15 May 1992
Supreme Court


Bench: RAY,G.N. (J)
Case number: Appeal Civil 10111 of 1983








CITATION:  1992 AIR 2038            1992 SCR  (3) 328  1992 SCC  (3) 285        JT 1992 (3)   417  1992 SCALE  (1)1212

ACT:      Gujarat Town Planning and Urban Development Act, 1976      Sections  119(1)  and 119(2)(c)-Levy  and  recovery  of development   fee-Whether  valid   and   authorised-Specific provision whether necessary.      Constitution  of  India,  1950-Articles  14,  19,   21- Constitutional validity of sections 119(1) and 119(2)(c)  of the  Gujarat Town Planning and Urban Development Act,  1976- Levy and recovery of development fee-Validity of.

HEADNOTE:      The respondents filed a writ petition in the High Court challenging  the Constitutional validity of  Section  119(1) and  119(2)(c)  of  the  Gujarat  Town  Planning  and  Urban devopment Act, 1976 and the regulations made under the  Act, contending that levy of devlopment fee was not authorised by the  statute and therefore the action of respondent No.1  in collecting various amounts from the petitioners in the  form of  development fee was not authorised; that no  development fee  could be charged even by the State  Government  because there was no provision in any Entry in List II of Schedule 7 to  the constitution; that the levy of development  fee  was ultra  vires as the same did not fall under Section  119  of the  Town  Planning  Act and the  regulations  made  by  the Development  Authority were unauthorised, illegal and  voil; and that even if there was any power to levy such fee by the State  Legislature  in  the absence of  delegation  of  such power,  the  Development  Authority  could  not  impose  any development fee.      The  High Court allowed the writ petition holding  that as there was no express provision for imposition of fee  and the State Government had not delegated any such power to the Development  Authority to impose  fees for development,  the regulations  framed  for  such imposition of  fees  and  the demands made therefore were wholly unauthorised and illegal.      The appellant, the Development Authority, in its appeal by  special leave, made against the High  Court’s  judgment, contended   that   for  implementing  various   schemes   of development, the development or betterment fee was  required to be imposed and collected, such imposition of fee,



                                                      329 therefore,  must  be held be incidental to  the  development activities;  that in such state of affairs, even  if,  there was  no specific provision for imposition of  betterment  or development fee, such power must be held to be implied under the  Act; that the development authority could  impose  such fee  and  such  power to impose fees was  ancillary  to  the development  activities and was implied in the Act; that  if the  State  Legislature was competent to  impose  fees,  the Development Authority by virtue of the delegated legislation also could impose betterment fee or the development fee  and simply  because  imposition of such fee by  the  Development Authority could not impose any betterment fee or development fee  even though such fee was essential for the  development activities   and   had  been  imposed  with   reference   to development effected; that the High Court was not  justified in   holding  that  such  imposition  of  fee   by   framing regulations was wholly unauthorised and as such illegal  and void.      Dismissing   the  appeal  of  the   Urban   Development Authority, this Court,      HELD: 1.01. In a fiscal matter it will not be proper to hold  that  even  in the absence  of  express  provision,  a delegated  authority can impose tax or fee.  Such  power  of imposition of tax and/or fee by delegated authority must  be very specific and there is no scope of implied authority for imposition of such tax or fee. [336 E]      1.02. The delegated authority must act strictly  within the  parameters  of the authority delegated to it under  the Act and it will not be proper to bring the theory of implied intend  or the concept of incidental and ancillary power  in the matter of exercise of fiscal power. [336 F]      1.03.  Whenever  there is compulsory  exaction  of  any money,  there should be specific provision for the same  and there is no room for intendment.  Nothing is to be read  and nothing  is to be implied and one should look fairly to  the language used. [337 B]      The  Hingir  Rampur Coal Company Limited  v.  State  of Orissa, AIR 1961 SC 459; Sri Jagannath Ramanuj Das v.  State of  Orissa, AIR 1954 SC 400; Delhi Municipal Corporation  v. Mohd.  Yasin,  AIR  1983 SC 617 and  Lilawati  v.  State  of Bombay, AIR 1957 SC 521, referred to.                                                        330      District  Council  of the  Jowai  Autonomous  District, Jowai and others v. Dwet Singh Rymbai etc., AIR 1986 SC 193; Khargam  Panchayat Samiti and Anr. v. State of  West  Bengal and Ors., [1987] 3 SCC 82, distinguished.

