ASSISTANT COMMISSIONER OF URBAN LAND TAX AND OTHERS versus THE BUCKINGHAM & CARNATIC CO. LTD, ETC.

Citation: [1970] 1 S.C.R. 268 · Decided: 11-04-1969 · Supreme Court of India · Bench: M. HIDAYATULLAH · Disposal: Disposed off

Cited by 11 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

268 
~ANT 
COMMISSIONER OF URBAN LAND TAX 
A 
AND OTHERS 
v. 
THE BUCKINGHAM & CARNATIC CO. LID, ETC. 
April 11, 1969 
[M. HIDAYATULLAH, C.1., 
1 .. C. SHAH, 
V. RAMASWAMI, 
G. K. MITTER AND A. N. GROVER, 11.] 
Madro.l Urban Lend Tax '4ct 1966-lf violative of Arts. 14 
alld 
19(1) U) of the Co11Jtitutlon--Co111tltutlo11 of India Schedule VII, Entry 
49 LIM 2 and Entry 86 List 1-Scopt of. 
Co11Jtltutlon of India Art. 19(1) (f)-Unreaso11able rutrlctlon-Acl, 
/n;yi11g tax with retrospective effect if unreasonable restriction. 
By s. 3 of the Madras Urban Land Tax Act. 1963, a tax was levied 
on every owner of urban land at the rate of OA% of the average market 
value of the usban .and os determined under '· 6(2) of the Act The 
viru of the Act was challenged by a writ petition and the impugned Act. 
wu struck down on the ground that it violated Art. 14 of the Comti-
tution because the charging section levied tho tax on urban land not on 
the market value of such land but on the average value of the land 
in a sub-zone. 
Thereafter the State 
legislature 
passed the 
Madras 
Urban Land Tax Act 12 of 1966 which omitted the proviaions relating 
to fixation of averaJIC market veluc in the sui>'l.one, and instead pro-
vided in s. 5 far the levy of a tax on urban land from the owner at tho 
rue of 0.4% of the market value of such urban land. 
The validity of 
the new Act was again challenged in a aroup of writ petitions before 
the Hi&h Court which held that the Madras le&islature was competent 
to enact the new Act but that it was 
violative 
of Arts. 
14 
and 
19(1) (f) of the Constitution. 
In appeals to this Cou.'1 it was contended, inter alia, on behalf of the 
pctitioocrs (i) that the impugned Act fell under Entry 86, List I and 
not under Entry 49 of List 2, so th~t the State legiolature was incom-
petent to pass the Act; furthermore as Entry 49, List 2 provides for 
tnea on land and buildings, the impugned Act which impooed tax on 
land alone could not be held to fall under the 
Entry; 
(ii) 
that the 
machinery was provided for determining 
the market value and 
the 
matter having been left to the arbitrary determination of the Assistant 
fr«nmlai011Cr, the provisiNls of the new Act were violative of Art. 14 
of the Constitution (iii) that the Act was an unreasonable reotriction on 
the right to acquire, hold and diopooc of property and u •uch was 
'l'iolatlve of Art. 19(1)(f) of the Comtitutio:i; furthermore together with 
the exi.mng property·tax under s. 100 of the City Municipality Cd-para. 
don Act the tsx under the impugned Act exhausted an unreasonably hish 
proportion of income and on tliis account also it was an unreasonable 
~ctioo; it was also contended that the .giving of retrospective opera-
tion to tho Act from July, 1963 made it unreasonable. 
HF!D: The Ma<bs Urban Land Tax Act 12 of 1966 was cousti-
tulionally valid. 
(i) In pith and substance the new Act in impooinjl a tsx ob urban 
land at a percentage of the market value is entirely within the ambit of 
B 
c 
D 
• 
' 
G 
H 
A 
B 
c 
• 
D 
E 
F 
G 
H 
ASST. COMMR, v. B. & C. LTD. 
269 
Entry 49 c:Jf List II and within the competence of the State Legislature; 
it does not in any way trench upon the field of legislation of Entry 
86 of List I. [280 G-H] 
There was no conflict between Entry 86 of List l and Entrv 49 of 
List II. The tax under Entry 86 proceeds on the principle of aggrega-
tion and is imposed on the totality of the net value of all assets. Entry 
49 of List II, contemplates a levy of tax on lands and buildings or both 
as units; it is not concerned with the division of interest or ownership in 
the units of land or buildings which are brought to tax. [278 E--F] 
The legislative entries must be given a large and liberal interpretation, 
the reason being that the ,allocation of the subjects to the Lists ts not by 
way of scientific or logical definition Mt by way of a mere sb:plex enu• 
meratio of broad categories. [277 G-H] 
Ra/la Ram v. Province of East Pun;ab, [1948] F.C.R. 207, Sudhlr 
Chandra Nawn v. Wealth Tax Officer, A.LR. 1969 S.C. 59; Ga//ahc:gher v. 
Lynn, [1937] A.C. 863 at p. 870; and Subrahma11yan Chettiar v. Mittu· 
swami Goundan, [1940] F.C.R. 188 at 201; referred to. 
Tbe legislative history of Entry 49, List II, does not lend any support 
to the argument that Entry 49 of List II relating to tax on land and 
buildings cannot be separated. 
On the other band Entry 49 "Taxes on 
lands and buildings" should be construed as t

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