# ' AJOY KUMAR MUKHERJEE v. LOCAL BOARD OF BARPETA

- **Citation:** [1965] 3 S.C.R. 47
- **Court:** Supreme Court of India
- **Decided:** 1965
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ajoy-kumar-mukherjee-v-local-board-of-barpeta-3509
- **Pages:** 6

## Headnote

A
B
c
D
E
F
G
B
'
AJOY KUMAR MUKHERJEE
v
LOCAL BOARD OF BARPETA
February, 11, 1965
IP. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, M. HIDAYATULLAH,
J. C. SlrAH AND S. M. SIKRI JJ ]
Assam Local Self Governmemt Act 1953, (Act 25 of 1953), s. 62Tax-Whether on land used for market or on market-State leaillature, competence-Constitution of India Seventh Schedule, List II
Entry
49-Interpretation-Discrimination-Allegations-Burden
of
prJOJ.
The appellant as a lund-holder held a hat or market on his land.
The respondent, the local board, within whose jurisdiction the
market was held, issued notice to the appel!lant to take out 'I licence
and pay a certain suni as licence fee for holding the market. Inspite
of the continued protests of the appellant against the levy,
the amount was sought to be recovered by the issue of distres!
warrants and attachment of his property. The appellant filed a writ
petition in the High Court challenging on a number of grounds, the
constitutionality of the impost, which was dismissed. In appeal by
certificate the appellant contended that (i) the Assam Legislature
had no legislative competence to tax markets, and (ii) the tax actually
imposed on this market infringed Art. 14 of the Constitution, because
the Loard fixed a higher rate for the appellant's market as compared
with other neighbouring markets.
·
HELD: (i) The tax in the present case being on land within the
meaning of Entry 49 .of List II of the Seventh Schedule of the Constitution, would clearly be within the competence of the State Legislature. r 49 E-Cl
The Scheme of s. 62 of the Assam Local Self Government Act,
1953 shows that the tax provided therein is a tax on land, though its
incidence depends upon the use of the land as a market and the
owner, occupier or farmer of that land has to pay a certain tax for
its use as such. But there is no tax on the transaction that may take
plar~ within the market. Further the amount of tax depends upon
the area of the land on which the market is held and the importance
of the market subject to a maximum fixed by the State Government.
Sectic n 62(2) which used the words "impose an annual tax thereon"
clearly shows that the word "thereon" refers to any land for which
a licence is issued for use as a market and not to the word "market".
The use to which the land is put can be taken into .account in imposing a tax on it within the meaning of entry 49 of thtl'·List II. Ral!a Ram
v. The Province of East Punjab, P9481 F.C.R. 207, applied. [51 C-F]
(ii) It was for the appellant to show that in fixing the tax 0.11.
the other markets as it did, the board acted arbitrarily and did not
take into account 'the size and importance of the markets. As there
was no material by which the relative size and imoortance of those
markets, could be judged. it was not possible to hold that there was
discrimination in taxing this market. r52 F-Gl
CIVIL APPELLATE JURISDfCTION: Civil Appeal No. 630 of
1963.
SUPREME
COURT
REPORTS
(1965) 3 S.C.R.
Appeal from the judgment and order dated June 8, 1959 of A
the Assam High Court in Civil Rule No. 42 of 1957.
D. N. Mukherjee, for the appellant.
Naunit Lal, for the respondent No. 3.

## Text

A
B
c
D
E
F
G
B
'
AJOY KUMAR MUKHERJEE
v
LOCAL BOARD OF BARPETA
February, 11, 1965
IP. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, M. HIDAYATULLAH,
J. C. SlrAH AND S. M. SIKRI JJ ]
Assam Local Self Governmemt Act 1953, (Act 25 of 1953), s. 62Tax-Whether on land used for market or on market-State leaillature, competence-Constitution of India Seventh Schedule, List II
Entry
49-Interpretation-Discrimination-Allegations-Burden
of
prJOJ.
The appellant as a lund-holder held a hat or market on his land.
The respondent, the local board, within whose jurisdiction the
market was held, issued notice to the appel!lant to take out 'I licence
and pay a certain suni as licence fee for holding the market. Inspite
of the continued protests of the appellant against the levy,
the amount was sought to be recovered by the issue of distres!
warrants and attachment of his property. The appellant filed a writ
petition in the High Court challenging on a number of grounds, the
constitutionality of the impost, which was dismissed. In appeal by
certificate the appellant contended that (i) the Assam Legislature
had no legislative competence to tax markets, and (ii) the tax actually
imposed on this market infringed Art. 14 of the Constitution, because
the Loard fixed a higher rate for the appellant's market as compared
with other neighbouring markets.
