LexTWYFORD TEA CO. LTD. AND ANOTHER versus THE STATE OF KERALA AND ANOTHER
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A B c D F G H TWYFORD TEA CO. LTD. AND ANOTHER v. THE STATE OF KERALA AND ANOTHER January 15, 1970 383 [M. HIDAYATULLAH, C. J., J. M. SHELAT, C. A. VAIDIALINGAM, A. N. GROVER AND A. N. RAY, JJ.] Kerala Plantation (Additional Tax) Act, 1960 (Ac! 17 of 1960) and the Kerala Plantation (Additional Tax) Amendment Act 1961 (Act 19 of 1967) ,s. 3-Con.rtitution aJ India, Art. 14--Charge of unlfotm tax from plantauons alleged to be differently situated-Validity of tax-C~mpetency <>f Kerala legislature to levy land tax in absence of enabling entries in · S.venth Schedule, Constitution of India. In the Kerala Plantation (Additional Tax) Act 1960 (Act 17 of 1960) there is a levy of additional tax on plantations. "Plantations" mean land used for growing cocoanut, Arecanut, Rubber, Coffee, Tea, Car- damom and Pepper. Under s .. 3 of the Act, for each financial year a plantation tax additional to the basic tax charged on land tax under the Land Tax Act 1955 is payable at the rate mentioned in Schedule I of the Act, the said rate being Rs. 8 per acre. Plantations of 5 acres or below held by a person do not attract tax. For the purpose of finding oot the extent ot the plantation in acres held by a person a method of , calculation is laid down in Schedule II. Act 17 of 1960 was amended by the Kerala Plantation (Additional Tax) Amendment Act 1967 (Act. 19 of 1%7). By the amending Act the word 'additional' is removed from all places and it is declared that the tax is additional to land revenue or any tax in lieu thereof, if any, payable in respect of such land. The unit of assessment is charged from acre to hectare, and the rate of tax in ·Schedule I is raised to Rs. 50/· per hectare. The tax is payable in res- pect of plantations of two hectares or· more with an exemption ior the lirst hectare. According to the new Schedule II the extent of the planta- tion for the purpose of tax in the case Of cocoanut, arecanut, rubber, coffee and pepper plantations is arrived at by dividing the total number of trees, plants or vines standing thereon by a number, specified in each case. In the case of tea and cardamom the extent of the plantation is the extent of lands on which these plants are grown and have begun to yield crops. The petitioner cOmpany was incorporated in India and the majority of its share-holders were Indians. It owned a tea estate in the Kuttikenam area .in the Peermade Hills in Kerala State. The company paid without protest the additional tax levied on plantation by Act 17 of 1960. When the rate became heavier as a result of th'l amendments made by Act 19 of 1967 the company field the present petitions under Art 32 of the Const:tu- tion. The challenge was based mainly on Art. 14 of the Constiut· lion. It was urged that there were differences of 'fertility and rainfall in the different areas where the plantations were situated. Fiqurcs com- piled by the Tea Board. were submitted to show the difference in yield be- tween different estates. Relying on Moopi/ Nair'•<:ase it was argued that the uniform tax ·on·unequals resulted in discrimination (a) as between the tea plantations themselves and .(b) as between <lifferent kinds of plantations. . The competence of the Kerala Legislature to Ievr a land tax was also challenged. 384 SUPREME COURT REPORTS [1970) 3 S.C.Jt HELD: Per Hidayatullah, G J., and Vaidialingam and Ray, IJ.-The A pe.titions must be dismissed. · · ( i) The legislature has ·a wide range of selection and freedom in appraisal not only in the objects of taxation and the manner of taxation but also in the determination of the rate or rates applicable. If produc- tian were always to be taken into account there will have to. be a settle- ment for every year and the tax will become a kind of income-tax. Tl~e burden of proving discrimination is· alwaYs heavy and heavier still when a taxing statute is under attack. The burden is on the person compJainipg Of .discrimination. The burden i.s proving not possible 1in- equality' 'but hostile 'unequal' treatment. This is more so when uniform taxes are levied. The State cannot be asked to demonstrate equality. Simply stated the law is this : Difference in treatment must be capable 0f being reasonably explained in the light of the object for which the particular legislation is undertaken. This must be based on some reason- aple distinction between the cases differentially treated. When differential tre
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