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PETITIONER: VISHWESHA THIRTHA SWAMIARI & ORS

       Vs.

RESPONDENT: STATE OF MYSORE AND ANR.

DATE OF JUDGMENT12/08/1971

BENCH: SIKRI, S.M. (CJ) BENCH: SIKRI, S.M. (CJ) RAY, A.N. PALEKAR, D.G.

CITATION:  1971 AIR 2377            1972 SCR  (1) 137  CITATOR INFO :  R          1992 SC1264  (14,17,19)

ACT: Mysore  Land Revenue (Surcharge) Act, 1961  as  amended-Com- petence  of  State  Legislature to  levy-Surcharge  on  land revenue-Whether   the  Acts  discriminatory  and   therefore violative of Art. 14 of the Constitution.

HEADNOTE: In 1961, the new State of Mysore enacted Mysore Land Revenue (Surcharge)  Act,  1961, by which a surcharge  on  the  land Revenue  @15 n.p. on every rupee of land revenue was  levied and this was payable by every landholder liable to pay a sum exceeding  Rs.  20 as land revenue.   By  another  enactment Mysore  Land  Revenue (Surcharge) Amendment Act,  1962,  the surcharge for 1962-63 and 1963-64 was raised to 100 per cent of the land revenue in the case of wet and garden lands  and 75 % in respect of dry lands. Both  these  Acts were challenged before the High  Court  on several  grounds  but  the  High  Court  rejected  them  and dismissed  the petitions.  In appeal, before this  Court  it was  contended  (i)  that the  Mysore  Legislature  was  not competent  to enact the Mysore Act of 1961 and the  amending Act  and  (ii) that since there is  inequality  in  taxation between  lands  comprised in South Kanara District  and  the areas in the erstwhile Mysore State, the levy is hit by Art. 14  as being discrimirfatory in character and therefore  bad in law.  Dismissing the appeal, HELD:     (i) Surcharge fell squarely under Entry 45 of List It and it is   not a tax on land revenue but an  enhancement of land revenue by way of     surcharge  and even if  it  is raised  by  1  00  %  does not  change  the  nature  of  the imposition.   It  is  still  land  revenue  and  the  Mysore Legislature is competent to enact the impugned Acts. [140 D- E] (ii) In  view of the temporary nature of the  Acts  imposing additional  land revenue, while resettlement and survey  was being  done in the entire State in order to have  a  uniform land revenue law, the Acts in question are not violative  of Art. 14 of the Constitution. [144F] C.   V.  Rajagopalachariar v. State of Madras,  A.I.R.  1960 Mad. 543, State of Andhra Pradesh v. Nalla Raja Reddy [1967]

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3  S. C. R. 28 and State of Madhya Pradesh v.  Bhopal  Sugar Industries Ltd.[1964] 6 S.C.R. 846, referred to.

JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos.  2222  of 1966, 441 to 444 and 446 of 1970.  Appeal from the judgment and order dated September 17, 1965 of the Mysore High Court in Writ Petitions Nos. 1173,  1138, 1151, 1152, 1153 and 1155 of 1963. 138 V.   S. Desai and R. B. Datar, for the appellants (i all the appeals). R.  Gopalakrishnan and M. Veerappa, for the respondents  (in all the appeals). The Judgment of the Court was delivered by Sikri,  C. J.-Seven writ petitions were filed in the  Mysore High  Court under art. 226 of the  Constitution  challenging the  validity  of the Mysore Land Revenue  (Surcharge)  Act, 1961-Mysore  Act XIII of 1961-, as amended by Mysore Acts  1 and 31 of 1963, as being ultra vires the Constitution.  Some of the petitioners were from South Kanara District, and some from Bellary.  District, which were part of the Madras State prior  to  the reorganisation of States.   Some  petitioners were  from the Karnatak area of the then Bombay State.   The High Court held that the Acts were within the competence  of the  Mysore legislature and did not violate Arts. 14, 19  or 31 of the Constitution.  There are six appeals before us but the learned counsel for the  appellant  gave  us facts  relating  to  writ  petition arising  from  South  Kanara district only.   It  is  common ground that if the High Court judgment on the writ  petition arising  from  South Kanara district is  upheld,  the  other appeals must also fail. In  writ petition No. 1137 of 1963, which is concerned  with lands  in  South  Kanara district, the facts  in  brief  are these.   The petitioner mutt, which is appellant before  us, owned  immovable properties in the district of South  Kanara and was paying an assessment to the Government approximately of  about Rs. 8,000/- per annum.  In respect of these  lands survey and settlement were introduced from 1902 to 1904  and classified into three major classes of lands, viz., dry, wet and garden.  The settlement was for a period of 30 years and the wet lands were further classified into sub-classes. Under  the  terms of the Ryotwari settlement  governing  the district  the  revenue assessment rates  for  the  different classes  of  lands were fixed for a period of 30  years  and they could not be varied during that period.  In 1934, after the said period of 30 years, by notification dated April 20, 1934, the rates of assessment of garden and wet lands 139 were  revised and increased uniformly by 12 1/2 per cent  on the existing rates.  Under the settlement of 1934 it was  an express term and condition that there was to be no increment of  assessment  during  the  period  of  30  years  of   the settlement of any assessment. The Madras Legislature levied a surcharge on these lands  in 1954,  and again in 1955, but by the time anything could  be done under the Madras Land Revenue (Surcharge) Act, 1954 and the  Madras Land Revenue (Additional Surcharge)  Act,  1955, the district of South Kanara with the exception of Kasaragod Taluk  became  integrated with Mysore and  other  areas  and formed the new State. By  virtue  of s. 119 of the States Reorganisation  Act  the

