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PETITIONER: SECUNDERABAD HYDERABAD HOTEL OWNERS ASSOCIATION & ORS.

       Vs.

RESPONDENT: HYDERABAD MUNICIPAL CORPORATION, HYDERABAD & ANR.

DATE OF JUDGMENT:       20/01/1999

BENCH: Sujata V. Manohar, A.P.Misra

JUDGMENT:

Mrs. Sujata V. Manohar,J.

     In  these proceedings the petitioners are  challenging an  increase  in  the licence fee for a  trade  licence  for running  a  lodging house, hotel, restaurant, coffee  house, tea stall, eating house, soft drink stall, cafeteria, tiffin room  etc.   levied  under  Section  622  of  the  Hyderabad Municipal Corporations Act, 1955.

     Under Section 521(1)(e)(ii) of the Hyderabad Municipal Corporations  Act  of 1955, except under and  in  conformity with  the  terms and conditions of a licence granted by  the Commissioner no person shall, inter alia, carry on, allow to be  carried  on,  in  or upon any  premises,  any  trade  or operation  which  in  the opinion of  the  Commissioner,  is dangerous  to  life,  health or property, or  is  likely  to create  a  nuisance either from its nature, or by reason  of the  manner  in  which, or the conditions under  which,  the same,  is  or is proposed to be carried on.  By an order  of the  Special  Officer, Municipal Corporation  of  Hyderabad, dated  15.4.1972 a list of trades, operations etc.   covered by  Section  521(1)(e)(ii)  was  notified.   The  trades  so covered  include eating houses, hotels, restaurants,  Cafes, bars,  tea  stalls, canteens, coffee houses,  tiffin  rooms, cafeteria  or any place where food is prepared and  supplied or  sold for the purpose of gain.  Lodging houses were  also covered.

     Under   Section  622  of   the   Hyderabad   Municipal Corporations Act, 1955 whenever it is provided under the Act that  a licence or a written permission may be given for any purpose,  such  licence or written permission shall  specify the  period  for which and the restrictions  and  conditions subject  to  which, the same is granted.  Under Section  622 (2)  for every such licence or written permission a fee  may be  charged at such rate as shall from time to time be fixed by  the Commissioner, with the sanction of the  Corporation. Under  the said order of 15.4.1972 the licence fees for  the said  trades were specified/revised.  Where the monthly rent of  an  eating  house etc.  was up to Rs.50/-  the  rate  of licence  fee  was  Rs.50/-.  The licence  fees  were  graded depending  upon  the  rent  of the  premises.   The  maximum licence  fee where rent was above Rs.1,000/- was Rs.1,000/-.

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The  same  was  the position with regard to  lodging  houses where  the  rates  of  licence fee varied  from  Rs.50/-  to Rs.1,000/-  depending upon the monthly rent of the premises. The  rates so prescribed were higher than the rates in force earlier.   This  increase was challenged, but was upheld  by the High Court.

     Thereafter  the Special Officer, Municipal Corporation of  Hyderabad,  by  his order dated 6.4.1981  revised  these licence  fees.   The said order, inter alia, stated that  in view  of the increase of the service charges rendered by the Municipal Corporation of Hyderabad, it was felt necessary to revise  the existing schedule of rates of licence fee  fixed under Section 622(2) of the Hyderabad Municipal Corporations Act,  1955.   As a result of this revision the  licence  fee where  the  monthly rent was up to Rs.50/- was increased  to Rs.100/-  and  the  maximum licence fee where the  rent  was above  1,500/- but not more than Rs.2,000/- was increased to Rs.2,000/-.   In  respect  of  lodging  houses  the  maximum licence fee where the rent was above Rs.4,000/- but not more than  Rs.5,000/-  was fixed at Rs.5,000/-.  The licence  fee was  proportionately increased in respect of all  categories of lodging houses and eating houses by the said order.

