Full Judgment Text
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PETITIONER:
KUNNATHAT THATHUNNI MOOPIL NAIR
Vs.
RESPONDENT:
THE STATE OF KERALA AND ANOTHER(with connected petitions)
DATE OF JUDGMENT:
09/12/1960
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
IMAM, SYED JAFFER
SARKAR, A.K.
SUBBARAO, K.
SHAH, J.C.
CITATION:
1961 AIR 552 1961 SCR (3) 77
CITATOR INFO :
R 1962 SC 123 (12)
R 1962 SC 148 (1)
R 1962 SC1006 (37,38,78,799)
RF 1962 SC1371 (42)
R 1962 SC1406 (37)
RF 1962 SC1563 (22)
R 1962 SC1621 (31,55,109,121)
R 1962 SC1733 (3A)
RF 1963 SC 591 (7)
RF 1963 SC1667 (12)
RF 1964 SC 370 (10)
R 1964 SC 925 (45)
R 1964 SC1013 (25)
R 1966 SC 619 (7)
E 1967 SC 691 (26,66)
F 1967 SC1458 (23)
R 1968 SC 658 (8)
RF 1969 SC 378 (3)
RF 1970 SC 169 (11)
R 1970 SC1133 (5,7,8,18,23,24,25,26,29,30,31
D 1971 SC1321 (11,14)
RF 1971 SC1801 (4)
R 1972 SC 828 (27)
D 1972 SC 845 (5,14,25,30)
RF 1972 SC2563 (16)
R 1974 SC 497 (21)
R 1974 SC 543 (32)
D 1974 SC 849 (19)
RF 1975 SC 511 (17)
RF 1975 SC1208 (28)
R 1979 SC 321 (5)
F 1980 SC 271 (43,49)
E 1980 SC 286 (51,52)
RF 1980 SC1789 (36)
D 1983 SC 762 (12)
D 1986 SC1668 (11)
D 1986 SC1930 (18)
R 1990 SC 40 (8)
RF 1992 SC 999 (12)
ACT:
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Land Tax-Constitutional validity of enactment-Uniform basic
tax on all lands-Classification--Tax on forest areas-Legis-
lative competence of State--Government’s power to exempt-
Provisional assessment-Validity-Travancore-Cochin Land Tax
Act, 1955 (Travancore-Cochin 15 of 1955), as amended by Act
10 of 1957, ss. 4, 5-A, 7-Constitution of India, Arts. 14,
19(1)(f), 31, 265, Schedule 7, List II, Entries 19, 49.
HEADNOTE:
The Travancore-Cochin Land Tax Act, 1955 was passed by the
legislature of the State of Travancore-Cochin and was
amended by Act 10 of 057, by the State of Kerala. By s. 4
Of the Act all lands in the State of whatever description
and held under whatever tenure were to be charged and levied
a uniform rate of tax to be called the basic tax. Section 7
gave power to the Government to exempt from the operation of
the Act such
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lands or class of lands which the Government may, by
notification, decide. Section 5A which was introduced into
the Act by the Amending Act enabled the Government to make a
provisional assessment of the basic tax in respect of the
lands which had not been surveyed by the Government and
provided that the Government after conducting the survey
shall make a regular assessment and make the necessary
adjustments in respect of the amounts paid already. There
was, however, no time fixed for the conduct of the survey.
The petitioners who owned forest in the State, challenged
the constitutional validity of the Act on the grounds that
the provisions of the Act contravened Arts. 14, 19(i)(f) and
31(1) of the Constitution of India inasmuch as (1) the Act
did not have any regard to the quality of the land or its
productive capacity and the levy of a tax at a flat rate of
RS. 2 per acre imposed very unreasonable restrictions on the
right to hold property, (2) the. Act did not lay down any
provision calling for a return from the assessee for an
enquiry or investigation of facts before the provisional
assessment was made or any right of appeal to any higher
authority and, in fact, did not make any provision for
hearing the assessee at any stage, (3) S. 7 gave arbitrary
power to the Government to pick and choose in the matter of
grant of total or partial exemption from the provisions of
the Act, and (4) the tax proposed to be levied had
absolutely no relation to the production capacity of the
land sought to be taxed or to the income they could derive,
and therefore the Act had been conceived with a view to
confiscating private property, there being no question of
any compensation being paid to those who may be expropriated
as a result of the working of the Act.
The petitioners also challenged the legislative competence
of the legislature of the State to levy a tax on lands on
which forests stood. The case on behalf of the State of
Kerala, inter alia, was that the Act had its justification
in Art. 265 Of the Constitution of India, which was not
subject to the provisions of Part III of the Constitution
and that, therefore, Arts. 14, 19 and 31 could not be
pressed in aid of the petitioners. ,
Held, (Sarkar, J., dissenting), that the Travancore-Cochin
Land Tax Act, 1955, infringed the provisions of Art. 14 Of
the Constitution of India.
The Act obliged every person who held land to pay the tax at
the flat rate prescribed, whether or not he made any income
out of the property, or whether or not the property was
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capable of yielding any income. Consequently, there was no
attempt at classification in the provisions of the Act and
it was one of those cases where the lack of classification
created inequality. It was therefore hit by the prohibition
to deny equality before the law contained in Art. 14.
Section 5A of the Act which enabled the Government to make a
provisional assessment of the basic tax payable by the
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holder of unsurveyed land imposed unreasonable restrictions
on the rights to hold property safeguarded by Art. 19(1)(f)
of the Constitution, inasmuch as (1) the Act did not impose
an obligation on the Government to undertake survey
proceedings within any prescribed or ascertainable period,
with the result that a landholder might be subjected to
repeated annual provisional assessments on more or less
conjectural basis and liable to pay the tax assessed, and
(2) the Act being silent as to the machinery and procedure
to be followed in making the assessment left it to the
Executive, completely ignoring the legal position that the
assessment of a tax on a person or property was at least of
a quasijudicial character.
Section 7 of the Act which vested the Government with the
power wholly or partially to exempt any land from the provi-
sions of the Act did not lay down any principle or policy
for the guidance of the exercise of discretion by the
Government in respect of the selection contemplated by the
section, and was, therefore, discriminatory in effect and
offended Art. 14. The section was not severable from the
rest of the Act as both the charging sections, S. 4 and S.
7, authorising the Government to grant exemptions from the
provisions of the Act were the main provisions of the
statute.
Shri Ram Krishna Dalmia v. Sri justice S. R. Tendolkar,
[1959] S.C.R. 279, relied on.
The Act was also confiscatory in character inasmuch as the
provisions of the Act had the effect of eliminating the
private owners through the machinery of the Act, without
proposing to acquire the privately owned forests in the
State after satisfying the conditions laid down in Art. 31
of the Constitution.
