TMI Blog1967 (2) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. For convenience of reference the Principal Act as amended by the Amending Act will be called in the course of the judgment as the Act . The appellants raised the question of the constitutional validity of the relevant provisions of the Act. The Principal Act was passed on September 27, 1962 and it came into force on July 1, 1962; and the Amending Act was passed on December 24, 1962, and it came into force on July 1, 1962. We are concerned in these appeals only with the Act, i.e. Principal Act as amended by the Amending Act. It is said that the main object in passing the Principal Act was to rationalize the land revenue assessment in the State by bringing uniformity between Telengana and Andhra areas and to raise the rate of revenue in view of the rise in prices and to make the ryots bear equitably their share of the burden of the plans. With that view, as the long title of the Principal Act indicates, the said Act was passed to provide for the levy of additonal assessment on certain classes of land in the State of Andhra Pradesh and for the revision of the assessments leviable in respect of such lands and matters connected therewith. The relevant provisions of the Act, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ll1/2 12.00 15.00 18.00 22.50 and above above and but below below 30,000 acres. III.50 acres All All 9.00 14.00 3.50 21.00 and above tarams bhaganas but below 5,000acres. IV. Below 50 All All 6.00 12.00 9.00 18.00 acres. tarams bhaganas. Explanation.-In this Table,- (a) The expression Government source of irrigation' does not include a well, spring channel, parrekalava or cross-bunding; (b) taram and bhagana classification shall be as registered in the revenue and settlement records; (c) where no such taram or bhagana classification is recorded in the revenue and settlement records, in respect of any land, that land shall be deemed to bear the taram or bhagana classification which a similar land in the vicinity bears. Section 8. (1) The District Collector, shall, from time to time, by notification published in the Andhra Pradesh Gazette and the District Gazette, specify the Government sources of irrigation falling under classes 1, 11 and IV of the Table under section 4 and may in like manner, include in, or exclude f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds in Andhra and bhagana in the case of lands in Telengana. Mr. P. Ram Reddy, learned counsel for the State in the other appeals, while adopting the arguments of the learned Solicitor General, argued in greater detail contending that though the classification under S. 4. of the Act was apparently based upon ayacut, there was a correlation between the extent of the ayacut and the duration of water supply and that on that basis the classification could be sustained as it had a reasonable relation to taram or bhagana, as the case may be, and also to the duration of water supply. He took us through various statistical data to support the said connection between the extent of ayacut and the duration of water supply. On the question whether there was any procedure for assessment, he strongly relied upon S. 6 of the Act and contended that the said section, by reference, incorporated the pro-existing procedure for assessment in Andhra under the Board's Standing Orders and in Telengana tinder the relevant Acts. Mr. P. A. Chowdhury, learned counsel for some of the res- pondents, argued that from time immemorial land assessment, both in Andhra and in Telengana, was scientifically s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a preliminary grouping of villages so as to bring together those which were similarly situated having regard to proximity to market, facility of com- munication and climate. Thereafter the soil was classified into series , such as (1) Alluvial islands in rivers and permanently improved soils; (2) Regar or regada, the so- called 'black cotton soil,' (3) Red ferruginous soil; (4) Calcareous-chalk or lime and; (5) Arenaceous. Every soil of the said series was again divided into classes on the basis of the variety and physical situation, such as pure clay or half sand or more than 2/3rd sand etc. The classes were again divided into sorts such as good or bad or ordinary or worst. Briefly stated land was classified into series into classes, and classes into sorts. In the case of wet land in addition to the sorts, other distinctions were borne in mind in grading the soil such as (1) whether the land was close to the irrigation main channel and had good level and drainage, (2) whether the land was less favourably situated in these respects, (3) whether the land was imperfectly supplied with water; or whether the level was inconvenient, and drainage bad, and (4) whether the land w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-sixth. Where the irrigation is precarious and the supply is supplemented by wells, the divisional officer, or in the course of a re- settlement, the Special Settlement Officer, or Special Assistant Settlement Officer, may allow the charge for second crop to be compounded at one-half of the rates referred to above, except under sources grouped in Class 1 or 2 for settlement purposes. Com- position at such favourable rates may be allowed to lands for which the charge for second crop has already been compounded at the ordinary rates. If the wells however fall into disrepair, the land should be transferred from compounded double crop to single crop wet. Ryots may be permitted to compound at any time and to any .extent even after the settlement. (2)In carrying out the settlement with reference to the foregoing principles, the