# SECRETARY, GOVERNMENT OF MADRAS, HOME DEPARTMENT AND ANOTHER v. ZENITH LAMP & ELECTRICAL LTD

- **Citation:** [1973] 2 S.C.R. 973
- **Court:** Supreme Court of India
- **Decided:** 1972-11-10
- **Case number:** Writ Petition 'No. 17 43 of 1964
- **Bench:** S. M. StKRI, A. N. Ray, D. G. Palekar M. H. Beg, S. N. Dwivedi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/secretary-government-of-madras-home-department-and-another-v-zenith-lamp-5930
- **Pages:** 17

## Headnote

Madras Court Fees and Suits Valuation Act 14 of 1955-Hlgh Court
Fees Rules 1956, Rule I-Enhancement of Court-fee 011
aJ valorcm
hasis_:_Validity of-Court fees whether fees or tax, factors to be taken into
consideration for
cleter111ini11g-Phrase "Fees taken in Court" in List I
E11try 77 and List II Entry 3 of Seventh Schedule to Comtirution of India,
meaning of.
The respondent petitioners intended to file a suit in the Madras Hiab
Court on the oriainal side valued at Rs. 2,06,552, aaainst the Revenue.
The petitioner ftled a writ petition in the High Court on the question of
court-fee payable in the in~nded suit praying that the High Court may
be pleased to issue a writ of mandamus or other direction or order declaring Rule I of the High Court Fee Rules 1956 and the provisions of the
Madrns High Court F~ and Suits Valuation Act 14 of 1955 to be in·
valid and ultra ·vfres insofar as they related to the levy
of fees on ad
va/ore111 scale. It was urged that the increase made in 1955 and 1956 in
the court fees payable was unjustifiable in the light of the cxpcndituri:
actually incurred in the administration of civil justice.
In its counter-·
affidavit the State urged that the rates of fee prescribed under the Court
Fees Act of 1955 were not excessive and that ihe levy did not amount to
a tax on litigation. A supplemental affidavit was filed on behalf of th~
State on October 11, 1966 in which various statements were given to show
that the expenditure on the administration of justice was higher than the
receipts. The petitioner objected that there were several inadmissible items
which had been taken into account. The High Court struck down the
levy found in Art. I of Schedule 1 of the Madras Court Fees and Suits
Valuation Act 1955 in its application to the High Court. With certificate,
appeal was filed in this Court. The Court had to consider whCther the
"fees taken in coun" in Entry 3 List II Schedule VI! of the Constitution
:ire taxes or fees or whether they are sui t?e;1eris.
Allowing the appeal.
Held: (i) The history of court fees in England as well as in India·
sho~s. that. fees taken in court were not levied as taies and the costs of
admmistratton was always one of the factors that was present.
(ii) It seems plain that ''fees taken in court" are not taxes for if it
'~'ere ~o, the w?.rd 'taxes~ \Vould have beeil used or some other i~dica
llon given.
ThlS conclus1on is strengthened by two considerations. First
taxes that can be levied by the Union are mentioned in List I from EntrY
S2 in List II t~xes that c~n b~ imp~sed start from Entry 45.
Secondly
the v_crv use of the word~ not mcludmg fees taken in any court' in Entry
96 1:tst I and Enny 66 Ltst II shows that they would otherwise have fullen
within these Entries.
It follows that "fees taken in court" cannot be
equated to Taxes'. There is no e"ential difference between fees taken in
C ?urt and other fees .. It is dillkult to appreciate why the word 'fees"
h<ars a <h.ffcrent meaning m Entries 77 List I and Entry 96 List I or
Entry 3 List II and Entry 66 List ll. [982 A·CJ
974
SUPREME COURT REPORTS
[1973] 2 S.C.R,
(iii) But even if the meaning is the same, what is 'fees' in a particular
case depends on the subject-matter in relation to which the fees are
imposed. The present case related to th.e administration of civil justice
in a State. The fees must have relation to the administration of civil justice.
While levying fees the appropriat,e legislature is competent to take
into account all relevant factors, the value of the subject matter of the
dispute, the various steps necessary in the pros.ecution of a suit or matter,
the entire cost of the upkeep of courts and officers administering civil
justice, the vexatious nature of certain types of litigation and other. relevant matters. It is free to levy a small fee in some cases, a large fee in
others, subject of course to th.e provisions or Art. 14. But one thin~ the
legislature is not competent to do, and that is to make litigan

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973
SECRETARY, GOVERNMENT OF MADRAS, HOME
DEPARTMENT AND ANOTHER
v.
ZENITH LAMP & ELECTRICAL LTD.
November 10, 1972
[S. M. StKRI, C.J., A. N. RAY, D. G. PALEKAR M. H. BEG AND
S. N. DWIVEDI, JJ.)
Madras Court Fees and Suits Valuation Act 14 of 1955-Hlgh Court
Fees Rules 1956, Rule I-Enhancement of Court-fee 011
aJ valorcm
hasis_:_Validity of-Court fees whether fees or tax, factors to be taken into
consideration for
cleter111ini11g-Phrase "Fees taken in Court" in List I
E11try 77 and List II Entry 3 of Seventh Schedule to Comtirution of India,
meaning of.
