Case: State Of Mysore Etc Vs. M. L. Nagade And Gadag &amp; Ors

Civil Appeals Nos. 1221-1222 of 1970 arise from a decision of the Division Bench of the then High Court of Mysore at Bangalore in Writ Petitions Nos. 672 of 1963 and 1934 of 1964 by which the High Court quashed the demand of non-agricultural, assessment (N. A. assessment for short) made by the respondents on the ground that Rule 71 as amended on July 4, 1978 of the Hyderabad Land Revenue Rules which appeared to have been repealed and reenacted as the Andhra Pradesh (Telengana Area) Land Revenue Rules, 1951 was unconstitutional being violative of Article 14 of the Constitution and hence void.2. Civil Appeals Nos. 1407 to 1413 of 1970 arise from a decision of the Division Bench of the same High Court in a group of writ petitions by which the High Court quashed the demand of non-agricultural assessment on the ground that Rule 81 of the Bombay Land Revenue Rules as amended on March 27, 1958 was unconstitutional being violative of Article 14 and hence void.3. Appellants in both the groups are the State of Mysore and some officers. Respondents are the original petitioners in both the groups.4. Rule 71 of the Hyderabad Land Revenue Rules and Rule 81 of the Bombay Land Revenue Rules were amended in an identical manner but on two different dates and the validity of each amended rule was questioned on identical grounds and more or less the High Court for identical reasons quashed both the Rules as amended and almost identical grounds were canvassed in support of rival contentions before us and therefore, all these appeals are disposed of by this common judgment.5. The boundaries of old Mysore State underwent a change consequent upon the reorganisation of States in 1956. Some portion of former Bombay State as well as some portion of the old Hyderabad State were allocated to Mysore State. This historical phenomenon led to different Land Revenue Code remaining in operation in different parts of the State of Mysore. To be precise that area of former Bombay State forming part of Mysore State continued to be governed in respect of land revenue by the Bombay Land Revenue Code, 1879 and the rules made thereunder. Similarly that area of former Hyderabad State which was allocated to Mysore State continued to be governed by the Hyderabad Land Revenue Act (8 of 1317C. As Nos. 1221-1222 of 1970 :6. Respondents questioned the validity of the amended Rule 71 of the Hyderabad Land Revenue Rules which came into force from July 4, 1958. It reads as under(1) Mode of assessment in the event of diversion of agricultural lands to non-agricultural purposes, the special assessment shall be levied as follows :(a) in the case of land situated in any village the population of which does not exceed 5000 the rate of special assessment leviable on such land and not more than Rs 40 per acre.(b) in the case of land situated in any village or town other than a town coming under clause (c) of this Rule, the population of which exceeds 5000 the rate of special assessment leviable shall be not less than Rs 40 per acre and not more than Rs 80 per acre.(c) in the case of land situated within an are comprising the Municipality limits of the town of Raichur, Gulbarga and Bidar the rate of special assessment leviable shall be not less than Rs 150 per acre and not more than Rs 250 pervalidity of the amended rule was challenged on the ground that it provides no guidelines for determining N. A. assessment for various plots and that it suffers from the vice of excessive delegation of essential legislative functions and therefore any demand raised in exercise of the power conferred by the amended Rule 71 would be arbitrary and therefore violative of Article 14 of the Constitution.Re C. As. Nos. 1407 - 1413 of 1970 :7. Respondents who were petitioners in the High Court questioned the validity of Rule 81 of the Bombay Land Revenue Rules as amended on March 27, 1958. It reads as under(1) Rate of Non-Agricultural assessment. - The rate of Non-Agricultural assessment leviable shall be as follows :(a) in the case of land situated in any village the population of which does not exceed 5000 the rate of Non-Agricultural assessment leviable shall be not less than the Agricultural assessment leviable on such land and not more than Rs 40 per acre.(b) in the case of land situated in any village or town other than a town coming under clause (c) of this sub-rule, the population of which exceeds 5000 the rate of Non-Agricultural assessment leviable shall be not less than Rs 40 per acre and not more than Rs 80 per acre.(c) in the case of land situated in any City or Town referred to in the Table to Rule 100, the rate of Non-Agricultural assessment leviable shall be not less than Rs 150 per acre and not more than Rs 250 per acre.(d) Non-Agricultural assessment will be levied at uniform rates for the entire extent converted for Non-Agricultural purpose, irrespective of the extent actually builtsame contention which was advanced in the former group of petitions was repeated in this group of petitions.8. Validity of both the Rules was questioned on other diverse grounds but except the one herein mentioned, other contentions did not find favour with the High Court and therefore, they need not be recapitulated here.9. The sole contention which found favour with the High Court was that the Rule under challenge confers unguided and uncontrolled power and there is no guideline either in the Act or the Rules and there is excessive delegation of legislative functions and therefore, both the amended Rules are violative of Article 14 of the Constitution.

