Kanchan Chakraborty, J.

1. This application is at the instance of Howrah Tax Payers Association and six (6) others and is directed against the judgment dated 30.3.2009 passed by the West Bengal Taxation Tribunal (hereinafter referred to as Tribunal) in R.N. 266 of 2008.

2. In this application the Writ Petitioners have questioned the constitutional validity of the provisions for imposition of late fee for filing of returns as contained in Sub-section (2) of Section 32 of the West Bengal Value Added Tax Act, 2003. (hereinafter referred to VAT in short)

3. The facts leading to this application are stated below, in short -

The State Legislature by the West Bengal Finance Act, 2007 amended the provisions of Section 32(2) of the VAT with effect from April 1, 2007 affording opportunity to the dealers who failed to submit return within the prescribed time to furnish return upon payment of penalty as prescribed. Further amendment was made by the West Bengal Finance Act, 2008 (Act 1 of 2008) to Section 32(2) providing payment of late fee in place of penalty with retrospective effect from April 1, 2007, i.e., the date when the first amendment of 2007 came into operation. The writ Petitioners filed three (3) applications before the learned Tribunal challenging the constitutional validity of earlier amendment of Section 32(2) of the VAT Act. While the matter was pending, the second amendment was introduced as aforesaid. The learned Tribunal disposed of those three (3) petitions in R.N. 406 of 2006 on 4.4.2008 observing that the questions raised before it by the Petitioners became academic and were not required to be decided. The Petitioners thereafter filed three (3) new applications as stated above on which the impugned judgment was passed. The learned Tribunal did not find any merit in the contentions raised on behalf of the Petitioners and accordingly, dismissed those applications. The writ Petitioners herein challenged the impugned judgment passed by the learned Tribunal on 30.3.2009 in R.N. 267 of 2008 on the grounds amongst other that the learned Tribunal was not at all justified in dismissing the petitions filed by the Petitioners.

4. Mr. Ghosh, the learned Counsel appearing for the Petitioners contended that the amendment in question by the Finance Act 2008 ultra vires. Constitution of India, and is unreasonable and has no legal sanctity because it is beyond the power of the State Legislature, in view of Article 246(3) of the Constitution of India read with list -II of the VI Ith schedule. Main thrust of argument of Mr. Ghosh is that the learned Tribunal failed to distinguish Tax and Fee. He contended that Section 32(2) is a machinery provision which relates to furnishing of return by a dealer and not a charging provision without which no amount can be collected from a dealer. He further contended that learned Tribunal erred in coming to a conclusion that the amended Section 32(2) has conferred a special beneficial right on the dealer to submit return even after the prescribed dates and for providing such special beneficial right, the State Legislature has imposed late fee. In view of Mr. Ghosh, imposition of late fee amounts to triple jeopardy in as much as there already exists such a right to file return either on payment of interest or penalty since introduction of the VAT Act, 2003. Mr. Ghosh also contended that the learned Tribunal was wrong and not justified in holding that the State Legislature has the legislative competency under Entry-66 of list II to levy the impugned late fee in as much as the said Entry-66 provides imposition of fees in respect of any of the matters in list II but not Tax" in disguise of "fees".

5. Mr. Prosenjit Basu, the learned Counsel for the Respondent contended that by introducing late fee in furnishing return under Section 32(2) of the VAT Act beyond the due date, a dealer is practically benefited and/or saved from any penal consequences provided in Section 45(2)(a) or Section 46(2)(a) of the Act. It is contended by Mr. Basu that if a dealer submits return after due date with late fee and pays all tax and interest, he can not be subjected to provisional assessment under Section 45 and for regular assessment under Section 46. The impugned provision of the act in question came into force on and from 1.4.2007 with retrospective effect. So the dealers can not be said to be prejudiced in as much as if they do not want to file return which was due on 1.4.2007 to 31.3.2008 with the late fee then the penal consequences only be attracted under Section 45(2)(a). He contended that the question of imposition of penalty does not arise if the dealers pay late fee. The introduction of late fee provides a special beneficial right to the dealers to avoid the hazard of paying penalty and interest. By paying late fee they are given opportunity to regularise filling of return which they failed to file within time. The impugned levy is not "tax" but "fee" and is well within the legislative competency of State Legislature under Entry No. 66 of list II of the Constitution of India.

