# [1963] 1 S.C.R. 220

- **Citation:** [1963] 1 S.C.R. 220
- **Court:** Supreme Court of India
- **Decided:** 1961-06-30
- **Bench:** P. B. Gajendragadkar, A. K. Sarkar, K. c. DAS GUPTA, N. Rajagopala Ayyangar, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1963-1-s-c-r-220-2545
- **Pages:** 23

## Headnote

Land Holding -Notice of Aase8sment -D•letmination .of
annual mlue-'-Constitutional validity of enactment-U. P. Larg•
Land Holdings Tax Act, J9{J7 (U. P. 31 of 1957), 88. 7 (2),
5 (1)-Conatitution of India, Arts. U, 19 (1) (b), 31, Sch. VII,
List II, Entry 49.
This petition challenged the constitutional validity of a
notice of assessment served under s.7 (2) of the U. P. Large
Land Holdings Tax Act, 1957. The High Court had found
against the petitioner. His case was that the relevant provisions
of the Act were unconstitutional as the State Legislature was
incompetent to pass the Act, that the Act violated Arts. 14, 19
and 31 of the comtitution and that the rates fixed by the State
Government under s. 5(1) of the Act were invalid as being
contrary to that section. The impugned Act has since been
repealed by the U. P. Imposition of ceiling of Land Holdings
Act, 1961, with effect from the 30th June, 1961.
Held, that the contentions \Vere without substance and
the petition must fail.
The cardinal rule of interpreting the words used by, the
Constitution in conferring legislative power Wds that they
01ust receive the most liberal construction and if they are
words of wide amplitude the construction must accord with
it.
If a general word was used it must be so construed as to
extend to all ancillary or subsidiary matters that can be
reasonably included in it. So construed, there could be no
doubt that the word •!and' in Entry 49, List II, 7th Schedule
includes all lands, whether agricultural or non-agricultural.
Since the impugned Act imposed tax on land holdings, it
was within the competance of the State Legislature and its
validity was beyond challenge.
Navinchandra Mafatlal, Bombay v.. Commissioner of
Income-tax, (1955] I. S.C.R. 829, and United Province• v. Jll.
Atiqa Begum, (1940] F. C.R. 110, referred to.
The word 'may' in s.5(1) of the Act could not in the
1 S.C.R.
SUPREME COURT REPJRTS
221
context mean 'shall' or •must'. While prescribing the maximum limit of the multiple which could not be exceeded, that
section rightly left it to the discretion of the State Government
to adjust it suitably to local requirement and the quality of
the land involved. The notification bsucd the Siate Government under s. 5(1) must, therefore, be held to have complied
with the statutory requirements prescribed therefor.
It is now settled Jaw that a taxing statute can be challenged on the ground that it infringes a fundamental right
guaranteed by the Constitution.
Mohammad Yasin v. Town Area Committee, J alabad, [ 1952]
S. C. R. 578, State of Bombay v. United Motors (India) Ltd.
[1953] S. C.R. 1069, The Bengal Immunity Company Ltd. v.
State of Bihar, [1955] 2 S C. R. 603, Oh. Tikn Ram.ii v. State
of U. P. [1956] S. C.R. ~93 and Balaji v. Income Ta.r; Officer,
[1962] 2 S. C. R. 983, relied on.
.
Ramjilal v. Income Tax Officer, [1951] S. C.R. 127 and
L. H. Jamkhani v; Union of India, [1955] l S. C. R. 769,
considered M. Oullock v. ltfnryland, [1819] 4 L. ed. 579,
referred to.
Therefore, a taxing statute can be challenged under
Art. 14 if it purports to impose on the same class of property,
similarly situated an incidence of taxation which leads to
obvious inequality.
The legislature can freely choose its objects of taxation,
fix the rate and classify persons and properties for that purpose, and the classification, if rational, cannot be challenged
merely because the rates are different for different classes or
objects. But if the taxing status contravenes Art. 14 of the
Constitution in its operation, the Courts are free to interfere.
Similarly if it 'provides no machinery or procedure for the
recovery or
assessment of the tax, so that the imposition
partakes of the character of a purely administrative affair,
the statute can, in a proper
case, be challenged under
Art. 19 (I) ( f).
A taxing statute that affects no fundamental rights meets
the requirement of Art. 31 (1).
Article 31 (2) can have no
application to such a statute even though the tax may

## Text

_Characters 0–39,882 of 47,318. This is a partial read: ask again with offset=39882 for what follows._

.Apdl 4.
220
SUPREME COURT REPORTS [l!J63]
RAJA JAGANNATH BAKSH SINGH
v .
THE STATE OF UTTAR PRADESH AND ANOTHER
(P. B. GAJENDRAGADKAR, A. K. SARKAR, K. c.
DAS GUPTA, N. RAJAGOPALA AYYANGAR
and J. R. MUDHOLKAR, JJ.)
Land Holding -Notice of Aase8sment -D•letmination .of
annual mlue-'-Constitutional validity of enactment-U. P. Larg•
Land Holdings Tax Act, J9{J7 (U. P. 31 of 1957), 88. 7 (2),
5 (1)-Conatitution of India, Arts. U, 19 (1) (b), 31, Sch. VII,
List II, Entry 49.
