Tax and fee-distinction, a tax is a compulsory exaction of money by a public authority for public purposes enforceable by law and is not payment 'for services rendered'. This definition brings out the essential characteristics of a tax as dis-tinguished from other forms of imposition which, in a general sense, are included within it. The essence of taxation is compulsion, that is to say, it is imposed under statutory power without the taxpayer's consent and the payment is enforced by law. The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. On the other hand A fee is generally defined to be a charge for a special service rendered to individuals by some govern-mental agency. But the traditional view that there must be actual quid pro quo has undergone a sea change with the passage of time. Correlation-ship between the levy and the services rendered/expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a 'reasonable relationship' between the levy of the free and the services rendered, State of Gujarat v. Akhil Gujarat Pravasi v. S. Mahamendal, (2004) 5 SCC 155 (166): AIR 2004 SC 3894; see also (2004) 10 SCC 201. [Constitution of India Act, 265]
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