# KiiandiRe Shch Bhat .& Others v. The Agricultural Income-lax Officer

- **Citation:** [1972] 2 S.C.R. 900
- **Court:** Supreme Court of India
- **Decided:** 1971-12-16
- **Case number:** writ petition No. 251 of 1971
- **Bench:** S. M. S!Kri, J. M. Shelat, I. D. Dua, H. R. Khanna B, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kiiandire-shch-bhat-others-v-the-agricultural-income-lax-officer-5580
- **Pages:** 20

## Headnote

Andhra Pradesh (Krishna and Godavari Delta Area) Drainage Cess
Ac:: 1968-Whetliei• vio{utive of Art. 14 of the Constitution.
The vires of the Andhra Pradesh (Krishna ancl Godavari Delta area)
Draina~ Cess Act 1968 has been challenged in C.A . ...No. 223 of 1970
and in writ petition No. 251 of 1971. The Act of 1968 applies to all
the lands comprised within the delta :ireas of "Krishna & Godavari rivers
in the State of Andhra Pradesh.
The Act provided fdr levy and collection of drainage cess on all lands comprised within the delta area of
Krishna & Godavari rivers, for tbc purpo!e of raising funds to meet the
expenses incurrc.U on drainage t>chcmes undc'rlakcn in the said area for
its protection from floods and for matters connected therewith.
Under
the Act, -fer- 6 yea'rs, a tax at the rate varying from Rs. 10/- for theGodavari eastern Delta to Rs. 20/ - per acre per annum for Godavari
Western Delta .was levied. A number of points were raised by the Appellants but the High Court rl!jcctcd all their contentions.
In appeal, th'J Appellants contended that the provisions of tile Act is
violative of ~rt. 14 of the Constitution, that the ~ight of appeal pro·
vitled by s. 5 of the Act is illusdry and lastly, there is excessive delegation of the legislative function inasmuch as no ininimum rate of the
ccss has hccn prescribed.
Disn1issing thi'.! appeal and the writ petition,
HELD : ( l) 111c. pro,•isions of. the impugned Act •are not violativl!
oi Art. 14 of tho Constitution. The floods and drainage problems of all
rho land<; in the delta area \\·ere not similar oi:: of equ~I m~itude. The\
vn'ried considerably from one part of the delta area to the other and the
c~timatetl cost of the proposed work a1so varied from area to area. 'fhe.
flo<jd strike equally all lands in the area and make no discrimination so
f::;.r as quality and productive c<lpacity of those lands are ~once{ncd. In
th~ circumstances, it appears to be just and reasonable that each aci'e
in a division should bear equal hurden of the amount which is sought
to be raisec.l to fight the danger of flood anc.l provide for an efticient sy•-
rcr.1 of drainage.
Furth·~r a~ the cost of draioa~ scheme varies in th:
di.fferent divisions, the rate of ccs-s has hee11 fixed at· different rates for
the divisions keeping ln view the cost of Jrainage scheme in ea~h. division.
The differential in tb.: cost o( -rlr~i!1age -schemes for the four divlsions has
been properly rcfiecited in the vnrying rat"!s of cess for each division.
l n the present cnse, the Act cont?. ins sufficient guidelines for the fixation
of rate of ccss and th"!Ie is justification for a uniform rate· of ccss for
cnch acre of land in a .division of the deltaic area.
Therefore, there is
no discrimination and tl'f&·provisions of the in1pugncd Act arc not viola·
tive of Art. 14 of the Gonstitution.
Th~ fact that on account of topogr~phical situ<:tion some land-0\\·n~rs get greater benefit of the drainage
:')cheme because of their ]ands being -1nore prone to damage by fl£XX!s
· is a fortuitous circumst'lnce and the s~mc would not be a va1i4 g:rotind
for srriking down the impugnetl legislation. [916 D-917 G]
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o. R. RAJU v. A. P. STATE (Khanna, J.)
901
(2) The right of appeal provided by sec. 5 of the Act is not illusory.
An aggrieved· person can agitate in appeal about ·the area for which the
cess is levied or the ownership of that area or that he owned an area
which is Jess than that for which a cess is levied.
Therefore, this right
is not
i."llagin~<ry.
·
( 3) Thero is also no excessive ddegation of the legislative power.
The S1'1tc Govt. has adhered to the maximum prescribed by the Act. The
absence of a nlinimum limit \Viii 11ot vitiate a taxing statute.
KiiandiRe Shch Bhat .& Others v. The Agricultural Income-lax Officer,
I, [ 1963] 3 S.C.R. 809. Eru•t India Tobacco Co. v. S!ate of Artdhra Pra·
aesh, [1963] I S.C.R. 404, Twyford Tea Co. Ltd v. The State of Kera/a,
[1970} 3 S.C.R. 383, State of A.P. v.

## Text

_Characters 0–39,926 of 52,911. This is a partial read: ask again with offset=39926 for what follows._

900
DANTIJLURI RAM RAJU AND ORS.
A
STATE OF ANDHRA PRADESH AND ANR.
December 16, 1971
[S. M. S!KRI, C.J., J. M. SHELAT, I. D. DUA, H. R. KHANNA
B
AND G. K. MITTER, JJ.J
Andhra Pradesh (Krishna and Godavari Delta Area) Drainage Cess
Ac:: 1968-Whetliei• vio{utive of Art. 14 of the Constitution.
