Turnover-based fee computation cannot be replaced by gross turnover where revised data is filed within the regularisation period.

The regulatory fee framework required SEBI registration fee to be computed on actual turnover breakup under clause (bb), and the text states that a circular could not substitute gross-turnover computation merely because breakup data was filed late. It also states that, where revised turnover data was produced within the regularisation period and the initial shortfall arose from the stock exchange's compilation process, rigid refusal to accept corrected data was unreasonable. The described consequence was acceptance of revised data, recomputation of fee liability, revision of fee statements, and credit for payments already made, while future defaults remained subject to the regulations.

---

---

Issues: (i) Whether the circular dated 10 October 2003 permitting computation of SEBI registration fee on gross turnover, where breakup turnover data was not filed within time, was valid; (ii) Whether SEBI was justified in refusing to accept revised turnover data certified by a later auditor and in denying the petitioners the benefit of the regularisation scheme and revised fee statements.

Issue (i): Whether the circular dated 10 October 2003 permitting computation of SEBI registration fee on gross turnover, where breakup turnover data was not filed within time, was valid.

Analysis: Clause (bb) inserted in the regulations was intended to implement the expert committee's recommendations by prescribing concessional rates for identified categories of transactions and by requiring fee computation on the actual turnover breakup. The regulatory framework did not authorise SEBI to ignore that structure and revert to gross-turnover computation merely because the breakup data was not furnished within the prescribed time. The failure contemplated by the regulations carried its own consequence, namely suspension of the registration certificate under the fee-payment framework, and not adoption of a different charging basis inconsistent with clause (bb).

Conclusion: The circular to the extent it authorised levy on gross turnover was held unsustainable and was not upheld against the petitioners.

Issue (ii): Whether SEBI was justified in refusing to accept revised turnover data certified by a later auditor and in denying the petitioners the benefit of the regularisation scheme and revised fee statements.

Analysis: The revised data was submitted before the regularisation period ended, and the initial failure was attributable to the stock exchange's handling of the compilation exercise rather than to any deliberate default by the individual brokers. The Court found that a rigid refusal to accept corrected data in a first-time implementation exercise was unreasonable, especially when the data could have been scrutinised or clarified instead of being rejected wholesale. The denial of the scheme's benefit and the failure to account for payments already made in the fee liability statements were therefore unjustified.

Conclusion: SEBI was directed to accept the revised data, recompute the fee liability, revise the fee liability statements, and give credit for amounts already paid.

Final Conclusion: The writ petition succeeded in substantial part, with the impugned fee computation approach displaced and consequential relief granted to the petitioners, while leaving SEBI free to act under the regulations for future defaults.

Ratio Decidendi: Where the regulatory scheme prescribes a specific method of fee computation based on turnover breakup, the authority cannot substitute a gross-turnover basis by circular, and a procedural delay attributable to the exchange's data-collation failure cannot justify wholesale denial of the statutory concessional regime when corrected data is produced within the regularisation period.

---