TaxTMI 
TaxTMI 
TaxTMI 
2004 (12) TMI 677
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....egistrars for the purpose of exercising powers and performing duties under the Act. Under Section 6 every money lender has to submit an application in the prescribed form to the Assistant Registrar of the area, within the limits of which he carries on or intends to carry on his business, for the grant of licence to carry on business of money lending every year on or before such date as may be prescribed by the State Government. The money lender is required to deposit licence fee [which has been fixed at Rs. 200/-] as per the provisions of sub-section (4) of Section 6 of the Act. The application so made is required to be processed under Section 8 of the Act. Section 9 prescribes the term of licence to be up to 31st July from the date on which the licence is granted. The licence is made valid until the application for renewal of licence, if made to the Registrar within the prescribed time, is disposed of. Section 9-A, in respect of levy of inspection fee, was introduced by Bombay Act No. 50 of 1959 which came into force w.e.f. 26.9.1959. The first amendment to Section 9-A was made by the Maharashtra Act No. 76 of 1975 which came into force from 26.7.1976. Section 9-A was amended f....
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.... to the appellants, amount of inspection fee differs from money lender to money lender and depends upon the utilization of the maximum capital on any day during the period of licence. Money lenders are required to maintain books of accounts under Section 18 of the Act read with Rule 16 and 17 of the Rules. Section 18 deals with the duty of the money lender to keep accounts and maintain cash books and the ledger in such form and in the manner as may be prescribed as also to furnish copies to debtors as well as Assistant Registrars. The section also provides that money lender upon repayment of loan in full shall make entries indicating payment or cancellation and discharge every mortgage, restore every pledge, return every note and cancel or reassign every assignment given by the debtor as security for loan. Rules 16 and 17 read as under :- "Rule 16 ? Forms of cash book, ledger and of statement and receipt under Section 18\026 The cash book and ledger to be maintained by a money lender under sub-section (1) of Section 18 shall be either in Form Nos. 4 and 7 respectively or in Form Nos. 5 and 6 respectively. The statement under clause (a) of sub-section (2) of Section 18 shall be in....
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....served and the accounts required are properly maintained as per the provisions of the Rule. Therefore, there is no question of co-relation of the amount of levy with the inspection fee or licence fee to cost of any service. The inspection of books of accounts of money lenders can by no stretch of imagination be considered service rendered to the money lenders either for the grant of licence or for renewal of the same. Levy of licence fee or inspection fee is, in fact, a tax which the State Government is not empowered to impose. It is also alleged by the appellants that maximum levy of Rs. 5,000/- is arbitrary and violative of fundamental rights granted under Article 14 of the Constitution inasmuch as it has no reference whatsoever to any service and no inspection fee is liable to be imposed or recovered from money lenders when already Section 6 provides for levy of licence fee. Appellants cannot be made to licence fee as well as inspection fee as inspection of books is for renewal of the licence. Licence fee would cover the charges for inspection as well. Since the levy is credited in the General Public Funds Account and not appropriated towards any specific service rendered, goes ....
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.... Bombay. Even in Bombay in case of more than 50% money lenders the maximum capital as defined in the Act is below Rs. 50,000/-. The same in case of 20% is between Rs. 1 lac to Rs. 3 lac and for 10% above Rs. 3.00 lac. In the remaining parts of Maharshtra about 70 to 75 per cent money lenders are having maximum capital below Rs. 50,000/-. Since the fees are to be collected at the rate of 1 per cent subject to the maximum of Rs. 5,000/- in majority of the cases there will be no difference in the inspection fee payable by them. In the case of money lenders who have invested capital of Rs. 50,000/- there will be no increase in the inspection fee payable by them. It is, therefore, submitted that the contention raised by the appellants that the increase was arbitrary or excessive are devoid of any substance. The staff and the officers of the Department have to visit the places of money lending business, inspect accounts and other matters relating to business. According to them, the inspection fee is charged not for rendering services only but also for regulating and controlling money lending business. The increase in the levy is justified on the ground of heavy increase in the Pay and A....
