State of Andhra Pradesh & ANR Vs.
Nalla Raja Reddy & Ors  INSC 47 (28 February 1967)
28/02/1967 RAO, K. SUBBA (CJ)
RAO, K. SUBBA (CJ) SHAH, J.C.
BHARGAVA, VISHISHTHA MITTER, G.K.
CITATION: 1967 AIR 1458 1967 SCR (3) 28
CITATOR INFO :
D 1970 SC1133 (12,31) RF 1971 SC2377 (16,18)
RF 1972 SC 828 (23,25) R 1972 SC 845 (14,25) RF 1980 SC1789 (36) R 1981 SC1829
(98) D 1983 SC 762 (15) RF 1985 SC1416 (91) D 1988 SC 322 (1) RF 1990 SC 85
The Andhra Pradesh Land Revenue (Additional
Assessment) and Cess Revision Act 22 of 1962, ss. 3, 4, 6 and 8-Providing for
additional assessment to land revenue at minimum flat rate without reference to
productivity of land or duration of water supply--Additional assessment to be
levied as land revenue-No procedure prescribed in the Act-Whether Act
discriminatory and violative of Art. 14.
The Andhra Pradesh Land Revenue (Additional
Assessment) and Cess Revision Act, 1962 (Act 22 of 1962) was passed with the
object of bringing uniformity in assessment of land revenue in the Telengana
and Andhra areas of the State. It also provided for additional levies on
certain classes of land.
When the assessment of land revenue was
sought to be collected from the respondents, they filed writ petitions in the
High Court challenging the constitutional validity of the Act and the petitions
In appeal by the State to this Court.,
HELD : The Act offended Art. 14 of the
Constitution and was there-fore void.
Both in Andhra as well as Telengana area
under the Ryotwari system, the land revenue which was a share of the produce of
the land commuted in money value varied according to the classification of soil
based upon its productivity; the soils of similar grain values were bracketed
together in orders called 'tarams' or 'Bhagana' and the rates were further
adjusted in the dry land having regard to the water supply. But in both the
cases, the quality and the grade of the soil divided in 'Tarams' or 'Bhaganas'
was the main basis for assessment. [37 E-G] Sections 3 and 4 of the Act, in
fixing the minimum flat rate for dry or wet lands, ignored the well
-established taram principle; and in the case of wet lands an attempt had been
made to classify different systems on the basis of the ayacuts; but this test
was unreasonable and had no relation to either the duration of water supply or
to the quality or the productivity of the soil. The classification attempted in
either case had no. reasonable relation to the objects sought to be achieved,
namely, imposition of fair assessments and rationalisation of the revenue
assessment structure. An arbitrary method has been introduced displacing one of
the most equitable and reasonable methods adopted for many years in the revenue
administration of the State. [44 C-E] Further, the imposition of assessment was
left to the arbitrary discretion of the officers not named in the Act without
giving any notice, opportunity or remedy to the assessees for questioning the
correctness of any of the important stages in the matter of assessment such as
ayacut taram, rate or classification or even in regard to the calculation of
the figures. It is not possible to read into the section the entire series of
the Standing Orders of the Board of Revenue which deal with the mode of assessment:
for if it was the intention of the Legislature that 29 the Standing Orders of
the Board of Revenue should be brought into the Act by incorporation, it would
have certainly used appropriates words to convey that idea. [45 D-E; 48 E-F]
Kunnathat Thathunni Moopil Nair v. The State of Kerala,  3 S.C.R. 77,
East India Tobacco Co. v. State of Andhra Pradesh,  1 S.C.R. 404 and
Khandige Sham Bhat v. The Agricultural Income-tax Officer,  3 S.C.R. 809,
C. V. Rajagopalachariar v. State of Madras,
A.I.R. 1960 Mad. 543 and H. H. Vishwasha Thirtha Swamiar of Sri Pejavar Mutt v.
The State of Mysore,  1 Mys. L.J. 351, distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 40-46,4868, 70-74 and 76-86 of 1966.
Appeals from the judgment and order dated
September 2,1955 of the Andhra Pradesh High Court in Writ Petitions Nos. 96,
281, 303, 836, 1029, 1130, 1219 and 1497 of 1963, and 79, 94, 1 1 1, 112, 141,
142, 148, 149, 159, 167, 171, 172, 173, 183,256,267,286,443,491,497,549,571,591,611,616,680,695,700,
720, 725, 737, 760, 1148, 1464 and 1789 of 1964 respectively.
S. V. Gupte, Solicitor-General and A. V.
Rangam, for the appellants in (C.A. No. 40 of 1966).
P.Ram Reddy, A. V. V. Nair and A. V. Rangam,
for the appellants (in C.A. Nos. 41-46, 48-68, 70-74 and 76 to 86).
P. A. Choudhury, and R. Thiagarajan for K.
Jayaram, for the respondents Nos. 1-12, 14-19, 21-40, 42-57, 59-113, 115, 116,
118 to 143, 145-156, 159-168, 170, 172-175, 177, 186, 188, 190-196, 197 to 219,
221, 223-233, 235-240, 242-259, 261-330, 332-381, 384-387, 389-391, 393-445,
447-453, 455472, 474476, 479-485, 494-514 and 556 (In C.A. No. 48 of 1966) and
respondents Nos. 1, 4-21, 23-36, 38-43, 45-55, 5762, 64-76, 79, 80, 82, 83, 85,
87-92, 94, 96-99, 101-104, 106, 108, 109, 111157, 159-198, 200, 202-207,
209-212, 214, 219, 221 to 272, 274-277, 279-299 and 301-324 (In C.A. No. 57 of
K.B. Krishnamurthy, K. Rajendra Chaudhuri and
K. R. Chaudhuri, for respondent No. (In C.A. No. 42 of 1966) respondents (in
C.A. No. 45 of 1966) respondents Nos. 1-80, 82-96, 98-129, 132-150, 152-207,
209-210 (In C.A. No. 46 of 1966) and respondents Nos. 1-29, 31-110 (In C.A. No.
