13 to 24 42 and 46 to 54 of 1958
Petitions under Article 32 of the Constitution of India for enforcement of Fundamental Rights
MC Setalvad Attorney General for India Syed Mahmud J B Dadachanji section N Andley Rameshwar Nath and P L Vohra for the petitioners in petitions Nos 13 18 and 46 54 of 1958
CK Daphtary Solicitor General of India Syed Mahmud J B Dadachanji section N Andley Rameshwar Nath and P L Vohra for the petitioners in Petitions Nos
19 24 of 1958
SN Andley Rameshwar Nath J B Dadachanji and P L Vohra for the petitioner in petition No 42 of 1958
KV Suryanarayana Iyer Advocate General of Kerala and Sardar Bahadur for the respondents
December 9
The Judgment of Sinha CJ Jafer Imam Subba Rao and Shah JJ was delivered 81 by Sinha C J Sarkar J delivered a separate Judgment
SINHA C J
In this batch of 22 petitions under article 32 of the Constitution the petitioners impugn the constitutionality of the Travancore Cochin Land Tax Act XV of 1955 as amended by the Travancore Cochin Land Tax Amendment Act X of 1957 which hereinafter will be referred to as the Act
The Act came into force on June 21 1955 and the Amending Act on August 6 1957
The petitioners are owners of forest areas in certain parts of the State of Kerala which before the reorganisation of States formed part of the State of Madras
The respondents to the petitions are 1 the State of Kerala and 2 the District Collector Palghat These petitions are based on allegations which are more or less similar and the following allegations made in Writ Petition No 42 of 1958 may be taken as typical and an extreme case which was placed before us in detail to bring into bold relief the full significance and effect of the legislation impugned in these cases
The petitioner in Petition 42 of 1958 is a citizen of India who owns forests in certain parts of Palghat Taluk in Palghat District which was part of the State of Madras before the reorganisation of States
These forests are now in the State of Kerala
Up to the time that these forests were in the State of Madras as it then was the Madras Preservation of Private Forests Act Madras Act XXVII of 1949 governed these forests
Even after these areas were transferred to the State of Kerala the said Madras Act XXVII of 1949 continued to apply to these forests
Under the said Madras Act the owners of forests like the petitioner could not sell mortgage lease or otherwise alienate any portion of their forests without the previous sanction of the District Collector nor could they without similar permission cut trees or do any act likely to denude the forest or diminish its utility as such
The District Collector in exercise of the powers under the Act does not ordinarily permit the cutting of more than a small 82 number of trees in the forest
Thus the petitioner has not the right fully to exploit the forest wealth in his forest area and has to depend upon the previous permission of the Collector
In exercise of the powers given to the Collector under the Madras Act aforesaid the petitioner s lessee was given permission to cut certain trees in his forest which brings to the petitioner by way of income from
the forest a sum of Rs 3100 per year
Under the Act a tax called land tax at a flat rate of Rs 2 per acre has been imposed on the petitioner
In pursuance of the provisions of the Act as amended as aforesaid the District Collector of Palghat purporting to act under the provisions of section 5A of the Act issued a notice to the petitioner provisionally assessing the petitioner s forest under the said Act to a sum of fifty thousand rupees per annum and informing the petitioner that if no representation was made within thirty days the said provisional assessment would be confirmed and a demand notice would be issued
As there has been no survey of the area of forest land in the petitioner s possession the District Collector has conjectured the said area to be twenty five thousand acres
The Petitioner had made an application to the District Collector under the Madras Preservation of Private Forests Act for felling trees in an area of one thousand acres but the Collector was pleased to grant permission to out trees from 450 acres only in the course of five years at the rate of 90 acres a year
The petitioner has leased out that right to another person who made the highest bid of Rs 3100 per year as the landlord s fee for the right to cut and remove the trees and other minor produce
Besides the demand aforesaid the revenue authorities have levied about four thousand rupees as tax on the surveyed portions of the forest
The petitioner s forest has large areas of and rocks rivulets and gorges
The petitioner in those circumstances questions the constitutional validity of the Act the provisions of which will be examined hereinafter
These petitions have been opposed on behalf of the first respondent and the allegations and submissions 83 made in the petitions are sought to be controverted by a counter affidavit sworn to by an Assistant Secretary of the Kerala Gover nment in the Revenue Department
It is in similar terms as a matter of fact printed in most of these cases
It is contended therein on behalf of the respondent that the petitions are not maintainable in as much as no fundamental rights of the petitioners have been infringed that the allegations about the income from the forest lands are not admi tted and by way of submission it is added they are irrelevant for the purposes of these petitions
It is stated that the Act was passed with a view to unifying the system of land tax in the whole of the State of Kerala
It is submitted that the validity of the Act has to be determined in the light of article 265 of the Constitution and that articles 19 and 31 were wholly out of the way
It is denied that the tax imposed was harsh or arbitrary or has the effect of violating the petitioner s right of holding property and it was asserted that the allegations in respect of income from the forests are entirely irrelevant as the tax was not a tax on income but was an impost on land
It is equally irrelevant whether the land is productive or not
It is also contended that in view of the provisions of article 315bi of the Constitution article 312 could not be relied upon by the petitioners
The allegation of the petitioners that the Act is a device to confiscate private forests is denied
It is admitted that except in certain cases the entire area is unsurveyed and that steps are being taken for surveying those areas
It is also stated that the areas shown in the notices served on the petitioners are based on information available to the Collector of the District and lastly it is stated that only notice has been issued calling upon the petitioners to make their representations if any to the proposed provisional assessments
The assessments have not yet been made and therefore there is no question of demand of tax being enforced by coercive processes
Finally it is suggested that the Act has been enacted for the legitimate revenue purposes of the State
Before entering upon a discussion of the points in 84 controversy it is convenient at this stage to indicate briefly the relevant provisions of the Act which is impugned by the petitioners as ultra vires the State Legislature
The preamble of the Act is in these terms Whereas it is deemed necessary to provide for the levy of a low and uniform rate of basic tax on all lands in the State of Travancore Cochin
 Basic tax has been defined as the tax imposed under the provisions of this Act
Section 3 lays down that the arrangement made under the Act for the levy of the basic tax shall be deemed inter alia to be a general revenue settlement of the State notwithstanding anything in any statute grant deed or other transaction subject to certain provisos not material for our present purposes