The vires of the Andhra Pradesh (Krishna ancl Godavari Delta area)
Draina~ Cess Act 1968 has been challenged in C.A . ...No. 223 of 1970
and in writ petition No. 251 of 1971. The Act of 1968 applies to all
the lands comprised within the delta :ireas of "Krishna & Godavari rivers
in the State of Andhra Pradesh.
The Act provided fdr levy and collection of drainage cess on all lands comprised within the delta area of
Krishna & Godavari rivers, for tbc purpo!e of raising funds to meet the
expenses incurrc.U on drainage t>chcmes undc'rlakcn in the said area for
its protection from floods and for matters connected therewith.
Under
the Act, -fer- 6 yea'rs, a tax at the rate varying from Rs. 10/- for theGodavari eastern Delta to Rs. 20/ - per acre per annum for Godavari
Western Delta .was levied. A number of points were raised by the Appellants but the High Court rl!jcctcd all their contentions.
In appeal, th'J Appellants contended that the provisions of tile Act is
violative of ~rt. 14 of the Constitution, that the ~ight of appeal pro·
vitled by s. 5 of the Act is illusdry and lastly, there is excessive delegation of the legislative function inasmuch as no ininimum rate of the
ccss has hccn prescribed.
Disn1issing thi'.! appeal and the writ petition,
HELD : ( l) 111c. pro,•isions of. the impugned Act •are not violativl!
oi Art. 14 of tho Constitution. The floods and drainage problems of all
rho land<; in the delta area \\·ere not similar oi:: of equ~I m~itude. The\
vn'ried considerably from one part of the delta area to the other and the
c~timatetl cost of the proposed work a1so varied from area to area. 'fhe.
flo<jd strike equally all lands in the area and make no discrimination so
f::;.r as quality and productive c<lpacity of those lands are ~once{ncd. In
th~ circumstances, it appears to be just and reasonable that each aci'e
in a division should bear equal hurden of the amount which is sought
to be raisec.l to fight the danger of flood anc.l provide for an efticient sy•-
rcr.1 of drainage.
Furth·~r a~ the cost of draioa~ scheme varies in th:
di.fferent divisions, the rate of ccs-s has hee11 fixed at· different rates for
the divisions keeping ln view the cost of Jrainage scheme in ea~h. division.
The differential in tb.: cost o( -rlr~i!1age -schemes for the four divlsions has
been properly rcfiecited in the vnrying rat"!s of cess for each division.
l n the present cnse, the Act cont?. ins sufficient guidelines for the fixation
of rate of ccss and th"!Ie is justification for a uniform rate· of ccss for
cnch acre of land in a .division of the deltaic area.
Therefore, there is
no discrimination and tl'f&·provisions of the in1pugncd Act arc not viola·
tive of Art. 14 of the Gonstitution.
Th~ fact that on account of topogr~phical situ<:tion some land-0\\·n~rs get greater benefit of the drainage
:')cheme because of their ]ands being -1nore prone to damage by fl£XX!s
· is a fortuitous circumst'lnce and the s~mc would not be a va1i4 g:rotind
for srriking down the impugnetl legislation. [916 D-917 G]
c
D
E
F
G
' ,
A
B
c
o. R. RAJU v. A. P. STATE (Khanna, J.)
901
(2) The right of appeal provided by sec. 5 of the Act is not illusory.
An aggrieved· person can agitate in appeal about ·the area for which the
cess is levied or the ownership of that area or that he owned an area
which is Jess than that for which a cess is levied.
Therefore, this right
is not
i."llagin~<ry.
·
( 3) Thero is also no excessive ddegation of the legislative power.
The S1'1tc Govt. has adhered to the maximum prescribed by the Act. The
absence of a nlinimum limit \Viii 11ot vitiate a taxing statute.
KiiandiRe Shch Bhat .& Others v. The Agricultural Income-lax Officer,
I, [ 1963] 3 S.C.R. 809. Eru•t India Tobacco Co. v. S!ate of Artdhra Pra·
aesh, [1963] I S.C.R. 404, Twyford Tea Co. Ltd v. The State of Kera/a,
[1970} 3 S.C.R. 383, State of A.P. v. Na/la Raja Reddy, [1969] J S.C.R.
28, State o(Kerala V.. Haji K. Haji K. Kurty Nalw, [1969] 1 S.C.R. 645
referred to.
°CIVIL APPELLATE JURISDICTION: C.A. No. 223. of 1970.
Appeal from the judgment and order dated March 27, 1969
of the Andhra Pradesh High Court i'll Writ Petition No. 998 of
1969.
AND
D
ORIGINAL JURISDICTION : Writ Petition No. 251 of 1971.
Under Article 32 of the Constitution of India for the enforcen1ent of the Fundamental Rights.
L. M. Singhvi, Krovid; Narasimhan, S. K. Dhingrd. and A.
Subbu Rao. for the appellants (in C.A. No. 223 of 1970).
E
K. R. Chaudhuri and K. Rajendra Chowdhary, for the petiF
G
H
tioners (in W.P. No. 251 of 1971).
P. Ram Reddy and P. Porameswara Jl.ao,
for respondents
(in both the matters).
