D.P. Uniyal, J.
1. This is a plaintiff's appeal, arising out of a suit for refund of Rs. 2,500 from the State Government.
2. The facts of the case, briefly stated, are these. On 30-7-1947 the Excise Commissioner of U. P. granted a permit to the plaintiff-appellant for export of 2,500 maunds of molasses outside U. P. on pre-payment of Re. 1 per maund as licence fee. It appears that by Clause (4) of the Molasses Control Order, 1944 the U. P. Government had controlled the export of molasses by rail, river or road outside the United Provinces on such terms and conditions as may be prescribed by the Excise Commissioner, United Provinces. The aforesaid licence was granted to the plaintiff by the Excise Commissioner in exercise of the powers conferred on him under Clause (4) of the Molasses Control Order, 1944 (hereinafter referred to as the Order). The aforesaid Order was made by the U. P. Government in exercise of powers conferred under Rule 81(2)(a) of the Defence of India Rules, which, inter alia, empowered the State Government to make an order providing for regulating the production, movement and transport of articles or things of any description whatsoever, Clause (f) of Rule 81(2) authorised the making of provision for grant or issue of permits.
3. The permit granted by the Excise Commissioner, U. P., to the plaintiff-appellant had thus been issued in exercise of the power conferred on him under Clause (4) of the Order. The appellant deposited the necessary licence fee and thereupon a permit was issued to him to purchase 2,500 maunds of molasses from the sugar mills at Lhaksar for purposes of export outside the United Provinces. Due to disturbances consequent on partition the plaintiff wag unable to transport molasses as he had intended to do. He, therefore, asked the Excise Commissioner of U. P. to refund the amount of Rs. 2,500 deposited by him. On being informed that the amount could not be refunded, the plaintiff brought the suit out of which this appeal has arisen. He contended that the U. P. Government had not provided him with necessary facilities for the transport of molasses outside U. P. and, as such, he was entitled to the refund of the amount paid by him by wayof licence fee, and further that the fee charged from him was excessive. The State Government denied the claim of the plaintiff and pleaded that it was not at all bound to supply transport facilities to the plaintiff. The permit issued to the plaintiff explicitly stated that the State Government did not guarantee any facilities of transport to the permit-holder.
4. The trial Court dismissed the suit on the finding that the Excise Commissioner, U. P. was justified to charge the licence fee from theplaintiff in exercise of the power conferred on in under the Molasses Control Order and that the payment of fee was not subject to the condition that the U. P. Government would provide facilities for the export of the goods.
5. The lower appellate court affirmed the decree of the Court of first instance and dismissed the suit. In the court below the appellant raised a new point and contended that the Excise Commissioner had no authority to fix any amount to be paid for obtaining permits, and that it really amounted to a tax or export duty. The lower appellate court held that the amount charged from the plaintiff was for obtaining permits for exporting molasses outside U. P. and was, therefore, in the nature of a fee and not a tax.
6. The main contention of the learned counsel for the appellant before me was, first, that the Molasses Control Order did not authorise the Excise Commissioner, U. P. to impose a fee on the purchase of molasses intended to be exported; secondly, that the levy of Re. 1 was in the nature of an export tax and not a fee inasmuch as there was no element of quid pro quo to justify the said levy. In other words, what was contended for was that there was no co-relation between the fee levied and the services rendered to persons from whom the fee was charged. And thirdly, that the levy was not set apart as a separate fund by the Government but was merged in the public revenues for the benefit of the general public, and not for the benefit of those who paid the impost.
7. In support of his argument that the charge made from the plaintiff was a tax and not a fee, the learned counsel strongly relied on the observations in the Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar, AIR 1954 SC 282. At page 295 Justice Mukerji observed as follows:
'The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of the common burden, while a fee is a payment for a special benefit or privilege. Fees confer a special privilege, although special advantage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest. Public interest seems to be the basis of all impositions, but in a fee it is some special benefit which the individual receives. As Seligman says, it is the special benefit accruing to the individual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage., if it exists at all, is an incidental result of State action.'
'If as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision, be co-related to the expenses incurred by the Government in rendering the services.'
8. It was urged that there was no evidence to show that the permit-holders were to receive any special benefit or advantage from the fee charged from them. On the other hand, the fact that the amount realised was merged in the general revenues indicated that it was a common burden shared by all, irrespective of benefit to any particular class.
9. The observations of the Supreme Court in the last cited case do not show that the levy made from the plaintiff was in the nature of a tax. Justice Mukerji pointed out at pp. 296 and 297 that this factor (levy) by itself might not be conclusive. According to his Lordship, the payment into a separate fund which does not merge in the consolidated fund of the State is at best only an indication that the levy is intended by the legislature as a fee for services rendered, but it is not a conclusive test. Equally so payment into a separate fund would not by itself remove a levy outside the pale of controversy whether the levy is in fact a fee. What is important in determining as to whether a particular levy is a tax or fee, as was pointed out by their Lordships, is the fact whether the primary motive of the levy is regulation in the public interest or whether it is to impose a burden irrespective of the benefit accruing to the class of persons affected thereby.
10. In Hingir Rampur Coal Company v. the State of Orissa, AIR 1961 SC 459 at p. 464 their Lordships of the Supreme Court pointed out that the fact whether there is a co-relation between the service and the levy and whether any particular cess levied amounts to fee or tax is always a question of fact to he determined in the circumstances of each case.
11. It was never pleaded by the appellant that there was no element of quid pro quo to justify the levy. This point was raised by him for the first time in the lower appellate court. The fee charged from the plaintiff appellant by the Excise Commissioner, U. P. was in return for the issue of permit granted to him. Under the Molasses Control Order the U. P. Government had authorised the Excise Commissioner, U. P. to impose such terms and conditions as he may consider necessary for regulating the purchase of molasses from certain sugar factories. Obviously the appellant could not obtain molasses from sugar mills except on the basis of a permit issued by the Excise Commissioner. He was thus getting a special benefit or advantage by securing the permit on pre-payment of Re. 1 per maund as fee. In the very nature of things, the Commissioner of Excise, U. P. would have to maintain a staff to see that the supplies were made by factories on permits. This would require checking of accounts of purchases and sales maintained by dealers and mill owners. Similarly, it would be necessary to incur expenses in the printing of application forms and permits and maintaining a staff to supervise the proper supply and purchase of molasses by sugar mills and traders. If the plaintiff had raised a specific plea in the trial Court that no special benefit accrued to the plaintiff on account of the payment of licence fee, the Government might have been able to prove by leading evidence that the expenses incurred over the issue of permits to purchasers of molasses from sugar mills were such as to justify the levy of a fee of Re. 1 per maund. The point raised by the learned counsel, therefore, needed investigation of facts. Since the appellant did not raise any such plea in the trial Court it was not possible to draw a presumption that the said impost was in the nature of a tax. On the contrary, the circumstances of the case point to the conclusion that the fee charged was a regulatory measure with the object of securing supplies of an essential commodity like molasses to traders from sugar mills for the purpose of export.
12. I find no force in this appeal and itis accordingly dismissed with costs.