Case Note & Summary
The petitioners, Taj Sats Air Catering Limited and another, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging letters issued by respondent 3 (the Mumbai International Airport Private Limited) imposing an Airport Levy equivalent to 10% of the gross turnover of the petitioners, and a circular dated 16 November 2009 stating that all licences and permits given to the petitioners and SkyGourmet Catering Private Limited would subsist only till November 2009. The petitioners contended that the levy was purportedly imposed under Section 12A(4) of the Airports Authority of India Act, 1994, but the purpose stated in the letter dated 5 September 2009 was to fund capital expenditure for development activities at Mumbai Airport. The petitioners argued that development fee can only be levied under Section 22A of the Act, which allows collection from embarking passengers, not from service providers like the petitioners. In the affidavit in reply, respondent 3 claimed the levy was under Section 22 of the Act. The court, after hearing submissions, found that the petitioners had made out a strong prima facie case for issuance of rule and for stay. The court noted that the levy appeared to be ultra vires the Act and that the petitioners would suffer irreparable injury if the levy was recovered and licences revoked. The court granted an interim stay on the recovery of the Airport Levy and on the revocation of licences, directing that the status quo be maintained pending the final hearing of the petition.
Headnote
A) Airport Law - Levy of Airport Levy - Ultra Vires - Section 12A(4), Section 22, Section 22A, Airports Authority of India Act, 1994 - Petitioners challenged letters imposing Airport Levy of 10% of gross turnover and circular revoking licences - Court held that prima facie the levy may be ultra vires as development fee can only be levied under Section 22A on embarking passengers - Interim stay granted on recovery of levy and revocation of licences (Paras 1-4).
Issue of Consideration
Whether the Airport Levy equivalent to 10% of gross turnover imposed by respondent 3 on the petitioners under Section 12A(4) of the Airports Authority of India Act, 1994 is valid, or whether it is ultra vires the Act, particularly in light of Section 22A which provides for levy of development fee only on embarking passengers.
Final Decision
The court issued rule and granted interim stay on the recovery of the Airport Levy and on the revocation of licences, directing that status quo be maintained pending final hearing.
Law Points
- Airport Levy
- Development Fee
- Ultra Vires
- Section 12A(4)
- Section 22
- Section 22A
- Airports Authority of India Act
- 1994
- Prima Facie Case
- Interim Relief
Case Details
2010 LawText (BOM) (01) 436
WRIT PETITION NO.2351 OF 2009
Smt. Ranjana Desai, Mrs. Mridula Bhatkar
Mr. Aspi Chinoy, senior counsel with Mr. N.H. Seerwai i/b M/s. Mulla & Mulla C.B. & C. for the petitioners; Mr. Girish Kulkarni for respondents 1 and 2; Mr. Rafiq Dada, senior counsel with Mr. P.K. Samdani, senior counsel i/b M/s. Wadia Ghandy & Co. for respondent 3
Taj Sats Air Catering Limited & Anr.
The Union of India & Ors.
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging letters imposing Airport Levy and circular revoking licences.
Remedy Sought
Petitioners sought issuance of rule and stay of the impugned letters and action, including recovery of Airport Levy and revocation of licences.
Filing Reason
Respondent 3 imposed an Airport Levy equivalent to 10% of gross turnover on petitioners and issued a circular stating that licences and permits would subsist only till November 2009.
Issues
Whether the Airport Levy imposed under Section 12A(4) of the Airports Authority of India Act, 1994 is valid or ultra vires the Act.
Whether the development fee can be levied on service providers like petitioners under Section 22A or only on embarking passengers.
Whether the petitioners are entitled to interim stay of the impugned letters and circular.
Submissions/Arguments
Petitioners argued that the Airport Levy is purportedly under Section 12A(4) but the purpose is to fund capital expenditure for development, which can only be done under Section 22A by levying development fee on embarking passengers, not on petitioners.
Petitioners submitted that respondent 3 in its affidavit claimed the levy is under Section 22, but that provision does not authorize such levy on petitioners.
Respondent 3 argued that the levy is valid under Section 22 of the Act.
Ratio Decidendi
The court held that the petitioners made out a strong prima facie case that the Airport Levy is ultra vires the Airports Authority of India Act, 1994, as development fee can only be levied under Section 22A on embarking passengers, and the balance of convenience and irreparable injury favored granting interim stay.
Judgment Excerpts
In this petition filed under Article 226 of the Constitution of India, the petitioners have challenged letters issued by respondent 3 imposing on the petitioners an Airport Levy equivalent to 10% of the gross turnover of the petitioners and action of respondent 3 in issuing Circular dated 16/11/2009 stating that all licences and permits given to the petitioners and to the SkyGourmet Catering Private Limited would subsist only till November, 2009.
Mr. Chinoy submitted that development fee could only be charged under Section 22A of the Airports Act. But under that provision, the development fee can be levied and collected from the embarking passengers, inter alia, for funding or financing the costs of upgradation, expansion or development of the airport. Therefore, respondent 3 cannot levy the development fee on the petitioners under this provision.
Prima facie, we are of the opinion that the petitioners have made out a strong case for issuance of Rule and for stay of the impugned letters and action.
Procedural History
The petitioners filed Writ Petition No.2351 of 2009 under Article 226 of the Constitution of India before the Bombay High Court challenging letters imposing Airport Levy and a circular revoking licences. The court heard submissions on 5 January 2010 and passed an interim order.
Acts & Sections
- Airports Authority of India Act, 1994: Section 12A(4), Section 22, Section 22A
- Constitution of India: Article 226
