A fee levied by a local authority must be correlated to or proportionate to the costs of the special service rendered to the person from whom the fee is collected.

ORDER :- Because of a similar point for consideration, these two petitions have been heard together. The question relates to the propriety of the Kadayanallur Panchayat and the Vasudevanallur Panchayat, which are the respondents, enhancing the licence fee for the private weekly market of each of the petitioners. The petitioners say that the enhancement is totally disproportionate to the value of service rendered by the panchayats and is therefore, illegal. The petitioner in W. P. 633 of 1962 is the owner, of a private weekly market at Nainaragaram village. He would say that the weekly market was functioning from prior to 1802, he purchased the weekly market in 1957, and was conducting the market under licences issued by the District Board every year. For 1959-60, the fee levied was a sum of Rs. 497-42. The quantum of the fee levied would appear to have been disputed, which eventually led to G. O. Ms. 1935, Local Administration, dated November 13, 1959. Based on this order of the State Government, the Special Officer, District Board, Tirunelveli, fixed the licence fee for 1959-60 at 3.6 % of the gross income of the preceding year. This basis was continued, but for 1960-61, the fee was assessed at 3.2% of the gross income. The assessment at that rate of fee amounted to Rs. 442-42. On 2-10-1961, the Kadayanallur Panchayat Union came into being. The Union, on 29-11-1961, demanded from the petitioner Rs. 342-42, being the balance of licence fee for the year 1960-61, after deducting a sum of Rs. 100 already paid. The balance was paid by the petitioner on 4-12-1961. On 28-3-1962, the Union, by a resolution of that date, enhanced the rate of licence fee from 3.2% to 12% with effect from 01-04-1961. Worked at this rate, the licence fee would stand enhanced from Rs. 531-20 to Rs. 1,992. In the other petition, the Vasudevanallur Panchayat Union Council, by a resolution, dated 17-3-1962, raised the licence fee for 1961-62 from Rs. 568-38 to Rs. 2,528-40, the difference representing enhancement of the rate of licence fee from 3.2 per cent to 15 per cent of the gross income of the turnover of the business in the private market. It is these levies as enhanced, the petitioners seek to quash as being illegal.

2. In both the petitions, the Panchayat Unions have filed counter affidavits justifying the enhancement. So far as the Vasudevanallur Panchayat Union is concerned, its justification is this. Under S. 100(4) of Madras Act XXXV of 1958, a fee not exceeding 15% of the gross income in the precedding year may be charged by the panchayat union council for a licence issued under S. 100(2) of that Act. In this case, the licence fee has been fixed at 15% of the gross income and the petitioner can have therefore no grievance. The option is with the local authority and an imposition of the fee by such authority within the percentage allowed cannot be contended to be in excess of its powers. The licence fee is authorised by law and is well within the jurisdiction of the Pancahayat union. To the same effect is the justification of the Kadayanallur Panchayat Union.

3. Neither of the Panchayat unions has justified the enhancement on the basis that the enhancement is related to increased expenses in rendering special service to the petitioners. But, on the other hand, the attempt of the unions is to show that one-fifth or one-seventh as the case may be of the salaries and allowance of the supervisory staff who inspect the market every week on the shandi day has been the basis for the increase in the licence fee. The counter affidavit filed for the unions contain a statement of the total expenses incurred towards salaries and allowances of staff like the Commissioner, the Health inspector, two peons, Chairman's peon and the travelling allowance of the Health Inspector Commissioner and Chairman and certain other expenses. But the Panchayat unions have not attempted in their counter affidavits to correlate the enhancement to the actual or approximate