' ABDUL QADEER CHAUDHRY, J.---This appeal by leave of the Court is directed against the judgment dated 25-9-1989 of the High Court.
2. The facts of the case are that the respondents filed a Constitutional Petition in the High Court challenging the action of the appellants to recover Rs,1,000 as Registration Fee instead of Rs,100 which used to be charged previously. The case of the respondents is that they are owners of Timber Sale Depots and Sawing Mills in the District of Swat. Prior to the merger of Swat. State with the Pakistan, a fee of Rs,100 was levied under `Riwaj'. In return, the then ruler provided the owners of Sale Depots facilities like allocation of Timber quota from the State Forests. After the merger of Swat in 1969, the fee of Rs,100 continued to be levied. However, the facilities provided earlier were totally withdrawn. In 1978, the Government of N.-W.F.P. Made rules which called N.-W.F.P. (Establishment of Sale Depots and Sawing Units) Rules, 1978, and fixed Rs,100 as Registration Fee. On 6-8-1984, the appellants increased the fee from Rs,100 to Rs,1,000 under Rule 9. The contention of the respondents was that the increase of Rs,900 amounts to imposition of tax as it was levied for the purpose of generating provincial revenue and not for any services rendered to the respondents. The petition was contested by the appellants. The High Court by the impugned judgment accepted the petition.
The High Court relied upon Abdul Majid and another v. Province of East Pakistan and others PLD 1960 Dacca 502 wherein it has been observed that "The distinction between a tax and fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is payment for special benefit or privilege". The High Court also referred to Mahboob Yar Khan and another v.
Municipal Committee, Mian Channu PLD 1975 Lah. 748; Sh. Muhammad Ismail & Co. Ltd. v. Chief Cotton Inspector, Multan Division, Multan PLD 1966 SC 388; Indian Mica and Micanite Industry Ltd. v.
Bihar (71) ASC 1182, 1186; Maharashta v. Salvation Army (1975) 3 SCK, 475 and then came to the conclusion as hereunder:- "The learned Advocate-General and the respondents in the written statement have not been able to suggest as to what benefits are being provided to the petitioners and as to what services are being rendered to them to justify the levy of Rs,1,000. On the other hand, the increase in the registration fee and renewal fee from Rs,100 to Rs,1,000 is being made vide memorandum on behalf of the Government (Annexure `A'), for mobilishing the resources "to generate provincial revenue and with the indirect benefit to discourage the trend of frequent installation of saw mills". It is, therefore, quite obvious that the disputed amount is being realised not for services rendered but for. "mobilising the resources to generate the provincial revenue" which patently amounts to taxation. Similarly, instead of giving benefit to the petitioners, the benefit is to be derived by the taxing authority in discouraging the trend of installation of saw-mills."
' It was also held by the High Court that the impugned notification is violative of Article 163 of the Constitution,
3. We have heard Mr. K.G. Sabir, learned counsel for the appellants and Mian Shakirullah Jan, Advocate-on-Record appearing for the respondents.
4. The learned counsel for the appellants submitted that the Government was authorised to enhance the fee as certain facilities are provided to the respondents. A fee is a charge for the services rendered by the Government to the persons from whom the fee is received. It is a consideration for the services provided by the Government or its agencies to the persons from whom the fee is collected. In Commissioner of Hindu Religious Endowments, Madras v. L.T. Swamiar AIR 1954 SC 282 it has been observed as under:- "No doubt, both tax and fee are compulsory exactions. But the difference between the two lies in the fact that a tax is not co-related to particular service rendered but is intended to meet the expenses of the Government and a fee is meant to compensate to Government for expenses incurred in rendering services of a special nature."
5. In Government of Andhra Pradesh v. Hindustan Machine Tools AIR 1975 SC 2037, it has been observed as follows:- "It is quite clear that "fee" can be levied by any authority only for some service rendered by it to the person from whom the levy is exacted. Fee levied by any local authority can be justified only if there is some special service rendered to the person from whom fee is collected and the sum total of the activities of the public body like the Municipal Council cannot be taken into account for this purpose. Expenses by the Municipality in discharging its obligatory functions are usually met by imposition of a variety of taxes and on that basis the levy of the fee could not be justified.