JUDGMENT:      CIVIL  APPELLATE JURISDICTION : Civil Appeal No.  10111 of 1983.      From  the  Judgment and Order dated  22.8.1983  of  the Gujarat High Court in Special Civil Application No. 3494  of 1980.      P.K. Goswami and P.H. Parekh for the Appellants.      P.C.   Kapur  (NP)  and  M.N.  Shroff  (NP)   for   the Respondents.      The Judgment of the Court was delivered by      G.N.  RAY,  J.  This appeal  is  directed  against  the judgment of the High Court of Gujarat dated August 22,  1983 in  Special  Civil Application No.3494 of  1980.   The  said Special  Civil  Application No.3494 of 1980 arose out  of  a Writ  petition  moved in the High Court of  Gujarat  by  the



respondents  Nos. 1,2,3 inter alia for declaration that  the provisions  of Sections 119(1) and 119(2)(c) of the  Gujarat Town  Planning and Urban Development Act, 1976  (hereinafter referred  to as the Town Planning Act) are ultra  vires  and the  impugned regulations purported to have been made  under the Town Planning Act are ultra vires Articles 14, 19 and 21 of the Constitution and the said regulations are also  ultra vires  the Town Planning Act itself.  The  Writ  Petitioners also  made  a prayer before the High Court  for  appropriate writ,  order  or  direction directing  the  Ahmedabad  Urban Development  Authority  (hereinafter  referred  to  as   the Development Authority) not to enforce or implement the  said regulations  and  not  to  levy or  recover  any  amount  as development  fee under the said regulations.  A  prayer  was also made for appropriate writ, order or direction directing the   Development   authority  to  refund  the   amount   of development fees realised from the Writ Petitioners.      It was contended by the Writ Petitioners that;           (a)  levy of development fee is not authorised  by          the statute and therefore the action of  respondent          No.1   in  collecting  various  amounts  from   the          petitioners in the forms of development fee was not          authorised.                                                        331          (b) No development fee could be charged even by the          State  Government because there is no provision  in          any  Entry  in  the List II of Schedule  7  to  the          Constitution.           (c) The levy of development fee is ultra vires  as          the  same  does not fall under Section 119  of  the          Town Planning Act and the impugned regulations made          by  the  Development  Authority  are  unauthorised,          illegal and void.           (d) Even if there is any power to levy such fee by          the State Legislature in the absence of  delegation          of such power, the Development Authority could  not          impose any development fee.      The  High  Court of Gujarat has held that Entry  66  of List  II  of VIIth Schedule to the Constitution  deals  with fees  in respect of any of the matters in the said List  but not  including any fee taken in any Court.  Entry 5 of  List II  of  that Schedule refers to Constitution and  powers  of improvement  trust  and  other  local  authorities  for  the purpose of local self government or village  administration. The  High  Court  has held that under Entry  66,  the  State Legislature  has legislative competence to  make  provisions for  fees  to  be  imposed  by  the  Development   Authority constituted  under  Section 31 of the said  Act.   The  High Court  has,  however,  held that  simply  because  there  is legislative  competence for the State Government  to  charge fees for the Urban Development Authority, it cannot be  held that  demands for the development fee and/or  imposition  of the  same  by the Development Authority under  the  impugned regulations  is  legal  and  valid.   The  High  Court   has indicated that it is to be seen whether under Town  Planning Act,  a  specific power has been given  to  the  Development Authority   to   impose   such   development   fee.    After scrutinising  the provisions of the Town Planning  Act,  the High  Court  has come to the finding  that  the  Development Authority  or as a matter of fact any other authority  under the  Act  has  not  been vested with  the  power  to  charge betterment or the development fee.      The  High Court has referred to the decisions  of  this Court in The Hingir Rampur Coal Company Limited v. State  of Orissa,  AIR  1961 SC 459 and Sri Jagannath Ramanuj  Das  v.



