Supreme Court of India

Jantia Hill Truck Owners … vs S.A.Coal Dealer & Truck Owner … on 10 July, 2009

Supreme Court of India
Jantia Hill Truck Owners … vs S.A.Coal Dealer & Truck Owner … on 10 July, 2009
Bench: S.B. Sinha, Deepak Verma
                                                                   REPORTABLE
               IN THE SUPREME COURT OF INDIA
                CIVIL APPELLATE JURISDICTION


                CIVIL APPEAL NO. 4225 OF 2009
            (Arising out of SLP (Civil) No. 14906 of 2009)


Jantia Hill Truck Owners Association ....   Appellant

                                Versus


Shailang Area Coal Dealer and Truck
Owner Association and others                .... Respondents




                                  WITH
             CIVIL APPEAL NOS. 4226-4227 OF 2009
       (Arising out of SLP (Civil) Nos. 15450-15451 of 2009)
                                          [CC Nos. 9222-9223/2009]


Ms. Mem Julet Passah                              ... Appellant
                                 Versus

Shailang Area Coal Dealer and Truck
Owner Association and others                     .... Respondents




                                  WITH
                                      2


                CIVIL APPEAL NO. 4228 OF 2009
           (Arising out of SLP (Civil) No. 15452 of 2009)
                                               [CC No. 9224/2009]
Shri Mylliemngaph                                 .....   Appellant
                                  Versus

Shailang Area Coal Dealer and Truck
Owner Association and others                      .... Respondents




                                  AND
                CIVIL APPEAL NO. 4229 OF 2009
            (Arising out of SLP (Civil) No. 15454 of 2009)
                                                [CC NO. 9231/2009]


Shri Trinspil K. Sangma                           .....   Appellant
                                  Versus

Shailang Area Coal Dealer and Truck
Owner Association and others                      .... Respondents


                           JUDGMENT

S.B. SINHA, J. .

1. Leave granted.

2. This batch of appeals arise out of a judgment and order dated 23rd

June, 2009 passed by a Division Bench of the Gauhati High Court at

Guwahati whereby and whereunder the Memorandum dated 11th
3

September, 2003 issued by the Government of Meghalaya purported to

be in terms of Section 138 (2)(b) of the Motor Vehicles Act, 1988 (for

short `the Act’) was held to be illegal and a writ of or in the nature of

mandamus was issued directing the Government of Mehalaya to make

Rules in exercise of its powers thereunder.

3. The basic fact of the matter is not in dispute.

Several writ petitions were filed before the High Court alleging

that trucks carrying cargo in the State of Meghalaya are compelled to pay

substantial amounts to various entites at innumerable points who broadly

fall under four categories – (1) persons operating weighbridges on

various terms and conditions stipulated by the State of Meghalaya ; (2)

the local tribal chiefs known as Sylems and Sardars ; (3) the authorities

implementing the provisions of the Air (Prevention and Control of

Pollution) Act, 1981 and (4) the Police officers of the State of

Meghalaya.

The Sylems and Sardars being the local tribal chiefs, admitted

establishment of such toll gates and collection of monies from the cargo

carrying vehicles asserting customary rights in them therefor and which

are said to be protected by Sixth Schedule of the Constitution of India

and the laws made by the District Council thereunder.
4

Indisputably a batch of the writ petitions including the connected

appeals relating to the right of Sylems and Sardars who established Toll

Gates and collection of monies by them, had been heard in part by the

High Court.

5

It is also not in dispute that various interim orders were passed in the said

pending mattes. The Gauhati High Court, however, took up for hearing a batch of six

matters in regard to the legality of collection of monies by the operators of the

weighbridges in the State of Meghalaya opining that the purported grievances made
6

in the other writ petitions relating to establishment of toll gates and collection of

monies by other agencies could be determined later.

