Case: The Commr., Hindu Religious Endowments, Madras Vs. Lakshmindra Thirtha Swamiar of Sri Shirur Mutt

if the money paid by licence holders goes for the upkeep of roads and other matters of general public utility, the licence fee cannot but be regarded as a tax.47. In the other class of cases, the Government does some positive work for the benefit of persons and the money is taken as the return for the work done or services rendered. If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax. There is really no generic difference between the tax and fees and as said by Seligman, the taxing power of a State may manifest itself in three different forms known respectively as special assessments, fees and taxes, Ibid p. 406.48. Our Constitution has, for legislative purposes, made a distinction between a tax and a fee and while there are various entries in the legislative lists with regard to various forms of taxes, there is an entry at the end of each one f the three lists as regards fees which could be levied in respect of any of the matters that is included in it. The implication seems to be that fees have special reference to governmental action undertaken in respect to any of these matters.49. Section 76 of Madras Act speaks definitely of the contribution being levied in respect to the service rendered by the Government so far it has the appearance of fees. It is true that religious institutions do not want these services to be rendered to them and it may be that they do not consider the State interference to be a benefit at all. We agree, however, with the learned Attorney-General that in the present day concept of a State, it cannot be said that services could be rendered by the State only at the request of those who require these services. If in the larger interest of the public, a State considers it desirable that some special service should be done for certain people, the people must accept those services, whether willing or not, vide Findlay Shirras on Science of Public Finance, Vol. 1. p. 202. It may be noticed however, that the contribution that has been levied under Section 76 of the Act has been made to depend upon the capacity of the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution. Further the institutions which come under the lower income group and have income less than Rs. 1000 annually are excluded from the liability to pay the additional charges under clause (2) of the Section. These are undoubtedly some of the characteristics of a tax and the imposition bears a close analogy to income tax. But the material fact which negatives the theory of fees in the present case is that the money raised by levy of the contribution is not ear-marked or specified for defraying the expenses that the Government has to incur in performing the services. All the collections go to the consolidated fun of the State and all the expenses have to be met not out of these collections put out of the general revenues by a proper method of appropriation as is done in case of other Government expenses. That in itself might not be conclusive, but in this case there is total absence of any correlation between the expenses incurred by the Government and the amount raised by contribution under the provision of Section 76 and in these circumstances the theory of a return or counter payment or quid pro quo cannot have any possible application to this case. In our opinion, therefore, the High Court was right in holding that the contribution levied under Section 76 is a tax and not a fee and consequently it was beyond this power of the State Legislature to enact this provision.50. In view of our decision on this point, the other ground hardly requires consideration. We will indicate, however, very briefly our opinion on the second point raised. The first contention, which has been raised by Mr. Nambiar in reference to Article 27 of the Constitution is, that the word "taxes", as used therein, is not confined to taxes proper but is inclusive of all other impositions like cases, fees, etc.51. We do not think it necessary to decide this point in the present case for in our opinion on the facts of the present case the imposition although it is a tax does not come within the purview of the latter part of the Article at all. What is forbidden by the Article is the specific appropriation of the proceeds of any tax in payment of expenses for the promotion or maintenance of any particular religion or religious denomination. The reason underlying this provision is obvious. Ours being a secular State and there being freedom of religion guaranteed by the Constitution both the individuals and to groups, it is against the policy of the Constitution to pay out of public funds any money for the promotion or maintenance of any particular religion or religious denomination. But the object of the contribution under Section 76 of the Madras Act is not the fostering or preservation of the Hindu-religion or any denomination within it. The purpose is to see that religious trusts and institutions, wherever they exist, are properly administered. It is a secular administration of the religious institutions that the legislature seeks to control and the object, as enunciated in the Act, is to ensure that the endowments attached to the religious institutions are properly administered and their income is duly appropriated for the purposes for which they were founded or exist. There is no question of favouring any particular religion or religious denomination in such cases. In our opinion, Article 27 of the Constitution is not attracted to the facts of the present case.