State of Mysore Vs. M. L. Nagade and
Gadag & Ors [1983] INSC 66 (6 May 1983)
DESAI, D.A.
DESAI, D.A.
REDDY, O. CHINNAPPA (J)
CITATION: 1983 AIR 762 1983 SCR (3) 93 1983
SCC (3) 253 1983 SCALE (1)618
ACT:
Hyderabad Land Revenue Rules subsequently
repealed and re-enacted as Andhra Pradesh (Telengana Area) Land Revenue Rules,
1951 framed under Hyderabad Land Revenue Act (VIII of 1317 F)-r. 71 as amended
on July 4, 1958 -Diversion of agricultural land to non-agricultural
purposes-mode of assessment of land revenue -Whether. rule valid.
Bombay Land Revenue Rules framed under Bombay
Land Revenue Act, 1879-r. 81 as amended on March 27, 1958-Whether rule valid.
Rule 71 of the Hyderabad Land Revenue Rules,
which is similar to r. 81 of the Bombay Land Revenue Rules, provides for mode
of assessment of land revenue in the event of diversion of agricultural lands
to non-agricultural purposes.
HEADNOTE:
The respondents in these appeals had filed
certain writ petitions challenging the levy and demand of non- agricultural
assessment made by the appellants, on the ground, among others, that the above
rules conferred unguided and uncontrolled power and there was excessive
delegation of legislative functions and therefore the rules were violative of
Art. 14 of the Constitution. The High Court accepted the contention and quashed
the demand of assessment.
Allowing the appeals,
HELD: Delegation of some part of legislative
power becomes a compulsive necessity for viability and functioning of the
various institutions created by the Constitution. The legislature can delegate
details to be worked out by the delegate and the details may be numerous and
significant yet they may well be made over to the appropriate agency. The
guideline need not be found in the impugned provision. The same may be
collected from the setting in which the provision is placed, the purpose for
which the Act is enacted and even the preamble of the statute in which the
provision is incorporated. The object sought to be achieved by legislation or
statute can furnish reliable guideline for the exercise of discretionary power.
[104 B, F-G, 100 H, 101 A] Constitutional Law by Prof. Wills, p. 587; Kunnathat
Thathunni Moopil Nair v. The State of Kerala and Another, [1961] 3 SCR 67; New
Manek Chowk Spinning and Weaving Mills.
Co. Ltd. and Ors. v. Municipal Corporation of
the City of Ahmedabad and Ors. [1967] 2 SCR 679; State of Andhra Pradesh
Kerala v. Haji K. Haji K. 94 Kutty Naha &
Ors. etc. [1969] 1 SCR 645; Rangildas Varajdas Khandwala v. Collector of Surat
& Ors. [1961] 1 SCR 951; and Avinder Singh etc. v. State of Punjab &
Anr. etc. [1979] 1 SCR 845, referred to.
The basic purpose for which a Land Revenue
Act is enacted is for empowering the State and its agencies and its officials
to assess and levy land revenue. The land revenue is a tax and the validity of
a 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. [105 A, G-H] In the instant case r. 71 is made in exercise of the
rule making power conferred by s. 172 of the Hyderabad Land Revenue Act. This
rule making power is to be exercised for the purpose of carrying out the
provisions of the Act.
Whenever land is diverted to use other than
agricultural, power is conferred to levy non-agricultural assessment or special
assessment but this assessment is to be determined under the amended r. 71,
keeping in view the purpose of the Act, namely, levying and collection of
revenue, the use to which the land is put, the profit derived from such
deviated use of the and again correlated to population as set out in various
sub-clauses of amended r. 71 and within floor and ceiling prescribed in the
impugned rule. The High Court 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 purposes.
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 of land. The order made by the revenue officer is appealable.
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.
[104 H; 105 A-B; E-G] There is no excessive
delegation of legislative functions in the Hyderabad Land Revenue Act. Section
50 of the Act clearly confers power on the State Legislature to levy assessment
and when the land is diverted to a use other than agriculture, the legislature conferred
to power to levy non-agricultural assessment. Elaborate provision has been made
for levying assessment. Section 172 conferred power to enact rules for giving
effect to the provision of the Act and the guideline was provided as herein
above indicated.