The charging section is section 4 which is in these terms Subject to the provisions of this Act there shall be charged and levied in respect of all lands in the State of whatever description and held under whatever tenure a uniform rate of tax to be called the basic tax
 Section 5 lays down the rate of the tax which by the Amendment has been raised to Rs 2 per acre two pies per cent
of land per annum and the basic tax charged and levied at that rate shall be the tax payable to the Government in lieu of any existing tax in respect of land
Section 6 lays down that any stipulation in any contract or agreement or lease or other transaction to pay land revenue assessment of any land shall be construed as stipulation for the payment of the amount
of basic tax as charged and levied under the Act
Section 7 is in these terms This Act is not applicable to lands held or leased by the Government or any land or class of lands which the Government may by notification in the Gazette either wholly or partially exempt from the provisions of this Act Sections 8 and 9 provide for the continuance of the liability to pay certain dues in respect of existing tenures in addition to the basic tax in respect of lands covered by those tenures
Section 10 abolishes the 85 irrigation assessment charged on certain tank beds and other water reservoirs named and described therein
Section 11 preserves the right of the Government to levy certain irrigation and water cesses and lays down that the Act shall not affect the power of the Government to levy any rate or alter any existing rate of irrigation or water cess on any land as they deem fit
Cesses other than those mentioned in section 11 are also abolished by section 12
Section 13 authorises the Government to appoint such officers as they deem necessary for the purpose of the Act
Section 14 lays down the bar of suits against the Government in respect of anything done or any order passed under the Act
Section 15 saves the right of the Government which accrued to it before the Act came into force as also the conditions of any agreement
grant or deed relating to any land except to the extent indicated in the Act
Section 16 vests the Government with the power to make rules for carrying into effect the provisions of the Act with particular reference to the power to make rules for the apportionment of the basic tax charged on certain kinds of holdings for defining the powers and duties of the officers appointed under the Act and for determining the kist instalments and the due date for the payment thereof
These in short are the provisions of the Act
The Act as indicated above was amended by Act X of 1957 which substituted the words State of Kerala for the words State of Travancore Cochin and made certain other consequential changes
The Amending Act introduced section 5A which has been very much assailed in the course of the argument before us and it is therefore necessary to set it out in full
It is in these terms section 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 2The 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 section 9 section 3 of the Madras Revenue Recovery Act 1864 has been substituted in these terms 3
Landholder when and to whom to pay kist
Every landholder shall pay to the Collector or other officer empowered by him in this behalf the land tax due from him on or before the day fixed for payment under the rules framed under section 16 of the Land Tax Act 1955
 From a review of the provisions of the Act as amended as aforesaid it will be clear that the provisions of the Act lay down in barest outline the policy to impose a uniform and what is asserted to be a low rate of land tax on all lands in the State of Kerala
Unlike other taxing statutes it does not make any provision for issue of notice to the assessee nor is there any provision for submission of a return by the assessee
By section 5A it authorises the Government to make a provisional assessment in respect of land which has not been surveyed and such provisional assessment is made payable by the person made liable under the Act
It does not make any provision for any appeals in cases where the assessee may feel dissatisfied with the assessment
The Act does contemplate the making of a regular assessment of the basic tax
But it does not indicate as to when the regular assessment would be made except indicating that it can be made only after a survey has been made in respect of the land assessed
The Act could not have been cast in more general terms and the proceedings under the Act could not have been more summary
It has thus the merit of brevity as also of simplicity derived 87 from the fact that a tax is levied at a flat rate irres pective of the quality of the land and consequently of its productive capacity
Under the Act the charge has to be levied whether or not any income has been derived from the land
The Legislature was so much in earnest about levying and realising the tax that it could not even wait for a regular survey of the lands to be assessed with a view to determining the extent and character of the land
Such are the provisions and the effect of the Act which has been assailed on a number of grounds on behalf of the petitioners
It is contended in the first instance that inequality is writ large in the provisions of the Act which is clearly discriminatory in character and effect and thus infringes article 14 of the Constitution
As the Act does not have any regard to the quality of the land or its productive capacity and a tax at a flat rate of Rs 2 per acre is proposed to be levied under the Act it is further contended it imposes very unreasonable restrictions on the right to hold property and is thus an invasion on the rights guaranteed to the petitioners under article 191f of the Constitution
The Act does not lay down any provision calling for a return from the assessee for any enquiry or investigation of facts before the provisional assessment is made or for any right of appeal to any higher authority from the order of provisional assessment in fact there is no provision for hearing the assessee at any stage
The Act is of an arbitrary character and is thus wholly repugnant to the guaranteed rights of the petitioners
Section 7 quoted above gives uncanalised unlimited and arbitrary power to the Government to pick and choose in the matter of grant of total or partial exemption from the provisions of the Act
It also suffers from the vice of discrimination
It has also been vehemently argued that the Act though it purports to be a tax on land is really a law relating to forests in possession of the petitioners and would not come within the purview of entry 18 read by itself or in conjunction with entry 45 of List II but is law relating to forests under entry 19
If we tear the veil in which the real 88 purpose and effect of the Act has been shrouded it will I appear that the true character and effect of the Act is not to levy a tax on land but to expropriate the private owners of the forests without payment of any compensation whatsoever
Lastly it has been urged that the whole Act has been conceived with a view to confiscating private property there being no question of any compensation being paid to those who may be expropriated as a result of the working of the Act
This last argument is based on the assertion that the tax proposed to be levied on private property in the State of Kerala has absolutely no relation to the paying capacity of the persons sought to be taxed with reference to the income they could derive or actually did derive from the property