This petition challenged the constitutional validity of a
notice of assessment served under s.7 (2) of the U. P. Large
Land Holdings Tax Act, 1957. The High Court had found
against the petitioner. His case was that the relevant provisions
of the Act were unconstitutional as the State Legislature was
incompetent to pass the Act, that the Act violated Arts. 14, 19
and 31 of the comtitution and that the rates fixed by the State
Government under s. 5(1) of the Act were invalid as being
contrary to that section. The impugned Act has since been
repealed by the U. P. Imposition of ceiling of Land Holdings
Act, 1961, with effect from the 30th June, 1961.
Held, that the contentions \Vere without substance and
the petition must fail.
The cardinal rule of interpreting the words used by, the
Constitution in conferring legislative power Wds that they
01ust receive the most liberal construction and if they are
words of wide amplitude the construction must accord with
it.
If a general word was used it must be so construed as to
extend to all ancillary or subsidiary matters that can be
reasonably included in it. So construed, there could be no
doubt that the word •!and' in Entry 49, List II, 7th Schedule
includes all lands, whether agricultural or non-agricultural.
Since the impugned Act imposed tax on land holdings, it
was within the competance of the State Legislature and its
validity was beyond challenge.
Navinchandra Mafatlal, Bombay v.. Commissioner of
Income-tax, (1955] I. S.C.R. 829, and United Province• v. Jll.
Atiqa Begum, (1940] F. C.R. 110, referred to.
The word 'may' in s.5(1) of the Act could not in the
1 S.C.R.
SUPREME COURT REPJRTS
221
context mean 'shall' or •must'. While prescribing the maximum limit of the multiple which could not be exceeded, that
section rightly left it to the discretion of the State Government
to adjust it suitably to local requirement and the quality of
the land involved. The notification bsucd the Siate Government under s. 5(1) must, therefore, be held to have complied
with the statutory requirements prescribed therefor.
It is now settled Jaw that a taxing statute can be challenged on the ground that it infringes a fundamental right
guaranteed by the Constitution.
Mohammad Yasin v. Town Area Committee, J alabad, [ 1952]
S. C. R. 578, State of Bombay v. United Motors (India) Ltd.
[1953] S. C.R. 1069, The Bengal Immunity Company Ltd. v.
State of Bihar, [1955] 2 S C. R. 603, Oh. Tikn Ram.ii v. State
of U. P. [1956] S. C.R. ~93 and Balaji v. Income Ta.r; Officer,
[1962] 2 S. C. R. 983, relied on.
.
Ramjilal v. Income Tax Officer, [1951] S. C.R. 127 and
L. H. Jamkhani v; Union of India, [1955] l S. C. R. 769,
considered M. Oullock v. ltfnryland, [1819] 4 L. ed. 579,
referred to.
Therefore, a taxing statute can be challenged under
Art. 14 if it purports to impose on the same class of property,
similarly situated an incidence of taxation which leads to
obvious inequality.
The legislature can freely choose its objects of taxation,
fix the rate and classify persons and properties for that purpose, and the classification, if rational, cannot be challenged
merely because the rates are different for different classes or
objects. But if the taxing status contravenes Art. 14 of the
Constitution in its operation, the Courts are free to interfere.
Similarly if it 'provides no machinery or procedure for the
recovery or
assessment of the tax, so that the imposition
partakes of the character of a purely administrative affair,
the statute can, in a proper
case, be challenged under
Art. 19 (I) ( f).
A taxing statute that affects no fundamental rights meets
the requirement of Art. 31 (1).
Article 31 (2) can have no
application to such a statute even though the tax may be
excessive and may ultimately lead to the loss of the assessee's
property. This is evident from the provisions of Art. 31 (2A)
and 31 (5) (b) (i).
Section 5 ( l) of the impugned Act did not confer no
unbettered power on the State Government so as to contravene
Art. 14 and 19 ( 1) ( f ) of the Constitution.
196?.
Rnja .l agarmalh
Baksh Singh
v.
The Stnte of
U tar p, adeeh
1962
---
Ra.fa Ja7ann'Ith
Baksli Sjngh
v.
The State of
Utlar Pr"desh
222
SUPREME UOUR'f REPORTS [1963]
No taxing statute can be said to be a colourable legis·
lation simply because the tax: it levies is excessive.
The pica
of·colourable legi:dation can succeed only when the relevant
circumstan.::e are strong enough to justify the inference that it
is so and so it amounts to a fraud.
K. T. Moopil v. State of Kerala, [1951] 3 S. C. R. 77,
held in applicable.
ORIGINAL JURISDICTION : Petition No. 327
of 1960.
Under Article 32 of the Constitution of India
for enforcement of Fundamental Rights .
.J. P. Goyal for the Petitioner.
K. L. Misra, Advocate-General for the State of
Uttar Pradesh, C. B. Aggarwala, K. 8. Hajela and
C. P. Lal for the Respondents.
1!162. April 4. The Judgment of the Court
was delivered by
Gajendrngadk•' J.
GAJENDRAGADKAR, J.-The petitioner Raja.
J agannath Baksh Singh was a Taluqada.r of Reh wan
Estate in District Rai Bare Ii, under the TJ.P. Zamindari Abolition and Land Reforms Act (U.P. Act I of
1951), the petitioner's Zamindari property vested in
the State Government, and the groves and other
agricultural land were left with the petitioner as a
Bhumidar under the said Act. In 1957, the U. P.