68 of 1966).
K.R. Chaudhuri and K. Rajendra Chaudhuri, for
respondents Nos. 1-7 and 9 (in C.A. No. 53 of 1966), respondents Nos. 13, 5-9,
11, 12, 14, 17-21, 23 and 24 (in C.A. No. 54 of 1966) and respondents Nos. 1,
2, 4-9, 11-16, 19-28, 30-33, 35-150, 152, 153, 155, 157, 197, 199-328, 330-357,
359-360 and 362-535 (In C.A. No. 44 of 1966).
G. S. Rama Rao, for the respondent (in C.A.
No. 66 of 1966).
30 B. R. L. Iyengar, S. P. Nayyar, for R. H.
Dhebar, for the intervener.
The Judgment of the Court was delivered by
Subba Rao, C.J. These 44 appeals by certificate are preferred against the common
judgment of a Division Bench of the Andhra Pradesh High Court allowing the
petitions filed by the respondents under Art. 226 of the Constitution for
directing the State of Andhra Pradesh and other appropriate authorities to
forbear from collecting the assessment of land revenue under the provisions of
the Andhra Pradesh Land Revenue (Additional Assessment) and Cess Revision Act,
1962 (Act 22 of 1962), hereinafter called the Principal Act, as amended by the
Andhra Pradesh Land Revenue (Additional Assessment) and Cess Revision
(Amendment) Act, 1962 (Act 23 of 1962), hereinafter called the Amending Act.
For convenience of reference the Principal Act as amended by the Amending Act
will be called in the course of the judgment as "the Act". The appellants
raised the question of the constitutional validity of the relevant provisions
of the Act.
The Principal Act was passed on September 27,
1962 and it came into force on July 1, 1962; and the Amending Act was passed on
December 24, 1962, and it came into force on July 1, 1962. We are concerned in
these appeals only with the Act, i.e. Principal Act as amended by the Amending
It is said that the main object in passing
the Principal Act was to rationalize the land revenue assessment in the State
by bringing uniformity between Telengana and Andhra areas and to raise the rate
of revenue in view of the rise in prices and to make the ryots bear equitably
their share of the burden of the plans. With that view, as the long title of
the Principal Act indicates, the said Act was passed to provide for the levy of
additonal assessment on certain classes of land in the State of Andhra Pradesh
and for the revision of the assessments leviable in respect of such lands and
matters connected therewith. The relevant provisions of the Act, i.e., the
Principal Act as amended by the Amending Act, read thus :
lm15 Section 3. In case of dry land in the
State, an additional assessment at the rate of seventy-five per cent of the
assessment payable for a fasli year for that land shall be levied and collected
by the Government from the person liable to pay the assessment for each fasli
year in respect of that land :
Provided that the additional assessment
together with the assessment payable in respect of any such land shall in no
case be less than fifty naye paise per acre per fasli year.
31 Section 4. In the case of wet land in the
State which Is served by a Government source of irrigation specified in classes
1, II, and III of the Table below, an additional assessment at the rate of one
hundred per cent and in the case of wet land in the State which is served by a
Government source of irrigation specified in Class IV thereof, an additional
assessment at the rate of fifty per cent, of the assessment payable for a fasli
year for that land shall be levied and collected by the Government from the
person liable to pay the assessment for each fasli year in respect of that land
Provided that the additional assessment
together with the assessment payable per acre per fasli year for any wet land
specified in column (1) of the Table below shall, in no case, be less than the
minimum, or exceed the maximum, specified in the corresponding entry against
that land(a) in column (2) of the Table ill the case of a single crop wet land,
and (b) in column (3) of the Table in the case of a double-crop wet land.
THE TABLE Rate of assessment Rate of
assessment Description Payable for single payable for double of wet land crop
wet land,per crop wet land,per acre. acre.
(1) (2) (3) Class of, and Number of Settlement
Mini-Maxi-Mini-Maxi extent of settlementmum classification ayacut under taram
(or) Government Bhagana source of irrigation.
(a) (b) (c) (a) (b) (a) (b) Rs.nP. Rs.nP.
1. 30,000 (a)1 to 5 16to12 20.00 24.00 30.00
36.00 acres (b)6 to 8 111/2 15.00 18.00 22.50 27.00 and (c)9 and to9 81/2 12.00
15.00 18.00 22.50 above above below II. 5,000 (a) 1to 5 16 to 12 15.00 18.00
22.50 27.00 acres (b) 6 and ll1/2 12.00 15.00 18.00 22.50 and above above and
but below below 30,000 acres.
III.50 acres All All 9.00 14.00 3.50 21.00
and above tarams bhaganas but below 5,000acres.
IV. Below 50 All All 6.00 12.00 9.00 18.00
acres. tarams bhaganas.
32 Explanation.-In this Table,(a) The
expression Government source of irrigation' does not include a well, spring
channel, parrekalava or cross-bunding;
(b) taram and bhagana classification shall be
as registered in the revenue and settlement records;
(c) where no such taram or bhagana
classification is recorded in the revenue and settlement records, in respect of
any land, that land shall be deemed to bear the taram or bhagana classification
which a similar land in the vicinity bears.
Section 8. (1) The District Collector, shall,
from time to time, by notification published in the Andhra Pradesh Gazette and
the District Gazette, specify the Government sources of irrigation falling
under classes 1, 11 and IV of the Table under section 4 and may in like manner,
include in, or exclude from, such notification any such source.
