Full Judgment Text
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PETITIONER:
STATE OF MYSORE ETC.
Vs.
RESPONDENT:
M. L. NAGADE AND GADAG & ORS.
DATE OF JUDGMENT06/05/1983
BENCH:
DESAI, D.A.
BENCH:
DESAI, D.A.
REDDY, O. CHINNAPPA (J)
CITATION:
1983 AIR 762 1983 SCR (3) 93
1983 SCC (3) 253 1983 SCALE (1)618
ACT:
Hyderabad Land Revenue Rules subsequently repealed and
re-enacted as Andhra Pradesh (Telengana Area) Land Revenue
Rules, 1951 framed under Hyderabad Land Revenue Act (VIII of
1317 F)-r. 71 as amended on July 4, 1958 -Diversion of
agricultural land to non-agricultural purposes-mode of
assessment of land revenue -Whether. rule valid.
Bombay Land Revenue Rules framed under Bombay Land
Revenue Act, 1879-r. 81 as amended on March 27, 1958-Whether
rule valid.
Rule 71 of the Hyderabad Land Revenue Rules, which is
similar to r. 81 of the Bombay Land Revenue Rules, provides
for mode of assessment of land revenue in the event of
diversion of agricultural lands to non-agricultural
purposes.
HEADNOTE:
The respondents in these appeals had filed certain writ
petitions challenging the levy and demand of non-
agricultural assessment made by the appellants, on the
ground, among others, that the above rules conferred
unguided and uncontrolled power and there was excessive
delegation of legislative functions and therefore the rules
were violative of Art. 14 of the Constitution. The High
Court accepted the contention and quashed the demand of
assessment.
Allowing the appeals,
^
HELD: Delegation of some part of legislative power
becomes a compulsive necessity for viability and functioning
of the various institutions created by the Constitution. The
legislature can delegate details to be worked out by the
delegate and the details may be numerous and significant yet
they may well be made over to the appropriate agency. The
guideline need not be found in the impugned provision. The
same may be collected from the setting in which the
provision is placed, the purpose for which the Act is
enacted and even the preamble of the statute in which the
provision is incorporated. The object sought to be achieved
by legislation or statute can furnish reliable guideline for
the exercise of discretionary power. [104 B, F-G, 100 H, 101
A]
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Constitutional Law by Prof. Wills, p. 587; Kunnathat
Thathunni Moopil Nair v. The State of Kerala and Another,
[1961] 3 SCR 67; New Manek Chowk Spinning and Weaving Mills.
Co. Ltd. and Ors. v. Municipal Corporation of the City of
Ahmedabad and Ors. [1967] 2 SCR 679; State of Andhra Pradesh
JUDGMENT:
Kerala v. Haji K. Haji K.
94
Kutty Naha & Ors. etc. [1969] 1 SCR 645; Rangildas Varajdas
Khandwala v. Collector of Surat & Ors. [1961] 1 SCR 951; and
Avinder Singh etc. v. State of Punjab & Anr. etc. [1979] 1
SCR 845, referred to.
The basic purpose for which a Land Revenue Act is
enacted is for empowering the State and its agencies and its
officials to assess and levy land revenue. The land revenue
is a tax and the validity of a taxing statute has to be
determined keeping in view the fact that in the matter of
taxation the Court allows wide area of picking and choosing
and the slab system. [105 A, G-H]
In the instant case r. 71 is made in exercise of the
rule making power conferred by s. 172 of the Hyderabad Land
Revenue Act. This rule making power is to be exercised for
the purpose of carrying out the provisions of the Act.
Whenever land is diverted to use other than agricultural,
power is conferred to levy non-agricultural assessment or
special assessment but this assessment is to be determined
under the amended r. 71, keeping in view the purpose of the
Act, namely, levying and collection of revenue, the use to
which the land is put, the profit derived from such deviated
use of the and again correlated to population as set out in
various sub-clauses of amended r. 71 and within floor and
ceiling prescribed in the impugned rule. The High Court fell
into an error in holding that rule 71 allowed a wide margin
to the revenue officers in the matter of determining the
special assessment to be levied on land used for non-
agricultural purposes. The High Court failed to notice that
area within which the discretion of the revenue officer can
operate is circumscribed both by the floor and ceiling fixed
and while determining the quantum of assessment, the revenue
officer has to bear in mind the use to which land is put as
also the profit derived from the use of the of land. The
order made by the revenue officer is appealable. When a
demand is raised, it can always be controverted under the
various provisions of the relevant rules and the concerned
assessee will have full opportunity to vindicate his stand.