Per Sinha, C.J., Imam, Subba Rao and Shah, JJ.-Article 265
of the Constitution which provided that the State shall not
levy or collect a tax except by authority of law referred to
a valid law, and in order that the law might be valid, the
tax proposed to be levied must be within the legislative
competence of the Legislature imposing a tax and authorising
the collection thereof and, secondly, the tax must be
subject to the conditions laid down in Art. 13, by which all
laws inconsistent with or in derogation of the fundamental
rights in Part III shall be void.
Per Sarkar, J.-(1) The object of the Act was to tax land in
the State for raising revenues by providing for a low and
uniform rate of basic tax replacing all other dues payable
to the Government and the tax payers were classified
according to the area of lands held by them. Such a
classification had an intelligible basis and had a rational
relation to the object of the Act. As tax was to be levied
not because the land was productive but because the land was
held in the State, the classification did not offend Art. 14
Of the Constitution, even though it might impose unequal
burden of the tax on the owners of land on account of owners
of less productive land being put on a larger burden.
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(2)Section 5A did not offend Art. 14 and in the absence of
express provisions laying down the procedure according to
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which the provisional assessment was to be made, the Act
could not be held invalid on the ground that it was against
the rules of natural justice.
(3)Section 7, even if it were considered invalid on the
ground that it gave arbitrary power to the Government and
offended Art. 14, was severable from the rest of the Act and
would not affect the other provisions of the Act.
(4)The Act did not infringe the fundamental rights in Art.
19(1)(f) as the rate of tax fixed by the Act was a very low
rate and the restrictions on those rights were reasonable.
(5) The Act was not in its nature expropriatary and did not
offend Art. 31. As there was no want of legislative
competence, theAct could not be assailed as a piece of
colourable legislation on the ground that though in form a
taxing statute it, in effect, was intended to expropriate
lands by imposing a tax too heavy for the land to bear.
(6)The word "land" in Entry 49 of List II, Sch. 7, of the
Constitution, included "land on which a forest stands" and,
therefore, under that Entry taxation on land on which
forests stood was permissible and legal. The Act,
therefore, could not be challenged as being beyond the
legislative competence of the State Legislature.
JUDGMENT:
ORIGINAL JURISDICTION: Petitions Nos. 13 to 24, 42 and 46 to
54 of 1958.
Petitions under Article 32 of the Constitution of India for
enforcement of Fundamental Rights.
M.C. Setalvad, Attorney-General for India, Syed Mahmud,
J. B. Dadachanji, S. N. Andley, Rameshwar Nath and P. L.
Vohra, for the petitioners in petitions Nos. 13-18, and 46-
54 of 1958.
C.K. Daphtary, Solicitor-General of India, Syed Mahmud,
J. B. Dadachanji, S. N. Andley, Rameshwar Nath and P. L.
Vohra, for the petitioners in Petitions Nos. 19-24 of 1958.
S.N. Andley, Rameshwar Nath, J. B. Dadachanji and P. L.
Vohra, for the petitioner in petition No. 42 of 1958.
K.V. Suryanarayana Iyer, Advocate General of Kerala and
Sardar Bahadur, for the respondents.
1960. December, 9. The Judgment of Sinha, C.J., Jafer Imam,
Subba Rao and Shah, JJ., was delivered
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by Sinha, C. J. Sarkar, J., delivered a separate Judgment.
SINHA, C. J.-In this batch of 22 petitions under Art. 32 of
the Constitution, the petitioners impugn the
constitutionality of the Travancore-Cochin Land Tax Act, XV
of 1955, as amended by the Travancore-Cochin Land Tax
(Amendment) Act, X of 1957, which hereinafter will be
referred to as the Act. The Act came into force on June 21,
1955, and the Amending Act on August 6, 1957. The
petitioners are owners of forest areas in certain parts of
the State of Kerala, which, before the reorganisation of
States, formed part of the State of Madras. The respondents
to the petitions are: (1) the State of Kerala and (2) the
District Collector, Palghat:
These petitions are based on allegations, which are, more or
less, similar, and the following allegations made in Writ
Petition No. 42 of 1958 may be taken as typical and an
extreme case, which was placed before us in detail to bring
into bold relief the full significance and effect of the
legislation impugned in these cases. The petitioner in
Petition 42 of 1958 is a citizen of India, who owns forests
in certain parts of Palghat Taluk in Palghat District, which
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was part of the State of Madras before the reorganisation of
States. These forests are now in the State of Kerala. Up
to the time that these forests were in the State of Madras,
as it then was, the Madras Preservation of Private Forests
Act, Madras Act XXVII of 1949, governed these forests. Even
after these areas were transferred to the State of Kerala,
the said Madras Act, XXVII of 1949, continued to apply to
these forests. Under the said Madras Act the owners of
forests, like the petitioner, could not sell, mortgage,
lease or otherwise alienate any portion of their forests
without the previous sanction of the District Collector; nor
could they, without similar permission, cut trees or do any
act likely to denude the forest or diminish its utility, as
such. The District Collector, in exercise of the powers
under the Act, does not ordinarily permit the cutting of
more than a small
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number of trees in the forest. Thus the petitioner has not
the right fully to exploit the forest wealth in his forest
area and has to depend upon the previous permission of the
Collector. In exercise of the powers given to the Collector
under the Madras Act aforesaid, the petitioner’s lessee was
given permission to cut certain trees in his forest, which
brings to the petitioner by way of income from. the forest,
a sum of Rs. 3,100 per year. Under the Act, a tax called
land tax at a flat rate of Rs. 2 per acre has been imposed
on the petitioner. In pursuance of the provisions of the
Act, as amended as aforesaid, the District Collector of
Palghat, purporting to act under the provisions of s. 5A of
the Act, issued a notice to the petitioner provisionally
assessing the petitioner’s forest under the said Act to a
sum of fifty thousand rupees per annum and informing the
petitioner that, if no representation was made within thirty
days, the said provisional assessment would be confirmed and
a demand notice would be issued. As there has been no
survey of the area of forest land in the petitioner’s
possession, the District Collector has conjectured the said
area to be twenty-five thousand acres. The Petitioner had
made an application to the District Collector under the
Madras Preservation of Private Forests Act for felling trees
in an area of one thousand acres, but the Collector was
pleased to grant permission to out trees from 450 acres only
in the course of five years at the rate of 90 acres a year.
The petitioner has leased out that right to another person,
who made the highest bid of Rs. 3,100 per year, as the
landlord’s fee for the right to cut and remove the trees,
and other minor produce. Besides the demand aforesaid, the
revenue authorities have levied about four thousand rupees
as tax on the surveyed portions of the forest. The
petitioner’s forest has large areas of and rocks, rivulets
and gorges. The petitioner, in those circumstances,
questions the constitutional validity of the Act, the
provisions of which will be examined hereinafter.
