Case: Vijay Mills Company Limited and Others Vs. State of Gujarat and Others

the relief vested in the assessee, stands on footing entirely different from the footing which may necessitate the passing of a Validating Act seeking to validate any statutory provision declared unconstitutional. When Parliament passes an amendment validating any provisions which might have been declared invalid for some defect or lacuna, the Parliament seeks to enforce its intention which was already there by removing the defect or lacuna. The Parliament indeed seeks to remedy the situation created as a result of the statutory provisions being declared invalid......." 29. It would thus be apparent that these observation made on the facts of the case have no relevance to the present facts. On the other hand they support the action of the Legislature in the present case inasmuch as the Validating Act in the present case has made clear what the Legislature wanted to do, viz., to validate the rate of assessment which was levied for the first time after the long lapse of time. The rate of assessment was enhanced with due notice to the assesses of its prospective impact. After examining the objection the rate was in fact reduced with retrospective effect. We are also not impressed by the fact that because the rate of assessment has been increased by five times the rate prevalent prior to September 1, 1976, the rate should be held to be either excessive or unreasonable. Considering the time lag the reduction in the purchasing power of the rupee, the increase in the cost of providing services and also considering the user of the land the rate of 10 paise per square metre cannot be said to be excessive. 30. Coming to the their contention it proceeds on the footing that the concept of land revenue is restricted to the assessment on the basis of the income from the soil of the land. The very basis of the contention is incorrect. As has been explained in Bomanji Ardeshir Wadia v., Secretary of State 1929 AIR(PC) 34) the basis of assessment of non-agricultural land is the return or the income from the user of such land to the land owner. Where the non-agricultural land is not actually put to any use, assessment can also be made on the basis of the potential income form such land. Section 48 of the Land Revenue Code purports to impose revenue on the basis of the return to the land owner. This is clear from the provisions of the said section which read as follows. "48. Manner of assessment and alteration of assessment - Prohibition of use of land of certain purpose - (1) The land revenue leviable on any land under the provision of this Act shall be assessed or shall be deemed to have been assessed, as the case may be with reference to the use of the land -(a) for the purpose of agriculture(b) for the purpose of building, and(c) for a purpose others than agriculture or building(2) Where land assessed for use for any purpose in used for any other purpose, the assessment fixed under the provisions of this Act upon such land shall notwithstanding that the term for which such assessment may have been fixed has not expired, be liable to be altered and fixed at a different rate by such authority and subject to such rules as the State Government may prescribe in this behalf(3) Where land held free of assessment or condition of being used for any purpose is used at any time for any other purpose, it shall be liable to assessment(4) The Collector or a survey officer may subject to any rules made in this behalf under Section 214, prohibit the sue of certain purpose of any unalienated land liable to the payment of the land revenue, and may summarily evict any holder who sues or attempt to use the same for any such prohibited purpose." * 31. The Section itself contemplates different rates of assessment depending upon the different purpose for which the land is used. The returns or the income form the different uses of the land is bound to be varied and therefore, under the said section it is permissible to levy different rates depending upon the income or the return from the sue to which the land is put. This proposition is not disputed by Shri Nariman. However his attack is directed against the further classification of the user based on the location of the land. According to him since the assessment is based on the sue of the land, the return or income from such use would not vary form location to location and hence the different rates of assessment fixed on the basis of the location of the industrial use is ultra vires Section 48 of the Act. We are afraid that the basic fallacy underlies the premise on which the argument is built. The land revenue is not lived on the income form the use of the land. That would amount to a tax on income. The assessment is graded on the basis of the income or the return from the land to owner thereof. In other words it is graded on the basis of the rental which the lad will fetch to the land owner. The rental will certainly different for use to sue to which the lad is put as well as with the location of the land. The land in a city or town like Ahmedabad and available for industrial use is bound to fetch more rental than the land put to the same use in a village. In fact, if irrespective of their location. Such assessment will fall foul of Article 14 of the Constitution. The assessment so made has o relation to the actual rental derived by the land owner. The rental derived have relation only to the gradations of the land made and the assessment levied on the basis of such gradations into low income and high income yielding lands. We are, therefore, unable to appreciate this argument either.