[104 H; 105 A-B; E-G]
There is no excessive delegation of legislative
functions in the Hyderabad Land Revenue Act. Section 50 of
the Act clearly confers power on the State Legislature to
levy assessment and when the land is diverted to a use other
than agriculture, the legislature conferred to power to levy
non-agricultural assessment. Elaborate provision has been
made for levying assessment. Section 172 conferred power to
enact rules for giving effect to the provision of the Act
and the guideline was provided as herein above indicated.
[106 B-C]
Bombay Land Revenue Code was enacted in the year 1879
to consolidate and amend law relating to revenue officers
and to the assessment and recovery of land revenue and other
matters connected with Land Revenue Administration. Section
48 confers power to levy and assess the land revenue with
reference to the use of the land. Chapter XI makes detailed
provision for the procedure to be followed by the revenue
officers while discharging their duties and carrying out the
functions imposed by the Code. Chapter XIII provides for
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appeals and revisions against the orders of the revenue
officers. [106 E-G]
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Rule 81 of the Bombay Land Revenue Rules framed under
s. 214 of the Act, as amended on March 27, 1958, provides
for ordinary rates of non-agricultural assessment. Floor and
ceiling rates vary from area to area demarcated on the basis
of population and it is further provided that in fixing the
rates within the floor and the ceiling, due regard shall be
had to the general level of the value of the lands in the
locality used for non-agricultural purposes. The Act and the
Rules provide for sufficient guidelines, and it cannot be
said that the Commissioner enjoys wide arbitrary
discretionary power. The discretion has to operate within
the floor and the ceiling; the yardstick is the value of the
land used for non-agricultural purposes in the locality, the
area has to be divided village-wise, town-wise, city-wise
and overall what is being assessed is none-the-less land
revenue. The High Court was in error in striking down the
provision on the ground that the Commissioner enjoyed wide
arbitrary discretion uncontrolled by any guidelines. The
discretion is not only controlled but there is sufficient
guidelines in the Act and the Rules. [106 H, 107 A-G]
We would expect revenue authority ordinarily to hear
the person affected by the order levying non-agricultural
assessment or at the time of its appeal or revision, but on
this count the demand cannot be struck down because when a
demand is served it can be objected to and the decision is
appealable. It cannot be said that the Rule would be bad as
it does not inhere the principles of natural justice. [107
G-H, 108 A]
&
CIVIL APPELLATE. JURISDICTION : Civil Appeals Nos.
1221-1222 & 1407-1413 of 1970
From the Judgment and Order dated the 30th September,
1965 of the Mysore High Court in Writ Petitions No. 1934/64,
672 of 1963, 1165-1168, 1198-1199 & 2619 of 1963
respectively.
M. Veerappa and Ashok Kumar Sharma for the appellants
in all appeals.
Naunit Lal, Kailash Vasdev and Krishna Kumar for
Respondents in CA. Nos. 1407-1412/73.
M.N. Phadke, Vinod Bobde, D.N. Misra and Mrs. A.K.
Verma with him for the Respondents in CA. 1222 & 1413/70.
S.S. Javali and B.P. Singh for the Respondent in CA.
1221 of 1970.
The Judgment of the Court was delivered by
DESAI, J. Civil Appeals Nos. 1221-1222/70 arise from a
decision of the Division Bench of the then High Court of
Mysore at
96
Bangalore in Writ Petition Nos. 672/63 and 193/64 by which
the High Court quashed the demand of Non-Agricultural
assessment (N. A. assessment for short) made by the
respondents on the ground that Rule 71 as amended on July 4,
1958 of the Hyderabad Land Revenue Rules which appeared to
have been repealed and re-enacted as the Andhra Pradesh
(Telengana Area) Land Revenue Rules, 1951 was
unconstitutional being violative of Art. 14 of the
Constitution and hence void.
Civil Appeals Nos. 1407 to 1413/70 arise from a
decision of the Division Bench of the same High Court in a
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group of writ petitions by which the High Court quashed the
demand of Non-Agricultural assessment on the ground that
Rule 81 of the Bombay Land Revenue Rules as amended on March
27, 1958 was unconstitutional being violative of Art. 14 and
hence void.