State of Orissa. AIR 1954 SC 400.  This Court has held  that between  a  tax  and a fee there is  no  generic  difference because in a sense both are compulsory exactions of money by public authority but in a tax imposed for public purpose, no service  need  be rendered in return of such tax. A  fee  is however levied essentially for                                                        332 services  rendered and as such there is an element  of  quid pro  quo  between the person paying the fee and  the  public authority imposing the same.  It has been further  indicated that whenever there is any compulsoty exaction of any  money from  a  citizen,  there must be a  specific  provision  for imposition of such tax and/or fee.  There is no room for any intendment  for imposition of compulsory payment.   whenever there  is any compulsory exaction of money from  a  citizen, nothing  is  to be read and nothing is to be  implied.   One should look fairly at the language used.  The High Court has also  referred to another decision of the Court in the  case of  Delhi Municipal Corporation v. Mohd. Yasin, AIR 1983  SC 617 wherein the compulsory nature of exaction by way of  tax and  fee partaking the character of tax has been  reiterated and  it  has been held that there is no  generic  difference between  tax  and  fee though broadly a  tax  is  compulsory exaction  as part of a common burden without promise of  any special advantages to classes of tax payers whereas a fee is a  payment  for  services rendered or  benefit  provided  or privilege  conferred.   The High Court has held  that  since there is no express provision for imposition of fee and  the State  Government  has not delegated any such power  to  the Development  Authority to impose fees for  development,  the regulations  framed  for  such imposition of  fees  and  the demands made therefore are wholly unauthorised and illegal.      Mr.  Goswami,  learned Counsel for the  appellant,  has however,  submitted  that although in some cases, a  fee  is essentially  a  tax  because of  its  compulsory  nature  of exaction,  there is a defference between a tax and a fee  if examined with reference to absence or presence of element of corresponding  service  rendered.   He  has  however  fairly conceded  that  when pursuant to the development  scheme  an area  is  developed under the provisions of  the  Act,  such development  of the area does not depend on the volition  of the  person  concerned.  Hence, when  development  fees  are imposed  for  the  development  effected  in  the  area   in question,  the persons coming under the scheme will have  to make  such payment irrespective of the fact whether  or  not such  person had intended for such  development  Even  then, such  fee  is  charged  for  the  service  rendered  by  the Development  Authority.  Mr. Goswami has  further  contended that   the   Development  Authority,  unlike   other   local authorities, like Municipalities or Panchayats has no  power or   authority  to  collect  any  tax  even  though  it   is essentially necessary to augment its revenue for the desired purpose  of development of the area in  question.  precisely for implementing various schemes of                                                     333 development,  the development or betterment fee is  required to  be  imposed  and collected.   Such  imposition  of  fee, therefore, must be held to be incidental to the  development activities.   In  such state of affairs even if there is  no specific   provision   for  imposition  of   betterment   or development fee, such power must be held to be implied under the  Act.   In this connection, Mr. Goswami  has  drawn  our attention to Section 90 and Section 91 of the Town  Planning Act.  Section 90 provides that:          "An appropriate authority may for the purpose of a



