The levy of market fee and license fee is valid if there is a quid pro quo, i.e., some service is rendered in return for the fee.

1. :- The only submission in the present writ petition is that the respondents are realising the market-fee and license fee and no services are rendered. On the principles of quid pro quo there must be some services rendered on the basis of which the fee is to be realised. No other point was raised or pressed before me. The decision of Apex Court in the case of Kewal Krishan Puri & anr. Vs. State of Punjab, AIR 1980 Supreme Court 1008, had drawn a distinction between tax and fee and it was held that substantial portion of amount of fees realised must be spent for special benefit of its payers. In this case the test of levy of market fee and market produce bought or sold by licensee in market area were held as under:

"(1) That the amount of fee realised must be earmarked for render- ing services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purposes.

(2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.

(3) That while rendering services in the market area for the purpose of facilitating the transaction of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions.

(4) That while conferring some special benefits on the licensee, it is permissible to render such service in the market which may be in the general interest of all concerned with transactions taking place in the market.

(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them.

(6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.

(7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three fourths must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above."

2. Reliance has also been placed on Full Bench decision of Kerala High Court in the case of City Corporation of Calicut Vs. Thachambalath Sadasivan and others AIR 1969 Kerala 99, wherein it was observed that without a special benefit accruing to the payer in return, the levy cannot be justified. The fee collected must have correlation to the expenses incurred in issuing the same. It was further held as under:

"In the cases before us we are not told that the fee collected from the petitioners for soaking husks is setapart for the purpose of meeting the expenses of the license. Nor is there any data placed before us by which the expenses incurred could be gauged. It was argued before us that for a simple fee for licence granted for carrying on an activity, no quid pro quo is needed. In such cases the fee will in fact be a tax and thus we are taken to the third category namely fee in the nature of a tax. The Corporation, in our view, cannot impose a tax in the guise of a fee.

3. Reliance has also been placed on the decision of Sri Jagannath Ramanuj Das and another Vs. State of Orissa and another, AIR 1954 Supreme Court 400 . It was observed that the fees, on the other hand, are payments primarily in the publi