Checkgates on:

Shallang- Riangdo-Athiabari Road (Meghalaya portion of the Road)

1. Shallang Area Labour Association – Rs.50/-

At Kyllon-Mathei

2. Western Hills Weigh Bridge – Rs.250/-

(On Challan-Rs.30/- Actual charge is more
at Nongdaju)

3. Nongstoin Syiemship Checkgate at – Rs.400/-

4. Nongstoin Syiemship Checkgate at – Rs.100/-

5. MVI not a Checkgate but persons kept by – Rs.1000/-

      this MVI at Athiabari                                (No slip)
6.    Sirdar of Riangsih Checkgate at Myndo     -           Rs.100/-
7.    Sirdar of Jyrgam Checkgate at Tynghor     -           Rs.100/-
8.    Smoke-Testing Checkgate at Kamrangshi -               Rs.65/-
                                                    On slip actually
                                                           collected
                                                            Rs.250/-
9.    Pollution under control at Athiabari      -           Rs.65/-
                                                    on slip actually
                                                           collected
                                                            Rs.250/-
10. D. Shira Weighbridge at Athiabari           -            No slip
                                                        Average per
                                                    truck Rs.1000/-
11. Police                                      -           Rs.400/-
      O.C.Hahim P.S.                                       (No slip/
                                                           Challan)
12. R.H. Weigh Bridge at Hahim                  -           Rs.500/-
13. Automobile Smoke Emission Testing           -      Rs.250/- (not
      Station near Hahim Bazar                        mentioned on
                                                                slip)
14. J.K. Rabha Weigh Bridge at Mauman           -           Rs.500/-
15. Smoke Testing at Mauman                     -           Rs.250/-
16. Smoke Testing at Haldipara                  -           Rs.250/-
      Total                                     -         Rs.5330/-
                                       7


4. We may, at the outset also place on record that in the writ petition

filed by the respondent – Shallang Area Coal Dealer and Truck Owner

Association 16 points at which the driver/owners of the trucks are

subjected to extortionate payments exacted without any authority of law

were mentioned which are as under :-

5. The prayers in the said writ petition read as under :-

“In the premises aforesaid, it is most respectfully
prayed that this Hon’ble Court may be graciously
pleased to issue Rule calling upon the respondents
to show cause as to why a writ of mandamus shall
not be issued directing stoppage of collection of
illegal tolls and subjection of weighment and
“smoke testing” more than once on public roads in
Assam and Meghalaya with immediate effect and
as to why all illegal check gates including the gates
where the trucks are subjected to weighment and
“smoke testing” more than once wherein such toll
collection takes place shall not be dismantled.”

6. The writ petitioner-respondent, however, directly or indirectly did

not question the validity or otherwise of the aforementioned

Memorandum dated 11th September, 2003.

7. The State of Meghalaya in its counter-affidavit filed before the

High Court inter alia stated :-

8

“5. That with regard to the statement made in
paragraphs 2, 3 4, 5, 6 and 7 of the petition your
deponent denies the same and states that the
Members of the Petitioner’s Association have not
made any complaint before the concerned Police
Station or any other Respondent Authority
regarding any illegal collection of tolls/ extortion
as alleged in the petition. It may also be stated that
so far illegal collection of tolls by the Respondent
No. 6 is concerned; no Motor Vehicle Inspector
has been posted in the Check gates as mentioned in
the petition. As such illegal collection or extortion
by the said person from the Members of the
Petitioner’s Association does not arise. The
statements made in the petition are general
statements containing wild allegations and the
same are vague in nature. Whenever, any such
complaint was received by the authority regarding
any collection of illegal tolls, necessary steps were
taken in the matter by the District Administration.”

8. Before the High Court, however, on a query made by the Court,

the learned Advocate General for the State of Meghalaya inter alia

contended that check posts have been established and fees are being

collected without framing any Rules and in terms of the said

Memorandum.

9. By reason of the impugned judgment the High Court while

recognizing that weighbridges can be established in terms of the Act but

in absence of any Rules framed in this behalf no fee can be collected.

The State of Meghalaya does not prefer any appeal thereagainst uptil

now.

9

10. The appellants were not parties before the High Court.

11. Mr. Ranjit Kumar, learned senior counsel appearing for the

appellants would contend that the appellants have preferred these appeals

against the impugned judgment because in absence of any valid receipt

granted to them by the authorized weighbridge owners, they would not be

permitted to carry on inter-state transport business and thus their right

under Article 301 of the Constitution would be violated.

