FACTS:
On 04.04.2006, the Airports Authority leased out the Indira Gandhi International Airport, New Delhi to the Delhi International Airport Pvt. Ltd. and also leased out the Chhatrapati Shivaji International Airport, Mumbai to Mumbai International Airport Pvt. Ltd. The GoI, Ministry of Civil Aviation, sent a letter to Delhi International Airport Pvt. Ltd. conveying the approval of the Central Government under Section 22A of the Airports Authority of India Act, 1994 for levy of development fees by the company at the Delhi Airport at the rate of Rs.200/- per departing domestic passenger and at the rate of Rs.1300/- per departing international passenger inclusive of all applicable taxes, purely on ad hoc basis, for a period of 36 months with effect from 01.03.2009. Similarly, the GoI, Ministry of Civil Aviation, sent another letter toĀ Mumbai International Airport Pvt. Ltd. conveying the approval of the Central Government under Section 22A of the 1994 Act for levy of development fees by the company at the Mumbai Airport at the rate of Rs.100/- per departing domestic passenger and at the rate of Rs.600/- per departing international passenger inclusive of all applicable taxes, purely on ad hoc basis, for a period of 48 months with effect from 01.04.2009.
The levy of development fees by the companies as lessees of the Delhi and Mumbai Airports were challenged by Consumer Online Foundation.
DECISION OF THE HIGH COURT:
The Division Bench of the High Court, after hearing, held that there was no illegality attached to the imposition of development fees by the two lessees with the prior approval of the Central Government and dismissed the writ petitions by the impugned judgment and order.
ARGUMENTS BY THE PETITIONER(S):
The Writ petitioners contended, inter alia, that such levy of development fees under Section 22A of the 1994 Act can only be made by the Airports Authority and not by the lessee and that until the rate of such levy is either prescribed by the Rules made under the 1994 Act or determined by the Regulatory Authority under the 2008 Act as provided in Section 22A of the Act before and after its amendment by the 2008 Act, the levy and collection of development fees are ultra vires the 1994 Act.
ARGUMENTS BY THE RESPONDENT(S):
It was argued that Section 22A of the 1994 Act permits the Airports Authority after previous approval of the Central Government to levy on and collect from embarking passengers at an airport development fees. Accordingly, after the lease of the two airports, such fees can be levied by the lessee. It was further contended that though Section 22A of the 1994 Act, before its amendment by the 2008 Act provided that for levy of development fees “at the rate as may be prescribed” and for regulation and utilization of the development fees “in the prescribed manner”, the absence of the rules prescribing the rate of development fees or the manner of regulation and utilization of development fees will not render Section 22A ineffective.
REPLY ON BEHALF OF THE LESSEE:
The challenge of the appellant to the levy and collection of airport development fees by the lessees of the two airports is based on a misconception that development fees is in the nature of a tax and can be levied strictly in accordance with Section 22A of the 1994 Act, only by the Airports Authority and not by the lessee. It was also put forth that the rules prescribing the rate of development fees and regulation and the manner in which the development fees will be utilized as provided in Section 22A of the 1994Ā Act cannot curtail the power to levy and collect development fees under Section 22A of the 1994 Act.
HELD:
The Apex Court stated that under section 22A of the 1994 Act, the Central Government has only the power to grant its previous approval to the levy and collection of the development fees but has no power to fix the rate at which theĀ development fees is to be levied and collected from the embarking passengers. Hence, the levy and collectionĀ Ā of development fees by the companies at the rates fixed by the Central Government in the two letters are ultra vires the 1994 Act.