These petitions have been opposed on behalf of the first
respondent and the allegations and submissions
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made in the petitions are sought to be controverted by a
counter affidavit sworn to by an Assistant Secretary of the Kerala Gover
nment in the Revenue Department. It is in
similar terms, as a matter of fact printed in most of these
cases. It is contended therein on behalf of the respondent
that the petitions are not maintainable in as much as no
fundamental rights of the petitioners have been infringed;
that the allegations about the income, from the forest lands are not admi
tted; and by way of submission, it is added,
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they are irrelevant for the purposes of these petitions. It
is stated that the Act was passed with a view to unifying
the system of land tax in the whole of the State of Kerala.
It is submitted that the validity of the Act has to be
determined in the light of Art. 265 of the Constitution and
that Arts. 19 and 31 were wholly out of the way. It is
denied that the tax imposed was harsh or arbitrary, or has
the effect of violating the petitioner’s right of holding
property; and it was asserted that the allegations in
respect of income from the forests are entirely irrelevant,
as the tax was not a tax on income, but was an "impost on
land". It is equally irrelevant whether the land is
productive or not. It is also contended that, in view of
the provisions of Art. 31(5)(b)(i) of the Constitution, Art.
31(2) could not be relied upon by the petitioners. The
allegation of the petitioners that the Act is a device to
confiscate private forests is denied. It is admitted that,
except in certain cases, the entire area is unsurveyed and
that steps are being taken for surveying those areas. It is
also stated that the areas shown in the notices served on
the petitioners are based on information available to the
Collector of the District; and lastly, it is stated that
only notice has been issued calling upon the petitioners to
make their representations, if any, to the proposed
provisional assessments. The assessments have not yet been
made, and, therefore, there is no question of demand of tax
being enforced by coercive processes. Finally, it is
suggested that the Act has been enacted for the legitimate
revenue purposes of the State.
Before entering upon a discussion of the points in
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controversy, it is convenient at this stage to indicate
briefly the relevant provisions of the Act which is impugned
by the petitioners as ultra vires the State Legislature.
The preamble of the Act is in these terms:-
"Whereas it is deemed necessary to provide for
the levy of a low and uniform rate of basic
tax on all lands in the State of Travancore-
Cochin."
Basic tax has been defined as "the tax imposed under the
provisions of this Act". Section 3 lays down that the
arrangement made under the Act for the levy of the basic tax
shall be deemed inter alia to be a general revenue
settlement of the State, notwithstanding anything in any
statute, grant, deed or other transaction subject to certain
provisos not material for our present purposes. The
charging section is s. 4, which is in these terms:-
"Subject to the provisions of this Act, there
shall be charged and levied in respect of all
lands in the State, of whatever description
and held under whatever tenure, a uniform rate
of tax to be called the basic tax."
Section 5 lays down the rate of the tax which, by the
Amendment, has been raised to Rs. 2 per acre (two pies per
cent. of land per annum) and the basic tax charged and
levied at that rate shall be the tax payable to the
Government in lieu of any existing tax in respect of land.
Section 6 lays down that any stipulation in any contract or
agreement or lease or other transaction to pay land revenue
assessment of any land shall be construed as stipulation for
the payment of the amount. of basic tax, as charged and
levied under the Act. Section 7 is in these terms:-
"This Act is not applicable to lands held or
leased by the Government or any land or class
of lands which the Government may, by
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notification in the Gazette, either wholly or
partially exempt from the provisions of this
Act."
Sections 8 and 9 provide for the continuance of the
liability to pay certain dues in respect of existing tenures
in addition to the basic tax in respect of lands covered by
those tenures. Section 10 abolishes the
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irrigation assessment charged on certain tank beds and other
water reservoirs named and described therein. Section 11
preserves the right of the Government to levy certain
irrigation and water cesses and lays down that the Act shall
not affect the power of the Government to levy any rate or
alter any existing rate of irrigation or water cess on any
land, as they deem fit. Cesses, other than those mentioned
in s. 11, are also abolished by s. 12. Section 13
authorises the Government to appoint such officers as they
deem necessary for the purpose of the Act. Section 14 lays
down the bar of suits against the Government in respect of
anything done or any order passed under the Act. Section 15
saves the right of the Government which accrued to it before
the Act came into force as also the conditions of any
agreement. grant or deed relating to any land, except to the
extent indicated in the Act. Section 16 vests the
Government with the power to make rules for carrying into
effect the provisions of the Act, with particular reference
to the power to make rules for the apportionment of the
basic tax charged on certain kinds of holdings, for defining
the powers and duties of the officers appointed under the
Act and for determining the kist instalments and the due
date for the payment thereof. These in short are the
provisions of the Act. The Act, as indicated above, was
amended by Act X of 1957 which substituted the words "State
of Kerala" for the words "State of Travancore-Cochin" and
made certain other consequential changes. The Amending Act
introduced section 5A, which has been very much assailed in
the course of the argument before us and it is, therefore,
necessary to set it out in full. It is in these terms:-
"S. 5A. Provisional assessment of basic tax
in the case of unsurveyed land8.-(1) It shall
be competent for the Government to make a
provisional assessment of the basic tax
payable by a person in respect of the lands
held by him and which have not been surveyed
by the Government, and upon such assessment
such person shall be liable to pay the amount
covered in the provisional assessment.
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(2)The Government after conducting a survey
of the lands referred to in sub-section (1)
shall make a regular assessment of the basic
tax payable in respect of such lands. After a
regular assessment has been made, any amount
paid towards the provisional assessment made
under sub-section (1) shall be deemed to have
been paid towards the regular assessment and
when the amount paid towards the provisional
assessment exceeds, the amount payable under
the regular assessment, the excess shall be
refunded to the person assessed."
By s. 9, s. 3 of the Madras Revenue Recovery Act, 1864, has
been substituted in these terms:
"3. Landholder when and to whom to pay kist.-
Every landholder shall pay to the Collector or
other officer empowered by ’him in this behalf
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the land tax due from him on or before the day
fixed for payment under the rules framed under
s. 16 of the Land Tax Act, 1955."
From a review of the provisions of the Act, as amended as
aforesaid, it will be clear that the provisions of the Act
lay down in barest outline the policy to impose a uniform
and, what is asserted to be, a low rate of land tax on all
lands in the State of Kerala. Unlike other taxing statutes,
it does not make any provision for issue of notice to the
assessee, nor is there any provision for submission of a
return by the assessee. By s. 5A, it authorises the
Government to make a "provisional assessment" in respect of
land, which has not been surveyed, and such provisional
assessment is made payable by the person made liable under
the Act. It does not make any provision for any appeals in
cases where the assessee may feel dissatisfied with the
assessment. The Act does contemplate the making of "a
regular assessment of the basic tax". But it does not
indicate as to when the regular assessment would be made,
except indicating that it can be made only after a survey
has been made in respect of the land assessed. The Act
could not have been cast in more general terms and the
proceedings under the Act could not have been more summary.
It has thus the merit of brevity as also of simplicity,
derived
87
from the fact that a tax is levied at a flat rate, irres-
pective of the quality of the land and consequently of its
productive capacity. Under the Act, the charge has to be
levied, whether or not any income has been derived from the
land. The Legislature was so much in earnest about levying
and realising the tax that it could not even wait for a
regular survey of the lands to be assessed with a view to
determining the extent and character of the land.
