STATE OF MAHARASHTRA & ORS. vs THE SALVATION ARMY, WESTERN INDIA TERRITORY

The Supreme Court examined the nature of the contribution required from public trusts under Section 58 of the Bombay Public Trusts Act, 1950, and clarified the distinction between a tax and a fee. The Court held that the contribution of 2% of gross annual income, as prescribed by Rule 32, is a fee for services rendered rather than a tax, as it is not a compulsory exaction for general revenue but rather a charge for specific administrative services. The Court upheld the High Court's decision that the levy was illegal after it assumed the character of a tax post-31 March 1958, thus affirming the need for clarity in the nature of such contributions under the Act.