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2017 (12) TMI 1448
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....he airport at Mumbai. The third respondent is an a department of the Central Government. 2. The first respondent was charging licence fee to the petitioners. The reason for filing the writ petition is that the first respondent threatened to terminate the licences granted to the petitioners and entry permits to the airport on the ground of failure of the petitioners to supply information demanded from them and for non payment of licence fee which was claimed with retrospective effect from 1979. The demand was made by the first respondent by a letter dated 6th December 1996 addressed to the third petitioner. By the said letter, the petitioners were called upon to pay the licence fee at the rate of 2% from the year 1979 to January 1985 and at the rate of 10% from February 1985 till March 1991. For the period commencing from 1st April 1991, the licence fee was demanded at the rate of 11%. The percentage specified was of gross turnover every year. According to the case of the petitioners, the demand for payment of licence fee was without authority of law as there is no power to impose licence fee save and except upon instructions of the Central Government as is clear from Section 22(....
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....2nd meeting of the Board of the third respondent held on 3rd September 1984, it is noted that earlier Regulations of 1982 have been superseded by the said Regulations of 1984. The resolution records that the Board approved charging of licence fee at the rate of 10% of gross turnover from agencies providing ground handling services to airlines at the airport. 5. By a letter dated 4th October 1995 issued by the first respondent, the third petitioner was informed by the first respondent that it has been decided to charge licence fee at the rate of 11% on the gross turnover of the petitioners for providing ground handling services at Mumbai Airport from the date on which the third petitioner has been rendering ground handling services to the concerned airlines. The petitioners by addressing a letter dated 28th October 1996 informed the Airport Director of the first respondent that the petitioners were ready and willing to pay licence fee at the rate of 2% of the gross turnover with effect from 4th October 1995. Accordingly, a cheque in the sum of Rs. 1,99,594.60 was forwarded with the said letter. By the said letter, it was pointed out that various flight kitchen operators rendering....
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....he first respondent which record that the Board approved the charging of licence fee at the rate of 10% on gross turnover from the agencies providing ground handling services. By a letter dated 2nd July 1986, the advocate for the first respondent informed the advocate for the petitioners that the petitioners should make payment of licence fee on whatever basis as an ad hoc payment until final amount is determined in consultation with the first respondent. By a letter dated 29th September/4th October 1995, the first respondent informed the petitioners that it has been decided to charge to the third petitioner licence fee at the rate of 11% of the gross turnover for providing ground handling services at Bombay Airport. By a letter dated 3rd October 1996, the petitioner requested the Airport Director of the Mumbai Airport to look into the matter and issue necessary directions for complying with the judgment and order dated 13th April 1994 in Writ Petition No.2277 of 1984. 9. This writ petition was originally filed for challenging the demand of licence fee made by the letter dated 6th December 1986 (Exhibit A to the petition). 10. In this writ petition, on 23rd December 1996, thi....
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.... (NOC) to the employees of the third petitioner till further orders. The petitioners were directed to pay licence fee at the rate of 15% of the gross turnover directly to the second respondent instead of first respondent. The said notice of motion taken out by the petitioners was disposed in terms of the minutes of the order dated 9th April 2009 by which the petitioners were directed to pay charges/ licence fees to the second respondent as per the policies of the second respondent. The second respondent was directed to give NOC in favour of the petitioners and their employees to the Bureau of Civil Aviation Security (the third respondent) for renewal of entry passes. 12. In supersession of the said Regulations of 2000, on 18th October 2007 the first respondent brought into force the Airports Authority of India (General Management, Entry for Ground Handling Services) Regulations of 2007 (for short "the Regulations of 2007"). The said Regulations were brought into force from 1st October 2007. 13. In this petition, it is pointed out that during the pendency of the petition, the second respondent continued to demand and recover from the petitioners licence fee by terming it as "r....
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....harges have been recovered from the National Carriers till the date of filing of the petition. It is contended that though resolution was passed by the Board of Directors of the first respondent on 26th December 2001 by which it was resolved to charge licence fee at the rate of 11% of gross turnover, a demand was made from the petitioners for the said amount with effect from 1st April 1991. It is contended that even initial rate of 2% is not sanctioned by the Board Resolution. It is contended that the amount paid at the rate of 2% of gross turnover was without prejudice to the rights and contentions of the petitioners. 17. There is reply filed by Shri Raghava M. on behalf of the second respondent. Shri Raghava M. is the General Manager­Legal and authorized representative of the second respondent. The first contention raised is that the first respondent is a private entity and, therefore, a writ under Article 226 of the Constitution of India cannot be issued against the second respondent. It was further contended that with a view to enable the second respondent to discharge its functions under OMDA, a registered lease­deed dated 26th April 2006 has been entered into by an....