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]18. From the above, it is clear that there are different modes of validating the provisions of the Act retrospectively, depending upon the intention of the legislature in that behalf. Where the Legislature intends that the provisions of the Act themselves should be deemed to have been in existence from a particular date in the past and thus to validate the actions taken in the past as if the provisions concerned were in existence from the earlier date, the Legislature makes the said intention clear by the specific language of the validating Act. It is open for the Legislature to change the very basis of the provisions retrospectively and to validate the actions on the changed basis. This is exactly what has been done in the present case as is apparent from the provisions of clauses (3) and (5) of the Amending Ordinance corresponding to Sections 2 and 4 of the Amending Act No. 2 of 1981. We have already referred to the effect of Sections 2 and 4 of the amending Act. The effect of the two provisions therefore, is not only to validate with retrospective effect the rules already made but also to amend the provisions of Section 214 itself to read as if the power to make rules with retrospective effect were always available under Section 214 since the said section stood amended to give such power from the time the retroactive rules were made. The Legislature had thus taken care to amend the provisions of the Act itself both to give the Government the power to make the rules retrospectively as well as to validate the rules which were alreadyThe contentions that the Validating Act cannot validate rules made or acts done prior to the date it was enacted if accepted will strike at the very root of the concept of retrospective validation. Law is an instrument which is forged to regulate the affairs of the society. Society can mould it to meet the needs felt from time to time. Society cannot be a salve of the instrument. The device of validating a state is forged precisely to adopt the law to meet the exigencies of the situations. The validations therefore, may be done in the manner required by the needs of the time. All that is required is that the agency which validates the statute must have the power to do it. The manner and method of doing it so to be left to the authority. If the intentions are clear the validations was to be interpreted according to the intentions. The courts have in fact upheld such validations regarding it to be an important weapon in the armory of legislative devices. It is to emphasize this aspect that we have endeavored to summarize the law on validations as above at the cost of lengthening theWe, therefore find no substance in Shri Narimans contentions that since the Amending Act came into force only on February 24, 1981 Section 214 of the Code as amended cannot be said to have been substituted from the original sections with retrospective effect. The law on the subject makes it clear that to give retrospective effect to the amended provisions it is enough if the Amending Act states that the said provisions will always be deemed to have been incorporated in the original provision with retrospective effect from a particulate date. This is exactly what has been done in the present case. Hence the first contention of the appellants mustComing to the second contention as the facts narrated earlier show for a long time the rate of assessment of the revenue of theland was not revised. It was after a long interval that a draft notification was issued on July 27, 1976 making the rules in question under which the assessment was revised. These rules were made final on July 31, 1976 and brought into force from August 1, 1976. Since the same were challenged among other things on the ground that no sufficient time was given for raising objections to the draft rules the notification dated July 31, 1976 making the rules final was withdrawn by a subsequent notification of June 28, 1977 and objections were invited to the original draft rules issued on July 21, 1976 with on 30 days from June 28, 1978 which were brought into force form September 1, 1976. Subsequently Section 214 itself was amended on December 10, 1980 to enable the Government to make rules with retrospect effect by issuing an ordinance for the purpose and the ordinance became the Act w.e.f. February 24,What is further so far as the industrial use of the land in towns and cities like Ahmedabad was concerned the original rate of assessment prescribed under the draft rules of July 21, 1976 viz., 15 paise per square metre was reduce to 10 paise per square metre under the impugned rules published on January 24, 1978 which rules were brought into force w.e.f. September 1,These facts will show that rights from July 21, 1976 the assesses were aware of the fact that the rate of assessment was sought to be enhanced. They were also give two opportunities to raise their objections to the enhanced assessment. Whatever may be the merit with regard to the first opportunity the second opportunity was admittedly fair. After considering the objections the rate of assessment was in fact reduced. As