·
HELD: (i) The tax in the present case being on land within the
meaning of Entry 49 .of List II of the Seventh Schedule of the Constitution, would clearly be within the competence of the State Legislature. r 49 E-Cl
The Scheme of s. 62 of the Assam Local Self Government Act,
1953 shows that the tax provided therein is a tax on land, though its
incidence depends upon the use of the land as a market and the
owner, occupier or farmer of that land has to pay a certain tax for
its use as such. But there is no tax on the transaction that may take
plar~ within the market. Further the amount of tax depends upon
the area of the land on which the market is held and the importance
of the market subject to a maximum fixed by the State Government.
Sectic n 62(2) which used the words "impose an annual tax thereon"
clearly shows that the word "thereon" refers to any land for which
a licence is issued for use as a market and not to the word "market".
The use to which the land is put can be taken into .account in imposing a tax on it within the meaning of entry 49 of thtl'·List II. Ral!a Ram
v. The Province of East Punjab, P9481 F.C.R. 207, applied. [51 C-F]
(ii) It was for the appellant to show that in fixing the tax 0.11.
the other markets as it did, the board acted arbitrarily and did not
take into account 'the size and importance of the markets. As there
was no material by which the relative size and imoortance of those
markets, could be judged. it was not possible to hold that there was
discrimination in taxing this market. r52 F-Gl
CIVIL APPELLATE JURISDfCTION: Civil Appeal No. 630 of
1963.
SUPREME
COURT
REPORTS
(1965) 3 S.C.R.
Appeal from the judgment and order dated June 8, 1959 of A
the Assam High Court in Civil Rule No. 42 of 1957.
D. N. Mukherjee, for the appellant.
Naunit Lal, for the respondent No. 3.
The Judgment of the Court was delivered by
Wanchoo, J. This appeal on a certificate granted by the Assam
B
High Court raises the question of the constitutionality of an annual
tax levied by local boards for the use of any land for
the purpose of holding markets as provided by s. 62 of the Assam
Local Self-Government Act, No. XXV cf 1953, (hereinafter ceferred to as the Act). Th~ ap.pellant is a landholder in the district of
Kamrup. As such landholder, he holds a hat or market on his
C
land since the year 1936 and this market is known as Kharma hat.
Jn 1953-54, the local board· of Barpeta, within whose jurisdiction
the Kharma market is held, issued notice to the appellant to take
out a licence and pay Rs. 600/- for the year 1953-54 as licence-fee
for holding the market. Later this sum was increased to Rs. 700 f -
for the year 1955-56. The appellant continued ;>rotesting against
D·
this levy but no heed was paid to his protests and the amount was
sought to be recovered by issue of distress warrants and attachment
of his property. Consequently, the appellant filed a writ petition in
the High Court challenging the constitutionality of the impost on a
number of grounds. In the present appeal two main conJ!!
tentions have been urged in support of the appellant's case that
the impost is unconstitutional, namely, (i) that the Assam legislature had no legislative competence to tax markets, and (ii) that
the tax actually imposed on the Kharma market infringes Art. 14
of the Constiiution. We shall therefore consider these two contentions only.
r
This attack on behalf of the appellant is met by the respondent
by relying on. item 49 of List II of the Seventh Schedule to the
Constitution, and it is urged that the State legislature was competent to impose the tax under that entry, for this was a tax on land.
As to Art. 14, the reply on behalf of the respondent is that under
s. 62 of the Act, a rule has been framed prescribing Rs. 1000 I - as
&
the maximum amount of tax which may be levied by any local
toard in Assam on markets licensed under that section. The rule
also provides that any locai board may with the previous approval of Government impose a tax within this maximum according to
the size and importance of a market. So it is submitted that the
tax has been imposed by Barpeta local board in accordance with K
this rule, and the appellant has failed to show that there has been
any ·discrimination in the fixation of the amount of tax on the
Kharma market.
The High Court repelled the contentions raised on behalf of
the appellant and dismissed the writ petition. As however, questions of .constitutional jmportance were involved, the High Court
AJUY KUMAR v. LOCAL BOARD (Wanchoo, J.)
41>
A
?"anted a certificate under Art. 132 of the Constitution; and that
t5 how the matter has come up before us.
The first question which falls for consideration therefore is
whether the impost in the present case is a tax on land within the
meaning of entry 49 of List II of the Seventh Schedule to the Constir
B
tution. It is well-settled that the entries in the three legislative lists
have to oe interpreted in their widest amplitude and therefore ii
a tax can reasonably be held to be a tax on land it will come within
entry 49. Further it is equally well-settled that tax on land may be
based on the annual value of tqe land and would still be a tax 011
land and would not be beyond the competence of the State legi!-
C lature on the ground that it is a tax on income: (see Ralla Ram v.
