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KUNNATHAT THATHUNNI MOOPIL NAIR vs THE STATE OF KERALA AND ANOTHER(with connected petitions) On 1960-12-09

HEADNOTE

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 20 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 JAFFERSARKAR, 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
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http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 20 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 JAFFERSARKAR, 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:Act did not lay down anyprovision calling for a return from the assessee for anenquiry or investigation of facts before the provisionalassessment was made or any right of appeal to any higherauthority and, in fact, did not make any provision forhearing the assessee at any stage, (3) S. 7 gave arbitrarypower to the Government to pick and choose in the matter ofgrant of total or partial exemption from the provisions ofthe Act, and (4) the tax proposed to be levied hadabsolutely no relation to the production capacity of theland sought to be taxed or to the income they could derive,and therefore the Act had been conceived with a view toconfiscating private property, there being no question ofany compensation being paid to those who may be expropriatedas a result of the working of the Act.The petitioners also challenged the legislative competenceof the legislature of the State to levy a tax on lands onwhich forests stood.19(1)(f)of the Constitution, inasmuch as (1) the Act did not imposean obligation on the Government to undertake surveyproceedings within any prescribed or ascertainable period,with the result that a landholder might be subjected torepeated annual provisional assessments on more or lessconjectural basis and liable to pay the tax assessed, and(2) the Act being silent as to the machinery and procedureto be followed in making the assessment left it to theExecutive, completely ignoring the legal position that theassessment of a tax on a person or property was at least ofa quasijudicial character.Section 7 of the Act which vested the Government with thepower wholly or partially to exempt any land from the provi-sions of the Act did not lay down any principle or policyfor the guidance of the exercise of discretion by theGovernment in respect of the selection contemplated by thesection, and was, therefore, discriminatory in effect andoffended Art.31of the Constitution.Per Sinha, C.J., Imam, Subba Rao and Shah, JJ.-Article 265of the Constitution which provided that the State shall notlevy or collect a tax except by authority of law referred toa valid law, and in order that the law might be valid, thetax proposed to be levied must be within the legislativecompetence of the Legislature imposing a tax and authorisingthe collection thereof and, secondly, the tax must besubject to the conditions laid down in Art.Finally, it issuggested that the Act has been enacted for the legitimaterevenue purposes of the State.Before entering upon a discussion of the points in84controversy, it is convenient at this stage to indicatebriefly the relevant provisions of the Act which is impugnedby 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.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.This last argument is based on theassertion that the tax proposed to be levied on privateproperty in the State of Kerala has absolutely no relationto the paying capacity of the persons sought to be taxed,with reference to the income they could derive, or actuallydid derive from the property.On behalf of the State of Kerala, the learned Advocate-General has argued that, though in most of the cases, thatis to say, except in seven petitions (Petitions 21, 22, 47,49, 50, 51 and 54) the lands have not been surveyed, theareas mentioned in the notices proposing provisionalassessment have been ascertained through the local agenciesof the Government.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 ofthis Court apply with full force to the provisions of theAct.The Actthus proposes to impose a liability on land-holders to pay atax which is not to be levied on a judicial basis, because(1) the procedure to be adopted does not require a notice tobe given to the proposed assessee; (2) there is no procedurefor rectification of mistakes committed by the AssessingAuthority; (3) there is no procedure prescribed forobtaining the opinion of a superior Civil Court on questionsof law, as is generally found in all taxing statutes, and(4) no duty is cast upon the Assessing Authority to actjudicially in the matter of assessment proceedings.It has however not infact been said in these petitions that in deciding to makethe provisional assessment the Government has made anydiscrimination between the persons liable to suchassessment.Section 5A(1) is also attacked on the ground that it isagainst rules of natural justice in that it does not saythat in making the provisional assessment, any hearing wouldbe given to the person sought to be assessed or requiring areturn from him or giving him a right of appeal in respectof the provisional assessment made.Such a reading is not impossible in the presentcase as there is nothing in the Act indicating that therules 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 certaincertificate which did not provide the procedure as to howthe architect was to conduct himself, came up forconsideration that, "No doubt, in the(1) 10 A.C. 229, 240.102absence of special provisions as to how the person who is todecide is to proceed, the law will imply no more than thatthe substantial requirements of justice shall not beviolated."Therefore, it is said, that there is nopower to impose tax on lands on which forests stand and theAct in so far as it imposes tax on lands covered by forests,which the lands of the petitioners are, is henceincompetent.It is not in dispute that a State Legislature has no powerto impose a tax on a matter with regard to which it has thepower to legislate but has been given no express power toimpose a tax.
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SUPREME COURT JUDGEMENT

1 of 20 PETITIONER: KUNNATHAT THATHUNNI MOOPIL NAIR Vs.RESPONDENT: THE STATE OF KERALA AND ANOTHER(with connected petitions) DATE OFJUDGMENT: 09/12/1960 BENCH: SINHA, BHUVNESHWAR P.(CJ)BENCH:SINHA, BHUVNESHWAR P.(CJ)IMAM, SYED JAFFERSARKAR, 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: Page 2 of 20 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-Provis
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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 JAFFERSARKAR, 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:


Page 2 of 20 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 TaxAct, 1955 (Travancore-Cochin 15 of 1955), as amended by Act10 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 thelegislature of the State of Travancore-Cochin and wasamended by Act 10 of 057, by the State of Kerala. By s. 4Of the Act all lands in the State of whatever descriptionand held under whatever tenure were to be charged and levieda uniform rate of tax to be called the basic tax. Section 7gave power to the Government to exempt from the operation ofthe Act such78lands or class of lands which the Government may, bynotification, decide. Section 5A which was introduced intothe Act by the Amending Act enabled the Government to make aprovisional assessment of the basic tax in respect of thelands which had not been surveyed by the Government andprovided that the Government after conducting the surveyshall make a regular assessment and make the necessaryadjustments in respect of the amounts paid already. Therewas, however, no time fixed for the conduct of the survey.The petitioners who owned forest in the State, challengedthe constitutional validity of the Act on the grounds thatthe provisions of the Act contravened Arts. 14, 19(i)(f) and31(1) of the Constitution of India inasmuch as (1) the Actdid not have any regard to the quality of the land or itsproductive capacity and the levy of a tax at a flat rate ofRS. 2 per acre imposed very unreasonable restrictions on theright to hold property, (2) the. Act did not lay down anyprovision calling for a return from the assessee for anenquiry or investigation of facts before the provisionalassessment was made or any right of appeal to any higherauthority and, in fact, did not make any provision forhearing the assessee at any stage, (3) S. 7 gave arbitrarypower to the Government to pick and choose in the matter ofgrant of total or partial exemption from the provisions ofthe Act, and (4) the tax proposed to be levied hadabsolutely no relation to the production capacity of theland sought to be taxed or to the income they could derive,and therefore the Act had been conceived with a view toconfiscating private property, there being no question ofany compensation being paid to those who may be expropriatedas a result of the working of the Act.The petitioners also challenged the legislative competenceof the legislature of the State to levy a tax on lands onwhich forests stood. The case on behalf of the State ofKerala, inter alia, was that the Act had its justificationin Art. 265 Of the Constitution of India, which was notsubject to the provisions of Part III of the Constitutionand that, therefore, Arts. 14, 19 and 31 could not bepressed in aid of the petitioners. ,Held, (Sarkar, J., dissenting), that the Travancore-CochinLand Tax Act, 1955, infringed the provisions of Art. 14 Ofthe Constitution of India.The Act obliged every person who held land to pay the tax atthe flat rate prescribed, whether or not he made any incomeout of the property, or whether or not the property was