L«gislature passed the U. P. Large Land Holdings
Ta.x Act (No. XXXI of 1957) (hereinafter called
the Act) and under section 7 ( 2) of the Act the petitio1wr was served with a. notice along with a provisional assessment of the annual value of the land
in his possession for the year 1365 fasli.
Similar
notices were served on the petitioner subseqnently
for the years 1366 and 1367 fasli. In response to
the said notices, the petitioner filed his returns and
objectt'd to the annual value of the land calculated
by the assessing authority. After the petitioner
n·ceive.d notices for the years 1365 and 1366 fa.sli,
1 S.C.R.
SUPREME COURT REPORTS
223
he filed writ petition in the Allahabad. High Court
challenging the validity of the said notices on the
ground that the material provisions of the Act 011
which the said notices were based ultra vires and unconstitutional. These writ petitions were numbered
3146of1958 ·and 1354 of 1959 in the said High
Court. Several other writ petitions had also been
filed by other assesses challenging the validity of
the Act, and the whole group of these petitions
was heard together by the Allahabad High Court.
In substance, the pleas ma.de by the petitioners
challenging the validity of the Act were rejected
by the High Court and it was held that the Act was
valid and constitutional, vide Oudh Sugar Mills Ltd.,
Hargaon v. State of U. P. (1). This decision was
pronounced on the 12th of October, 1959.
On the 22nd November, 1960, the petitioner
filed three petitions in ·this Court under Art.
32 of the Constitution. These
petitions were
Nos. 325, 326 & 327 of 1960.
These three petitions were directed against the notices served
on the petitioner for the years 1365, 1366 and
1367 fasli respectively. Out of these petitions,
the first two were dismissed on the ground that
they were barred by res judicata. It is common
ground that after the Allahabad High Court dismissed the petitioner's writ petitions, h~. applied for
and obt'lined a certificate from the said High Court
to appeal to this Court, but he failed to deposit the
necessary security for · printing charges as required
by the rules of the Allahabad High Court, and, in
consequence, on the 9th August, 1960, the certificate
granted to him was cancelled. - That is how t.he
two writ petitions which purported to challenge the
validity of the notices served on the petitioner for
the two years 1365 and 1366 fasli were held
to be barred by res judicata. On the petitioner's
writ petition No. 327 of 1960 which is concerned
(J) A.I.R. 1960 All. 136.
1962
R .ja J agnnnath
Baksh Singh
v
The Stute of
M adhy 1 Pradesh
Gajendragadkar ,1.
1961
.RoJa J tigtJ11nath
Baksh Singh
v.
The Siok of
Uttar Pradesh
Gajend1agad/car J.
224
SUPREME COURT REPORTS [1963]
with the assessment for the year 1367 fasli, rule
was ordered to be issued by this Court and it is on
this rule that the present petition has come for final
disposal before us today. This writ petition is
confined to the assessment levied on the petitioner
for the year 1367 fasli.
It appears that for the relevant year a notice
has been served on the petitioner under 11. 7(2) of
the Act and a tax of Rs. 15,838/92 nP was assessed
on his total holding of 1152A-11R-IB with a valu·
ation of Rs. 44,464/88nP. After hearing the petitioner, the Assessing Authority has decided that
the amount recoverable from the petitioner by way
of tax for the relevant year is Rs. l 4,882/86nP. The
petitioner contends that since the Act is unconstitutional, it is not open to respondent No. I, the
State of U. P. and respondent No. 2, the assessing
authority to claim the said tax from him on his
holding.
The petitioner's case is that the relevant provisions of the Act are unconstitutional because the
U. P. Legislature was not competent to pass the
Act.
He also contend8 altorniLtively that the said
Act violates the fundamental rights guaranteed by
Articl1•s 14, 19 and :H and as such, is void.
According to him, the rates fixed by t.he State Government in
pursuanc~ of the authority conferred on
it by section 5( I) of the Act, are in valid because in
fixing the 8aid rates, the State Government has not
complied with the provisions of the said section.
Broadly stated, it is on these three grounds that
the validity of the Act is
challen~ed. ThC'Se grounds are denied by the respondents and it has been
allPged by them that the U. P .. Legislature was
competent to pass the Act, that the Act does not
.violate the fundamental rights guaranteed by Articles 14, l!l and :ll and that the rates have been
fixed in accordance with the provisions of s. 5( I)
of tl1c Act.
I
'
I
'
\ .
I
I S.C.R.
SUPREME COURT REPORTS
225
Before dealing with these contentions, it is
necessary to consider briefly the scheme of the Act.
The Act has been passed because the J...egislature thought it expedient to provide for the imposition and collection of a tax on large land holdings. Section ~8 of the Act repeals the earlier
U. P. Agricultural In.come Tax Act, 1948. It may
bl/pointed out that this Act itself has been subseqqently repealed by section 45 'of the U. P. Imposition of Ceiling of Land Holdings Act 1961 (I of
1961) as from the 30th June, 1961, so that as from
~he 30th June, 1961. this Act is no longer in force.
