Full Judgment Text
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PETITIONER:
AJOY KUMAR MUKHERJEE
Vs.
RESPONDENT:
LOCAL BOARD OF BARPETA
DATE OF JUDGMENT:
11/02/1965
BENCH:
WANCHOO, K.N.
BENCH:
WANCHOO, K.N.
GAJENDRAGADKAR, P.B. (CJ)
HIDAYATULLAH, M.
SHAH, J.C.
SIKRI, S.M.
CITATION:
1965 AIR 1561 1965 SCR (3) 47
CITATOR INFO :
D 1975 SC2193 (6,12,13,14)
RF 1991 SC1766 (28,31,62)
ACT:
Assam Local Self Government Act 1953, (Act 25 of 1953),
s. 62-Tax--Whether on land used for market or on
market--State legislature, competence--Constitution of India
Seventh Schedule, List II Entry 49--Interpretation--
Discrimination--Allegations--Burden of proof.
HEADNOTE:
The appellant as a land-holder held a hat or market on
his land. The respondent, the local board, within whose
jurisdiction the market was held, issued notice to the
appellant to take out a licence and pay a certain sum as
licence fee for holding the market. Inspire of the
continued protests of the appellant against the levy,
the amount was sought to be recovered by the issue of
distress warrants and attachment of his property. The
appellant file.d a writ petition in the High Court
challenging on a number of grounds, the constitutionality of
the impost, which was dismissed. In appeal by certificate
the appellant contended that (i)the Assam Legislature had no
legislative competence to tax markets, and (ii) the tax
actually imposed on this market infringed Art. 14 of the
Constitution, because the board fixed a higher rate for the
appellant’s market as compared with other neighbouring
markets.
HELD:(i) The tax in the present case being on land
within the meaning of Entry 49 of List II of the Seventh
Schedule of the Constitution, would clearly be within the
competence of the State Legislature. [49 E-C]
The Scheme of s. 62 of the Assam Local Self Government
Act, 1953 shows that the tax provided therein is a tax on
land, though its incidence depends upon the use of the land
as a market and the owner, occupier or farmer of that
land .has to pay a certain tax for its use as such. But
there is no tax on the transaction that may take place
within the market. Further the amount of tax depends upon
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the area of the land on which the market is held and the
importance of the market subject to a maximum fixed by the
State Government. Section 62(2) which used the words "impose
an annual tax thereon" clearly shows that the word "thereon"
refers to any land for which a licence is issued for use as
a market and not to the word "market". The use to which the
land is put can be taken into account in imposing a tax on
it within the meaning of entry 49 of the List II. Ralla Ram
v. The Province of East Punjab, [1948] F.C.R. 207, applied.
[51 C-F]
(ii) It was for the appellant to show that in fixing the
tax on the other markets as it did, the board acted
arbitrarily and did not take into account the size and
importance of the markets. As there was no material by which
the relative size and importance of those markets, could be
judged, it was not possible to hold that there was
discrimination in taxing this market. [52 F-G]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 630 of
1963.
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Appeal from the judgment and order dated June 8, 1959
the Assam High Court in Civil Rule No. 42 of 1957.
D.N. Mukherjee, for the appellant.
Naunit Lal, for the respondent No. 3.
The Judgment of the Court was delivered by
Wanchoo, J. This appeal on a certificate granted by
the Assam High Court raises the question of the
constitutionality of an annual tax levied by local boards
for the use of any land for the purpose of holding
markets as provided by s. 62 of the Assam Local Self-
Government Act, No. XXV of 1953, (hereinafter referred to as
the Act). The appellant is a landholder in the district of i
Kamrup. As such landholder, he holds a hat or market on his
land since the year 1936 and this market is known as Kharma
hat. In 1953-54, the local board of Barpeta, within whose
jurisdiction the Kharma market is held, issued notice to
the appellant to take out a licence and pay Rs. 600/-
for the year 1953-54 as licence-fee for holding the
market. Later this sum was increased to Rs. 700/- for
the year 1955-56. The appellant continued .protesting
against this levy but no heed was paid to his protests and
the amount was sought to be recovered by issue of
distress warrants and attachment of his property.
Consequently, the appellant filed a writ petition in the
High Court challenging the constitutionality of the impost
on a number of grounds. In the present appeal two main
contentions have been urged in support of the appellant’s
case that the impost is unconstitutional, namely, (i)
that the Assam legislature had no legislative competence to
tax markets, and (ii) that the tax actually imposed on
the Kharma market infringes Art. 14 of the Constitution.
We shall therefore consider these two contentions only.
This attack on behalf of the appellant is met by the
respondent by relying on item 49 of List 1I of the
Seventh Schedule to the Constitution, and it is urged
that the State legislature was competent to impose the tax
under that entry, for this was a tax on land. As to Art.
14, the reply on behalf of the respondent is that under
s. 62 of the Act, a rule has been framed prescribing Rs.