(2) Any person aggrieved by a notification
published under subsection (1) may, within forty-five days from the date of
publication of the notification in the Andhra Pradesh Gazette and the District
Gazette, prefer an appeal to the Board of Revenue whose decision thereon shall
We will analyse the provisions of the said
section at a later ,stage of the judgment. The High Court in deciding against
the constitutional validity of the said provisions gave in effect the following
findings : (1) Under s. 3 of the Act there is no classification at all in the
case of dry lands. (2) The ayacut basis adopted in the Table under S. 4 of the
Act has no rational relation to the taram or quality of the land or the nature
of the irrigation source. (3) The minimum fixed by the proviso in many cases is
more than 100 per cent increase fixed by the section and thus, the proviso has
exceeded the section. (4) The Act is silent as to the machinery for making the
assessment, the criteria for fixation of the assessment, within the range of a
fixed maximum and a minimum the rights and remedies of the assesses and the
obligation of the Government to survey the lands. In short, the High Court
struck down the said provisions on the ground that they offend Arts. 14 and 19
of the Constitution for three reasons, namely (i) in the,, case of dry lands
there,. is no reasonable classification at all as the flat minimum rate of
50nP. per acre has no relation to the fertility of the land, (ii) in regard to
wet land there is no reasonable relation between the quality of the land and
the ayacut to 33 which it belongs, and (iii) the procedure prescribed for the
ascertainment of the rate is arbitrary and uncontrolled, The High Court, though
it elaborately considered the question whether the revenue assessment was by
authority of law within the meaning of Art. 265 of the Constitution, did not
express a final opinion thereon.
Mr. S. V. Gupte, learned Solicitor General,
who appeared in one of the appeals filed by the State, contended broadly that
the High Court went wrong in coming to the conclusion that the revenue
assessment made under the Act had no reasonable relation to the quality of the
soil and pointed out that what the Legislature did was nothing more than
imposing a surcharge on previous rates fixed on the basis of tarams in the case
of lands in Andhra and bhagana in the case of lands in Telengana.
Mr. P. Ram Reddy, learned counsel for the
State in the other appeals, while adopting the arguments of the learned
Solicitor General, argued in greater detail contending that though the
classification under S. 4. of the Act was apparently based upon ayacut, there
was a correlation between the extent of the ayacut and the duration of water
supply and that on that basis the classification could be sustained as it had a
reasonable relation to taram or bhagana, as the case may be, and also to the
duration of water supply. He took us through various statistical data to
support the said connection between the extent of ayacut and the duration of
water supply. On the question whether there was any procedure for assessment,
he strongly relied upon S. 6 of the Act and contended that the said section, by
reference, incorporated the pro-existing procedure for assessment in Andhra
under the Board's Standing Orders and in Telengana tinder the relevant Acts.
Mr. P. A. Chowdhury, learned counsel for some
of the respondents, argued that from time immemorial land assessment, both in
Andhra and in Telengana, was scientifically settled on the basis of taram or
bhagana, as the case may be, depending upon the quality and the productivity of
the soil and that the Act in adopting the maximum and the minimum rates in
respect of both dry and wet lands had ignored the said basis and instead
adopted a thoroughly arbitrary method of fixing rates on the basis of ayacut
which had no relevance at all to the quality or productivity of the land in
respect of which a particular assessment was made. He further contended that
the Act omitted the entire machinery for assessment which would be found in
almost every taxation statuts and conferred an arbitrary and uncanalized power
on the appropriate authority to impose assessments and contended that the want
of reasonable relation between the quality and fertility of the soil and the
ayacut and the conferment of arbitrary power of assess34 ment would infringe
the doctrine of equality enshrined in Art. 14 of the Constitution, both in its
substantive and procedural aspects.
Mr. Krishnamurthy, learned counsel appearing
for the respondents in some of the appeals, advanced an additonal argument in
respect of lands fed by Yeleru river, that in any event the Act would not apply
to the said land as they did not fall under any of the three categories covered
by the Act, namely, dry land, single-crop wet land and doublecrop wet land and
that, therefore, no assessment under the Act could be imposed in respect of the
Before we consider the said arguments it
would be necessary to know briefly the nature and scope of the previous revenue
settlements in Andhra and Telengana. After some experiments in the Madras State
it was decided in 1865 that a general revision of assessment should be made
based on accurate survey and classification of soils. This is known as Ryotwari
Settlement. The Ryotwari Settlement was conducted in seven stages : (1)
demarcation of boundaries, (2) survey, (3) inspection, (4) classification of
soils, (5) assessment, (6) matters subsequent to assessment, and (7) records of
settlement. The first two items were done by the Survey Department and the items
Nos. 3 to 7 by the Settlement Department. It will be enough for the purposes of
those appeals if we describe briefly how this classification of soils was done
and the assessment made on that basis.
Before proceeding to the detailed
classification of soils in each village, there was a preliminary grouping of
villages so as to bring together those which were similarly situated having
regard to proximity to market, facility of communication and climate.
Thereafter the soil was classified into "series", such as (1)
Alluvial islands in rivers and permanently improved soils; (2) Regar or regada,
the socalled 'black cotton soil,' (3) Red ferruginous soil; (4)
Calcareous-chalk or lime and; (5) Arenaceous. Every soil of the said series was
again divided into classes on the basis of the variety and physical situation,
such as pure clay or half sand or more than 2/3rd sand etc. The classes were
again divided into sorts such as good or bad or ordinary or worst. Briefly
stated land was classified into series into classes, and classes into sorts. In
the case of wet land in addition to the sorts, other distinctions were borne in
mind in grading the soil such as (1) whether the land was close to the
irrigation main channel and had good level and drainage, (2) whether the land
was less favourably situated in these respects, (3) whether the land was
imperfectly supplied with water; or whether the level was inconvenient, and
drainage bad, and (4) whether the land was so situated that the water could not
be let to flow on to it, but had to be raised by baling it out. After the said
classification the next stage was to ascertain the amount of crop each
different class and 35.
sort of soil could produce. After deducting
the cost of cultivation the net produce was valued in money and the said amount
was divided into proper percentages, one such percentage fixed by the Rules
would be the Government revenue. On the basis of this classification a table of
class and sort rates called Taram, which would apply equally to several soils
was drawn up. We have gathered the necessary particulars from "Land
Systems of British India" by Baden Powell, Vol. 3.