Such are the provisions and the effect of the Act, which has
been assailed on a number of grounds on behalf of the
petitioners. It is contended, in the first instance, that
inequality is writ large in the provisions of the Act, which
is clearly discriminatory in character and effect and thus
infringes Art. 14 of the Constitution. As the Act does not
have any regard to the quality of the land or its productive
capacity, and a tax at a flat rate of Rs. 2 per acre is
proposed to be levied under the Act, it is further
contended, it imposes very unreasonable restrictions on the
right to hold property and is thus an invasion on the rights
guaranteed to the petitioners under Art. 19(1)(f) of the
Constitution. The Act does not lay down any provision
calling for a return from the assessee, for any enquiry or
investigation of facts before the provisional assessment is
made or for any right of appeal to any higher authority from
the order of provisional assessment; in fact, there is no
provision for hearing the assessee at any stage. The Act is
of an arbitrary character and is thus wholly repugnant to
the guaranteed rights of the petitioners. Section 7 quoted
above gives uncanalised, unlimited and arbitrary power to
the Government to pick and choose in the matter of grant of
total or partial exemption from the provisions of the Act.
It also suffers from the vice of discrimination. It has
also been vehemently argued that the Act, though it purports
to be a tax on land, is really a law relating to forests in
possession of the petitioners and would not come within the
purview of entry 18 read by itself or in conjunction with
entry 45 of List II, but is law relating to forests under
entry 19. If we tear the veil in which the real
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purpose and effect of the Act has been shrouded, ’it will I
appear that the true character and effect of the Act is not
to levy a tax on land, but to expropriate the private owners
of the forests without payment of any compensation
whatsoever. Lastly, it has been urged that the whole Act
has been conceived with a view to confiscating private
property, there being no question of any compensation being
paid to those who may be expropriated as a result of the,
working of the Act. This last argument is based on the
assertion that the tax proposed to be levied on private
property in the State of Kerala has absolutely no relation
to the paying capacity of the persons sought to be taxed,
with reference to the income they could derive, or actually
did derive from the property.
On behalf of the State of Kerala, the learned Advocate-
General has argued that, though in most of the cases, that
is to say, except in seven petitions (Petitions 21, 22, 47,
49, 50, 51 and 54) the lands have not been surveyed, the
areas mentioned in the notices proposing provisional
assessment have been ascertained through the local agencies
of the Government. It was further contended that the State
had only declared the liability to the payment of the tax at
a flat rate of Rs. 2 per acre in respect of land,
irrespective of the income to be derived therefrom. Hence
there was no necessity for making provision for a detailed
enquiry or investigation. The rate of the tax being known,
and the area of the land to be taxed having been locally
ascertained, even though without any regular survey, what
remained was merely quantifying the tax, which was of a
purely administrative character. The local agencies
estimated the land in possession of particular persons.
Those persons were called upon to pay provisionally at the
rate fixed by the statute. The State has, by executive
action, appointed authorities who are expected to act in
accordance with the principle of natural justice. There
was, therefore, no need for laying down any elaborate
procedure as in other instances of taxing statutes. There
is a presumption that the authority appointed by the
Government would act bona fide and in a
89
proper manner. If there was any case of unfair dealings,
the matter could be brought to the Court. It was greatly
emphasised that as a flat rate of taxation had been
envisaged by the Act and as ultimately the tax at that rate
would be realised from land found to be in possession of
particular persons after a regular survey, the regular
survey to be ultimately made would automatically determine
the amount of tax to be paid and the adjustment of the taxes
already paid could be made on that basis. On the legal
aspect of the controversy raised on behalf of the
petitioners, it was argued that the Act has its
justification in Art. 265 of the Constitution, which was not
subject to the provisions of Part III of the Constitution
and that, therefore, Arts. 14, 19, 31 could not be pressed
in aid of the petitioners. It was also contended that even
if the Act is, in effect, confiscatory, it cannot be
questioned, being a taxing statute. Finally, it was urged
that the question of the amount of income derived by the
petitioners from the property sought to be taxed is wholly
irrelevant, because the Act was not a tax on income but it
was a tax on the property itself.
The most important question that arises for consideration in
these cases, in view of the stand taken by the State of
Kerala, is whether Art. 265 of the Constitution is a
complete answer to the attack against the constitutionality
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of the Act. It is, therefore, necessary to consider the
scope and effect of that Article. Article 265 imposes a
limitation on the taxing power of the State in so far as it
provides that the State shall not levy or collect a tax,
except by authority of law, that is to say, a tax cannot be
levied or collected by a mere executive fiat. It has to be
done by authority of law, which must mean valid law. In
order that the law may be valid, the tax proposed to be
levied must be within the legislative competence of the
Legislature imposing a tax and authorising the collection
thereof and, secondly, the tax must be subject to the
conditions laid down in Art. 13 of the Constitution. One of
such conditions envisaged by Art. 13(2) is that the
Legislature shall not make any law which
90
takes away or abridges the equality clause in Art. 14, which
enjoins the State not to deny to any person equality before
the law or the equal protection of the laws of the country.
It cannot be disputed that if the Act infringes the
provisions of Art. 14 of the Constitution, it must be struck
down as unconstitutional. For the purpose of these cases,
we shall assume that the State Legislature had the necessary
competence to enact the law, though the petitioners have
seriously challenged such a competence. The guarantee of
equal protection of the laws must extend even to taxing
statutes. It has not been contended otherwise. It does not
mean that every person should be taxed equally. But it does
mean that if property of the same character has to be taxed,
the taxation must be by the same standard, so that the
burden of taxation may fall equally on all persons holding
that kind and extent of property. If the taxation,
generally speaking, imposes a similar burden on every one
with reference to that particular kind and extent of
property, on the same basis of taxation, the law shall not
be, open to attack on the ground of inequality, even though
the result of the taxation may be that the total burden on
different persons may be unequal. Hence, if the Legislature
has classified persons or properties into different
categories, which are subjected to different rates of
taxation with reference to income or property, such a
classification would not be open to the attack of inequality
on the ground that the total burden resulting from such a
classification is unequal. Similarly, different kinds of
property may be subjected to different rates of taxation,
but so long as there is a rational basis for the
classification, Art. 14 will not be in the way of such a
classification resulting in unequal burdens on different
classes of properties. But if the same class of property
similarly situated is subjected to an incidence of taxation,
which results in inequality, the law may be struck down as
creating an inequality amongst holders of the same kind of
property. It must, therefore, be held that a taxing statute
is not wholly immune from attack on the ground that it
infringes the equality clause ill
91
Art. 14, though the Courts are not concerned with the policy
underlying a taxing statute or whether a particular tax
could not have been imposed in a different way or in a way
that the Court might think more just and equitable. The Act
has, therefore, to be examined with reference to the attack
based on Art. 14 of the Constitution.