The Province of East Punjab('). It follows therefore that the use
to which the land is put can be taken into account in imposing a
tax on it within the meaning of entry 49 of List II, for the annual
value of land which can certainly be taken into account.in imposing
a tax for the purpose of this entry would necessarily depend upon
D
the use to which the land is put. It is in the light of this settled proposition that we have to examine the scheme of s. 62 of the Act,
which imposes the tax under challenge.
•
It is necessary therefore to analyse the scheme of s. 62 which
provides for this tax. Section 62(1) inter alia lays down that the
!l local board may order that no land shall be used as a market otherwise than under a licence to be granted by the board. Sub-section (2)
of s. 62 is the charging provision and may be quoted in full :
"On the issue of an order as in sub-section (!), the
board at a meeting may grant within the local limits of its
1urisdiction a licence for the use of any land as a market
I'
and impose an annual tax thereon and such conditions as
prescribed by rules."
Sub-section (3) provides that when it has been determined that a
tax shall be imposed under the preceding sub-section, the local board
shall make an order that the owner of any land used as a market
6
specified in the order shall take out a licence for the purpose. Such
order shall specify the tax not exceeding such amount as may be
prescril5ed by rule, which shall be charged for the financial year.
It will be seen from the provisions of these three sub-sections
that power of the board to impose the tax arises on its passing a
resolution that no land within its jurisdiction shall be used as a
B
market. Such resolution clearly affects land within the jurisdiction
of the board and on the passing of such a resolution the hoard
gets the further power to issue licences for holding of markets on
lands within its jurisdiction by a resolution and al.so the nower
to impose an annual tax thereon. Now it is urged on behalf of
the appellant that when sub-s . (2) speaks of imposing of "an .mnual
(') (1948) F.C.R. 207.
SUPREME
COURT
REPORTS
(1965] 3 S.C.B.
tax thereon" it means the imposition of an annuaL tax on the
A
market, and that there is no provision in List II of the Seventh
Schedule for a tax on markets as such. "Markets and fairs" appear
at item 28 of List 11, and it is urged that under item 66 of the
same List, fees with respect to markets and fairs can be imposed;
but there is no provision for imposing a tax on markets in the
entries rrom 45 to 63 which deal with taxes. It may be accepted
B
that there is no entry in List II which provides for taxes as wch
on markets and fairs. It may also be accepted that entry 66 will
only justify the imposition of fees on markets and fairs which would
necessitate the providing of services by the board imposing
the fees as a quid pro quo. That however, does not conclude the matter, for the contention on behalf of the State is that C
tax under s. 62 is on land and not on the market and further the
tax depends upon the use of the land as a market. It seems to
us on a close reading of sub-s. (2) that when that sub-section speaks
of "annμal tax thereon", the tax is on the land but the .:barge
arises only when the land is used for a market. This will also be
D
clear from the subsequent provisions of s. 62 which show that
the tax is on land though its imoosiiion depends upon user of the
land as a market. Sub-section (3) shows that as soon as sub-s. (!)
and (2) are complied with, the local board shall make an order
that the owner of any land used as a market shall take out the
licence. Thus the tax is on the land and it is the owner of the E
land who has to take out the licence for its use as a market.
The form of the tax i.e. its being an annual tax as contrasted to
a tax for each day on which the market is held also shows that in
essence the tax is on land and not on the market held thereon.
Further the tax is not imposed on any transactions in the market
by persons who come there for business which again shows that Y
it is an impost on land and not on the market i.e. on the business
therein. Then sub-s (5) provides that the tax shall be paid by the
· owner of any land used as a market. which again shows that it is
on the land that the tax is levied, though the charge arises when
it is used as a market. Sub-section (6) then lays down that on
receiving the amount so fixed the board shall issue a licence to the
person paying .the same. Here again the licence is for the use of
G
the land. Then comes sub-s. (8) which provides that whcever, being
the owner or occupier of any land uses or permits the same to b~
used as a market without a licence shall be liable to fine. This
provision clearly shows that the tax is on the land and it is the
H
owner or occupier of the land who is responsible and is liable to
prosecution if he fails to take out a licence. No liability of any
kind is thrown on those who come to the market for the purpose
of trade. Sub-section (9) then lays down that wliere a conviction
has been obtained under sub-s. (8), the District Magistrate or the
Sub Divisional Officer, as the case may be, may stbp the use of
the land as a market. Sub-section (] 0) then provides that every
1
'
AJOY KUMAR v. LOCAL BOARD (W anchoo, J.)