Page 3 of 20 capable of yielding any income. Consequently, there was no attempt at classification in the provisions of the Act andit was one of those cases where the lack of classificationcreated inequality. It was therefore hit by the prohibitionto deny equality before the law contained in Art. 14.Section 5A of the Act which enabled the Government to make aprovisional assessment of the basic tax payable by the79holder of unsurveyed land imposed unreasonable restrictionson the rights to hold property safeguarded by Art. 19(1)(f)of the Constitution, inasmuch as (1) the Act did not imposean obligation on the Government to undertake surveyproceedings within any prescribed or ascertainable period,with the result that a landholder might be subjected torepeated annual provisional assessments on more or lessconjectural basis and liable to pay the tax assessed, and(2) the Act being silent as to the machinery and procedureto be followed in making the assessment left it to theExecutive, completely ignoring the legal position that theassessment of a tax on a person or property was at least ofa quasijudicial character.Section 7 of the Act which vested the Government with thepower wholly or partially to exempt any land from the provi-sions of the Act did not lay down any principle or policyfor the guidance of the exercise of discretion by theGovernment in respect of the selection contemplated by thesection, and was, therefore, discriminatory in effect andoffended Art. 14. The section was not severable from therest of the Act as both the charging sections, S. 4 and S.7, authorising the Government to grant exemptions from theprovisions of the Act were the main provisions of thestatute.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 theprovisions of the Act had the effect of eliminating theprivate owners through the machinery of the Act, withoutproposing to acquire the privately owned forests in theState after satisfying the conditions laid down in Art. 31of the Constitution.Per Sinha, C.J., Imam, Subba Rao and Shah, JJ.-Article 265of the Constitution which provided that the State shall notlevy or collect a tax except by authority of law referred toa valid law, and in order that the law might be valid, thetax proposed to be levied must be within the legislativecompetence of the Legislature imposing a tax and authorisingthe collection thereof and, secondly, the tax must besubject to the conditions laid down in Art. 13, by which alllaws inconsistent with or in derogation of the fundamentalrights in Part III shall be void.Per Sarkar, J.-(1) The object of the Act was to tax land inthe State for raising revenues by providing for a low anduniform rate of basic tax replacing all other dues payableto the Government and the tax payers were classifiedaccording to the area of lands held by them. Such aclassification had an intelligible basis and had a rationalrelation to the object of the Act. As tax was to be leviednot because the land was productive but because the land washeld in the State, the classification did not offend Art. 14Of the Constitution, even though it might impose unequalburden of the tax on the owners of land on account of ownersof less productive land being put on a larger burden.80(2)Section 5A did not offend Art. 14 and in the absence ofexpress provisions laying down the procedure according to

Page 4 of 20 which the provisional assessment was to be made, the Act could not be held invalid on the ground that it was againstthe rules of natural justice.(3)Section 7, even if it were considered invalid on theground that it gave arbitrary power to the Government andoffended Art. 14, was severable from the rest of the Act andwould 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 lowrate and the restrictions on those rights were reasonable.(5) The Act was not in its nature expropriatary and did notoffend Art. 31. As there was no want of legislativecompetence, theAct could not be assailed as a piece ofcolourable legislation on the ground that though in form ataxing statute it, in effect, was intended to expropriatelands by imposing a tax too heavy for the land to bear.(6)The word "land" in Entry 49 of List II, Sch. 7, of theConstitution, included "land on which a forest stands" and,therefore, under that Entry taxation on land on whichforests stood was permissible and legal. The Act,therefore, could not be challenged as being beyond thelegislative competence of the State Legislature.
JUDGMENT: ORIGINAL JURISDICTION: Petitions Nos. 13 to 24, 42 and 46 to54 of 1958.Petitions under Article 32 of the Constitution of India forenforcement 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 andSardar Bahadur, for the respondents.1960. December, 9. The Judgment of Sinha, C.J., Jafer Imam,Subba Rao and Shah, JJ., was delivered81by Sinha, C. J. Sarkar, J., delivered a separate Judgment.SINHA, C. J.-In this batch of 22 petitions under Art. 32 ofthe Constitution, the petitioners impugn theconstitutionality of the Travancore-Cochin Land Tax Act, XVof 1955, as amended by the Travancore-Cochin Land Tax(Amendment) Act, X of 1957, which hereinafter will bereferred to as the Act. The Act came into force on June 21,1955, and the Amending Act on August 6, 1957. Thepetitioners are owners of forest areas in certain parts ofthe State of Kerala, which, before the reorganisation ofStates, formed part of the State of Madras. The respondentsto the petitions are: (1) the State of Kerala and (2) theDistrict Collector, Palghat:These petitions are based on allegations, which are, more orless, similar, and the following allegations made in WritPetition No. 42 of 1958 may be taken as typical and anextreme case, which was placed before us in detail to bringinto bold relief the full significance and effect of thelegislation impugned in these cases. The petitioner inPetition 42 of 1958 is a citizen of India, who owns forestsin certain parts of Palghat Taluk in Palghat District, which