The respondent petitioners intended to file a suit in the Madras Hiab
Court on the oriainal side valued at Rs. 2,06,552, aaainst the Revenue.
The petitioner ftled a writ petition in the High Court on the question of
court-fee payable in the in~nded suit praying that the High Court may
be pleased to issue a writ of mandamus or other direction or order declaring Rule I of the High Court Fee Rules 1956 and the provisions of the
Madrns High Court F~ and Suits Valuation Act 14 of 1955 to be in·
valid and ultra ·vfres insofar as they related to the levy
of fees on ad
va/ore111 scale. It was urged that the increase made in 1955 and 1956 in
the court fees payable was unjustifiable in the light of the cxpcndituri:
actually incurred in the administration of civil justice.
In its counter-·
affidavit the State urged that the rates of fee prescribed under the Court
Fees Act of 1955 were not excessive and that ihe levy did not amount to
a tax on litigation. A supplemental affidavit was filed on behalf of th~
State on October 11, 1966 in which various statements were given to show
that the expenditure on the administration of justice was higher than the
receipts. The petitioner objected that there were several inadmissible items
which had been taken into account. The High Court struck down the
levy found in Art. I of Schedule 1 of the Madras Court Fees and Suits
Valuation Act 1955 in its application to the High Court. With certificate,
appeal was filed in this Court. The Court had to consider whCther the
"fees taken in coun" in Entry 3 List II Schedule VI! of the Constitution
:ire taxes or fees or whether they are sui t?e;1eris.
Allowing the appeal.
Held: (i) The history of court fees in England as well as in India·
sho~s. that. fees taken in court were not levied as taies and the costs of
admmistratton was always one of the factors that was present.
(ii) It seems plain that ''fees taken in court" are not taxes for if it
'~'ere ~o, the w?.rd 'taxes~ \Vould have beeil used or some other i~dica
llon given.
ThlS conclus1on is strengthened by two considerations. First
taxes that can be levied by the Union are mentioned in List I from EntrY
S2 in List II t~xes that c~n b~ imp~sed start from Entry 45.
Secondly
the v_crv use of the word~ not mcludmg fees taken in any court' in Entry
96 1:tst I and Enny 66 Ltst II shows that they would otherwise have fullen
within these Entries.
It follows that "fees taken in court" cannot be
equated to Taxes'. There is no e"ential difference between fees taken in
C ?urt and other fees .. It is dillkult to appreciate why the word 'fees"
h<ars a <h.ffcrent meaning m Entries 77 List I and Entry 96 List I or
Entry 3 List II and Entry 66 List ll. [982 A·CJ
974
SUPREME COURT REPORTS
[1973] 2 S.C.R,
(iii) But even if the meaning is the same, what is 'fees' in a particular
case depends on the subject-matter in relation to which the fees are
imposed. The present case related to th.e administration of civil justice
in a State. The fees must have relation to the administration of civil justice.
While levying fees the appropriat,e legislature is competent to take
into account all relevant factors, the value of the subject matter of the
dispute, the various steps necessary in the pros.ecution of a suit or matter,
the entire cost of the upkeep of courts and officers administering civil
justice, the vexatious nature of certain types of litigation and other. relevant matters. It is free to levy a small fee in some cases, a large fee in
others, subject of course to th.e provisions or Art. 14. But one thin~ the
legislature is not competent to do, and that is to make litigants contribute
to ·the increase of general public revenue. In other words,
it cannot
tax litigation and make litigations pay, say for road building or education
·or other beneficial schemes that a State may have.
There must be
a
·correlationship between the fees collected and the cost of administration
·Of civil justice. [982 F-H]
(iv) The phrase 'fees taken in court' cannot ~e interpreted to mean that
it described fees which were actually being taken before the Constitution
·C3!rul into force. If that was the meaning, no fees could be levied in the
Supreme Court .because the Supreme Court did not exist before the Constitution came into force and no fees were being taken therein.. This would
render part of the Entry of List I nugatory. 1983 A-BJ
(v) The contention that fees taken in court are taxes because
by
virtue bf Art. 266 all fees, being revenues of the State will be credited to
the Consolidated Fund, could not be accepted. This Court has held that
the fact that an item of revenue is credited to the Consolidated Fund is
not conclusive to show that it is an item of tax.
As Art. 266 requires
that all revenues received by the State have to go to the Consolidated
Fund, not much stress can be laid on this point. Fees and taxes are both
revenue for the State. [983 C; 984 HJ
(vi) The High Court rightly held in the present case that the
fees
tak~n in Courts are not a category by themselves and must contaiR the
essential elements of the fees as laid down by this Court. The High Court
was also right in holding that it is for the State to establish that wliat
has been levied 'is court-fees properly so-<:alled and if there is any.,en>-
hancement the. State musf justify the enhancement.. [988 D; 989 DJ
(vii) The State had claimed in its supplementary affidavit'that the<State
was not making any profit out of the administration of civil justice. Since
this had been questioned by the respondents the case must l)e remanded
·to the High Court for determin-ation of the question. Various items both
on the receipts side and the expenditure side must be carefully analysed
to see what items or portion of items should be credited or debited to the
administration of civil justice. [989 C-DJ
Case law considered.