        development plan or for the making of execution  of          a  town  planning scheme borrow money  and  if  the          approriate authority is a local authority the money          shall be borrowed in accordance with the provisions          of  the  Act  under which the  local  authority  is          constituted  or  if such Act does not  contain  any          provision  for such borrowing, in  accordance  with          the  Local  Authorities Loans Act, 1914 or  as  the          case may be, the Saurashtra Local Authorities Loans          Act,   1951,  and  any  expenses  incurred  by   an          appropriate authority or the State Governmnet under          this Act in connection with a development plan or a          town  planning  scheme may be defreyed out  of  the          funds of the appropriate authority".      Section  91  (1) and (2) have been referred to  by  Mr. Goswami, which are to the following effect:          "91  (1)  An appropriate authority shall  have  and          maintain its own fund to which shall be credited-          (a) all moneys received by the authority by way  of          grants, loans, advances or otherwise;          (b)  all  moneys  derived  from  its  undertakings,          projections and other sources;          (c)  such  amounts  of  contributions  from   local          authorities  as  the State Government  may  specify          from time to time to be credited to the fund          (2)  the fund of an appropriate authority shall  be          applied towards meeting-          (a)  expenditure incurred in the administration  of          this Act;                                                    334          (b) cost of acquisition of land for the purpose  of          this Act;          (c) expenditure for any development of land in  the          development area;          (d)  expenditure  for such other purposes  as  the          State Government may direct.          * * * * * * * * * * * *"      Mr.  Goswami  has  submitted that clause  (a)  of  sub- section (1) of Section 91 indicates that moneys received  by the authorites may come by way of grants, loans, advances"or otherwise".   He has, therefore, contended that  apart  from grants, loans and advances, the appropriate authority  which is Development Authority in the instant case, can have funds which are not  by way of grants, loans and advances but from a  source  different from that.  He has contended  that  the legal implication of the expression ‘or otherwise’ has  been noted  by  this Court in the case of Lilawati  v.  State  of Bombay,  AIR 1957 SC 521.  This Court in the  said  decision has   indicated  when  and  under  what  circumstances   the principle  of  ejusdem  generis is to  be  applied  and  has indicated  that the legislature, when it uses the  word  ‘or otherwise’,apparently intends to cover other cases which may not come within the meaning of provided clauses.  Relying on the said decision, Mr. Goswami has contended that apart from the  money received by the Development Authority by  way  of grants,  loans and advances, the Development  Authority  can also  create  funds "otherwise"  and the development fee  is creation of such fund otherwise than by loans, grants,  etc. Mr. Goswami has contended that the funds so received by  the development  authority  are required to applied  under  sub- section  (2)  of Section 91 for purposes  mentioned  therein including the expenditure for any development of the land in development  area.   He has, therefore, contended  that  the legislature  has  really intended that for  the  purpose  of development, fund is required to be generated and such  fund



may  be  generated  not  only by way  of  grants,  loans  or advances  but  also  otherwise.   The  only  limitation   of generation  of  such  funds is to apply such  fund  for  the specific purposes referred to in sub-section (2) of  Section 91.  Mr. Goswami has contended that it is nobody’s case that such  development fee has not been utilised for the  purpose of  sub-section  (2)  of Section  91.   He  has,  therefore, contended that the development authority                                                    335 can  impose  such  fee  and such power  to  impose  fees  is ancillary  to the development activities and is  implied  in the Act.  He has contended that if the State Legislature  is competent  to  impose  fees, the  Development  Authority  by virtue   of  the  delegated  legislation  can  also   impose betterment  fee  or the development fee and  simply  because imposition  of such fee by the Development Authority is  not specifically   mentioned,  it  cannot  be  held   that   the Development  Authority cannot impose any betterment  fee  or development  fee even though such fee was essential for  the development  activities and has been imposed with  reference to  development  effected.  Mr. Goswami  has  very  strongly relied  on  the decision of this Court in the  case  of  the District Council of the Jowai Autonomous District Jowai  and others  v.   Dwet Singh Rymbai etc., AIR 1986  SC  193.   In considering  the validity of the Notification issued by  the District  Council of District, Jowai under United Khasi  and Jaintia Hills Autonomous District (Management and Control of Forests)  Act. 1959, it has been held by this Court that  in the  real sense what in sought to be required under the  Act is  not  royalty  since the forest does not  belong  to  the District  Council.   The amount claimed by  way  of  royalty under the Notification is in reality compulsory exaction  of money by public authority for public purpose enforeceable by law  and in not a payment for service rendered.   The  Court has held that there is no specific reference to the power to levy and fee in respect of any matter mentioned in paragraph 3  in  the 6th Schedule to the Constitution similar  to  the corresponding  provision  in  Entries  of  List  II  of  7th Schedule.   Considering the facts of the case, it  has  been held  that the power to levy fees in respect of any  of  the matters  mentioned  in  paragraph 3  should  be  necessarily implied  but such fee should not be disproportionately  very high,  that is a tax in disguise.  The Court  has  indicated that  the  said United Khasi and  Jaintia  Hills  Autonomous District (Management and Control  of Forests) Act 1959,  was enacted  for the purpose of making provisions regarding  the management and the control of forests which are not reserved forests  in  the area within the  jurisdiction  of  District Council  in  the exercise of the powers conferred  by  Entry 3(1)(d)  of  the 6th Schedule to the Constitution.   It  has been held that even if there is no express provision to levy fees, the District Council under paragraph 3  can levy fees. Mr.  Goswami  has contended that it will not be  correct  to conted that in no case imposition of fee can be made  unless there is specific provision for such imposition.  Such power of imposition may be implied if the provision                                                  336 of  the Act are considered in the proper perspective and  if such  imposition  becomes essential for the  activities  for which the statutory bodies are created.  In this connection, Mr.  Goswami has referred to another decision of this  Court made  in  the case of Khargram Panchyat Samiti and  Anr.  v. State of West Bengal and Ors., [1987] 3 SCC 82.  It has been held  by this Court that in a statute conferment of  general statutory   power  also  carries  with  it  incidental   and