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....f the said Act of 1994. She submitted that the first respondent is not empowered to charge any fees or rent without previous approval of the Central Government and in the present case, there is nothing placed on record to show that the rate of fees was fixed at 2%, 10%, 11% and 15% respectively with previous approval of the Central Government. She invited our attention to the said Regulations of 1984 and the said Regulations of 2000. She invited our attention to the definition of "ground handling" in both the said Regulations. She also pointed out the guidelines issued for grant of permit to provide ground handling services at airports other than those belonging to the Airport Authority of India. She submitted that the levy attempted to be made by the first and second respondents is in the nature of tax. She also pointed out the pleadings regarding discrimination between certain other private agencies and the present petitioners. She tendered across the bar a statement showing the amounts so far paid by the petitioners to the first respondent which are also set out in the petition and in the rejoinder filed by the petitioners. She relied upon the decision of Calcutta High Court in ....
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....on 22 thereof. He submitted that clause (ii) deals with non­aeronautical services as it concerns the facility for carrying on any trade or business at airport, heliport or airstrip. He submitted that for charging fees or rent for such services, prior approval of the Central Government is not necessary. He submitted that as clause (ii) covers ground handling services, the first respondent and the second respondent have power to levy ground handling charges. He also pointed out that the petitioners have discontinued their operation at the Mumbai Airport from 31st March 2015 as set out in the affidavit­in­reply. He relied upon the said Regulations of 2000 and guidelines bearing No.AIC 07/2007. He relied upon the minutes of order dated 9th April 2009. 20. The learned counsel appearing for the first respondent supported the impugned action. One of the submissions of the first respondent and the second respondent, without prejudice to their rights and contentions, is that in any event, the petitioners are not entitled to refund as the same would amount to unjust enrichment. The learned counsel appearing for the petitioners, relying upon the interim orders, submitted that t....
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....#39;s writ jurisdiction. This is not a private airport or an airport set up by the respondent No.2. The airport was already in existence and various functions were performed thereat in terms of this statute of 1994. That the amendment permits leasing and for the purpose of preserving and protecting public interest or better management of airports, then, it would not be proper to agree with Mr. Tulzapurkar that a writ petition cannot be filed and raising the above challenge. 85. Mr. Tulzapurkar's reliance on Article 12 of the Constitution of India is not proper for Article 226 of the Constitution of India empowers this Court to issue a writ in terms thereof to any person or authority, including in appropriate cases, any Government, for the enforcement of any of the rights conferred by Part III and for any other purpose. Part III of the Constitution of India contains Articles 12 to 35. The right to equality guaranteed by Articles 14 to 18, the right to freedom guaranteed by Articles 19 to 22, the right against exploitation, the right to freedom of religion, constitutional and educational rights and right to constitutional remedies. Therefore, for enforcement of any of th....
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....t comes from certain authorisation. That is in terms of the primary document styled as lease deed. It also comes from several ancillary and connected documents and deeds. However, the foundation for all this is the AAI Act, 1994, and the functions discharged in pursuance thereof. It is in these circumstances that we hold that the management and administration of an airport meant for passengers and cargo carried by airline companies is the function discharged and duty performed. That is not under any private arrangement. It is futile to urge that everything in relation to the administration, management and operation of the airport is in the realm of a contract or private law. That extreme contention has not been canvassed. The only argument is that the larger issue about maintainability of the writ petition against MIAL is pending and we should observe nothing by which the stand of the MIAL in such proceedings is affected or jeopardized. We hasten to add that we have no such intent nor as a blanket proposition are we suggesting that the MIAL in all times and under all circumstances is amenable to writ jurisdiction. Just as Mr. Tulzapurkar relies upon paragraph 102 of the judgment in....
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.... the airport levy and collect it and it is that very statute on which the argument of the petitioner is based, namely, its provisions do not empower collection of such levy which we are considering and, therefore, to determine the question of maintainability de hors or contrary to the statute would be impermissible. Therefore, we do not think that the writ petition can be dismissed on the grounds of maintainability." (underlines supplied) Therefore, the preliminary issue raised by the second respondent is already concluded against the said respondent. 22. Even otherwise, the said decision which binds this Court is material and relevant. We must note that in the said case before the Division Bench, the challenge was to the payment demanded from various airlines of levy of 13% of gross turnover of food items/articles which are uplifted from Chhatrapati Shivaji International Airport, Mumbai and sold on­board for domestic and international airlines. The Division Bench considered Sections 12 and 12A of the said Act of 1994, which reads thus: "12. Functions of the Authority.­­ (1) Subject to the rules, if any, made by the Central Government in this behalf, i....