CIVIL APPELLATE JURISDICTION
1967.
Civil Appeal No. 993 of
Appeal by certificate from the judgment and order dated
March 31, 1967 of the Madras High Court in Writ Petition
'No. 17 43 of 1964.
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SECY. MADRAS GOVT. v. ZENITH LAMP (Sikri, C.J.)
975
S. Govind Swaminandan, Advocate-Genera! of Tamil Nadu,
S. Mohan, N. S: Sivan,
K.
Rajendra Chaudhry and K. R.
Chaudhry, for the appellant.
R. Thiagarajan, for respondent No. 1.
K. R. Chaudhry, for respondent No. 2.
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A. R. Somnatha Iyer and S. Lakshminarasu, for interveners
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Nos. 1-3.
V. M. Tarkunde and B. D. Sharma· for interveners Nos. 1-3.
S. N. Chaudhry, for intervener No. 5.
Syed Mahamud, and A . . G. Pudisssery, for intervener No. 5.
K. K. Sinha, S. K. Sinha and B. P. Sinha, for interv.ener
No. 7.
.
V. S. Raman and Vineet Kur.iar, for intervener No. 8.
S. V. Gupte, A. V. Diwan. P. C. Bhartari, !. B. Dadachanji,
0. C. Mathur and Ravinder Narain, for intervener No. 9.
A. Subba Rao, for intervener No. 10.
The Judgment of the Court was delivered by
S1KRI, C. J.-This appeal, by certificate granted by the High
Court, is directed against the judgment dated March 31, 1967 of
the High Court of Madras, in Zenith Lamps and Electricals Ltd.
v. The Registrar, High Court, Madras(') given in Writ Petition
No. 1743 of 1964 (and Writ Petition No. 3891of1965). Messrs
Zenith Lamps and Electrical Limited, respondent before us and
hereinafter referred to as the petitioner, intended to file a suit in
the Madras High Court, on the original side, claiming a relief
valued at Rs. 2,06,552, against the Revenue.
The petitioner
filed Writ Petition No. 1743 of 1964 on the question of court-fee
payable on the intended suit. praying that the High Court may be
pleased to issue a writ of mandamus or other direction order
declaring Rule l of the High Court Fees Rules, 1956, and the
provisions of the Madras Court Fees and Suits
Valua1iOll
Act
(Madras Act XIV of 1955) to be invalid and ultra vire.1· insofar
as they rela1e to the levy of fees on ad valorem scale. It was
contended that Rule I of the High Court Fees Rules, 1956, was
void and ultra vires because the Madras Court Fees and Suits
Valuation Act (XIV of 1955} which had been awlied in these
R ulcs was void and ultra vires.
Various rea1ons were given in
the petition for alleging that the impugned Rule was void. It
was stated inter alia that there was no justification at all for the
increase of court-fees in 1955 and 1956 on the basi~ :if
civil
(I) I.LR. [1968] I Mad. 247·
976
SUPREME COURT REPORTS
[1973] 2 s.c.R.
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litigants being made to pay fees covering the ~xpenditu~e on civil
litigation. It was alleged that 'whenever an increase 1s contemplated, it is for the authority to justify ~y facts and fi!:l!res such
increase by showing that actual expenditure at the tlffie
exceeds the fee income.
The petitioner alleged that "judged by
this test, the increases of 1955 were without a.,y legal or actual
justification." I( was further alleged that the State was proceedB
ing on the basis that ·the court-fees had to compensate the Government both for the cost of civil_ as well as criminal administration,
which was unwarranted.
In ground D it was alleged :
"From the figures of 1963-64 available from
the
budget for 1964-65, it is seen that the fees levied exceeds the cost of administration of civil justice. The
figures have further to be scrutinised and amended so
that in-admissible items such as fees. of Government's
Law Officers are eliminated as it is not the duty of
litigant public generally to bear the expense of the
State's Law-Officers."
·
In ground E it was alleged that it was ultra vires and inequitable to levy an.ad va/orem fee without limit from the petitioner in
a single proceeding.
Various other reasons were given but it is not necessary to set
them out.
The State filed an affidavit in reply maintaining that Rule 1
of the High Court Fees Rules, 1956, and the Madras Court Fees
and Suits Valuation Act, 1955 (Madras Act XIV of 1955) were
legal and valid.
It was stated that the rates of fees prescribed
under the Court Fees Act of 1955 were not excessive and that the
levy did not. amount to a tax on litigants. The State gave figures
to show that the expenditure on the administration of justice was
higher during the year 1954-55 than the 'fees realised.
The
State rebutted the contention that the cost of criminal administration and the fees paid to Government Law Officer should not be
taken into account in justifying court fees.
This affidavit was filed on March 6, 1965. It appears that a
supplemental counter-affidavit on behalf of respondents 2 and 3
was filed on October 11, 1966. In this affidavit various state111Cnts were given to show that the expenditure (In the administration of justice was hiJ?ber than the receipts.
The petitioner took objection to the filing of the supplemental
counter-affidavit at that sta,ge because it was filed after the arguments had started. It was contcnd!l() that the figures given in
the .counter-affidavit would require drastic scrutiny.