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lands continued to pay land revenue under the existing  law, but the new state enacted Mysore Act No. XIII of 1961 called the  Mysore  Land Revenue (Surcharge Act, 1961,  which  came into force on April 1, 1961.  Under this Act a surcharge  on the  land revenue at the rate of 15. np. on every  rupee  of land  revenue  was  levied and this  was  payable  by  every landholder  liable  to pay a sum exceeding Rs.  20  as  land revenue.  Section 3 (2) provided for an exemption to  merged territories  or  merged  areas within the  Bombay  Area,  or within the Hyderabad area, if on such land the land  revenue payable  had  not  been  fixed  by  a  revenue  survey   and settlement made under the Bombay Land Revenue Code, 1879, or the  Hyderabad  Land Revenue Act, 1318 Fasli, and  the  land revenue  payable after remission, if any, was equal  to  ,or more  than the land revenue and the surcharge  under  sub-s. (1)  payable  on similar lands in the  nearest  neighbouring villages to which the revenue survey and settlement had been introduced. Another  Act,  called the Mysore  Land  Revenue  (Surcharge) (Amendment)  Act, 1962, was enacted and it ,came into  force from  April 1, 1962.  Under this Act the surcharge  for  the two  years, viz., 1962-63 and 1963-64 was raised to 100  per cent  of  the land revenue in. the case of  wet  and  garden lands and 75 per cent of the land revenue in respect of such dry lands.  Section 5 of the Surcharge Act of 1961  provided for  the surcharge being treated as land revenue  and  being recovered as such. 140 Before  the  High  Court the acts were  challenged  on  four grounds  :  (1) The Mysore Legislature  had  no  legislative competence  to  enact the Mysore Act No. 13 of 1961  or  the amending  Act; (2) Under any circumstances, the  Legislature had  no  competence to levy additional land revenue  if  the levy  in question was considered as land revenue during  the period the settlement was in force; (3) The impugned Act was ultra-vires art. 19 (1) (f)and art. 31 of the  Constitution; and  (4)  The  levy in question was hit by art.  14  of  the Constitution  as the same was discriminatory  in  character. Before us the learned counsel for the appellant has confined his attack on the first and the fourth grounds. The  High  Court  held  that  the  so-called  land   revenue surcharge was but an additional imposition of land  revenue’ or a land tax and fell either within Entry 45 or Entry 49 of the State List. It seems to us that the surcharge fell squarely within Entry 45.   The  legislation  is but an enhancement  of  the  land revenue by imposition of surcharge and it cannot be called a tax on land-revenue, as contended by the learned counsel for the  appellant.   It is a common practice among  the  Indian Legislatures to impose surcharge on existing tax.  Even art. 271.  of  the Constitution speaks of a.  surcharge  for  the purpose of the Union being levied by way of increase in  the duties or taxes mentioned in art.. 269) and art. 270. Section 3 (1) of the Act of 1961 reads:               "3(1)-Notwithstanding  anything  contained  in               any contract, grant or other instrument, or in               the Mysore Land Revenue Code, 1888 (Mysore Act               IV of 1888) or any other corresponding law  or               orders having the force of law in any area  of               the State:-               (a)   Every  landholder  liable to pay  a  sum               exceeding twenty rupees for a revenue year  to               the Government in respect of all lands held by               him shall pay for every revenue year surcharge               at  the  rate of fifteen naye paise  on  every