' It is no doubt that in some cases it Will not be possible to show with mathematical exactitude the precise co-relation between the amount realized as fee from one particular person and the services rendered to him. In a given case, it is also possible that the fee is realized from hundreds or thousands of persons and the corresponding services is also rendered to hundreds or thousands.
In that situation it may not be possible to show any strict correlation qua an individual except to indicate that the person who had paid the fee has derived a benefit in return. In such a case correlation between the fee levied and the service rendered may have to be determined having regard to the services rendered to the various persons and the benefit derived by an individual factory."
6. This Court in Muhammad Ismail & Co. v. The Chief Cotton Inspector, Multan Division, Multan PLD 1966 SC 388 has observed as hereunder:- "It is not necessary that the realizations made by way of fee for the servicing of the Act, should correspond exactly with the expenditure incurred by Government on the services rendered."
' It was further 'observed as follows:- "Mere forms of accounting however not be regarded as conclusive in this regard. So long as the levy is raised for the purpose contemplated by an enactment designed to serve a particular trade or commodity production and the realizations made are expended actually for those purposes, the levy would remain a fee, whatever method of keeping accounts for other Governmental purposes may be adopted."
7. In the present case, it is not disputed that the appellants are recovering the fee. According to the respondents, no services are rendered by the appellants whereas according to the appellants the services are being rendered and the expenditure has increased manifold.
8. The learned counsel for the appellants submitted that for the preservation of forests which is for the benefit of the respondents and for other services supplied to the respondents so that no unauthorised persons may indulge in the trade being run by the respondents, a staff consisting of senior clerk, junior clerk and a peon has been appointed and their salary comes to Rs,4,700 per month. They visit the area so that nobody could instal saw-mills and they charge Travelling and Daily Allowance. All these expenses are necessary for the services provided to the respondents. The Conservator of Forests has given the following reasons for the enhancement of the fee:- "The .Registration fee has been enhanced from Rs,100 to Rs,1,000 through a notification by the Finance Deptt: with the objective of mobilization the resources to general provincial revenue and with the indirect benefit to discourage the trend of frequent installation of sawmills which is detrimental to the interest of forests conservancy. The enhancement of registration fee has been decided by the Provincial Government after due consideration. Therefore, it is regretted to inform you that the said decision cannot be reviewed/revoked by the undersigned."
' In this letter, it has been stated in clear terms that the respondents would get indirect benefit as it would discourage the trend of frequent installation of Saw-Mills which is detrimental to the interest of Forests conservancy therefore not only the appellants are providing certain facilities to the respondents but the respondents would also get advantage as the installation of new Saw-Mills is being discouraged. The respondents were paying Rs,100 without any objection for defraying the expenditure of registration. The enhancement of fee was justified to meet the expenses. Rs,100 was fixed in the year 1969 and the expenditure on account of pay and the services has increased manifold since then. The enhancement has been made in the year 1984 i.e, the fee was increased after about fifteen years. There is no illegality committed by the appellants. The learned High Court also took the view that the notification is violative of Article 163 of the Constitution which reads as hereunder:- "A Provincial Assembly may by Act impose taxes, not exceeding such limits as may from time to time be fixed by Act of Majlis-e-Shoora (Parliament), on persons, engaged in professions, trades, callings or employments and no such Act of the Assembly shall be regarded as imposing a tax on income."
9. We do not consider that the enhancement of fee has, in any way, infringed Art. 163 of the Constitution which refers to imposition of a tax on income. No such tax is imposed on persons engaged in the profession but a fee is being charged for the services rendered to the respondents.
10. In the result, we accept this appeal, set aside the judgment of the High, Court and recall the writ issued by it. There will be no order as to costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.