Gauhati High Court Voids Provision Imposing 7% Ad Valorem Duty On Court Fees For Grant Of Probate Or Letters Of Administration Over Properties Exeeding ₹5 Lakh In Value

The Gauhati High Court on Tuesday held that Article 11 of Schedule I of the Court Fee (Amendment) Act, 1950 in respect of levy of Court fee for grant of probate or letter of administration at the rate of 7 percent ad valorem where the value of properties exceeds Rs.5 Lakhs without there being any upper limit fixed, as unconstutional and violative of Article 14 of the Constitution of India.

The division bench of the Chief Justice Vijay Bishnoi and Justice N. Unni Krishnan Nair observed:

“It cannot be denied that the proceedings for grant of probate and letters of administration are also registered as suits and proceeded with accordingly but in respect of other suits an upper limit of Rs.11,000/- on the Court fee is fixed in the State of Assam, whereas in the case of grant of probate, where the value of properties exceeds Rs.5,00,000/-, no upper limit Court fees is fixed. In our view, it cannot be justified to single out the proceedings for grant of probate or letter of administration for an ad valorem without the benefit of any upper limit though it is prescribed in the very same statute for all other litigants.”

The Court was hearing two writ petitions preferred by the petitioners under Article 226 of the Constitution of India challenging the constitutional validity of Article 11 of Schedule 1 of the Court Fees Act, 1870 (Assam Amendment) brought into effect by the Assam Court Fees (Amendment) Act, 1950 in respect of levy of Court fee for grant of probate or letter of administration at the rate of 7 percent ad valorem where the value of properties exceeds Rs.5,00,000/- without there being any upper limit fixed.

The Counsel appearing for the petitioners argued that persons who go to the Civil Courts claiming decrees are not required to pay Court fees in excess of Rs.11,000/- in the State of Assam though the suits and the other proceedings are more complex in nature in comparison to the testamentary proceedings.

It was submitted that the testamentary proceedings are simple in nature involving less time and less strain upon the Courts vis-à-vis the other types of litigations which the Courts have to handle. It was contended that despite all these, the impugned Article 11 prescribes an ascending scale of fees for persons desirous of obtaining probate or letter of administration.

It was further argued that the fees ranges from 2 percent to 7 percent, even charge leviable goes on increasing from slab to slab, without there being any upper limit fixed though in almost all such cases, there is no contest as such. It was argued that the discrimination embodied in the impugned Article 11 of the Court Fees Act, 1870 (Assam Amendment) brought into effect by the Assam Court Fees (Amendment) Act, 1950 is violative of Article 14 of the Constitution of India.

It was contended that the impugned Article 11 prescribes an ever increasing percentage of fee payable in the Court which cannot be equated to taxes. It was submitted that fees recoverable under the Court Fees Act are Court fees and such Court fees are free and distinct from taxes.

On the other hand, the Counsel the matter relating to Court fees for grant of Probate was referred to the Finance Department and the Finance Department is of the view that upon calculating such ad valorem fee, the Government of Assam has prepared the Receipt Budget. It was further submitted that in case of any rebate on such fee, it may lead to drastic reduction of Receipt Budget which in turn may lead to serious destabilization of expenditure estimated in the Annual statement of Expenditure of the Government causing financial constraints for undertaking various developmental activities in important sectors, like- health, education, agriculture etc.

It was argued that the essential character of impost is that some special service is intended or envisaged as a “quid pro quo” to the class of citizens which is entitled to be benefited by the service and there is a broad and general correlation between the amount so raised and the expenses involved in providing the service, the impost would partake the character of a “fee” notwithstanding the circumstance that the identity of the amount so raised is not always kept distinguished but is merged in the general revenues of the State.

The Court noted that the Court fees taken in the Courts are not the taxes.

“In the various pronouncements of the Hon'ble Supreme Court, it is clearly held that before any levy can be upheld as a fee it must be shown that the levy has reasonable correlation with the services rendered by the Government. It must be provided to have a “quid pro quo” for the services rendered. It is held that fee must have relation to the administration of civil rights while levying fees the appropriate Legislature is required to take into account all relevant factors,” the Court said.

It was further observed by the Court that the legislature cannot compel the litigants to contribute in increasing the Government coffers to be used for roads, building, education and other schemes launched for general benefit.

The Court relied upon the judgments of the Supreme Court in The Secretary, Government of Madras, Home Department & Anr. v. Zenith Lamp and Electrical Ltd. (1973) 1 SCC 162; P.M. Ashwathanarayana Setty & Ors. v. State of Karnataka & Ors. 1989 Supp (1) SCC 696 and Secretary to Government of Madrass v. P.R. Sriramulu & Anr. (1996) 1 SCC 345.

“In view of the above settled position of law, if we examine, it is clear that Article 11 of Schedule 1 of Court Fees Act, 1870 (Assam Amendment) brought into effect by the Assam Court Fees (Amendment) Act, 1950 provides levy of Court fees for grant of probate or letter of administration at the rate of 7% ad valorem where the value of the properties exceeds Rs.5,00,000/- without there being any upper limit, whereas a person, who approaches the Civil Court claiming decrees, is required to pay Court fees not excess of Rs.11,000/- in the State of Assam,” the Court said.

Thus, the Court held that Article 11 of Schedule I of Court Fees Act, 1870 (Assam Amendment) brought into effect by the Assam Court Fees (Amendment) Act, 1950 in respect of levy of Court fee for grant of probate or letter of administration at the rate of 7 percent ad valorem where the value of properties exceeds Rs.5,00,000/- without there being any upper limit fixed is ultra vires to the Article 14 of the Constitution of India.

The Court further noted that it is high time for the State Government to take into consideration the matter regarding levy of court fees and to make effort to bring rationalization on levy of court fees in the proceedings filed before the Courts.

Citation: 2024 LiveLaw (Gau) 29

Case Title: Prafulla Govinda Baruah v. The State of Assam & Anr.

Case No. WP(C)/2919/2018

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