The power to levy fees for licences is not unlimited and must be reasonable, not unfairly burdening specific taxpayers.

Phillips, J.

1. The only question for determination in this appeal is whether the action of the appellant, the Madras Corporation, in raising the licence fee for storing-spirits from Rs. 25 to Rs. 200 was within its powers. Beasley, J., who tried the case has held that the increase in the fee is unreasonable within the meaning of the term as defined by Lord Russell, C.J., in Kruse v. Johnson (1898) 2 Q.B. 91 and has directed refund to the plaintiffs, Messrs. Spencer and Co., of the excess amount paid by them. Mr. Rangaswami Aiyangar for the appellant now takes exception to this finding and says that the power to levy fees for licences under the Madras Act IV of 1919 is conferred on the Council and it is within their power to fix the fee at any figure they please. He contends that if they fixed it at a figure too high or too low, the tax-payer has two remedies, (1) by exercising pressure on the member of the Corporation for his ward with a view to getting the figure altered, and

(2) the correction of its own mistake by the Council; but he was not at first prepared to accept the dictum in Kruse v. Johnson (1898) 2 Q.B. 91 that the Court has power to interfere with bye-laws which are unreasonable. The definition given of "unreasonable" at p. 99 of the report of that case is as follows:

If, for instance, they (i.e., the bye-laws) were found to be partial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men....

2. Appellants contention in the first place is that the fees fixed for licences for what are called dangerous and offensive trades which are leviable under the provisions of the Act are revenue in the same sense as the taxes which the Council is empowered to levy. When there is a question of what is the power of taxation conferred by Government on a public body, a very careful scrutiny is necessary to see that only powers specially conferred are exercised and that nothing further is added to them. In Part Iff of the Act which purports to deal with Taxation and Finance, Chapter V deals with Taxation and enumerates the several taxes which the Council is empowered to levy. Licences are dealt with in Part IV of the Act and are leviable under Section 287. The power to levy fees for licences is given in the chapter on Procedure. There can be little doubt that there is great difference between taxes and licence fees. The fact that in Sections 110 and 111 the levying of taxes is authorised but is stated to be by way of licence fees does to some extent support the argument that taxes and licence fees have something in common, but that a tax is not the same as a licence fee, is clear from the fact that no permission has to be obtained before the tax becomes payable and the tax is not paid for such permission, whereas the licence fee is payable in respect of a permission which is granted by the Corporation. I must confess that the words "by way of licence fee" in Sections 110 and 111 are not very intelligible to me and I cannot think that the Sections would be affected in any way by the omission of these words. Presumably the legislature intended to attach some meaning to these words, but nothing has been suggested in the course of these proceedings in explanation of the meaning. Whatever may be the meaning, I am satisfied that taxes cannot be treated as being in the same category as licence fees under the Act. The argument therefore that, when the Corporation is empowered to levy licence fees, it may do so solely for the purpose of revenue does not seem to me to be tenable. Beasley, J., has held that the fees are leviable as compensation to the Corporation for the expenses incurred in the issue of licences and the general regulation of the trades and other occupations which are licensed and there must b