Page 5 of 20 was part of the State of Madras before the reorganisation of States. These forests are now in the State of Kerala. Upto the time that these forests were in the State of Madras,as it then was, the Madras Preservation of Private ForestsAct, Madras Act XXVII of 1949, governed these forests. Evenafter these areas were transferred to the State of Kerala,the said Madras Act, XXVII of 1949, continued to apply tothese forests. Under the said Madras Act the owners offorests, like the petitioner, could not sell, mortgage,lease or otherwise alienate any portion of their forestswithout the previous sanction of the District Collector; norcould they, without similar permission, cut trees or do anyact likely to denude the forest or diminish its utility, assuch. The District Collector, in exercise of the powersunder the Act, does not ordinarily permit the cutting ofmore than a small82number of trees in the forest. Thus the petitioner has notthe right fully to exploit the forest wealth in his forestarea and has to depend upon the previous permission of theCollector. In exercise of the powers given to the Collectorunder the Madras Act aforesaid, the petitioner's lessee wasgiven permission to cut certain trees in his forest, whichbrings to the petitioner by way of income from. the forest,a sum of Rs. 3,100 per year. Under the Act, a tax calledland tax at a flat rate of Rs. 2 per acre has been imposedon the petitioner. In pursuance of the provisions of theAct, as amended as aforesaid, the District Collector ofPalghat, purporting to act under the provisions of s. 5A ofthe Act, issued a notice to the petitioner provisionallyassessing the petitioner's forest under the said Act to asum of fifty thousand rupees per annum and informing thepetitioner that, if no representation was made within thirtydays, the said provisional assessment would be confirmed anda demand notice would be issued. As there has been nosurvey of the area of forest land in the petitioner'spossession, the District Collector has conjectured the saidarea to be twenty-five thousand acres. The Petitioner hadmade an application to the District Collector under theMadras Preservation of Private Forests Act for felling treesin an area of one thousand acres, but the Collector waspleased to grant permission to out trees from 450 acres onlyin 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 thelandlord's fee for the right to cut and remove the trees,and other minor produce. Besides the demand aforesaid, therevenue authorities have levied about four thousand rupeesas tax on the surveyed portions of the forest. Thepetitioner's forest has large areas of and rocks, rivuletsand gorges. The petitioner, in those circumstances,questions the constitutional validity of the Act, theprovisions of which will be examined hereinafter.These petitions have been opposed on behalf of the firstrespondent and the allegations and submissions83made in the petitions are sought to be controverted by acounter affidavit sworn to by an Assistant Secretary of the Kerala Government in the Revenue Department. It is insimilar terms, as a matter of fact printed in most of thesecases. It is contended therein on behalf of the respondentthat the petitions are not maintainable in as much as nofundamental rights of the petitioners have been infringed;that the allegations about the income, from the forest lands are not admitted; and by way of submission, it is added,

Page 6 of 20 they are irrelevant for the purposes of these petitions. It is stated that the Act was passed with a view to unifyingthe system of land tax in the whole of the State of Kerala.It is submitted that the validity of the Act has to bedetermined in the light of Art. 265 of the Constitution andthat Arts. 19 and 31 were wholly out of the way. It isdenied that the tax imposed was harsh or arbitrary, or hasthe effect of violating the petitioner's right of holdingproperty; and it was asserted that the allegations inrespect of income from the forests are entirely irrelevant,as the tax was not a tax on income, but was an "impost onland". It is equally irrelevant whether the land isproductive or not. It is also contended that, in view ofthe provisions of Art. 31(5)(b)(i) of the Constitution, Art.31(2) could not be relied upon by the petitioners. Theallegation of the petitioners that the Act is a device toconfiscate private forests is denied. It is admitted that,except in certain cases, the entire area is unsurveyed andthat steps are being taken for surveying those areas. It isalso stated that the areas shown in the notices served onthe petitioners are based on information available to theCollector of the District; and lastly, it is stated thatonly notice has been issued calling upon the petitioners tomake their representations, if any, to the proposedprovisional assessments. The assessments have not yet beenmade, and, therefore, there is no question of demand of taxbeing enforced by coercive processes. Finally, it issuggested that the Act has been enacted for the legitimaterevenue purposes of the State.Before entering upon a discussion of the points in84controversy, it is convenient at this stage to indicatebriefly the relevant provisions of the Act which is impugnedby 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 theprovisions of this Act". Section 3 lays down that thearrangement made under the Act for the levy of the basic taxshall be deemed inter alia to be a general revenuesettlement of the State, notwithstanding anything in anystatute, grant, deed or other transaction subject to certainprovisos not material for our present purposes. Thecharging 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 theAmendment, has been raised to Rs. 2 per acre (two pies percent. of land per annum) and the basic tax charged andlevied at that rate shall be the tax payable to theGovernment in lieu of any existing tax in respect of land.Section 6 lays down that any stipulation in any contract oragreement or lease or other transaction to pay land revenueassessment of any land shall be construed as stipulation forthe payment of the amount. of basic tax, as charged andlevied 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

Page 7 of 20 notification in the Gazette, either wholly or partially exempt from the provisions of this Act."Sections 8 and 9 provide for the continuance of theliability to pay certain dues in respect of existing tenuresin addition to the basic tax in respect of lands covered bythose tenures. Section 10 abolishes the85irrigation assessment charged on certain tank beds and otherwater reservoirs named and described therein. Section 11preserves the right of the Government to levy certainirrigation and water cesses and lays down that the Act shallnot affect the power of the Government to levy any rate oralter any existing rate of irrigation or water cess on anyland, as they deem fit. Cesses, other than those mentionedin s. 11, are also abolished by s. 12. Section 13authorises the Government to appoint such officers as theydeem necessary for the purpose of the Act. Section 14 laysdown the bar of suits against the Government in respect ofanything done or any order passed under the Act. Section 15saves the right of the Government which accrued to it beforethe Act came into force as also the conditions of anyagreement. grant or deed relating to any land, except to theextent indicated in the Act. Section 16 vests theGovernment with the power to make rules for carrying intoeffect the provisions of the Act, with particular referenceto the power to make rules for the apportionment of thebasic tax charged on certain kinds of holdings, for definingthe powers and duties of the officers appointed under theAct and for determining the kist instalments and the duedate for the payment thereof. These in short are theprovisions of the Act. The Act, as indicated above, wasamended by Act X of 1957 which substituted the words "Stateof Kerala" for the words "State of Travancore-Cochin" andmade certain other consequential changes. The Amending Actintroduced section 5A, which has been very much assailed inthe 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. 86 (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, hasbeen 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