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]6. The learnedfor Madras, who appeared in support of the appeal, confined his arguments exclusively to the constitutional points involved in this case. Although he had put in an application to urge grounds other than the constitutional grounds, that application was not pressed and he did not challenge the findings of fact upon which the High Court based its decision on the merits of the petition. The position, therefore, is that the order of the High Court issuing the writ of prohibition against the appellant must stand irrespective of the decision which we might arrive at on the constitutional points raised before us.As regards the property rights of a Mathadhipati, it may not be possible to say in view of the pronouncements of the Judicial Committee which have been accepted as good law in this country ever since 1921, that a Mathadhipati holds the Math property as aor that this position is similar to that of a Hindu widow in respect to her husbands estate or of an English Bishop holding a benefice. He is certainly not a trustee in the strict sense. He may be, as the Privy CouncilVaruthi v. Balusami, AIR 1922 PC 123 says a manager or custodian of the institution who has to discharge the duties of a trustee and is answerable as such, but he is not a mere manager and it would not be right to describe Mahantship as a mere office. A superior of a Math has not only duties to discharge in connection with the endowment but he has a personal interest of a beneficial character which is sanctioned by custom and is much large than that of a Shebait in the debutter property.The contention formulated in such broad terms cannot, we think be supported, in the first place, what constitutes the essential part of a religion is primarily to be ascertained with reference to the doctrines of that religionshould be noticed, however, that under Article 26 (d), it is the fundamental right of a religious denomination or its representative to administer its properties in accordance with law, and the law, therefore, must leave the right of administration to the religious denomination itself subject to such restrictions and regulations as it might choose to impose. A law which takes away the right of administration from the hands of a religious denomination altogether and vests it in any other authority would amount to a violation of the right guaranteed under clause (d) of Articlemay be pointed out at the outset that the learned Judges were not right in including Sections 18, 39(2) and 42 in this list, as these Sections are not applicable to Maths under the Act itself. This position has not been disputed by Mr. Somayya who appears for the respondent.24. Section 20 of the Act describes the powers of the Commissioner in respect to religious endowments and they include power to pass any orders that may be deemed necessary to ensure that such endowments are properly administered and that their income is duly appropriated for the purposes for which they were founded. Having regard to the fact that the Mathadhipati occupies the position of a trustee with regard to the Math. which is a public institution, some amount of control or supervision over the due administration of the endowments and due appropriation of their funds is certainly necessary in the interests of the public and we do not think that the provision of this Section by itself offends any fundamental right of the Mahant. We do not agree with the High Court that the result of this provision would be to reduce the mahant to the position of a servant. No doubt the Commissioner is invested with powers to pass orders, but orders can be passed only for the purposes specified in the Section and not for interference with the rights of the Mahant as are sanctioned by usage or for lowering his position as the spiritual head of the institution. The saving provision contained in Section 91 of the Act makes the position quite clear. An apprehension that the powers conferred by this Section may be abused in individual cases does not make the provision itself bad or invalid in law.25. We agree, however, with the High Court in the view taken by it about Section 21. This Section empowers the Commissioner and his subordinate officers and also persons authorised by them to enter the premises of any religious institution or place of worship for the purpose of exercising any power conferred or any duty imposed by or under the Act. It is well known that there could be no such thing as an unregulated and unrestricted right of entry in a public temple or other religious institution for persons who are not connected with the spiritual functions thereof. It is a traditional custom aniversally observed not to allow access to any outsider to the particularly sacred parts of a temple as for example, the place where the deity is located. There are also fixed hours of worship and rest for the idol when no disturbance by any member of the public is allowed. Section 21, it is to be noted, does not confine the right of entry to the outer portion of the premises : it does not even exclude the inner sanctuary "The Holy of Holies" as it is said the sanctity of which is zealously preserved. It does not say that the entry may be made after due notice to the head of the institution and at such hours which would not interfere with the due observance of the rites and ceremonies in the institution. We think that as the Section stands, it interferes with the fundamental rights of the Mathadhipati and the denomination of which he is head guaranteed under Articles 25 and 26 of the