The Judgment of the Court was delivered by
Khanna, J.
The vires of the Andhra Pradesh (Krishna and
Godavari Delta Area) Drainage Cess Act, 1968 (Act No. 11 of
1968), hereinafter referred to as the Act. has been challenged in
Civil Appeal No. 223·of 1970 as well as in Writ Petition No. 251
of I 971. Civil Appeal No. 223 has been filed on a certificate
granted bv the Andhra Pradesh High Court against ithe judgment
of that Court whereby petition under article· 226 of ti).e Constitution of India presented on behalf of the eight appellants to assail
the vires of the Act was dismissed at the stage of admission. Writ
Petition No. 251 of 1971 has ken filed by 434 petitioners. The
respondents in the appeal are 1the State of Andhra Pradesh and
the Collector of West Godavari District while those in the writ
petition are the State of Andhra Pradesh and the Collector of
Kri>hna District.
Tho? apnellants in the civil appeal belong to different Talub
of the West Godavari District and own. extensive area5 of land in
Jt1-L736S •PCl(n
902
SUPREME COURT REPORTS
[1972] 2 S.C.R.
that district. As such, they are liable to pay land revenue. Petitioners Nos. 1 to 38 in the writ petition are residents of Tenneru
within the .area of Vijayawada Taluk. They own about 500
acres of !dnd in and around that village. The rest of the petitioners are residents of different villages in Krishna district and
own an area of about 4,000 acres in that district.
As the petition under article 226 of the Constitution of India
which. is the subject of civil appeal was dismissed at the stage of
admission, no affidavit on behalf of the respondents was filed in
the High Court.
The respondents were consequently permitted
to file an affidavit in this Court. Affidavit of Shri D. Venkatdri,
Assistant Secretary, Government of Andhra Pradesh was thereafter filed on behalf of the respondents.
A more detailed supplementary a!fidavit of Shri Venkatdri has also been filed on behalf
of the respondents and the same officer has filed his affidavit in
opposition to the petition under article 32 of the Constitution.
Before dealing with the different provisions of the Act and the
contentions advanced, it would be apposite to reproduce the Statement of Objects and Reasons of the Bill for the purpose of understanding the historical background and the antecedent state of
affairs leading up to ihe impugned legislation.
The Statement of
Objects and Reasons reads as under . :
"The coastal distriots of East Godavari, West Godavari, Krishna and Guntur are being subjected. to floods
every year which cause immense damage to crops as well
as private properties besides disrupting rail and road
communications. for considerable periods in the year.
The intensity of the floods which occurred in 1953, 1962
and 1964 have highlighted the
need for
immediate
action for solving this recurrin1t problem and to suggest remedial measures for mitigating or avoiding in
future the damage to crops and property in the area on
account of similar floods. The Committee after having
an extensive tour in the area, made some recommendations for improvit:ig all the drains in the delta area of
the Krishna and Godavari rivers and also formation of
flood moderating reservoirs across Budameru,
Y errakalva. Tammileru etc.
The total cost of all the drain
improvement sGlJemes as well as the flood moderating
reservoirs as reC(Jmmended bv the Expert Committee is
a~timated roughly to be Rs: 27 crores. It is considered
that it might be necessary to undertake in the delta area
noi onlv the schemes' and works suggested by the Exoert Committee but also some other schemes and works
for the purpose in view. The actual" cost of all the
schemes and works ·required to be undertaken in the
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D. It. RAJU v. A. P. STATE (Khanna, /.)
903
delta area is likely to exceed the cost, as estimated above.
In view of the present difficult ways and means posi-
- tion, it is not possible to provide the necessary funds
required for the purpose either under the flood control
sector Qr under the irrigation sector of the State. It is,
therefore, considered necessary to leyy a drainage cess
on all the lands comprised within each of the divisions
in the delta of the Krishna and Godavari rivers, for a
period of six years, at a rate not exceeding rupees ten
per aqe per annum in respect of lands in the Godavari
eastern deltaic division and Godavari Central deltaic
division, JUpees twenty-five per acre per annum in respect of lands in the division comprising the Godavari
western deltaic division and the Krishna eastern and
Krishna Central del'taic divisions and at rupees fifteen
per acre per annum in respect of lands in the Krishna
western deltaic division.
It is also proposed to constitute the proceeds of the
drainage cess into a separate fund and to establish a
Board to administer the said Fund and to apply the
proceeds of the drainal(e _ cess derived in a division towards meeting the cost of drainage schemes undertaken
in '°1at division.
This Bill is intended to give effect to the above
objects."
The Act carne into force on 20th December, 1968. It applies
to all the lands comprised within the delta areas of Krishna and
Godavari rivers in the State of Andhra Pradesh.
According to
the preamble of the Act, it is "an Act to provide for 'the leyy and
collection of drainage cess on all lands comprised within the delta
area of the Krishna amd Godavari rivers in the State of Andhra
Pradesh for the purpose of raising funds to meet the expenses incurred on drainage schemes undertaken in the said delta area and
for matters connected therewith." Section 2 of the Act contains
various definitions.
