LexAHMEDABAD MANUFACTURING & CALICO. PRINTING CO., LTD., AHMEDABAD AND ORS. versus STATE OF GUJARAT & ORS.
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595 A AHMEDABAD MANUFACTURING & CALICO PRINTING CO., LTD., AHMEDABAD AND ORS. B c E G H v. STATE OF GUJARAT & ORS. April IO, 1967 [K. SUBBA RAo, C.J., M. HIDAYATULLAH, R. S. BACHAWAT, J.M. SHELAT AND C. A. VAIDIALINGAM, JJ,) Constitution of India, 1950, Art, 14, and Gu/arlll Education Cus Act, 1962-City of Ahmedabad divl.Jlble Into three zones-Different mdtlwd of levying cess In each zone-Whether results In discrimination. Gujarat Education Cess Act, 1962, s. 12.--Levy based on assusment book prepared by municipality under Bombay Provincial Corporation Act, 1949 as applied to city of Ahmedabad-Sald assessment book; levy- ing property tax at flat rate on basis. of floor area, declared Invalid by S11oreme Court-Section 12 of Cess Act whether survives-Cess Act whether invalid for lack of opp<1rtunlty to raise objections etc, The petitioners had their textile mills in the City of Ahmedabad. The properties in Ahmedabad were. in three zones. In the Inner zone were situated proeerties which did not bear land revenue on account of the exemption given in s. 123 of the Bombay Land Revenue Code. In the middle zone were sitilated laods which though originally agricultural laods had been diverted to non-agricultural use. Io the outer z.one were lands which were purely agricultural. Under the Gujarat Education Cess Ad, 1962 the Cess was of three separate kinds; (a) a surcharge on land revenue assessed on purely agricultural laods, (b) a surcharge on non-agricultural assessment in respect of laods used for non-agricul- tural purposes, and (c) a tax on laods and buildings which did not bear laod revenue. As a result the CO'ls Act operated differently in the three zones. The properties of the petitioners were in the middle zone of Ahmedabad. Io their writ petitions under Art. 32 of the Constitution they contended that ·by reason of their situation the Cess Act operated unequally ae,in•t them became while the owners of o·roperty in the other two zones bore either a surcharge on the land revenue or a tax on the annual· letting value, they bad to pay both the surcharge as well as the tax. Thus a violation of Art. 14 was alleged. It was also contended that the preparation of the assessment book on the basis of a ftat rate ~n the fto_or area of a prooerty havin~ been struck down by his court 10 an earlier case (New Manek Chowk Spinning & Weaving Co. Ltd. etc. v. Municipal Corporation of the City of Ahmedabad & Ors., [i967J 2 S.C.R. 679 the tax under s. 12 of the Cess Act was no longer leviable and that '· 12 being no longer operative. the Cess Act must fall as a whole The ,validity of. th~ Act w!is also att;lcked on the ground that it did not provide for ob1ect1ons be10g considered. HELD : (i) If as a result of the decision of this Court the assess- ment book needed revision or the principles on which valuation must be based had to be laid .down afr~h by the Legislature, the provisions of s. 12 of the Cess Act did not fad automatically. Thev would fasten on the. ne~ valuation ~hen made. This caonot affect the validity of the section in the mean.!Jme. The section remains on the statute book tn be worked into such assessment book as hereafter emerged. The argument that s. 12 had failed must therefore be rejected. [599 F-GJ 596 SUPREME COURT REPORTS [1967)3 S.C.R. (ii) A double imposition on the middle zone was not by itself offen· sive of Art. 14 of the Constitution unless it could be shown that the double tax in one zone as compared with the single tax in the other zones fell more heavily than the single tax. According to the earlier decision of this Court a new assessment book would be prepared. Even if, in the middle zone, the surehsrge and tax both had to be paid, tho rates might be so adjusted that the cess fell equitably on all landholders regard being had to the advantage; derived from the cess and the advan· tages derived from the situation of the lands. [601 D-F] (iii) The procedure for the levy of the cess cannot be said to offend natural justice in not providing opportunity for putting forward objec- tions etc. Tho cess is nothing more than an addition to othe.r taxes which allow the raising of objections and provide for appeals. There is no need for further scrutiny, objection or appeal. Nor is the Cess Act bad because it is not ·self-contained in the matter of assessment, thls being the usual method by which cesses are levied. [601 H] ORIGINAL
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