Appellants in both the groups are the State of Mysore
and some officers. Respondents are the original petitioners
in both the groups.
Rule 71 of the Hyderabad Land Revenue Rules and Rule 81
of the Bombay Land Revenue Rules were amended in an
identical manner but on two different dates and the validity
of each amended rule was questioned on identical grounds and
more or less the High Court for identical reasons quashed
both the Rules as amended and almost identical grounds were
canvassed in support of rival contentions before us and
therefore, all these appeals are disposed of by this common
judgment.
The boundaries of old Mysore State underwent a change
consequent upon the re-organisation of States in 1956. Some
portion of former Bombay State as well as some portion of
the old Hyderabad State were allocated to Mysore State. This
historical phenomenon led to different Land Revenue Code
remaining in operation in different parts of the State of
Mysore. To be precise that area of former Bombay State
forming part of Mysore State continued to be governed in
respect of land revenue by the Bombay Land Revenue Code,
1879 and the rules made thereunder. Similarly that area of
former Hyderabad State which was allocated to Mysore State
continued to be governed by the Hyderabad Land Revenue Act
(VIII of 1317F).
97
In Re C. A. Nos. 1221-1222/70 : Respondents questioned
the validity of the amended Rule 71 of the Hyderabad Land
Revenue Rules which came into force from July 4, 1958. It
reads as under :
"71 (1) : Mode of assessment in the event of
diversion of agricultural lands to non-agricultural
purposes, the special assessment shall be levied as
follows :-
(a) in the case of land situated in any village the
population of which does not exceed 5,000 the rate
of special assessment leviable shall be not less
than the agricultural assessment leviable on such
land and note more Rs. 40 per acre.
(b) in the case of land situated in any village or
town other then a town coming under Sub-Rule (c)
of this Rule, the population of which exceeds
5,000 the rate of special assessment leviable
shall be not less than Rs. 40 per acre and not
more than Rs. 80 per acre.
(c) in the case of land situated within an area
comprising the Municipality limits of the town of
Raichur, Gulbarga and Bidar the rate of special
assessment leviable shall be not less than Rs. 150
per acre and not more than Rs. 250 per acre."
The validity of the amended rule was challenged on the
ground that it provides no guidelines for determining N.A.
assessment for various plots and that it suffers from the
vice of excessive delegation of essential legislative
functions and therefore any demand raised in exercise of the
power conferred by the amended Rule 71 would be arbitrary
and therefore violative of Art. 14 of the Constitution.
In Re. C.A. Nos, 1407 to 1413/70: Respondents who were
petitioners in the High Court questioned the validity of
Rule 81 of the Bombay Land Revenue Rules as amended on March
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27, 1958. It reads as under:
"81 (1): Rate of Non-Agricultural assessment:
The rate of Non-Agricultural assessment leviable
shall be as follows:-
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(a) in the case of land situated in any village the
population of which does not exceed 5,000 the rate
of Non-Agricultural assessment leviable shall be
not less than the agricultural assessment leviable
on such land and not more than Rs. 40 per acre.
(b) in the case of land situated in any village or
town other than a town coming under Clause (c) of
this rule, the population of which exceeds 5,000
the rate of Non-Agricultural assessment leviable
shall be not less than Rs. 40 per acre and not
more than Rs. 80 per acre.
(c) in the case of land situated in any City or Town
referred to in the Table to Rule 100, the rate of
Non-Agricultural assessment leviable shall be not
less than Rs. 150 per acre and not more than Rs.
250 per acre.
(d) Non-Agricultural assessment will be levied at
uniform rates for the entire extent converted for
non-agricultural purposes, irrespective of the
extent actually built upon."
The same contention which was advanced in the former group
of petitions was repeated in this group of petitions.
Validity of both the Rules was questioned on other
diverse grounds but except the one herein mentioned, other
contentions did not find favour with the High Court and
therefore, they need not be recapitulated here.
The sole contention which found favour with the High
Court was that the Rule under challenge confers unguided and
uncontrolled power and there is no guideline either in the
Act or the Rules and there is excessive delegation of
legislative functions and therefore, both the amended Rules
are violative of Art. 14 of the Constitution.
Thus the question which falls for consideration is
whether the amended Rule 71 of the Hyderabad Land Revenue
Rules and amended Rule 81 of the Bombay Land Revenue Rules
suffer from the vice of excessive delegation of legislative
functions or that it confers canalised and unguided
arbitrary power on the officers or there is
99
no guideline to govern the discretion while enforcing and
implementing the two Rules.
