The Punjab government came under severe criticism from the Punjab and Haryana high court for adopting an "ingenious method" to raise revenue by putting nursing homes, private hospitals and ultrasound, CT scan and testing laboratories in the category of "offensive and dangerous trades" to recover licence fee.
The high court not only quashed the state government's relevant notification but also directed it to refund the licence fee collected from petitioners involved in these trades within a month with further orders of paying a compensation of Rs. 10,000 each to the petitioners. If the authorities fail to refund the collected licence fee within a month, it would have to pay it with an interest of 12% per annum to the petitioners.
The directions came from the division bench, comprising chief justice Sanjay Kishan Kaul and justice Augustine George Masih, on a petition filed by the Indian Medical Association, Sangrur (Punjab) Chapter and two other doctors.
The court said it was unambiguously of the view that this was a "misadventure on the part of the municipal council (Sangrur) or the state government to include one and sundry category of trade to somehow generate revenue through licence fee without even basic analysis of the provisions of the Act".
The petitioners had averred that there was no question of any dangerous and offensive trade in case of nursing homes, private hospitals and ultrasound, CT scan and testing laboratories and thus licence fee could not be imposed.
The petitioners had challenged the notification issued by the local government department on March 24, 2005, for imposing licence fee.
As per notification, a licence fee of Rs. 2,500 annually was to be paid by private hospitals, nursing homes and laboratories under the municipal council, Sangrur -- Rs. 2,000 by CT scan units, Rs. 1,500 by ultrasound units and Rs. 200 by other testing laboratories.
After hearing arguments from both the sides, the court observed that there was no storage of the alleged "offensive material" in case of petitioners but it was only the use of spirit and medicines in small quantities for purposes of the linked trade of medical profession.