6. We have gone through the judgment impugned passed by the learned Tribunal minutely. It appears to us that the learned Tribunal has elaborately discussed the relevant features of the scheme and system of assessment of VAT liability of dealers. The learned Tribunal found that the dealer who has not submitted return, remains liable to pay penalty for the default in furnishing return either under provisional assessment or under regular assessment. Prior to April 1, 2007 when Section 32(2) was first amended, a dealer had no opportunity or scope to file a return after the prescribed date and was to suffer penal consequences for non-submission of return. The West Bengal Finance Act 2007 amended the provisions of Section 32(2) With effect from April 1, 2007 and provided opportunity to the dealers who failed to submit return within the prescribed time, to furnish return upon payment of penalty as prescribed. The State Legislature by West Bengal Finance Act, 2008 (Act 1 of 2008) amended Sub-section (2) of Section 32 by introducing late fee in place of penalty and made consequential amendment of the Sub-section (2) of Section 32 with retrospective effect from April 1, 2007, i.e., date when amendment of 2007 came into operation. By virtue of the amendment of the 2008 with retrospective effect from April 1, 2007, the dealers have acquired a special right rather provided with an opportunity to submit returns even after prescribed date upon payment of prescribed late fee and avoid the consequences of non-filing of return. The learned Tribunal opined also that Entry - 66 of list II has empowered the State Legislature to levy fees in respect of all the matters enumerated in the State List. We find that the learned Tribunal distinguished tax and fee and came to a conclusion that by introducing late fee in place of penalty a special service is provided to dealers, i.e., there is element of quid pro quo in levying late fee.

7. In order to appreciate the entire matter it would be appropriate for us to set out the relevant provisions of the Act:

Section 32(1) - "Every dealer liable to pay tax under the Act or every other dealer, if so, required by the Commissioner by a notice served in the prescribed manner, shall furnish such returns by such dates and to such authority, as may be prescribed.

Section 32(2) - Every dealer required by Sub-section (1) to furnish a return shall be liable to pay such late fee not exceeding rupees two thousand for each month or part thereof of delay in furnishing return, as may be prescribed, and pay, before furnishing such return the full amount of net tax, interest and late fee, if any, payable according to such return in the manner as provided in Section 31 and shall furnish along with such return, a receipt from the appropriate Government Treasury referred to in that section showing the payment of such amount.

Provided that where a dealer required by Sub-section (1) to furnish return for any return period is unable to make payment of the full amount of net tax or interest, or late fee referred to in this Sub-section, payable according to such return, such dealer shall furnish the return without payment of the full amount of such tax or interest or late fee payable according to such return along with an application adducing reasons to the Commissioner for extension of time for making payment of net tax, interest and late fee up to the extended date of payment.

Provided further that the Commissioner may, if he is satisfied on the reasons adduced by the dealer in the application referred to in the first proviso, extend, by an order in writing, the time for making payment of such unpaid amount of the (net tax, interest and late fee,) payable thereon on such terms and conditions as he may deem fit and proper.

Section 45(2) - In making a provisional assessment under this section, the Commissioner or other authority as referred to in Sub-section (1) shall-

(a) Where the dealer has failed to furnish return, assess the net tax of the dealer for the relevant return period on the basis of past returns or past records, and where no such returns or records are available, on the basis of information received by the Commissioner of such other authority and determine the interest payable by the dealer for the relevant return period; or

(b) Where the dealer furnishes return but fails to make an application to the Commissioner, or fails to make payment of (the net tax, interest, and late fee as referred to in Sub-section (2) of Section 32) as mentioned in Clause (b) Clause (c) and Clause (d), respectively, of Sub-section (1), assess the net tax on the basis of return furnished and determine the interest payable or unpaid amount of interest, for the relevant period, and impose a penalty not exceeding twice the assessed amount of net tax or the unpaid amount of net tax. as the case may be. and fix a date for production of documentary evidence for removing the cause for making the (provisional assessment) and shall direct the dealer by a notice to pay the assessed amount of net tax or the unpaid amount of net tax, as the case may be, with the interest payable or remaining unpaid and penalty imposed, in such manner, and within such the date, as may be prescribed.

Section-46(2) - "While making an assessment under Sub-section (1), the Commissioner may, if he is satisfied -

(a) that the dealer has defaulted in furnishing any return as required under Section 32 without any reasonable cause; or

(b) the dealer has furnished such return but has failed to pay the full amount of net tax for any period within the prescribed date or within such date as extended by the Commissioner, direct that the dealer shall pay by way of penalty, in addition to the amount of tax to assessed, a sum not exceeding fifty per centum of the amount so assessed.

8. We have considered the contention and rival contention of the learned Counsels for both the parties. The relevant provisions set out above altogether makes it abundantly clear that under Section 32(2) of the Vat Act, a dealer is under legal obligation to furnish return within the prescribed period. In case of failure to do so, he may or may not opt for filing the return together with the total Net Tax and interest upon payment of "late fee" under the amended provision of Section 32(2) of the Act. Before amendment of the Sub-section (2) by Act-I of 2008. such a dealer could furnish return upon payment penalty and prior to that no such scope was available. The impugned amendment has introduced "late fee" in place of "penalty" which is entirely optional to such a dealer who has failed to furnish return within prescribed period. The dealer is under no compulsion or obligation to furnish return upon payment of late fee. A dealer is still free to choose not to file return after the prescribed period upon payment of late fee and to suffer penal consequences either under Section 45(2) or under Section 46(1) or under Section 46(2) of the Act.