On behalf of the State of Kerala the learned Advocate General has argued that though in most of the cases that is to say except in seven petitions Petitions 21 22 47 49 50 51 and 54 the lands have not been surveyed the areas mentioned in the notices proposing provisional assessment have been ascertained through the local agencies of the Government
It was further contended that the State had only declared the liability to the payment of the tax at a flat rate of Rs 2 per acre in respect of land irrespective of the income to be derived therefrom
Hence there was no necessity for making provision for a detailed enquiry or investigation
The rate of the tax being known and the area of the land to be taxed having been locally ascertained even though without any regular survey what remained was merely quantifying the tax which was of a purely administrative character
The local agencies estimated the land in possession of particular persons
Those persons were called upon to pay provisionally at the rate fixed by the statute
The State has by executive action appointed authorities who are expected to act in accordance with the principle of natural justice
There was therefore no need for laying down any elaborate procedure as in other instances of taxing statutes
There is a presumption that the authority appointed by the Government would act bona fide and in a 89 proper manner
If there was any case of unfair dealings the matter could be brought to the Court
It was greatly emphasised that as a flat rate of taxation had been envisaged by the Act and as ultimately the tax at that rate would be realised from land found to be in possession of particular persons after a regular survey the regular survey to be ultimately made would automatically determine the amount of tax to be paid and the adjustment of the taxes already paid could be made on that basis
On the legal aspect of the controversy raised on behalf of the petitioners it was argued that the Act has its justification in article 265 of the Constitution which was not subject to the provisions of Part III of the Constitution and that therefore articles 14 19 31 could not be pressed in aid of the petitioners
It was also contended that even if the Act is in effect confiscatory it cannot be questioned being a taxing statute
Finally it was urged that the question of the amount of income derived by the petitioners from the property sought to be taxed is wholly irrelevant because the Act was not a tax on income but it was a tax on the property itself
The most important question that arises for consideration in these cases in view of the stand taken by the State of Kerala is whether article 265 of the Constitution is a complete answer to the attack against the constitutionality of the Act
It is therefore necessary to consider the scope and effect of that Article
Article 265 imposes a limitation on the taxing power of the State in so far as it provides that the State shall not levy or collect a tax except by authority of law that is to say a tax cannot be levied or collected by a mere executive fiat
It has to be done by authority of law which must mean valid law
In order that the law may be valid the tax proposed to be levied must be within the legislative competence of the Legislature imposing a tax and authorising the collection thereof and secondly the tax must be subject to the conditions laid down in article 13 of the Constitution
One of such conditions envisaged by article 132 is that the Legislature shall not make any law which 90 takes away or abridges the equality clause in article 14 which enjoins the State not to deny to any person equality before the law or the equal protection of the laws of the country
It cannot be disputed that if the Act infringes the provisions of article 14 of the Constitution it must be struck down as unconstitutional
For the purpose of these cases we shall assume that the State Legislature had the necessary competence to enact the law though the petitioners have seriously challenged such a competence
The guarantee of equal protection of the laws must extend even to taxing statutes
It has not been contended otherwise
It does not mean that every person should be taxed equally
But it does mean that if property of the same character has to be taxed the taxation must be by the same standard so that the burden of taxation may fall equally on all persons holding that kind and extent of property
If the taxation generally speaking imposes a similar burden on every one with reference to that particular kind and extent of property on the same basis of taxation the law shall not be open to attack on the ground of inequality even though the result of the taxation may be that the total burden on different persons may be unequal
Hence if the Legislature has classified persons or properties into different categories which are subjected to different rates of taxation with reference to income or property such a classification would not be open to the attack of inequality on the ground that the total burden resulting from such a classification is unequal
Similarly different kinds of property may be subjected to different rates of taxation but so long as there is a rational basis for the classification article 14 will not be in the way of such a classification resulting in unequal burdens on different classes of properties
But if the same class of property similarly situated is subjected to an incidence of taxation which results in inequality the law may be struck down as creating an inequality amongst holders of the same kind of property
It must therefore be held that a taxing statute is not wholly immune from attack on the ground that it infringes the equality clause ill 91 article 14 though the Courts are not concerned with the policy underlying a taxing statute or whether a particular tax could not have been imposed in a different way or in a way that the Court might think more just and equitable
The Act has therefore to be examined with reference to the attack based on article 14 of the Constitution
It is common ground that the tax assuming that the Act is really a taxing statute and not a confiscatory measure as contended on behalf of the petitioners has no reference to income either actual or potential from the property sought to be taxed
Hence it may be rightly remarked that the Act obliges every person who holds land to pay the tax at the flat rate prescribed whether or not he makes any income out of the property or whether or not the property is capable of yielding any income
The Act in terms claims to be a general revenue settlement of the State section 3
Ordinarily a tax on land or land revenue is assessed on the actual or the potential productivity of the land sought to be taxed
In other words the tax has reference to the income actually made or which could have been made with due diligence and therefore is levied with due regard to the incidence of the taxation
Under the Act in question we shall take a hypothetical case of a number of persons owning and possessing the same area of land
One makes nothing out of the land because it is arid desert
The second one does not make any income but could raise some crop after a disproportionately large investment of labour and capital
A third one in due course of husbandry is making the land yield just enough to pay for the incidental expenses and labour charges besides land tax or revenue
The fourth is making large profits because the land is very fertile and capable of yielding good crops
Under the Act it is manifest that the fourth category in our illustration would easily be able to bear the burden of the tax
The third one may be able to bear the tax