[106 B-C] Bombay Land Revenue Code 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 Land Revenue Administration. Section 48 confers power to levy
and assess the land revenue with reference to the use of the land. Chapter XI
makes detailed provision for the procedure to be followed by the revenue
officers while discharging their duties and carrying out the functions imposed
by the Code. Chapter XIII provides for appeals and revisions against the orders
of the revenue officers. [106 E-G] 95 Rule 81 of the Bombay Land Revenue Rules
framed under s. 214 of the Act, as amended on March 27, 1958, provides for
ordinary rates of non-agricultural assessment. 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 the 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. The Act and the Rules 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, town-wise, city-wise and overall what is being assessed is
none-the-less land revenue. 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 guidelines in the Act and the Rules. [106 H, 107 A-G] We would expect
revenue authority ordinarily to hear the person affected by the order levying
non-agricultural 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. [107
G-H, 108 A] & CIVIL APPELLATE. JURISDICTION : Civil Appeals Nos.
1221-1222 & 1407-1413 of 1970 From the
Judgment and Order dated the 30th September, 1965 of the Mysore High Court in
Writ Petitions No. 1934/64, 672 of 1963, 1165-1168, 1198-1199 & 2619 of
1963 respectively.
M. Veerappa and Ashok Kumar Sharma for the
appellants in all appeals.
Naunit Lal, Kailash Vasdev and Krishna Kumar
for Respondents in CA. Nos. 1407-1412/73.
M.N. Phadke, Vinod Bobde, D.N. Misra and Mrs.
A.K. Verma with him for the Respondents in CA. 1222 & 1413/70. S.S. Javali
and B.P. Singh for the Respondent in CA. 1221 of 1970.
The Judgment of the Court was delivered by
DESAI, J. Civil Appeals Nos. 1221-1222/70 arise from a decision of the Division
Bench of the then High Court of Mysore at 96 Bangalore in Writ Petition Nos.
672/63 and 193/64 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, 1958 of the Hyderabad Land Revenue Rules
which appeared to have been repealed and re-enacted as the Andhra Pradesh
(Telengana Area) Land Revenue Rules, 1951 was unconstitutional being violative
of Art. 14 of the Constitution and hence void.
Civil Appeals Nos. 1407 to 1413/70 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 Art. 14 and
hence void.
Appellants in both the groups are the State
of Mysore and some officers. Respondents are the original petitioners in both
the groups.
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.
The boundaries of old Mysore State underwent
a change consequent upon the re-organisation 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 (VIII of 1317F).
97 In Re C. A. Nos. 1221-1222/70 :
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 :
"71 (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 5,000 the rate
of special assessment leviable shall be not less than the agricultural
assessment leviable on such land and note more Rs. 40 per acre.
(b) in the case of land situated in any
village or town other than a town coming under Sub-Rule (c) of this Rule, the
population of which exceeds 5,000 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
area 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 per acre." The validity 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 Art. 14 of the Constitution.
In Re. C.A. Nos, 1407 to 1413/70: 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:
"81 (1): Rate of Non-Agricultural
assessment:
The rate of Non-Agricultural assessment
leviable shall be as follows:- 98 (a) in the case of land situated in any
village the population of which does not exceed 5,000 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 rule, the
population of which exceeds 5,000 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
purposes, irrespective of the extent actually built upon." The same
contention which was advanced in the former group of petitions was repeated in
this group of petitions.
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.
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 Art. 14 of the Constitution.
Thus the question which falls for
consideration is whether the amended Rule 71 of the Hyderabad Land Revenue
Rules and amended Rule 81 of the Bombay Land Revenue Rules suffer from the vice
of excessive delegation of legislative functions or that it confers canalised
and unguided arbitrary power on the officers or there is 99 no guideline to
govern the discretion while enforcing and implementing the two Rules.
We would first examine the validity of
amended Rule 71 of the Hyderabad Land Revenue Rules. The Hyderabad Land Revenue
Act (VIII of 1317F) was enacted to amend and consolidate the orders and
regulations relating to land revenue. It is an exhaustive Code divided into 12
Chapters.
Chapter II deals with appointment of Revenue
Officers and their respective powers. Chapter IV contains provision in respect
of land and land revenue. Sec. 24 provides that all Unalienated lands belong to
Government. Sec. 48 provides that all land, whether applied to agricultural or
any other purpose and wherever situate shall be liable to payment of land
revenue to the Government in accordance with provisions of this Chapter and
Chapters VII and IX except in case title to land has been transferred to any
municipality or the revenue thereof has been wholly remitted under any special
contract with the Government or under any order or law. Sec. 50 which is
material for the present purpose confers power for assessment and levy of land
revenue. It reads as under :
"50. Land revenue shall be assessed
according to the various modes of use- (a) agricultural use.