Constitution. Our attention has been drawn in this connection to Section 91 of the Act which, it is said, provides a sufficient safeguard against any abuse of power under Section 21. We cannot agree with this contention. Clause (a) of Section 91 excepts from the saving clause all express provisions of the Act within which the provision of Section 21 would have to be included. Clause (b) again does not say anything about custom or usage obtaining in an institution and it does not indicate by whom and in what manner the question of interference with the religious and spiritual functions of the Math would be decided in case of any dispute arising regarding it. In our opinion, Section 21 has been rightly held to be invalid.26. Section 23 imposes a duty the trustees to obey all lawful orders issued by the Commissioner or any subordinate authority under the provisions of the Act. No exception can be taken to the Section if those provisions of the Act, which offend against the fundamental rights of the respondent, are left out of account as being invalid. Nobody can make a grievance if he is directed to obey orders issued in pursuance of valid legal authority. The same reason would, in our opinion, apply to Section 24.As regards Section 25, the High Court has taken exception only to Clause (4) of the Section. If the preparation of registers for religious institutions is not wrong and does not affect the fundamental rights of the Mahant, one fails to see how the direction for addition to or alteration of entries in such registers, which clause (4) contemplates and which will be necessary as a result of enquiries made under clause (3) can in any sense, be held to be invalid as infringing the fundamental rights of the Mahant. The enquiry that is contemplated by Clauses (3) and (4) is an enquiry into the actual state of affairs, and the whole object of the Section is to keep an accurate record of the particulars specified in it. We are unable therefore to agree with the view expressed by the learned Judges. For the same reasons, Section 26, which provides for annual verification of the registers, cannot be held to be bad.28. According to the High Court Section 28 is itself innocuous. The mere possibility of its being abused is no ground for holding it to be valid. As all endowed properties are ordinarily inalienable, we fail to see why the restrictions placed by Section 29 upon alienation of endowed properties should be considered bad. In our opinion. the provision of Clause (2) of Section 29, which enables the Commissioner to impose conditions when he grants sanction to alienation of endowed property, is perfectly reasonable and to that no exception can be taken.The provision of Section 30(2) appears to us to be somewhat obscure. Clause (1) of the Section enables a trustee to incur expenditure out of the funds in his charge after making adequate provision for the purposes referred to in Section 70(2), for making arrangements for the health, safety and convenience of disciples, pilgrims, etc. Clause (2), however, says that in incurring expenditure under clause (1), the trustee shall be guided by such general or special instruction as the Commissioner of the Area Committee might give in that connection. If the trustee is to be guided but not fettered by such directions, possibly no objection can be taken to this clause; but if he is bound to carry out such instructions we do think that it constitutes an encroachment on his right. Under the law, as it stands, the Mahant has large powers of disposal over the surplus income and the only restriction is that he cannot spend anything out of it for his personal use unconnected with the dignity of his office. But as the purposes specified in(a) and (b) of Section 30(1) are beneficial to the institution, there seems to be no reason why the authority vested in the Mahant to spend the surplus income for such purposes should be taken away from him and he should be compelled to act in such matters under the instructions of the Government officers. We think that this is an unreasonable restriction on the Mahants right of property which is blended with his office.30. The same reason applies in our opinion to Section 31 of the Act, the meaning of which also is far from clear. If after making adequate provision for the purposes referred to in Section 70(2) and for the arrangements mentioned in Section 30(2) there is still a surplus left with the trustee, Section 31 enables him to spend it for the purposes specified in Section 59(1) with the previous sanction of the Deputy Commissioner, one of the purposes mentioned in Section 59(1) is propagation of the religious tenets of the institution and it is not understood why sanction of the Deputy Commissioner should be necessary for spending the surplus income for the propagation of the religious tenets of the order which is one of the primary duties of a Mahant to discharge. Thenext thing that strikes one is, whether sanction is necessary if the trustee wants to spend the money for purposes other than those specified in Section 59(1).If the answer is in the negative, the whole object of the Section becomes meaningless. If, on the other hand, the implication of the Section is that the surplus can be spent only for the purpose specified in Section 59(1) and that too with the permission of the Deputy Commissioner, it undoubtedly places a burdensome restriction upon the property rights of the Mahant which are sanctioned by usage and which would have the effect of impairing his dignity and efficiency as the head of the institution. We think that Sections 30(2) and 31 have been