We would first examine the validity of amended Rule 71
of the Hyderabad Land Revenue Rules. The Hyderabad Land
Revenue Act (VIII of 1317F) was enacted to amend and
consolidate the orders and regulations relating to land
revenue. It is an exhaustive Code divided into 12 Chapters.
Chapter II deals with appointment of Revenue Officers and
their respective powers. Chapter IV contains provision in
respect of land and land revenue. Sec. 24 provides that all
Unalienated lands belong to Government. Sec. 48 provides
that all land, whether applied to agricultural or any other
purpose and wherever situate shall be liable to payment of
land revenue to the Government in accordance with provisions
of this Chapter and Chapters VII and IX except in case title
to land has been transferred to any municipality or the
revenue thereof has been wholly remitted under any special
contract with the Government or under any order or law. Sec.
50 which is material for the present purpose confers power
for assessment and levy of land revenue. It reads as under :
"50. Land revenue shall be assessed according to the
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various modes of use-
(a) agricultural use.
(b) In addition to agricultural use any other use from
which profit or advantage is derived.
When rate is assessed on any land for any one of
the aforesaid purposes and the land is appropriated for
any other purpose the rate thereof shall be altered and
fixed again, although the term of subsisting settlement
may not have expired.
It becomes clear that the land revenue was to be assessed
according to the use to which the land is put and especially
in the case of use of land for purposes other than
agriculture, the N.A. assessment would be assessed keeping
in view the use to which the land is put and the profit or
advantage derived from such use of the land. Chapter VII
contains provisions for Survey and settlement of land which
would include assessment in respect of each survey, piece
and parcel of land. Sec. 84 provides for announcement of the
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assessment and the manner in which it is made, and the
announcement should include the assessment fixed in respect
of each plot of land called survey number. Chapter IX makes
provision for responsibility of payment of revenue and the
method of its recovery and the priority of payment in
respect of land revenue. Chapter X deals with the procedure
prescribed for revenue officers in dealing with cases under
the Land Revenue Act. Chapter XI provides for appeal, review
and revision of the orders of revenue officers. Sec. 172
confers power on the Government to make rules by publication
in the Jarida (presumably official Gazette) consistent with
the provisions of the Act to carry out the purpose and
objects of the Act and for the guidance of all persons in
matters connected with the enforcement of the Act or in
matters not expressly provided for in the Act. In exercise
of this power, Hyderabad Land Revenue Rules have been
enacted and promulgated subsequently repealed and re-enacted
as the Andhra Pradesh (Telengana Area) Land Revenue Rules,
1951. Rule 71 as amended on July 4, 1958 has been extracted
hereinbefore. It provides for mode of assessment in the
event of diversion of agricultural lands to non-agricultural
purposes. Briefly, N.A. assessment also styled as special
assessment has to be levied within the minimum and the
maximum as provided in sub-clauses (a), (b) and (c) of Rule
71 (1). The amended rule also confers power for upward
revision of N.A. assessment at intervals.
Is this power uncanalised, unguided or arbitrary ? Rule
71 (1) as amended recites that in different areas correlated
to population between the floor and the ceiling therein
prescribed, N.A. assessment has to be levied. Ordinarily the
land is put to agricultural use and the assessment is to be
levied depending upon the use of the land for agricultural
purposes. Where there is a diversion in the use of land, a
special assessment called N.A. assessment can be levied. The
right to levy N.A. assessment is not in dispute. And N.A.
assessment is none-the-less assessment of revenue to be paid
for the use of the land. What is questioned is that the
power conferred by the rule gives so much wide arbitrary
discretion to the officers that in the absence of guidelines
the revenue officers indifferent areas may act arbitrarily
and therefore, in the absence of guidelines this rule is
violative of Art. 14.
The question therefore, is whether there is any
guideline for the exercise of this power ? It is by now
well-recognised that guideline need not be found in the
impugned provision. The same may be
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101
collected from the setting in which the provision is placed,
the purpose for which the Act is enacted and even the
preamble of the statute in which the provision is
incorporated. A legislation or statute is enacted to achieve
some public purpose and the policy of law and the object
sought to be achieved can furnish reliable guidelines for
the exercise of discretionary power. Prof. Wills in his
Constitutional Law, p. 587 observes as under:
"If a statute declares a definite policy, there is
a sufficiently definite standard for the rule against
the delegation of legislative power, and also for
equality if the standard is reasonable. If no standard
is set up, to avoid the violation of equality’ those
exercising the power must act as though they were
administering a valid standard."