"Board" has been defined in clause (a) to
mean the Krishna and Godavari Delta Drainage Board established under section 7 of the Act. "Delta area" .according to
clause ( c) means the area comprising the lands in the deltas of
Krishna and Godavari rivers, irrigated whether by flow or lift,
under the network of canals taking off from the barrage near
Vijayawada on the Krishna river and the anicut near Dowlaishwaram on the Godavari river. "Division" has been defined in
clause ( d) to mean any of the following difisions in the delta
area, namely :-
(i) the Godavari eastern delta;
904
SUPREME COURT REPORTS
[1972] 2 S.C.R.
(ii) th~ Godavari central delta;
(iii) the area comprising the Godavari western delta, the
Krishna eastern delta and the Krishna central delta;
(iv) the Krishna western delta;
According to clause ( e), "drainage cess' means th~ tax leviable
A
and collectable under section 3.
Clause (f)
defines 'drainage
B
scheme" as under :
"(f) "drainage scheme" means any scheme for the
improvement of drains in the delta area and for
the
formation of flood moderating reservoirs in the upland
areas across the rivers and streams flowing into the delta
area and includes any scheme relating to the following
c
works in the delta area which are owned or controlled
by the Government or constructed or maintained by
them and not handed over to any person :-
( i) channels, whether natural or artificial, for the
discharge of waste or surplus water, and escape channels from an imgation work, together with dams, emD
bankments, weirs, sluices, groynes, pumping sets and
other works connected with or auxilliary to all such
channels;
(ii) all works for the protection of lands from
floods or from erosion;
Exp/JJnation.-For the purpose of this clause, any
E
part or stage of a scheme shall be deemed to be a
scheme."
.,,
"Governn1ent" according to clause (g) means the· State Govern·
meat, while "land" has been defined in clause (h) to mean wet
or dry land.
Clause (j) defines "owner" in relation to any land as
meaning the person liable to pay the land revenue due o°' the land
F
and includes a ryot having a permanent right of occupancy with"
in the meaning of the Andhra Pradesh (Andhra Area) Estates
Land Act, 1908. According to the explanation to that ·clause,
the expression "person liable to pay the public revenue" in relation to any land in respect of which no public revenue is payable
means ithe person who would have been liable to pay public reveG
nue had it been payable on such land.
Section 3 of the Act deals with levy and collection of drainage
cess. According to sub-section ( 1 ) of the section, there shall be
levied and collected by the Government. for a period of six years
from the date of the commencement of the Act. as a drainage cess
on every land in the delta area comprised within a division speciH
lied in column (2) ·of the Schedule, for the purposes of this Act
in ihat division. a tax at such rate per acre per annum, not exceed·
in.!! the rnte specified in the corres1rndinj! entry in column
(3)
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D. R. RAJU V. A. P'·S:fATE (Khanna,!.)
905
thereof, as the Government may, by notification, specify in respect
of that division.
According to sub-section (3) of that section,
the drainage cess leviable under the section on any land shall be
payable by the owner of such land while according to sub-section
( 2), nothing i11 sub-section ( 1) >hall prevent the Government from
levying and collecting at anv time after the expiration of the
period of six years the drainage cess or any arrears pertaining
thereto, which is foviable or collectable during 1the said period of
six years. The Schedule referred to in the se9\ion fixes the maxinium rate at which drainage cess may be collected and according
to it the maximum rate shall be Rs.· 10 per acre per annum for the
Godavari eastern delta and the Godavari central delta, Rs. 20 per
acre per annum for the area comprising the Godavari western
delta, Krishna eastern delta and tho~ Krishna central dealta and
Rs. 15 per acre per annum for 'the Krishna western delta.
Section 4 of the Act gives the procedure to be followed beforn levying drainage cess.
According to this seotion, the col·
lector before levying the cess in respect of any land, shall cause
a notice
1to be served on the owner of the land, requiring him to
make payment of the amount of the drainage cess within 45 days
of the service of the notice. Section 5 gives a right of appeal to
the perrnn aggrieved by the levy o~ the drainage cess, while section 6 makes provision for order in revision by the Go\l'~rnmem.
Section 7 provides for the establishment of the Krishna and
Godavari Delta Drainage Board.
Provision for the constitution
of the proceeds of the drainage cess into a fund and its ?tiministrn:ion and :n:iplication is made in se.ction 8 which
1 ;ads as
under :
"8 ( 1) The ,ll·oceeds of the drainage
cess levied
and collected under this Act. reduced by the cost of collection as determined by the Government. shall after
due appropriation nrnde by the State Legislature
by
law, be constituted in1o a fund It'll'~ called the "Krishna
and Godavari Delta Draina.ge Cess Fund.
( 2) Jn addition to the proceeds referred to in subsection ( 1), any moneys received from the State or
Central Government or any other source for the pur·
poses of this Act, shall be credited to 'the Fund.
( 3) The Fund shall vest in, and be administered
b~·. the Board in such manner as may be prescribed.
( 4) The Fund. in so far as it relates to the proceeds
of the draina~e cess leyied and collected in a division,
shall be applied towards meeting the cost of the drainage schemes which the Board may, with the concurrence of the Government. undertake in that division.
906
SUPREME COURT REPORTS
(1972] 2 S.C.R.
The exl>(:nses of the Board and its Committees shall
also be met out of the Fund :
Provided that it shall not be necessary to
obtain
the concurrence of the Government as aforesaid in respect of such class of drainaf!,e schemes as
may be
prescribed;
Provided further that the expenditure incurred by
the Board for any purpose common 1to all or any of
the divisions shall be apportioned amonf!, the divisions
concerned in such manner as may be prescribed."