Under the Act, "land" means land, whether
assessed to land revenue or not, which is held or
occupied for a purpose connected with agriculture,
horticulture, animal husbandry,
pisciculture or
poultry farming and includes uncultivated ·land
held by a land-holder as such [s. 2(15)]; and according to s. 2( 16), '•land-holder" means (i) an
intermediary, where the land is in his ·personal cultivation or is he1d as sir, khudkasht or grove and (ii)
any other person who holds or occupies land otherwise than as-(a)_an asami, (b) a sub-tenant, (c) a tenant of sir, or (d) a sirtan, and includes a manager or
principal officer, as the case may be. These two difinitions ghre an idea as to the property over which the
Act purports to impose a tax and as to the person
,from whom the tax is recoverable. Section 4 defines
a "land-holding". It provides that ''land-holding"
means the aggregate of all land held or occupied on
the first day of Ju)y each year by a land-holder,
whether in his own name or in the name of any
member of his family, and all such land shall be
deemed to form part of the land• holding of such
land-holder. With the rest of the section we are
not concerned in the present petition. It is the landholding thus defined which is the subject-matter of
taxation imposed by s. 3. Section 3(1) provides·
that there shall, save as hereinafter provided, be
1961
Raja J ogannath
Baksh Singh
v.
The State of
Uttur Prad4sh
Gajendragadkar J.
1£82
Raja J agoMoth
Boksli Singh
••
The State of
Uttor Pradtsh
Gojtntirof1odk11r J.
226
SUPREME COURT REPORTS [1963]
charged, levied and paid, for each agricultural year,
on the annual value of each land holding, a tax,
hereinafter called the "Holding Tax" at the ratesspecified in the Schedule. The proviso to s. 3 makes
it clear that no such tax sh&ll be charged on 'any
land holding the area whereof does not exceed 30
acres. Sub-section (2) empowers the State Government to exempt or remit in whole or in part, for
such period as it may think fit and as often as it
may consider necessary, the holding tax chargeable
under sub-section (1) in respect of any class or classes of land holdings as may be prescribed. Under
sub-sectio_n (3) the land covered by building with
the area appurtenant thereto which does not exceed
five acres, shall be excluded in computing the area
of land under the proviso to sub-.section (1).
The
Schedule prescribes the rates of the Holding Tax.
No tax is levied up to Rs. 3,600/- of annual valuation. When the annual valuation exceeds Rs 3,600/-
the rate is prescribed on a graded scale beginning
with 5nP in a rupee when the annual valuation is
between Rs. 3,600/- to Rs. 5,000/- and ending with
60 naye paise in a rupee where the annual valuation
exceeds Rs. 30,000/-. The intermediate rates are
lOnP in a rupee, 25nP in a rupee and 40nP in a
rupee and they are prescribed for where the annual
valuation is between Rs. 5,001/- to Rs. 10,000/-,
Rs. 10,001/-to Rs. 20,000/-and Rs. 20,001/-to Rs.
30,000/-respectively. Thus, reading section 3 and
the Schedule together, it follows that where the
annual valuation of the litnd-holding exceeds Rs.
3,600/-, tax is leviable at a graded scale and is recoverable from the land holder, subject to conditions.
(a) & (b) specified in the Schedule.
Section 5 ( 1) pr6virles for the determination
of the annual value. It lays down that the annual
va.lue of a land holding shall be deemed to be an
amount equal to the rent payable for the land or
Ja.nds included therein multiplied by 11uch multiple
I
,
I
1 S.C.R.
SUPREME COURT REPORTS
227
not exceeding 12-1 /2 as may be prescribed and different multiples may be prescribed for different
districts or portions of districts or for different classes of lands included in a land holding. Section 5(2)
provides that for the purposes of sub-section (1 ),
the rent payable shall be deemed to be an amount
calculated at the sanctioned hereditary ra.tes applica )le to the land or lands included in the land
holding and where there are no sanctioned hereditary rates, on such principles as may be prescribed,
provided that the State Government may,, where
such w.tes were sanctioned prior to the first day of
July, 1927, enhance the rates by such percentage
not exceeding fifty as may be specified by notification in the Official Gazette and different percentages
may be specified for the different classes of lands
and for different areas of Uttar Pradesh. The
scheme of taxation evidenced by sections 3, 4 and 5
is ·thus clear. Where the area covered by a land
holding exceeds 30 acres, the tax is leviable. Th9
tax is leviable at the rates prescribed by the ScheduJe and the rates prescribed by the Schedule are
fixed by a reference to the annual value of the land
determined in the manner provided by s. 5.
That,
in effect, is the result of the relevant provisions of
Chapter II of the Act which deals with the imposition of holding tax.
Chapter III consists of ss. 6 to 16 which are
concerned with the procedure prescribed for the
assessment of holding tax. Section 6 deals with the
Assrssing Authority. Section 7 requires notice
regarding return of land holdings to be served on
the assessee. Section 8 deals with the levy of the
assessment and prescribes an enquiry in connection
therewith. Section 9 provides that proceedings
may be taken against the legal representative of
the assessee. Section 10 deals with notice of dem!lnd. Section 11 allows an appeal against the
assessment of holding tax. Section 12 permits a
J962
R-,ia J 1gannath
BQ/esh Sin1h
v.
The Stat1 •f
Utt" Pradesh
i912
Raja J agann•th
Baksh Sinzh
••
The State of
Ut.tar p,adesh
228
SUPREME COURT REPORTS [1963]
revision to be preferred to the Baard of Revenue
ands. 13 makes the order passed by the Board of
Revenue final. According to s. 14 the procedure
prescribed by the relevant provisions of the U.P.