     The  present petitioners filed Writ Petiton No.3055 of 1981  in  the High Court of Andhra Pradesh  challenging  the increase  in the licence fee by the said order of  6.4.1981. The  Learned Single Judge upheld the levy and dismissed  the writ  petition.  An appeal before the Division Bench of  the High  Court  filed by the petitioners was also dismissed  by the  Division Bench.  The Division Bench held that since the Corporation  is providing services in the form of inspection by  the officials of the premises of the petitioners, and is also  providing general services like lifting of garbage  in the  whole city for which staff is required, the Corporation is  providing  services  though general in  nature,  to  the persons  or traders.  The levy is not a tax.  It upheld  the levy as a fee.  Civil Appeal Nos.  1811 and 1812 of 1988 are against  the said judgment of the Division Bench of the High Court.

     In  1987 the respondent-Corporation again revised  and increased   licence  fees.   The   said  increase  is  under challenge  before  the High Court.  Thereafter by  an  order dated 12.10.1991 the respondent- Corporation again increased the  licence fees of eating houses and lodging houses.   The increase  was  four  times the licence fee  fixed  in  1987. However,  on  25.7.1992  the respondents have  reduced  this increase on the basis of a compromise arrived at between the Corporation  and  several groups of affected  traders.   The increased  licence fee under the order of 25.7.1992 is twice the  licence  fee  charged  under the order  of  1987.   The petitioners  were not parties to the compromise.  They  have filed  Writ  Petition No.  238 of 1992 in this  Court  under Article  32 challenging the increased licence fee under  the orders  of 1992.  Since common questions of law arise in all these  proceedings  they have been heard together.  A  chart showing  the increase of licence fee for lodgings and eating houses from time to time is set out below:-

I.......T.......T.......T.......T.......T.......T.......T..J ------------------------------------------------------------ Description    Annual li  Annual li-  Annual li-  Annual li- of the trade&  cence fee  cence fee   cence fee   cencee fee operation to   prevaili-  increased   increased   revised in

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be licensed    ng prior   in 1981     in 1987     impugned                to 1981                            order -------------------------------------------------------------                   Rs.        Rs.         Rs.      1991   1992                                                    Rs.    Rs. ------------------------------------------------------------- Lodging/Hotels Whre monthly rent is upto Rs. 50/-             50/-         100/-      300/-    1200/-600/- ------------------------------------------------------------- Rent above 50/- not more than 100/-           125/-         150/-       450/-   1800/-900/- ------------------------------------------------------------- Rent above 100/- but not more than 200/-      200/-         250/-        750/-  3000/-1500/- -------------------------------------------------------------- Rent above 200/- but not more than 400/-      300/-         400/-       1200/-   4800/-2400/- --------------------------------------------------------------- Rent above 400/- but not more than 600/-      400/-         600/-       1800/-    7200/-3600/- ---------------------------------------------------------------- Rent above 600/- but not more than 800/-      500/-          800/-      2400/-    9600/-4800/- ---------------------------------------------------------------- Rent above 800/- but not more than 1000/-     600/-          1000/-     3000/-    12000/-6000/- ----------------------------------------------------------------- Rent above 1000/- but not more than 1500/-    1000/-          1500/-     4000/-     16000/-8000/- ------------------------------------------------------------------ Rent above 1500/- but not more than 2000/-    1000/-          2000/-     6000/-      24000/-12000/ ------------------------------------------------------------------- Rent above 3000/- but not more than 4000/-    1000/-          4000/-    12000/-       48000/-24000/ -------------------------------------------------------------------- Rent above 4000/-         1000/-          5000/-    15000/-       60000/-30000/ --------------------------------------------------------------------

