TaxTMI 
TaxTMI 
2004 (9) TMI 636
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....t they were allotted an industrial plot in Parwanoo by the Himachal Pradesh Housing Board for establishing an industrial unit. They were sanctioned two loans of Rs. 30 lacs and Rs. 27.76 lacs by Himachal Pradesh Financial Corporation and Himachal Pradesh Mineral and Industrial Development Corporation respectively and in order to secure the loan, they were required to mortgage and hypothecate the fixed assets of their leasehold rights in the industrial plot and the machinery installed therein with the aforesaid Corporations for which a deed of simple mortgage was required to be executed. At the time of the execution of the mortgage deed, the plaintiffs were required to pay stamp duty of Rs. 45,804/- and registration charges amounting to Rs. 27,760/- in accordance with the notification issued under sections 78 and 79 of the Registration Act by the State of Himachal Pradesh. The plaintiffs challenged the vires of the notification fixing the registration fee by filing Civil Writ Petition No. 105 of 1979 which was summarily dismissed by a Division Bench of the High Court on 22.5.1979 on the ground that the plaintiffs had an equally efficacious alternative remedy of filing a civil suit w....
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.... fee on a graduated form on the basis of value of subject matter of the instrument is in accordance with the spirit of section 78 of the Registration Act and is valid in law. 5. By the very nature of things recognition of rights or title over immovable property and transactions therein give rise to manifold problems. Movable property, depending upon its size or dimension, can be kept in absolute control in possession of its owner and a third party may not be in a position even to know where the same has been kept. But this is not so for an immovable property which lies in the open attached to the earth at a particular place and the owner may be residing at a far away place. The owner may give the property on lease or licence to someone else who may get physical possession thereof and enjoy the usufruct thereof. In order to get over this difficulty, a system of registration of title to immovable property has been evolved which is followed in many countries. In the United States the legal position has been described as under in Vol. 76 Corpus Juris Secundum Page 525: "Systems looking toward the registration of titles to land, as distinguished from the practice under recording acts ....
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....ance with the conveyancing technique for which the legislation provides. Indirect reference to the earlier legislation is found at the commencement of the Land Registration Act 1925 in the provision that requires the Chief Land Registrar to continue to keep a register of title to freehold and leasehold land. 705. The Land Registry Act 1862. The Land Registry Act 1862 marked the first attempt to introduce registration of title as distinct from registration of deeds by memorial. Registration was on a voluntary basis and subject to conditions, which included conditions (1) that a marketable title should be shown; (2) that the boundaries of the land should be officially determined and defined as against adjoining owners; and (3) that partial interests should be disclosed and registered. The Act continues to apply to estates registered under it as if the Land Registration Act 1925 had not been passed, until such time as those estates are registered pursuant to the Act of 1925. The intention that the registration of such estates is to be transferred to the modern register is confirmed by power given to the Lord Chancellor to provide by order that all titles registered under the Land Reg....
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....ks necessary for the purposes of the Act and further in each district suitable provision for the safe custody of the records connected with the registration of documents in such districts. By amending Act No. 48 of 2001, section 16A (1) has been inserted in the Act. This section provides that notwithstanding anything contained in section 16, the books provided under sub-section (1) of that section may also be kept in computer floppies or diskettes or in any other electronic form in the manner and subject to the safeguards as may be prescribed by the Inspector General with the sanction of the State Government. The office of Sub-Registrar has naturally to be provided with other staff like clerks and other persons for carrying on various kinds of works which are associated with the registration of documents, which involve recording the contents thereof in the register maintained for the purpose, issuing certified copies and giving replies to the search applications. The State Government has to incur considerable expenditure in maintaining the offices of Sub-Registrars which are normally located at the headquarters of a sub-division in a district and in payment of salaries to the staff....
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....part and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax. 9. After independence of the country the Governmental functions increased manifold and various legislations were enacted and schemes were introduced for upliftment of the society. Many measures were introduced which contained provisions for imposing compensatory and regulatory fees. It was realized that the indicia of fee indicated in Shirur Mutt case was too technical and rigid and was not in tune with the requirement of the prevailing social conditions. The characteristics of tax and fee were then examined in considerable detail by a three Judge Bench in Sreenivasa General Traders. vs. State of Andhra Pradesh AIR 1983 SC 1246 and in paragraphs 30 and 31 of the judgment, the Court held as under: "The traditional view that there must be actual quid pro quo for a fee has undergone a sea of change subsequent to decision in AIR 1980 SC 1008. Correlationship between the levy and the services rendered/expected is one of general character and not of mathematical exactitude. All that is necessary is....
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.... State, as the case may be, and will thus necessarily get merged in the public revenues and cannot be set apart. 10. In Sreeniwasa General Traders (supra) the Court took note of the fact that presumably the attention of the Bench hearing Shirur Mutt case was not drawn to Article 266 of the Constitution. It was further observed therein that the Constitution nowhere contemplates it to be an essential element of fee that it should be credited to a separate fund and not to a consolidated fund. 11. In Municipal Corporation of Delhi and others vs. Mohd. Yasin AIR 1983 SC 617, it was held that compulsion is not the hallmark of the distinction between a tax and a fee. That the money collected does not go into a separate fund but goes into the consolidated fund does not also necessarily make a levy a tax. Though a fee must have relation to the services rendered, or the advantages conferred, such relation need not be direct; a mere casual relation may be enough. It was further held that it is neither necessary nor expedient to weigh too meticulously the cost of the services rendered etc., against the amount of fees collected so as to evenly balance the two. A broad correlationship is all t....
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....sons that the State came forward to levy fee by legislative amendments in order to cover up the expenses towards pay, allowances and pensions of judicial officers and establishment staff, their residential accommodations, court buildings, repairs and maintenance as well as other expenses under various heads mainly engaged and employed for the administration of justice. After taking note of the observation in Om Prakash Agarwal vs. Giri Raj Kishori 1986 (1) SCC 722, that in determining a levy as fee the true test must be whether its primary and essential purpose is the rendering of specific services to a specified area or class, it being of no consequence that the State may ultimately and indirectly be benefited by it, it was held that if a broad and general correlation between the totality of the fee on the one hand and the totality of the expenses of the services on the other is established, the levy will not fail in its essential character of a fee on the ground alone that the measure of its distribution on the persons or incidence is disproportionate to the actual services obtainable by them. The test of the correlationship is not in the context of the individual contributors, t....
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....lue of the totality of the services set off against the totality of the receipts. The character of the fee is thus established. The vagaries in its distribution amongst the class do not detract from the concept of a fee as such. 16. The subject matter of challenge in the present case is registration fee which has been fixed by the State Government in exercise of power conferred by Section 78 of the Registration Act. The said provision reads as under: "78. Fees to be fixed by State Government. The State Government shall prepare a table of fees payable -- (a) for the registration of documents; (b) for searching the registers; (c) for making or granting copies of reasons, entries or documents, before, on or after registration; and of extra or additional fees payable -- (d) for every registration under section 30; (e) for the issue of commissions; (f) for filing translations; (g) for attending at private residences; (h) for the safe custody and return of documents; and (i) for such other matters as appear to the State Government necessary to effect the purposes of this Act". 17. The fixation of registration fee under Sub-section (a) on a graduated scale depending upon the v....