12. Mr. A. Sarma, learned senior counsel appearing on behalf of the

respondent-writ petitioner, however, would support the impugned

judgment.

13. Before adverting to the question involved in these appeals, we may

place on record the relevant part of the said Memorandum dated 11th

September, 2003 laying down the procedures required to be followed by

the Transport Department for granting permission for installation and

operation of weighbridges for commercial and regulatory purposes. They

read as under :-

“1. This procedure shall be followed by the
Transport Department for granting of permission
of installation and operation of Weigh Bridge for
commercial and regulatory purposes.

10

8. For the weighment of vehicles fees may be
charged at a rate fixed by the Transport
Department.

9. The weighment of vehicles, whenever and
wherever it becomes necessary in connection with
any of the affairs of any of the Departments of the
State shall be done at the weighbridges installed
under these directions/ procedure and in keeping
with the relevant provisions of the Motor Vehicles
Act, 1988.

10. Whenever _________ under these provisions a
certificate of the weight of the vehicle shall be
issued by or under the authority of the Transport
Department and the same shall be taken
cognizance of by all Government authorities/
Departments.

14. Fees shall be paid at the rate fixed by
Government for each application for permission
and for renewal of permission. All fees under these
provisions shall be paid into the concerned
Treasury and credited in the relevant Head of
Account.

15. This Office Memorandum shall also apply and
be binding on all the other weighbridges set-up on
or before notification of this Office Memorandum.

17. These orders shall remain in force till the
finalization and approval of the Rules for
installation, Regulation, and Operation of
weighbridges in Meghalaya.”

14. Indisputably an interim order was passed on 11th June, 2008

directing stoppage of collection of monies from the truck owners/drivers

by the various local tribal chiefs. Pursuant thereto or in furtherance

thereof the Deputy Commissioner, West Khasi Hills, District of
11

Meghalaya issued an order dated 20th February, 2009 directing the said

persons to remove/stop all the illegal Toll gates/Check gates/Weigh

Bridge on public roads and stop collection of illegal tolls therein

immediately within one week from the date of issue of the said letter.

15. Writ petitions were filed thereagainst and a learned Single Judge of

the High Court kept the said stay order in abeyance during the pendency

of the writ petitions. Writ appeals preferred thereagainst are pending

before the Division Bench of the High Court.

16. As indicated heretobefore although various questions were raised

in the writ petitions filed by the Association of the Coal Dealers and

Truck Owner as also by tribal chiefs, the High Court thought it fit not to

go into other questions except the one involved in these appeals.

17. It is not in dispute that the Act in unequivocal terms provides to

specify among other things the weight which a carrier of a given

description may carry. The said provisions are necessary not only for

construction and maintenance of road but also to prevent accidents.

18. The Act provides for registration of the Motor Vehicles in terms of

the provisions contained in Chapter IV of the Act. Section 41 prescribes

that an application therefor is required to be accompanied by such

documents, particulars and information and shall be made within such
12

period as may be prescribed by the Central Government. In terms of

Section 58 of the said Act, the Central Government is authorized to

notify the gross vehicle weight, and axle weight of certain types of

transport vehicles.

Sub-section (3) of Section 113 of the Act prohibits any person to

drive or cause or allow to be driven in any public place any motor vehicle

– (a) the unladen weight of which exceeds the unladen weight specified

in the certificate of registration and (b) the laden weight of which exceeds

the gross vehicle weight specified in the certificate of registration.

19. Section 114 of the Act, which is relevant for our purpose, reads as

under:-

“114. Power to have vehicle weighed.
(1) Any officer of the Motor Vehicles
Department authorised in this behalf by the
State Government shall, if he has reason to
believe that a goods vehicle or trailer is being
used in contravention of section 113,] require
the driver to convey the vehicle to a weighing
device, if any, within a distance of ten
kilometres from any point on the forward route
or within a distance of twenty kilometres from
the destination of the vehicle for weighment;
and if on such weighment the vehicle is found
to contravene in any respect the provisions of
section 113 regarding weight, he may, by order
in writing, direct the driver to off-load the
excess weight at his own risk and not to remove
the vehicle or trailer from that place until the
13

laden weight has been reduced or the vehicle or
trailer has otherwise been dealt with so that it
complies with section 113 and on receipt of
such notice, the driver shall comply with such
directions.