     The  petitioners  contend that the  increased  licence fees of 1981 and thereafter of 1992 are not in the nature of fees since there is no quid pro quo between the fees charged by  the respondents and the services rendered by them to the traders in question.  These are taxes.  The petitioners have drawn  our  attention  to  Chapter  VIII  of  the  Hyderabad Municipal  Corporations Act, 1955 which deals with municipal taxation.   Under  Section 197, (which is the first  section falling  under Chapter III) for the purposes of this Act the Corporation  shall  impose the taxes which are specified  in that  section.   Under  sub-section(2) of  Section  197  the Corporation  may  impose any tax other than those  specified under sub-section(1) subject to the previous sanction of the

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Government.  Under Section 198 before the Corporation passes any resolution imposing a tax for the first time or at a new rate it shall direct the Commissioner to publish a notice in the Andhra Pradesh Gazette and in the local newspaper of its intention  to  do so and fix a reasonable period  not  being less  than  one  month for submission  of  objections.   The Corporation may, after considering the objections, determine by  resolution  to  levy the tax.  The Corporation  is  also required  to publish a notice specifying the date from which and  the  rate at which such tax or increased tax is  to  be levied.  The petitioners contend that this procedure has not been  followed while increasing the licence fee which is  in the  nature of a tax and not a fee and hence the levy is not valid.

     The   first   question,   therefore,  which   requires consideration is whether the increased licence fee under the orders  of 1981 and 1992 is in the nature of a tax or a fee. In  order to answer this question it is necessary to look at the  nature  of  the licence which is  granted.   The  hotel licence which is issued to each of the traders is subject to the  conditions  set forth in the bye-laws of the  Municipal Corporation  of  Hyderabad  relating to  the  regulation  of eating  houses  or hotels mentioned in Section  521.   These conditions  are reproduced in the licence.  These prescribe, inter  alia,  that (1) the building shall be situated  at  a suitable  place  and  shall  be  spacious  and  have  enough accommodation  according  to the requirements  of  business; (2)  it  shall  be  constructed of masonry  and  such  other non-inflammable   material  as  may  be  approved   by   the Commissioner;   (3) a sign board of the hotel in English and at least one regional language shall be hung in front of the building;  (4) the licensee shall put up a notice-board in a conspicuous  part  of  the dining hall stating  whether  the articles  of  food  are made of beef, mutton, ghee  or  oil. There  are  several  other conditions.  e.g.   the  licensee shall  make adequate provision for parking of cycles,  motor cars  or  other vehicles of the persons visiting the  hotel. The  licensee  shall  provide suitable  means  of  drainage, ventilation  and  lighting of such premises.   The  licensee shall  provide  in the kitchen suitable outlets  for  smoke. The  licensee shall provide doors and windows with  shutters fitted with wire gauge so as to make them proof against dust and  flies.   The  licensee  shall provide  good  supply  of wholesome water.  All cups, saucers etc.  shall be rinsed in clear water.  No vessels or utensils shall be used which are likely  to  get  corroded or which  would  otherwise  render obnoxious the article of food, and so on.  There are a large number  of  conditions for the purpose of ensuring that  the premises  are  safe and suitable, the food is wholesome  and hygienic  and there is adequate ventilation, drainage and so on.   The respondent-Corporation is required to inspect  the premises  in question in order to ensure that the conditions are  complied  with.   It also has  the  responsibility  for inspecting  and supervising the sale of foodstuff to  ensure that  all  the  conditions  of  licence  pertaining  to  the preparation  and  sale of such food are complied with.   The respondent  is also required to ensure cleanliness,  removal of  garbage  and maintenance of hygiene in  these  premises. Undoubtedly, the Corporation has the general duty to provide scavenging  and  sanitation  services including  removal  of garbage  and maintaining hygienic conditions in the city for the   benefit   of  all  persons   living   in   the   city. Nevertheless,  hotels  and  eating houses by reason  of  the nature  of their occupation, do impose an additional  burden

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on  the  municipal corporation in discharging its duties  of lifting  of  garbage, maintenance of hygiene and  sanitation since  a large number of persons use the premises either for lodging  or  for  eating;   the food is  prepared  in  large quantity  unlike  individual  households and  the  resulting garbage  is  also much more than what would otherwise be  in the  case of individual households.  In fact, under  Section 230 of the said Act the respondent-Corporation has the power to  fix  special  rates of conservancy tax in respect  of  a hotel,  club  or other large premises.  This, however,  does not turn a licence fee into a tax.