The principles of settlement of ryotwari land
and the manner the Government demand was arrived at is found in the Standing
Orders of the Board of Revenue Vol. 1, Paras 1 and 2. They are as follows :
(1) The assessment shall be on the land, and
shall not depend upon the description of produce, or upon the claims of certain
classes such as Brahmans, Mahajanas, Purakkudis and others to reduced rates.
(ii)The classification of soils is to be as
simple as possible, and is to be alike everywhere instead of each village
having its own;
(iii)The assessment is to be fixed so as not
to exceed half the net produce after deducting the expenses of cultivation,
(iv)No tax is to be imposed for a second crop
on dry land, but wet lands which in all ordinary seasons have an unfailing
supply of water for two crops are to be registered as double crop, the charge
for the second crop being generally half the first crop assessment. Remissions
may be given when the supply of water fails. In cases where water is raised by
baling an abatement of half a rupee per acre is allowed :
(v) The Tahsildar, or in the course of a
resettlement, the Special Settlement Officer or Special Assistant Settlement
Officer may allow the charge for second crop to be compounded in respect of all
irrigated lands of which the supply of water is not ordinarily unfailing. The
rates of composition will be as follows :
For wet land irrigated from a second-class
irrigation source one third :
For wet land irrigated from a third-class
irrigation source, one fourth;
For wet land irrigated from a fourth-class
irrigation source, one fifth;
36 For wet land irrigated from a fifth-class irrigation
Where the irrigation is precarious and the
supply is supplemented by wells, the divisional officer, or in the course of a
resettlement, the Special Settlement Officer, or Special Assistant Settlement
Officer, may allow the charge for second crop to be compounded at one-half of
the rates referred to above, except under sources grouped in Class 1 or 2 for
settlement purposes. Composition at such favourable rates may be allowed to
lands for which the charge for second crop has already been compounded at the
ordinary rates. If the wells however fall into disrepair, the land should be
transferred from compounded double crop to single crop wet. Ryots may be
permitted to compound at any time and to any .extent even after the settlement.
(2)In carrying out the settlement with
reference to the foregoing principles, the Settlement Department divides the
soils into certain classes with reference to their mechanical composition,
sub-divides them into sorts or grades with reference to their chemical and
physical properties and other circumstances affecting their fertility, ,and
attaches a separate grain value to each grade after numerous examinations of
the actual outturn of the staple products in each class and sort of soil. The
grain value is then converted into money at the commutation price, based
generally on the average of the 20-non famine years immediately preceding the
settlement, for the whole district, with some abatement for trader's profits
and for the distance the grain has usually to be carried to the markets, and
from the value of the gross produce thus determined, the cost of cultivation
and a certian percentage on account of vicissitudes of season and unprofitable
areas is deducted, and one-half of the remainder is the maximum taken as
assessment or the Government demand on the land. After this, soils of similar
grain values, irrespective of their classification, are bracketed together in
orders called Tarams, each with its own rate of assessment.
These rates are further adjusted with
reference to the position of the villages in which the lands are situated and
the nature of the sources of irrigation. For this purpose villages are formed
into groups, in the case of dry lands, with reference to their proximity to
roads and markets, and, in the case of wet lands, with reference to the nature
and quality of 37 the water supply. This accounts for different rates of
assessment being imposed on lands of similar soils, but situated in different
groups or under different classes of irrigation." The broad principles of
Ryotwari system may be stated thus (1) Under that system the soil itself is
taxed and the assessment is fixed on the land; (2) Lands are classed into two
general heads, namely, wet and dry; (3) The soils of similar grain values are
bracketed together in orders called "Tarams" each with its own rate
of assessment; (4) The rates are further adjusted, in the case of dry lands,
with reference to the nature and quality of water supply. This system had been
followed from time immemorial and had the general approval of the public. It
has a scientific basis and throws equitable burden on the different classes of
The system followed in Telengana which formed
part of the erstwhile Hyderabad State was as follows. The relative scale of
soils in respect of classification was in annas or "annawari". The
existing or the former rates were taken as the basis and were adjusted having
regard to altered circumstances, the rise or fall of prices, increase in
population, means of support and other advantages. No attempt was made to fix
the assessment at a certain fraction of net assets for determining the money
value of the produce of the field crop. But experiments were made by the
Settlement Officers and with the results obtained therein the rates fixed were
checked in order to ascertain what profit would be left to the cultivators.
It will be seen that both in Andhra as well
as Telengana area; under the Ryotwari system, the land revenue which was a
share of the produce of the land commuted in money value varied according to
the classification of soil based upon its productivity. Both in Andhra and
Telengana areas under the Ryotwari system the soils of similar grain values
were bracketed together in orders called 'Tarams' or Bhagana and the rates were
further adjusted in the dry land having regard to the grouping and in wet lands
having regard to the water supply. But in both the cases, the quality and the
grade of the soil divided in 'Tarams' or 'Bhaganas' as the case may be, was the
main basis for assessment.
It appears that the Ryotwari Settlements were
abandoned in the year 1939. In the Report of the Land Revenue Reforms Committee
of the Government of Andhra Pradesh, Hyderabad at page30 it is stated
"Re-settlement operations were never popular with the ryots, as in all
cases due to the steady increase in prices, resettlements always led on to an
increase in land revenue assessment. They were finally ordered to be abandoned
in 1939." 38 But the Andhra Pradesh Land Revenue Assessment (Standardization)
Act, 1956 and the Hyderabad Land Revenue (Special Assessment) Act, 1952 were
passed in order to standardize the rates on the basis of price level. 'They
increased the rates by way of surcharge. In the year 1958 the Government of
Andhra Pradesh appointed Land Revenue Reforms Committee to examine the existing
system and rates of land revenue assessment and irrigation charges obtaining in
the various regions of the State and to make suitable recommendations for their
The relevant recommendations of the Land
Revenue Reforms Committee of the Government of Andhra Pradesh in regard to
fixation of rates are contained in Ch. XV of Part 11 Vol.
(iii) of its Report. They are :
"No. 51. Land Revenue should be fixed as
a percentage of the net produce.
