PETITIONER:
DANTULURI RAM RAJU AND ORS.
Vs.
RESPONDENT:
STATE OF ANDHRA PRADESH AND ANR.
DATE OF JUDGMENT16/12/1971
BENCH:
KHANNA, HANS RAJ
BENCH:
KHANNA, HANS RAJ
MITTER, G.K.
SIKRI, S.M. (CJ)
SHELAT, J.M.
DUA, I.D.
CITATION:
1972 AIR 828 1972 SCR (2) 900
1972 SCC (1) 421
CITATOR INFO :
E 1973 SC1374 (12)
R 1980 SC1382 (75)
ACT:
Andhra Pradesh (Krishna and Godavari Delta Area) Drainage
Cess Act 1968-Whether violative of Art. 14 of the
Constitution.
HEADNOTE:
The vires of the Andhra Pradesh (Krishna and Godavari Delta
area) Drainage 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
areas of Krishna & Godavari rivers in the State of Andhra
Pradesh. The Act provided for levy and collection of
drainage cess on all lands comprised within the delta area
of Krishna & Godavari rivers, for the purpose of raising
funds to meet the expenses incurred on drainage schemes
undertaken in the said area for its protection from floods
and for matters connected therewith, Under the Act, for 6
years, a tax at the rate varying from Rs. 10/- for the
Godavari 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 rejected all
their contentions.
In appeal, the Appellants contended that the provisions of
the Act is violative of Art. 14 of the Constitution, that
the right of appeal provided by 5 of the Act is illusory and
lastly, there is excessive delegation of the legislative
function inasmuch as no minimum rate of the cess has been
prescribed. Dismissing the appeal and the writ petition,
HELD : (1) The provisions of the impugned Act at,- not
violative of Art. 14 of the Constitution. The floods and
drainage problems of all the lands in the delta area were
not similar or of equal magnitude. They varied considerably
from one part of the delta area to the other and the
estimated cost of the proposed work also varied from area to
area. The flood strike equally all lands in the area and
make no discrimination so far as 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 sought to be raised to fight the danger of
flood 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 for 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 has been
properly reflected in the varying rates of cess for each
division. In the present case, the Act contains sufficient
guidelines for the fixation of rate of cess and there is
justification for a uniform rate of cess for each acre of
land in a division of the deltaic area. Therefore, there is
no discrimination and the provisions of the impugned Act are
not violative of Art. 14 of the Constitution. The fact that
on account of topographical situation some land-owners get
greater benefit of the drainage scheme because of their
lands being more prone to damage by floods is a fortuitous
circumstance and the same would not be a valid ground for
striking down the impugned legislation. [916 D-917 G]
901
(2)The right of appeal provided 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 less than that
for which a cess is levied. Therefore, this right is no,
(3) There is also no excessive delegation of the
legislative power. The State has adhered to the maximum
prescribed by the Act. The absence of minimum limit will
not vitiate a taxing statute.
Khandige shah Bhat & Others v. The Agricultural Income-tax
Officer, 1, [1963] 3 S.C.R. 809, East India Tobacco Co. v.
State of Andhra Pra[1963] 1 S.C.R. 404, Twyford Tea Co. Ltd
v. The State of Kerala, [1970] 3 S.C.R. 383, State of A.P.
v. Nalla Raja Reddy, [1969] 3 S.C.R. 28, State of Kerala v.
Haji K. Haji K. Kutty Naha, [1969] 1 S.C.R. 645 referred to.
JUDGMENT:
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 in Writ Petition No. 998 of
1969.
AND
ORIGINAL JURISDICTION : Writ Petition No. 251 of 197 1.
Under Article 32 of the Constitution of India for the
enforcement of the Fundamental Rights.
L.M. Singhvi, Krovidi Narasimhan, S. K. Dhingra and A.
Subba Rao, for the appellants (in C.A. No. 223 of 1970).
K.R. Chaudhuri and K. Rajendra Chowdhary for the peti-
tioners (in W.P. No. 251 of 1971):.