     It  is, by now, well settled that a licence fee may be either  regulatory  or compensatory.  When a fee is  charged for  rendering  specific services a certain element of  quid pro  quo must be there between the service rendered and  the fee charged so that the licence fee is commensurate with the cost  of  rendering the service although exact  arithmetical equivalence  is not expected.  However, this is not the only kind  of fee which can be charged.  Licence fees can also be regulatory  when the activities for which a licence is given require  to  be regulated or controlled.  The fee  which  is charged  for  regulation for such activity would be  validly classifiable  as a fee and not a tax although no service  is rendered.   An element of quid pro quo for the levy of  such fees is not required although such fees cannot be excessive.

     In  the  case  of The  Commissioner,  Hindu  Religious Endowments,  Madras  v.  Sri Laxshmindra Thirtha Swamiar  of Sri  Shirpur Mutt (1954 SCR 1005) one of the earliest  cases dealing  with  the question whether the levy is a fee  or  a tax, this Court held that the Constitution and in particular the  legislative entries in Schedule VII of the Constitution make  a clear distinction between a tax and a fee.  The High Court  reproduced the definition of what "tax" means,  given by  Latham C.J.  of the High Court of Australia in  Matthews v.   Chicory  Marketing Board (60 C.L.R.  263, 276) (see  at page 1040).  "A tax" according to the learned Chief Justice, "is  a compulsory exaction of money by public authority  for public  purposes  enforceable by law and is not payment  for services  rendered".   A fee on the other hand is  generally defined  to  be a charge for a special service  rendered  to individuals  by some governmental agency.  The amount of fee levied  is supposed to be based on the expenses incurred  by the Government in rendering the service though in many cases the  costs  are arbitrarily assessed.  Ordinarily, the  fees are uniform and no account is taken of the varying abilities of  different recipients to pay.  These are undoubtedly some of  the  general characteristics, as far may be, of  various kinds of fees.  It is not possible to formulate a definition that  would  be  applicable to all cases.   The  Court  then observed  (at page 1042), "The distinction between a tax and a  fee lies primarily in the fact that a tax is levied as  a part  of  the common burden, while a fee is a payment for  a special  benefit  or  privilege.    Fees  confer  a  special capacity, although the special advantage, as for example, in the  case  of  registration fees for documents  or  marriage licences,  is secondary to the primary motive of  regulation in  the  public  interest".   There  is  really  no  generic difference  between tax and fee and as said by Seligman, the taxing  power  of  a  State may  manifest  itself  in  three different  forms  known respectively a special  assessments, fees  and  taxes.   Our Constitution  has,  for  legislative purposes, made a distinction between a tax and a fee.

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     In  the case of Corporation of Calcutta and Another v. Liberty  Cinema  ([1965] 2 SCR 477 at page 483), this  Court after  referring  to the constitutional provisions making  a distinction  between  a fee and a tax, also went on  to  say that  in  our  Constitution fees for licence  and  fees  for services  rendered  are contemplated as different  kinds  of levy.   The former is not intended to be a fee for  services rendered.   This is apparent from a consideration of Article 110(2)  and  Article 199(2) where both the  expressions  are used  indicating  thereby  that they are not the  same.   In other  words,  a  distinction  was  made  between  fees  for services  rendered and fees which are regulatory.  In Indian Mica  & Micanite Industries Ltd.  v.  State of Bihar &  Ors. (1971  Supp.  SCR 319 at page 324), Om Parkash Agarwal  etc. v.   Giri  Raj Kishori & Ors.  etc.  ([1986] 1 SCR 149)  and The  Municipal  Council,  Madurai  v.   R.   Narayanan  etc. ([1976]  1  SCR  333  at pages 339 to  400)  the  Court  had considered  a  fee which was charged for services  rendered. In  all  these cases the Court observed that when a  fee  is charged  for services rendered an element of quid pro quo is necessary and there has to be a co-relationship of a general character between the cost of rendering such service and the fee charged.  A number of other decisions were also cited in this  connection.   The  position  in respect  of  fees  for services  rendered  is summed up in the case of Krishi  Upaj Mandi  Samiti  and  Ors.   v.   Orient  Paper  &  Industries Ltd.([1995] 1 SCC 655 in paragraph 21).