No. 53. As periodical settlements or resettlements
are not recommended and as revisions in future will be based on prices and
other relevant factors, it is not necessary to give an opinion as to what
percentage of the net produce, the share of the Government should be.
No. 71. In future, the assessment on
irrigated land should be fixed on the basis of the dry land potential and the
charge for irrigation should be on the basis of a charge, for service, by the
No. 72. The productivity of the soils, the
capacity of the source based on the duration of supply and the ability of the
ryots to bear the charge, are the chief factors which should be considered in
determining the water charges.
No. 73. In future, the assessment on irrigated
land should consist of dry assessment depending on the quality of soil and the
charge for irrigation, based on the quantum of service rendered by the
Even though, the income from irrigated land
is several times that of dry land, still for the service done, it is not
suggested to levy a uniform rate, but graduated rates, related to the soil
value of the lands, on which the yields would depend." It will be seen
from the said recommendations that the Committee ,did not recommend Ryotwari settlements
but suggested that assessments should be based on the quality and productivity
of soils, the duration of supply of water and the prices. It may be noticed
that the Committee did not make ayacut the basis of the assessment.
39 Let us now analyse the provisions of the
Act. Under ss. 3 and 4 of the Act and the Table attached to S. 4, which have
been extracted earlier, a completely new scheme has been laid down. Under S. 3,
an additional assessment at the rate of 75 per cent of the earlier assessment
is imposed and under the proviso the total asessment should not be less than 50
np. per acre for a fasli year. That is to say, irrespective of the quality and
productivity of the soil, every acre of dry land has to bear a minimum
assessment of 50 np. per acre for a fasli year. Coming to wet lands, under the
Table appended to S. 4, they are divided into 4 categories depending upon the
extent of the ayacuts.
Ayacuts of 30,000 acres and above fall under
the first class, 5,000 acres and above but below 30,000 acres, under the 2nd
class, 50 acres and above but below 5000 acres, under the 3rd class, and below
50 acres, under the 4th class. A maximum and a minimum rate of assessment per
acre are fixed for lands under ayacuts under each of the said class . Further,
under class I the tarams and bhaganas are divided into 3 groups and different
maxima and minima rates of assessment are fixed for each such group. In the 2nd
class, tarams and bhaganas are put into two groups and different maxima and
minima rates are fixed in respect of the two groups; in classes 3 and 4 no
distinction is made on the basis of tarams. Briefly stated, the whole
classification is based on the extent of ayacut and in the case of classes 1
and 2 groups of tarams are relied upon only for introducing differences in the
maximum and minimum rates. But the distinction between different taranis in
each of the groups is effaced without any appreciable reason for such
effacement. The minimum flat rates fixed for dry lands as well as for wet lands
are not based upon the quality and productivity of the soil and in the case of
wet lands the minimum rate is mainly founded on the extent of ayacut.
Prima facie we do not see any reasonable
relation between the extent of the ayacut and the assessment payable in respect
of an acre of land forming part of that ayacut. The system of periodical
ryotwari settlement held by the British Government on a scientific basis of
quality and productivity of the soil with marginal adjustments on the foot of
the duration of water supply in the case of wet lands and grouping of villages
in the case of dry lands was given up.
The scheme of surcharge on pre-existing
rates, earlier accepted, was not adopted. The recommendation of the Committee
that the assessment should be based on the duration of water supply among
others was not followed. Instead the Act introduced in the case of both dry and
wet lands an unscientific and arbitrary method of assessment imposing a minimum
flat rate irrespective of the tarams. In the case of wet lands an additional
irrational factor is laid down, viz., the rate is linked with the extent of the
ayacut. In the case of wet land, a minimum flat 40 rate with some variations
within different groups in classes I and II and a minimum flat rate in respect
of the groups in classes III and IV is fixed without any rational connection
between the two. Mr. P. A. Choudhury contended that the scheme accepted by the
Act was hit by Art. 14 of the Constitution inasmuch as it gave up practically
the principle of tarams and bhaganas and accepted a flat rate irrespective of
the quality and productivity of the land and, therefore, suffered from want of
reasonable classification. He further contended that the alleged justification
for the classification, namely, the extent of the ayacut, had no reasonable
relation to the objects sought to be achieved by the Act, namely,
rationalisation of the revenue assessments on land in the entire State.
Mr. P. Ram Reddy, on the other hand, made a
strenuous attempt to sustain ss. 3 and 4 of the Act on the basis of reasonable
classification. He said that in the case of dry land the minimum rate of 50 np.
was so low that in most of the cases 75 per cent of the previous assessment per
acre would not be more than 5 np., and. therefore, the mere fact that in a few
cases the 75 per cent of the assessment would fall on the other side of the
line could not affect the validity of the classification for it would almost be
impossible in any scheme of classification to avoid marginal cases. So too, in
the case of wet lands, he argued, in regard to classes I and II, the duration
of supply of water corresponded to the extent of the ayacut in most of the
cases and, therefore, though the classification was based upon the extent of
the ayacut, it was really made on the basis of the duration of the water
supply. As regards different groupings of the tarams and bhaganas in the first
two classes, it was contended that, as the differences between the tarams in
each group were not appreciable and, therefore, if the rate of assessment was
integrally connected with the duration of the water supply, the said groupings
of the tarams would not affect the reasonableness of classifications. In the
case of classes 11 and IV, he contended, that in respect of lands falling under
the said two classes the difference in the rates between the different tarams
was not appreciable and, therefore, that could be ignored. In short he
maintained that there was an equation between the duration of supply of water
and the extent of the ayacut and that the difference in the duration of water
supply in the context of assessment of various lands has a reasonable relation
to the aforesaid object of the Act sought to be achieved.
Now let us test the contentions of Mr. Ram
Reddy with the facts placed before us.
Wet Lands.some tabular statements under the
headings "average test" and "majority test" have been
placed before us in 41 support of the contention. The following are the figures
under the "Average test" :"A" AVERAGE TEST Average Average
AverageAverage Sl. Name of Taluk for less for bet-for bet-for more NO. than 3
ween 3 ween 5than 8 months and 5 and 8months months months 1. Anantapur 26.4
50.5 120.8 .....
