LexKUNNATHAT THATHUNNI MOOPIL NAIR versus THE STATE OF KERALA AND ANOTHER
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3 S.C.R. SUPREME COURT REPORTS 77 The Tribunal had come to the conclusion that no pay. r96o ment in addition to the salary, annual bonus and rh c . . · 1 b · "fi d d . f ' ommirnoner specia onus was JUStI e an any express10n 0 of Exms Profits opinion to the contrary in the supplementary state- Jax, Madras ment pursuant to the order for statement of case v. could not in our judgment affect the conclusion origi- N. M. 11ayaloo nally recorded. Iy" & Sons In our view the answer to the question whether the disa.llowance by the Excess Profits Tax authorities of the commission paid to branch managers was justified under r. 12, Sch. 1, of the Excess Profits Tax Act should have been answered in the affirmative. On the view taken by us, Appeal No. 494/1958 will be allow- ed, but there will be no order as to costs. Appeal No. 495 of 1958 will be allowed with costs. Appeals allowed. KUNNATHAT THATHUNNI MOOPIL NAIR v. THE STATE O:E' KERALA AND ANOTHER (with connected petitions) (B. P. SINHA, c. J., JAFER IMAM, A. K. SARKAR, K. SUBBA RAO and J.C. SHAH, JJ.) Land Tax-Constitutional validity of enactment-Uniform basic tax on all lands-Classification-Tax on forest areas-Legis- lative competence of State-Govcrnment"s power to exempt-Provi- sional assessment-Validity-Travancore-Cochin Land Tax Act, I955 (Travancore-Cochin IS of r955), as amended by Act ro of z957, ss. 4, 5-A, 7-Constitution of India, Arts. r4, r9(r)(j), 3r, 265. Schedule 7, List II, Entries z9, 49. The Travancore-Cochin Land Tax Act, 1955, was passed· by the legislature of the State of Travancore-Cochin and was amended by Act IO of 1957, by the State of Kerala. By s. 4 of the Act all lands in the State of whatever description and held under whatever tenure were t.o be charged and levied a uniform rate of tax to be called the basic tax. Section 7 gave power to tne Government to exempt from.the operation of the Act such Shah]. December 9. T<. T. Moopil Nair v. Stale of Kerala 78 SUPREME COURT REPORTS [1961) lands or class of lands which the Government may, by notifica- tion, decide. Section 5A which was introduced into the Act by the Amending Act enabled the Government to make a provisional assessment of the basic tax in respect of the lands which had not been surveyed by the Government and provided that the Government after conducting the survey shall make a regular assessment ·and make the necessary adjustments in respect of the amounts paid already. There was, however, no time fixed for the conduct of the survey. The petitioners who owned forest in the State, challenged the constitutional validity of the Act on the grounds that the provisions of the Act contravened Arts. r4, r9(1)(f) and 31(1) of the Constitution of India inasmuch as (1) the Act did not have any regard to the quality of the land or its productive capacity and the levy of a tax at a fiat rate of Rs. 2 per acre imposed very unreasonable restrictions on the right to hold property, (3) the Act did not lay down any provision calling lor a return from the assessee for an enquiry or investigation of facts before the provisional assessment was made or any right of appeal to any higher authority and, in fact, did not make any provision for hearing the assessee at any stage, (3) s. 7 gave arbitrary power to the Government to pick and choose in the matter of grant of total or partial exemption from the provisions of the Act, and (4) the tax proposed to be levied had absolutely no relation to the production capacity of the land sought to be taxed or to the income they could derive, and therefore the Act had been con- ceived with a view to confiscating private property, there being no question of any .compensation being paid to those who may be expropriated as a result of the working of the Act. The petitioners also challenged the legislative competence of the legislature of the State to levy a tax on lands on which forests stood. The case on behalf of the State of Kerala, inter alia, was that the Act had its justification in Art. 265 of the Constitution of India, which was not subject to the provisions of Part III of the Constitution and that, therefore, Arts. 14, rg and 31 could not be pressed in aid of the petitioners. Held, (Sarkar, J., dissenting), that the Travancore-Cochin Land Tax Act, 1955, infringed the provisions of Art. r4 of the Constitution of India. The Act obliged every person who held land to pay the t
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