(b) In addition to agricultural use any other
use from which profit or advantage is derived.
When rate is assessed on any land for any one
of the aforesaid purposes and the land is appropriated for any other purpose
the rate thereof shall be altered and fixed again, although the term of
subsisting settlement may not have expired.
It becomes clear that the land revenue was to
be assessed according to the use to which the land is put and especially in the
case of use of land for purposes other than agriculture, the N.A. assessment
would be assessed keeping in view the use to which the land is put and the
profit or advantage derived from such use of the land. Chapter VII contains
provisions for Survey and settlement of land which would include assessment in
respect of each survey, piece and parcel of land. Sec. 84 provides for
announcement of the 100 assessment and the manner in which it is made, and the
announcement should include the assessment fixed in respect of each plot of
land called survey number. Chapter IX makes provision for responsibility of
payment of revenue and the method of its recovery and the priority of payment
in respect of land revenue. Chapter X deals with the procedure prescribed for
revenue officers in dealing with cases under the Land Revenue Act. Chapter XI
provides for appeal, review and revision of the orders of revenue officers.
Sec. 172 confers power on the Government to make rules by publication in the
Jarida (presumably official Gazette) consistent with the provisions of the Act
to carry out the purpose and objects of the Act and for the guidance of all
persons in matters connected with the enforcement of the Act or in matters not
expressly provided for in the Act. In exercise of this power, Hyderabad Land
Revenue Rules have been enacted and promulgated subsequently repealed and
re-enacted as the Andhra Pradesh (Telengana Area) Land Revenue Rules, 1951.
Rule 71 as amended on July 4, 1958 has been extracted hereinbefore. It provides
for mode of assessment in the event of diversion of agricultural lands to
non-agricultural purposes. Briefly, N.A. assessment also styled as special
assessment has to be levied within the minimum and the maximum as provided in
sub-clauses (a), (b) and (c) of Rule 71 (1). The amended rule also confers
power for upward revision of N.A. assessment at intervals.
Is this power uncanalised, unguided or arbitrary?
Rule 71 (1) as amended recites that in different areas correlated to population
between the floor and the ceiling therein prescribed, N.A. assessment has to be
levied. Ordinarily the land is put to agricultural use and the assessment is to
be levied depending upon the use of the land for agricultural purposes. Where
there is a diversion in the use of land, a special assessment called N.A.
assessment can be levied. The right to levy N.A. assessment is not in dispute and
N.A.
assessment is none-the-less assessment of
revenue to be paid for the use of the land. What is questioned is that the
power conferred by the rule gives so much wide arbitrary discretion to the
officers that in the absence of guidelines the revenue officers indifferent
areas may act arbitrarily and therefore, in the absence of guidelines this rule
is violative of Art. 14.
The question therefore, is whether there is
any guideline for the exercise of this power ? It is by now well-recognised
that guideline need not be found in the impugned provision. The same may be 101
collected from the setting in which the provision is placed, the purpose for
which the Act is enacted and even the preamble of the statute in which the
provision is incorporated. A legislation or statute is enacted to achieve some
public purpose and the policy of law and the object sought to be achieved can
furnish reliable guidelines for the exercise of discretionary power. Prof.
Wills in his Constitutional Law, p. 587 observes as under:
"If a statute declares a definite
policy, there is a sufficiently definite standard for the rule against the
delegation of legislative power, and also for equality if the standard is
reasonable. If no standard is set up, to avoid the violation of equality' those
exercising the power must act as though they were administering a valid
standard." In Kunnathat Thathunni Moopil Nair v. The State of Kerala and
Another(1), a Constitution Bench of this Court struck down the
Travancore-Cochin Land Tax Act, 1955 as being violative of Art. 14 on the
ground that unequals were treated equally. By the impugned Act all lands in the
State of whatever description and held under whatever tenure were to be charged
and levied a uniform rate of tax to be called the basic tax. This Court held
that the Act obliged every person who held land to pay the tax at the flat rate
prescribed, whether or not he made any income out of the property, or whether
or not the property was capable of yielding any income. Consequently, the Court
held there was no attempt at classification in the provisions of the Act and it
was one of those cases where the lack of classification created inequality. In
reaching this conclusion, Sinha, CJ speaking for the majority observed as
under:
"The Act thus proposes to impose a
liability on land holders to pay a tax which is not to be levied on a judicial
basis, because (1) the procedure to be adopted does not require a notice to be
given to the proposed assessee; (2) there is no procedure for rectification of
mistakes committed by the Assessing Authority; (3) there is no procedure prescribed
for obtaining the opinion of a superior Civil Court on questions of law, as is
generally found in all taxing statutes; and (4) no duty is cast upon the
Assessing Authority to act judicially in the matter of 102 assessment
proceedings. Nor is there any right of appeal provided to such assessee as may
feel aggrieved by the order of assessment." This decision is of no
assistance because Hyderabad Land Revenue Act prescribed a detailed method of
assessment and relevant provisions would be followed while levying N.A. Assessment.