It is common ground that the tax, assuming that the Act is
really a taxing statute and not a confiscatory measure, as
contended on behalf of the petitioners, has no reference to
income, either actual or potential, from the property sought
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to be taxed. Hence, it may be rightly remarked that the Act
obliges every person who holds land to pay the tax at the
flat rate prescribed, whether or not he makes any income out
of the property, or whether or not the property is capable
of yielding any income. The Act, in terms, claims to be "a
general revenue settlement of the State" (s. 3).
Ordinarily, a tax on land or land revenue is assessed on the
actual or the potential productivity of the land sought to
be taxed. In other words, the tax has reference to the
income actually made, or which could have been made, with
due diligence, and, therefore, is levied with due regard to
the incidence of the taxation. Under the Act in question we
shall take a hypothetical case of a number of persons owning
and possessing the same area of land. One makes nothing out
of the land, because it is arid desert. The second one does
not make any income, but could raise some crop after a
disproportionately large investment of labour and capital.
A third one, in due course of husbandry, is making the land
yield just enough to pay for the incidental expenses and
labour charges besides land tax or revenue. The fourth is
making large profits, because the land is very fertile and
capable of yielding good crops. Under the Act, it is
manifest that the fourth category, in our illustration,
would easily be able to bear the burden of the tax. The
third one may be able to bear the tax. The first and the
second one will have to pay from their own pockets, if they
could afford the tax. If they cannot afford the tax, the
property is
92
liable to be sold, in due process of law, for realisation of
the public demand. It is clear, therefore, that inequality
is writ large on the Act and is. inherent in the very
provisions of the taxing section. It is also clear that
there is no attempt at classification in the provisions of
the Act. Hence, no more need be said as to what could have
been the basis for a valid classification. It is one of
those cases where the lack of classification creates
inequality. It is,, therefore, clearly hit by the
prohibition to deny equality before the law contained in
Art. 14 of the Constitution. Furthermore, sec. 7 of the
Act, quoted above, particularly the latter part, which vests
the Government with the power wholly or partially to exempt
any land from the provisions of the Act, is clearly
discriminatory in its effect and, therefore, infringes Art.
14 of the Constitution. The Act does not lay down any
principle or policy for the guidance of the exercise of
discretion by the Government in respect of the selection
contemplated by a. 7. This Court has examined the cases
decided by it with reference to the provisions of Art. 14 of
the Constitution, in the case of Shri Ram Krishna Dalmia v.
Shri Justice S. B. Tendolkar and others (1). S. R. Das, C.
J., speaking for the Court has deduced a number of
propositions from those decisions. The present case is
within the mischief of the third proposition laid down at
pages 299 and 300 of the Report, the relevant portion of
which is in these terms:-
"A statute may not make any classification of
the persons or things for the purpose of
applying its provisions but may leave it to
the discretion of the Government to select and
classify persons or things to whom its
provisions are to apply. In determining the
question of the validity or otherwise of such
a statute the Court will not strike down the
law out of hand only because no classification
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appears on its face or because a discretion is
given to the Government to make the selection
or classification but will go on to examine
and ascertain if the statute has laid down any principle or
policy for the guidance of the
exercise of discretion by the Government in
the matter of the selection or classification.
93
After such scrutiny the Court will strike down
the statute if it does not lay down any
principle or policy for guiding the exercise
of discretion by the Government in the matter
of selection or classification, on the ground
that the statute provides for the delegation
of arbitrary and uncontrolled power to the
Government so as to enable it to discriminate
between persons or things similarly situate
and that, therefore, the discrimination is
inherent in the statute itself" (p. 299 of the
Report).
The observations quoted above from the unanimous judgment of
this Court apply with full force to the provisions of the
Act. It has, therefore, to be struck down as
unconstitutional. There is no question of severability
arising in this case, because both the charging sections, s.
4 and s. 7, authorising the Government to grant exemptions
from the provisions of the Act, are the main provisions of
the Statute, which has to be declared unconstitutional.
The provisions of the Act are unconstitutional viewed from
the angle of the provisions of Art. 19(1)(f) of the
Constitution, also. Apart from the provisions of ss. 4 and
7 discussed above, with reference to the test under Art. 14
of the Constitution, we find that s. 5(A) is also equally
objectionable because it imposes unreasonable restrictions
on the rights to hold property, safeguarded by Art. 19(1)(f)
of the Constitution. Section 5(A) declares that the
Government is competent to make a provisional assessment of
the basic tax payable by the holder of unsurveyed land.
Ordinarily, a taxing statute lays down a regular machinery
for making assessment of the tax proposed to be imposed by
the statute. It lays down detailed procedure as to notice
to the proposed assessee to make a return in respect of
property proposed to be taxed, prescribes the authority and
the procedure for hearing any objections to the liability
for taxation or as to the extent of the tax proposed to be
levied, and finally, as to the right to challenge the
regularity of assessment made, by recourse to proceedings in
a higher Civil Court. The Act merely declares the
competence of the Government to make
94
a provisional assessment, and by virtue of s. 3 of the
Madras Revenue Recovery Act, 1864, the land-holders may be
liable to pay the tax. The Act being silent as to the
machinery and procedure to be followed in making the
assessment leaves it to the Executive to evolve the
requisite machinery and procedure. The whole thing, from
beginning to end, is treated as of a purely administrative
character, completely ignoring the legal position that the
assessment of a tax on person or property is at least of a
quasi-judicial character. Again, the Act does not impose an
obligation on the Government to undertake survey proceedings
within any prescribed or ascertainable period, with the
result that a land-holder may be subjected to repeated
annual provisional assessments on more or less conjectural
basis and liable to pay the tax thus assessed. Though the
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Act was passed about five years ago, we were informed at the
Bar that survey proceedings had not even commenced. The Act
thus proposes to impose a liability on land-holders to pay a
tax which is not to be levied on a judicial basis, because
(1) the procedure to be adopted does not require a notice to
be given to the proposed assessee; (2) there is no procedure
for rectification of mistakes committed by the Assessing
Authority; (3) there is no procedure prescribed for
obtaining the opinion of a superior Civil Court on questions
of law, as is generally found in all taxing statutes, and
(4) no duty is cast upon the Assessing Authority to act
judicially in the matter of assessment proceedings. Nor is
there any right of appeal provided to such assessees as may
feel aggrieved by the order of assessment.
That the provisions aforesaid of the impugned Act are in
their effect confiscatory is clear on their face. Taking
the extreme case, the facts of which we have stated in the
early part of this judgment, it can be illustrated that the
provisions of the Act, without proposing to acquire the
privately owned forests in the State of Kerala after
satisfying the conditions laid down in Art. 31 of the
Constitution, have the effect of eliminating the private
owners through the machinery of the Act. The petitioner in
petition 42
95
of 1958 has been assumed to own 25 thousand acres of forest
land. The liability under the Act would thus amount to Rs.