Land Revenue Act, 1901, are made applicable to
the proceedings before the Board of Revenue under
s. 12. Section 15 deals with cases of land holdings
that escaped assessment and s. 16 empowers the
appropriate authority to rectify mistakes. It would
thus be seen that Chapter III provides for the procedure which has to be followed before levying a
tax on the assessee. This procf'tdure contemplates
a notice to be given to an assessee who would be
heard, and gives the assessee a right to make an
appeal and to move the Board in revision. Chapter
IV deals with the payment of Holding Tax, and
provides that tax shall be payable by the land-holder and that in case the land-holder dies, it has to
be paid by his legal representative. Under s. 19,
the said tax shall be payable in four equal instalments. The last Chapter deals with miscellaneous
provisions to which it is unnecessary to refer, except
s. 24 which, inUir alia, bars a suit in a Civil Court
to set aside or modify any assessment made undn
the Act.
The first contention which bas been raised
by Mr. Goyal before us is that the Act is
unconstitutional and void inasmuch as it is beyond
the legislative competence of the U. P. Legislatur ,
and this contention raises the question about
the construction of Entry 49 in List II of the 7th
Schedule of the Constitution. This Entry relates
to taxes to lands and buildings. The argument
is that 'Lands' in the cun text does not include
agricultural lands and so, ~he U. P. Legislature was
not competent to'levy th .. tax. In considering the
merits of this argument, it is necessary to bear in
mind that we are interpreting the words used in the
Constitution and it is an elementary cardinal rule
of interpretation that the worda used in the -
1 s.c.R.
SUPHEME COURT REPORTS
229
Constitution which confer legislative power must
receive the most liberal construction and if they
are word$ of wide amplitude. they must be
interpreted so ·as to give effect to t.hat amplitude.
It would be out of place to put a narrow or restricted construction on words of wide amplitude in a
Constitution. A general word used in an entry
like the present one must be construed to extend
to a.U ancilliary or subsidiary matters which can
fairly and reasonably be held to be included in it,
vide, N avinchandra M afatlal, Bombay v. Commissioner of Income Tax (1) and United Provinces v. Mt.
Atiqa Begum (2 ). If this principle is borne in mind,
it is obvious that the words "lands" cannot be
interpreted in the manner suggested by Mr.
Goyal. The word "lands" is wide
enough to
include all lands, whether agricultural or not, and
it would be plainly unreasonable to assume that it
includes non-agricultural lands but does not include
agricultural lands.
It is, however, urged that since Entry 46 in list
II refers to taxe1 on agricultural income, it follows
that agricultura:l income is not included in Entry
49. That, no doubt, is true; if the State Legislature
purports to impose a tax on agrieU:ltural income,
it would be referable to Entry 46 and not Entry 49
and in that sense,
agricultur~l income is not
covered by Entry 49.
But it must be remembered
that both Entries 46 and 49 are in List II .and it
would make no difference whether the State
legislation· imposing taxes on agricultural income
is sustained by reference to Entry 46 rather than
by reference to Entry 49. Therefore, the fa.ct tha~
agricultural
income
having
been
specifically
provided by Entry 46 cannot be deemed to be
.included in Entry 49, does not justify the argument
that the word ''lands" in the latter Entry does
not include agricultural lands.
(1) (1955) 1S.C.R.829, 836.
(2) (1940) F.C.R.. 110, lM. ·
1962
Ra_;a J a11annalh
B1ksh SrntJ.
v.
The Slat1 of
l!Uar -Prad1sh
Gajtndragadk•r I.
Ruja J agannath
Baksh Singh
••
the Srate of
Utt11r Pradesh
230
SUPREME COURT REPORTS (196:l)
It is then argued that when the Constitution
wanted to refer to agricultural land, it has used the
expr.,ssion •agricultural land' as, for in•tance,
Entries 86, 87 and 88 in List I. This agrument
is entirely fallacious. The three EntriPs in which
agricultural land h&s been specifically mentioned
clearly indicate that agricultural land had to be
excluded from their purview and so, it was necessary
to describe the land as agricultural land in the
context. The fact that the necessity of the context
required the use of the expression 'agricultural land,
in the said three Entries, cannot possibly lead to
the conclusion that wherever the word 'land' is
used, it should mean non-agricultural lands. We
have, therefore, no hesitation in rejecting the
argument that Entry 49 in List II does not take
in agricultural lands. If agricultural lands are
included in the said Entry, the validity of the Act
would be beyond challenge, as in substance and in
fact, it imposes a tax on land holding and as such,
is within the competence of the State Legislature.
As we have already seen ,the scheme of the Act is
to impose a tax on land holdings, though the mea·
sure of the tax has to be determined by its annual
value as is ascertained in the manner prescribed
by section 5. The object of the tax is land holding and the extent of the tax leviable is determined
in the light of the annual value of the land. Thus
there can be no doubt that the Act was within
the iegislative competence of the U. P. Legislature
and so, the challenge to its validity c>n the ground
that it has been passed without legislative com·
petence must be rejected.
Mr. Goyal then contends that the multiple
prescribed by the State Government is invalid
because it has been prescribed in a. manner contrary
to the mandatory requirement of s .. 5(1). This argu·
ment proceeds on the a.BBumption thats. 5(1) i!llposes
a.n obligation on the State Govt. to adopt different
.
