Registration fee levied on a value-based scale upheld where broad correlation with service cost, not exact quid pro quo, was shown.

A registration fee fixed by the State on a graduated scale linked to the value of the instrument was upheld as a valid fee and not a tax. The governing principle is that a fee need only bear a broad and reasonable correlation to the overall cost of the statutory service; exact quid pro quo is not required, and crediting collections to the Consolidated Fund does not by itself invalidate the levy. The challenge failed because the prior court examined only the individual fee paid by the claimants, rather than the overall receipts and expenditure of the registration department.

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Issues: Whether the registration fee fixed by the State Government under section 78 of the Registration Act on a graduated scale with reference to the value of the instrument was invalid as being in the nature of a tax rather than a fee.

Analysis: The levy for registration of documents serves a statutory scheme connected with transfer and recognition of rights in immovable property, and the State is obliged to maintain registration offices, staff, records, copies and related infrastructure. The earlier strict view that a fee must be matched by exact quid pro quo and that collections must be kept in a separate fund was held to have been diluted by later decisions. The governing principle is that a fee does not fail merely because collections go into the Consolidated Fund of the State, and what is required is a broad and reasonable correlation between the total levy and the total expenditure on the service. The challenge succeeded below only on the basis of the individual fee paid by the plaintiffs, without examining whether the overall receipts from the registration department bore a reasonable relationship to the overall expenditure incurred in maintaining and functioning that department.

Conclusion: The notification fixing registration fees was valid, the levy was a fee and not a tax, and the challenge to its vires failed.

Ratio Decidendi: A statutory fee is valid if there is a broad and general correlation between the total levy and the cost of the services rendered, and it does not cease to be a fee merely because the collections are credited to the Consolidated Fund of the State.

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