Page 8 of 20 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 asaforesaid, it will be clear that the provisions of the Actlay down in barest outline the policy to impose a uniformand, what is asserted to be, a low rate of land tax on alllands in the State of Kerala. Unlike other taxing statutes,it does not make any provision for issue of notice to theassessee, nor is there any provision for submission of areturn by the assessee. By s. 5A, it authorises theGovernment to make a "provisional assessment" in respect ofland, which has not been surveyed, and such provisionalassessment is made payable by the person made liable underthe Act. It does not make any provision for any appeals incases where the assessee may feel dissatisfied with theassessment. The Act does contemplate the making of "aregular assessment of the basic tax". But it does notindicate as to when the regular assessment would be made,except indicating that it can be made only after a surveyhas been made in respect of the land assessed. The Actcould not have been cast in more general terms and theproceedings under the Act could not have been more summary.It has thus the merit of brevity as also of simplicity,derived87from the fact that a tax is levied at a flat rate, irres-pective of the quality of the land and consequently of itsproductive capacity. Under the Act, the charge has to belevied, whether or not any income has been derived from theland. The Legislature was so much in earnest about levyingand realising the tax that it could not even wait for aregular survey of the lands to be assessed with a view todetermining the extent and character of the land.Such are the provisions and the effect of the Act, which hasbeen assailed on a number of grounds on behalf of thepetitioners. It is contended, in the first instance, thatinequality is writ large in the provisions of the Act, whichis clearly discriminatory in character and effect and thusinfringes Art. 14 of the Constitution. As the Act does nothave any regard to the quality of the land or its productivecapacity, and a tax at a flat rate of Rs. 2 per acre isproposed to be levied under the Act, it is furthercontended, it imposes very unreasonable restrictions on theright to hold property and is thus an invasion on the rightsguaranteed to the petitioners under Art. 19(1)(f) of theConstitution. The Act does not lay down any provisioncalling for a return from the assessee, for any enquiry orinvestigation of facts before the provisional assessment ismade or for any right of appeal to any higher authority fromthe order of provisional assessment; in fact, there is noprovision for hearing the assessee at any stage. The Act isof an arbitrary character and is thus wholly repugnant tothe guaranteed rights of the petitioners. Section 7 quotedabove gives uncanalised, unlimited and arbitrary power tothe Government to pick and choose in the matter of grant oftotal or partial exemption from the provisions of the Act.It also suffers from the vice of discrimination. It hasalso been vehemently argued that the Act, though it purportsto be a tax on land, is really a law relating to forests inpossession of the petitioners and would not come within thepurview of entry 18 read by itself or in conjunction withentry 45 of List II, but is law relating to forests underentry 19. If we tear the veil in which the real88

Page 9 of 20 purpose and effect of the Act has been shrouded, 'it will I appear that the true character and effect of the Act is notto levy a tax on land, but to expropriate the private ownersof the forests without payment of any compensationwhatsoever. Lastly, it has been urged that the whole Acthas been conceived with a view to confiscating privateproperty, there being no question of any compensation beingpaid to those who may be expropriated as a result of the,working of the Act. This last argument is based on theassertion that the tax proposed to be levied on privateproperty in the State of Kerala has absolutely no relationto the paying capacity of the persons sought to be taxed,with reference to the income they could derive, or actuallydid derive from the property.On behalf of the State of Kerala, the learned Advocate-General has argued that, though in most of the cases, thatis to say, except in seven petitions (Petitions 21, 22, 47,49, 50, 51 and 54) the lands have not been surveyed, theareas mentioned in the notices proposing provisionalassessment have been ascertained through the local agenciesof the Government. It was further contended that the Statehad only declared the liability to the payment of the tax ata flat rate of Rs. 2 per acre in respect of land,irrespective of the income to be derived therefrom. Hencethere was no necessity for making provision for a detailedenquiry or investigation. The rate of the tax being known,and the area of the land to be taxed having been locallyascertained, even though without any regular survey, whatremained was merely quantifying the tax, which was of apurely administrative character. The local agenciesestimated the land in possession of particular persons.Those persons were called upon to pay provisionally at therate fixed by the statute. The State has, by executiveaction, appointed authorities who are expected to act inaccordance with the principle of natural justice. Therewas, therefore, no need for laying down any elaborateprocedure as in other instances of taxing statutes. Thereis a presumption that the authority appointed by theGovernment would act bona fide and in a 89proper manner. If there was any case of unfair dealings,the matter could be brought to the Court. It was greatlyemphasised that as a flat rate of taxation had beenenvisaged by the Act and as ultimately the tax at that ratewould be realised from land found to be in possession ofparticular persons after a regular survey, the regularsurvey to be ultimately made would automatically determinethe amount of tax to be paid and the adjustment of the taxesalready paid could be made on that basis. On the legalaspect of the controversy raised on behalf of thepetitioners, it was argued that the Act has itsjustification in Art. 265 of the Constitution, which was notsubject to the provisions of Part III of the Constitutionand that, therefore, Arts. 14, 19, 31 could not be pressedin aid of the petitioners. It was also contended that evenif the Act is, in effect, confiscatory, it cannot bequestioned, being a taxing statute. Finally, it was urgedthat the question of the amount of income derived by thepetitioners from the property sought to be taxed is whollyirrelevant, because the Act was not a tax on income but itwas a tax on the property itself.The most important question that arises for consideration inthese cases, in view of the stand taken by the State ofKerala, is whether Art. 265 of the Constitution is acomplete answer to the attack against the constitutionality

Page 10 of 20 of the Act. It is, therefore, necessary to consider the scope and effect of that Article. Article 265 imposes alimitation on the taxing power of the State in so far as itprovides that the State shall not levy or collect a tax,except by authority of law, that is to say, a tax cannot belevied or collected by a mere executive fiat. It has to bedone by authority of law, which must mean valid law. Inorder that the law may be valid, the tax proposed to belevied must be within the legislative competence of theLegislature imposing a tax and authorising the collectionthereof and, secondly, the tax must be subject to theconditions laid down in Art. 13 of the Constitution. One ofsuch conditions envisaged by Art. 13(2) is that theLegislature shall not make any law which90takes away or abridges the equality clause in Art. 14, whichenjoins the State not to deny to any person equality beforethe law or the equal protection of the laws of the country.It cannot be disputed that if the Act infringes theprovisions of Art. 14 of the Constitution, it must be struckdown as unconstitutional. For the purpose of these cases,we shall assume that the State Legislature had the necessarycompetence to enact the law, though the petitioners haveseriously challenged such a competence. The guarantee ofequal protection of the laws must extend even to taxingstatutes. It has not been contended otherwise. It does notmean that every person should be taxed equally. But it doesmean that if property of the same character has to be taxed,the taxation must be by the same standard, so that theburden of taxation may fall equally on all persons holdingthat kind and extent of property. If the taxation,generally speaking, imposes a similar burden on every onewith reference to that particular kind and extent ofproperty, on the same basis of taxation, the law shall notbe, open to attack on the ground of inequality, even thoughthe result of the taxation may be that the total burden ondifferent persons may be unequal. Hence, if the Legislaturehas classified persons or properties into differentcategories, which are subjected to different rates oftaxation with reference to income or property, such aclassification would not be open to the attack of inequalityon the ground that the total burden resulting from such aclassification is unequal. Similarly, different kinds ofproperty may be subjected to different rates of taxation,but so long as there is a rational basis for theclassification, Art. 14 will not be in the way of such aclassification resulting in unequal burdens on differentclasses of properties. But if the same class of propertysimilarly situated is subjected to an incidence of taxation,which results in inequality, the law may be struck down ascreating an inequality amongst holders of the same kind ofproperty. It must, therefore, be held that a taxing statuteis not wholly immune from attack on the ground that itinfringes the equality clause ill91Art. 14, though the Courts are not concerned with the policyunderlying a taxing statute or whether a particular taxcould not have been imposed in a different way or in a waythat the Court might think more just and equitable. The Acthas, therefore, to be examined with reference to the attackbased on Art. 14 of the Constitution.It is common ground that the tax, assuming that the Act isreally a taxing statute and not a confiscatory measure, ascontended on behalf of the petitioners, has no reference toincome, either actual or potential, from the property sought