It was also
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SECY, MADRAS GOVT, v .. Z-!2NITH LAMP (S/kri, C.J.)
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alleged that various inadmissible items had
been
taken into
account; for example, the ex1nnditure on law officers had been
taken into· consideration.
.
The High Court struck down the levy found in Article 1 of
Schedule 1 of ~he Madras High Court Fees and Suits Valuation Act,
1955, in its
application to the High Court,
As it was not
contendeti before the High Court that the result of striking
down article 1 of schedule 1 in its application to the High Court
would necessitate the declaration of the invalidity ·of the entire
Court Fees Act, it refrained from examining the position.
The State having obtained certificate of fitness filed the appeal
which is now before us.
We may mention that the petitioner was
not interested in pursuing ·the appeal and it prayed that if the
appeal is decided agaillSt it no order may be made against it for
costs in the circumstances of the case.
We issued notice to the Advocates-General and a number of
Stat•.is have appeared before us.
The fir~t question that arises out of the arguments addressed
to us is : What is the nature of "fees taken in court" in entry 3
List II Schedule VII of the Constitution ? Are they taxes or fees
or are they sui generis? It is necessary that there should not correlationship between 'fees taken in Court' and the cost of administration of civil justice ? Dr. Syed Mohammed has on behalf
of the State of Kerala urged that fees taken in Court are taxes
simpliciter.
The A'livocate-Oeneral of Madras had urged that
they are sui generis, and that they are more in the nature of taxes
than in nature of fees.
Mr. Tarkunde has urged that rt would
be wronJ?; to regard them as 'fees' of the same nature as fees in
Entry 65 List 11.
The answer depends on the correct interpretation of various entries in the three Legislative Lists and several
articles oi the Constitution. In the background must be kept
the .history of fees taken in Courts in the past both in England and
India.
Le\ us first look at the background. According to Holdsworth( ) f!ie ~udges, from the first,
were paid salaries by the
Crown ~hie~ l!l the course of years were increased. "But from
the earli~ time:'• the salaries of the Judges-bad not formed their
0n1Ji ~o'fr:h of mcom~. Though they <lid not hold their offices
as
err
olds, though they could be dismissed by the Crown
the~. ne~;rtheless dr~w a considerable part of their income fron;
foes · . When th~ mco~e of the Judges from fees was
taken
H
':£5'5~g .. ~ 826 their salane~ were raised from £ 2400 a year to
(I) ~~!~;~,of English law-W.s. Holdswor1h-Scven1h Edn. vol., I, page
978
SUPREME COURT REPORTS
[1973) 2 S.C.R.
As far as the officials of the courts were concerned "the
earliest information which we get about the officials of the courts
of common law shows that they were paid almost entirely by fees.
ln fact it would be true to sny that the official staff oJ all the
central courts (except the Lord Chancellor and the judges) was
almost entirely self-supporting."
"But probably the largest part
of the remuneration of the official staff of the' courts came from
fees in connection with the very numerous acts that must be done
to set and keep in motion the- complicated machinery of the
courts, from the issue of the original writ to .the execution of final
judgment."
(Holdsworth-P. 256)
In the Dictionary of English Law by
Earl Jowitt (Vol.
1
P. 791) it is stated;
"Fees,
perquisites
allowed
to officers in the
administr,iltion of' j~stice as a
recompense for
their
labour and trouble, ascertained either by Acts of Parliament, by rule or order of court, or by ancient usage, in
modern times frequently commuted for a salary, e.g.
by the Justice Clarks Act, 1877."
"Although, however, the officers of a court may be
paid by salary instead of the fees, the
obligation of
suitors to pay fees usually remains, these fees
being
paid into the fund out of which the salaries of the
officers are defrayed.
In the Supreme Court they are
collected by means of stamps under the
Judicature
Act, 1875, s. 26, and order of 1884, and the Supreme
Court Fees Order, 1930 (as amended) .. "
"The mode of collecting fees in a public office is
under the Public Office Fees Act, 1879 (repealing and
replacing the Public Office Fees Act, 1866), by stamps
or money, as the Treasury may direct."
At present "the Lord Chancellor has also power, with the
consent of at )east three judges of the Supreme Court and the
concurrence of the Treasury, to fix fees to b·~ taken in the High
Court and the Court of Appeal or in any court created by the commission. Under the powers referred to, the Ruks of the Supreme
Court, 1883· and the Supreme Court Fee; Order,
I 930, were
made( 1)."
The English history shows that a vcrv
close
connection
existed between fees and cost of administration of civil justice.
In the beginni,ng, th·~y were directly appropriated by the court
officials.
The existing Jaw shows that fees
arc not taxes.
It
is not usual to delegate taxil1j! powers to 1udges.
(I) vide Halsbury's Laws of England, Vol. 9 p. 422-423.
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SECY. MADRAS GOVT. v. ZENITH LAMP (Sikri, C.J,)
979
In India according to the Fifth Report on East India Mairs
Vol. 1 ( 1812) , chapter, 'The civil courts of Justice', "the chouthay
or fourth part of the value of property recovered in a court . of
judicature seems to be considered in most parts of the Indian
Peninsula 'as the compensation or fee due to the ruling power for
the administration of justice." This was abolished on the ac~
sion. of the ·British power to the Government of Bengal., a!1'1 . m
lieu of.it, the introduction of a small percentage on the msutuuon
of a suit has been noticed.