has been stated earlier even this rate of assessment was fixed after a long lapse of time during which incomes prices of products levels of profits rentals of the lands, inflations and the cost of maintenance and providing services had gone up enormously. It is therefore, not possible to accept the contention that either the enhancement in assessment was made without following the principles of the natural justice or that it was arbitrary or unreasonable. This part of the contention must, thereforeIt would thus be apparent that these observation made on the facts of the case have no relevance to the present facts. On the other hand they support the action of the Legislature in the present case inasmuch as the Validating Act in the present case has made clear what the Legislature wanted to do, viz., to validate the rate of assessment which was levied for the first time after the long lapse of time. The rate of assessment was enhanced with due notice to the assesses of its prospective impact. After examining the objection the rate was in fact reduced with retrospective effect. We are also not impressed by the fact that because the rate of assessment has been increased by five times the rate prevalent prior to September 1, 1976, the rate should be held to be either excessive or unreasonable. Considering the time lag the reduction in the purchasing power of the rupee, the increase in the cost of providing services and also considering the user of the land the rate of 10 paise per square metre cannot be said to beComing to the their contention it proceeds on the footing that the concept of land revenue is restricted to the assessment on the basis of the income from the soil of the land. The very basis of the contention is incorrect. As has been explained in Bomanji Ardeshir Wadia v., Secretary of State 1929 AIR(PC) 34) the basis of assessment ofland is the return or the income from the user of such land to the land owner. Where theland is not actually put to any use, assessment can also be made on the basis of the potential income form such land. Section 48 of the Land Revenue Code purports to impose revenue on the basis of the return to the land owner. This is clear from the provisions of the said section which read asManner of assessment and alteration of assessmentProhibition of use of land of certain purpose(1) The land revenue leviable on any land under the provision of this Act shall be assessed or shall be deemed to have been assessed, as the case may be with reference to the use of thefor the purpose of agriculture(b) for the purpose of building, and(c) for a purpose others than agriculture or building(2) Where land assessed for use for any purpose in used for any other purpose, the assessment fixed under the provisions of this Act upon such land shall notwithstanding that the term for which such assessment may have been fixed has not expired, be liable to be altered and fixed at a different rate by such authority and subject to such rules as the State Government may prescribe in this behalf(3) Where land held free of assessment or condition of being used for any purpose is used at any time for any other purpose, it shall be liable to assessment(4) The Collector or a survey officer may subject to any rules made in this behalf under Section 214, prohibit the sue of certain purpose of any unalienated land liable to the payment of the land revenue, and may summarily evict any holder who sues or attempt to use the same for any such prohibited purpose."The Section itself contemplates different rates of assessment depending upon the different purpose for which the land is used. The returns or the income form the different uses of the land is bound to be varied and therefore, under the said section it is permissible to levy different rates depending upon the income or the return from the sue to which the land is put. This proposition is not disputed by Shri Nariman. However his attack is directed against the further classification of the user based on the location of the land. According to him since the assessment is based on the sue of the land, the return or income from such use would not vary form location to location and hence the different rates of assessment fixed on the basis of the location of the industrial use is ultra vires Section 48 of the Act. We are afraid that the basic fallacy underlies the premise on which the argument is built. The land revenue is not lived on the income form the use of the land. That would amount to a tax on income. The assessment is graded on the basis of the income or the return from the land to owner thereof. In other words it is graded on the basis of the rental which the lad will fetch to the land owner. The rental will certainly different for use to sue to which the lad is put as well as with the location of the land. The land in a city or town like Ahmedabad and available for industrial use is bound to fetch more rental than the land put to the same use in a village. In fact, if irrespective of their location. Such assessment will fall foul of Article 14 of the Constitution. The assessment so made has o relation to the actual rental derived by the land owner. The rental derived have relation only to the gradations of the land made and the assessment levied on the basis of such gradations into low income and high income yielding lands. We are, therefore, unable to appreciate this argument either