Page 11 of 20 to be taxed. Hence, it may be rightly remarked that the Act obliges every person who holds land to pay the tax at theflat rate prescribed, whether or not he makes any income outof the property, or whether or not the property is capableof yielding any income. The Act, in terms, claims to be "ageneral revenue settlement of the State" (s. 3).Ordinarily, a tax on land or land revenue is assessed on theactual or the potential productivity of the land sought tobe taxed. In other words, the tax has reference to theincome actually made, or which could have been made, withdue diligence, and, therefore, is levied with due regard tothe incidence of the taxation. Under the Act in question weshall take a hypothetical case of a number of persons owningand possessing the same area of land. One makes nothing outof the land, because it is arid desert. The second one doesnot make any income, but could raise some crop after adisproportionately large investment of labour and capital.A third one, in due course of husbandry, is making the landyield just enough to pay for the incidental expenses andlabour charges besides land tax or revenue. The fourth ismaking large profits, because the land is very fertile andcapable of yielding good crops. Under the Act, it ismanifest that the fourth category, in our illustration,would easily be able to bear the burden of the tax. Thethird one may be able to bear the tax. The first and thesecond one will have to pay from their own pockets, if theycould afford the tax. If they cannot afford the tax, theproperty is92liable to be sold, in due process of law, for realisation ofthe public demand. It is clear, therefore, that inequalityis writ large on the Act and is. inherent in the veryprovisions of the taxing section. It is also clear thatthere is no attempt at classification in the provisions ofthe Act. Hence, no more need be said as to what could havebeen the basis for a valid classification. It is one ofthose cases where the lack of classification createsinequality. It is,, therefore, clearly hit by theprohibition to deny equality before the law contained inArt. 14 of the Constitution. Furthermore, sec. 7 of theAct, quoted above, particularly the latter part, which veststhe Government with the power wholly or partially to exemptany land from the provisions of the Act, is clearlydiscriminatory in its effect and, therefore, infringes Art.14 of the Constitution. The Act does not lay down anyprinciple or policy for the guidance of the exercise ofdiscretion by the Government in respect of the selectioncontemplated by a. 7. This Court has examined the casesdecided by it with reference to the provisions of Art. 14 ofthe 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 ofpropositions from those decisions. The present case iswithin the mischief of the third proposition laid down atpages 299 and 300 of the Report, the relevant portion ofwhich 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

Page 12 of 20 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 ofthis Court apply with full force to the provisions of theAct. It has, therefore, to be struck down asunconstitutional. There is no question of severabilityarising in this case, because both the charging sections, s.4 and s. 7, authorising the Government to grant exemptionsfrom the provisions of the Act, are the main provisions ofthe Statute, which has to be declared unconstitutional.The provisions of the Act are unconstitutional viewed fromthe angle of the provisions of Art. 19(1)(f) of theConstitution, also. Apart from the provisions of ss. 4 and7 discussed above, with reference to the test under Art. 14of the Constitution, we find that s. 5(A) is also equallyobjectionable because it imposes unreasonable restrictionson the rights to hold property, safeguarded by Art. 19(1)(f)of the Constitution. Section 5(A) declares that theGovernment is competent to make a provisional assessment ofthe basic tax payable by the holder of unsurveyed land.Ordinarily, a taxing statute lays down a regular machineryfor making assessment of the tax proposed to be imposed bythe statute. It lays down detailed procedure as to noticeto the proposed assessee to make a return in respect ofproperty proposed to be taxed, prescribes the authority andthe procedure for hearing any objections to the liabilityfor taxation or as to the extent of the tax proposed to belevied, and finally, as to the right to challenge theregularity of assessment made, by recourse to proceedings ina higher Civil Court. The Act merely declares thecompetence of the Government to make94a provisional assessment, and by virtue of s. 3 of theMadras Revenue Recovery Act, 1864, the land-holders may beliable to pay the tax. The Act being silent as to themachinery and procedure to be followed in making theassessment leaves it to the Executive to evolve therequisite machinery and procedure. The whole thing, frombeginning to end, is treated as of a purely administrativecharacter, completely ignoring the legal position that theassessment of a tax on person or property is at least of aquasi-judicial character. Again, the Act does not impose anobligation on the Government to undertake survey proceedingswithin any prescribed or ascertainable period, with theresult that a land-holder may be subjected to repeatedannual provisional assessments on more or less conjecturalbasis and liable to pay the tax thus assessed. Though the

Page 13 of 20 Act was passed about five years ago, we were informed at the Bar that survey proceedings had not even commenced. The Actthus proposes to impose a liability on land-holders to pay atax which is not to be levied on a judicial basis, because(1) the procedure to be adopted does not require a notice tobe given to the proposed assessee; (2) there is no procedurefor rectification of mistakes committed by the AssessingAuthority; (3) there is no procedure prescribed forobtaining the opinion of a superior Civil Court on questionsof law, as is generally found in all taxing statutes, and(4) no duty is cast upon the Assessing Authority to actjudicially in the matter of assessment proceedings. Nor isthere any right of appeal provided to such assessees as mayfeel aggrieved by the order of assessment.That the provisions aforesaid of the impugned Act are intheir effect confiscatory is clear on their face. Takingthe extreme case, the facts of which we have stated in theearly part of this judgment, it can be illustrated that theprovisions of the Act, without proposing to acquire theprivately owned forests in the State of Kerala aftersatisfying the conditions laid down in Art. 31 of theConstitution, have the effect of eliminating the privateowners through the machinery of the Act. The petitioner inpetition 4295of 1958 has been assumed to own 25 thousand acres of forestland. The liability under the Act would thus amount to Rs.50,000 a year, as already demanded from the petitioner onthe basis of the provisional assessment under the provisionsof s. 5(A). The petitioner is making an income of Rs. 3,100per 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 landamounts to Rs. 54,000 whereas his annual income for the timebeing is only Rs. 3,100 without making any deductions forexpenses of management. Unless the petitioner is veryenamoured of the property and of the right to hold it may beassumed that he will not be in a position to pay the deficitof about Rs. 51,000 every year in respect of the forests inhis possession. The legal consequences of his making adefault in the payment of the aforesaid sum of money will bethat the money will be realised by the coercive processes oflaw. One can, easily imagine that the property may be soldat auction and may not fetch even the amount for therealisation of which it may be proposed to be sold at publicauction. In the absence of a bidder forthcoming to bid forthe offset amount, the State ordinarily becomes the auctionpurchaser for the realisation of the outstanding taxes. Itis clear, therefore, that apart from being discriminatoryand imposing unreasonable restrictions on holding property,the Act is clearly confiscatory in character and effect. Itis not even necessary to tear the veil, as was suggested inthe course of the argument, to arrive at the conclusion thatthe Act has that unconstitutional effect. For thesereasons, as also for the reasons for which the provisions ofss. 4 and 7 have been declared to be unconstitutional, inview of the provisions of Art. 14 of the Constitution, allthese operative sections of the Act, namely 4, 5A and 7,must be held to offend Art. 19(1)(f) of the Constitutionalso.The petitions are accordingly allowed with costs against thecontesting respondent, the State of Kerala.96SARKAR,J.- These petitions were filed under Art.32 of the