rightly held to be invalid by the High Court.31. Sections 39 and 42, as said already, are not applicable to Maths and hence can be left out of consideration. Section 53 has been condemned by the High Court merely on the ground that the court has ample jurisdiction to provide for the contingencies that this Section is intended to meet. But that surely cannot prevent a competent legislature from legislating on the topic provided it can do so without violating any of the fundamental rights guaranteed by the Constitution. We are unable to agree with the High Court on this point. There seems to be nothing wrong or unreasonable in Section 54 of the Act which provides for fixing the standard scale of expenditure. The proposals for this purpose would have to be submitted by the trustee; they are then to be published and suggestions invited from persons having interest in the amendment. The Commissioner is to scrutinise the original proposals and the suggestions received and if in his opinion a modification of the scale is necessary he has to submit a report to the Government, whose decision will be final. This we consider to be quite a reasonable and salutary provision.32. Section 55 deals with a Mahants power over "Pathukanikas" or personal gifts, ordinarily a Mahant has absolute power of disposal over such gifts, though if he dies without making any disposition, it is reckoned as the property of the Math and goes to the succeeding Mahant. The first clause of Section 55 lays down that such "Pathakanikas" shall be spent only for the purposes of the Math. This is an unwarranted restriction on the property right of the Mahant. It may be that according to customs prevailing in a particular institution, such personal gifts are regarded as gifts to the institution itself and the Mahant receives them only as the representative of the institution; but the general rule is otherwise. As Section 55(1) does not say that this rule will apply only when there is a custom of that nature in a particular institution, we must say that the provision in this unrestricted form is an unreasonable encroachment upon the fundamental right of the Mahant. The same objection can be raised against Clause (2) of the Section; for if the Pathakanikas" constitute the property of a Mahant, there is no justification for compelling him to keep accounts of the receipts and expenditure of such personal gifts. As said already, if the Mahant dies without disposing of these personal gifts, they may form part of the assets of the Math, but that is no reason for restricting the powers of the Mahant over these gifts so long as he is alive.33. Section 56 has been rightly invalidated by the High Court. It makes provision of an extremely drastic character. Power has been given to the Commissioner to require the trustee to appoint a manager for administration of the secular affairs of the institution and in case of default, the Commissioner can make the appointment himself. The manager thus appointed though nominally a servant of the trustee, has practically to do everything according to the directions of Commissioner and his subordinates. It is to be noted that this power can be exercised at the mere option of the Commissioner without any justifying necessity whatsoever and nolike mismanagement of property or maladministration of trust finds are necessary to enable the trustee to exercise such drastic power. It is true that the Section contemplates the appointment of a manager for administration of the secular affairs of this institution. But no rigid demarcation could be made as we have already said between the spiritual duties of the Mahant and his personal interest in the trust property. The effect of the Section really is that the Commissioner is at liberty at any moment he chooses to deprive the Mahant of his right to administer the trust property even if there is no negligence or maladministration on his part. Such restriction would be opposed to the provision of Article 26(d) of the Constitution. It would cripple his authority as Mahant altogether and reduce his position to that of an ordinary priest or paid servant.34. We find nothing wrong in Section 58 of the Act which relates to the framing of the scheme by the Deputy Commissioner. It is true that it is a Government officer and not the court who is given the power to settle the scheme, but we think that ample safeguards have been provided in the Act to rectify any error or unjust decision made by the Deputy Commissioner. Section 61 provides for an appeal to the Commissioner against the order of the Deputy Commissioner and there is a right of suit given to a party who is aggrieved by the order of the Commissioner with a further right of appeal to the High Court.35. The objection urged against the provision of Clause (3)(b) of Section 58 does not appear to us to be of much substance. The executive officer mentioned in that clause could be nothing else but a manager of the properties of the Math and he cannot possibly be empowered to exercise the functions of the Mathadhipati himself. In any event, the trustee would have his remedy against such order of the Deputy Commissioner by way of appeal to the Commissioner and also by way of suit as laid down in Sections 61 and 62 Section 59 simply provides a scheme for the application of the cy pres doctrine in case the object of the trust fails either from the inception or by reason of subsequent events. Here again the only complaint that is raised is, that such order could be made by the Deputy Commissioner. We think that this objection has not much substance. In the first