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.... transport facilities as are, in the opinion of the Authority, necessary to the passengers travelling by air; (n) form one or more companies under the Companies Act, 1956 (1 of 1956) or under any other law relating to companies to further the efficient discharge of the functions imposed on it by this Act; (o) take all such steps as may be necessary or convenient for, or may be incidental to, the exercise of any power or the discharge of any function conferred or imposed on it by this Act; (p) perform any other function considered necessary or desirable by the Central Government for ensuring the safe and efficient operation of aircraft to, from and across the air space of India; (q) establish training institutes and workshops; (r) any other activity at the airports and the civil enclaves in the best commercial interests of the Authority including cargo handling, setting up of joint ventures for the discharge of any function assigned to the Authority. (4) In the discharge of its functions under this section, the Authority shall have due regard to the development of air transport service and to the efficiency, economy and safety of....
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.... when an action is challenged as being violative of the mandate of Article 14 and 19(1)(g), 265 of the Constitution of India, then, all the more, the defence raised cannot prevent the constitutional court from adjudicating the issue or challenge." (underline supplied) Thereafter the Division Bench proceeded to deal with clauses (i) and (ii) of Section 22 of the said Act 1994. In paragraph­ 118, the Division Bench held thus: "118. After this comes clause (ii) which once again must be seen as the power of the authority. The authority with due regard to the instructions that the Central Government may give to it from time to time, charge fees or rent from persons who are given by the authority any facility for carrying on any trade or business at any airport, heliport or airstrip. Thus, these fees or rent is charged from persons who are given by the authority any facility for carrying on a trade or business at any airport. This provision once again must be read not in isolation but harmoniously with all other provisions of the Act falling in separate chapters and particularly those functions which the authorities may discharge in terms of section 12(1) and (2)....
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....he air traffic and air traffic operations by the airline companies are concerned, render any facility for carrying on their trade or business. What is contemplated by section 22 (ii) is the facility for carrying on any trade or business. The charge of rent or fees is from persons who are given by the authority any facility for carrying on any trade or any business at any airport. This facility given by the AAI to such persons and that function in turn being taken over by the second respondent would not take within its import the services rendered by the airline operators to the passengers and the flying public. The persons contemplated by clause (ii) of section 22 are those who are carrying on trade or business at the airport. To enable them to carry on any trade or business, facilities are given by the AAI and which power, in turn, is now vesting in a limited sense with the second respondent. It is for that the fees or rent can be charged. The question raised is whether the petitioners before us are such persons as are contemplated and covered by this clause. We think not. We hasten to clarify that this would not be so in all cases and in all circumstances for the authority may ch....
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....If the statute does not invest respondent Nos.1 and 2 to charge fees, then, no amount of reliance on OMDA is of assistance." (underline supplied) 23. It is in the light of the law laid down by the Division Bench that the controversy on merits has to be decided. The first and second respondents derive their power to levy licence fee only from the said Acts of 1971 and 1984. The said power is not derived by the second respondent under OMDA. Thus, the act of the first and second respondents of imposing or levying licence fee must be supported by the said statutory provisions. 24. In the earlier part of the judgment, we have referred to the decision of this Court in Writ Petition No.2277/1984 filed by the petitioners. In the said writ petition, it was noted that the third petitioner commenced its business in the year 1979, initially of baggage handling of Gulf Air passengers. Later on, the third petitioner started handling of Saudi Airlines crew baggage. Thereafter, the third petitioner entered into agreements with various airlines for ground handling services including the services of providing wheel chairs and stretchers. In the said writ petition, it is held by this C....
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....equipment, loading and off loading export, import as well as transshipment cargo from the aircraft. Regulations 4 and 5 of the said Regulations of 2000 read thus: " 4. Entry into and remaining in the movement area/ terminal building at any airport/ civil enclave for providing ground handling services or for operating any vehicle or equipment shall be restricted to; (a) the operator or the owner of aircraft(s) or his bonafide whole time employees or any of the designated agency under Regulation 3 authorised by it for handling its own aircrafts; (b) any other Operator or Agency who or which has been specially permitted in writing by the Authority to undertake ground handling activities through their bonafide whole time employees; (c) the bonafide whole time employees of National Carriers or any of the designated agencies under Regulation 3 authorised by them; (d) the bonafide whole time employees of Airports Authority of India or a designated agency authorized by it. 5. The Board of AAI will lay down terms and conditions (including financial consideration), eligibility criteria for ground handling agency (both financial and techni....