1000/- as the maximum amount of tax which may be levied
by any local board in Assam on markets licensed under that
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section. The rule also provides that any local board may
with the previous approval of Government impose a tax within
this maximum according to the size and importance of a
market. So it is submitted that the tax has been imposed
by Barpeta local board in accordance with this rule, and
the appellant has failed to show that there has been any
discrimination in the fixation of the amount of tax on the
Kharma market.
The High Court repelled the contentions raised on behalf
of the appellant and dismissed the writ petition. As
however, questions of constitutional importance were
involved, the High Court
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granted a certificate under Art. 132 of the Constitution;
and that is how the matter has come up before us.
The first question which falls for consideration
therefore is whether the impost in the present case is a tax
on land within the meaning of entry 49 of List II of the
Seventh Schedule to the Constitution. It is well-settled
that the entries in the three legislative lists have to be
interpreted in their widest amplitude and therefore if a tax
can reasonably be held to be a tax on land it will come
within entry 49. Further it is equally well-settled that tax
on land may be based on the annual value of the land and
would still be a tax on land and would not be beyond the
competence of the State legislature on the ground that it is
a tax on income: (see Ralla Ram v.The Province of East
Punjab(1). It follows therefore that the use to which the
land is put can be taken into account in imposing a tax on
it within the meaning of entry 49 of List II, for the annual
value of land which can certainly be taken into account in
imposing a tax for the purpose of this entry would
necessarily depend upon the use to which the land is put. It
is in the light of this settled proposition that we have to
examine the scheme of s. 62 of the Act,
which imposes the tax under challenge.
It is necessary therefore to analyse the scheme of s. 62
which provides for this tax. Section 62(1) inter alia lays
down that the local board may order that no land shall be
used as a market otherwise than under a licence to be
granted by the board. Sub-section (2) of s. 62 is the
charging provision and may be quoted in full:
"On the issue of an order as in sub-section
(1), the board at a meeting may grant within
the local limits of its jurisdiction a
licence for the use of any land as a market
and impose an annual tax thereon and such
conditions as prescribed by rules."
Sub-section (3) provides that when it has been determined
that a tax shall be imposed under the preceding sub-section,
the local board shall make an order that the owner of any
land used as a market specified in the order shall take out
a licence for the purpose. Such order shall specify the tax
not exceeding such amount as may be prescribed by rule,
which shall be charged for the financial year.
It will be seen from the provisions of these three sub-
sections that power of the board to impose the tax arises on
its passing a resolution that no land within its
jurisdiction shall be used as a market. Such resolution
clearly affects land within the jurisdiction of the board
and on the passing of such a resolution the board gets the
further power to issue licences for holding of markets on
lands within its jurisdiction by a resolution and also the
power to impose an annual tax thereon. Now it is urged on
behalf of the appellant that when sub-s (2) speaks of
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imposing of "an annual
(1) [1948] F.C.R. 207.
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tax thereon" it means the imposition of an annual tax on the
market, and that there is no provision in List II of the
Seventh. Schedule for a tax on markets as such. "Markets and
fairs" appear at item 28 of List H, and it is urged that
under item 66 of the same List, fees with respect to markets
and fairs can be imposed; but there is no provision for
imposing a tax on markets in the entries from 45 to 63 which
deal with taxes. It may be accepted that there is no entry
in List II which provides for taxes as such on markets and
fairs. It may also be accepted that entry 66 will only
justify the imposition of fees on markets and fairs which
would necessitate the providing of services by the board
imposing the fees as a quid pro quo. That however, does not
conclude the matter, for the contention on behalf of the
State is that tax under s. 62 is on land and not on the
market and further the tax depends upon the use of the land
as a market. It seems to us on a close reading of sub-s. (2)
that when that sub-section speaks of "annual tax thereon",
the tax is on the land but the charge arises only when the
land is used for a market. This will also be clear from the
subsequent provisions of s. 62 which show that the tax is on
land though its imposition depends upon user of the
land as a market. Sub-section (3) shows that as soon as sub-
s. (1) and (2) are complied with, the local board shall make
an order that the owner of any land used as a market shall
take out the licence. Thus the tax is on the land and it is
the owner of the land who has to take out the licence for
its use as a market.The form of the tax i.e. its being an
annual tax as contrasted to a tax for each day on which the
market is held also shows that in essence the tax is on land
and not on the market held thereon.Further the tax is not
imposed on any transactions in the market by persons who
come there for business which again shows that it is an
impost on land and not on the market i.e. on the business
terein. Then sub-s (5) provides that the tax shall be paid
by the owner of any land used as a market which again shows
that it is on the land that the tax is levied, though the
charge arises when it is used as a market. Sub-section (6)
then lays down that on receiving the amount so fixed the
board shall issue a licence to the person paying the same.
