Legal Benefit Fund; Cardamom Marketing Corporation Vs. State of Kerala [Supreme Court of India, 01-09-2016]

Court Fees and Suits Valuation Act, 1959 (Kerala) – S. 76 – Legal Benefit Fund – Providing social security to the legal profession becomes an essential part of any legal system which has to be effective, efficient and robust to enable it to provide necessary service to the consumers of justice. Section 76 of the CF Act and the impugned notification vide which additional court fee is imposed have a direct nexus to the objective sought to be achieved in relation to the service available to the appellants or others who approached the courts/tribunals for redressal of their grievances.


IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

(A.K. SIKRI) (S.A. BOBDE) (ASHOK BHUSHAN) JJ.

SEPTEMBER 01, 2016

CIVIL APPEAL NO. 4453 OF 2008

CARDAMOM MARKETING CORPORATION & ANR. …..APPELLANT(S)

VERSUS

STATE OF KERALA & ORS. …..RESPONDENT(S)

W I T H

WRIT PETITION (CIVIL) NO. 514 OF 2009

A N D

WRIT PETITION (CIVIL) NO. 490 OF 2011

J U D G M E N T

A.K. SIKRI, J.

The two appellants before us in Civil Appeal No. 4453 of 2008, who are the registered dealers under the

Kerala General Sales Tax Act, 1963

and/or the

Kerala Value Added Tax Act, 2003

in the State of Kerala. They challenged the vires of S.R.O. No. 226 of 2002 dated April 05, 2002 issued by the Government of Kerala in exercise of powers under

Section 76(1) of the Kerala Court Fees and Suits Valuation Act, 1959

(hereinafter referred to as the ‘CF Act’) whereby the Government authorised the tribunals and appellate authorities constituted by or under special or local law, other than civil and criminal courts, to levy additional court fee in respect of each appeal or revision at the rate of 0.5% of the amount involved in the dispute in cases where it is capable of valuation, and at the rate of ₹50 in other cases. This notification further provides that the amount so collected shall be credited to the Kerala Legal Benefit Fund constituted under sub-section (2) of Section 76 of the CF Act. The main contention of the appellants was that the aforesaid levy is in the nature of compulsory exaction/tax and the element of service/quid pro quo was absent and, therefore, such a fee cannot be charged. The High Court has repelled the challenge thereby upholding the validity of the said notification following its earlier judgment in

Chackolas Spinning & Weaving Mills Ltd. v. State of Kerala, 2006 (1) KLT 989

vide its judgment dated July 13, 2007. This judgment of the High Court is challenged in this appeal on the same grounds. Subject matter of the two writ petitions is also identical.

2) Before coming to the detailed submissions in this behalf, it would be apposite to take note of the relevant provisions of the CF Act as well as terms of the notification dated April 05, 2002.

3) The CF Act relates to court fees and valuation of suits in the State of Kerala. The court fee calculated as per the provision of the said Act has to be paid in respect of various kinds of proceedings initiated in a court of law in the State. Clause (ii) of Section 3 defines ‘court’ and reads as under:

“”Court” means any Civil, Revenue, or Criminal Court and includes a Tribunal or other authority having jurisdiction under any special or local law to decide questions affecting the rights of parties;”

It is clear from the aforesaid definition that within the ambit of the CF Act, it is not only civil or criminal courts but also revenue authorities, including the tribunal or other authority having jurisdiction under any special or local laws, to decide questions affecting the rights of the parties. Thus, revenue courts as well as tribunals, when such bodies are deciding questions affecting the rights of the parties, are treated as ‘court’ for the purpose of CF Act. Fee prescribed under the said Act becomes payable in respect of proceedings before these authorities as well.

4) Section 76 of the CF Act, under which the impugned notification is issued, deals with ‘Legal Benefit Fund’ and makes the following reading:

76. Legal Benefit Fund

(1) Notwithstanding anything contained in this Act or any other law for the time being in force, it shall be competent for Government to levy an additional court fee, by notification in the Gazette, in respect of appeals or revisions to tribunals or appellate authorities, other than Civil and Criminal Courts, at a rate not exceeding one per cent of the amount involved in the dispute in cases where it is capable of valuation and in other cases at a rate not exceeding one hundred rupees for each appeal or revision.

(2) There shall be constituted a legal benefit fund to which shall be credited –

(i) the proceeds of the additional court-fee levied and collected under sub-section (1);

(ii) fifty per cent of the court fees levied and collected on mukhtarnama or vakalathnama under Article 16 of Schedule II of this Act.

(3) The fund constituted under sub-section (2) shall be applied and utilised for the purpose of providing an efficient legal service for the people of the State and to provide social security measures for the legal profession.

(4) The mode and manner in which legal service to the people may be made more efficient and social security measures for legal profession may be provided, shall be as prescribed by rules made by Government.”

5) As is clear from the plain language of the aforesaid Section, this provision empowers the State Government to levy an additional court fee in respect of appeals or revisions to tribunals or appellate authorities, other than civil and criminal courts. This can be done by notification in the Gazette. The upper limit of such an additional court fee is one per cent of the amount involved in the dispute in cases where it is capable of valuation, and in other cases the additional court fee which can be levied is not to exceed rupees hundred for each appeal or revision. This levy of additional court fee is meant for Legal Benefit Fund. This Fund is to be applied and utilised for the purpose of providing an efficient legal service for the people of the State and to provide social security measures for the legal profession. The mode and manner in which legal services are to be made more efficient and social security measures for legal profession need to be provided can be prescribed by rules made by the Government. For this purpose, the State Government has framed the