P.Ram Reddy and P. Parameswara Rao, 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. 25 1 of 1971. Civil Appeal No. 223 has
been filed on a certificate granted by the Andhra Pradesh
High Court against the judgment of that Court whereby
petition under article 226 of the 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 been filed by 434
petitioners. The respondents in the appeal are the 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 Krishna District.
The appellants in the civil appeal belong to different
Taluks of the West Godavari District and own extensive areas
of land in
10-L736S,SupCl/72
902
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 land 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 affidavit
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 the impugned
legislation. The Statement of objects and Reasons reads as,
under :
“The ‘coastal districts 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 high
lighted the need for immediate action for
solving this recurring 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
improving all the drains-in the delta area of
the Krishna and Godavari rivers and also
formation of flood moderating reservoirs
across Budameru, Yerrakalva. Tammileru etc.
The total cost of all the drain improvement
schemes As well as the flood moderating
reservoirs as recommended by the Expert
Committee is estimated roughly to be Rs. 27
crores. It is considered that it might be
necessary to undertake in the delta area not
only the schemes and works suggested by the
Expert 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
903
delta area is likely to exceed the cost, as
estimated above. In view of the present
difficult ways and means position, it is not
possible to provide the necessary funds
required for the purpose either under the
flood control sector or under the irrigation
sector of the, State. It is, therefore,
considered necessary to levy 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 acre per
annum in respect of lands in the Godavari
eastern deltaic division and Godavari Central
deltaic division, rupees 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 deltaic 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
drainage_cess derived in a division towards
meeting the cost of drainage schemes
undertaken in that division.
This Bill is intended to give effect to the
above objects.”
The Act came 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 levy and collection of drainage cess on all
lands comprised within the delta area of the Krishna and
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 estab-
lished 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,
divisions in the delta area, namely
(i) the Godavari eastern delta;
9 04
(ii) the 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 the tax
leviable and collectable under section 3. Clause (f) defines
drainage 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 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 irrigation work,
together with dams, embankments, 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;
Explanation For the purpose of this clause,
any part or stage of a scheme shall be deemed
to be a scheme.”
“Government” according to clause (g) means the State Govern-
ment, 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 on the land and includes a ryot having a
permanent right of occupancy withIn 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
the person who would have been liable to pay public revenue
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 specified in column (2) of the
Schedule, for the purposes of this Act in that division, a
tax at such rate per acre per annum, not exceeding the rate
specified in the corresponding entry in column (3)
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 subsection (2), nothing in sub-section (1)
shall prevent the Government from levying and collecting at
any time after the expiration of the period of six years the
drainage cess or any arrears pertaining thereto, which is
leviable or collectable during the said period of six years.
The Schedule referred to in the section fixes the maximum
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 the
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 be-
fore levying drainage cess. According to this section, the
collector before levying the cess in respect of any land,
shall cause a notice to 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 person aggrieved by the levy
of the drainage cess, while section 6 makes provision for
order in revision by the Government. Section 7 provides for
the establishment of the Krishna and Godavatri Delta
Drainage Board. Provision for the constitution of the
proceeds of the drainage cess into a fund and its adminis-
tration and application is made in section 8 which as under
“ 8(1) The proceeds of the drainage cess I
vied and collected under this Act, reduced by
the cost of collection as determined by the
Government, shall after due appropriation made
by the State Legislature by law, be
constituted into a fund to be called the
“Krishna and Godavari Delta Drainage Cess
Fund.
(2)In addition to the proceeds referred to
in subsection (1), any moneys received from
the State or Central Government or any other
source for the purposes of this Act, shall be
credited to the Fund.
(3)The Fund shall vest in, and be
administered by the Board in such manner as
may be prescribed.
(4)The Fund, in so far as it relates to the
proceeds of the drainage cess levied and
collected in a division, shall be applied
towards meeting the cost of the drainage
schemes which the Board may, with the concur-
rence of the Government, undertake in that
division.
9 06
The expenses 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 drainage
schemes as may be prescribed;
Provided further that the expenditure incurred
by the Board for any purpose common to all or
any of the divisions shall be apportioned
among the divisions concerned in such manner
as may be prescribed.”