In Kunnathat Thathunni Moopil Nair v. The State of
Kerala and Another(1), a Constitution Bench of this Court
struck down the Travancore-Cochin Land Tax Act, 1955 as
being violative of Art. 14 on the ground that unequals were
treated equally. By the impugned 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. This Court held that 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 capable of
yielding any income. Consequently, the Court held 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. In reaching this
conclusion, Sinha, CJ speaking for the majority observed as
under:
"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
102
assessment proceedings. Nor is there any right of
appeal provided to such assessee as may feel aggrieved
by the order of assessment."
This decision is of no assistance because Hyderabad
Land Revenue Act prescribed a detailed method of assessment
and relevant provisions would be followed while levying N.A.
Assessment. The Rule circumscribes the operation of the
discretion between the floor and the ceiling. The various
slabs are correlated to population. Sec. 50 itself provides
that the N.A. assessment will be assessed keeping in view
the use of the land and the profit derived from the use.
Further the orders made by the Revenue Officers are not only
appealable but even a review petition is contemplated at the
instance of the person aggrieved by the order of assessment.
Therefore, the criteria which appealed to the Constitution
Bench in striking down the Travancore-Cochin Land Tax Act,
1955 are not available in this case. On the contrary where
are such detailed provisions for assessment of Non-
Agricultural assessment such as use of land, profit derived
by the use of the land, the maxima and minima and the
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various rates correlated to population.
In New Manek Chowk Spinning and Weaving Mills Co. Ltd
and Ors. v. Municipal Corporation of the City of Ahmedabad
and Ors.(1), a Constitution Bench of this Court struck down
the assessment of property tax by the Municipal Corporation
inter alia on the ground that the method of levy of tax on
the basis of floor area was against the provisions of the
Act and the Rules made thereunder. The Court held that the
method of taxation on the basis of floor area was sure to
give rise to inequalities as there had been no
classification of factories on any rational basis and the
Corporation failed to observe the law to determine the
annual rental value of each building and land comprised in
each of the Textile factories. We fail to see how this
decision would be of any use because there is no flat rate
levy here and the N.A. assessment has to be levied in
respect of each plot of land keeping in view its location,
use and the profit derived by the use of the land.
Reference was next made to State of Andhra Pradesh &
Anr. v. Nalla Raja Reddy & Ors.(2) Affirming the decision of
the Andhra High
103
Court which declared Andhra Pradesh Land Revenue (Additional
Assessment) and Cess Revision Act, 1962 as unconstitutional,
the Court held that the classification based on ayacuts has
no reasonable relation to the duration of water supply or to
the quality or the productivity of the soil and that Secs. 3
and 4 fixing the minimum flat rate for dry or waste land as
the case may be, have ignored the well established tarams
principle and therefore, the classification attempted in
either case has no reasonable relation to the objects sought
to be achieved, namely, imposition of fair assessment and
rationalisation of revenue assessment structure. Again we
fail to see how the decision would help us because
geographical classification based on population criterion is
a valid basis for classification.
The next case to which out attention was drawn was
State of Kerala v. Haji K. Haji K. Kutty Naha & Ors. etc,(1)
in which this Court upheld the decision of the Kerala High
Court declaring Kerala Buildings Tax Act, 1961 ultra vires
the Constitution in that it infringed the equality clause of
the Constitution. The Court following its decision in New
Manek Chowk case held that in the absence of any rational
classification which was not even attempted, the tax levied
on floor area alone ignoring the use to which the building
is put, the materials used in putting up the structure had
the pernicious effect of treating unequals as equals and
therefore, violative of Art. 14 of the Constitution. This
decision has hardly any relevance to the issue raised before
us.
As against the aforementioned decisions, it would be
advantageous to refer to Rangildas Varajdas Khandwala v.
Collector of Surat and Ors.(2) The power to levy N.A.
assessment was questioned before this Court albeit under
different set of circumstances. The land involved in the
dispute was governed by the Bombay Personal Inams Abolition
Act, 1952, whose constitutional validity was challenged. The
Court held the Act was protected by the umbrella of Art. 31A
of the Constitution.