Accordinf!, 1o section 9, the drainaf!,e ce>s payable under the Act
by an owner in respect of any land shall be deemed to be public
revenue· due upon the said land and the provisions of the Andhra
Pradesh Revenue Recovery Act, 1864, shall apply. Section 10
f!,ives power to tlle Government to fix instalments for payment of
drainaf!,e cess while section 11
empowers the Gove1Ilment to
f!,rant exemn.tion or make reduction in case of undue hardship on
account of unseen calamity or any other reasonable cause to an
owner or class of owners of land. Section 12 pertains to the bar
of iurisdi~•;r.-" of civil courts in respect of matters fallillf!, within
the scope of the authorities actinf!, under the Act. Accordinf!, to
section 13, the provisions of the Andhra Pradesh Irrigation (Levy
of Bettermen1 Contribu'tion and Advance Betterment Contribution) Act, 1955 in so far as they relate to drainaf!,e work, shall
not apply to any drainaf!,e schem~ under the Act.
Section 14
f!,ives powers to the Government 1to give directions to the Board.
Rules under the Act are made bv the Government under section
15 of the Act for carrying out all or any of the purpose> of the
Act.
The Krishna and Godavari Delta Drainage Board Cess Fund
Rules made under section 15 ot the Act were issued in April 1969.
It is not necessary to refer to the different rules. For our purposes
it would suffice. to reproduce clauses (1) to ( 3) of rule 21 as
under :
"(I). The drainage cess shall be collected along with
the land revenue and credited 'to
"M.H.
IX-Land
Revenues''. Subject to the provision under sub-section
(I) of section 8 at the end of each financial year, an
equivalent amount shall be transferred to the Krishna
and Godavari draina)!e cess fund account by debit to
"9. Land Revenue".
(2) The expenditure on the drainage schemes shall
be debited to the appropriate head of account within
the Consolidated Fund of the State, either in the revenue
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D.R. RAJU v. A. P. STATE (Khanna,/.)
907
or capital head according to the expenditure falling
under revenue or capital head and at the end of each
financial year, an equivalent amount shall be transferred
from the Krishna and Godavari Drainage Cess Fund
account to the concerned head by means of a deduct
entry.
( 3) The expenditure incurred by the Board for
purposes common to all or any of the divisions, 'llke the
establishment, tools and plants, shall be apportioned
among the division concerned as far as possible in the
proportion in which the expenditure is incurred on the
drainage schemes in these respective divisions."
Following notifica>tion was issued on December 17 /20, 1968
under sub-s•ection (1) of section 3 of the Act :
"In exercise of the powers conferred by sub-section
( 1 ) of section 3 of the Andhra Pradesh (Krishna and
Godavari Delta Area) Drainage Cess Act, 1968
( Andhra Pradesh Act 11 of 1968), the Governor of
Andhra Pradesh hereby specifies in column ( 3) of the
Table below in respect of the division mentioned in
column (2) thereof, the rate of tax per acre per annum
that shall be levi·~d and collected by the Government for
the first year commencing on the 20th December, 1968
(date of commencement of the Act) as drainage cess
on everv land in the delta area comprised within the
said division :-
TABLE
SJ.
Name of tlte division
Rate of drainage cess leviable
and collectable
No.
I. The Godavari Eastern Delta
2. The Godavari Central Delta
3
Rs. JO/- per acre per annun ..
Rs JO/- per acre per annum.
3. The area comprising the Godavari Western
Rs. 20/- per acre per annum.
Delta. the Krishna Eastern Delta and the
Krishna Central Deta.
4. The Krishna \Vestern Delta
Rs. 15,'- per acre per annum.
The High Court while dismissing the appellants writ petition
repelled the contention that the provisions of the Act were violative
of article 14 of the Constitution and 'that the cess levied by the
Act was a fee and not a tax. Likewise. the argument put forth on
behalf of the appellants that the State Legislature was not competent to levy drainage oess and there were no effective provisions
for appeal and revision did nut find favour with the High Court.
908
SUPREME COURT REPORTS
[l972j 2 s.c.R.
In appeal Dr. Singh vi on behalf of the appellants has cha!·
lenged the vires of ithe provisions of the Act on three grounds. It
is urged in the first instance that the provisions of the Act are
violative of article 14 of the Constitu1ion.
Secondly, according
to the learned counsel, the right of appeal provided by section 5
of the Act·is illusory.
Lastly, it is submitted, there is excessive
delegation of the legislative function inasmuch as no minimum
rate of tlie cess has been prescribed. The grounds that drainage
cess amounted to fee and that the State Legislature was not competent to enact •the Act have not been pressed in appeal.
In the writ petition under article 32 of the Constitution, Mr.
Choudhury on behalf of the petitioners, has adopted the contentions advanced by Dr. Singhvi.
The above contentions have been controverted by Mr. Reddy
on behalf of the respondents and according to him, the provisions
of the Act suffer from no legal cir constitu1ional infirmity.
Before dealing with •the question as to whether there has been
an infringement of article 14 of the Constitution, we may mention
that the material on record shows that the State of Andhra Pradesh
is one of the major rice producing State in the country. The
Krishna Godavari D~lta area has most fertile lands and paddy crop
is raised thereon at an extensive scale.