50,000 a year, as already demanded from the petitioner on
the basis of the provisional assessment under the provisions
of s. 5(A). The petitioner is making an income of Rs. 3,100
per year out of the forests. Besides, the liability of Rs.
50,000 as aforesaid, the petitioner has to pay a levy of Rs.
4,000 on the surveyed portions of the said forest. Hence,
his liability for taxation in respect of his forest land
amounts to Rs. 54,000 whereas his annual income for the time
being is only Rs. 3,100 without making any deductions for
expenses of management. Unless the petitioner is very
enamoured of the property and of the right to hold it may be
assumed that he will not be in a position to pay the deficit
of about Rs. 51,000 every year in respect of the forests in
his possession. The legal consequences of his making a
default in the payment of the aforesaid sum of money will be
that the money will be realised by the coercive processes of
law. One can, easily imagine that the property may be sold
at auction and may not fetch even the amount for the
realisation of which it may be proposed to be sold at public
auction. In the absence of a bidder forthcoming to bid for
the offset amount, the State ordinarily becomes the auction
purchaser for the realisation of the outstanding taxes. It
is clear, therefore, that apart from being discriminatory
and imposing unreasonable restrictions on holding property,
the Act is clearly confiscatory in character and effect. It
is not even necessary to tear the veil, as was suggested in
the course of the argument, to arrive at the conclusion that
the Act has that unconstitutional effect. For these
reasons, as also for the reasons for which the provisions of
ss. 4 and 7 have been declared to be unconstitutional, in
view of the provisions of Art. 14 of the Constitution, all
these operative sections of the Act, namely 4, 5A and 7,
must be held to offend Art. 19(1)(f) of the Constitution
also.
The petitions are accordingly allowed with costs against the
contesting respondent, the State of Kerala.
96
SARKAR,J.- These petitions were filed under Art.32 of the
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Constitution, challenging the validity of the Travancore-
Cochin Land Tax Act, 1955, as amended by Act X of 1957. The
principal Act was passed by the legislature of the State of
Travancore-Cochin and the Amending Act, by the legislature
of the State of Kerala, in which the State of Travancore-
Cochin had been merged. The petitioners are owners of lands
in the State of Kerala. The Act as amended and hereafter
referred to as the Act, levied a certain basic tax on all
lands in the State of Kerala. The petitioners say that the
levy is illegal and violates their fundamental rights.
It appears from the preamble that the Act was passed as it
was deemed necessary to provide for the levy of a low and
uniform rate of basic tax on all lands in the State. The
Act provides that the arrangement made by it for the levy of
the basic tax is to be deemed to be a general revenue
settlement of the State. Section 4 of the Act is the
charging section and it lays down that there shall be
charged and levied in respect of all lands in the State, of
whatever description and held under whatever tenure, a
uniform rate of tax to be called the basic tax. Section 5
fixes the rate of the tax at 2 n.P. per cent which works out
at Rs. 2 per acre per annum. This section also provides
that the basic tax shall be the tax payable to the
Government in lieu of any other existing tax in respect of
land. Section 12 abolishes all cesses on land except
irrigation cess.
The first ground on which the validity of the Act is
challenged is that it offends the provision as to the equal
protection of the laws contained in Art. 14 of the
Constitution. The Act applies to all lands in the State and
it imposes an uniform rate of tax, namely, Rs. 2 per acre.
It is said that all lands in the State have not the same
productive quality; that some are waste lands and others,
lands of varying degrees of fertility. The contention is
that the tax weighs more heavily on owners of waste lands
than on owners of fertile lands. It is said that it is
bound to happen that some owners make no income out of their
lands
97
or make a small income and they would have to pay the tax
out of their pocket while the owners of better classes of
lands yielding larger income would be able to pay the tax
out of the income from the lands. It is contended that the
Act therefore discriminates between several classes of
owners of lands in the State and is void as infringing the
equality clause in the Constitution. It may be conceded
that all lands in the State are not of the same degree of
fertility. I am however unable to see that because of that,
the Act can be said to discriminate between the owners of
them.
What is really said appears to be that the Act makes a
classification of the owners of lands according to areas.
Assume that the Act does so. The question then is, is such
a classification illegal? The equal protection clause in
the Constitution does not mean that there shall be no
classification for the purpose of any law. It has been said
by this Court in Budhan Choudhury v. The State of Bihar(1):
"It is now well established that while article 14 forbids
class legislation, it does not forbid reasonable
classification for the purposes of legislation. In order,
however, to pass the test of permissible classification two
conditions must be fulfilled, namely, (i) that the
classification must be founded on an intelligible
differential which distinguishes persons or things that are
grouped together from others left out of the group and (ii)
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that differential must have a rational relation to the
object. Bought to be achieved by the statute in question".
On the argument of the petitioners, the Act makes a
classification between owners of lands using as the
differentia, the area of the land held by them. The
question then, is, is that differentia intelligible and has
that differentia a rational relation to the object of the
Act? Now it seems to me that both the tests are satisfied
in the present case. The tax payers are classified
according to the area of lands held by them. That is quite
an intelligible basis on which to make a classification;
holders of varying areas of land can
(1) [1955] 1 S.C.R. 1045 1049.
13
98
quite understandably be placed in different classes.
Next, has such a basis of classification, a rational
relation to the object of the Act? The Act is a taxing
statute. It is intended to collect revenue for the
governmental business of the State. It says that one of its
objects is to provide a low and uniform rate of basic tax.
Another object mentioned is to replace all other dues
payable to the Government in respect of the ownership of the
land by a uniform basic tax. Why is it to be said that the
use of the area of land held as the basis of classification
has no rational relation to these objects. I find no
reason. The object is to tax land held in the State for
raising revenues. It is the holding of the land in the
State that makes the owner liable to pay tax. It would
follow that the quantum of the tax can be reasonably linked
with the quantum of the holding.
Why is it said that the classification on the basis of area
is bad? It is only because it imposes unequal burden of the
tax on the owners of land; because owners of less productive
land would have a larger burden put on them. Now if this
argument is right, then tax on land can be imposed only
according to its productivity. I have not been shown any
authority which goes to this length. I am further unable to
see how productivity as the basis of classification could be
said to have a more rational relation to the object of a
statute collecting revenue by taxing land held in the State.
The tax is not levied because the land is productive but
because the land is held in the State. Again if the tax
which could be imposed on land had to be correlated to its
productivity, then the State would have no power to tax
unproductive land and the provision in the Constitution that
it would have power to tax land would, to that extent, be
futile. It seems to me that a contention leading to such a
result cannot be accepted.
Reliance was placed for the petitioners on Cumberland Coal
Company v. Board of Revision on Tax Assessments (1) in
support of the contention that a tax on land not based on
its productivity, violates Art. 14.
(1) 76 L.Ed. 146.
99
I am unable to hold that this case supports the contention.