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....vided by the Authority at any airport, heliport or airstrip; (ii) with due regard to the instructions that the Central Government may give to the Authority, from time to time, charge fees or rent from persons who are given by the Authority any facility for carrying on any trade or business at any airport." The said Act of 1971 was repealed by the said Act of 1994. Section 22 of the said Act of 1994 reads thus: "22 ­ Power of the Authority to charge fees, rent, etc.­­ The Authority may,­­ (i) with the previous approval of the Central Government, charge fees or rent­­ (a) for the landing, housing or parking of aircraft or for any other service or facility offered in connection with aircraft operations at any airport, heliport or airstrip; Explanation.­­In this sub­clause "aircraft" does not include an aircraft belonging to any armed force of the Union and "aircraft operations" does not include operations of any aircraft belonging to the said force; (b) for providing air traffic services, ground safety services, aeronautical communications and navigational aids and meteorological services ....
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....respondent in connection with the aircraft operations at any airport. It applies to charging of fees or rent by the Airport Authority or the second respondent, as the case may be, from those persons for whose benefit services or facilities as set out in the sub­clauses (a) to (d) of clause (i) are provided by the first or second respondents. Clause (i) is not applicable to the demand of fees from the petitioners. The petitioners have been allowed facility to carry on business of providing ground handling services at the Mumbai airport by the first respondent and thereafter, by the second respondent. Thus, the power to collect licence fee or rent from the petitioners will be under clause (ii) of section 22 and not under clause (i). The business carried on by the ground handling services agencies on the basis of their agreements with the airlines will be covered by clause (ii). The second respondent on the basis of the lease executed under Section 12­A can exercise power to levy fees only under the said Act of 1994 and not otherwise. As far as the demands subject matter of this petition are concerned, it is not shown that the same are either contrary or inconsistent with any ....
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....h the second respondent. It is for that the fees or rent can be charged." 29. Hence, clause (ii) of Section 22 is applicable to the petitioners who have been allowed to carry on business of ground handling services at the airport. Now we come back to the factual aspect of the case. Exh.A to the petition is a letter dated 6th December 1996 issued by the first respondent to the third petitioner. It calls upon the petitioners to pay licence fee at the rate of 2% (from the year 1979 to January 1985), at the rate of 10% (from February 1985 till March 1991) and at the rate of 11% (from 1st April 1991 up to date). A copy of the Board Resolution of the first respondent fixing licence fee at the rate of 2% is not placed on record. The petitioners addressed a letter dated 28th October 1996 to the Airport Director of Mumbai Airport in which they have specifically stated that they are ready and willing to pay licence fee at the rate of 2% of gross turnover with effect from 4th October 1995 when for the first time demand for licence fee was made. In fact, a cheque representing the said amount was forwarded along with the said letter dated 28th October 1996. Even in the letter dated 6th Decem....
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....dition to licence fee for any specific space provided for the purpose." 31. The demand for payment of the fees at the rate of 10% could have been made from 3rd September 1984. But, the demand was for the first time made from the petitioners on 6th December 1996 with retrospective effect from February 1985. But, the petitioners were made aware of the Board Resolution by a letter dated 6th April 1986 addressed by the Advocate for the first respondent to the petitioners and in fact, a copy of the Resolution was enclosed with the said letter. But, the petitioners never challenged the said resolution. There is no challenge to this resolution even in this petition filed in the year 1996. Thus, there is no merit in the challenge to the levy at the rate of 10% . 32. Exh.E is the letter dated 29th September/ 4th October 1995 by which the third petitioner was informed by the Deputy General Manager that it was decided to charge licence fee at the rate of 11% of gross turnover for providing ground handling services at Mumbai Airport. In fact, by the said letter, a demand was made for payment of licence fee at the rate of 11% of gross turnover from the date of commencement of the business....