place, the various objects on which the trust funds could be spent are laid down in the Section itself and the jurisdiction of the Deputy Commissioner is only to make a choice out of the several heads. Further an appeal has been provided from an order of the Deputy Commissioner under this Section to the Commissioner. We, therefore, cannot agree with the High Court that Sections 58 and 59 of the Act are invalid.36. Chapter 6 of the Act, which contains Sections 63 to 69 relates to notification of religious institutions. The provisions are extremely drastic in their character and the worst feature of it is that no access is allowed to the Court to set aside an order of notification. Thefor Madras frankly stated that he could not support the legality of these provisions. We hold, therefore, in agreement with High Court that these Sections should be held to be void.37. Section 70 relates to the budget of religious institutions. Objection has been taken only to Clause (3) which empowers the Commissioner and the Area Committee to make any additions to or alterations in the budget as they deem fit. A budget is indispensable in all public institutions and we do not think that it is per se unreasonable to provide for the budget of a religious institution being prepared under the supervision of the Commissioner or the Area Committee. It is to be noted that if the order is made by an Area Committee under Clause (3), Clause (4) provides an appeal against it to the Deputy Commissioner.38. Section 89 provides for penalties for refusal by the trustee to comply with the provisions of the Act. If the objectionable portions of the Act are eliminated the portion that remains will be perfectly valid and for violation of these valid provisions penalties can legitimately be provided. Section 99 vests an overall revisional power in the Government. This in our opinion, is beneficial to the trustee, for he will have an opportunity to approach the Government in case of any irregularity error or omission made by the Commissioner or any other subordinate officer.Section 76 of Madras Act speaks definitely of the contribution being levied in respect to the service rendered by the Government so far it has the appearance of fees. It is true that religious institutions do not want these services to be rendered to them and it may be that they do not consider the State interference to be a benefit at all. We agree, however, with the learnedthat in the present day concept of a State, it cannot be said that services could be rendered by the State only at the request of those who require thesethe material fact which negatives the theory of fees in the present case is that the money raised by levy of the contribution is notor specified for defraying the expenses that the Government has to incur in performing the services. All the collections go to the consolidated fun of the State and all the expenses have to be met not out of these collections put out of the general revenues by a proper method of appropriation as is done in case of other Government expenses. That in itself might not be conclusive, but in this case there is total absence of any correlation between the expenses incurred by the Government and the amount raised by contribution under the provision of Section 76 and in these circumstances the theory of a return or counter payment or quid pro quo cannot have any possible application to this case. In our opinion, therefore, the High Court was right in holding that the contribution levied under Section 76 is a tax and not a fee and consequently it was beyond this power of the State Legislature to enact this provision.50. In view of our decision on this point, the other ground hardly requires consideration. We will indicate, however, very briefly our opinion on the second point raised. The first contention, which has been raised by Mr. Nambiar in reference to Article 27 of the Constitution is, that the word "taxes", as used therein, is not confined to taxes proper but is inclusive of all other impositions like cases, fees, etc.51. We do not think it necessary to decide this point in the present case for in our opinion on the facts of the present case the imposition although it is a tax does not come within the purview of the latter part of the Article at all. What is forbidden by the Article is the specific appropriation of the proceeds of any tax in payment of expenses for the promotion or maintenance of any particular religion or religious denomination. The reason underlying this provision is obvious. Ours being a secular State and there being freedom of religion guaranteed by the Constitution both the individuals and to groups, it is against the policy of the Constitution to pay out of public funds any money for the promotion or maintenance of any particular religion or religious denomination. But the object of the contribution under Section 76 of the Madras Act is not the fostering or preservation of theor any denomination within it. The purpose is to see that religious trusts and institutions, wherever they exist, are properly administered. It is a secular administration of the religious institutions that the legislature seeks to control and the object, as enunciated in the Act, is to ensure that the endowments attached to the religious institutions are properly administered and their income is duly appropriated for the purposes for which they were founded or exist. There is no question of favouring any particular religion or religious denomination in such cases. In our opinion, Article 27 of the Constitution is not attracted to the facts of the present case.