Reasoning:
23. The High Court in our opinion unfortunately fell into an error in holding that Rule 71 allowed a wide margin to the Revenue Officers in the matter of determining the special assessment to be levied on land used for non-agricultural purpose. The High Court failed to notice that area within which the discretion of the Revenue Officer can operate is circumscribed both by the floor and ceiling fixed and while determining the quantum of assessment, the revenue officer has to bear in mind the use to which land is put as also the profit derived from the use of the land. The order made by the Revenue Officer is appealable. Now when a demand is raised, it can always be controverted under the various provisions of the relevant rules and the concerned assessee will have full opportunity to vindicate his stand. It should not be overlooked that the land revenue is a tax and the validity of the taxing statute has to be determined keeping in view the fact that in the matter of taxation, the court allows wide area of picking and choosing and the slab system. We are therefore, of the opinion that there was sufficient guideline to govern the discretion of the Revenue Officer and the rule could not be struck down on the ground that it confers wide arbitrary, uncanalised discretionary power uncontrolled by any guidelines.Bombay Land Revenue Act was enacted in the year 1879 to consolidate and amend law relating to Revenue Officers and to the assessment and recovery of land revenue and other matters connected with the Land Revenue Administration. Section 48 confers power to levy and assess the land revenue 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 other than agriculture or building. Chapter VIII includes provision for surveys, assessment and settlements of land revenue. Chapter VIII-A makes further provisions for assessment and settlement of land revenue on agricultural land. Chapter XI makes detailed provision for the procedure to be followed by the Revenue Officer while discharging their duties and carrying out the functions imposed by the Code. Chapter XIII provides for appeals and revisions against the orders for the Revenue Officer. Section 214 confers power on the State Government to make rules not inconsistent with the provisions of the Act to carry out the purpose and object thereof and for the guidance of all persons in matters connected with the enforcement of the Act. Armed with this power, Lane Revenue Rules, 1951 were enacted. Chapter XIV headed imposition and revision of non-agricultural assessment makes detailed provisions for assessment and levy of N. A. assessment. Rule 80 confers power for alteration of assessment when land assessed or held for agricultural purpose if used for agricultural purpose if used for non-agricultural purpose. Rule 80-A confers power for revision of N. A. assessment on the expiry of the period for which assessment on any land was assessed and levied. Rule 81 provides for ordinary rates of N. A. assessment. It was amended and the validity of the amended rule is in question. Floor and ceiling rates vary from area to area demarcated on the basis of population and it is further provided that in fixing the rates within floor and the ceiling, due regard shall be had to the general level of the value of the lands in the locality used for non-agricultural purposes. Rule 82 makes detailed provision for the rate of non-agricultural assessment to be determined in accordance with that provision where special rate of non-agricultural assessment is in force. Where N. A. assessment is levies at an ordinary rate, the Commissioner before determining the rate at which N. A. assessment will be levied on any particular plot has by notification to divide the villages, towns and cities in each district in his division to which a standard rate under Rule 82 has not been extended into two classes. Even while assessing N. A. assessment, the Commissioner has to keep in view the level of land in the locality used for non-agricultural purposes. In our opinion, both the Act and Rules thus provide for sufficient guidelines, and it cannot be said that the Commissioner enjoys wide arbitrary discretionary power. The discretion has to operate within the floor and the ceiling; the yardstick is the value of the land used for non-agricultural purposes in the locality, the area has to be divided village-wise, city-wise and overall what is being assessed is land revenue because N. A. assessment is nonetheless land revenue. In our opinion, the High Court was in error in striking down the provision on the ground that the Commissioner enjoyed wide arbitrary discretion uncontrolled by any guidelines. The discretion is not only controlled but there is sufficient guideline in the Act and the Rules and therefore, the High Court was in error in striking down the amended Rule 81.27. It was in passing urged that there is no provision for notice before N. A. assessment is levied. We would expect revenue authority ordinarily to hear the person affected by the order levying N. A. assessment or at the time of its appeal or revision, but on this count the demand cannot be struck down because when a demand is served, it can be objected to and the decision is appealable. It cannot be said that the Rule would be bad as it does not inhere the principles of natural justice.28. The decisions of the High Court were not sought to be supported on any other ground. Accordingly, these appeals must succeed.