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....is of the annual valuation of the cinema halls. The assessee who was the owner and licensee of the cinema theatre had been paying licence fee @ Rs. 400/- per year. In 1958 the Corporation by a resolution changed the basis of assessment of the fee. Under the new method the fee was to be assessed at rates prescribed per show according to the sanctioned seating capacity of the cinema houses and the assessee had to pay a fee of Rs. 6,000/- per year. The assessee filed a petition in the High Court for the issuance of a writ for quashing the resolution. The writ petition was allowed. The Corporation came up in appeal to this Court, which was accepted. The case of the Corporation was that the levy was a tax and not a fee. Accepting the plea of the Corporation, it was observed that in order to make a levy a fee for services rendered, the levy must confer special benefits to the person on whom it is imposed. The levy under Section 548(2) was not a "fee in return for services" as the Act did not provide for any services of a special kind being rendered, resulting in benefits to the person on whom it was imposed. The levy was held to be a tax. In The Commissioner, Hindu Religious Endo....
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.... administrative charges for the State Government. The administrative charges were not a component of a consideration received by the sugar factory and did not form part of the revenue of the sugar factory. The administrative charges could not be appropriated to the revenue account of the sugar factory and, therefore, there was no element of quid pro quo as far as the administrative charges in the hands of the sugar factory are concerned. The administrative charges were thus held to be a tax and not a fee. A three Judge Bench of this Court in B.S.E. Brokers' Forum, Bombay and Others v. Securities and Exchange Board of India and Others [(2001) 3 SCC 482], after considering a large number of authorities, has held that much ice has melted in Himalayas after the rendering of the earlier judgments as there was a sea change in the judicial thinking as to the difference between a tax and a fee since then. Placing reliance on the following judgments of this Court in the last 20 years, namely, Sreenivasa General Traders Vs. State of Andhra Pradesh, (supra); City Corporation of Calicut Vs. Thachambalath Sadasivan, (1985) 2 SCC 112; Sirsilk Ltd. Vs. Textiles Committee, (1989) Supp. 1 SCC 168;....
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....s. To arrest this exploitation, the Money-Lenders Act was enacted to improve the economic conditions of the bulk of the rural population and the poorer sections of the population in towns and cities. Under the Act it was made mandatory first to take a licence to do the business of money lending on payment of a licence fee of Rs. 200/-. Inspection fee is levied for renewal of licence and for that purpose it is necessary that the records maintained by the money lenders should be thoroughly examined in order to satisfy whether all the registers are maintained properly in accordance with the rules and it is only after the satisfying that no irregularities are committed, the money lender becomes entitled to get the renewal of his licence. 'Inspection fee' has been defined in Section 2(5-A) of the Bombay Money-Lenders Act, 1946 to mean the fee leviable under Section 9A in respect of inspection of books of account of a money-lender. Section 2(7) defines the 'licence' to mean licence granted under this Act and according to Section 2(8) 'licence fee' means fee payable in respect of a licence. Renewal of licence is not automatic and can be refused on the grounds specified in Section 8. In or....
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....ledger and of statement and receipt under Section 18. Rule 17 provides for opening of a capital account in Form 11 for the purposes of Section 9A. The inspection of records, thus by itself, provides for service rendered by the State to the money lenders which is done in connection with their request to renew the licences. It is necessary to find out before granting renewal of the licence that the applicant has complied with the provisions of the Act and the Rules and that he has not made any wilful default in complying with or knowingly acted in contravention of any requirements of the Act. This is the direct service rendered to the money lenders as the renewal of licence depends upon the inspection of their accounts which is required to be carried out under the Act. This apart the fee charged is regulatory in nature to control and supervise the functioning of the money lending business to protect the debtors the vast majority of which are poor peasants, tenants, agricultural labourers and salaried workers who are unable to repay their loans. The object of the Act is to control the money lending business and protect the debtors from the malpractices in the business by detecting i....