Page 14 of 20 Constitution, challenging the validity of the Travancore- Cochin Land Tax Act, 1955, as amended by Act X of 1957. Theprincipal Act was passed by the legislature of the State ofTravancore-Cochin and the Amending Act, by the legislatureof the State of Kerala, in which the State of Travancore-Cochin had been merged. The petitioners are owners of landsin the State of Kerala. The Act as amended and hereafterreferred to as the Act, levied a certain basic tax on alllands in the State of Kerala. The petitioners say that thelevy is illegal and violates their fundamental rights.It appears from the preamble that the Act was passed as itwas deemed necessary to provide for the levy of a low anduniform rate of basic tax on all lands in the State. TheAct provides that the arrangement made by it for the levy ofthe basic tax is to be deemed to be a general revenuesettlement of the State. Section 4 of the Act is thecharging section and it lays down that there shall becharged and levied in respect of all lands in the State, ofwhatever description and held under whatever tenure, auniform rate of tax to be called the basic tax. Section 5fixes the rate of the tax at 2 n.P. per cent which works outat Rs. 2 per acre per annum. This section also providesthat the basic tax shall be the tax payable to theGovernment in lieu of any other existing tax in respect ofland. Section 12 abolishes all cesses on land exceptirrigation cess.The first ground on which the validity of the Act ischallenged is that it offends the provision as to the equalprotection of the laws contained in Art. 14 of theConstitution. The Act applies to all lands in the State andit imposes an uniform rate of tax, namely, Rs. 2 per acre.It is said that all lands in the State have not the sameproductive quality; that some are waste lands and others,lands of varying degrees of fertility. The contention isthat the tax weighs more heavily on owners of waste landsthan on owners of fertile lands. It is said that it isbound to happen that some owners make no income out of theirlands97or make a small income and they would have to pay the taxout of their pocket while the owners of better classes oflands yielding larger income would be able to pay the taxout of the income from the lands. It is contended that theAct therefore discriminates between several classes ofowners of lands in the State and is void as infringing theequality clause in the Constitution. It may be concededthat all lands in the State are not of the same degree offertility. I am however unable to see that because of that,the Act can be said to discriminate between the owners ofthem.What is really said appears to be that the Act makes aclassification of the owners of lands according to areas.Assume that the Act does so. The question then is, is sucha classification illegal? The equal protection clause inthe Constitution does not mean that there shall be noclassification for the purpose of any law. It has been saidby this Court in Budhan Choudhury v. The State of Bihar(1):"It is now well established that while article 14 forbidsclass legislation, it does not forbid reasonableclassification for the purposes of legislation. In order,however, to pass the test of permissible classification twoconditions must be fulfilled, namely, (i) that theclassification must be founded on an intelligibledifferential which distinguishes persons or things that aregrouped together from others left out of the group and (ii)

Page 15 of 20 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 aclassification between owners of lands using as thedifferentia, the area of the land held by them. Thequestion then, is, is that differentia intelligible and hasthat differentia a rational relation to the object of theAct? Now it seems to me that both the tests are satisfiedin the present case. The tax payers are classifiedaccording to the area of lands held by them. That is quitean intelligible basis on which to make a classification;holders of varying areas of land can(1) [1955] 1 S.C.R. 1045 1049.1398quite understandably be placed in different classes.Next, has such a basis of classification, a rationalrelation to the object of the Act? The Act is a taxingstatute. It is intended to collect revenue for thegovernmental business of the State. It says that one of itsobjects is to provide a low and uniform rate of basic tax.Another object mentioned is to replace all other duespayable to the Government in respect of the ownership of theland by a uniform basic tax. Why is it to be said that theuse of the area of land held as the basis of classificationhas no rational relation to these objects. I find noreason. The object is to tax land held in the State forraising revenues. It is the holding of the land in theState that makes the owner liable to pay tax. It wouldfollow that the quantum of the tax can be reasonably linkedwith the quantum of the holding.Why is it said that the classification on the basis of areais bad? It is only because it imposes unequal burden of thetax on the owners of land; because owners of less productiveland would have a larger burden put on them. Now if thisargument is right, then tax on land can be imposed onlyaccording to its productivity. I have not been shown anyauthority which goes to this length. I am further unable tosee how productivity as the basis of classification could besaid to have a more rational relation to the object of astatute collecting revenue by taxing land held in the State.The tax is not levied because the land is productive butbecause the land is held in the State. Again if the taxwhich could be imposed on land had to be correlated to itsproductivity, then the State would have no power to taxunproductive land and the provision in the Constitution thatit would have power to tax land would, to that extent, befutile. It seems to me that a contention leading to such aresult cannot be accepted.Reliance was placed for the petitioners on Cumberland CoalCompany v. Board of Revision on Tax Assessments (1) insupport of the contention that a tax on land not based onits productivity, violates Art. 14.(1) 76 L.Ed. 146.99I am unable to hold that this case supports the contention.What had happened there was that a certain statute hadimposed a tax ad valorem on all coal situated in a certainarea and in assessing the tax, the coal of the CumberlandCoal Company had been assessed by the authorities concernedat its full value while the coal of the rest of the classliable to the tax had been assessed at a lower value.Thereupon it was held that "the intentional systematicundervaluation by State Officials-of taxable property of thesame class belonging to other owners contravenes the con-

