National Engineering Industries Limited vs The Chief Electrical Inspector and Others

M.N. Bhandari, J.—All these writ petitions involve common question of law and facts thus are decided by this judgment.

For convenience, facts of S.B. Civil Writ Petition No. 1507/1989 are considered.

Learned counsel for petitioner submits that respondents issued schedule of fee for testing and inspection of electrical installations and other services vide Notification at Annexure-1. The respondents enhanced fee by issuing another Notification in the year 1977. It was challenged successfully by the petitioners. The notification enhancing the fee was set aside by this court as it was levied in violation of provisions of law. The respondents accordingly charged fee at the rate initially prescribed vide Annexure-1. They came with the Notification dated 2nd February, 1988 and revised the fee for testing and inspection of electrical installations and other services. The enhancement of fee was due to revision of pay scale and other benefit to the employees involved for those services. The enhancement was thus made on erroneous grounds. The fee can be levied to the extent of expenses incurred for the services or facilities.

In the instant case, the respondents have enhanced the fee taking note of increase in salaries of the employees and other such similar components which includes payment of gratuity, PF, etc. Those components cannot be taken for determination of the actual expenses incurred for services/facilities rendered to the petitioners. The respondents thus committed illegality in enhancing the fee. To support the arguments, learned counsel for petitioner has given reference of the judgment of Hon''ble Apex Court in the case of Kewal Krishan Puri and Others Vs. State of Punjab and Another, . Referring to Paras 52 and 53 of the said judgment, learned counsel submitted that expenses required to be incurred by the other agencies cannot be accounted to determine the fee. The amount incurred for construction of the road was shown to be for the purpose of facility to the licensees. The Hon''ble Apex Court held that construction of the road is the work to be carried out by the PWD thus for their expenses, justification to enhance the fee cannot be allowed. Any expenses incurred for other agencies cannot justify enhancement of fee. In view of the above, the impugned notification dated 2nd February, 1988 so as demand raised by the respondents be set aside.

Learned counsel has made reference of affidavit filed by the respondents pursuant to the direction of this court. It is to show that income towards fee is now more than the expenditure towards service. In the light of the figures given in Annexure-R/4, there remains no justification to levy or enhance the fee.

I have considered the submission made by learned counsel for petitioner and perused the record.

A challenge to the Notification dated 2nd February, 1988 so as demand is mainly on the ground that fee charged for testing and inspection of electrical installations and other services should not have been enhanced based on enhancement of salary of the employees apart from other benefits.

Before averting to the facts of this case, it is to be clarified that as and when fee is charged, it has to be co-relation with the expenses incurred for that purposes. It is unlike imposition of tax where amount can be used for any purpose without accounting it towards tax imposed. For imposition of fee, the position is just reverse. Thus as and when fee is levied, it has to be accounted or to have co-relation with the expenses incurred for that purposes.

In the instant case, the respondents have employed the person for testing and inspection of electrical installations and other services. In view of the aforesaid, they have calculated amount of expenses incurred. It would obviously include any expenses towards employees rendering the services because it is a direct expenses towards the services rendered by the respondents and it cannot be held to be illegal or improper.

The judgment in the case of Kewal Krishan Puri (supra) is having altogether different facts. Therein, enhancement of fee or levy of market fee was after giving figures of expenses incurred towards construction of road which is the work assigned to the PWD. The Hon''ble Apex Court held that amount incurred towards construction of road cannot be accounted to justify the market fee. The case in hand is not of such nature inasmuch the amount incurred by the respondents is having direct co-relation with the fee and to justify the expenses incurred for the purpose of services/facilities rendered by the respondents.

In view of the above, I do not find any illegality in the impugned notification dated 2nd February, 1988 so as the demand raised against the petitioner. The demand raised by the respondents has already been satisfied.

All these writ petitions are accordingly dismissed. It is however clarified and liberty is given to the petitioner that if for subsequent period, expenses incurred for services rendered by the respondents are less than the revenue earned, then they would be at liberty to challenge the same in respect of the subsequent demands.