     In the present case, however, the fees charged are not just  for  services  rendered  but they also  have  a  large element  of  a  regulatory  fee levied for  the  purpose  of monitoring the activity of the licensees to ensure that they comply  with  the  terms  and  conditions  of  the  licence. Dealing with such regulatory fees, this Court in Vam Organic Chemicals  Ltd.   &  Anr.  etc.  v.  State of U.P.   &  Ors. etc.   ([1997]  2 SCC 715 at page 726) observed that in  the case  of a regulatory fee no quid pro quo was necessary  but such  fee  should  not be excessive.  The  same  distinction between  regulatory  and compensatory fees has been made  in the case of P.  Kannadasan & Ors.  v.  State of T.N.  & Ors. ([1996]  5  SCC  670 in paragraph 36) as well  as  State  of Tripura  & Ors.  v.  Sudhir Ranjan Nath ([1997] 3 SCC 665 at 673).

     The  petitioners,  however,  submitted  that  the  fee charged  was, in fact, a tax in the guise of a fee.  Because apart  from  the fact that there was no element of quid  pro quo  present  in this case, the amount collected by  way  of fees  was  credited  to  the common fund  of  the  municipal corporation.   Under Section 169 of the Hyderabad  Municipal Corporations  Act, 1955 a municipal fund is constituted  and under the said section it is provided as follows:-

     "169.  Constitution of Municipal Fund :- (1)Subject to the provisions of this Act and the rules and the bye-laws -

     (a)  all  moneys  received  by or  on  behalf  of  the Corporation  under  the provisions of this Act or any  other law for the time being in force, or under any contract,

     (b) .............

     (c) .............

     (d)  all  moneys  raised  by any tax  levied  for  the

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purposes of this Act,

     (e)  all fees and fines payable and levied under  this Act  or  under any rule, bye-law or standing order in  force thereunder,

     (f) .............

     (g) ............., and

     (h)   all  interest  and   profits  arising  from  any investment  of,  or from any transaction in connection  with any  money belonging to the Corporation shall be credited to a  fund which shall be called ’the Municipal Fund’ and which shall  be held by the Corporation in trust for the  purposes of this Act, subject to the provisions herein contained.

     (2)..........."

     Section  174  describes  the  purpose  for  which  the municipal  fund  is  to  be   applied.   It  is,  therefore, submitted  that since all the fees form a part of the common municipal  fund, and this fund is to be deployed for various purposes of the municipal corporation, there is no provision by  which the fee collected is used for regulatory purposes. This Court, however, in the case of Sirsilk Ltd.  & Anr.  v. Textiles Committee & Ors.  ([1988] Supp.(2) SCR 880 at pages 910,  912)  has  pointed  out that a separate  fund  is  not essential  in  the case of regulatory fees.  In the  present case  the  Budget  Estimate  Rules are relied  upon  by  the respondents  in  order  to  show that  the  fees  are  being utilised  for regulatory services.  The Hyderabad  Municipal Corporation Budget Estimate Rules, 1968 under Rule 6 provide as follows:-

     "6.   Sanctioning  of the Budget:- The council  shall, after  satisfying  itself on the following points,  sanction the  budget  ordinarily  not  later than  the  twentieth  of February,  each year with such modifications, as it may deem necessary:

     (a)............