What had happened there was that a certain statute had
imposed a tax ad valorem on all coal situated in a certain
area and in assessing the tax, the coal of the Cumberland
Coal Company had been assessed by the authorities concerned
at its full value while the coal of the rest of the class
liable to the tax had been assessed at a lower value.
Thereupon it was held that "the intentional systematic
undervaluation by State Officials-of taxable property of the
same class belonging to other owners contravenes the con-
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stitutional right of one taxed on the full value of his
property." On this view of the matter the Supreme Court of
America directed readjustment of the assessments. The
statute with which this case was concerned had levied the
tax ad valorem which, it may be, is the same thing as a tax
correlated to productivity. The case had therefore nothing
to do with the question that a tax on coal otherwise than ad
valorem would be unconstitutional. In fact this case did
not declare any statute invalid.
Then it seems to me that if the contention of the
petitioners is right, and land could be taxed only on its
productivity, for the same reason, taxes on all other things
would have to be correlated to the income to be derived from
them. The result would be far reaching. I am not prepared
to accept a contention producing such a result and no
authority has been cited to lead me to accept it.
It may be that as lands are not of equal productivity, some
tax payers may be able to pay the tax out of the income of
the land taxed while others may have to find the money from
another source. To this extent the Act may be more hard on
some than on others. But I am unable to see that for that
reason it is unconstitutional. All class legislation puts
some in a more disadvantageous position than others. If the
classification made by the law is good, as I think is the
case with the present Act, the resultant hardship alone
cannot make it bad. It was said in Magonn v. Illinois
Trust and Savings Bank(1), "It is hardly
(1) 42 L.Ed. 1037, 1043.
100
necessary to say that hardship, impolicy, or injustice of
state laws is not necessarily an objection to their
constitutional validity."
It is then said that sub-sec. (1) of s. 5A, which was
introduced into the Act by the Amending Act, offends Art.
14. The impugned provision is in these terms:
S.5A. (1) It shall be competent for the
Government to make a provisional assessment of
the basic tax payable by a person in respect
of the lands held by him and which have not
been surveyed by the Government, and upon such
assessment such person shall be liable to pay
the amount covered in the provisional
assessment.
This section was enacted as at the date of the Act, all
lands had not been surveyed and so the areas of all holdings
were not known. In the absence of such knowledge the tax
which was payable on the basis of the areas of the holdings
could not be assessed on unsurveyed lands, so the section
provides that pending the survey, the Government will have
power to make a provisional assessment on unsurveyed lands.
This provision was necessary as the survey was bound to take
time.
The contention is that a. 5A(1) gives arbitrary power to the
Government to make a provisional assessment on any person it
chooses, leaving out others from the provisional assessment.
I am unable to read the sub-section in that way. It may be
that it leaves it to the Government to make a provisional
assessment if it chooses. This does not result in any
illegal classification. The surveyed lands and unsurveyed
lands are distinct classes of properties and may be
differently treated. Again, all unsurveyed lands would on
survey have to pay tax from the beginning. It would follow
that the holders of both classes of lands are eventually
subjected to the same burden. As to the contention that
under this section the Government has the right to levy the
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provisional assessment at its choice on some and not on all
holders of unsurveyed lands, I am unable to agree that this
is a proper reading of the section. In my view, the
101
expression "a person" in the section does not lead to that
conclusion. That expression should be read as "all persons"
and it is easily capable of being so read. The section
says, "It shall’ be competent for the’ Government to make a
provisional assessment of the basic tax payable by a
person". Now the basic tax is payable by all persons
holding land. So the provisional assessment, if made, has
to be on all persons holding lands whose lands have not been
surveyed. The Government cannot, therefore, pick and
choose. A statute is intended to be legal and it has
therefore to be read in a manner which makes it legal rather
than in a manner which makes it illegal. If the Government
did not make the provisional assessment in the case of all
liable to such assessment, then the Government’s action
could be legitimately questioned. It has however not in
fact been said in these petitions that in deciding to make
the provisional assessment the Government has made any
discrimination between the persons liable to such
assessment.
Section 5A(1) is also attacked on the ground that it is
against rules of natural justice in that it does not say
that in making the provisional assessment, any hearing would
be given to the person sought to be assessed or requiring a
return from him or giving him a right of appeal in respect
of the provisional assessment made. It is true that the’
section does not expressly provide for a hearing being
given. It seems to me however that if according to the
rules of natural justice the assessee was entitled to a
hearing, an assessment made without giving him such a
hearing would be bad. The Act must be read so as to imply a
provision requiring compliance with the rules of natural
justice. Such a reading is not impossible in the present
case as there is nothing in the Act indicating that the
rules of natural justice need not be observed.
It was said in Spack man v. Plumstead Board of Works (1)
where a statute requiring an architect to give a certain
certificate which did not provide the procedure as to how
the architect was to conduct himself, came up for
consideration that, "No doubt, in the
(1) 10 A.C. 229, 240.
102
absence of special provisions as to how the person who is to
decide is to proceed, the law will imply no more than that
the substantial requirements of justice shall not be
violated." Again in Maxwell on Statutes (10th ed.) p. 370 it
has been said, "In giving judicial powers to affect
prejudicially the rights of person or property, a statute is
understood as silently implying, when it does not expressly
provide, the condition or qualification that the power is to
be exercised in accordance with the fundamental rules of
judicial procedure, such, for instance, as that which
requires that before its exercise, the person sought to be
prejudicially affected shall have an opportunity of defend-
ing himself." In so far as this Act confers a power on the
Government to discharge the judicial duty of making a
provisional assessment, which the petitioners say, it does,
it must imply that the judicial process has to be observed.
As regards the return, that seems to me not to be of much
consequence. If the assessee is entitled to be heard, the
fact that he is not asked to make a return, would not
constitute a departure from the rules of natural justice.
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Likewise, the absence of a right of appeal is not something
on which the petitioners can rely. Rules of natural justice
do not require that there must always be a right of appeal.
Under the Act it is the Government which makes the assess-
ment and it would not be unreasonable to hold that in view
of the high authority of the person assessing, the absence
of a right of appeal is not likely to cause any miscarriage
of justice. I am therefore unable to hold that in the
absence of express provisions laying down the procedure
according to which the provisional assessment is to be made,
the Act has to be held invalid.
It may here be stated that in those instances where, in the
present cases, provisional assessments had been made, the,
assessees had either themselves supplied the area of the
lands held by them or the area had been determined after
giving them a hearing. After the area has been determine ,
the amount of the tax payable is decided by a simple
calculation at the rate
103
of Rs. 2 per acre of land held and with regard to this, no
hearing is required.