The first legislative measlire which has been brought to our
notice is .the Ben.gal Regulation :XXXVHI of 1795.
In the
preamble, it is stated that the establishing of fees on the institution
and trial of suits, and on petitions presented to. the courts was
considered tlie best method of putting a stop to the abuse of
bringinl!: groundless and litigious suits.
There are various. sections of the Regulation which allow fees to be appropriated by
the Judges.
In section 11 ( 4) it was laid down :
"The Munsiffs are to appropriate the fees they may
colleot under this section, to their own use, as a compensation for their trouble and an indemnification for
the expense which they may incur in the execution of
the duties of their office".
Similarly under section III ( 6), the "Register" was entitled to
appropriate the fees, collected under this section. Similarly subsection: (7) of section II~ enabled the Commissioners to appropriate the fees.
But fees under section IV to be paid on the
trial of sui~. tried in the first instance by the Judges of the Zilfah
and City Courts or by their Registers were to be carried to the
account of Government.
Similarly various
other
fees
were
carried to the account of Government.
In the preamble to Bengal Regulation VI of 1797, the object
is stated to be to :rl_iscourage litigation~, complaints and the filing
of superfluous exh1b1ts and the summomng of unnecessary witnesses
on the trial of ~uits a~d also to provide for . deficiency which
would be occasioned m the public revenue by abolition of the
police tax as well as to add eventually public resources, without
~urd~ning in~ividuals. The same object of discouraging litigation 1s stated m clause 1 of the Bombay Regulation VIII.of 1802.
In 'the Statement of Obiects and Reasons for the Court Fees
Bill, 1869,_it is stated that "the .experienoe iiained of their (stami>
fees) working during the two years in which they have been in
force, seems to be conclusive as to "their repressive effect on the
g~neral litigation of the country". "It is, therefore, thought expedient to make a general reduction in the. rates now chargeable on
11-L499Sup.CJ.173
980
SUPl!.EME COURT REPORTS
[1973] 2 S.C.R.
the institution .of Civil suits, and to revert to the principle of a
maximum fee which obtained under the former law."
Later it is stated :
"As sqme measure of compensation for the loss of revenue
which is expected to result from the gerieral reduction of fees, it
is proposed to discon\inue the refund of any portion of the amount
levied on the first ·institution of suits, and also to raise the fees
heretofore chargeable on probates and letters of administration
granted under the Indian Succession Act, and on certificates issued
under Act XXVII of 1860, to the ad valorem rates leviable
under the English law in like cases".
The Bill was designed to ,;ontain in one enactment the whole°
of the existing law relative to fees leviable in al! Courts of Justi.~,
whereas previously fees were leviable und~r various acts.
This brief rcsume of the history shows that the court fees were
levied sometimes with tho object of restricting litigations; sometimes with the object of increasing revenue.
But there is no
material to show that when the latter was the objective whether
the cost of administration of civil justice was more than the fees
levied and collected.
The constitutional question with which we
are
concerned
could not arise before the enactment of the Government of India
Act. 1935, because even if fees taken in courts were taxes on
litigation, there was no bar to the levy of taxes on litigation.
Various judges have spoken about the nature o{ court fees.
In the judgment under appeal ( 1), reference has been made to
their observations but those Judges were not faced with the constitutional problem with which we are concerned.
Some described fees as one form of tax~tion, some regarded it as taxes for services rendered by the court or work done by the court or as prier.
payable to Government for the trial of the suit.
This background does not supply a sure touchstone for the
determination of the question posed in· the beginning of the
judgment, but it docs show that fees taken in court were not levied
as taxes and the cost of administration was always one of the
factors that was present. In its origin in England fees
were
meant fof ofiicers and judges.
In India indeed section 3 of the
Court Fees' Act, 1870 mentions "fees payable for the tlllle being
to the clerks and officers". Section 15 of the Indian High Courts
Act. 18 61, also spoke of fees to be allowed to sheriffs ........ .
and all clerks and officers of Court".
We will therefore have to
interpr~t the relevant Entries and various Articles of the Constitu-
(ll J.L.R. [t968] 1 Mad. 247, 311-315.
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SECY. MADRAS GOVT. V. ZENITH LAMP (Sikri, C.J.)
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tion in 'order to ascertain the true nature of Court fees.
The
relevant Entries of the Constitution are :
"List I Entry 77 : Constitution, organisati?n, ju~is
diction and powl'r of the Supreme Court
( mclud1pg
contempt of such Court), and the fees taken therem;
v:rsons entitled to practise before the Supreme Court".
"List I Entry 96 : Fees in respect of any of the
matters in this List, but not including fees taken in -any
Court".
"List II Entry 2 : Administration of justice; constitution and organisation of all courts, except the Supreme
Court and the High Court, officers and servants of the
High Court; procedure in rent and revenue c~urts; fees
taken in all courts except the Supreme Court.
"Llst II Entry 66 : Fees in respect of any of the
matters in this List, biut not including fees taken in any
court.
