fees charged to them, it was necessary to know the cost incurred for organising and rendering the services; but the matters involving consideration of such a correlationship are not required to be proved by a mathematical formula. What has to be seen is whether there is a fair correspondence between the fee charged and the cost of services rendered to the fee payers as a class. Each case has to be judged from a reasonable and practical point of view for finding out the element of quid pro quo. It was held as under:-

'The information sought by the appellants could have been supplied by the respondents because matters like the date of constitution of the Fund, the annual salary budget of the Commissioner's establishment at different places and the total number of institutions to which services were rendered would be within their special knowledge. For the purpose of finding whether there is a correlationship between the services rendered to the fee payers and the fees charged to them, it is necessary to know the cost incurred for organising and rendering the services. But matters involving consideration of such a correlationship are not required to be proved by a mathematical formula. What has to be seen is whether there is a fair correspondence between the fee charged and the cost of services rendered to the fee payers as a class. The further and better particulars asked for by the appellants under Order VI, Rule 5 of the Civil Procedure Code, would have driven the Court, had the particulars been supplied, to a laborious and fruitless inquiry into minute details of the Commissioner's departmental budget. A vivisection of the amounts spent by the Commissioner's establishment at different places and for various purposes and the ad hoc allocation by the Court of different amounts to different heads would be best have been speculative. It would have been no more possible for the High Court if the information were before it, than it would be possible for us if the information were before us, to find out what part of the expenses incurred by the Commissioner's establishment at various places and what part of the salary of his staff at those places should be allocated to the functions discharged by the establishment in connection which the services rendered to the appellants. We do not therefore think that any substantial prejudice has been caused to the appellants by reason of the non-supply of the information sought by them.'

(21). Vide notification Annexure-3 dated 17.2.1976 table of registration fee was prescribed in Schedule I from the fee ranging from Rs. 2.50 p. to the maximum of Rs. 250/- and fixed fee was also prescribed for the purpose of registration in regard to the will, adoption deed, general power of attorney etc. etc.

(22). Vide Annexure-4, the table of registration fee was regularised with effect from 1.4.1986 and the registration fee was enhanced ranging from Rs. 5/- to the maximum of Rs. 500/- and similarly fixed fee on certain documents was also enhanced which enhancement was quite nominal. In about 10 years time vide Annexure-5 amendment was made in the notification Annexure-4 and the registration fee was enhanced from Rs. 100/- to Rs. 5,000/- i.e. the minimum fee was enhanced 20 limes and the maximum 10 times, however, the maximum was kept at Rs. 5,000/- for the value or consideration where it exceeded Rs. 10 lacs and above. Vide impugned notification Annexure-6, the amendment has been made in the earlier notification w.e.f. 1.4.1997 and the fee has been prescribed at 1% of the value or consideration for all type of sale-deeds. This very notification has been further amended after about a year on 21.3.1998 by reducing the maximum fee upto Rs. 25,000/r vide Annexure R/1; meaning thereby the Government had by realised that 1% fee on the consideration value on the documents for the purpose of registration was perhaps not proper. The maximum fee chargeable in various notification right from 1976 to 1998 are as under:-

Prior to 1976

Us. 100A

1976

Rs. 250/-

1986

Rs. 500/-

1994

Rs. 5000/-

1997

1 % of the value or considerationof sale-deed.

1998

Rs. 25000/-

(23). For the 10 years from 1976 to 1986, the increase was cent- percent. For the period from 1986 to 1994 for about 8 years, the increase was 10 times and again for 1997 after about 3 years without fixing the maximum an ad valoram fee was fixed which has now been amended in the year 1998 to the maximum of Rs. 25,000/- i.e. from 1994 to 1998 it has been increased to 5 times i.e. from Rs. 5,000/- to Rs. 25,000/-.

