05.04.’21, LAW NOTES:*k selvaraj mhc advt *“Distinction between a Tax and a Fee”* *1)* Taxes are specifically divided between List I (Entries 82 – 92A) and List II (Entries 46 – 63) and the residuary power to levy a tax other than those enumerated in any of the Lists is given to Parliament by Entry 97 of List I.

*05.04.’21, LAW NOTES:*k selvaraj mhc advt

*“Distinction between a Tax and a Fee”*

*1)* Taxes are specifically divided between List I (Entries 82 – 92A) and List II (Entries 46 – 63) and the residuary power to levy a tax other than those enumerated in any of the Lists is given to Parliament by Entry 97 of List I.

*2)* Fees are, however, not mentioned specifically. There is general entry towards the end of each List which empowers the Legislature to levy a fee. The power to levy fees is thus distributed in Entry 96 of List I, Entry 66 of List II and Entry 47 of List III.

*3)* A Tax is a compulsory exaction of money by a public authority for the public purpose enforceable by law and is not payment ‘for service rendered’. Whereas a fee is generally defined to be a charge for a special service rendered to individuals by some government agency. There should be a ‘reasonable relationship’ between the levy of the fee and the service rendered.

[(2004) 6 SCC 155]
State of Gujarat Vs. Akhil Gujarat Pravasi V.S. Mahamandal.

[(2006) 6 SCC 763]
Vijayalakshmi Rice Mills Vs. Commercial Tax Officer, Palakol

*(To be continued)*

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