(2) Where the person authorised under sub-
section (1) makes the said order in writing, he
shall also endorse the relevant details of the
overloading on the goods carriage permit and
also intimate the fact of such endorsement to
the authority which issued that permit.”

20. Section 138 of the said Act empowers the State Government to make

rules. Sub-section 2(b) thereof states that such rules may provide for “the

installation and use of weighing devices”.

Section 194 of the said Act reads as under :-

“194. Driving vehicle exceeding permissible
weight. (1) Whoever drives a motor vehicle or
causes or allows a motor vehicle to be driven in
contravention of the provisions of section 113 or
section 114 or section 115 shall be punishable with
minimum fine of two thousand rupees and an
additional amount of one thousand rupees per
tonne of excess load, together with the liability to
pay charges for off-loading of the excess load.

(2) Any driver of a vehicle who refuses to stop and
submit his vehicle to weighing after being directed
to do so by an officer authorised in this behalf
under section 114 or removes or causes the
removal of the load or part of it prior to weighing
shall be punishable with fine which may extend to
three thousand rupees.”

14

Section 211 of the Act provides for power to levy fee.

It reads :-

“211. Power to levy fee.

Any rule which the Central Government or the
State Government is empowered to make under
this Act may, notwithstanding the absence of any
express provision to that effect, provide for the
levy of such fees in respect of applications,
amendment of documents, issue of certificates,
licences, permits, tests, endorsements, badges,
plates, countersignatures, authorisation, supply of
statistics or copies of documents or orders and for
any other purpose or matter involving the
rendering of any service by the officers or
authorities under this Act or any rule made
thereunder as may be considered necessary:

Provided that the Government may, if it considers
necessary so to do, in the public interest by general
or special order, exempt any class of persons from
the payment of any such fee either in part or in
full.”

Section 212 provides for publication, commencement and laying of

rules and notifications. Sub-sections (1), (2) and (3) thereof read as

under:-

“212. Publication, commencement and laying of
rules and notifications.

15

(1) The power to make rules under this Act is
subject to the condition of the rules being made
after previous publication.

(2) All rules made under this Act shall be
published in the Official Gazette, and shall unless
some later date is appointed, come into force on
the date of such publication.

(3) Every rule made by any State Government
shall be laid, as soon as may be after it is made
before the State Legislature.”

21. We may at this juncture also notice the provisions of Section 23 of the

General Clauses Act, 1897 which reads :-

23. Provisions applicable to making of rules or
bye-laws after previous publication.- Where, by
any (Central Act) or Regulation, a power to make
rules or bye-laws is expressed to be given subject
to the condition of the rules or bye-laws being
made after previous publication, then the following
provisions shall apply, namely:-

(1) the authority having power to make the rules
or bye-laws shall, before making them, publish a
draft of the proposed rules or bye-laws for the
information of person likely to be affected thereby.

(2) the publication shall be made in such
manner as that authority deems to be sufficient, or,
if the condition with respect to previous
publication so requires, in such manner as the
(Government concerned) prescribed.

(3) there shall be published with the draft a
notice specifying a date on after which the draft
will be taken into consideration.

16

(4) the authority having power to make the rules
or bye-laws , and where the rules or bye-laws are
to be made with the sanction, approval or
concurrence of another authority, that authority
also, shall consider any objection or suggestion
which may me received by the authority having
power to make the rules or bye-laws from any
person with respect to the draft before the date so
specified.

(5) the publication in the (Official Gazette) of a
rule or bye-law purporting to have been made in
exercise of a power to make rules or bye-laws after
previous publication shall be conclusive proof that
the rule or bye-law has been duly made.”

22. The core question which arises for consideration in these appeals is as

to whether the State Government is empowered to issue any executive order

in respect of the matters required to be prescribed by Rules.