Page 16 of 20 stitutional right of one taxed on the full value of his property." On this view of the matter the Supreme Court ofAmerica directed readjustment of the assessments. Thestatute with which this case was concerned had levied thetax ad valorem which, it may be, is the same thing as a taxcorrelated to productivity. The case had therefore nothingto do with the question that a tax on coal otherwise than advalorem would be unconstitutional. In fact this case didnot declare any statute invalid.Then it seems to me that if the contention of thepetitioners is right, and land could be taxed only on itsproductivity, for the same reason, taxes on all other thingswould have to be correlated to the income to be derived fromthem. The result would be far reaching. I am not preparedto accept a contention producing such a result and noauthority has been cited to lead me to accept it.It may be that as lands are not of equal productivity, sometax payers may be able to pay the tax out of the income ofthe land taxed while others may have to find the money fromanother source. To this extent the Act may be more hard onsome than on others. But I am unable to see that for thatreason it is unconstitutional. All class legislation putssome in a more disadvantageous position than others. If theclassification made by the law is good, as I think is thecase with the present Act, the resultant hardship alonecannot make it bad. It was said in Magonn v. IllinoisTrust and Savings Bank(1), "It is hardly(1) 42 L.Ed. 1037, 1043.100necessary to say that hardship, impolicy, or injustice ofstate laws is not necessarily an objection to theirconstitutional validity."It is then said that sub-sec. (1) of s. 5A, which wasintroduced 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, alllands had not been surveyed and so the areas of all holdingswere not known. In the absence of such knowledge the taxwhich was payable on the basis of the areas of the holdingscould not be assessed on unsurveyed lands, so the sectionprovides that pending the survey, the Government will havepower to make a provisional assessment on unsurveyed lands.This provision was necessary as the survey was bound to taketime.The contention is that a. 5A(1) gives arbitrary power to theGovernment to make a provisional assessment on any person itchooses, leaving out others from the provisional assessment.I am unable to read the sub-section in that way. It may bethat it leaves it to the Government to make a provisionalassessment if it chooses. This does not result in anyillegal classification. The surveyed lands and unsurveyedlands are distinct classes of properties and may bedifferently treated. Again, all unsurveyed lands would onsurvey have to pay tax from the beginning. It would followthat the holders of both classes of lands are eventuallysubjected to the same burden. As to the contention thatunder this section the Government has the right to levy the

Page 17 of 20 provisional assessment at its choice on some and not on all holders of unsurveyed lands, I am unable to agree that thisis a proper reading of the section. In my view, the101expression "a person" in the section does not lead to thatconclusion. That expression should be read as "all persons"and it is easily capable of being so read. The sectionsays, "It shall' be competent for the' Government to make aprovisional assessment of the basic tax payable by aperson". Now the basic tax is payable by all personsholding land. So the provisional assessment, if made, hasto be on all persons holding lands whose lands have not beensurveyed. The Government cannot, therefore, pick andchoose. A statute is intended to be legal and it hastherefore to be read in a manner which makes it legal ratherthan in a manner which makes it illegal. If the Governmentdid not make the provisional assessment in the case of allliable to such assessment, then the Government's actioncould be legitimately questioned. It has however not infact been said in these petitions that in deciding to makethe provisional assessment the Government has made anydiscrimination between the persons liable to suchassessment.Section 5A(1) is also attacked on the ground that it isagainst rules of natural justice in that it does not saythat in making the provisional assessment, any hearing wouldbe given to the person sought to be assessed or requiring areturn from him or giving him a right of appeal in respectof the provisional assessment made. It is true that the'section does not expressly provide for a hearing beinggiven. It seems to me however that if according to therules of natural justice the assessee was entitled to ahearing, an assessment made without giving him such ahearing would be bad. The Act must be read so as to imply aprovision requiring compliance with the rules of naturaljustice. Such a reading is not impossible in the presentcase as there is nothing in the Act indicating that therules 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 certaincertificate which did not provide the procedure as to howthe architect was to conduct himself, came up forconsideration that, "No doubt, in the(1) 10 A.C. 229, 240.102absence of special provisions as to how the person who is todecide is to proceed, the law will imply no more than thatthe substantial requirements of justice shall not beviolated." Again in Maxwell on Statutes (10th ed.) p. 370 ithas been said, "In giving judicial powers to affectprejudicially the rights of person or property, a statute isunderstood as silently implying, when it does not expresslyprovide, the condition or qualification that the power is tobe exercised in accordance with the fundamental rules ofjudicial procedure, such, for instance, as that whichrequires that before its exercise, the person sought to beprejudicially affected shall have an opportunity of defend-ing himself." In so far as this Act confers a power on theGovernment to discharge the judicial duty of making aprovisional 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 muchconsequence. If the assessee is entitled to be heard, thefact that he is not asked to make a return, would notconstitute a departure from the rules of natural justice.

Page 18 of 20 Likewise, the absence of a right of appeal is not something on which the petitioners can rely. Rules of natural justicedo 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 viewof the high authority of the person assessing, the absenceof a right of appeal is not likely to cause any miscarriageof justice. I am therefore unable to hold that in theabsence of express provisions laying down the procedureaccording 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 thepresent cases, provisional assessments had been made, the,assessees had either themselves supplied the area of thelands held by them or the area had been determined aftergiving them a hearing. After the area has been determine ,the amount of the tax payable is decided by a simplecalculation at the rate103of Rs. 2 per acre of land held and with regard to this, nohearing is required.Then again sub-see. (2) of s. 5A provides that theGovernment after conducting a survey of the lands mentionedin sub-sec. (1) under which provisional assessment is to bemade, shall make a regular assessment and adjustments wouldhave to be made in regard to tax already paid on the basisof the regular assessment. A point is made that there is notime limit fixed within which the regular assessment is tobe made and so the Act leaves it to the arbitrary decisionof the Government when to make the regular assessment. I donot 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 soonafter the survey, as is reasonably possible.It is also said that s. 7 of the Act offends Art. 14. Thissection gives power to the Government to exempt from theoperation of the Act such lands or class of lands as theGovernment may by notification decide. This section doesnot indicate on what grounds the exemption is to be granted.It therefore seems to me that it gives arbitrary power tothe Government and offends Art. 14. But the section isclearly severable from the rest of the Act. If the sectionis taken out of the Act, the operation of the rest of theAct will not in the least be affected. The only effect willthen be that the Government will have no power to exempt anyland from the tax. That will not in any way affect theother provisions of the Act. The invalidity of this sectionis therefore no reason for declaring the entire Act illegal.It may be pointed out that it is not alleged in thepetitions that the Government has exempted any lands orclass of lands from the operation of the Act.It is contended that s. 8 of the amending Act also shows thearbitrary nature of the Act. That section provides that ifany difficulty arises in giving effect to the provisions ofthis Act, the Government may by order do anything notinconsistent with such provisions which appears to it to benecessary or expedient104for removing the difficulty. This is a common form ofprovision now found in many Acts. The power given under itcannot be said to be uncontrolled for it must be exercisedconsistently with the Act and to remove difficulties arisingin giving effect to the Act. In any event, this provisionis contained in the amending Act only. Even if the sectionbe held to be invalid that would not affect, the rest of the

