Air passengers got a big relief on Tuesday, with the Supreme Court quashing the levy of airport development fee on embarking passengers in the Delhi and Mumbai airports.

While the Mumbai airport collects Rs.100 from a domestic passenger and Rs. 600 from an international passenger, the Delhi airport is collecting Rs. 200 from a domestic passenger and Rs.1,300 from an international passenger.

A Bench of Justices R.V. Raveendran and A.K. Patnaik said, “We hold that development fees could not be levied and collected by the lessees of the two major airports, namely, DIAL and MIAL, on the authority of the two letters dated February 9, 2009 and February 27, 2009 of the Central government from the embarking passengers under the provisions of Section 22A of the Airports Authority of India Act, 1994.”

The Bench said that with effect from January 1, 2009, no development fee could be levied or collected from the embarking passengers at major airports, “unless the Airports Economic Regulatory Authority determines the rates of such development fee.” Writing the judgment, Justice Patnaik said: “Whenever there is compulsory exaction of money, there should be a specific provision for the same, and there is no room for intendment and nothing is to be read or nothing is to be implied, and one should look fairly to the language used.”

The Bench said: “It is a settled principle of statutory interpretation that any compulsory exaction of money by the government such as a tax or a cess has to be strictly in accordance with law, and for these reasons a taxing statute has to be strictly construed.” In the present case “since the rules have not prescribed, the rate at which the development fees could be levied and collected from the embarking passengers, levy and collection of development fees from embarking passengers was without the authority of law.”

The Bench allowed an appeal from the Consumer Online Foundation of India against a Delhi High Court judgment holding the levy valid. The Bench directed DIAL and MIAL to give an account to the Airports Authority of the development fees. The Airports Authority would ensure that the development fees levied and collected was used for development purposes. The Bench set aside the Delhi High Court judgment.