The first and the second one will have to pay from their own pockets if they could afford the tax
If they cannot afford the tax the property is 92 liable to be sold in due process of law for realisation of the public demand
It is clear therefore that inequality is writ large on the Act and is
inherent in the very provisions of the taxing section
It is also clear that there is no attempt at classification in the provisions of the Act
Hence no more need be said as to what could have been the basis for a valid classification
It is one of those cases where the lack of classification creates inequality
It is therefore clearly hit by the prohibition to deny equality before the law contained in article 14 of the Constitution
Furthermore sec
7 of the Act quoted above particularly the latter part which vests the Government with the power wholly or partially to exempt any land from the provisions of the Act is clearly discriminatory in its effect and therefore infringes article 14 of the Constitution
The Act does not lay down any principle or policy for the guidance of the exercise of discretion by the Government in respect of the selection contemplated by a 7
This Court has examined the cases decided by it with reference to the provisions of article 14 of the Constitution in the case of Shri Ram Krishna Dalmia vs Shri Justice section B Tendolkar and others 1
section R Das C J speaking for the Court has deduced a number of propositions from those decisions
The present case is within the mischief of the third proposition laid down at pages 299 and 300 of the Report the relevant portion of which is in these terms A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply
In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification
93 After such scrutiny the Court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situate and that therefore the discrimination is inherent in the statute itself p 299 of the Report
The observations quoted above from the unanimous judgment of this Court apply with full force to the provisions of the Act
It has therefore to be struck down as unconstitutional
There is no question of severability arising in this case because both the charging sections section 4 and section 7 authorising the Government to grant exemptions from the provisions of the Act are the main provisions of the Statute which has to be declared unconstitutional
The provisions of the Act are unconstitutional viewed from the angle of the provisions of article 191f of the Constitution also
Apart from the provisions of sections 4 and 7 discussed above with reference to the test under article 14 of the Constitution we find that section 5A is also equally objectionable because it imposes unreasonable restrictions on the rights to hold property safeguarded by article 191f of the Constitution
Section 5A declares that the Government is competent to make a provisional assessment of the basic tax payable by the holder of unsurveyed land
Ordinarily a taxing statute lays down a regular machinery for making assessment of the tax proposed to be imposed by the statute
It lays down detailed procedure as to notice to the proposed assessee to make a return in respect of property proposed to be taxed prescribes the authority and the procedure for hearing any objections to the liability for taxation or as to the extent of the tax proposed to be levied and finally as to the right to challenge the regularity of assessment made by recourse to proceedings in a higher Civil Court
The Act merely declares the competence of the Government to make 94 a provisional assessment and by virtue of section 3 of the Madras Revenue Recovery Act 1864 the land holders may be liable to pay the tax
The Act being silent as to the machinery and procedure to be followed in making the assessment leaves it to the Executive to evolve the requisite machinery and procedure
The whole thing from beginning to end is treated as of a purely administrative character completely ignoring the legal position that the assessment of a tax on person or property is at least of a quasi judicial character
Again the Act does not impose an obligation on the Government to undertake survey proceedings within any prescribed or ascertainable period with the result that a land holder may be subjected to repeated annual provisional assessments on more or less conjectural basis and liable to pay the tax thus assessed
Though the Act was passed about five years ago we were informed at the Bar that survey proceedings had not even commenced
The Act thus proposes to impose a liability on land holders to pay a tax which is not to be levied on a judicial basis because 1 the procedure to be adopted does not require a notice to be given to the proposed assessee 2 there is no procedure for rectification of mistakes committed by the Assessing Authority 3 there is no procedure prescribed for obtaining the opinion of a superior Civil Court on questions of law as is generally found in all taxing statutes and 4 no duty is cast upon the Assessing Authority to act judicially in the matter of assessment proceedings
Nor is there any right of appeal provided to such assessees as may feel aggrieved by the order of assessment
That the provisions aforesaid of the impugned Act are in their effect confiscatory is clear on their face
Taking the extreme case the facts of which we have stated in the early part of this judgment it can be illustrated that the provisions of the Act without proposing to acquire the privately owned forests in the State of Kerala after satisfying the conditions laid down in article 31 of the Constitution have the effect of eliminating the private owners through the machinery of the Act
The petitioner in petition 42 95 of 1958 has been assumed to own 25 thousand acres of forest land
The liability under the Act would thus amount to Rs 50000 a year as already demanded from the petitioner on the basis of the provisional assessment under the provisions of section 5A
The petitioner is making an income of Rs 3100 per year out of the forests
Besides the liability of Rs 50000 as aforesaid the petitioner has to pay a levy of Rs 4000 on the surveyed portions of the said forest
Hence his liability for taxation in respect of his forest land amounts to Rs 54000 whereas his annual income for the time being is only Rs 3100 without making any deductions for expenses of management
Unless the petitioner is very enamoured of the property and of the right to hold it may be assumed that he will not be in a position to pay the deficit of about Rs 51000 every year in respect of the forests in his possession
The legal consequences of his making a default in the payment of the aforesaid sum of money will be that the money will be realised by the coercive processes of law
One can easily imagine that the property may be sold at auction and may not fetch even the amount for the realisation of which it may be proposed to be sold at public auction
In the absence of a bidder forthcoming to bid for the offset amount the State ordinarily becomes the auction purchaser for the realisation of the outstanding taxes
It is clear therefore that apart from being discriminatory and imposing unreasonable restrictions on holding property the Act is clearly confiscatory in character and effect
It is not even necessary to tear the veil as was suggested in the course of the argument to arrive at the conclusion that the Act has that unconstitutional effect
For these reasons as also for the reasons for which the provisions of sections 4 and 7 have been declared to be unconstitutional in view of the provisions of article 14 of the Constitution all these operative sections of the Act namely 4 5A and 7 must be held to offend article 191f of the Constitution also
