TaxTMI 
TaxTMI 
1993 (7) TMI 337
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....ly, this Court in Om Prakash Agarwal and Ors. v. Giri Raj Kishori and Ors. held that Section 3 thereof was unconstitutional on the ground of legislative incompetence as the levy of cess under Section 3 thereof was in the Feature of tax and not fee, quid pro quo being absent. Purporting to have removed the defects as pointed out therein, the Act came to be made and the full bench put its seal of approval of its validity. 3. Sri Shanti Bhushan, the learned Senior counsel for the appellants in his usual vehemence contended that the agriculture produce is a declared goods under Article 286(2) of the Constitution. This Court declared in Kewal Krishan Puri and Anr. v. State of Punjab and Ors. that constitutionally it is impermissible to levy mar....
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.... and other related entries empowers the State Legislature under Art. 246(3) of the Constitution to make the Act. The Act was made to augment agricultural production and improving its marketing and sale by expending the fund realised by imposition and collection of fee envisaged in Section 5(1) of the Act. The rate of fee on ad valorem basis was determined at 1 per cent of the sale/purchase of agricultural produce bought or sold or brought for processing in the notified market area. 5. The market area was defined to mean any area defined under Section 6 of the Punjab Agricultural Produce Markets Act, 1961. The principal market yard and sub market yard were also demarcated in Section 7 thereof. The market also was similarly defined to mean m....
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....nistered by the Board which would be expended only for the purposes envisaged under Sub-section (5) of Section 6 extracted hereinbefore. It is trite to reiterate the law laid down by this Court of the distinction between the tax and the fee and its demarcating line visa-vis the power of the legislation to make law for imposition of fee in that behalf. Suffice to reiterate the ratio laid in Sreenivasa General Traders and Ors. v. State of A.P. and Ors. that the traditional view that there must be actual quid pro quo for a fee has undergone a sea change. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the s....
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.... authority to each individual nor that each should obtain the benefit of the service. The ratio in K.K. Puri's case that "At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services in the market to the payer of fee" was held to be "an obiter" which is the main plank on which the contention of Sri Shanti Bhushan rests. 6. In Ramesh Chandra Etc. v. State of U.P. Etc. , Southern Pharmaceuticals & Chemicals Trichur and Ors. etc. v. State of Kerala and Ors. etc. benches of three Judges and Municipal Corpn. of Delhi and Ors. v. Mohd. Yasin a bench of two Judges ....
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....plied to meet the expenditure incurred, though in the rural areas but in connection with the developments enumerated therein, for providing enumerated amenities and facilities and for conversion of the notified market areas into model market areas by utilising the technical know-how thereto etc. The object of the Act is to improve the agricultural production and the marketing and sale of the agricultural produce, bought or sold or bought for processing. The levy is on the agricultural produce and the burden is passed on to the second purchaser. The dealer bears no burden under Section 5(3). The primary and essential purpose of the impost and collection of the fee is to effect improvement of communications and other related amenities and fac....
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....ged with specific reference to notified market area was totally absent in Act 12 of 1973. The definition of rural area therein was vague and the fee could be spent in any rural area under that Act and not necessarily in any notified market areas or in relation thereto. Thus it was held to be a tax. It is settled law that the legislature has no power to overrule the judgment while re-enacting the law but has power to remove the defects pointed out therein and make the law consistent with the law declared by the court and validate the invalid law thus declared earlier retrospectively from the date when the invalid law was passed. This Court in D. Dasegowda v. State of Karnataka and Ors. Civil Appeal No. 797 of 1993 dated February 19, 1993 hel....