(24). It has been repeatedly held as discussed above that the fee which is to be collected for the various services, involve the element of Quid Pro Quo. In the present case, the services to be rendered for the purpose of registration of all type of sale-deeds or even for registration of the lease-deed is identical irrespective of the fact whether a sale consideration is Rs. 100/- or to any higher amount. The services required for registration of the sale-deeds are equal and similar in respect of the amount consideration mentioned in the sale-deed. The quantum of amount makes no difference so far the services or documentation for the purpose of service is concerned. There seems to be valid reasons for providing the minimum or maximum fee. A person presenting the registration document for less consideration be not burdened with a higher fee but the vice versa is not correct. The State is bound to reveal the approximate expenditure for meeting out and for rendering such services for which the registration fee is to be collected. In the present case, in the written statement filed by the respondents, it has been specifically mentioned that from the year 1986 to 1995, the expenses in me Registration Department had increased from approx. Rs. 81 lacs to Rs. 372 lacs, it comes to the increase by 4-1/2 limes. The total income has not been mentioned but even if the ratio of increase as per the expenses is to be maintained as has been held by the Hon'ble Supreme Court in the case of Sikandarabad Hyderabad Hotels Association (supra) where the doubling of the service charges after 8 years ofperiod was held to be valid. In such situation, it is to be seen by the courts, as has been held by the Supreme Court in the case of H.H. Swamiji 1979 (4) SCC 642 (supra), whether the amount being charged for rendering the services is reasonable and not arbitrary and correlates to the services so being rendered. It does without saying that the charging of fee at 1% irrespective of the amount even though now stood revoked, was unreasonable. The maximum or minimum fee ought to have been prescribed. It is un-imaginable that by fixing 1% of fee in the impugned notification, the respondents would have charged Rs. 1/- only if the sale consideration is Rs. 100/- and without any limit if there is higher sale consideration as in the present case by charging more than 10 lacs. As mentioned above, from 1986 to 1995 and as per written statement the increase of expenses are stated to be 4.6% approx. The maximum fee prescribed in the year 1986 was Rs. 500/- , the fee could have been increased by six or seven times taking the base year to be 1986. But in the year 1994 instead of increase to seven times it was increased by 10 times i.e. from Rs. 500/- to Rs. 5,000/-. But in the year 1998 vide notification it has again been raised to 50 times (Base 1986) without there being any proportionate increase of the expenses brought out on record. For the reason that the notification Annexure R/1 fixing the fee as Rs. 25,000/- has not been challenged, I may not go into this aspect to adjudicate whether the latest notification of 21.3.1998 is valid or not, but by no stretch of imagination the impugned notification can be held to be in accordance with law. The petitioner had to pay a registration fee of Rs. 10,24,280/-apart from the stamp duty he was liable to pay. This amount of Rs. 10,24,280/- collected as registration fee for the registration of the sale-deed cannot be held a correlationship with the element of Quid Pro Quo. It goes without saying that the respondents are entitled to charge reasonable fee to meet the expenses of the services which are to be rendered but such charging of fee cannot be left to be whimsical or too highside which should look arbitrary in itself. In my opinion, the prescription of maximum fee of Rs. 5,000/- immediately before issuing the impugned notification was reasonable fee prescribed by the respondents itself which was 10 times more than the prior notification of 1986 and in such situation the impugned notification, even though already revoked by the State Government is held to be bad and the petitioner shall be entitled to the refund of the amount in question after adjusting the maximum registration fee of Rs. 5,000/- as per the previous notification of 1994. The refund of the amount is to be made within two months failing which the petitioner shall be entitled to interest @ 12% from the date of collection till the date of payment.

(25). For the above-said reasons, the writ petition is allowed. The impugned notification Annexure 6 even though revoked by a subsequent notification is set aside with a direction that the illegal registration fee charged from the petitioner shall be refunded to the petitioner within two months after adjustment of Rs. 5,000/- maximum registration fee as per 1994 notification and in case the order is not complied with within two months, the petitioner shall be entitled to interest @ 12% p.a. from the date of payment at the time of registration of sale-deed till the date of realisation. No order as to costs.