DELHI CLOTH & GENERAL MILLS CO. LTD. vs CHIEF COMMISSIONER, DELHI & ORS.

The Supreme Court upheld the validity of Rule 7 read with Rule 5 of the Delhi Factories Rules, 1950, concerning the annual renewal fee for factory licenses under the Factories Act, 1948. The Court established that the fee is not a tax as there exists a quid pro quo for the services rendered by inspectors, who provide essential guidance and ensure compliance with safety regulations. The High Court's finding that 60% of the license fees were utilized for services to factory owners was deemed conclusive, affirming the legitimacy of the fee structure.