V. D. BHARGAVA, J.

( 1 ) THESE two petitions are on behalf of two applicants who are owners and proprietors of brick-kilns situate within the municipal limits of Ferozabad, district Agra.

( 2 ) A bye-law was framed by the Municipality of Ferozabad levying a licence fee of Rs. 500/-per year on every brick kiln. The case of the-petitioners is that the Municipality does not incur any expenditure and there are many brick kilns and the licence fee that has been realised is out of all proportion to the expenditure incurred in this connection and is exorbitant; and on that ground they challenge the validity of the bye-law enforcing this licence fee. Learned counsel for the Municipal Board has. tried to support the fee imposed as being reasonable and has urged that the Municipal Board has to spend a large amount of money on account of these brick kilns and further that this. fee is not only charged for the purpose of immediate expenses which the Municipal Board has to meet but it is also for the purpose of meeting any likely expenditure of an emergent nature, for example, spread of malaria or of any other kind of disease, and therefore, they should be seen not from the point of view of the actual expenditure incurred in the year but what are likely expenditures that may be incurred by the municipal Board if such emergency arises. The distinction between a tax and a licence fee has been decided by their Lordships of the supreme Court in more than one case. In --rati Lal Panachand v. State of Bombay, AIR 1954 sc 388 (A), their Lordships of the Supreme Court have given the distinction as follows:

"a tax is in the nature of a compulsory exaction of money by a public authority for purposes, the payment of which is enforced by law. The other characteristic of a tax is, that the imposition is made for public purpose to meet the general expenses of the state without reference to any special advantage to be conferred upon the payers of the tax. Thus although a tax may be levied upon particular classes of persons or particular kinds of property, it is imposed not to confer any special benefit upon individual persons and the collections are all merged in the general revenue of the State to be applied for general public purposes. Tax is a common burden and the only return which the tax payer gets is participation in the common benefits of the State. Fees are payments primarily in the public interest, but for some special service rendered or some special work done for the benefit of those from whom the payments are demanded. Thus in fees there is always an element, of quid pro quo which is absent in a tax. In order that the collections made by the Government can rank as fees, there must be correlation between the levy Imposed and the expenses incurred by the State for the purpose of rendering such services. Thus two elements are essential in order that a payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly and in the second place, the amount collected must be earmarked to meet the expenses of rendering these services and must not go to the general revenue of the State to be spent for general public purposes. However, too much stress should not be laid on the presence or absence of what has been called the coercive element. It is not correct to say that as distinguished from taxation which is compulsory payment, the payment of fees is always voluntary it being a matter of choice with individuals either to accept the service or not for which fees are to be paid. "

( 3 ) ACCORDING to this decision of their Lordships it must be established before a fee can be justified that it was for some special services rendered or some special work done for the benefit of those from whom the payments are demanded, It may be levied in consideration of some services and the third and most essential qualification of a fee is that it must be ear-marked

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