The petitions are accordingly allowed with costs against the contesting respondent the State of Kerala
96 SARKARJ
These petitions were filed under Art32 of the Constitution challenging the validity of the Travancore Cochin Land Tax Act 1955 as amended by Act X of 1957
The principal Act was passed by the legislature of the State of Travancore Cochin and the Amending Act by the legislature of the State of Kerala in which the State of Travancore Cochin had been merged
The petitioners are owners of lands in the State of Kerala
The Act as amended and hereafter referred to as the Act levied a certain basic tax on all lands in the State of Kerala
The petitioners say that the levy is illegal and violates their fundamental rights
It appears from the preamble that the Act was passed as it was deemed necessary to provide for the levy of a low and uniform rate of basic tax on all lands in the State
The Act provides that the arrangement made by it for the levy of the basic tax is to be deemed to be a general revenue settlement of the State
Section 4 of the Act is the charging section and it lays down that there shall be charged and levied in respect of all lands in the State of whatever description and held under whatever tenure a uniform rate of tax to be called the basic tax
Section 5 fixes the rate of the tax at 2 n
P per cent which works out at Rs 2 per acre per annum
This section also provides that the basic tax shall be the tax payable to the Government in lieu of any other existing tax in respect of land
Section 12 abolishes all cesses on land except irrigation cess
The first ground on which the validity of the Act is challenged is that it offends the provision as to the equal protection of the laws contained in article 14 of the Constitution
The Act applies to all lands in the State and it imposes an uniform rate of tax namely Rs 2 per acre
It is said that all lands in the State have not the same productive quality that some are waste lands and others lands of varying degrees of fertility
The contention is that the tax weighs more heavily on owners of waste lands than on owners of fertile lands
It is said that it is bound to happen that some owners make no income out of their lands 97 or make a small income and they would have to pay the tax out of their pocket while the owners of better classes of lands yielding larger income would be able to pay the tax out of the income from the lands
It is contended that the Act therefore discriminates between several classes of owners of lands in the State and is void as infringing the equality clause in the Constitution
It may be conceded that all lands in the State are not of the same degree of fertility
I am however unable to see that because of that the Act can be said to discriminate between the owners of them
What is really said appears to be that the Act makes a classification of the owners of lands according to areas
Assume that the Act does so
The question then is is such a classification illegal The equal protection clause in the Constitution does not mean that there shall be no classification for the purpose of any law
It has been said by this Court in Budhan Choudhury vs The State of Bihar1 It is now well established that while article 14 forbids class legislation it does not forbid reasonable classification for the purposes of legislation
In order however to pass the test of permissible classification two conditions must be fulfilled namely i that the classification must be founded on an intelligible differential which distinguishes persons or things that are grouped together from others left out of the group and ii that differential must have a rational relation to the object
Bought to be achieved by the statute in question
On the argument of the petitioners the Act makes a classification between owners of lands using as the differentia the area of the land held by them
The question then is is that differentia intelligible and has that differentia a rational relation to the object of the Act Now it seems to me that both the tests are satisfied in the present case
The tax payers are classified according to the area of lands held by them
That is quite an intelligible basis on which to make a classification holders of varying areas of land can 1  1049
13 98 quite understandably be placed in different classes
Next has such a basis of classification a rational relation to the object of the Act The Act is a taxing statute
It is intended to collect revenue for the governmental business of the State
It says that one of its objects is to provide a low and uniform rate of basic tax
Another object mentioned is to replace all other dues payable to the Government in respect of the ownership of the land by a uniform basic tax
Why is it to be said that the use of the area of land held as the basis of classification has no rational relation to these objects
I find no reason
The object is to tax land held in the State for raising revenues
It is the holding of the land in the State that makes the owner liable to pay tax
It would follow that the quantum of the tax can be reasonably linked with the quantum of the holding
Why is it said that the classification on the basis of area is bad It is only because it imposes unequal burden of the tax on the owners of land because owners of less productive land would have a larger burden put on them
Now if this argument is right then tax on land can be imposed only according to its productivity
I have not been shown any authority which goes to this length
I am further unable to see how productivity as the basis of classification could be said to have a more rational relation to the object of a statute collecting revenue by taxing land held in the State
The tax is not levied because the land is productive but because the land is held in the State
Again if the tax which could be imposed on land had to be correlated to its productivity then the State would have no power to tax unproductive land and the provision in the Constitution that it would have power to tax land would to that extent be futile
It seems to me that a contention leading to such a result cannot be accepted
Reliance was placed for the petitioners on Cumberland Coal Company vs Board of Revision on Tax Assessments 1 in support of the contention that a tax on land not based on its productivity violates article 14
1  99 I am unable to hold that this case supports the contention
What had happened there was that a certain statute had imposed a tax ad valorem on all coal situated in a certain area and in assessing the tax the coal of the Cumberland Coal Company had been assessed by the authorities concerned at its full value while the coal of the rest of the class liable to the tax had been assessed at a lower value
Thereupon it was held that the intentional systematic undervaluation by State Officials of taxable property of the same class belonging to other owners contravenes the con stitutional right of one taxed on the full value of his property
 On this view of the matter the Supreme Court of America directed readjustment of the assessments
The statute with which this case was concerned had levied the tax ad valorem which it may be is the same thing as a tax correlated to productivity
The case had therefore nothing to do with the question that a tax on coal otherwise than ad valorem would be unconstitutional
In fact this case did not declare any statute invalid
Then it seems to me that if the contention of the petitioners is right and land could be taxed only on its productivity for the same reason taxes on all other things would have to be correlated to the income to be derived from them
The result would be far reaching