51
A owner, occupier or tanner of a market shall cause such drain to be
made therein and take all necessary steps to keep such market in a
clean and wholesome state and shall cause supply of sufficient
water for the purpose as well as for drinking purpose. Subsections (1 I) and (12) give power to the board on the failure of
any owner, occupier or fartner to comply with a notice under subB
s. (10), to take possession of the land and the market thereon and
execute die works itself and receive all rents, tolls and other dues
in respect of the market. This will again show that the tax provided by s. 62(2) is a tax for the use of the land and it is not a tax on
the market as such, for the income from the market in the shape of
tools, rents and other dues is not liable to tax under s. 62 and is differC ent from tax. The scheme of s. 62 therefore shows that whenever
any land is :used for the purpose of holding a market, the owner,
occupier or farmer of that land has to pay a certain tax for its
use as such. But there is no tax on any transaction that may take
place within the market. Further. the amount of tax depends upon
D the area of the land on which market is held and the importance
of the market subject to a maximum fixed by the State Government. We have therefore no hesitation in coming to the conclusion
on a consideration of the scheme of s. 62 of the Act that the tax
provided therein is a tax on land, though its incidence depends
upon the use of the land as a market. Further as we have already
B indicated s. 62(2) which uses the words "impose an annual tax
thereon" clearly shows that the word "thereon" refers to any land
for which a licence is issued for use as a market and not to the
word "market". Thus the tax in the present case being on land
would clearly be within the competence of the State legislature.
The contention of the appellant that the State legislature was not
p
competent to impose this tax because there is no provision in List
II of the Seventh Schedule for imposing ·a tax on markets as such
must therefore fail.
Then we come to the contention under Art. 14 of the Constitution. As to that it is well-settled that it is for the person who alleges
G that equality before law has been infringed to show that such really
is the case. It was therefore for the appellant to produce facts and
figures from which it can be inferred that the tax imposed in the
present case is hit by Art. 14 of the Constitution. In that connection, all that the appellant has stated in his writ petition is that
the board fixed a high rate arbitrarily and thus discriminated ngainst
B
the appellant's market as against the other neighbouring
markets where the tax had been fixed at a much lower rate, and
that this was hit by Art. 14. There was certainly an allegation by
the appellant that Art. 14 had been infringed; but that allegation
is vague and gives no facts and figures fqr holding tliat the tax
imposed on the Khanna market was discriminatory. It appears that
the tax was imposed for the year 1953-54, which was continued
later on, with some modifications. At that time there were five
i2
SUPREME
COURT
REPORTS
[1965] 3 s.c.R.
markets on which the tax was imposed including the Khanna A
market. The lowest tax was at Rs. 400 /- on two markets, then at
Rs .. 500/- on the third market and at Rs. 600/- on the Khanna
market and fina!l y at Rs. 1000 /- on the fifth market.
Rule 300(2), framed in accordance with s. 63(3) runs thus:-
"Rs. 1000 /- (Rupees one thousand) only per annum has
been fixed as the maximum amount of tax which may be
levied by the local boards in Assam on markets licimsed
under section 62 of the Act.
Any local board may with the previous approval of Government impose a tax within this maxim)llll according to
the size and importance of a market."
Now the rule provides that Rs. 1000 /- is the maximum tax and
within that maximum the board has to graduate the tax according
B
c
to the size and importance of the market. The size of the. market
natur;illy takes into account the area of the land en which the
market is held; the importance of the market depends upon the D
number of transactions that take place there, for the larger the
number of transactions the greater is 'the importance of the market. If therefore the appellant is to succeed on his plea of Art. 14
on the ground that the tax (ixea on his market was discriminatory
he had to adduce facts and figures, firstly as to the size bf the
lll
five markets on which the tax was levied in the relevant. years and
secondly as to the relative importance of these markets. J}ut no
such facts and figures have been adduced on behalf of the appellant. It is true that the respondent in reply to the charge of discrimination was equally vague and merely denied that there was
any arbitrary discrimination. But it was for the appellant to show r
that in fixing the tax on the five markets as it did, the board acted
arbitrarily and did not take into account the size and importance
of the markets. As there is no material before us by which we can
J'Udge the relative size and importance of the five markets, it is
not possible to hold that there was discrimination in taxing Khanna
market at Rs. 600 /- per year as compared to taxing the three other G
markets at less than Rs. 600 /-. The attack therefore on the amount
actually fixed on the ground of discrimination must fail.
We therefore dismiss the appeal with costs.
Appeal dismissed.
•