CORPORATION OF CALCUTTA V. LIBERTY CINEMA
AIR 1965 SC 661
FACTS
The Respondent had obtained a licence for its cinema house and was paying a licence fee of Rs. 400 every year. After a resolution passed in 1958, the corporation changed its basis of assessment of licence fee from 1st April 1958. Under the new method the fee was to be assessed at rates prescribed per show according to the sanctioned seating capacity of the cinema houses. The Respondent's cinema house had 551 seats and under the changed method it became liable to a 482 fee of Rs. 5 per show. In the result it became liable to pay a fee of Rs. 6,000 per year.
ISSUE
The major issue before this Hon'ble Court was whether “levy” was a fee in return for services. Another subsidiary question was what is the nature of the services which makes a levy in respect of them, a fee.
RULES
Section 548(2) of Calcutta Municipal Act “discusses that for licence under the Act, a fee may, unless otherwise provided, be charged at such rate as may from time to time be provided” Further, Section 443 of Calcutta Municipal Act discusses that “no person shall without a licence granted by the Corporation keep open any cinema house for public amusement. It, however, does not say that any fee is to be paid for the licence”
DECISION OF THE HIGH COURT
Under article 226 of the Constitution, the Respondent presented an application to the Hon'ble Court for the quashing of the resolution. The application was allowed and the order was further confirmed by the appellate bench of the court on appeal by the corporation. The corporation then further appealed to the Supreme Court.
JUDGEMENT AND ANALYSIS
The court said that interpreting the statute on the basis of the principle ut res magis valeat quam pereat (Maxwell on Statutes) it was clear that the expression “fee” used in Section 548 must mean a tax because fee simply means some amount of money in lieu of services rendered which is absent in the present case. Further, it uses specifically the word “licence fee” which did not necessarily mean fee for services rendered. In fact in our Constitution licence fee and fee for services rendered are contemplated as different kinds of levy. The former is not intended to be a fee for services rendered. This is apparent from a consideration of Art. 110(2) and Art. 199(2) where both the expressions are used indicating that they are not the same. It was further analysed that by reading the word as referring to a tax, any violence to the language would be done.
RELEVANT THEORY
(UT RES MAGIS VALEAT QUAM PEREAT)
The words of a statute must be construed so that a reasonable meaning is given to them. This principle must be applied by the court except in cases when there is absolute intractability of language. It is on this principle that a court presumes the Constitutionality of a provision and prefers an interpretation in favour of the competence of the legislature or any other authority laying down the rule of law.