I am not prepared to accept a contention producing such a result and no authority has been cited to lead me to accept it
It may be that as lands are not of equal productivity some tax payers may be able to pay the tax out of the income of the land taxed while others may have to find the money from another source
To this extent the Act may be more hard on some than on others
But I am unable to see that for that reason it is unconstitutional
All class legislation puts some in a more disadvantageous position than others
If the classification made by the law is good as I think is the case with the present Act the resultant hardship alone cannot make it bad
It was said in Magonn vs Illinois Trust and Savings Bank1 It is hardly 1   1043
100 necessary to say that hardship impolicy or injustice of state laws is not necessarily an objection to their constitutional validity
 It is then said that sub sec
1 of section 5A which was introduced into the Act by the Amending Act offends article 14
The impugned provision is in these terms S5A 1 It shall be competent for the Government to make a provisional assessment of the basic tax payable by a person in respect of the lands held by him and which have not been surveyed by the Government and upon such assessment such person shall be liable to pay the amount covered in the provisional assessment
This section was enacted as at the date of the Act all lands had not been surveyed and so the areas of all holdings were not known
In the absence of such knowledge the tax which was payable on the basis of the areas of the holdings could not be assessed on unsurveyed lands so the section provides that pending the survey the Government will have power to make a provisional assessment on unsurveyed lands
This provision was necessary as the survey was bound to take time
The contention is that a 5A1 gives arbitrary power to the Government to make a provisional assessment on any person it chooses leaving out others from the provisional assessment
I am unable to read the sub section in that way
It may be that it leaves it to the Government to make a provisional assessment if it chooses
This does not result in any illegal classification
The surveyed lands and unsurveyed lands are distinct classes of properties and may be differently treated
Again all unsurveyed lands would on survey have to pay tax from the beginning
It would follow that the holders of both classes of lands are eventually subjected to the same burden
As to the contention that under this section the Government has the right to levy the provisional assessment at its choice on some and not on all holders of unsurveyed lands I am unable to agree that this is a proper reading of the section
In my view the 101 expression a person in the section does not lead to that conclusion
That expression should be read as all persons and it is easily capable of being so read
The section says It shall  be competent for the  Government to make a provisional assessment of the basic tax payable by a person
Now the basic tax is payable by all persons holding land
So the provisional assessment if made has to be on all persons holding lands whose lands have not been surveyed
The Government cannot therefore pick and choose
A statute is intended to be legal and it has therefore to be read in a manner which makes it legal rather than in a manner which makes it illegal
If the Government did not make the provisional assessment in the case of all liable to such assessment then the Government s action could be legitimately questioned
It has however not in fact been said in these petitions that in deciding to make the provisional assessment the Government has made any discrimination between the persons liable to such assessment
Section 5A1 is also attacked on the ground that it is against rules of natural justice in that it does not say that in making the provisional assessment any hearing would be given to the person sought to be assessed or requiring a return from him or giving him a right of appeal in respect of the provisional assessment made
It is true that the  section does not expressly provide for a hearing being given
It seems to me however that if according to the rules of natural justice the assessee was entitled to a hearing an assessment made without giving him such a hearing would be bad
The Act must be read so as to imply a provision requiring compliance with the rules of natural justice
Such a reading is not impossible in the present case as there is nothing in the Act indicating that the rules of natural justice need not be observed
It was said in Spack man vs Plumstead Board of Works 1 where a statute requiring an architect to give a certain certificate which did not provide the procedure as to how the architect was to conduct himself came up for consideration that No doubt in the 1 10 AC 229 240 102 absence of special provisions as to how the person who is to decide is to proceed the law will imply no more than that the substantial requirements of justice shall not be violated Again in Maxwell on Statutes 10th ed p 370 it has been said In giving judicial powers to affect prejudicially the rights of person or property a statute is understood as silently implying when it does not expressly provide the condition or qualification that the power is to be exercised in accordance with the fundamental rules of judicial procedure such for instance as that which requires that before its exercise the person sought to be prejudicially affected shall have an opportunity of defend ing himself In so far as this Act confers a power on the Government to discharge the judicial duty of making a provisional assessment which the petitioners say it does it must imply that the judicial process has to be observed
As regards the return that seems to me not to be of much consequence
If the assessee is entitled to be heard the fact that he is not asked to make a return would not constitute a departure from the rules of natural justice
Likewise the absence of a right of appeal is not something on which the petitioners can rely
Rules of natural justice do not require that there must always be a right of appeal
Under the Act it is the Government which makes the assess ment and it would not be unreasonable to hold that in view of the high authority of the person assessing the absence of a right of appeal is not likely to cause any miscarriage of justice
I am therefore unable to hold that in the absence of express provisions laying down the procedure according to which the provisional assessment is to be made the Act has to be held invalid
It may here be stated that in those instances where in the present cases provisional assessments had been made the assessees had either themselves supplied the area of the lands held by them or the area had been determined after giving them a hearing
After the area has been determine  the amount of the tax payable is decided by a simple calculation at the rate 103 of Rs 2 per acre of land held and with regard to this no hearing is required
Then again sub see
2 of section 5A provides that the Government after conducting a survey of the lands mentioned in sub sec
1 under which provisional assessment is to be made shall make a regular assessment and adjustments would have to be made in regard to tax already paid on the basis of the regular assessment
A point is made that there is no time limit fixed within which the regular assessment is to be made and so the Act leaves it to the arbitrary decision of the Government when to make the regular assessment
I do not think that this contention is correct
Properly read the section in the absence of any indication as to time means that regular assessment would have to be made as soon after the survey as is reasonably possible
