Judgment

MATHEW, J.: - The respondent in this appeal is the Salvation Army, Western India Territory. It is a part of the worldwide organization known as the Salvation Army. The headquarters of the organisation is in London. The organisation in India was registered as a public limited company uncle the Indian Companies Act, l9l3, having obtained a licence to carry on its activities without suffixing the word limited after its name. It is also registered under the Bombay Public Trusts Act, 1950 (hereinafter called the Act ) and carries on various charitable activities. The Company has its headquarters in Bombay. The funds of the Company are administred under the Articles of Assoication by a Board consisting of a General, a Chief of Staff and various other officers The accounting year of the Company is from 1st of October to the 30th of September of each year. In the years ending 3-9-1954, 30-9-l955 and 30-9-1956, the respondent received three sums from the international organisation, namely Rupees 1,97,302/-, Rupees 2,50,228-14-o and Rupees 2,67,732-15-0. Besides these amounts, the respondent had made collections in India. Upon all these amounts the respondent was called upon to pay a contribution of 2 per cent as required by Section 58 of the Act read with Rule 32 of the Bombay Public Trust Rules. The respondent claimed exemption from liability to pay contribution upon three donations. Appellant No. 3 disallowed the claim. The respondent s appeal against the order was dismissed by appellant No. 4. The respondent thereupon filed a writ petition in the High Court of Bombay for a declaration that the provision for levy of contribution contained in Section 58 of the Act and rules 32 and 33 of the Rules as also the provisions of Sections 2 and 4 of the Maharashtra Act 29 of l962 (hereinafter referred to as the "Amending Act of l962") were beyond the powers of the State Legislature and that the levy of contribution on the three donations was therefore illegal. The respondent also prayed for quashing the orders passed by appellants 3 and 4 disallowing its claim for exemption from levy of contribution upon the aforesaid sums.

2. A learned Single Judge of the High Court held that the levy, was bad as it was not a fee but tax.

3. Against this decision, an appeal was preferred.before the Division Bench by the appellants. The Bench came to the conclusion that though the levy of 2 per cent on the gross income of the public trusts was a fee in the beginning, it assumed the character of a tax by the end of 31st March, 1958 as there was a surplus of Rs. 30,44,541 by that time and therefore the levy assumed the character of tax and was illegal from that date. The Court further held that the levy of contribution on the three donations was ultra vires as the actual levy was made after it assumed the character of a tax. It is against this judgment that this appeal has been filed on the basis of certificate granted by the High Court.

4. The Act was brought into force from- 14-8-1950. The object o the Act is to regulate and make better provision for the administration of public religious and charitable trusts in the State of Bombay. Section 57 (1) states that there shall be established a fund to be called the Public Trusts Administration Fund and that the Fund shall vest in the Charity Commissioner appointed under the Act. Clauses (a) to (f) of sub-section (2) of the section specify the amounts which go to make the fund. Of these, clause (b) concerns the contribution made under S. 58.

5. Section 58 was amended by the Amending Act of 1962 and the Amending Act came into force on 27-8-1962. That section, at all times prescribed that every public trust shall pay to the Public Trusts Administration Fund annually such contribution on such date and in such manner as may be prescribed. The contribution so be paid was originally fixed by Rule 32 which was also amended by the Amending Act of 1962.

6. Section 58 as it originally stood provided that the contribut