     Provided that no part of the receipts under any fee or charge  collected  or recovered for performance of  services such  as  Slaughter  House  fee,   Market  fees  and  rents, buildings permit fees, layout fees, licence fee and the like shall  be utilised or expended for purposes other than those for  which  the  fees and rents are collected.   Any  amount remaining  surplus  or  unexpended shall be  invested  in  a reserve fund."

     The  fees,  though  credited in the common  fund,  are earmarked  for  the purposes for which they  are  collected. Clearly,  therefore,  the intention is to levy a  fee  which would  be utilised for regulatory and compensatory  purposes in the present case.  The contention of the petitioners that this  is a tax in the guise of a fee does not appears to besustainable.

     It  is, however, contended by the petitioners that  if

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this  is a fee, the quantum of fee levied is excessive.   It is  also unreasonable because the manner in which the fee is levied  bears  no nexus to the purpose for which the fee  is levied.  The petitioners contend that a licence fee based on the  rent  payable in respect of the premises in  which  the activities of an eating house or a lodging house are carried on is not a proper basis for charging a fee because the rent charged  for  the  premises has no nexus with  the  services rendered by the Corporation.

     In  the  first  place it is not necessary that  a  fee should  only  be in the form of a lump sum fee.  A  fee  can also  be graded as in the present case.  The Corporation has chosen  the  quantum of rent paid as the criterion  for  the quantum  of fee to be charged.  The rent under the  relevant provisions of law in that connection, does have a nexus with the  area  in the occupation of the lodging house or  eating house.   In  the  case  of activities carried  on  by  these lodging  houses  and  eating  houses,   the  area  in  their possession  has  a direct nexus with the extent of  business activities.   The  need  for cleanliness  and  hygiene,  the generation  of garbage and the extent of regulation that may be  required  depend upon the size of the premises which  in turn control the extent of activity.  Undoubtedly in a given case  if the premises are old, the rent may be less but that does  not mean that classifying premises on the basis of the rent paid has no connection with the quantum of fee charged.

     It  is  also  contended  that  the  fees  charged  are excessive.  The respondents in their counter affidavit filed in the writ petition have given general figures to show that the total income from trade licence fees on the basis of the 1987   rates  was  Rs.1,08,25,588/-  as  per   the   revised estimates.   With  the increase in the licence fees in  1992 the income would be doubled to Rs.2,16,51,176/-.  This would not  be  sufficient  for  the  sanitary  and  public  health services  including  lifting of garbage, cleaning of  roads, sanitation,  medical centres, salaries of the staff employed and so on.  The public health budget for the relevant period of   the   Corporation   is   to    the   tune   of   nearly Rs.13,95,40,000/-.  Of course, these figures do not indicate separately  the  extent  of fees collected from  eating  and lodging  houses  or the amount expended for  regulating  the activities  of eating and lodging houses and rendering  them services.   In  respect of the year 1981-82, when the  first increase  which  is under challenge took place,  the  income from licences on the basis of the rates as enhanced in 1981, was  to the tune of Rs.37,89,627/- while the expenditure  on license  section and sanitary section of the Corporation was Rs.3,85,11.961/-.  The Corporation also pointed out that the annual salary bill in the year 1981 for the staff in various sections  of the municipal corporation dealing with licences was  Rs.40,45,585/-.  The annual salary of the same staff in 1992  was Rs.1,75,31,943/-.  The attempt of the  Corporation is  to show that the expenditure under various heads between 1981  and  1992  had  more  than  doubled.   Therefore,  the increase  in the licence fee which was made in 1981 for  the first  time  after  1972, as also the increase made  in  the licence fee in 1992 were co-related with the increase in the cost   of  providing  services  ?   whether  regulatory   or otherwise,  to  the trades in question.  The respondents  in their  affidavit have also annexed budget estimates for  the year  1989-90  in  order  to  show  that  the  licence  fees collected  are  far  less  than   the  requirements  of  the municipal  corporation  for  dealing with  health  services,