"List III Entry 13 : Civil procedure, including al!
matters included in the Code of Civil Procedure ict the
commeneement of this Constitution, limitation
and
arbitration".
"List III Entry 47 : Fees in respect of any of the
matters in this List, but not includmg !ecs taken in. any
court".
It will be noticed that the 'fees taken therein i.e. in Supreme
Court' in List I Entry 77 have been excluded from List I Entry
.96.
Similarly the 'fees taken in all courts' included in Lis'! II
Entry 3 have been excluded from List II Entry 66.
In List ill
Entry 47 'fees taken. in any cOurt' have been excluded.
What is
the significance of this exclusion ? Does the Constitution regard
'fees taken in court' as being different from 'fees leviable under
List I Entry 96, List II Entry 66 and in List III Entry 47'?
It seems to us that the separate mention of 'fees taken in court'
in the Entries referred to above has no other significanee than
that they logically come under Entries dealin_g with administration of. justice and courts.
The draftsman has followed
the
scheme designed in the Court Fees Act, 1870 of dealing with fees
taken in court at one place. If it was the intention to distinguish
them from fees in List II Entry 66, surely some indication would
have been given by the language employed. If these words had
not been separately mentioned in List I Entry 77 and List II
Entry 3, the court fees would still have been leviect under List I
Entry 96 and List II Entry 66.
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SUPREME COURT REPORTS
[1973] 2 s.c.R.
It seems plain that 'fees taken in court' are not taxes! for
if it were so the word 'taxes' would have been used or some other
indication given. It seems to us that this conclusion . is strengthened by two considerations.
First, taxes that c~n b~ levied by
the Union are mentioned in List I from Entry 82; m List II taxes
that can be imposed start from Entry 45.
Secondly, the very
use of the words ·not including fees taken. in any court' in Entry
96 List·I, and Entry bb List 11' shows that they would
otherwi~e
have fallen within these Entries.
It follows that 'fees taken m
Court' cannot be equa1ted to 'Taxes', If this is so, is their any
essential difference between fees taken in Court and other fees ?
We are unable to appreciate why the word 'fees' bears a different
meaning in Entries 77 List I a11d Entry \16 List I or Entry 3 List
II and Entry 66 List II. All these relevant cases on the nature
of :fees' were reviewed .in The Indian Mica and Micanite Industries Ltd. v. The State of Bihar and oihers(1) by Hegde, J. and the
observed:-
"From the above discussion, it is clear that before
any levy can be upheld as a fee, it must be shown that
the levy has reasonable correlationsilio with the ser ..
vices rendered by the Government.
In other words ..
the levy must be proved to be a quid pro quo for the
services rendered.
But in these matters it will be impossible to have an exact correlationship. .. The correlationship expected is one of a general character and
not as of arithmetical exactitude".
But even if the meaninp; is the same, what is 'fees' in a particular case depends on the subject'matter in relation to which fees
are imposed.
In this ca&~ we are concerned with the administration of Civil justice in a State.
The fees ;nust have relation to the
administration of dvil justice.
While levying fees
the appropriate legislature is competent to tak.~ into account all :elevant
factors, the value of the subject matter of the dispute, the various
!lteps necessary in the prosecution of a suit or matter, the entire
cost of the up1"'..ep of courts and officers administerina civil justice
the vexatious nature of a certain type of litigation a~d other rele~
vant matters. It is free to levy a small fee in some cases, a large
fee in others, subject of course to the provisions of Art. 14.
But
one thing the Legislature is not competent to do, and •that is to
make litigants contribute to the increase of _general public revenue.
In other words •. it. cannot tax l.Higation. and mak·~ litigations pay,
say for road bmldmg or education or other beneficial schemes that
a State mav have.
There must be a broad correlationship with
the fees collected and the cost of adiμinis1ration of civil justice ..
(l) <\.T.R. 1971 S.C. 1182 at p. 1186.
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SECY. MADRAS GOVT. V. ZENrTH LAMP (Sikri, C.J.)
983
We may now dispose of other arguments addressed to us. We
are not able to interoret the phrase 'fees taken in court' to mean
that it described fees which were actually being taken before the
Constitution came into force. If this was the meaning, no fees
could be levied in the Supreme Court because the Supreme Court
did not exist before the Constitution came into force and no fees
were being taken therein.
This would render part of the Entry
of List I nugatory.
It was urged that various Articles in the Constitution show
that fees taken in Courts are taxes.
For instance, by virtue of
Article 266 al! fees, being revenues of the State, will have to be
credited 110 the Consolidated .Fund.
But this Court has held that
the fact that one item of revenue is credited to the Consolidated
Fund is not conclusive to show that the item is a Tax. In The
Commissioner,
Hindu Religious Endowments,
Madras
v Sri
Lakshmindra Thirtha Swamiar of Sri Shirur Mutt( 1), it was held:
"A tax is a compulsory exaction of money by -public
authority for ptibllc purposes enforceable by law and is
not payment for ser\>ices rendered.
It is not possible to formulate a definition of fees
that can apply to all cases as there are various kinds
of fees.
But a fee may general!y be defined as a charge
for a special s-:rvice rendered to individuals by some
governmental agency.