According to section 9, the drainage cess 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 gives power to the Government to fix instalments
for payment of drainage cess while section I I empowers the
Government to grant exemption 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 jurisdiction of civil
courts in respect of matters falling within the scope of the
authorities acting under the Act. According to section 13,
the provisions of the Andhra Pradesh Irrigation (Levy of
Betterment Contribution and Advance Betterment Contribution)
Act, 1955 in so far as they relate to drainage work, shall
not apply to any drainage scheme under the Act. Section 14
gives powers to the Government to give directions to the
Board. Rules under the Act are made by 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 Found.
Rules made under section 15 of 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 :
“(1)The drainage cess shall be collected
along with the land revenue and credited To
“M.H. IX-Land Revenues”. Subtract to the
provision under sub-section (1 ) of section 8
at the end of each financial year, an
equivalent amount shall be transferred to the
Krishna and Godavari drainage 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 revenu
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, like 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 notification was issued on December 17/20, 1968
under subsection (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 levied and collected by
the Govemment for the first year commencing on
the 20th December, 1968 (date of commencement
of the Act) as drainage cess on every land in
the delta area comprised within the said
division :-
TABLE
Sl. Name of the divisionRate of drainage cess leviable
No. and collectable
1 2 3
1.The Godavari Eastern Delta Rs. 10;- per acre per annum.
2.The Godavari Central Delta Rs. 10/- per acre per annum.
3. The area comprising the Rs. 20/-per acre per annum.
Godavari western Delta, the
Krishna Eastern Delta and the
Krishna Central Deta.
4. The Krishna Western 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
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 cess
and there were no effective provisions for appeal and
revision not find favour with the High Court.
908
In appeal Dr. Singhvi on behalf of the appellants has chal-
lenged the vires of the 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
Constitution. 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 the 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 or constitutional
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 Delta area has most
fertile lands and paddy crop is raised there-on 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 floods 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 the recurring problem. The
Government of India in the Ministry of Irrigation and Power
as per resolution dated October 9, 1964 constituted an
Expert Committee under the Chairmanship 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, Thammileru and Yerrakalva by
construction of detention reservoirs or by
diversion into adjoining valley or any other
methods.
9 09
(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 to make for prevention of
floods and inundation.”
The Committee in its report submitted 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 the aforesaid drains should be improved by deepening
and widening the 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 suggested by the Mitra Committee along with the
other drainage schemes as might be found necessary 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
,he representatives of the people belonging, to the area and
a proposal was adopted for collection of drainage cess for
tackling the problem of floods and drainage in the Krishna-
Godavari delta. The Estimates Committee of the Andhra
Pradesh Legislative Assembly in its report also recognized
the need for solving the problem of drainage 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 there after introduced in the Andhra Pradesh
Legislative Assembly in June 1968.
The affidavit filed on behalf of the respondents shows that
the floods and drainage problems of all the lands in the
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 control of floods and
drainage problems varied considerably from one part of the
delta area to the other. This fact resulted in difference
in the magnitude 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
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 drainage 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 flood
control and drainage works in the area and
their estimated expenditure.
The four divisions were : (1) Godavari Eastern Delta; (ii)
the Godavari Central 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 the delta area into four units was in
accordance with the findings of the Mitra Committee. It was
also felt that in view of the 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
subdivide any of the above divisions into smaller units. On
account of the difference in the nature of problems and the
needs of improvement requiring different scales of
expenditure in each division, it was decided that the levy
of drainage cess on the lands in each division should vary
in rate in accordance with the estimated expenditure for
drainage work in that division. The Chief Engineer of
Andhra Pradesh expressed the view that the proposed flood
control and drainage schemes could be implemented in a
period of six to seven years if adequate financial
resources, including foreign exchange for the required
dredging equipment, were 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 result of those schemes in each division
and–also keeping in view the fact that the period 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
introduced in the Legislature a rate of Rs. 25 per acre per
annum was prescribed in division comprising the Godavari
western delta, Krishna eastern delta and the Krishna
central, delta, but the Legislature reduced The rate for
that division from Rs. 25,to Ps.,29 per acre per annum.