Settlement Department divides the soils into certain classes with reference to their mechanical composition, sub-divides them into sorts or grades with reference to their chemical and physical properties and other circumstances affecting their fertility, ,and attaches a separate grain value to each grade after numerous examinations of the actual outturn of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpt was made to fix the assessment at a certain fraction of net assets for determining the money value of the produce of the field crop. But experiments were made by the Settlement Officers and with the results obtained therein the rates fixed were checked in order to ascertain what profit would be left to the cultivators. It will be seen that both in Andhra as well as Telengana area; under the Ryotwari system, the land revenue which was a share of the produce of the land commuted in money value varied according to the classification of soil based upon its productivity. Both in Andhra and Telengana areas under the Ryotwari system the soils of similar grain values were bracketed together in orders called 'Tarams' or Bhagana and the rates were further adjusted in the dry land having regard to the grouping and in wet lands having regard to the water supply. But in both the cases, the quality and the grade of the soil divided in 'Tarams' or 'Bhaganas' as the case may be, was the main basis for assessment. It appears that the Ryotwari Settlements were abandoned in the year 1939. In the Report of the Land Revenue Reforms Committee of the Government of Andhra Prade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts but suggested that assessments should be based on the quality and productivity of soils, the duration of supply of water and the prices. It may be noticed that the Committee did not make ayacut the basis of the assessment. Let us now analyse the provisions of the Act. Under ss. 3 and 4 of the Act and the Table attached to S. 4, which have been extracted earlier, a completely new scheme has been laid down. Under S. 3, an additional assessment at the rate of 75 per cent of the earlier assessment is imposed and under the proviso the total asessment should not be less than 50 np. per acre for a fasli year. That is to say, irrespective of the quality and productivity of the soil, every acre of dry land has to bear a minimum assessment of 50 np. per acre for a fasli year. Coming to wet lands, under the Table appended to S. 4, they are divided into 4 categories depending upon the extent of the ayacuts. Ayacuts of 30,000 acres and above fall under the first class, 5,000 acres and above but below 30,000 acres, under the 2nd class, 50 acres and above but below 5000 acres, under the 3rd class, and below 50 acres, under the 4th class. A maximum and a minimum rate of assessment per acre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a flat rate irrespective of the quality and productivity of the land and, therefore, suffered from want of reasonable classification. He further contended that the alleged justification for the classification, namely, the extent of the ayacut, had no reasonable relation to the objects sought to be achieved by the Act, namely, rationalisation of the revenue assessments on land in the entire State. Mr. P. Ram Reddy, on the other hand, made a strenuous attempt to sustain ss. 3 and 4 of the Act on the basis of reasonable classification. He said that in the case of dry land the minimum rate of 50 np. was so low that in most of the cases 75 per cent of the previous assessment per acre would not be more than 5 np., and. therefore, the mere fact that in a few cases the 75 per cent of the assessment would fall on the other side of the line could not affect the validity of the classification for it would almost be im- possible in any scheme of classification to avoid marginal cases. So too, in the case of wet lands, he argued, in regard to classes I and II, the duration of supply of water corresponded to the extent of the ayacut in most of the cases and, therefore, though the classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween 3 ween 5 and 5 and 8 months months 1. Ichapuram 8.3 69.6 2. Pathapattanam 24.7 47.4 3. Chipurapalli 2.5 139.3 4. Srikakulam 6.4 84.9 5. Sompeta. 6.6 80.8 6. Salur 13.8 .... 7. Babbili 19.5 .... 8. Palkonda .... 37:8 9. Narasannapet .... 35.5 10. Parvathipuram .... 84.2 Average of Taluks 8.2 57.9 Sl Average Average Average Average No Name of Taluk for less for bet- for bet for more than 3 ween 3 ween 5 than 8 months and 5 and 8 months months months 1. Mahabooba 4.8 26.8 60.6 .... 2. Mulug 25.1 171.6 370.86086.46 The averages mentioned under different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 407 18 18 ------------------------------------------------------------ Below 5 months duration Between 5 8 months ----------------------------------------- Sl . Name of Taluk NO. of Total No No of Total No irrigation of irri- irrigat- of irriga- sources gation tion tion sources sources sources below 50 between 50 acres ayacut and 5000 acres ----------------------------------------------------------- 1. Ichapuram 165 166 35 79 2. Pathapatnam 927 1,054 147 570 3. Cheepurapalli 1,799 1,905 39 39 4. Srikakulam 465 470 127 129 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... increase is on the basis of the flat minimum rate and not on the basis of the duration of the irrigation sources. Further water sources which supply water for more than 5 months but less than 8 months and have registered ayacuts below 5,000 acres fall under class IV. Some of the tanks which supply water for more than 8 months fall under different classes having regard to the ayacut which they serve. For instance, Kumbum tank has a registered ayacut of 10,000 acres, Bukkaepatnam tank has a registered ayacut of 184 acres; and though both supply water for 8 months or More, the former falls under class II and the latter under class 111. A cursory glance through the statistics of the various districts tells the same tale. In the Warrangal district of the Telengana area. in Mahaboobad taluk none of the water sources supplies water for more than 8 months and none of them has an ayacut of more than 175 acres; they are all classified under class III or class IV. In Malug taluk 3 tanks supply water for more than 8 months and they have ayacuts of 3,400 acres, 1,901 acres and 6,470 acres re.