The amount of fee
levied is
supposed to be based on the expenses incurred bv the
Government in rendering the service, .though in· many
cases such ~penses are arbitrarily asses&:d.
The distinction between a tax and a fee lies primarily in ithe fact that a tax is levied as part of a common
burden, while a fee is a payment for special benefit or
privilege."
.Our attention was invited to Art. 199 (2) which provides that
a b1U s~all not. be deemed to be a Money Bill by reason only that
i~ provides
for ...... : . the demand or payment of fees for
l~cences or fees for services rendered.
It was suggested· that as
Co~rt fees were not for services rendered they would have to be
levied by means of a Money ~ill. It seems to us that this argument pr?Ceeds on an assumption that fees taken in court are not
for service~ rendered.
Reference to Art. 277 and Art 366(28)
does not throw any light on the problem before us.
·
I~ The Commissioner, Hindu Religious Endowments Mad
v. Sn Lakshmindra Thirthri. Swamiar of Sri Shlrur Mutt(1), r~~~
rence was made by Mukher1ea, J. to Essays in Taxation by Selig-
(1)[1954] S.C.R. 1005 at p. 1006.
984
SUPREME COURT REPORTS
[1973] 2 S.C.R.
man.
We may here refer to some other passages which have
reference to court fees.
"The distinction between fees and taxes, although
sometimes ascribed to Rau, is really much older. Adam
Smith- already speaks of certain expenses "which are
fold out for the benefit of the whole ~ociety". ''lt is
reasonable, therefore", he adds, "that they should be
defrayed by the general corrtribution of the whole
society, .all the different members contributing as nearly
as possibfo in proportion to their respective abilities".
These, as he afterward explains, are taxes.
On the
other hand, he speaks of certam outlays, as for .iust1ce,
for "persons who give occasion to this expense," and
"who are_ most immediately benefited by this expense."
The expenditure, therefore, he thinks, "may very properly be &~frayed by the particuar contributions
of
these pe~ons", ithat is, by fees
of
~ourt. And he
ex1ends this principle to tolls of ro~ds and various other
expenses."
·
"This point of view helps us out of a difficulty as to
the line of cleavage between fees and taxes.
Thus, if
a charge is made for the cost of judicial process, the
payment is a fee, because of 'the special benelit to the
litigant.
H no charge is made, the cost of the process
must be defrayed biY general taxation; and the litigant
pays his share in general taxes. If the charge is
so
arranged as to bring in a considerable illet revenue to
the government, the payment by the litigan't is a taxnot a general tax on all taxpayers, but a special tax on
litigants, like the tax on law suits in some of our
Southem Commonwealths.
The character of fees disappears only secondarily because the principle of cost
is CEviated from .. buf primarily because the special
benefit to the litigant is converted in the first case into a
common benefit shared with the rest of the community,
and in ~he second case into a special burden.
The failure to grasp the basis of this distinction, which is
equally ti-ue of other fees, has confused many writers."
A great deal of stress was laid by Mukherjca, J. at p. 1044 on
the fact that the collections in that case went to the Consolidated
Fund. He, however, said that that in itself might not be conclusive.
But as Art. 266 requires that all revenues received by the
State have to go to the Consolidated Fund, not much stress can
be laid on th.is point.
Reliance V/_as placed on two cases decided by the Privy Council. In Attorney-General for British Columbia v. Esquimalt and
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SECY. MADRAS GOVT. V. ZENITH LAMP (Sikri, C.J.)
98 5
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Nanaimo Railway Company & Ors. (1), a case .from Canada,
question (7) was put thus :
"Is the Esqu.imalt and Nanaimo Railway liabl·~ to
tax (so-called) for forest protection imposed by s. 123
of the 'Forest Act' (later corrected to sec. 121) of ithe
Forest Act ..... .in connection with its timber lands in
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the island railway belt acquired from Canada in 1887?
In particular does the said tax (so called) derogalte from
the provisions of section 22 of the Act of 1883" ?
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The Privy Council observed :
"The question is a short one.
The eJ<emption conferred by section 22 is given in the words "the lands ...
shall not be liable to taxation".
There is no context to
give the word "taxation" any special meaning and the
question comes to this : "Is the impost charged by s.
124 of the Forest Act 'taxation' within the ordinary significance of that word ?"
After examining the provisions of Pt. XI of the Act, consisting of ss. 95 to 127, which dealt with what is described as
"Forest Pmtection", the Privy Council observed :
"The levy has what arc, undoubtedly, characteristics
of taxation. in that it is imposed cornpul!orily by the
State aiJ.d is recoverable at the suit of the Crown."
This case is distinguishable because the Privy Council did not
have to deal .with fees and taxes but interpreted the word 'taxation' in section 22 of the Act to mean a compulsory :evy by the
State.
Whether it was fees or taxes did not matter. The only
question was whether it was a compulsory levy.
In Bachappasubran v.
Shidappti
Vankatrao(2) be'ore the
Privy Council for the first time objection was raised that the suit,
out of which the appeal arose, was not triable by the First Class
Subordinate J u<lge.
