Municipalities :

Hyderabad Municipal Corporation Act, 1955: Sections 169, 174, 197, 198, 230, 521(1)(e) and 622.

Licence fee - Trade licence - For running a lodging house, hotel, restaurant, coffee house, tea stall, eating house, soft drink stall, cafeteria, tiffin room etc. - lncrease of - By orders dated 6.4.1981 and 25.7.1992 issued under Ss. 521(1)(e) and 622 - Tax or fee - Municipal Corporation required to inspect the premises in question to ensure that conditions of licence were complied with and supervising sale of foodstuff and to ensure cleanliness, garbage removal and maintenance of hygiene in these premises - Licence fee was credited to the common fund of the Corporation but the fees were earmarked for the purposes for which they were collected under R. 6 of Budget Estimates Rules - Held, Under such circumstances, levy is a fee and not a tax - Intention is to levy the fee for regulatory and compensatory purposes - Contention that levy is a tax in the guise of fee, rejected - Further, contention that non-compliance with Ss. 197 and 198 rendered the levy invalid, also rejected - Corporation's power to impose conservancy tax under S. 230 does not affect nature of the said fee - No quid pro quo is necessary for levying such fee if the fee is charged for regulating such activity but it cannot be excessive - On facts, fee is not excessive.

Fee or tax - Determination of - Depends on the nature of licence granted - Regulatory fee - Creation of a separate fund - Not necessary -Earmarking the amount for its purposes is sufficient - Hyderabad Municipal Corporation Estimate Rules, 1968, R. 6. 

Licence fee - For running a lodging or eating houses etc. - Rate of - Fixing of - On basis of rent of premises concerned - Validity of - Held Rent does not have a nexus with service rendered by Municipal Corporation - Hence classification of premises on basis of rent has connection with quantum of fee charged - Also doubling of fees after nine years, not excessive - Constitution of India 1950, Art, 14.