It is also said that section 7 of the Act offends article 14
This section gives power to the Government to exempt from the operation of the Act such lands or class of lands as the Government may by notification decide
This section does not indicate on what grounds the exemption is to be granted
It therefore seems to me that it gives arbitrary power to the Government and offends article 14
But the section is clearly severable from the rest of the Act
If the section is taken out of the Act the operation of the rest of the Act will not in the least be affected
The only effect will then be that the Government will have no power to exempt any land from the tax
That will not in any way affect the other provisions of the Act
The invalidity of this section is therefore no reason for declaring the entire Act illegal
It may be pointed out that it is not alleged in the petitions that the Government has exempted any lands or class of lands from the operation of the Act
It is contended that section 8 of the amending Act also shows the arbitrary nature of the Act
That section provides that if any difficulty arises in giving effect to the provisions of this Act the Government may by order do anything not inconsistent with such provisions which appears to it to be necessary or expedient 104 for removing the difficulty
This is a common form of provision now found in many Acts
The power given under it cannot be said to be uncontrolled for it must be exercised consistently with the Act and to remove difficulties arising in giving effect to the Act
In any event this provision is contained in the amending Act only
Even if the section be held to be invalid that would not affect the rest of the amending Act or any question that arises on these petitions
The validity of the Act is also challenged on the ground that it infringes article 19 cl
1 sub cls
f   g
This challenge seems to me to be wholly untenable
Apart from the question whether a taxing statute can become invalid as offending article 19 as to which the position on the authorities does not seem to be very clear it is plain that article 19 permits reasonable restrictions to be put on the rights mentioned in subcls
f   g
Now there is no dispute that the rate of tax fixed by the Act is a very low rate
It has not been said that the rate fixed is unreasonable
It clearly is not so
The restrictions on these rights under article 191 f  g put by the Act if any are clearly reasonable
These rights cannot therefore be said to have been infringed by the Act
The lands of the petitioners are lands on which stand forests
It is said that under the Madras Preservation of Private Forests Act Act XXVII of 1949 which applies to the lands with which we are concerned as they are situated in an area which previously formed part of the State of Madras the owners of the forests can work them only with the permission of the officer mentioned in that Act
It is said that the control imposed by the officer has been such that the income received from the forest is much less than the tax payable under the Act in respect of the land on which the forest stands
Taking by way of illustration Petition No 13 it is pointed out that the income from the forest with which that petition is concerned was Rs 8477 for the year 1956 57 while the tax payable under the Act for more or less the same period was Rs 151000
I am unable to hold that because of this the Act offends article 191 f and g
105 It is not stated that the land is not capable of producing any income other than the income from the forest standing on it
There is nothing to show that in all times to come the income from the land including the income from the forest will be less than the tax imposed on it by the Act
The area of the land concerned in Petition No 13 is enormous being about 75500 acres
I am further unable to hold the impugned  Act to be invalid because of action that may be taken under another Act namely the Madras Act XXVII of 1949
The validity of the Act is challenged also on the ground that it offends article 31 of the Constitution
I am unable to see any force in this contention
If the statute is otherwise valid as I have found the present Act to be it cannot even if it deprives any person of property be said to offend article 311
It has been held by this Court in Ramjilal vs Income tax Officer
Mohindargarh 1 that clause 1 of article 31 must be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax for otherwise article 265 becomes wholly redundant No question of cl
2 of article 31 being violated arises here for the Act does not deal with any acquisition of property
It is also said that the Act is a colourable piece of legislation namely that though in form a taxing statute it in effect is intended to expropriate lands held by the citizens in the State by imposing a tax too heavy for the land to bear
As was said in Raja Bhairebendra Narayan Bhup vs The State of Assam 2 The doctrine of colourable legislation is relevant only in connection with the question of legislative competency
In the present case there being in my view no want of legislative competency in the legislature which passed the Act in question the Act cannot be assailed as a piece of colourable legislation
I may add that I do not accept the argument that the Act is in its nature expropriatary or that the tax imposed by it is really excessive
11951 SCR 127 136
2 1956 SCR 303
14 106 I come now to the last argument advanced by the petitioners
It is said that the Act was beyond the legislature competence of the State Legislature
It is conceded that the State Legislature has power to impose a tax on land under entry 49 of List 2 in the Seventh Schedule to the Constitution but it is said that land as mentioned in that entry does not include lands on which forests stand
It is contended that the State Legislature has power to legislate about forests under entry 19 of that List and also as to land under entry 18
There is however no power to impose a axon forests while there is power under entry 49 of that list to tax land
Therefore it is said that there is no power to impose tax on lands on which forests stand and the Act in so far as it imposes tax on lands covered by forests which the lands of the petitioners are is hence incompetent
It is not in dispute that a State Legislature has no power to impose a tax on a matter with regard to which it has the power to legislate but has been given no express power to impose a tax
Therefore I agree that a State Legislature cannot impose tax on forests
I am however not convinced that land in entry 49 is not intended to include land on which a forest stands
No doubt a forest must stand on some land
In Shorter Oxford Dictionary one of the mean ings of forest is given as an extensive tract of land covered by trees and undergrowth sometimes intermingled with pastures
The concepts of forest and land however are entirely different
The principal idea conveyed by the word forest is the trees and other growth on the land
Under entry 19 there may no doubt be legislation with regard to land in so far it is necessary for the purpose of the forest growing on it
It is well known that entries in the legislative lists have to be read as widely as possible
It is not necessary to cut down the plain meaning of the word land in entry 49 to give full effect to the word forest in entry 19
In my view the two entries namely entry 49 and entry 18 deal with entirely different matters
Therefore under entry 49 taxation 107 on land on which a forest stands is permissible and legal
For these reasons I would dismiss these petitions
