The distinction between a 'fee' and a 'tax' and the criteria for determining whether a charge is a fee or a tax.

( 1 ) THIS is a petition under Article 226 of the Constitution challenging the imposition of registration fee on animals and heads -of cattle sold in the Market of the Gram panchayat, Ratanpur, District Bilaspur. It is contended that what is charged from the purchasers in the said cattle market is really a 'tax'--not 'fee'--and is ultra vires the C. P. and Berar Panchayafe Act No. 1 of 1947. Section 42 (1) (c) of the act empowers a Gram Panchayat to charge 'fee' on sale of animals but does not authorise it to charge 'sales tax. '. The section runs thus :

"42, (1) With the approval of the District Council, and subject to rules made under this Act, a Gram Panchayat may, by a majority of two-thirds of its members, impose any of the following taxes, tolls, fees or rates : (a) tolls On vehicles, pack-animals and porters bringing goods for sale into the Gram Panchayat area; (b) fees on persons exposing goods for sale in any market or place belonging to or under the control of the Gram Panchayat or for the use of any building or structure therein; (c) fees on the registration of animals sold in any market or place belonging to or under the control of the Gram panchayat; (d) fees for the use of sarais, dharamshalas, responses, slaughter-houses and encamping grounds; (e) a water-rate where water is supplied by the Gram panchayat; (f) fee for cleansing private latrines payable by the owners or occupiers of the houses to which the private latrines are attached where such cleansing is done by the Gram Panchayat agency; (g) a tax payable by the owners of animals used for riding, driving, draught or burden or ot dogs or pigs kept withinthe gram Panchayat area; (h) a fee payable by the owners on vehicles where such vehicles are kept within the Gram Panchayat area; (i) a lighting rate where the lighting of public streets, places and buildings is undertaken by the Gram Panchayat; (i) a drainage fee where a system of drainage has been introduced by the Gram Panchayat; (k) any other tax, toll, fee or rate approved by the Provincial government. . . . . "

The section makes a distinction between 'fee', 'tax', 'toll' and 'rate'.

( 2 ) GRAM Panchayat Ratanpur is constituted under the said Act. It has established a market for the sale of cattle. Every sale within the market is registered and a registration fee is charged. The fee varies according to the price of the cattle sold. In fact the registration fee is indirectly charged through a contractor who takes an annual contract of the market from the Gram Panchayat.

( 3 ) THE petitioner's grievance is that in the name of 'registration fee' what is really charged is 'sales tax' because it is calculated upon the price fetched by the sale. And, although the services required for registration of one cattle is the same as those required for registration of any other animal of the same class, still the fee varies. It is urged that the imposition is for raising money for general revenue. The petitioner had to pay such fee on different occasions and apprehends that such fee would be collected in future also.

( 4 ) IN the return filed by the Gram Panchayat it is stated that for the relevant year (1960-61) the Theka (contract) of the cattle market was auctioned publicly. Keshav Prasad respondent No. 2, being the highest bidder, paid Rs. 17,710/- as auction price when it was knocked down in Ins favour. The Gram Panchayat maintains the market; it keeps it clean and hygienic, it also renders services by giving market facilities; and it also provides facilities for water and conservancy. It is admitted that the basis for the fee of registration is the price of the animal sold within the market. These facts the learned counsel for the petitioner has not challenged before us and we must accept them.

( 5 ) SHRI Pande relies on the decision in Nagpur Kshatriya Khatik Samaj v. Corporation of City of Nagpur, ILR (1956) Nag 102 : ( (S) AIR 1956 Nag 152 ). Delivering the judgment of the Court, Chief justice Hi