The Krishna-Godavari
Delta system provides irrigation facilities primarily for paddy crop
over an ayacut area of about 22 lakh acres annually in the coastal
districts of Guntur, Krishna, West and East Godavari. The irrigated lands in the above delta system are subject to frequent floods
and drainage congestion resulting in heavy loss of crores of rupees
per annum because of the damage to the crops.
The flood; are
caused mainly by
rivers _ like Budameru,
Thammileru
and
Yerrakalva. Apart from causing damage to crops, the floods disrupt rail and road communications for long periods.
Plans for
ameliorating the situation were under consideration for nearly half
a century. The floods of 1964 highlighted the need for immediate
action for solving ithe recurring problem. The Government of
India in the Ministry of Irrigation and Power as per resolution
dated October 9, 1964 constituted an Exeprt Committee under
the Chairman~hip of Shri A. C. Mitra, Engineer-in-Chief, Uttar
Pradesh for suggesting a comprehensive plan for controlling the
floods. The terms of reference of the Committee were :
"(i) To suggest a comprehensive Plan for control of
floods in the coastal rivers like Budameru,
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Thammileru and Y errakalva by construction of
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D. R. RAJU v. A. P. STATE (Khanna, J.)
909
(ii) To consider and recommend proposals for
lowering the flood level of Kelleru lake either
by improving the outfall channel
Upputeru or
by pumping or by both.
(iii) To consider and recommend proposals for improving the drainage system in the area and;
(iv) Any other recommendation that the Committee
desires 1o make for prevention of floods and inundation."
The Committee in its report submitred in January 1966 suggested
various measures and schemes for tackling the problem of floods
and drainage. The Committee noted that most of the existing
drains were small in size and short in length. One of the recommendations of the Committee was that tho~ aforesaid drains should
be improved b_y deepening and widening 'them to suitable sections. Recommendation was also made that "all drains should be
brought to their design section and maintained in that condition".
The execution of the schemes and implementation of the
measures su_g,gested by the Mitra Committee along with the other
drainage schemes as might be found nece,,ary after detailed investigation involved an expenditure of several crores of rupees.
As the financial resources of the Andhra Pradesh Government
were already over-strained, the Government had to think of other
measures for raising the necessary funds.
The matter was thereafter discussed with the representatives of 'the people belonging to
the area- and a proposal was adopted for collection of drainage
cess for tackll!lg the problem of floods
and drainage in
th.e
Krishna-Godavari delta. The Estima1es Committee of the Andhra
Pradesh Legislative Assembly in its report also recognized the
need for solving the problem of drainago~ in the area and observed
that the amount of drainage cess collected should be kept separate. The Bill which formed the basis of the Act was thereafter
introduced in the Andhra Pradesh Le_~islativc Assemblv in June
1968.
The affidavit filed on behalf of the respondents shows that the
floods and drainage problems of all the lands in tho~ delta area
were not similar or of equal magnitude. As such, the need for
improving the existing drainage works and constructing new works
for the contr9l of floods and drainage problems variP.d considerably from one part of the delta area to the other. This fact resulted in difference in the magni,tude of the proposed work and
the estimated expenditure for one part of the delta area and those
for the other. It was, therefore, considered unjust and irrational
to treat the entire delta area as single unit and collect drainage
cess at a uniform rate from all the lands. The whole delta area
910
SUPREME COURT REPORTS
(1972] 2 S.C.R.
was consequently divided into four compact and contiguous units
which were •termed "divisions" by broadly adopting the following
criteria :
1. The geographical features' of the area.
2. The drainage characteristics and the unity of
draim1ge system, or systems in the area.
3. The extent of improvement needed in the existing
flood control and drainage work in the area and
their estimated expenditure; and
4. The need to construct further flcod
control and
drainage works in the area and their estimated
expenditure.
The four divisions were :
( l) Godavari Eastern Delta; (ii) th~
Godavari C~ntral Delta; (iii) the area comprising the Godavari,
Western Delta, Krishna Eastern Delta and the Krishna Central
Delta and (iv) Krishna Western Delta.
The above division of 1the delta area into four units was in
accordance with the findings of the Mitra Committee. It was also
feH that in view of ithe nature of floods and the drainage problems,
the unity of the existing drainage systems, the geographical situation and the benefits likely to be derived from the improvements
proposed, it would be neither desirable nor technically feasible to
further su'2cdivide any of the above d(visions into smaller units.
On account of the difference in the nature of problems and the
needs of improvement requiring diffurent scales of expenditure in
each division, it was decided that the levy of drainage cess on •the
lands in each <;livision should vary in rate in accordance with the
estima1ed expenditure for drainage work in that division.
The
Chief Engineer of Andhra Pradesh expres&~d the view that the
proposed flood control and drainag.e schemes could be implemented
in a period of six to seven years if adequate financial resources, including foreign exchange for the required dredging equipment.
well~ made available. It was after taking into account the quantum
of expenditure on the schemes proposed and the, irrigated area
which would be benefited as a resu1't of those schemes in each
division and :also keeping in view the fact that the peri<Jd' of collection of drainage cess was six years that the State Legislature provided the rates of drainage cess per acre per annum for the four
divisions.