2. Dbarmavaram 13.7 49.0 120.1 .....
3. Tadipartri 16.4 62.0 126.0 .....
4. Gooty 9.5 48.3 152.8 .....
5. Kalyanadurga 10.2 52.9 152.5 .....
6. Rayadurg 22.0 59.7 162-0 .....
7. Mabakasira 15.2 55.4 143.2 .....
8. Penukonda 10.9 60.6 186.4 .....
9. Hindupur 15.1 58.3 108.7 .....
10. Kadiri 9.9 43.9 147.9 .....
Average of Taluks 14.954.1142-2
AverageAverage for bet-for between 3 ween 5 and 5 and 8 months months
1. Ichapuram 8.3 69.6
2. Pathapattanam 24.7 47.4
3. Chipurapalli 2.5 139.3
4. Srikakulam 6.4 84.9
5. Sompeta. 6.6 80.8 6. Salur 13.8 ....
7. Babbili 19.5 ....
8. Palkonda .... 37:8
9. Narasannapet .... 35.5
10. Parvathipuram .... 84.2 Average of Taluks
8.2 57.9 Sl Average Average Average Average No Name of Taluk for less for betfor
bet for more than 3 ween 3 ween 5 than 8 months and 5 and 8 months months months
1. Mahabooba 4.8 26.8 60.6 ....
2. Mulug 25.1 171.6 370.86086.46 The averages
mentioned under different columns are the average extent of the ayacuts in each
taluk correlated with particular months of water supply. If we take the average
for less than 3 months in respect of different taluks in the Rayalaseema area,
which is part of the Andhra, the extents of the ayacuts vary from 9 acres to 26
acres. In regard to the duration of water supply between 3 and 4 months, they
vary from 43 to 62 acres. In regard to the duration of water supply between 5
and 8 months, they vary bet M4SupCI-67-4 42 ween 108 and 152 acres. So too in
some of the taluks of the Andhra area the same variations are found. It is,
therefore, not possible from the average test to hold that particular months of
supply corresponded with particular extent of the ayacut.
The following tabular form represents the
"Majority test" "B" MAJORITY TEST
----------------------------------------------------------Between 5 months duraBetween
5 and 7 month.-;
tion Sl. Name of Taluk
----------------------------------No. No irrTotal No of No of irrTotal gation
irrigation gation No of irrigation sources sourcessources sources below 50
between 50 acres ayacut and 5000 acres ------------------------------------------------------------
1. Anantpur 15 30 19 19
2. Dbaramavaram 23 32 14 14
3. Tadapatri 7 9 1 1
4. Gooty 31 34 5 5
5. Kalyandurg 38 51 14 14
6. Kayadurg 5 9 2 2
7. Madakasira 37 62 25 25
8. Pandukonda 54 85 32 32
9. Hindupur 113 155 30 30
10. Kadiri 379 407 18 18
-----------------------------------------------------------Below 5 months
duration Between 5 & 8 months ----------------------------------------Sl .
Name of Taluk NO. of Total No No of Total No irrigation of irriirrigatof irrigasources
gation tion tion sources sources sources below 50 between 50 acres ayacut and
5000 acres ----------------------------------------------------------
1. Ichapuram 165 166 35 79
2. Pathapatnam 927 1,054 147 570
3. Cheepurapalli 1,799 1,905 39 39
4. Srikakulam 465 470 127 129
5. Sompeta 1,082 1,099 125 131 6. Salur 594
614 ... ...
7. Bobbili 1,629 1,771 ... ...
8. Palkonda ..... .... 178 290
9. Narasannapet ..... ... 192 1.214
10. Paravathipuram including Karupum Section.
135 152 1 Mahabooba Taluk 111 111 90 90 (P. 1456 to 1457 upto 10 acres)
2. Mulugu 179 231 12 12 Do No. of Irrigation
Sources Between 5000 & 3,000 acres for more than 8 months-2 Total No. of
Irrigation sources do-3 -------------------------------------------------------------43
By majority test it is meant to convey that in each taluk the majority of the
irrigation sources with a particular duration have a proportionate relation to
the different extent of the ayacut mentioned in the Act. But the aforesaid
tabular form does not support that assertion. In regard to water sources of
below 5 months duration with an ayacut of below 50 acres, a comparison of the
first two columns shows that, except in a few cases, the test completely fails.
No doubt in regard to irrigation sources supplying water for between 5 and 8
months of ayacut of 5,000 to 50,000 acres, the test appears to be satisfied.
But the table itself is confined only to the,
Rayalaseema area of the Andhra Part of the State and even in regard to that
area there is no unanimity, as the test fails in regard to sources within 5
months duration. Similar tests in Srikakulam district which is a part of the
Andhra area of the State, shows that in many cases the majority test thoroughly
breaks. Nothing can, therefore, be built upon the said tests. Further, the
statements filed in the case showing the area irrigated for different durations
clearly indicates that in many cases the additional assessment is more than 100
per cent or 50 per cent, as the case may be, of the original assessment showing
thereby that the increase is on the basis of the flat minimum rate and not on
the basis of the duration of the irrigation sources. Further water sources
which supply water for more than 5 months but less than 8 months and have
registered ayacuts below 5,000 acres fall under class IV. Some of the tanks
which supply water for more than 8 months fall under different classes having
regard to the ayacut which they serve. For instance, Kumbum tank has a
registered ayacut of 10,000 acres, Bukkaepatnam tank has a registered ayacut of
184 acres; and though both supply water for 8 months or More, the former falls
under class II and the latter under class 111. A cursory glance through the
statistics of the various districts tells the same tale. In the Warrangal
district of the Telengana area. in Mahaboobad taluk none of the water sources
supplies water for more than 8 months and none of them has an ayacut of more
than 175 acres; they are all classified under class III or class IV. In Malug
taluk 3 tanks supply water for more than 8 months and they have ayacuts of
3,400 acres, 1,901 acres and 6,470 acres re.-,pectively. The first two fall
under class III and the last under class H. In Anantapur District, 14 out of 22
source% which supply water for between 3 and 5 months are placed under class
111. III Dharmavaram taluk, out of 22 water sources of similar nature, 9 fall
in class III. In Srikakulam district some of the water sources which supply
water for more than 8 months fall under class III, because of their ayacut. The
record also discloses that Sitanagaram Anicut system has a registered ayacut of
4,017 acres, Mahadevpuram tank system has only 1.500 acres. Dondaped tank
system has 1,504 acres, Anamasamudram-Giraperu tank system has 826 acres,
Jangamamaheswarapuram tank system has only 246 acres.