911
At the time the above-mentioned Bill was introduced in the
Legislature in July 1968 the following estimate in tabular
form of the various expenditures was given on behalf of the
Government:
S. Name of Division Total esti- Approxi- Maximum Total maxi-
No mated ex- mate Ayacut Rate of mum
penditure in acres drainage amount of
on schemes cess per drainage
in lakhs acre per cess anti-
Rs. annum cipated to
Rs. be collected
over 6
years in
lakhs Rs.
1. Krishna-Western delta 500 4,86,800 15/- 438
2. Krishna Central 1,25,500
Krishna Eastern and 6,12,700
Godavari Western 4,90,000
deltas. 1073 12,28,200 25/- 1842
3. Godavari Central delta 150 2,00,000 10/- 120
4. Godavari Eastern 2003, 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 lakhs, the Government proposed to
raise only a suni of Rs. 2,592 lakhs through collection of
drainage cess over a period oil 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. The total expenditure was thus expected to go
up to Rs. 35 crores and the excess over the anticipated
collection amounting to about Rs. 9 crores would be borne by
the State Government.
As regards the argument about the infringement of the
equality clause embodied in article 14, it may be mentioned
that a tax statute is as much subject to article 14 as any
other statute. In the application, however, of the
principle embodied in that article, the Courts. in view of
the inherent complexity of fiscal adjustment of divers
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 that it can adjust its system of
taxation in all’ proper and reasonable ways. (see Khandige
Shah. Bhat and Other s v. The Agriculture at Income Tax
Officer(1); as well as the recent decision of this Court
(1) [1963] 3S.C.R.809.
912
in Vivian Joseph Ferreira and Anr. v. The Municipal
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 tax something. It is allowed to pick
and choose districts, objects, persons,
methods and even rates for taxation if it does
so reasonably…… The Supreme Court has been
practical and has permitted a very wide
latitude in classification for taxation.”
The above principle was approved by this Court in East India
Tobacco Co. v. State of Andhra Pradesh(1) and Twyford Tea
Co. Ltd. and Another v., The State of Kerala and Another(2).
It was also observed in the last mentioned case that burden
is on a person complaining of discrimination and, for this
purpose, it is necessary 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 beneficent schemes
for the good of the 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,- the revenue. Taxes are levied for
this purpose, and the Stat is given 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 tuition and act
accordingly. No rigidity being possible, it is difficult
to apply any set formula. Much greater latitude and
discretion has, therefore, to be allowed to the State for
the purpose of taxation the context of article 1 4 of the
Constitution.
Dr. Singhvi on behalf of the appellants has referred to The
fact that there is flat 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
urged that a flat and uniform rate for all lands in a
division results in inequality and is violative of article
14. In this connection, we find that the material on record,
to which reference has been made earlier, shows that the
rate of cess prescribed 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 the implementation 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, the levy of cess at
uniform rate for each acre of the land in a division cannot
be considered to offend the
(1) [1963] 1 S.C.R.404.
(2) [1970] 3 S.C.R.383.
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 sought 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 for 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
cess for each division.
Reference has been made on behalf of the appellants, with a
view to show that lack of classification in the matter of
tax can create inequality, to the following cases: :
Kunnathat Thathunni Moopil Nair ,v. The State of Kerala and
Another(1)
New Manek Chowk Spinning and Weaving Mills Co. Ltd. and Ors.
v. Municipal Corporation of Ahmedabad and Ors. (2)
State of Andhra Pradesh & Anr. v. Nalla Raja Reddy & Ors.
(3)
State of Kerala v. Haji K. Haji K. Kutt Naha & Ors. Etc.
(4)
In the case of K.T. Moopil Nair this Court considered the
provisions of Travancore Cochin Land Tax Act, 1955 and found
that all lands in the State of whatever description were to
be charged 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 Pradesh 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 yearly assessment was imposed
on dry land and the total assessment was not to be less than
50 paise per acre. On wet land the additional assessment
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-
(1) [1961] 3 S.C.R. 77.
(3) [1967] 3 S.C.R. 28.
(2) [1967] 2 S.C.R. 679.