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sanitation,  licencing  section  and so on.  In  the  budget estimates  for  1988-89  the licence fees from  hotels,  for example,   are   estimated   at   Rs.25,00,000/-.    Revenue expenditure  for  the year 1988-89 as per  budget  estimates under sanitary, conservancy and scavenging section including establishment  expenses, salaries and allowances are to  the tune  of  Rs.10,14,61,100/-;  while under the health  office section,  these  are to the tune of  Rs.31,30,400/-.   Under prevention  of  food adulteration and  municipal  laboratory section,  the  estimated  expenditure  is  to  the  tune  of Rs.7,66,200/-.   Undoubtedly,  this expenditure  covers  not just  the  services rendered to the trades in question.   It also  covers  services rendered to various other trades,  to individuals  and organisations and all other members of  the public  who  benefit  from  such services  rendered  by  the municipal  corporation.   Nevertheless, looking to the  fact that  the licence fees collected form only a very small part of   the  total  expenditure   incurred  by  the   municipal corporation,  we are not inclined to hold the levy of  these fees  as  excessive.  It is also necessary to note that  the impugned increase in 1981 was the first increase after 1972. The  High  Court has rightly considered that looking to  the increase in the cost of the various activities carried on by the  Hyderabad  Municipal Corporation, doubling  of  licence fees  after nine years can not be considered as an excessive increase.  In respect of the increase from the 1987 level of licence  fees to the 1992 level of licence fees, the initial increase could have been viewed as excessive.  But after the representations  were made to the respondent-Corporation  by the  various traders affected by the increase in the licence fees,  the  municipal corporation reduced the  increase  and kept  it  at  twice the licence fees charged in  1987.   The respondents  in  this connection had meetings  and  detailed negotiations  with the various trade organisations connected with  the  conducting of eating houses and  lodging  houses. The  respondents have annexed the minutes of the proceedings before the Commissioner, Municipal Corporation of Hyderabad, dated  25.7.1992.   The  meeting  of  25.7.1992  dealt  with enhancement of licence fee of certain trades and operations. These  cover  the  present   trades  and  occupations.   The proceedings record that the traders viewed the increase from the  existing rates as on the high side and the increase  in many  cases  was  four  to five times  the  existing  rates. Aggrieved  by  the increase in the licence fee, the  traders formed a Twin Cities Traders Joint Action Committee and made representations at various levels.  Joint meetings were held on  22nd  April,  4th, 6th, 11th and 12th of May,  1992  and after  a great deal of exchange of views, it was unanimously resolved  to increase the trade licence fee by 100% over the rates  prevailing  prior to the increase in  October,  1991. Agreement  was reached to this effect.  These proposals were accepted  by the Standing Committee and the General Body  of the  Corporation.   Accordingly,  the   revised  rates  were implemented.  The petitioners contend that their members did not agree to this increase.  Nevertheless, the Traders Joint Action  Committee  which covered a number of  other  traders carrying  on  the same trade did agree to this  increase  as reasonable.  It would not, therefore, be proper to term this agreed  increase as excessive or as indicating that it was a taxing measure rather than a fee.

     The  petitioners  had  also  contended  that  if  this increased  levy  is viewed as a tax then the provisions  for imposing  a  tax under the Hyderabad Municipal  Corporations Act,  1955 have not been complied with.  Since we have  come

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to  a conclusion that the licence fee which is charged is  a regulatory-cum-  compensatory  fee, and it is not a tax,  we are not examining this question since it is not necessary to view this levy as a tax.

     We,  therefore, agree with the conclusions reached  by the  High  Court.  The appeals as well as the writ  petition are, therefore, dismissed.  There will, however, be no order as to costs.