The main legal point established in the judgment is the distinction between fees and taxes, and the factors that determine the nature of the levy, including the purpose of the levy and the presence of quid pro quo.

1. These appeals are directed against the common order dated 110.2004 passed by learned Single Judge in various writ petitions. Since, common facts and issue are involved in these appeals, we heard and dispose of all these appeals by this common Judgment .

2. The petitioners-appellants are carrying on the business of Catering at various Stations on the Jaipur Division of North Western Railway. They are providing catering service to traveling passengers. In the writ petition, the petitioners-appellants have challenged the New Catering Policy, 2000, specially Para 15.4 of the new policy which deals with the license fee. For ready reference that reads as under:-

“15.4 License Fee:

License fee will be 12% (or any other percentage commission on sales notified from time to time)

of estimated annual sales turn over for both general and reserved categories. In the case of static

units, there will be no separate charges towards rent for building/land, vendors fee and

conservancy charges etc. except electricity and water charges based on actual consumption.”

3. The case of the petitioners-appellants is that license fee should be fixed as it was before policy. Now under the New Policy, licence fee is being charged on the sales turnover. The case of petitioners is that charging of fees on the basis of sales turnover is infact nothing but charging of tax similar to sales tax. The notice of demand has also been challenged on the basis that license fee is charged with retrospective effect which is illegal.

4. Learned Single Judge after considering all these aspects has taken the view that New Policy is in order and license fee charged as per Para 15.4 of the new policy is in the nature of fees and not the tax and there is nothing wrong in charging of license fee in the manner referred in Para 15.4 of the New Policy.

5. Learned Counsel for the appellants mainly emphasized on the ground that the system adopted for charging the license fees is nothing but similar to sales tax as it has been charged on the basis of sales turnover and under this New Policy, the authorities have no power to charge tax. He also submits that as the notices were issued for recovery of the past sales i.e., from 2000 onwards when the policy was framed, the new policy is illegal as policy cannot be given effect retrospectively.

6. Learned Counsel for the respondents i.e., U.O.I. and Divisional Railway Manager have placed reliance on the decision of learned Single Judge.

7. The short controversy for our consideration in these appeals is whether the fees charged under Para 15.4 of the New Policy is in the nature of tax? For that, we have to see the difference between the tax and fees.

8. Their Lordships have considered this aspect in the case of Sudhindra Thirtha Swamiar & Ors. vs. The Commissioner for Hindu Religious & Charitable Endowments, Mysore & Anr., AIR 1963 SC 966. In Para 18 of the Judgment , their Lordships have observed as under:-

“A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual services rendered by the authority to each individual who obtains the benefit of the service. If with a view to provide a specific service, levy is imposed by law and expenses for maintaining the service are met out of the amounts collected there being a reasonable relation between the levy and the expenses incurred for rendering the service, the levy would be in the nature of a fee and not in the nature of a tax. It is true that ordinarily a fee is uniform and no account is taken of the varying abilities of different recipients. But absence of uniformity is not a criterion on which alone it can be said that it is of the nature of a tax. A fee being a levy in consideration of rendering service of a particular type, correlation between the expenditure incurred by the Government and the levy must undoubtedl