(4) [1969] 1 S.C.R. 645
914
relation to the fertility of the land. It was also found
that the assessment was left to the arbitrary discretion of
an officer with-out an opportunity to question his findings.
This case, as observed in the later case of Twyford Tea Co.
v. The State of ‘Kerala and Another-(1) was peculiar to
itself.
In the case of New Manek Chowk Spinning and Weaving Mills
and Haji K. Haji K. Kutty Naha, the question was one of
rating. What was held in those cases was that taking only
the floor area of a building as the basis for determination
of a tax was an arbitrary method when buildings had
different rental values depending upon the nature of the
construction and the purpose for which 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 present case.
So far as the case of K. T. Moopil Nair is concerned, we
find that the majority quoted with approval the following
observation of Das C.J. in Shri Ram Krishna Dalmia v. Shri
Justice S. R Tendolkar, and Others(2).
“In determining the question of the validity
or otherwise of such a statute the Court will
not strike down the law out of hand only
because no classification appears on its face
or because at discretion is given to the
Government to make the selection or
classification but will go on to examine and
ascertain if the statute 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 lay d
own 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 statute itself.”
Keeping the above observations in view we find that’ in the
present case the Act contains sufficient guidelines for the
fixation of the rate of cess and there is also enough
material on record to justify a uniform rate of cess for
each acre of land in a division of the deltaic are. The
imposition of tax on land for raising general revenue is
substantially different from the levy of cess for
(1) [1970] 3 S.C.R. 383
(2) [1961] 3 S.C.R.77
915
implementation of a 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 the appellants to
an American case, Village of Norwvod v. Ellen R. Baker(1).
In that case the Court considered special assessment upon an
abutting property by the front door without taking special
benefits into account for the entire cost and expenditure of
opening a street. It was held that the 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 to the extent of such excess a taking
under the guise of taxation of private, property for public
use without compensation. Perusal of that authority shows
that the Court invoked the doctrine of due process of law in
arriving at the above conclusion. The aforesaid doctrine of
due process of law is not applicable to India and, as such,
the appellants cannot derive much assistance from that
authority. Another American case referred to on behalf of
the appellants is Kansas City Southern Railway Co. v. Road
Improvement Dist. No. 6 ( 2). The question involved in that
case was whether a railway property in an area is subject to
assessment to help cost of constructing a local improvement
in the nature of a country highway. The Court observed :
“Obviously, the railroad companies have not
been ,treated like individual owners, and we
think the discrimination so palpable and
arbitrary as to amount to a denial of the
equal protection of the law. Benefits from
local improvements must be estimated upon
contiguous Property according to some standard
which will probably produce appr
oximately
correct general results. To say that 9.7
miles of railroad in a purely farming section,
treated as an aliquot part of the whole
system, will receive benefits amounting to $
67,900 from the construction of 11.2 miles of
gravel road seems wholly improbable, it not
impossible. Classification, of course, is
permissible, but we can find no adequate
reason for what has been attempted in the
present case.”
The question involved in the above case, in our view, was
materially different and, as such, the appellants cannot
derive much assistance from it also.
it has also been argued on behalf of the appellants that
their lands are not benefited by the proposed drainage
schemes as those lands are not subject to floods. Reference
in this context has
(1) 43 L. ed. 441.
(2) 65 L. ed. 1157.
916
been made to a statement which constitutes Appendix F to
Vol. II of the report of the Mitra Committee wherein details
are given of ,the areas damaged by floods. According to
that statement, the average area damaged in floods in
Godavari western delta, to which the appellants belong,
during the years 1955 to 1964 was 33,091 acres. The land on
which cess is proposed to be levied in the Godavari western
delta, according to the estimate in tabular form given on
behalf of the State Government to State Legislature in July
1968, measured 4,90,000 acres. Dr. Singhvi accordingly
concludes that only 7 per cent of the land in Godavari
western delta is to be benefited as a result of the drainage
scheme and that 93 per cent of landowners in the Godavari
western delta are being made to pay the cost of the scheme
which would benefit 7 per cent of the lands in that area.