consequential  power.   Relying on the  said  decision,  Mr. Goswami  has  contended  that as the  development  has  been effected   by  the  Development  Authority  and  there   was necessity  for augmenting the revenue for  such  development work  and as Section 91 has recognised a fund to be  created otherwise  than by way of grants, loans or advances  and  as imposition  of such fee is incidental and/or ancillary to c- arrying on the purposes for which the Development  Authority has been constituted under the Town Planning Act, it  should be held that such power of imposition of fee is implied.  He has, therefore, contended that the High Court of Gujarat was not  justified  in holding that such imposition  of  fee  by framing impugned regulations was wholly unauthorised and  as such illegal and void.      After   giving   our  anxious  consideration   to   the contentions raised by Mr. Goswami, it appears to us that  in a  fiscal matter it will not be proper to hold that even  in the absence of express provision, a delegated authority  can impose  tax or  fee.  In our view, such power of  imposition of  tax  and/or  fee by delegated  authority  must  be  very specific  and  there is no scope of  implied  authority  for imposition  of such tax or fee.  It appears to us  that  the delegated authority must act strictly within the  parameters of  the authority delegated to it under Act and it will  not be  proper  to  bring the theory of implied  intent  or  the concept of incidental  and ancillary power in the matter  of exercise  of fiscal power.  The facts and  circumstances  in the   case  of  District  Council  of  Jowai  are   entirely different.  The exercise of powers by the Autonomous Jaintia Hills  Districts   are  controlled  by  the   constitutional provisions and in the special facts of the case, this  Court has  indicated  that the realisation of just fee for  the  a specific  purpose by the autonomous District  was  justified and  such  power was implied.  The said decision  cannot  be made applicable in the facts of this case or the same should not be held to have laid down any legal proposition that  in matters  of  imposition  of tax or  fees,  the  question  of necessary  intendment  may be looked into when there  is  no express  provision for imposition of fee or tax.  The  other decision in Khargram Panchayat Samiti’s case also deal  with the                                                  337 exercise of incidental and consequential power in the  field of  administrative law and the same does not deal  with  the power of imposing tax and fee.      The  High  Court has referred to the decisions of  this Court  in  Hingir’s case, and Jagannath Ramanuj’s  case  and Delhi  Municipal  Corporation’s case (supra).  It  has  been consistently  held  by  this Court that  whenever  there  is compulsory  exaction of any money, there should be  specific provision for the same and there is no room for  intendment. Nothing  is to be read and nothing is to be implied and  one should   look  fairly  to  the  language  used.    We   are, therefore,  unable to accept the contention of Mr.  Goswami. Accordingly,  there  is no occasion to  interfere  with  the impugned decision of the High Court.  The appeal, therefore, fails and is dismissed with no order as to costs. V.P.R.                                      Appeal dismissed.                                                      338