BY COURT In accordance with the opinion of the majority of the Court these Petitions are allowed with costs against the contesting Respondent the State of Kerala
Petitions allowed


Summary:
The Travancore Cochin Land Tax Act 1955 was passed by the legislature of the State of Travancore Cochin and was amended by Act 10 of 057 by the State of Kerala
By section 4 Of the Act all lands in the State of whatever description and held under whatever tenure were to be charged and levied a uniform rate of tax to be called the basic tax
Section 7 gave power to the Government to exempt from the operation of the Act such 78 lands or class of lands which the Government may by notification decide
Section 5A which was introduced into the Act by the Amending Act enabled the Government to make a provisional assessment of the basic tax in respect of the lands which had not been surveyed by the Government and provided that the Government after conducting the survey shall make a regular assessment and make the necessary adjustments in respect of the amounts paid already
There was however no time fixed for the conduct of the survey
The petitioners who owned forest in the State challenged the constitutional validity of the Act on the grounds that the provisions of the Act contravened articles 14 19if and 311 of the Constitution of India inasmuch as 1 the Act did not have any regard to the quality of the land or its productive capacity and the levy of a tax at a flat rate of RS
2 per acre imposed very unreasonable restrictions on the right to hold property 2 the
Act did not lay down any provision calling for a return from the assessee for an enquiry or investigation of facts before the provisional assessment was made or any right of appeal to any higher authority and in fact did not make any provision for hearing the assessee at any stage 3 section 7 gave arbitrary power to the Government to pick and choose in the matter of grant of total or partial exemption from the provisions of the Act and 4 the tax proposed to be levied had absolutely no relation to the production capacity of the land sought to be taxed or to the income they could derive and therefore the Act had been conceived with a view to confiscating private property there being no question of any compensation being paid to those who may be expropriated as a result of the working of the Act
The petitioners also challenged the legislative competence of the legislature of the State to levy a tax on lands on which forests stood
The case on behalf of the State of Kerala inter alia was that the Act had its justification in article 265 Of the Constitution of India which was not subject to the provisions of Part III of the Constitution and that therefore articles 14 19 and 31 could not be pressed in aid of the petitioners
 Held Sarkar J dissenting that the Travancore Cochin Land Tax Act 1955 infringed the provisions of article 14 Of the Constitution of India
The Act obliged every person who held land to pay the tax at the flat rate prescribed whether or not he made any income out of the property or whether or not the property was capable of yielding any income
Consequently there was no attempt at classification in the provisions of the Act and it was one of those cases where the lack of classification created inequality
It was therefore hit by the prohibition to deny equality before the law contained in article 14
Section 5A of the Act which enabled the Government to make a provisional assessment of the basic tax payable by the 79 holder of unsurveyed land imposed unreasonable restrictions on the rights to hold property safeguarded by article 191f of the Constitution inasmuch as 1 the Act did not impose an obligation on the Government to undertake survey proceedings within any prescribed or ascertainable period with the result that a landholder might be subjected to repeated annual provisional assessments on more or less conjectural basis and liable to pay the tax assessed and 2 the Act being silent as to the machinery and procedure to be followed in making the assessment left it to the Executive completely ignoring the legal position that the assessment of a tax on a person or property was at least of a quasijudicial character
Section 7 of the Act which vested the Government with the power wholly or partially to exempt any land from the provi sions of the Act did not lay down any principle or policy for the guidance of the exercise of discretion by the Government in respect of the selection contemplated by the section and was therefore discriminatory in effect and offended article 14
The section was not severable from the rest of the Act as both the charging sections section 4 and section 7 authorising the Government to grant exemptions from the provisions of the Act were the main provisions of the statute
Shri Ram Krishna Dalmia vs Sri justice section R Tendolkar   relied on
The Act was also confiscatory in character inasmuch as the provisions of the Act had the effect of eliminating the private owners through the machinery of the Act without proposing to acquire the privately owned forests in the State after satisfying the conditions laid down in article 31 of the Constitution
Per Sinha CJ Imam Subba Rao and Shah JJ
Article 265 of the Constitution which provided that the State shall not levy or collect a tax except by authority of law referred to a valid law and in order that the law might be valid the tax proposed to be levied must be within the legislative competence of the Legislature imposing a tax and authorising the collection thereof and secondly the tax must be subject to the conditions laid down in article 13 by which all laws inconsistent with or in derogation of the fundamental rights in Part III shall be void
Per Sarkar J 1 The object of the Act was to tax land in the State for raising revenues by providing for a low and uniform rate of basic tax replacing all other dues payable to the Government and the tax payers were classified according to the area of lands held by them
Such a classification had an intelligible basis and had a rational relation to the object of the Act
As tax was to be levied not because the land was productive but because the land was held in the State the classification did not offend article 14 Of the Constitution even though it might impose unequal burden of the tax on the owners of land on account of owners of less productive land being put on a larger burden
80 2Section 5A did not offend article 14 and in the absence of express provisions laying down the procedure according to which the provisional assessment was to be made the Act could not be held invalid on the ground that it was against the rules of natural justice
3Section 7 even if it were considered invalid on the ground that it gave arbitrary power to the Government and offended article 14 was severable from the rest of the Act and would not affect the other provisions of the Act
4The Act did not infringe the fundamental rights in article 191f as the rate of tax fixed by the Act was a very low rate and the restrictions on those rights were reasonable
5 The Act was not in its nature expropriatary and did not offend article 31
As there was no want of legislative competence theAct could not be assailed as a piece of colourable legislation on the ground that though in form a taxing statute it in effect was intended to expropriate lands by imposing a tax too heavy for the land to bear
6The word land in Entry 49 of List II Sch 7 of the Constitution included land on which a forest stands and therefore under that Entry taxation on land on which forests stood was permissible and legal
The Act therefore could not be challenged as being beyond the legislative competence of the State Legislature