We are not impressed by the above contention. The floods
have a vagary and caprice of their own, and it is difficult
to predicate about the behaviour of flood waters. The
problem which arises in one year cannot afford a proper,
guidance for the following year because the dimensions of
the problems in the subsequent year may be hundredfold
compared to those of the previous year. This is evident
from the figures in the table relied upon by Dr. Singhvi. R
would appear therefrom that in the year 1961 only 1,149
acres of land in the Godavari western delta were damaged by
floods, while in the year 1959 the damage caused by the
floods in that area covered 89,528 acres of land. The
material on record further shows that during 1969 floods, an
area of as much as 3,69,395 acres out of a total of 4,90,000
acres, that is, about 75 per cent of the appear was damaged
by floods in the Godavari western delta. It is, therefore,
plain that we cannot stick to the average damage referred to
by Dr. Singhvi in considering the scheme of drainage. An
effective system of drainage has in the very nature of
things to make provision not only for a normal rainfall but
also to meet those contingencies as arise when there are
unusual rains and heavy floods. It is indeed only then that
the efficacy of a drainage system is proved. We also find
it difficult to accede to the submission made on behalf of
the appellants that we should not take into account the
figures of damage done in the 1969 floods. The proposed
drainage scheme has to provide for years to come adequate
safeguards and protect against contingencies created by
unusually heavy rains and floods. The fact that the
impugned Act enacted in 1968 covered 4,90,000 acres of land
in the Godavari western delta shows. in the light of
subsequent 1969 floods, the foresight of the authors of the
drainage scheme which is the subject of the impugned
legislation.
The an The appellants lands are admittedly irrigated in the
deltaic area. The benefit to the appellants land, in the
circumstances, is implicit in the scheme of drainage. It is
not disputed that proper
917
drainage is an essential concomitant of an efficient system
of irrigation. Without adequate drainage the irrigated land
gradually loses its fertility, becomes saline and water
logged. The following extracts from the proceedings of the
First Inter-Society Conferenc on Irrigation and Drainage
would show the importance of drainage for irrigation :
“Drainage is the removal of both excess water
and salines from agricultural soils. Surface
drainage is the removal, of excess
precipitation and irrigation wastes at the
surface to prevent flooding and to minify the
more costly sub-surface drainage requirements.
Efficient engineering designs of surface
drains require only an understanding of
topographic conditions, pumping. Effective
surface drainage is comparatively inexpensive
and is essential to permanence of irrigation
agriculture.”
The affidavit of Shri Venkatadri shows that apart from
prevention of damage to crop by floods, the following
indirect benefit& are derived by irrigated land as a result
of drainage
“(1) Facilitates early ploughing and planting,
(2) lengthens the crop-growing season, (3)
provides more available, soil moisture and
plant food by increasing the depth of root-
zone soil (4) helps in soil ventilation (5)
decrees soil erosion and gullying, by
increasing water infiltration into soils, (6)
favours growth of soil bacteria, (7) leaches
excess salts from soil and (8) assures higher
soil temperatures.” I
There is one integrated drainage scheme for the division in
which the appellants lands are situated and the appellants,
in our opinion, are beneficiaries of that scheme in the same
way as the other landowners in that division. The fact that
on account of topographical situation some landowners get
greater benefit of the drainage scheme because of their
lands being more prone to damage by floods is a fortuitous
circumstance and the same would not be a valid ground for
striking down the impugned legislation. It is well
established that if there is equality and uniformity within
each group, the law will not be condemned as discriminative
though due to some fortuitous circumstances arising out of a
peculiar situation, some included in a class get an
advantage over others so long as they are not singled out
for special treatment. (Khandige Sham Bhat and Others v. The
Agricultural Income Tax Officer, Supra).