•
1 S.C.R..
SUPREME COURT REPORTS
231
multiples in different districts and in reference to
different classes of land included in the land holding. Mr. Goyal suggests that whens. 5 ( 1) provides
that the rent may be multiplied by such multiple
not exceeding 12! as may be prescribed and
different multiples may be pres9ril 1ed for different
districts or portions of districts or for different
classes of land included in a land holding, the
Legislature intended that different multiplies must
be prescribed as therein indicated. In other words,
'may" in -the context means "must" and since
different multiples have not been prescribed for
different districts and in reference to different
classes of land, the multiple value of the petitioner's
land holding cannot be determined under the
uniform multipfo prescribed by the State Government. In our opinion, there is no substance in
this argument. It is quite clear that the word
''may'' in the context cannot mean "shall" or
"must". Section 5 (1) has prescribed the maximum limits of the multiple which may be adopted
and it has left to the discretion of the State Govern·
ment to adopt such multiple for different districts
or by reference to different classes of land as it may
deem proper. In other words, having prescribed
the maximum beyond which the multiple will not
go, discretion has been left to the State Government to make suitable adjustments according to
the requirements of local condition and varying
qualities of lands.
In fact, the notification issued by the State
Government on the 23rd April, 1958, shows that
it has complied with the provisions of 5 (1). Under
this notification, the multiple of 12-1/2 has been
fixed for determining the annual value throughout
U. P. for agricultural lands, but in respect of
different kinds of groves planted_ before let July,
1957, the multiple is prescribed at 5 for the whole
19~S
Rai• Jagcnncth
B.ksh Singh
v •.
The St1t11 cf
Uttar Pradesh
G•jendr•t•ikcr J.
1962
11oja ,/ og innath
Bak.sh Singh
v •.
1"/u S1ale nf
(]I tar Prod~h
Gaj1mdraga,!fc1Jr J.
232
SUPREME OOURT REPORTS (1963]
of the State. Then there a variation made in res·
pect of Kumaun Division and the district of TehriGarhwal. In respect of groves planted on or after
the 1st July, 19i7, the multiple is prescribed at 4
for the lat year, 2 for the second yE>ar and nil for
the 3rd and subse9uent years. The notification
further provides for reduced multiples as Ppccified
in it in respect of •banjar' or user land newly
brought under cultivation subject to the conditions
therein specified. It would thus be seen that in
prescribing the multiple, the State Government
has classified lands and has varied multiple accordingly.
Therefore, there can be no doubt that the
notification' iBBued by the State Government under
s. 5 ( 1) has complied with the statutory requirements prescribed therefore.
Mr. Goyal then contends that if the word "may"
is construed as gi viug discretion to the State Government and not imposing an obligation on it, then
s. 5 (1) contravenes Art. 19 (1) (f) as well as Art.
14; and his argument is that the charging section
also contravenes the said two Articles as well as
Art. 31. This contention raises the familiar problem
as to whether a taxing statute is subject to the
provisions of Part III of the Cqnstitution or not;
and it arises in regard to a statute which has been
passed for the purpose of only raising revenue.
The power of taxation is, no doubt, the sovereign
right of the State; as was observed by Chief Justice
Marshall in M'OiiUoch v. Mary'-and (1): "The
power of taxing the people and their property is
essential to the very existence of Government, and
may be IE>gitimately exercised on the object& to
which it is applicable to the utmost extent to which
the Government may choose to carry it". In that
sense, it is not the function of the Court to enquire
whether the power of taxation has been · reasonably
exercised either in respect of the amount taxed or
(I) (1819) t L, ed. 579. 607.
..
...
-.. ..
~
.. -
1 S.C.R.
SUPREME . COURT REPORTS
233
in respect of the property which is made the obj~ct
of the tax. Article 265 of the Constitution provides
that no tax shall be levied or collected, except by
authority of law; and so, for deciding whether a
tax bas been validly levied or not, it would be
necessary first to enquire whether the Legislature
which passes the Act was competent to pass it or
not. But that ia not the only enquiry which is
relevant in deciding the validity of a taxing statute.
Since a taxing statute is a law, it is a. Jaw for the
. purpose of Art. i3 and so, its validity can be
challenged on the ground that is contravenes one
or the other of the fundamental rights guaranteed
by part III .. It is thus clear that a ci.tizen can
challenge the validity of a taxing statute on the
ground that it offends Art. 14 of the Constitution ..
At one stage, it appears to have been assumed in
some of the earlier decisions of this Court that
Art. 31 was concerned with deprivation of property
otherwise than by imposition or collection of tax
and inasmuch as the right conferr~d by Art. 265
is not a right conferred by Part III of the Constitution, it could npt be enforced under Art. 32. In
these decisions, certain general observations were
made which would
indicate t,ha.t
the fundamental rights guaranteed in Part III could not be
invoked iu respect of taxing· statutes, vi.de, Ramjilal
v.
lnoome.-Tax
O.tficer, . Mohinilergark (1), · and.
Laxmanappa H anumantappa Jamlckandi v. The, Union
of India (2). But in recent years, there has been
a consensus of opinion in the decisions of this
Court that the validity of the legislation imposing
a tax can be challenged not only on the .ground
of laok or absence of Jegislative competence,
but also on the ground that the impugned legislation violates the fundamental right guaranteed
by Part III of the Constitution, vide M okammad
Yasin v. Tke Town Area OommiUee, Jalalaba. (8) 1
{l) (1951) S. C. R. 127.