The next contention raised in that case was that the
Collector could not have levied N.A. assessment under Sec.
52 of the Bombay Land Revenue Code. Negativing this
contention, this Court held that when the land is being used
for non-agricultural purpose, Sec.
104
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48 makes it obligatory upon the assessing officer when
assessing the land revenue to look to the use to which it is
put at the time of the assessment and assess it according to
such use. Rule 71 provides for three safeguards against
arbitrary exercise of power viz. (i) use of the land, (ii)
profit derived from the use of the land and, (iii) location
of the land.
In this connection we may refer to the latest decision
of this Court in Avinder Singh etc. v. State of Punjab &
Anr. etc.(1) After a review of large number of decisions
this Court held that delegation of some part of legislative
power becomes a compulsive necessity for viability and
functioning of the various institutions created by the
Constitution. Pertinent observation may be extracted:
"The Law-making is not a turnkey project readymade
in all detail and once this situation is grasped the
dynamics of delegation easily follow. Thus we reach the
second constitutional rule that the essentials of
legislative functions shall not be delegated but the
inessentials however numerous and significant they be,
may well be made over to appropriate agencies. Of
course, every delegate is subject to the authority and
control of the principal and exercise of delegated
power can always be directed, corrected or cancelled by
the principal. Therefore, the third principle that
emerges is that even if there be delegation,
parliamentary control over delegated legislation should
be a living continuity as a constitutional necessity.
Within these triple principles, Operation Delegation is
at once expedient, exigent and even essential if the
legislative process is not to get stuck up or bogged
down or come to a grinding halt with a few complicated
bills."
Thus it is crystal clear that the legislature can
delegate details to be worked out by the delegate and the
details may be numerous and significant yet they may well be
made over to the appropriate agency.
Applying this yardstick, what emerges in this case.
Rule 71 is made in exercise of the rule making power
conferred by Sec. 172 of
105
the Hyderabad Land Revenue Act. This rule making power is to
be exercised for the purpose of carrying out the provisions
of Act. The basic purpose for which the Land Revenue Act is
enacted is for empowering the State and its agencies and its
official to assess and levy land revenue. Whenever land is
diverted to use other than agriculture, power is conferred
to levy N.A. assessment or special assessment but this
assessment is to be determined under the amended Rule 71
keeping in view the purpose of the Act, namely, levying and
collection of revenue, the use to which the land is put, the
profit derived from such deviated use of the land and again
correlated to population as set out in various sub-clauses
of amended Rule 71 and within floor and ceiling prescribed
in the impugned rule. Further the order made by the
assessing authority is made appealable and reviewable. In
out opinion, there is sufficient guideline in the Act and
the Rules following which the assessing authority has to
assess the N.A. assessment. In this connection, it will be
advantageous to refer to the oft quoted passage from Wills
which bears repetition. It reads as under:
"A State does not have to tax everything in order
to tax something. It is allowed to pick and choose
districts, objects, persons, methods and even rates for
taxation, if it does so reasonably ..."
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The High Court in our opinion unfortunately fell into
an error in holding that Rule 71 allowed a wide margin to
the revenue officers in the matter of determining the
special assessment to be levied on land used for non-
agricultural purposes. The High Court failed to notice that
area within which the discretion of the revenue officer can
operate is circumscribed both by the floor and ceiling fixed
and while determining the quantum of assessment, the revenue
officer has to bear in mind the use to which land is put as
also the profit derived from the use of the land. The order
made by the revenue officer is appealable. Now when a demand
is raised, it can always be controverted under the various
provisions of the relevant rules and the concerned assessee
will have full opportunity to vindicate his stand. It should
not be over-looked that the land revenue is a tax and the
validity of the taxing statute has to be determined keeping
in view the fact that in the matter of taxation, the Court
allows wide area of picking and choosing and the slab
system. We are therefore, of the opinion that there was
sufficient guideline to govern the discretion of the revenue
officer and the rule could not be struck down on the
106
ground that it confers wide arbitrary, uncanalised
discretionary power uncontrolled by any guidelines.