In the case of Vivian Joseph Ferriera and Anr. v. The Muni-
cipal Corporation of Greater Bombay & Ors. (Supra), this
Court dealt with the validity of the Bombay Building Repairs
and Reconstruction Board Act of 1969. The said Act related
to the problems arising out of the collapse of residential
buildings and
-L736Sup CI/72
918
acute shortage of housing accommodation. Provision was made
in the Act for establishing a Board to deal with the said
problem by carrying out structural repairs to dangerous
buildings by acquiring and reconstructing buildings which
were beyond repair and for the rehousing of occupiers who
because of such repairs would be dishoused. Temporary levy
of an additional cess on buildings and lands to meet the
expenditure for the aforesaid purposes was provided for in
that Act. One of the grounds which was urged on behalf of
the petitioners was that the Act was violative of article 14
in that it failed to recognize the material difference
between various buildings with regard to their physical
conditions and treated unequals as equals. The petitioners
in that case were owners of a residential building which by
reason of its having been recently constructed was neither
dilapidated nor in dangerous condition. Repelling, the
above contention this Court observed :
“The contention that some of the buildings
falling in categories B and C would not need
structural repairs throughout the life of the
Act or that such repairs would be carried out
in buildings not cared for by defaulting
landlords, takes no notice of the fact that
the primary object of the Act is not to repair
all buildings subject to cess but to prevent
the’ annually recurrent mischief of house
collapses and the human tragedy and
deprivations they cause. The cess being thus
levied to prevent such disasters, there is no
question of unequal treatment between one
class of owners and another.”
We are, therefore, of the view that the, provisions of the
impugned Act are not violative of article 14 of the
Constitution.
There is no substance in the contention advanced on behalf
of the appellants that the right of appeal provided by
section 5 of the Act is illusory. The legislature has
prescribed the maximum limit of the rate of cess and the
notification issued under the Act has fixed that rate. The
procedure to be adopted before the levy of the cess has been
prescribed in section 4 of the Act. Section 5 gives a right
of appeal to a person aggrieved by the levy of the drainage
cess under section 4. The matters which can be agitated in
appeal may relate to the area for which the cess is levied
or the ownership of that area. In case a landowner’s stand
is that the area owned by him is less than that for which
cess is levied or that he has transferred the said land or
part of it, he can agitate the matter in appeal. The fact
that no discretion is given to the appellate authority to
determine the rate of cess would not introduce an infirmity
or make the right of appeal to be illusory.
919
The argument that there has been excessive delegation of the
legislative power in the matter of determining the rate of
cess is equally devoid of force. According to Dr. Singhvi,
the legislature has merely prescribed the maximum rate at
which cess may be levied but has not fixed the minimum rate
of the cess. The Precise rate of cess is left to the
Government by section 3 of the Act and, as such, according
to the learned counsel, there has been excessive, delegation
of the legislative power. In this connection, we find that
it is open to the legislature to prescribe the maximum rate
of cess. The authority mentioned in the statute, subject to
other legal requirements, can levy cess up to that limit.
As things are the State Government in the present case has
adhered to the maximum prescribed by the Act vide
notification dated December 17/20, 1968. The power of the
legislature to fix or change the limit of tax has been
discussed in para 165 of the Law of Taxation by Cooley, 4th
Edition, in the following, words :
“Power of legislature to fix or change limit :
In addition to, or in place of, constitutional
provisions, there are statutes in many states
limiting the amount or rate of taxation by a
country, town, municipality, or other local
subdivision; and sometimes the limitation
imposed upon a municipality is found in its
charter. A valid limitation on the rate,
where fixed by the legislature, is just as
binding on counties and municipalities as is
such a limitation fixed by the constitution.”
No authority has been cited before us to show that even
though maximum limit of the tax has been prescribed, the
absence of a minimum limit vitiates the taxing statute. It
is not necessary, however, to dilate upon this aspect of the
matter as we find that there are enough guidelines in the
Act in respect of the rate of cess because the rate of cess
in a division has to be corrected to the amount of
expenditure to be incurred on the drainage scheme in that
division.
It may also be mentioned that subsequent to the decision of
the writ petition which is the subject of the present
appeal, validity of the provisions of the Act was challenged
in a batch of writ petitions before the Andhra Pradesh High
Court. The matter was then referred to a full bench. The
learned judges constituting the full bench by means of three
separate judgments upheld the constitutional validity of the
provisions of the Act.
As a result of the above, the appeal and the writ petition
are dismissed, but, in the circumstances, without cost.
S.C. Appeal and petition dismissed.
920