23. Article 162 of the Constitution of India in unequivocal terms provides

that the executive power of a State shall extend to the matters with respect to

which the Legislature of the State has power to make laws. Such executive

powers having regard to the Rule of Executive Business are framed in terms

of Article 166. Clause (3) of Article 166 empowers the Governor to make

rules for the more convenient transaction of the business of the Government

of the State, and for the allocation among Minister of the said business in so

far as it is not business with respect to which the Governor is by or under the

Constitution required to act in his discretion.
17

24. The Memorandum was issued in the name of the Governor. It is not

in dispute that it was authenticated in terms of clause (2) of Article 166 of

the Constitution. The power was exercised by the State under the provisions

of the Act. The said order was to remain in force till Rules are framed in the

prescribed manner.

The provisions of the Act mandate that the unladen weight and laden

weight must be determined. Indisputably, weighing devices had to be

provided for the said purpose. It is true that for the said purpose Rules may

have to be framed. It is, however, a well settled principle of law that even in

a case where the statute provides for certain things to be done, subject to

Rules, any action taken without framing the Rules would not render any

action invalid. If a statute is workable even without framing of the Rules,

the same has to be given effect to. The law itself except in certain situations

does not envisage vacuum.

25. Non compliance of the provisions relating to “laden weight” and

“unladen weight” being penal in nature must be held to be imperative in

character. For the purpose of construction of the provisions of the Act the

Courts will have to take into consideration the freedom on the part of the

citizens as also non citizens to carry out trade and business in terms of
18

Article 301 of the Constitution of India, subject of course to the other

provisions thereof.

26. The High Court itself noticed the two primary contentions of the writ

petition for its consideration, which read :-

“Essentially the grievances in these cases is two
fold – (1) the State lacks the necessary authority of
law to collect such fee and (2) even if the authority
in law exists, that those who are entrusted with the
responsibility of rendering the services and
collecting the fee are acting in excess of the
authority conferred on them.”

27. The second contention was not answered.

In fact there was no sufficient pleadings brought on record by the

parties in that behalf. The State for giving effect to the provisions of the

statute may upon itself take the burden of providing for weighbridges and

collection of fees etc. in exercise of its power under Article 298 or Article

162 of the Constitution of India. It may, however, permit to provide parties

to install weighbridges, subject to regulations.

28. The Memorandum in question provides broad terms and conditions

under which the private parties were authorized to set up weighbridges and

collection of fees. Power of the State to do so is not in question. It is not a
19

case where fees are required to be prescribed for undertaking administrative

action.

29. Apart from Section 211 of the Act the State is entitled to make laws

for collection of fees in respect of any manner enumerated in List II of the

Seventh Schedule of the Constitution of India as would be evident from

Entry 66 thereof. If it itself carries on business, it is entitled to lay down the

norms therefor.

30. Where the State or the State controlled agencies render services for

the purpose of effectuation of the provisions of a Central Act, it, in our

opinion, is entitled to charge a reasonable amount in respect thereof.

31. We may, in this behalf, refer to a decision of this Court in T. Cajee v.

U. Jormanik Siem and another [ [1961] 1 SCR 750]. The question which

arose for consideration therein was as to whether in absence of any law

regulating the appointment and succession of Chiefs and Headmen, a notice

issued to the respondent therein to show cause as to why he should not be

removed from his office, was valid. The respondent questioned the said

legality of the show cause notice as also the order of suspension passed

against him on the grounds :-

“(i) That he could not be removed by
administrative orders but only by making a
law ;

20

(ii) that the Executive Committee could not take
any action in this case, and

(iii) that the order of suspension was ultra vires.”