Here again the license is for the rise of the land. Then
comes sub-s. (8) which provides that wherever. being the
wner or occupier of any land uses or permits the same to be
used as a market without a licence shall be liable to fine.
This provision clearly shows that the tax is on the land and
it is the owner or occupier of the kind who is responsible
and is liable to prosecution if he fails to take cut a
licence. No liability of any kind is thrown on those who
come to the market for-the purpose of trade. Sub-section (9)
then lays down that where a conviction has been obtained
under sub-s. (8), the District Magistrate or the Sub
Divisional Officer, as the case may be, may stop the use of
the land as a market. Sub-section (10) then provides that
every,
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owner, occupier or farmer of a market shall cause such drain
to be made therein and take all necessary steps to keep such
market in a clean and wholesome state and shall cause
supply of sufficient water for the purpose as well as for
drinking purpose. Sub-sections (ID and (12) give power to
the board on the failure of any owner, occupier or farmer to
comply with a notice under sub-s. (10), to take possession
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of the land and the market thereon and execute the works
itself and receive all rents, tolls and other dues in
respect of the market. This will again show that the tax
provided by s. 52(2) is a tax for the use of the land and it
is not a tax on the market as such, for the income from the
market in the shape of tools, rents and other dues is not
liable to tax under s. 52 and is different from tax. The
scheme of s. 62 therefore shows that whenever any land is
used for the purpose of holding a market, the owner,occupier
or farmer of that land has to pay a certain tax for its use
as such. But there is no tax on any transaction that may
take place within the market. Further the amount of tax
depends upon the area of the land on which market is held
and the importance of the market subject to a maximum fixed
by the State Government. We have therefore no hesitation in
coming to the conclusion on a consideration of the scheme
of s. 52 of the Act that the tax provided therein is a tax
on land, though its incidence depends upon the use of the
land as a market. Further as we have already indicated s.
62(2) which uses the words "impose an annual tax thereon"
clearly shows that the word "thereon" refers to any land for
which a licence is issued for use as a market and not to the
word "market". Thus the tax in the present case being on
land would clearly be within the competence of the State
legislature. The contention of the appellant that the State
legislature was not competent to impose this tax because
there is no provision in List II of the Seventh Schedule for
imposing a tax on markets as such must therefore fail.
Then we come to the contention under Art. 14 of the
Constitution. As to that it is well-settled that it is for
the person who alleges that equality before law has been
infringed to show that such really is the case. It was
therefore for the appellant to produce facts and figures
from which it can be inferred that the tax imposed in the
present case is hit by Art. 14 of the Constitution. In that
connection, all that the appellant has stated in his writ
petition is that the board fixed a high rate arbitrarily and
thus discriminated against the appellant’s market as
against the other neighbouring markets where the tax had
been fixed at a much lower rate, and that this was hit by
Art. 14. There was certainly an allegation by the appellant
that Art. 14 had been infringed; but that allegation is
vague and gives no facts and figures for holding that the
tax imposed on the Kharma market was discriminatory. It
appears that the tax was imposed for the year 1953-54. which
was continued Inter on, with some modifications. At that
time there were five
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markets on which the tax was imposed including the Kharma
market. The lowest tax was at Rs. 400/- on two markets, then
at Rs. 500/- on the third market and at Rs. 600/- on the
Kharma market and finally at Rs. 1000/- on the fifth market.
Rule 300(2), flamed in accordance with s. 63(3) runs
thus:---
"Rs. 1000/- (Rupees one thousand) only
per annum has been fixed as the maximum amount
of tax which may be levied by the local boards
in Assam on markets licensed under section 62
of the Act.
Any local board may with the previous
approval of Government impose a tax within
this maximum according to the size and
importance of a market."
Now the rule provides that Rs. 1000/- is the maximum tax and
within that maximum the board has to graduate the tax
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according to the size and importance of the market. The size
of the market naturally takes into account the area of the
land on which the market is held; the importance of the
market depends upon the number of transactions that take
place there, for the larger the number of transactions the
greater is the importance of the market. If therefore the
appellant is to succeed on his plea of Art. 14 on the ground
that the tax fixed on his market was discriminatory he had
to adduce facts and figures, firstly as to the size of the
five markets on which the tax was levied in the relevant
years and secondly as to the relative importance of these
markets. But no such facts and figures have been adduced on
behalf of the appellant. It is true that the respondent in
reply to the charge of discrimination was equally vague and
merely denied that there was any arbitrary discrimination.
But it was for the appellant to show that in fixing the tax
on the five markets as it did, the board acted arbitrarily
and did not take into account the size and importance of the
markets. As there is no material before us by which we can
judge the relative size and importance of the five markets,
it is not possible to hold that there was discrimination in
taxing Kharma market at Rs. 600/- per year as compared to
taxing the three other markets at less than Rs. 600/-. The
attack therefore on the amount actually fixed on the ground
of discrimination must fail.
We therefore dismiss the appeal with costs.
Appeal dismissed.
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