44 Yerur Tank system has 1,500 acres, and
Ponnalur tank system has 987 acres. Under S. 4 all these water sources fall
under class III. It is not necessary to multiply instances.
The High Court has carefully considered this
aspect. Enough has been said to make the point that classification based on
ayacut has no reasonable relation to the duration of water supply. It is,
therefore, clear that the ayacuts do not correspond to the number of months of
water supply; indeed, many tanks which supply water for a longer duration have
smaller ayacuts. Tanks supplying water for equal durations fail under different
classes. In a large number of cases the minimum rate is more than 100 per cent
of the earlier assessment indicating thereby that the minimum rate has no
relation to the quality or the productivity of the soil. In short, both ss. 3
and 4 in fixing the minimum flat rate for dry or wet lands, as the case may be,
have ignored the well established taram principle; and in the case of wet lands
an attempt has been made to classify different systems on the basis of the
ayacuts but the said test is unreasonable and has no relation to either the
duration of water supply or to the quality or the productivity of the soil. The
classification attempt in either case has no reasonable relation to the objects
sought to be achieved, namely, imposition of fair assessments and
rationalisation of the revenue assessment structure. Indeed, an arbitrary
method has been introduced displacing one of the most equitable and reasonable
methods adopted all these years in the revenue administration of that State.
The same unreasonableness is writ large on
the provisions prescribing the machinery for assessment. The machinery provisions
read thus :
Section 6. The additional assessment payable
under this Act in respect of any land shall, for all purposes, be treated as
Section 8. (1) The District Collector shall,
from time to time, by notification published in the Andhra Pradesh Gazette and
the District Gazette, specify the Government sources of irrigation falling
under classes I, II and IV of the Table under section 4 and may in like manner,
include in, or exclude from, such notification any such source.
(2) Any person aggrieved by a notification
published under subsection (1) may, within forty-five days from the date of
publication of the notification in the Andhra Pradesh Gazette and the District
Gazette. prefer an appeal to the Board of Revenue whose decision thereon shall
45 Section 8 has nothing to do with the
assessment. It only provides for specification of Government sources of
irrigation falling under different classes. Therefore, the only provision which
may be said to relate to procedure for assessment is s. 6. Mr. Ram Reddy argued
that S. 6 by reference brought into the Act not only the entire provisions of
the Andhra Pradesh Revenue Recovery Act but also the elaborate procedure for
assessment prescribed by the Standing Orders of the Board of Revenue. He added
that S. 6 incorporated by reference the Standing Orders of the Board of Revenue
relating to procedure and thereby the said Standing Orders were made part of
the statute. This argument has been pitched rather high and we do not think that
the phraseology of the section permits any such interpretation. Under S. 6 the
additional assessment payable under the Act shall be treated as land revenue.
E.x facie this provision has nothing to do with the procedure for assessment;
but the assessment payable is treated as land revenue. An assessment becomes
payable only after it is assessed. The section, therefore, does not deal with a
stage prior to assessment. The amount payable towards assessment may be
recovered in the manner the land revenue is recovered.
For the same reason it is not possible to
read into the section the entire gamut of the Standing Orders of the Board of
Revenue which deal with the mode of assessment; for the said machinery also
deals with a stage before the assessment becomes due. If it was the intention
of the Legislature that the Standing Orders of the Board of Revenue should be
brought into the Act by incorporation, it would have certainly used appropriate
words to convev that idea.
It would not have left such an important provision
so vague and particularly when the Legislature may be presumed to know that the
question whether the Standing Orders are law was seriously raised in many
proceedings. Therefore, if S. 6 is put aside, there is absolutely no provision
in the Act prescribing the mode of assessment. Sections 3 and 4 are charging
sections and they say in effect that a person will have to pay an additional
assessment per acre in respect of both dry and wet lands. They do not lay down
how the assessment should be levied. No notice has been prescribed, no
opportunity is given to the person to question the assessment on his land.
There is no procedure for him to agitate the correctness of the classification
made by placing his land in a particular class with reference to ayacut,
acreage or even taram. The Act does not even nominate the appropriate officer
to make the assessment to deal with questions arising in respect of assessments
and does not prescribe the procedure for assessment. The whole thing is left in
a nebulous form. Briefly stated, under the Act there is no procedure for
assessment and however grievous the blunder made there is no way for the
aggrieved party to get it corrected. This is a typical case where a taxing
statute does not provide any machinery of assessment.
46 On the said facts the question is whether
ss. 3 and 4 of the Act offend Art. 14 of the Constitution. The scope of Art.