(2) [19SS] J, S. C.R. 769, n2,
. (3) [l.952) s. c. R. 578.
1962
Raja .1 aiann·itli
BakshSinJh
v.
7h •State of
Utlar Pradesh
Gajendrag.adkar I.
J962
Rojo J agatmath
Baksh Singh
v.
Tl:c State of
Utrar Pi adesh
Gajendragadkar J.
234
SUPhEME COURT REPORTS [1963]
State of Bombay v. The United Motors (India) Ltd.(1),
The Bengal lmmunit.11 Company Ltd. v. The State
of Bihar (2 ). Ch. Ti/ca Ramji v. The State of Uttar
Pradesh,(") and Balaji v. income Tax Officer. (').
Therefore, it must now be taken to he settled that
the validity of a tax law can be challenged on the·
ground that it, infringes one or tbe other of the
fundamental rights guaranteed by Part III, and so,
the argument that the tax with which we are concerned is invalid because it offends against Arts. 14
and 19 ( 1 )(f), cannot be rejected as inadmissible.
A taxing statute can be held to contravene
Art. 14 if it purports to impose on the same class
of property similarly situated an incidence of taxajon which leads to obvious ineq aality.
There is
no doubt that it is for the Legislature to decide on
what objects to levy, what rate of tax and it is not
for the Courts to consider whether some other
objects should have been taxed or whether a different rate should have been prescribed for the tax.
It is also true that the legislature is competent to
classify
persons
or
properties
into different
categories and tax them differently, and if the
classification thus made is rational, the taxing
statute cannot be challenged merely because different rates of taxation are prescribed for different
categories of presons or objects. But, if in its
operation, any taxing statute is found to contravene
Art. 14, it would be open to Courts to strike it
down as ~enying to the citizens the equality before
the law guaranteed by Art. 14.
_ ·
Similarly, if a taxing statute makes no specific
provision about the machinery to recover tax and
the procedure to make the assessment of the tax
· and leaves it entirely to the executive to devise
such machinery as it thinks fit and to prescribe such
procedure as allpears to it to be ·fair, an occasion
(I) (1953] S. C.R. 1069.
(2) [1955] 2 S. C.R. 603.
(3J . [1956) S. C, R, 393.
(t) (1962) 2 S, C. R. 983.
1 S.C.R.
SUPH.EME UOURT REPOH.TS
235
may arise fur the Courts to consider whether the
fa.ilure to provide for a machinery and to prescribe
a procedure does not tend to make the imposition
of the tax: an unreason~ble restriction within the
meaning of Article 19 (5 ).
An imposition of tax
which in the absence of a. prescribed machinery
and the prescribed procedure would pttrtake of the
character of a purely administrative affair can, in
a proper sense, be challenged as contravening Art.
i9 (l) ( f ).
Therefore, whenever the validity of
a. taxing statute is challenged on the ground that
it contravenes Art. 14 or Art. 19, the challenge
cannot be thrown out on the preliminary ground
that a tax law is beyond such challenge, but its
merits mnst be carefully examined.
The position,
however. is different when
the challenge is made on the
ground that
the Aot is inconsistent with Art. 31.
So far as
Art. 31 (1) is concerned; all that it requires is
that no person can be deprived of his property
save by authority of law, and as . w~ have just
observed, the authority of law post1,1lated · by
Art. 31 (I) is obviously the authority ofavalid law.
If the law is not valid because it offend~-ltg~inst Art.
14 or Art. 19 or some other fundamental right guaranteed by Part III, then the itn.J>oshion of tax
levied by it cannot be said meet the. ·requirementa
of Art. 31 ( 1 ). But if the Act in questfo_n -is
other~
wise valid, then the Art. 31 (l}·is COD)plied· with.
Article 31 (2) would be inapplicable to a. taxing
sta tote be ca.use the taxing statute does n9t · purport
to acquire or requisition any property. . It may be
·that the imposition of the tax levied by: the. statute
is excessive and may ultimately lead to the · loss of
the assessee's property, but even so; il cannot be
said that by virtue of the Act, •the property has
been acquired or requisitioned. Article 31 (2A)
clearly brings out the limits of the application of
Art. 31 (2). Similarly, A1t. 31 (5) (b) (i) specifically
provides that nothing in cl. (2) shall affect the
1962
Roja Jagannath
· Baksh Singh
v.
The State of
Uttar Pradesh
Gajendragadkar J.
1~62
R11ja 'ogonnath
Ba~sh Singh
••
The" State of
Uttar Pradesh
Gajendragadkar J,
236 SUPH.EME COURT REPORTS [1963]
provisions of any law which the State may hereafter
make for the purpose of imposing or levying any
tax or penalty. Thus it is clear that the provisions
of Art. 3 i (2) cannot be invoked in impeaching the
validity of a taxing Atatute and so, we come back to
the position that a taxing law which does not offend
against any of the fundamental rights guaranteed
by Part III, would justify the imposition of a tax
and would meet the requirements of A rt. 31 (I).
Therefore, in our opinion the challenge to the
validity of the Act on the ground that it contra·
venes Act. 31 (1) is not well-founded.