Wanchoo, J. speaking for the Court opined as under :-

“The High Court seems to be of the view that until
such a law is made there could be no power of
appointment of a Chief or Siem like the respondent
and in consequence there would be no power of
removal either. With respect, it seems to us that the
High Court has read far more into para 3(1)(g)
than is justified by its language. Para 3(1) is in fact
something like a legislative list and enumerates the
subjects on which the District Council is
competent to make laws. Under para 3(1)(g) it has
power to make laws with respect to the
appointment or succession of Chiefs or Headmen
and this would naturally include the power to
remove them. But it does not follow from this that
the appointment or removal of a Chief is a
legislative act or that no appointment or removal
can be made without there being first a law to that
effect. The High Court also seems to have thought
that as there was no provision in the Sixth
Schedule in terms of Articles 73 and 162 of the
Constitution, the administrative power of the
District Council would not extend to the subjects
enumerated in para 3(1). Now para 2(4) provides
that the administration of an autonomous district
shall vest in the District Council and this in our
opinion is comprehensive enough to include all
such executive powers as are necessary to be
exercised for the purposes of the administration of
the district. It is true that where executive power
impinges upon the rights of citizens it will have to
be backed by an appropriate law; but where
executive power is concerned only with the
21

personnel of the administration it is not necessary

— even though it may be desirable — that there
must be laws, rules or regulations governing the
appointment of those who would carry on the
administration under the control of the District
Council. ”

The said decision has been noticed by this Court in Surinder Singh v.

Central Govt., [ (1986) 4 SCC 667]. It was held therein:-

“6. The High Court has held that the disposal of
property forming part of the compensation pool was
“subject” to the rules framed as contemplated by
Sections 8 and 40 of the Act and since no rules had
been framed by the Central Government with regard
to the disposal of the urban agricultural property
forming part of the compensation pool, the authority
constituted under the Act had no jurisdiction to
dispose of urban agricultural property by auction-sale.
Unless rules were framed as contemplated by the Act,
according to the High Court the Central Government
had no authority in law to issue executive directions
for the sale and disposal of urban agricultural
property. This view was taken, placing reliance on an
earlier decision of a Division Bench of that court in
Bishan Singh v. Central Government. The Division
Bench in Bishan case took the view that since the
disposal of the compensation pool property was
subject to the rules that may be made, and as no rules
had been framed, the Central Government had no
authority in law to issue administrative directions
providing for the transfer of the urban agricultural
land by auction-sale. In our opinion the view taken by
the High Court is incorrect. Where a statute confers
powers on an authority to do certain acts or exercise
power in respect of certain matters, subject to rules,
the exercise of power conferred by the statute does
not depend on the existence of rules unless the statute
22

expressly provides for the same. In other words
framing of the rules is not condition precedent to the
exercise of the power expressly and unconditionally
conferred by the statute. The expression “subject to
the rules” only means, in accordance with the rules, if
any. If rules are framed, the powers so conferred on
authority could be exercised in accordance with these
rules. But if no rules are framed there is no void and
the authority is not precluded from exercising the
power conferred by the statute.”

32. Mr. Sharma would lay emphasis on the opinion of the Bench in Cajee

(supra) that executive power infringing upon the rights of the citizens would

have to be backed by appropriate law.

The aforementioned observation was made in the context of the

Constitutional provisions contained in the Sixth Schedule.

There exists a distinction between an executive order made in terms of

Articles 73 and 162 of the Constitution of India and one made under the

Sixth Schedule thereof.

Furthermore the levy of charges towards rendering services by itself

does not infringe upon the right of any person.

33. Services of the weighbridges are required to be obtained by the

drivers/owners of the trucks for fulfillment of their statutory obligations.
23

They cannot obtain such services free of any charges. When private parties

are given the right to set up such weighbridges, indisputably they would be

entitled to reasonable profit.

It was not the contention of the writ petitioner-respondent that the

charges levied for getting their trucks weighed at the weighbridges are

exorbitant or they are compelled to get their trucks weighed at several

places, although they otherwise fulfill the statutory requirements laid down

in Section 211 of the Act.

34. Our attention has been drawn by Mr. Sharma to a decision of this

Court in The Commissioner., Hindu Religious Endowments v. Sri

Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, [ AIR 1954 SC 282].