-,- pectively. The first two fall under class III and the last under class H. In Anantapur District, 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this Act in respect of any land shall, for all purposes, be treated as land revenue. Section 8. (1) The District Collector shall, from time to time, by notification published in the Andhra Pradesh Gazette and the District Gazette, specify the Government sources of irrigation falling under classes I, II and IV of the Table under section 4 and may in like manner, include in, or exclude from, such notification any such source. (2) Any person aggrieved by a notification published under subsection (1) may, within forty-five days from the date of publication of the notification in the Andhra Pradesh Gazette and the District Gazette. prefer an appeal to the Board of Revenue whose decision thereon shall be final. Section 8 has nothing to do with the assessment. It only provides for specification of Government sources of irrigation falling under different classes. Therefore, the only provision which may be said to relate to procedure for assessment is s. 6. Mr. Ram Reddy argued that S. 6 by reference brought into the Act not only the entire provisions of the Andhra Pradesh Revenue Recovery Act but also the elaborate procedure for assessment prescribed by the Standing Orders of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grievous the blunder made there is no way for the aggrieved party to get it corrected. This is a typical case where a taxing statute does not provide any machinery of assessment. On the said facts the question is whether ss. 3 and 4 of the Act offend Art. 14 of the Constitution. The scope of Art. 14 has been so well-settled that it does not require further elucidation. While the article prohibits discrimination, it permits classification. A statute may expressly make a discrimination between persons or things or may confer power on an authority who would be in a position to do so. Official arbitrariness is more subversive of the doctrine of equality than statutory discrimination. In respect of a statutory discrimination one knows where he stands, but the wand of official arbitrarianess can be waved in all directions indiscriminately. A statutory provision may offend Art. 14 of the Constitution both by finding differences where there are none and by making no difference where there is one. Decided cases laid down two tests to ascertain whether a classification is permissible or not, viz., (i) the classification must be founded on an intelligible differentia which distinguishes pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al treatment. Taxation law is not an exception to this doctrine...... But in the application of the principles, 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 said doctrine. The power of the Legislature to classify is of wide range and flexibility so that it can adjust its system of taxation in all proper and reasonable ways. It is, therefore, manifest that this Court while conceding a larger discretion to the Legislature in the matter of fiscal adjustment will insist that a fiscal statute just like any other statute cannot infringe Art. 14 of the Constitution by introducing unreasonable discrimination between persons or property either by classification or lack of classification. Two decisions relied upon by the learned counsel for the appellant may now be noticed. In C. V. Rajagopalachariar v. State of Madras(A. I.R. 1960 Mad. 543.) the facts were : two Acts, namely. Madras Land Revenue Surcharge Act (19 of 1954) and Madras Land Revenue (Additional Surcharge) Act (30 of 1955), were passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was concerned and a flat minimum rate was fixed in the case of dry lands without any reference to the quality or fertility of the soil and in the case of wet lands a minimum wet rate was fixed and it was sought to be justified by correlating it to the ayacut. Further, the whole imposition of assessment was left to the arbitrary discretion of the officers not named in the Act without giving any remedy to the assessees for questioning the correctness of any of the important stages in the matter of assessment, such as ayacut, taram, rate or classification or even in regard to the calculation of the figures. Not only the scheme of classification, as pointed out by us earlier, has no reasonable relation to the objects sought to be achieved viz., fixation and rationalisation of rates but the arbitrary power of assessment conferred under the Act enables the appropriate officers to make unreasonable discrimination between different persons and lands. The Act, therefore, clearly offends Art. 14 of the Constitution. In some of the appeals relating to Peddapuram and Kumara- puram villages another point was raised, namely, that a special rate bad been fixed which was neither for a single crop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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