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....ld good. The said respondents were entitled to charge the fees as per decisions taken on 3rd November 1984, 26th December 2001 and 21st June 2007 (effective from 1st July 2007) respectively. 35. Now we must deal with the other argument canvassed that amount charged is in fact a tax and not fee. A tax is a payment for raising general revenue and it is a burden. It is based on principle of ability or capacity to pay as held by the Apex Court in the case of Jharkhand and others v. Tata Commins Ltd. (supra). In the case of Sreenivasa General Traders v. State of Andhra Pradesh (supra), the Apex Court laid down the test of determination whether a particular demand is a tax or a fee. Paragraphs­ 31 and 32 of the said decision read thus: "31. The traditional view that there must be actual quid pro quo for a fee has under gone a sea change in the subsequent decisions. 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 special advantage is secondary to the primary motive of regulation in public interest. If the element of revenue for gene....
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.... It is now increasingly realized that merely because the collections for the services rendered or grant of a privilege or licence are taken to the consolidated fund of the State and not separately appropriated towards the expenditure for rendering the service is not by itself decisive. Presumably, the attention of the Court in the Shirur Mutt case was not drawn to Article 266 of the Constitution. The Constitution no where contemplates it to be an essential element of fee that it should be credited to a separate fund and not to the consolidated fund. It is also increasingly realized that the element of quid pro quo in the strict sense is not always a sine qua non far a fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax : Constitutional Law of India by H. M. Seervai, Vol. 2, Second Edn., p. 1252, paras 22, 39." (underline supplied) 36. The Apex Court observed that a tax is levied as a part of a common burden, while a fee is a payment for a specific benefit or privilege. However, co­relation between levy and service rendered or expected should be of the general character and not of mathematical exactitude. In the prese....
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.... cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11­B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. The said enactments including Section 11­B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self­ contained enactments providing for levy, assessment, recovery and refund of duties imposed thereunder. Section 11­B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are const....
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....hether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and app....
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.... burden of the said duty. (vi) Section 72 of the Contract Act is based upon and incorporates a rule of equity. In such a situation, equitable considerations cannot be ruled out while applying the said provision. (vii) While examining the claims for refund, the financial chaos which would result in the administration of the State by allowing such claims is not an irrelevant consideration. Where the petitioner­ plaintiff has suffered no real loss or prejudice, having passed on the burden of tax or duty to another person, it would be unjust to allow or decree his claim since it is bound to prejudicially affect the public exchequer. In case of large claims, it may well result in financial chaos in the administration of the affairs of the State. (viii) The decision of this Court in STO v. Kanhaiya Lal Mukundlal Saraf 1959 SCR 1350 AIR 1959 SC 135 (1958 9 STC 747 must be held to have been wrongly decided insofar as it lays down or is understood to have laid down propositions contrary to the propositions enunciated in (i) to (vii) above. It must equally be held that the subsequent decisions of this Court following and applying the said propositions in Kanhai....
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....g the proceedings or under the orders of the Court/Tribunal/Authority or otherwise. It must be held that Union of India v. Jain Spinners (1992) 4 SCC 389 and Union of India v. I.T.C. 1993 Supp 4 SCC 326 have been correctly decided. It is, of course, obvious that where the refund proceedings have finally terminated ­ in the sense that the appeal period has also expired ­ before the commencement of the 1991 (Amendment) Act (19­9­1991), they cannot be re­opened and/or governed by Section 11­B(3) [as amended by the 1991 (Amendment) Act]. This, however, does not mean that the power of the appellate authorities to condone delay in appropriate cases is affected in any manner by this clarification made by us. (xii) Section 11­B does provide for the purchaser making the claim for refund provided he is able to establish that he has not passed on the burden to another person. It, therefore, cannot be said that Section 11­B is a device to retain the illegally collected taxes by the State. This is equally true of Section 27 of the Customs Act, 1962." (underlines supplied) What is held by the Apex Court is in the context of illegal collection ....
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....at the amounts have not been recovered from third parties, the petitioners will be entitled to refund. Even, the computation of the amount of refund with interest will have to be made by the said officer. The refund will carry interest at the rate of 6% per annum from the respective dates of payment. 39. Accordingly, the petition must succeed in part and we pass the following order: (I) We declare that demand for licence fee at the rate of 2% from the petitioner for the period prior to 4th October 1995 is illegal. We declare that the demand of licence fee at the rate of 10% with effect from 3rd September 1984 is lawful. However, there is no legal basis for demanding the Licence fee at the rate of 11% till 26th December 2001. The second respondent is justified in demanding the licence fee at the rate of 15% from 1st July 2007. The first respondent was not competent to demand licence fee at the rate of 2% for the period prior to 4th October 1995. The first respondent was entitled to recover licence fee at the rate of 10% of the annual turnover from 3rd September 1984 till 26th December 2001. From 26th December 2001, the recovery at the rate of 11% was lawful. From 1st Jul....