Then again sub-see. (2) of s. 5A provides that the
Government after conducting a survey of the lands mentioned
in sub-sec. (1) under which provisional assessment is to be
made, shall make a regular assessment and adjustments would
have to be made in regard to tax already paid on the basis
of the regular assessment. A point is made that there is no
time limit fixed within which the regular assessment is to
be made and so the Act leaves it to the arbitrary decision
of the Government when to make the regular assessment. I do
not think that this contention is correct. Properly read,
the section in the absence of any indication as to time,
means that regular assessment would have to be made as soon
after the survey, as is reasonably possible.
It is also said that s. 7 of the Act offends Art. 14. This
section gives power to the Government to exempt from the
operation of the Act such lands or class of lands as the
Government may by notification decide. This section does
not indicate on what grounds the exemption is to be granted.
It therefore seems to me that it gives arbitrary power to
the Government and offends Art. 14. But the section is
clearly severable from the rest of the Act. If the section
is taken out of the Act, the operation of the rest of the
Act will not in the least be affected. The only effect will
then be that the Government will have no power to exempt any
land from the tax. That will not in any way affect the
other provisions of the Act. The invalidity of this section
is therefore no reason for declaring the entire Act illegal.
It may be pointed out that it is not alleged in the
petitions that the Government has exempted any lands or
class of lands from the operation of the Act.
It is contended that s. 8 of the amending Act also shows the
arbitrary nature of the Act. That section provides that if
any difficulty arises in giving effect to the provisions of
this Act, the Government may by order do anything not
inconsistent with such provisions which appears to it to be
necessary or expedient
104
for removing the difficulty. This is a common form of
provision now found in many Acts. The power given under it
cannot be said to be uncontrolled for it must be exercised
consistently with the Act and to remove difficulties arising
in giving effect to the Act. In any event, this provision
is contained in the amending Act only. Even if the section
be held to be invalid that would not affect, the rest of the
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amending Act or any question that arises on these petitions.
The validity of the Act is also challenged on the ground
that it infringes Art. 19, cl. (1), sub-cls. (f ) & (g).
This challenge seems to me to be wholly untenable. Apart
from the question whether a taxing statute can become
invalid as offending Art. 19, as to which the position on
the authorities does not seem to be very clear, it is plain
that Art. 19 permits reasonable restrictions to be put on
the rights mentioned in subcls. (f ) & (g). Now there is no
dispute that the rate of tax fixed by the Act is a very low
rate. It has not been said that the rate fixed is
unreasonable. It clearly is not so. The restrictions on
these rights under Art. 19(1), (f) & (g) put by the Act, if
any, are clearly reasonable. These rights cannot therefore
be said to have been infringed by the Act.
The lands of the petitioners are lands on which stand
forests. It is said that under the Madras Preservation of
Private Forests Act, (Act XXVII of 1949), which applies to
the lands with which we are concerned as they are situated
in an area which previously formed part of the State of
Madras, the owners of the forests can work them only with
the permission of the officer mentioned in that Act. It is
said that the control imposed by the officer has been such
that the income received from the forest is much less than
the tax payable under the Act in respect of the land on
which the forest stands. Taking by way of illustration
Petition No. 13, it is pointed out that the income from the
forest with which that petition is concerned was Rs. 8,477
for the year 1956-57 while the tax payable under the Act for
more or less the same period was Rs. 1,51,000. I am unable
to hold that because of this the Act offends Art. 19(1), (f)
and (g).
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It is not stated that the land is not capable of producing
any income other than the income from the forest standing
on it. There is nothing to show that in all times to come
the income from the land including the income from the
forest, will be less than the tax imposed on it by the Act.
The area of the land concerned in Petition No. 13 is
enormous being about 75,500 acres. I am further unable to
hold the impugned’ Act to be invalid because of action that
may be taken under another Act, namely, the Madras Act XXVII
of 1949.
The validity of the Act is challenged also on the ground
that it offends Art. 31 of the Constitution. I am unable to
see any force in this contention. If the statute is
otherwise valid, as I have found the present Act to be, it
cannot, even if it deprives any person of property, be said
to offend Art. 31(1). It has been held by this Court in
Ramjilal v. Income-tax Officer,. Mohindargarh (1) that
"clause (1) of Art. 31 must be regarded as concerned with
deprivation of property otherwise than by the imposition or
collection of tax, for otherwise Art. 265 becomes wholly
redundant." No question of cl. (2) of Art. 31 being violated
arises here for the Act does not deal with any acquisition
of property.
It is also said that the Act is a colourable piece of
legislation, namely, that though in form a taxing statute
it, in effect, is intended to expropriate lands, held by the
citizens in the State by imposing a tax too heavy for the
land to bear. As was said in Raja Bhairebendra Narayan Bhup
v. The State of Assam (2) "The doctrine of colourable
legislation is relevant only in connection with the question
of legislative competency". In the present case, there
being in my view, no want of legislative competency in the
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legislature which passed the Act in question, the Act cannot
be assailed as a piece of colourable legislation. I may add
that I do not accept the argument that the Act is in its
nature expropriatary or- that the tax imposed by it is
really excessive.
(1)[1951] S.C.R. 127, 136.
(2) [1956] S.C.R. 303.
14
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I come now to the last argument advanced by the petitioners.
It is said that the Act was beyond the legislature
competence of the State Legislature. It is conceded that
the State Legislature has power to impose a tax on land
under entry 49 of List 2 in the Seventh Schedule to the
Constitution, but it is said that land as mentioned in that
entry does not include lands on which forests stand. It is
contended that the State Legislature has power to legislate
about forests under entry 19 of that List and also as to
land under entry 18. There is however no power to impose a
-axon forests while there is power under entry 49 of that
list to tax land. Therefore, it is said, that there is no
power to impose tax on lands on which forests stand and the
Act in so far as it imposes tax on lands covered by forests,
which the lands of the petitioners are, is hence
incompetent.
It is not in dispute that a State Legislature has no power
to impose a tax on a matter with regard to which it has the
power to legislate but has been given no express power to
impose a tax. Therefore, I agree, that a State Legislature
cannot impose tax on forests. I am however not convinced
that "land" in entry 49 is not intended to include land on
which a forest stands. No doubt, a forest must stand on
some land. In Shorter Oxford Dictionary, one of the mean-
ings of "forest" is given as an extensive tract of land
covered by trees and undergrowth, sometimes intermingled
with pastures. The concepts of forest and land however are
entirely different. The principal idea conveyed by the word
"forest" is the trees and other growth on the land. Under
entry 19 there may no doubt be legislation with regard to
land in so far it is necessary for the purpose of the forest
growing on it. It is well known that entries in the
legislative lists have to be read as widely as possible. It
is not necessary to cut down the plain meaning of the word
,"land" in entry 49 to give full effect to the word "forest"
in entry 19. In my view, the two entries namely, entry 49
and entry 18 deal with entirely different matters.
Therefore, under entry 49 taxation
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on land on which a forest stands is permissible and legal.
For these reasons I would dismiss these petitions.
BY COURT:-In accordance with the opinion of the majority of
the Court, these Petitions are allowed with costs against
the contesting Respondent, the State of Kerala.
Petitions allowed.