B. J. DIVAN, P. N. BHAGWATI, P. D. DESAI, J.

( 1 ) I entirely agree with my brother Divan J. but in view of the importance of the question involved I would like to add a few words of my own in regard to the last contention of the petitioners that the Courtfees levied on an application for a reference under sec. 18 of the Land Acquisition Act 1894 is not a fee but a tax and Article 15 of the First Schedule to the Bombay Courtfees Act 1959 which provides for levy of such courtfees is therefore outside the legislative competence of the State Legislature. It was common ground between the parties and in any event it cannot now be disputed in view of a recent decision given by the Supreme Court on 11th November 1972 in Civil Appeal No. 293 of 1967:- The Secretary Government of Madras Home Department v. Zenith Lamp and Electrical Ltd. (yet unreported) (A. I. R. 1973 S. C. 724) that if Courtfee levied under Article 15 of the First Schedule is a tax and not a fee it would be beyond the competence of the State Legislature to enact such an Article. The main question which therefore arises for consideration is whether courtfee levied under Article 15 of the First Schedule is a tax or a fee. Whatever might have been the complexity of this question at one time it is not now difficult of solution in view of the decision of the Supreme (. Court in The Secretary Government of Madras Home Department v. Zenith Lamp and Electrical Ltd. (supra) to which we have just adverted. There the test to be applied for the purpose of determining a question of this kind is laid down in clear and unmistakable terms and all that we have to do is to apply this test and arrive at the proper result.

( 2 ) THE question which arose for determination before the Supreme Court in the Secretary Government of Madras Home Department v. Zenith Lamp and Electrical Ltd. (supra) was whether Rule 1 of the Madras High Court Fees Rules 1958 and the provisions of the Madras Courtfees and Suits Valuation Act 1955 were ultra vires and void in so far as they related to the levy of fees on ad valorem scale. The main ground of challenge was that the levy made under the Madras Courtfees and Suits Valuation Act 1955 was a tax and not a fee and the said Act was Therefore outside the competance of the State Legislature and Rule 1 of the Madras High Court Fees Rules 1958 which incorporated some of the provisions of the said Act by reference was also consequently void. This challenge found favour with the Madras High Court and taking the view that the impost levied under Article I of Schedule 1 of the Madras Courtfees and Suits Valuation Act 1955 was a tax and not a fee the Madras High Court struck down that Article in its application to the High Court. The State of Madras thereupon preferred an appeal to the Supreme Court. The question as to what is the true nature of fee taken in Court and how it differs from tax was canvassed at great length before the Supreme Court and after referring to the historical background of the enactment of Courtfee legislation in England as well as India the Supreme Court laid down certain propositions which may be regarded as finally settling the law on the subject. The Supreme Court first pointed out that fees taken in Court in Entry 3 of List II cannot be equated with taxes and then proceeded to discuss the question whether there is any essential difference between fees taken in Court and other fees and answered it by saying that there is no difference. What is the true nature of fee was then discussed by the Supreme Court and the following passage from the judgment of Hegde J. in Indian Mica and Micanite Industries Ltd. v. The State of Bihar A. I. R. 1971 S. C. 1182 was relied upon by the Supreme Court as explaining the essential characteristics of fee: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 correlationship with the services rendered by the Government. In other words the

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