Page 19 of 20 amending Act or any question that arises on these petitions. The validity of the Act is also challenged on the groundthat it infringes Art. 19, cl. (1), sub-cls. (f ) & (g).This challenge seems to me to be wholly untenable. Apartfrom the question whether a taxing statute can becomeinvalid as offending Art. 19, as to which the position onthe authorities does not seem to be very clear, it is plainthat Art. 19 permits reasonable restrictions to be put onthe rights mentioned in subcls. (f ) & (g). Now there is nodispute that the rate of tax fixed by the Act is a very lowrate. It has not been said that the rate fixed isunreasonable. It clearly is not so. The restrictions onthese rights under Art. 19(1), (f) & (g) put by the Act, ifany, are clearly reasonable. These rights cannot thereforebe said to have been infringed by the Act.The lands of the petitioners are lands on which standforests. It is said that under the Madras Preservation ofPrivate Forests Act, (Act XXVII of 1949), which applies tothe lands with which we are concerned as they are situatedin an area which previously formed part of the State ofMadras, the owners of the forests can work them only withthe permission of the officer mentioned in that Act. It issaid that the control imposed by the officer has been suchthat the income received from the forest is much less thanthe tax payable under the Act in respect of the land onwhich the forest stands. Taking by way of illustrationPetition No. 13, it is pointed out that the income from theforest with which that petition is concerned was Rs. 8,477for the year 1956-57 while the tax payable under the Act formore or less the same period was Rs. 1,51,000. I am unableto hold that because of this the Act offends Art. 19(1), (f)and (g). 105It is not stated that the land is not capable of producingany income other than the income from the forest standingon it. There is nothing to show that in all times to comethe income from the land including the income from theforest, will be less than the tax imposed on it by the Act.The area of the land concerned in Petition No. 13 isenormous being about 75,500 acres. I am further unable tohold the impugned' Act to be invalid because of action thatmay be taken under another Act, namely, the Madras Act XXVIIof 1949.The validity of the Act is challenged also on the groundthat it offends Art. 31 of the Constitution. I am unable tosee any force in this contention. If the statute isotherwise valid, as I have found the present Act to be, itcannot, even if it deprives any person of property, be saidto offend Art. 31(1). It has been held by this Court inRamjilal v. Income-tax Officer,. Mohindargarh (1) that"clause (1) of Art. 31 must be regarded as concerned withdeprivation of property otherwise than by the imposition orcollection of tax, for otherwise Art. 265 becomes whollyredundant." No question of cl. (2) of Art. 31 being violatedarises here for the Act does not deal with any acquisitionof property.It is also said that the Act is a colourable piece oflegislation, namely, that though in form a taxing statuteit, in effect, is intended to expropriate lands, held by thecitizens in the State by imposing a tax too heavy for theland to bear. As was said in Raja Bhairebendra Narayan Bhupv. The State of Assam (2) "The doctrine of colourablelegislation is relevant only in connection with the questionof legislative competency". In the present case, therebeing in my view, no want of legislative competency in the

Page 20 of 20 legislature which passed the Act in question, the Act cannot be assailed as a piece of colourable legislation. I may addthat I do not accept the argument that the Act is in itsnature expropriatary or- that the tax imposed by it isreally excessive.(1)[1951] S.C.R. 127, 136.(2) [1956] S.C.R. 303.14106I come now to the last argument advanced by the petitioners.It is said that the Act was beyond the legislaturecompetence of the State Legislature. It is conceded thatthe State Legislature has power to impose a tax on landunder entry 49 of List 2 in the Seventh Schedule to theConstitution, but it is said that land as mentioned in thatentry does not include lands on which forests stand. It iscontended that the State Legislature has power to legislateabout forests under entry 19 of that List and also as toland under entry 18. There is however no power to impose a-axon forests while there is power under entry 49 of thatlist to tax land. Therefore, it is said, that there is nopower to impose tax on lands on which forests stand and theAct in so far as it imposes tax on lands covered by forests,which the lands of the petitioners are, is henceincompetent.It is not in dispute that a State Legislature has no powerto impose a tax on a matter with regard to which it has thepower to legislate but has been given no express power toimpose a tax. Therefore, I agree, that a State Legislaturecannot impose tax on forests. I am however not convincedthat "land" in entry 49 is not intended to include land onwhich a forest stands. No doubt, a forest must stand onsome land. In Shorter Oxford Dictionary, one of the mean-ings of "forest" is given as an extensive tract of landcovered by trees and undergrowth, sometimes intermingledwith pastures. The concepts of forest and land however areentirely different. The principal idea conveyed by the word"forest" is the trees and other growth on the land. Underentry 19 there may no doubt be legislation with regard toland in so far it is necessary for the purpose of the forestgrowing on it. It is well known that entries in thelegislative lists have to be read as widely as possible. Itis 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 49and entry 18 deal with entirely different matters.Therefore, under entry 49 taxation 107on 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 ofthe Court, these Petitions are allowed with costs againstthe contesting Respondent, the State of Kerala.Petitions allowed.

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Case Number Writ Petition (Civil) 13 of 1958

Judgment Date 09-12-1960

Bench SINHA, BHUVNESHWAR P.(CJ),IMAM, SYED JAFFER,SARKAR, A.K.,SUBBARAO, K.,SHAH, J.C.

CITED SECTIONS

  • Section.7 of Constitution of India Arts 14191f 31 265 Schedule 7 List II Entries 19 49 HEADNOTE The TravancoreCochin Land Tax Act 1955
  • Section.4 of Constitution of India Arts 14191f 31 265 Schedule 7 List II Entries 19 49 HEADNOTE The TravancoreCochin Land Tax Act 1955
  • Section.5 of Constitution of India Arts 14191f 31 265 Schedule 7 List II Entries 19 49 HEADNOTE The TravancoreCochin Land Tax Act 1955
  • Section.7 of The TravancoreCochin Land Tax Act 1955
  • Section.4 of The TravancoreCochin Land Tax Act 1955
  • Section.5 of The TravancoreCochin Land Tax Act 1955

CITED KEYWORDS