14 has been so well-settled that it does not
require further elucidation. While the article prohibits discrimination, it permits
classification. A statute may expressly make a discrimination between persons
or things or may confer power on an authority who would be in a position to do
Official arbitrariness is more subversive of
the doctrine of equality than statutory discrimination. In respect of a
statutory discrimination one knows where he stands, but the wand of official
arbitrarianess can be waved in all directions indiscriminately. A statutory
provision may offend Art. 14 of the Constitution both by finding differences
where there are none and by making no difference where there is one. Decided
cases laid down two tests to ascertain whether a classification is permissible
or not, viz., (i) the classification must be founded on an intelligible
differentia which distinguishes persons or things that are grouped together
from others left out of the group; and (ii) that the differential must have a
rational relation to the object sought to be achieved by the statute in
question. The said principles have been applied by this Court to taxing
statutes. This Court in Kunnathat Thathunni Moopil Nair v. The State of
Kerala(1) held that the Travancore-Cochin Land Tax Act, 1955, infringed Art. 14
of the Constitution, as it 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. It
was pointed out that that was one of the cases where the lack of classification
created inequality. In East India Tobacco Co.
v. State of Andhra Pradesh(2) though this
Court again held that taxation laws also should pass the test of Art. 14 of the
Constitution gave the caution that in deciding whether such law was
discriminatory or not it was necessary to bear in mind that the State had a
wide discretion in selecting the persons or things it would tax. The
applicability of Art. 14 to taxation statute again arose for consideration in
Khandige Sham Bhat v. The Agricultural Income Tax Officer(3) and this Court
affirmed the correctness of the decision in K. T. Moopil Nair's case(1). In the
context of a taxation law this Court held "Though a law ex-facie appears
to treat all that fall within a class alike, if in effect it operates unevenly
on persons or property similarly situated, it may be said that the law offends
the equality clause. It will then be the duty of the court to scrutinize the
effect of the law carefully to ascertain its real impact on the persons or
property similarly situated. Conversely, a law may treat (1)  3 S. C. R.
77. (2)  1 S. C.
(3)  3 S. C. R. 899, 817.
persons who appear to be similarly situated
differently; but on investigation they may be found not to be similarly
situated. To state it differently, it is not the phraseology of a statute that
governs the situation but the effect of the law that is decisive. If there is
equality and uniformity within each group, the law will not be condemned as
discriminative, though due to some fortuitous circumstances arising out of a
peculiar situation some included in a class get an advantage over others, so
long as they are not singled out for special treatment. Taxation law is not an
exception to this doctrine......
But in the application of the principles, the
courts, in view of the inherent complexity of fiscal adjustment of diverse
elements, permit a larger discretion to the Legislature in the matter of
classification, so long it adheres to the fundamental principles underlying the
said doctrine. The power of the Legislature to classify is of "wide range
and flexibility" so that it can adjust its system of taxation in all
proper and reasonable ways." 47 It is, therefore, manifest that this Court
while conceding a larger discretion to the Legislature in the matter of fiscal
adjustment will insist that a fiscal statute just like any other statute cannot
infringe Art. 14 of the Constitution by introducing unreasonable discrimination
between persons or property either by classification or lack of classification.
Two decisions relied upon by the learned counsel for the appellant may now be
noticed. In C. V. Rajagopalachariar v. State of Madras(1) the facts were : two
Acts, namely. Madras Land Revenue Surcharge Act (19 of 1954) and Madras Land
Revenue (Additional Surcharge) Act (30 of 1955), were passed by the Madras
Legislature increasing the land revenue payable by landlords to the extent of
the surcharge levied. Those two Acts were questioned, inter alia, on the ground
that they offended Art. 14 of the Constitution; but the ground of attack was
that the Acts fixed a slab system under which the rate of surcharge
progressively increased from As. -/2/to As.
-/8/on each rupee of the land revenue paid
and that the relevant provision was discriminatory in its operation as a
distinction had been made between rich and poor people and as the levy of the
tax was different for different classes of owners.
That contention, for the reasons given
therein, was negatived. In the said Madras Acts a surcharge was imposed in
addition to the previous rates and the previous rates had been made on the
basis of ryotwari settlements which did not offend Art. 14 of the Constitution
and, therefore, a small addition to the said rates could not likewise infringe
the said article. The present question did not arise in that case. Nor has (1)
A. I.R. 1960 Mad. 543.
48 the decision of the Mysore High Court in
H. H. Vishwasha Thirtha Swamiar or Sri Pejawar Mutt v. The State of Mysore(1)
in regard to the Mysore Land Revenue Surcharge Act (13 of 1961) any bearing on
the present question. There, as in the Madras Acts, the revenue surcharge
levied wag an additional imposition of land tax and, therefore, the Mysore High
Court held that it did not offend Art. 14 of the Constitution. In holding that
Art. 14 was not infringed, the Court said:
"We have before us a temporary measure.
That is an extremely important circumstance. The State, not unreasonably,
proceeded on the basis that a temporary levy could be made on the basis of
existing rates. We can think of no other reasonable basis on which the levy
could have been made. It may be that in the result some areas were taxed more
But yet it cannot be said with any
justification that there was any hostile discrimination between one area and
another." It will be seen that in that case on existing rates based upon
scientific data a surcharge was imposed as a temporary measure till a uniform
land revenue law was enacted for the whole State. That decision, therefore,
does not touch the present case. But in the instant case, as we have pointed
out earlier, the whole scheme of ryotwari settlement was given up so far as the
minimum rate was concerned and a flat minimum rate was fixed in the case of dry
lands without any reference to the quality or fertility of the soil and in the
case of wet lands a minimum wet rate was fixed and it was sought to be
justified by correlating it to the ayacut.
Further, the whole imposition of assessment
was left to the arbitrary discretion of the officers not named in the Act
without giving any remedy to the assessees for questioning the correctness of
any of the important stages in the matter of assessment, such as ayacut, taram,
rate or classification or even in regard to the calculation of the figures. Not
only the scheme of classification, as pointed out by us earlier, has no
reasonable relation to the objects sought to be achieved viz., fixation and
rationalisation of rates but the arbitrary power of assessment conferred under
the Act enables the appropriate officers to make unreasonable discrimination
between different persons and lands. The Act, therefore, clearly offends Art.
14 of the Constitution.
In some of the appeals relating to Peddapuram
and Kumarapuram villages another point was raised, namely, that a special rate
bad been fixed which was neither for a single crop nor for a double crop and
that, therefore, they do not come under any of (1)  1 Mys. L.J. 351,359.
49 the provisions of the Act. In the view we
have expressed on the other questions it is not necessary to notice this
In the result the appeals are dismissed with
costs. One hearing fee.
R. K. P. S.