The Rule circumscribes the operation of the discretion between the floor and
the ceiling. The various slabs are correlated to population. Sec. 50 itself
provides that the N.A. assessment will be assessed keeping in view the use of the
land and the profit derived from the use.
Further the orders made by the Revenue
Officers are not only appealable but even a review petition is contemplated at
the instance of the person aggrieved by the order of assessment.
Therefore, the criteria which appealed to the
Constitution Bench in striking down the Travancore-Cochin Land Tax Act, 1955
are not available in this case. On the contrary where are such detailed
provisions for assessment of Non- Agricultural assessment such as use of land,
profit derived by the use of the land, the maxima and minima and the various
rates correlated to population.
In New Manek Chowk Spinning and Weaving Mills
Co. Ltd and Ors. v. Municipal Corporation of the City of Ahmedabad and Ors.(1),
a Constitution Bench of this Court struck down the assessment of property tax
by the Municipal Corporation inter alia on the ground that the method of levy
of tax on the basis of floor area was against the provisions of the Act and the
Rules made thereunder. The Court held that the method of taxation on the basis
of floor area was sure to give rise to inequalities as there had been no
classification of factories on any rational basis and the Corporation failed to
observe the law to determine the annual rental value of each building and land
comprised in each of the Textile factories. We fail to see how this decision
would be of any use because there is no flat rate levy here and the N.A.
assessment has to be levied in respect of each plot of land keeping in view its
location, use and the profit derived by the use of the land.
Reference was next made to State of Andhra
Pradesh & Anr. v. Nalla Raja Reddy & Ors.(2) Affirming the decision of
the Andhra High 103 Court which declared Andhra Pradesh Land Revenue
(Additional Assessment) and Cess Revision Act, 1962 as unconstitutional, the
Court held that the classification based on ayacuts has no reasonable relation
to the duration of water supply or to the quality or the productivity of the
soil and that Secs. 3 and 4 fixing the minimum flat rate for dry or waste land
as the case may be, have ignored the well established tarams principle and
therefore, the classification attempted in either case has no reasonable
relation to the objects sought to be achieved, namely, imposition of fair assessment
and rationalisation of revenue assessment structure. Again we fail to see how
the decision would help us because geographical classification based on
population criterion is a valid basis for classification.
The next case to which our attention was drawn
was State of Kerala v. Haji K. Haji K. Kutty Naha & Ors. etc,(1) in which
this Court upheld the decision of the Kerala High Court declaring Kerala
Buildings Tax Act, 1961 ultra vires the Constitution in that it infringed the
equality clause of the Constitution. The Court following its decision in New
Manek Chowk case held that in the absence of any rational classification which
was not even attempted, the tax levied on floor area alone ignoring the use to
which the building is put, the materials used in putting up the structure had
the pernicious effect of treating unequals as equals and therefore, violative
of Art. 14 of the Constitution. This decision has hardly any relevance to the
issue raised before us.
As against the aforementioned decisions, it would
be advantageous to refer to Rangildas Varajdas Khandwala v. Collector of Surat
and Ors.(2) The power to levy N.A.
assessment was questioned before this Court
albeit under different set of circumstances. The land involved in the dispute
was governed by the Bombay Personal Inams Abolition Act, 1952, whose
constitutional validity was challenged. The Court held the Act was protected by
the umbrella of Art. 31A of the Constitution.
The next contention raised in that case was
that the Collector could not have levied N.A. assessment under Sec. 52 of the
Bombay Land Revenue Code. Negativing this contention, this Court held that when
the land is being used for non-agricultural purpose, Sec.
104 48 makes it obligatory upon the assessing
officer when assessing the land revenue to look to the use to which it is put
at the time of the assessment and assess it according to such use. Rule 71
provides for three safeguards against arbitrary exercise of power viz. (i) use
of the land, (ii) profit derived from the use of the land and, (iii) location
of the land.