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             rupee of the land revenue payable by him; and               141               (b)   where the term for which the  assessment               of  land revenue on any land fixed  under  the               Mysore Land Revenue Code, 1888 (Mysore Act  IV               of  1888)  or under any corresponding  law  or               order  in. force in any area of the State  has               expired,  every such landholder shall pay  for               every revenue year an additional surcharge  at               the  rate of twenty naye paise on every  rupee               of  the  land revenue on such land  until  the               land revenue fixed at the next revenue  survey               and settlement on such land becomes payable." It  seems  to us that the Act clearly  levies  land  revenue although  it  is by way of surcharge on  the  existing  land revenue.   If  this is so, the fact that the  surcharge  was raised to 1 00 % of the 1-and revenue on the wet and  garden land  and 75 % of the land revenue in respect of dry  lands, subject to some minor exceptions, does not change the nature of the imposition. We may mention that the Madras High Court took the same view in C. Y. Rajagopalachariar v.. State of Madras. (1) We agree with the High Court that the Mysore Legislature was competent to enact the impugned Acts. The  learned  counsel challenged the validity of  the  Acts. under art. 14 of the Constitution on the ground that it  was common ground that there was inequality in taxation  between the  lands  comprised in the South Kanara District  and  the areas  in  the  erstwhile  Mysore  State.   The  High  Court proceeded on the basis that the land revenue was highest  in the  Madras  area of the State as it was represented  to  it that  in  the old Madras.  State half of the  estimated  net produce  was taken as land revenue where as in  other  areas only 1/16th of the gross. produce was taken as land revenue. These  facts  were not admitted by the State  but  the  High Court assumed those facts for the purpose of the case to  be correct.  We will also proceed on those assumptions  because even  assuming facts it cannot be said that there  has  been any breach of art. 14 of the Constitution. (1)  A.I.R. [1960] Mad.543. 142 This  Court, in State of Andhra Pradesh v. Nalla Raja  Reddy (1),  while dealing with the Andhra Pradesh Land A  Revenue (Additional  Assessment)  and Cess Revision Act 22  of  1962 made the following general ,observations               "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.               After referring to the decision of the  Madras               High  Court  in Rajagopalachariar’s  (2)  case               this Court observed :               "In  the said Madras Acts a surcharge was  im-               posed  in addition to the previous  rates  and               the previous rates had been made on the  basis               of  ryotwari settlements which did not  offend

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             Art. 14 of the Constitution and, therefore,  a               small  addition  to the said rates  could  not               likewise infringe the said article." Referring to the judgment under appeal in the present  case, this Court observed in Nalla Reddy’s case as follows:               "Nor has the decision of the Mysore High Court               in  H.H.  Vishwasha  Thirtha  Swamiar  or  Sri               Pajawar Nutt v. The State of Mysore in  regard               to the Mysore Land Revenue Surcharge Act (1  3               of 196 1) any bearing on the present question.               There,  as  in the Madras  Acts,  the  revenue               surcharge levied was an additional  imposition               of  land tax and, therefore, the  Mysore  High               Court  held that it did not offend Art. 14  of               the (1) [1967] 3 S.C.R. 28, 46-48. (2) A.I.R. 1960 Med. 543. 143 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 than               others. 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." It seems to us that this Court rightly distinguished the two above  mentioned  cases  on good grounds.  We  have  here  a temporary  measure  imposing additional land  revenue  while resettlement and survey was being done in the entire  State. This process necessarily takes a long time.  It is stated in the  judgment of the High Court that the  settlement  report was  received  by  the Government only in  1963.   In  these circumstances  it  cannot  be  said  that  the  State  acted arbitrarily  in imposing a surcharge on land  revenue  which was being levied under the existing settlements and acts. Reorganisation  of  the  State is  an  important  factor  in considering art. 14 and existing laws or any temporary  laws that may be made because of reorganisation.  This Court,  in State of Madhya Pradesh v. Bhopal Sugar Industries Ltd.  (1) observed:               "Continuance  of  the laws of the  old  region               after  the  reorganisation by S.  119  of  the               States  Reorganisation Act was by  itself  not               discrimi- (1)  [1964] 6, S.C.R. 846, 852-53. 144 natory even though it resulted in differential treatment  of persons, objects and transactions in the new State,  because it  was  intended to serve a dual  purpose-facilitating  the early formation of homogeneous units in the larger  interest of  the  Union,  and maintaining  even,  while  merging  its political   identity  in  the  new  unit,  the   distinctive character  of  each  region, till  uniformity  of  laws  was secured  in those branches in which it was  expedient  after

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full enquiry to do so." In reply to the argument that the State had sufficient  time and  opportunity to decide, whether the continuance  of  the impugned  act in the Bhopal region would be consistent  with art. 14 of the Constitution, this Court observed:               "It  would  be  impossible  to  lay   down-any               definite time-limit within which the State had               to   make  necessary  adjustments  so  as   to               effectuate   the,  equality  clause   of   the               Constitution." The learned counsel contended before us that the State could have  easily  waited  for a few  years  before  levying  the additional surcharge while the enquiries were pending.  Ibis is a matter not for the Courts but for the State Legislature to  determine.  If the State needs funds urgently it is  for it to levy additional revenue provided it does not  infringe art.  14.  In view of the facts of this case, the  temporary nature of the Acts, and the pendency of the resettlement and survey  proceeding  we cannot say that the  Legislature  has acted contrary to the provisions of art. 14. In  the result the appeals fail and are dismissed but  there will be no order as to costs in these appeals. S. C.                            Appeals dismissed. 145