Small Scale Entrepreneurs Association v. State of Maharashtra 2026 INSC 570 - MMC Act - Tax and Fee

Constitution of India - Article 265, 366(28) - Until and unless the statute provides for the imposition of tax which may include impost, no tax can be levied or collected from any person - Tax and Fee - Distinction between “tax” and “fee” having been blurred to some extent but still it has not been completely done away with and the distinction, though very fine, continues to remain. The tax is a compulsory extraction for the collection of revenue whereas fee is in the nature of a charge for the services rendered. The element of quid pro quo is an essential characteristic of a fee or a charge. Therefore, so long as the said element ex facie exists, the levy of fee or charges cannot be equated with tax. (Para 84)

Maharashtra Municipal Corporations Act, 1949  - Section 127 and 128A- Municipality has the power to impose and collect property tax which include water tax, water benefit tax, 37 sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment charges, but it does not include any service charges and as such Municipality is denuded from realizing any service charges as part of the tax in exercise of the above power. (Para 70)

Interpretation of Statutes – Fiscal Statutes Beneficial Exemption — In context with fiscal statutes, if there is any ambiguity in the interpretation of any provision or clause, the benefit of the same should always be given to the assessee, and in the event of ambiguity in a beneficial tax exemption provision, the benefit accrues in favour of the assessee. (Para 100)