9. There can not be any room of doubt that the amended Sub-section (2) of Section 32 of the Act affords a benefit rather special beneficial right to the dealer to submit return upon payment of late fee even after the prescribed period as rightly commanded by Mr. Basu and found by the learned Tribunal. A dealer may avoid penal consequences by way of regularising the delay in filing return upon payment of late fee. Late Fee herein can well be distinguished from Tax. The essential characteristic of Tax is compulsion to pay while "fee" is generally defined be a charge for service, tangible or intangible, rendered to individuals by the State or Governmental agency. So far as "fee" is concerned one is absolutely free to get service upon payment of fee. In this impost element of compulsion or legal obligation is absent. Payment of late fee as introduced by the Act I of 2008 can not be a characterized as Tax as choice is left with the dealer concerned to be attractable by the levy. Needless to mention a fee is payment levied by the state in respect of services performed by it for the benefit of the individuals.

10. In case of levying tax there is no quid pro quo between the Tax payer and the State. But element of quid pro quo is a must in case of imposing Fee. By virtue of impugned amendment, a dealer is entitled to get service indirectly from the authority upon payment of late fee. His irregular filing of return is regularised upon payment of late fee without being suffered from penal consequences which can not be categorised as nothing but special service. Thus, there exists quid pro quo in imposing late fee.

11. In this context it is pertinent to mention here that though a fee must be co-related to the services rendered, such relationship need not be mathematical one even casual co-relationship in all that is necessary. The view of the Apex Court in : (2005) 2 SCC 345 [LQ/SC/2004/1432] (referred to by the learned Tribunal at page 14 of the impugned judgment) removed all the doubts on this issue.

12. On careful scrutiny of the scheme and system of assessment of VAT liability of the dealers, we find ourselves convinced that late fee as introducing by Act-I of 2008 is not at all tax as Mr. Ghosh wanted to project. In our considered opinion, the learned Tribunal is absolutely right on this point.

13. Again, the proposition of Mr. Ghosh that late fee is amounting to double jeopardy is not acceptable for the reason as discussed above. The right envisaged in Article 20 or 21 of the Constitution of India can not possibly be stretched to that extent. This apart, if the scheme of the VAT Act is understood clearly, one can easily find that a dealer who fails to file return in terms of Section 32(1) of the Act, is not required to pay late fee as well as penalty for non filing of return in time.

14. So, in our view, the learned Tribunal has not at all erred in coming to the conclusion that there is no basis for raising the plea of double jeopardy by the Petitioners.

15. Coining to the point as to competency of the "State Legislature" to impose fee in any matter in the List-II of the schedule VII, suffice it to state that the Entry N0.-66 empowers the State Legislature to levy fees in most general terms in all the matters. If the conditions of a fee are satisfied, the nomenclature given by the legislature is immaterial.

16. An imposition purported to be made under the Entry No. -66 in the List-II of the schedule VII can not be valid if it lacks any of the two characteristics of a fee, viz.:

a) The authority levying the fee must render some services for the fee levied, however, remote that service may be; and

b) The fee realised must be spent for the purposes of the imposition and should not form part of the general revenues of the State.

17. As far as the first characteristic is concerned, we reiterate that the late fee introduced by Act-I of 2008 has the element of quid pro quo, i.e., rendering special service or providing special benefit to such dealers who fail to furnish return interest of Section 32(1) but opt to pay late fee under 32(2) of the act.

18. The second characteristic of fee, we have already mentioned, is that the object of imposition of fee is completely opposite to that of a Tax. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering service and in fact, under Section 32(2) of the VAT Act, rate of late fee is uniform unlike tax which varies from dealer to dealer according to their capacity. Therefore, it can well be accepted that late fee as introduced by Act I, 2008 is estimated uniform expenses incurred by Government for rendering special service or providing special benefit/privilege only to those dealers who chooses to get that services upon payment of the late fee.

19. We are satisfied that the imposition of impugned late fee by the State Legislature is well within its competency under Entry No. -66 of List II of VII Schedule. We do not incline to accept the analogy given by Mr. Ghosh. We, therefore, endorse the view taken by the learned Tribunal on this issue also.

20. Lastly we hold that retrospective effect of present Section 32(2) of the VAT Act, by no way, is prejudicial to the dealers because if they pay the late fee they cannot be treated as defaulters and no penalty would be imposed for want of filing return which is due between 01.4.07 to 31.3.2008.

21. The foregoing discussion unmistakably leads to the conclusion that the prayer of the Petitioners has no merit and the petition is liable to be dismissed. The learned Tribunal, in our estimate, has made no mistake in dismissing the petitions of the Petitioners in R.N.-267 of 2008 by the judgment impugned. The appeal, thus, fails.

22. The writ petition is disposed of accordingly. No order as to cost is passed.

Kalyan Joyti Sengupta, J.-I agree