In this connection we may refer to the latest
decision of this Court in Avinder Singh etc. v. State of Punjab & Anr.
etc.(1) After a review of large number of decisions this Court held that
delegation of some part of legislative power becomes a compulsive necessity for
viability and functioning of the various institutions created by the
Constitution. Pertinent observation may be extracted:
"The Law-making is not a turnkey project
readymade in all detail and once this situation is grasped the dynamics of
delegation easily follow. Thus we reach the second constitutional rule that the
essentials of legislative functions shall not be delegated but the inessentials
however numerous and significant they be, may well be made over to appropriate
agencies. Of course, every delegate is subject to the authority and control of
the principal and exercise of delegated power can always be directed, corrected
or cancelled by the principal. Therefore, the third principle that emerges is
that even if there be delegation, parliamentary control over delegated
legislation should be a living continuity as a constitutional necessity.
Within these triple principles, Operation
Delegation is at once expedient, exigent and even essential if the legislative
process is not to get stuck up or bogged down or come to a grinding halt with a
few complicated bills." Thus it is crystal clear that the legislature can
delegate details to be worked out by the delegate and the details may be numerous
and significant yet they may well be made over to the appropriate agency.
Applying this yardstick, what emerges in this
case.
Rule 71 is made in exercise of the rule
making power conferred by Sec. 172 of 105 the Hyderabad Land Revenue Act. This
rule making power is to be exercised for the purpose of carrying out the
provisions of Act. The basic purpose for which the Land Revenue Act is enacted
is for empowering the State and its agencies and its official to assess and
levy land revenue. Whenever land is diverted to use other than agriculture,
power is conferred to levy N.A. assessment or special assessment but this
assessment is to be determined under the amended Rule 71 keeping in view the
purpose of the Act, namely, levying and collection of revenue, the use to which
the land is put, the profit derived from such deviated use of the land and
again correlated to population as set out in various sub-clauses of amended
Rule 71 and within floor and ceiling prescribed in the impugned rule. Further
the order made by the assessing authority is made appealable and reviewable. In
our opinion, there is sufficient guideline in the Act and the Rules following
which the assessing authority has to assess the N.A. assessment. In this
connection, it will be advantageous to refer to the oft quoted passage from
Wills which bears repetition. It reads as under:
"A State does not have to tax everything
in order to tax something. It is allowed to pick and choose districts, objects,
persons, methods and even rates for taxation, if it does so reasonably
..." 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 purposes. 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 over-looked 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 106 ground
that it confers wide arbitrary, uncanalised discretionary power uncontrolled by
any guidelines.
A very feeble attempt was made to urge that
there was excessive delegation of essential legislative functions to the
executive giving it the power not only to enact the rule but to amend it so as
to vary the N.A. assessment. Sec. 50 clearly confers power on the State
Legislature to levy assessment and when the land is diverted to a use other
than agriculture, the legislature conferred the power to levy N.A. assessment.
Elaborate provision has been made for levying assessment. Sec. 172 conferred
power to enact rules for giving effect to the provision of the Act and the
guideline was provided as herein above indicated. Therefore, we are not
impressed by the submission that in the case the legislature was guilty of
delegating its essential legislative functions in favour of the executive.
Re C.A. Nos. 1407 to 1413/70: In this group
of appeals, vires of amended rule 81 of the Bombay Land Revenue Rules was
questioned on the same identical grounds and the challenge must fail for the
same reasons. We may however, briefly point out the scheme of the relevant Act
and the rules governing this case.
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. Sec. 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,
Assessments 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 officers while discharging their duties and carrying out the functions
imposed by the Code. Chapter XIII provides for appeals and revisions against
the orders of the revenue officers. Sec. 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, Land
Revenue Rules, 1951 were enacted.
Chapter XIV headed 'imposition 107 and
revision of non-agricultural assessment' make 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 non-
agricultural purpose. Rule 80A 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 levied 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 value 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, town-wise,
city-wise and overall what is being assessed is land revenue because N.A.
assessment is none-the-less 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 guidelines in the Act
and the Rules and therefore, the High Court was in error in striking down the
demanded Rule 81.
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 108 be said that the Rule
would be bad as it does not inhere the principles of natural justice.
The decisions of the High Court were not
sought to be supported on any other ground. Accordingly, these appeals must
succeed.
All the appeals are allowed and the judgments
of the High Court in both the groups are quashed and set aside and the writ
petitions filed by the respondents are dismissed with costs throughout.
H.S.K. Appeals allowed.
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