Let us now turn to the merits of the argument
thats. 5 (1) contravenes Arts.14 and 19 (1) (f). It
is urged that since discretion has been left to the
State Government to prescribe the multiple without
any guidance, the prescription of the necessary mul·
tiple by the State Government at its own sweet-will
will amount to an unreasonable restriction under
Art. 19(5) and so, Art. 19 (1) (f) must be held to have
been contravened. On the same ground, it is said that
Art. 14 has also been contravened. We are not
impressed by this a.rgument. It is clear that tha
policy of the Act is to argument the revenues of the
t'tate and for that purpose, the tax has been levied
on land holdings, subject to the important proviso
that holdings the area whereof does not excred
thirty acres would not be taxed. In other words,
it is only big holders whose land holdings are subjected to tax by this Act. Even so, the basis
adopted for lsvying the tax is ultimately the rent
payable for the land or lands in question and
taking the b~sis of the said rent, the annual value
of the land is required to be determined by adopting
a suitable multiple. Section 5 ( 1) prescribes the
maximum limit of this multiple and leaves it to the
discretion of the State Government to adjust . the
multiple as local conditions and conditions of land
may require. It would obviously not have been practicable for the Legislature to provide for different
1 S.C.R.
SUPREME COURT REPORTS
237
multiples in respect of different districts or in regard
to difference classes of lands. Having ]aid down the
general policy in that behalf, the Legislature naturally left the adjustment of the multiple to the discretion of the State Governmt>nt because the said
adjustment had to be made in the light o( local conditions stnd by reference to the tilass of the land.
Therefore, we do not think that the discretion left to
the Stctte Government can bf' said to be unfettered
or uncanalised so as to amount to an unreasonable
restriction as contended by Mr. Goyal; as we have
already pointed out the notification issued by the
State Government prescribing the multiple has
clearly complied with the requirement of s. 5 ( l):
We must accordingly hold that the challenge to the
validity of s. 5 ( 1) on the gt·ound that it contravenes
Articles 14 and 19 ( 1) (f) must fail.
Then it is urged that the rates fixed by the
Schedule contravene Arts. 14 and 19. It is not !•asy
to appreciate this argument. Section 5 ( 1) makes it
clear that the rent is to be taken as the basis . for
fixing the annual value and s. 5 (2} provides for the
method of calculating the said rent. Thus the rent
being determined, the annual value has to be
ascertained by adopting a suitable multiple and it
is on the annual value thus determined that the
~chedule prescribes a 'grading scale of rates for
Holding Tax. The tax bejng on land ·holding, the
measure ofthe tax is thus fixed in the light of the
annual value of the land holding. In other words,
the land holding is taxed on the basis of its annual
value and it is difficult to undnstand how the
Schedule can be successfully challenged as being
inconsistent with Arts. 14 and 19 ( 1) (fJ.
That leaves one more question to be considered.
Mr. Goyal argues that the Act is confiscatory in
c:haracter and must be struck down as being a
oolourable piece of legislation, and in support of
this argument he suggests that the rates prescribed
1962
Raia J ~gmmo:h
Boksh Singh
v.
The S•ate of
U•tar Pradesh
Oojendragodkar J.
1962
Rnja J agannath
Baksh Singh
v.
Ths State of
Vttar Prade1h
Goj~ndragadkar J.
238
SUPREME COURT REPORTS [1963]
by the Schedule are so hl'avy that the assessees
would virtually have to part with their properties
within a short time in order to bear the burden of
the tax. This plea raises the question as to whether
a taxing statute can be challenged on the ground
that the burden of tax imposed by it is unreasonably high or excessive. We have alr;eady seen that
the provisions of Art. 31 (2) cannot be invoked in
challenging the validity of a taxing statute on the
ground that the tax levied is unreasonably high and
we have also noticed that if the taxing statute does
not contravene any other fundamental right guaranteed by part III, it would normally be t.reated as a
valid law by whose authority tax can be collected
without infringing Art. 31 (I). Thuugh the validity
of a taxing statute cannot be challenged merely on
the ground that it imposes an unreasonably high
burden, it does not follow that a taxing statute
cannot be challenged on the ground that it is a
colourable piece of legislation and as such, is a
fraud on the lrgislative power conferred on the
Legislature in question. If, in fact, it is shown that
the Act which purports to be a taxing Act is a
c6lourable exercise of the legislative power of the
Legislature, then that would be an independent
ground on which the Act can be struck down.
Colourable exercise of legislative power is not a
legitimate exercise of the said power and as such, it
may be open to challenge. But such a challenge
can sucoeed not merely by showing that the tax
. levied is unreasonably high or excessive, but by proving other relevant circumstances which justify the
conclusion that the statute is colourable and as
such, amounts to a fraud.
As an illustration of such a colonrable statute,
we may refer to the decision of this Court in
K. T. Moopil Nair v. State of Kerala (').
In that
case, the provisions of "ections 4 and 7 of the
Travancore-Cochin Land Tax Act (XV of 1955) as
(I) [19611 3. S. C R. 77.
1 S.C.R.
SUPREME COURT REPORTS
239
amended by Act X of 1957, were :declared to be
unconstitutiional in view of the provisions of Articles 14 and 19 (l)(f) of the Constitution. These provisions along with the provisions of section 5A which
was held to contravene Art. 19 (1) (f), were the
main provisions of the Act and as such, as soon as
the said provisions were struck down as unconstitutional the whole Act inevitably became void. In
d6aling with the validity of the said Act., this Court
had occasion to consider also the confiscatory
character of its operative provisions.