Originally in the Bill as ill'troduced in the Legislature
a rate of Rs. 25 oer "ere ner annum was prescribed in respect rl
division comprising the Godavari western delta, Krishna eastern
delta and the Kri<hna central delta but the Legislature reduced
the rate for ;that division from Rs. 25 to Rs. 20 ' per acre per
annum.
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D. R. RAJU v. A. p, STATE (Khanna, J.)
911
At the time the above-mentioned Bill was introduced in the
Legislature in July 1968 the following estimate in tabular form
of the vario_ys expenditures was given on behalf of the Government :
s. Name of Division
Total estiApproxiMaximum
Total maxiNo
mated exmate Ayacut Rate of
mum
penditure
in acres
drainage
amount of
on schemes
cess per
drainage
in lakhs
acre per
cess antiRs.
annum
cipated to
Rs.
be collected
over 6
years in
lakhs Rs.
1. Krishna-Western delta
500
4,86,800
15/-
438
~. Krishna Central
1,25,500
Krishna Eastern and
6,12,700
Godavari We~tern
4,90,000
jeJtas.
!073
12,28,200
25/-
1842
3. _Godavari Central delta
150
2,00,000
10/-
120
4. Godavari Eastern
200
3,20,000
10/-
192
Total
2923
22,35,000
2592
It may be noted that as against the total estimated expenditure
of Rs. 2,923 !akhs, the Government proposed to raise only a sum
of Rs. 2,592 !akhs through collection of drainage cess over a
period of six years. The estimated expenditure, according to the
affidavit filed on behalf of the respondents, was expected to go up
by 10 to 20 per cent during the course of six to seven years of the
completion of the scheme.
Tue total expenditure was thus
ex-.
pec'ted to go up to Rs. 35 crores and the excess over th·~ anticipated
collection amounting to about Rs. 9 crores would be borne by the
State Government.
As regards the argument about the infringement ofthe equality
clause embodied in article 14, it may be men'tioned that a taxing
statute is as much subject to article 14 as any other statute. In the
application. however.- of the principle embodied in ihat article, the
Courts, in view of the inherent complexity of fiscal adjustment of
diverse elements, permit a larger discretion to the Legislature in
the matter of classification so long it adheres to the fundamental
principles underlying the doctrine of equality. The power of the
Legislature to classify is of "wide range and flexibility'', so thaf it
can adjust its system of taxation in all proper and reasonable
ways.
(see Khandige Shah Bhat and Others v. The Agricultural
Tncome Tax Officer('_) ,as well as the recent decision of this Court
(I) [1963) 3 S.C.R. 809.
912
SUPREME COURT REPORTS
[1972] 2 ~.R.
in Vivian Joseph Ferreira and Anr. v. The M,unieipal Corporation
of Greater Bombay & Ors., Writ petition No. 187 of 1970 decided
on November 4, 1971).
Willis in his Constitution Law has
summed up the position as under on page 587 :
"A State does not have to tax everything in order to
A
tax sQmething.
It is allowed to pick and choose disB
tricts, objects, persons, methods and even rates for
/
taxation if it does so reasonably. . . . . . The Supreme
Court has been practical and has permitted a V'~ry wide
latitude in classification for taxation."
The above principle was approved by this Court in East 1 ndia
Tobacco Co. v. State of Andhra Pradesh(') and Twyford Tea Co.
Ltd. and Another v. The State of Kera/a and Another('). It was
also observed in the last mentioned case that burden is on a person
complaining of discrimination and, for this purpose, it is neo!ssary
·to prove not possible inequality but hostile unequal ·treatment. ·
The modern trend in all
progressive countries
is
towards
establishment of a welfare State, and with this end in view, the
State has to prepare plans and devise beneficrent schemes for the
good of (he common people. The implementation of those plans
and schemes entails colossal expenditure.
The State has consequently to tap various sources for augmenting its income and raisin_g, the revenue. Taxes are levied for this purpose, and the State
is give!) a wide range of choice.for the purpose of taxation. It is
axiomatic that different situations call 'for different fiscal measures.
The State is presumed to know the requirements of the &ituation
and act accordingly.
No .,rigidity being possible, it is difficult to
a_pply any set formula. Much greater latitude and discretion has.
therefore, to be allowed to the State for the purpdse of taxation in
the context of article 14 of the Constitution.
Dr. Singhvi on behalf of the appellants has referred to the fact
tha't there is {lat and uniform rate of cess for each acre in respect
of all lands in a division irrespective of the quality and productive
capacity of the land. It is ur~ed tha-t a flat and uniform rate for all
lands in a division results in i!lequality and is violative of article
14.
Jn this conneC'tion, we find that the material on record, t:J
which reference has been made. earlier.shows that the rate of cess
rirescribed for· each division has a rational nexus with the object
of the Act .and is based on intelligible differentia. The object of
the Act is to raise funds for 1the implementaiion of schemes to
secure protection of the lands in the deltaic area from ravages of
·the floods.
As the Act is designed to benefit the land-in/the divisions of the deltaic area, ithe levy of cess at uniform rate for ·~ach
acre of the fond in a division cannoi be considered to offend the
(1) [19631 t S.C.R. 404.
