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Mahant Sri Jagannath Ramanuj Das Versus State of Orissa

Writ Petition No. 405 of 1953 - Dated:- 16-3-1954 - MUKHERJEA, B.K., HASAN, GHULAM, MAHAJAN, MEHAR CHAND (CJ), DAS, SUDHI RANJAN AND BOSE, VIVIAN. N. C. Chattanooga (B. K. Saran and B. C. Pratt, with him), S. P. Sinclair (B. K. Saran and R. C. Pratt, with him) for the Appellants. M. C. Seth (G. N. Jose, with him) for the Respondent. JUDGMENT: The Judgment of the Court was. delivered by MUKHERJEA J.-These two connected matters are taken up together for the sake of convenience and may be, disposed .....

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the year 1939 and it received the assent of the Governor- General on the 31st August, 1939. The object of the Act, as stated in the preamble, is "to provide for the better administration and governance of certain Hindu religious endowments" and' the expression "religious endowment" has been defined comprehensively in the Act as meaning all property belong to or given or endowed for the support of Maths or temples or for the performance of any service orcharity connected .....

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Government. For the purpose, of meeting the expenses of the Commissioner and his staff, every Math or temple, the annual income of which exceeds ₹ 250, is required under section 49 of the Act to pay an annual contribution at certain percentage of the annual income which increases I progressively with the increase in the income. With this contribution as well as loans and grants made by the Government, a special fund is to be constituted as provided by section 50 and the expenses of adminis .....

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n three grounds, namely, (1) that the subject matter of legislation was not covered by Entry 34 of List 11 in Schedule VII of the Government of India Act, 1935 ; (ii) that the, contribution levied under, section 49 was, in substance, a tax and could not have been imposed by the Provincial Legislature; and (iii) that as the provisions of the Act affected the income of properties situated outside the territorial limits of the Province, the Act was extra- territorial in its operation and hence inop .....

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d the appeal. it is against this judgment that Case No. 1 of 1950 has come to this court. During the pendency of the appeal in this court the Constitution came into force on the 26th January 1950, with its chapter on fundamental rights, and the Orissa Hindu Religious Endowments Act also has been amended recently by the State Legislature of Orissa by Amending Act II of 1952. In view of these changes, the present application under article 32 of the Constitution has been filed by two of the Mahants .....

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t on the validity or otherwise of the different provisions of the impugned Act. It may be stated at the beginning that the Orissa Hindu Religious Endowments Act of 1939 follows closely the pattern of the Madras Hindu Religious Endowments Act of 1927 which has been now replaced by a later Act passed by the State Legislature of Madras in 1951 and described as the Madras Hindu Religious and Charitable Endowments Act. The grounds upon which the validity of the Orissa Act has been attacked before us .....

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s of the petitioners guaranteed under articles 19(1) (f), 25 26, and, 27 of the Constitution. The other branch of the contention relates to the provision for levying contribution on religious institutions under section 49 of the Act and this provision has been impeached firstly on the ground that the contribution being in substance a tax, it was beyond the competency of the Provincial Legislature to enact any such provision. The other ground raised is, that the payment of such tax or imposition .....

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tions have been taken by the learned counsel appearing for, the petitioners in the light of the principles which this court has laid down in the Madras appeal. It may be said that many of the impugned provisions of the Orissa Act correspond more or less. to similar provisions in the Madras Act. Section 11 of the Act has been objected to on the ground that it vests almost, an uncontrolled and arbitrary power upon the Commissioner. This section corresponds to section 20 of the Madras Act and as ha .....

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r that the general power conferred upon the Commissioner extends to passing of interim orders as the Commissioner might think fit. Section 14 lays down the duties of the trustee and the care which he should exercise in the management of the affairs of the religious institutions. The care, which he has to exercise, is What is demanded normally of every -trustee in charge of trust estate and the standard is that of a man of ordinary prudence dealing with his own funds or properties. This is a matt .....

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orders. The sections of the Act, to which serious objections have been taken are sections 38, 39, 46, 47 and 49. Sections 38 and 39 relate to the framing of a scheme. A scheme can certainly be settled to ensure due administration of the endowed property but the objection seems to be that the Act -provides, for the framing. of a scheme not by a civil Court or under its supervision but by the Commissioner who is a mete administrative or executive officer. There is also no provision for appeal agai .....

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in the institution to file a suit in a civil court to modify or set aside an order framing a scheme; and under section 40, the order made under section 39 could be final only subject to the result of such suit. Subsection (4) of section 39, however, was deleted by the Amending Act of 1952, and under the new sub- section (4), the order passed by the Commissioner has been made final and conclusive. Strangely, however, section 41 of the Act has still been retained in its original shape and that spe .....

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ts to an unreasonable restriction upon the right of property of the superior of the religious institution which is blended with his office. Sections 38 and 39 of -the Act must, therefore, be held to be invalid. There is nothing wrong in the provision of section 46 itself but legitimate exception, we think, can be taken to the proviso appended to the section. Under the law, as it stands, the Mahant or the superior of a Math has very wide powers of disposal over the surplus income and the only res .....

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t merely when the original purpose of the trust fails or becomes incapable of being carried out either in whole or in part by reason of subsequent events, but also where there is a surplus left after meeting the legitimate expenses of the institution. Objection apparently could be raised against the last provision of the sub-section, but as subsection(4) of section47gives the party aggrieved by any order of the Commissioner in this respect to file a suit in a civil court and the court is empower .....

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or a fee; and it is not disputed that if it is a tax, the Provincial Legislature would have no authority to enact such a provision. This question has been elaborately discussed in our judgment in the Madras appeal referred to above and it is not necessary to repeat the discussions over again. As has been pointed out in the Madras appeal, there is no generic difference between a tax and a fee and both are different forms in which the taxing power of a State manifests itself. Our Constitution, how .....

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ntial thing in a tax is that the imposition is made for public purposes to meet the general expenses of the State without reference to any special benefit to be conferred upon the payers of the tax. The taxes collected are all merged in the general revenue of the State to be applied for general public purposes. Thus, tax is a common burden and the only return which the taxpayer gets is the participation in the common benefits of the State. Fees, on the other hand, are payments primarily in the p .....

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e, if the payments demanded for rendering of such services are not set apart or specifically appropriated for that purpose but are merged in the general revenue of the State.to be spent for general public purposes. Judged by this test, the contribution that is levied by section 49 of the Orissa Act will have to be regarded as a fee and not a tax. The payment is demanded only for the purpose of meeting the expenses of the Commissioner and his office which is the machinery set up for due administr .....

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e Act. We think, therefore, that according to the Principles which this court has enunciated in the Madras appeal mentioned above, the contribution could legitimately be regarded as fees and hence it was within the competence of the Provincial Legislature to enact this provision. The fact that the amount of levy is graded according to the capacity of the payers though it gives it the appearance of an income-tax, is not by any means a decisive test. We are further of opinion that an imposition li .....

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