“44. Coming now to fees, a “fee” is generally
defined to be a charge for a special service
rendered to individuals by some governmental
agency. The amount of fee levied is supposed to be
based on the expenses incurred by the Government
in rendering the service, though in many cases the
costs are arbitrarily assessed. Ordinarily, the fees
are uniform and no account is taken of the varying
abilities of different recipients to pay. These are
undoubtedly some of the general characteristics,
but as there may be various kinds of fees, it is not
possible to formulate a definition that would be
applicable to all cases.”

The ratio laid down therein is not in dispute.

24

35. We may, however, notice that the question has been considered by a

Constitution Bench of this Court in Jindal Stainless Ltd. (2) and another vs.

State of Haryana and others [ (2006) 7 SCC 241 ]. The Bench noticed the

difference between `a tax’ `a fee’ and `a compensatory tax” inter alia in the

following terms :-

“40. Tax is levied as a part of common burden.
The basis of a tax is the ability or the capacity of
the taxpayer to pay. The principle behind the levy
of a tax is the principle of ability or capacity. In the
case of a tax, there is no identification of a specific
benefit and even if such identification is there, it is
not capable of direct measurement. In the case of a
tax, a particular advantage, if it exists at all, is
incidental to the State’s action. It is assessed on
certain elements of business, such as, manufacture,
purchase, sale, consumption, use, capital, etc. but
its payment is not a condition precedent. It is not a
term or condition of a licence. A fee is generally a
term of a licence. A tax is a payment where the
special benefit, if any, is converted into common
burden.

41. On the other hand, a fee is based on the
“principle of equivalence”. This principle is the
converse of the “principle of ability” to pay. In the
case of a fee or compensatory tax, the “principle of
equivalence” applies. The basis of a fee or a
compensatory tax is the same. The main basis of a
fee or a compensatory tax is the quantifiable and
measurable benefit. In the case of a tax, even if
there is any benefit, the same is incidental to the
government action and even if such benefit results
25

from the government action, the same is not
measurable. Under the principle of equivalence, as
applicable to a fee or a compensatory tax, there is
an indication of a quantifiable data, namely, a
benefit which is measurable.”

[See also M. Chandru v. The Member Secretary, Chennai Metropolitan

Development Authority and another, [ 2009 (2) SCALE 750 ].

36. Although not very relevant, we may notice that this Court in Vimal

Kumari v. State of Haryana and others, [(1998) 4 SCC 114 ] has held that

even the draft rules may be followed where no rules in accordance with the

statutory provisions have been framed. {See also High Court of Gujarat v.

Gujarat Kishan Mazdoor Panchayat, [(2003) 4 SCC 712] and Mahabir

Vegetable Oils (P) Ltd. and another v. State of Haryana and others,

[ (2006) 3 SCC 620 ]}.

37. Mr. Ranjit Kumar relying on the decision of this Court in Indian

Express Newspapers (Bombay) Pvt. Ltd. and others v. Union of India and

others, [ (1985) 1 SCC 641 ], would contend that the High Court had no

jurisdiction to direct State to frame Rules. We need no go into the said

question as before us Mr.Ranjan Mukherjee, learned counsel appearing on

behalf of the State of Meghalaya made a categorical statement that the Rules

would be framed within eight weeks.

26

38. This Court in Surinder Singh (supra) opined that a copy of the order

must be produced before the High Court before the same can be quashed.

The validity of an order issued by the State Government, furthermore should

be questioned by a person aggrieved upon raising grounds therefor. The

State must be given an opportunity to file a counter-affidavit meeting those

grounds.

39. We, therefore, are of the opinion that the impugned judgment cannot

be sustained. The same is, therefore, set aside.

40. The writ petitioners, however, would be at liberty to file additional

affidavit (s) questioning the validity or otherwise of the said Memorandum.

The High Court must also give an opportunity to the State and other

interested parties to present their respective cases before the High Court.

41. The High Court in the peculiar facts and circumstances of this case

may also consider the desirability of consideration of the matters pending

before it together, if not already disposed of, so that the points raised by the

writ-petitioners may be dealt with comprehensively.

42. The appeals are allowed. No costs.

……………………………..J.

[ S.B. SINHA ]
27

……………………………..J.

[ DEEPAK VERMA ]
New Delhi
July 10, 2009