It was argued that this was tb~ result of
provisions contained in the Court Fees Act 1870 and the Suits
Valuation Act, which, it was said, imposed notional value on the
property as distinct from its real value and that this notional
va!Ue was less than Rs. 5000/-. It was in this context that the
Privy Council observed :
-
"Their Lordships are of opinion that they would not ·
be justified in assisting an objection of this type, but
more than that, they hold that even the technicality on
which the defendant relies cannot prevail.
The Court-Fees Act was passed not to arm a Iiti-
,gant with a weapon of technicality against his oppo0 l [1950] A.C. 87, 120, 121.
(2) J.L.R. 43 Born. 507.
986
SUPREME COURT REPORTS
[1973) 2 s.c.R.
nent, b_yt to secure revenue for the benefit of the State.
This is evident from the character of the Act, and is
brought Qut by section 12, which niak.es the decision
of the 'First Couvt as to value final as between the parties and enables a Court oi appeal to correct any error
as to 'this, only where the First Court decided to the
detriment of the revenue.
The defendant in this suit seeks to utilise the provisiC1ns f#f the Act, not to safeguard the interest of the
State but to obstruct the plaintiff; he does not contend
mat ihe Court wrongly decided to the detriment of the
revenue, but thaJt it dealt with th.e case without jurisdiction".
We are unable to appreciate how this case assists the appellant.
Fees and taxes are both revenne for the benefit of the State.
At any raJte the Privy Council was not concerned with the interpretation of JegislatiV'~ Entries, where a sharp discinction is drawn
between fees and taxes.
Two High Courts have upheld 'the levy of increased court fees
and the learned Advocate-General strongly relied on 1hem. In
Khacharu Singh v. S.D.O. Khurja( 1), a petitiQD. under Art 226
was presented with a fee of Rs. 5/-, while by virtue of the Court
:fees (Uttar Pradesh Amendment) Act, 1959, the fee leviable was
Rs. 50/-. The latter fee was held to fall within Entry 3 List II.
Mootham C. J. held that becau&~ court fees were not appropriated
for any specific purpose but formed part of the general revenues
of the State, these were neither tax nor fees as defined in The Commissioner; Hindu Religious Endowments, Madras v.
Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt( 2) and Mahant Sri
Jagannath Ramanuj Das v. The State of Orissa(8). He observed :
"It is not an exaction imposed without referenr:e to
any special benefit conferred on the payers, for it is
imposed only on those persons who wish· to file documents, the filing of the document or the obtaining of the
copy being of direct benefit to the person concerned.
It would appear l:herefore 111ot to be a tax as so defined."
He went on to observe, and here, with respect, he made a mistake : "Nor clearly is it a fee as so defined if only for the reason
Iha! the mone~s realized have not been set apart ,but have merged m the pubhc revenue of the State". MukheIJea, J. in Th~
Commissioner, Hindu Religious Endowments,
Madras v
Sri
Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(')
had said
that this fact was not conclusive and in vbw of Art. 266 of the
(I) l.L.R. [1960] 1 All. 429.
(3) [1954]
S.C.R. 1046.
(2) [1954] S.C.R. 1005.
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987
Constitution, it could not be conclusive.
Mootham,
C.J. in
Khacharu Singh v. S.D.O. Khurja(') observed :
"It clearly follows, I think, from the fact that the
fees or other money taken by the Supreme Court or a
High Court are to be credited to
the Consolidated
Fund that such fees cannot be fees of the kind which
the Supreme Court had under consideration; for
an
essential characteristic of such a fee is that it shall be
set apart and not merged in the general revenue of the
State. It accordingly appears that there exists another
class of imposition, also called a fee in the Constitution
which differs from the type, of fee which the Supreme
Court had under consideration and that the definition
of fee to be found in th•J three Supreme Comt decisions
of 1964 is not exhaustive".
With respect, the fees taken in courts and the fees mentioned
in Entry 66 List "I are of the same kind.
They may differ from
each other only becau&J they relate to different subject ma'lters
and the subject matter may dictate what kind of fees can be levied
conveniently, but the overall limitation is that fees cannot be
levied for the increase of general revenue.
For instance if a
State were to double fees with the object of providing money
for road building or building schools, the enactment would be
held to be void. Dayal J. correctly observed in Khacham Singh
v. S.D.O. Khurja( 1)
:
"The expression "the fees taken therein" in item
No. 77 of List I and "fees taken in all courts except the
Supreme Court" in item No. 3 of List II need not be
interpreted to rder to such fees which must be credited
to a separate fund and not to the gen~rnl fund of India
or the State.
It follows therefore that the Constitution
did not contemplate it to be an essential element of a
fee--tha!t it be credited to a separate fund and not to the
Consolidated, Fund."
But 'the High Court in Khacharu Singh v: S.D.O. Khurja(')
did not meet the argument of the learned counsel that "as the
State Government w~s already. making a very large pro,'jt out
·of court fees, the entire amendmg Act of 1959 increasin~ those
lees is
ultra vires".
It seems to us that whenever
the~ State
Legislature generally increases fees it 1irnst establish
that it is
ncessary to increase court fees in order to meet the cost of ud 1ninistration of civil
justice.
As soon as the broad
correlationship
between the cost of administration of civil justice and the Jevv
of court fees ceases, the imposition becomes a tax and beyond the
competence of the State Legislature.
(!) l.L.R. [1960] 1 All.