A very feeble attempt was made to urge that there was
excessive delegation of essential legislative functions to
the executive giving it the power not only to enact the rule
but to amend it so as to vary the N.A. assessment. Sec. 50
clearly confers power on the State Legislature to levy
assessment and when the land is diverted to a use other than
agriculture, the legislature conferred the power to levy
N.A. assessment. Elaborate provision has been made for
levying assessment. Sec. 172 conferred power to enact rules
for giving effect to the provision of the Act and the
guideline was provided as herein above indicated. Therefore,
we are not impressed by the submission that in the case the
legislature was guilty of delegating its essential
legislative functions in favour of the executive.
Re C.A. Nos. 1407 to 1413/70: In this group of appeals,
vires of amended rule 81 of the Bombay Land Revenue Rules
was questioned on the same identical grounds and the
challenge must fail for the same reasons. We may however,
briefly point out the scheme of the relevant Act and the
rules governing this case.
Bombay Land Revenue Act was enacted in the year 1879 to
consolidate and amend law relating to revenue officers and
to the assessment and recovery of land revenue and other
matters connected with the Land Revenue Administration. Sec.
48 confers power to levy and assess the land revenue with
reference to the use of the land -(a) for the purpose of
agriculture, (b) for the purpose of building, and (c) for a
purpose other than agriculture or building. Chapter VIII
includes provision for Surveys, Assessments and Settlements
of Land Revenue. Chapter VIII-A makes further provisions for
assessment and settlement of land revenue on agricultural
land. Chapter XI makes detailed provision for the procedure
to be followed by the revenue officers while discharging
their duties and carrying out the functions imposed by the
Code. Chapter XIII provides for appeals and revisions
against the orders of the revenue officers. Sec. 214 confers
power on the State Government to make rules not inconsistent
with the provisions of the Act to carry out the purpose and
object thereof and for the guidance of all persons in
matters connected with the enforcement of the Act. Armed
with this power, Land Revenue Rules, 1951 were enacted.
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Chapter XIV headed ’imposition
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and revision of non-agricultural assessment’ make detailed
provisions for assessment and levy of N.A. assessment. Rule
80 confers power for alteration of assessment when land
assessed or held for agricultural purpose if used for non-
agricultural purpose. Rule 80A confers power for revision of
N.A. assessment on the expiry of the period for which
assessment on any land was assessed and levied. Rule 81
provides for ordinary rates of N.A. assessment. It was
amended and the validity of the amended rule is in question.
Floor and ceiling rates vary from area to area demarcated on
the basis of population and it is further provided that in
fixing the rates within floor and the ceiling, due regard
shall be had to the general level of the value of the lands
in the locality used for non-agricultural purposes. Rule 82
makes detailed provision for the rate of non-agricultural
assessment to be determined in accordance with that
provision where special rate of non-agricultural assessment
is in force. Where N.A. assessment is levied at an ordinary
rate, the Commissioner before determining the rate at which
N.A. assessment will be levied on any particular plot has by
notification to divide the villages, towns and cities in
each district in his division to which a standard rate under
Rule 82 has not been extended into two classes. Even while
assessing N.A. assessment, the Commissioner has to keep in
view the level of value of land in the locality used for
non-agricultural purposes. In our opinion, both the Act and
Rules thus provide for sufficient guidelines, and it cannot
be said that the Commissioner enjoys wide arbitrary
discretionary power. The discretion has to operate within
the floor and the ceiling; the yardstick is the value of the
land used for non-agricultural purposes in the locality, the
area has to be divided village-wise, town-wise, city-wise
and overall what is being assessed is land revenue because
N.A. assessment is none-the-less land revenue. In our
opinion, the High Court was in error in striking down the
provision on the ground that the Commissioner enjoyed wide
arbitrary discretion uncontrolled by any guidelines. The
discretion is not only controlled but there is sufficient
guidelines in the Act and the Rules and therefore, the High
Court was in error in striking down the demanded Rule 81.
It was in passing urged that there is no provision for
notice before N.A assessment is levied. We would expect
revenue authority ordinarily to hear the person affected by
the order levying N.A. assessment or at the time of its
appeal or revision, but on this count the demand cannot be
struck down because when a demand is served, it can be
objected to and the decision is appealable. It cannot
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be said that the Rule would be bad as it does not inhere the
principles of natural justice.
The decisions of the High Court were not sought to be
supported on any other ground. Accordingly, these appeals
must succeed.
All the appeals are allowed and the judgments of the
High Court in both the groups are quashed and set aside and
the writ petitions filed by the respondents are dismissed
with costs throughout.
H.S.K. Appeals allowed.
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