(2) [!970] l S.C.R. l8l·
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D.R. RAJU v. A. P. STATE (Khanna,!.)
913
principle of equality.
The floods strike equally all lands in the·
area and make no discrimination so far as the quality and productive capacity of those lands are concerned. In the circumstances,
it appears to be just and reasonable that each acre in a division
should bear equal burden of the amount which is sougM to be
raised to fight the danger of floods and provide for an efficient
system of drainage. Further, as the cost of drainage scheme varies
in the different divisions, the rate of cess has been fixed at different rates fo_r the divisions keeping in view the cost of drainage
scheme in each division. The differential in. the cost of drainage
schemes for the four divisions, in our opinion, has been properly
reflected in the varying rates of ces.s for each division.
Reference has been made on behalf of the appellants, with a
view to show that Jack of classification in the matter of tax can
create inequality, to the following cases :
Kunnathat Thathunni Moopil Nair v. The State of Kera/a and
Another(')
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New Manek Chowk Spinning and Weaving Mills Co. Ltd.
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and Ors. v. Municipal Corporation of Ahmedabad and
Ors.(2 ).
State of Andhra Pradesh & Anr. v. Nal/a Rafa Reddy &
Ors.(8 )
State of Kerala v. Haji K. Haji K. Kutty Naha & Ors. Etc.(')
In the case of K.T. MoopiJ Nair this Court considered the provisions of Travancore Cochin Land Tax Act, 1955 and found that
all lands in the Sta!te of whatever description were to be chllrged
basic tax at uniform rate per acre irrespective of the quality of
the land and the fact whether it yielded or was capable of yielding
any income.
In the case of Nalla Raja Reddy this Court held the provisions
of Andhra l;'radesh Land Revenue (Additional Assessment) and
Cess Revision Act, 1962 to be violative of article 14. The said
Act was passed to. bring uniformity in assessment of land revenue
in the Telengana and Andhra areas of the State of Andhra Pradesh.
An additional assessment at the ·rate of 75 per cent of the
vearly assessment was imposed on dry land and the total assessment was not fo be less than 50 paise per acre. On wet land the
additional as§essmetit was to be 100 per cent for land irrigated
from a Government source and 50 per cent in case of other wet
lands.
The minimum total demand was also prescribed.
The
Act was considered to be discriminatory as the minimum had no·
(!) [1961] 3 S.C.R. 77.
(2) [1967] 2 S.C.R. 679.
(3) [1967) 3 S.C.R. 28.
(4) [1969j I S.C.R. 645
914
SUPREME COURT REPORTS
[1972] 2 S.C.R.
relation to the fertility of the land. It was also found that tire
assessment was left to the arbitrary discretion of an officer without an opportunity to question his findings.
This case, as
observed in the lwter case of Twyford Tea Co. v. The Stare of
Kera/a and Another(') was peculiar to itself.
In the case of New Manek Chowk Spinm'ng and Weaving Mills
and Haji K. Haji K. Kutty Naha, the question was one of rating.
What was held in those cases was thwt taking only the floor area
.of a building as the basis for determination of a tax was an
arbitrary method· when buildings bad different rental values
depending upon the nature of 1he construction and •the purpose
for whicli they were used.
These facts were held to be vital in
the rating of buildings. It is manifest that the principle involved
in these cases has not much relevance for the preseni case.
So far as the case of K. T. Moopil Nair is concerned, we find
that the majority quoted with approval the following observations
i0f Das C.J. in Shri Ram Krishna Dalmi11. v. Shri Justice S. R.
Tendolkar and Others(').
"In determining the question of the validity or otherwise of ~uch a statute the Court will not strike down the
law out of hand only because no classification appears on
its face or .because a discretion is given ito the Government to make the selection or classification but will _go
on to examine and ascertain if the sta1ute has laid down
any principle or policy for the guidance of the exercise
of discretion by 'the Government in the matter of the
selection or classification.
After such scrutiny the
Court will strike down the statute if .it does not Jay down
any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or
classification, on the ground that the statute provides
for the delegation of arbitrary and uncontrolled power
to the Government so as •to enable it to discriminate
between persons or things similarly situate ·and that,
therefore, the discrimination is inherent in the· sta•.ute
itself."
Keeping the above .observa1ions in vi·~w wi find that in the
present case the Act contains sufficient guidelines for the fixation
of the rate of cess and there is also enough maierial on record to
justify a uniform rate of cess for each acre of land in a division
of the deltaj_c area.
The imposi1ion of tax on land for· rai~in'!
general revenue is substantially diff.erent from the levy of cess fo;
111 [t970J J s.c.R. JRJ
(2)
[i961] 3.S.C.R. 77.
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D.R. RAJU v. A. P. STATE (Khanna,/.)
915
implementation of 1 drainage scheme for the benefit of lands in
an area and the principles applicable in one case would not necessarily hold good in the other.
Reference has then been made on behalf of it11e appellants to
an American case, Village of Norwood v. Ellen R. Baker('). In
that case the Court considered special assessment upon an abutting
property by the front door without taking special benefits into
account for 1the entire cost and expenditure of opening a street.
It was held that othe exaction from the owner of a private property
of the·cost of public improvement in substantial excess of the
special benefits accruing to him is ito the extent of such excess a
taking under the· guise of •taxation of private property for public
use without compensation.