Kunhi Moosa Keyi v. State of Kerala — 1962 DIGILAW 109 (KER)

JUDGMENT C.A. Vaidialingam, J. 1. The petitioner who is the same in both these writ petitions challenges the assessments made by the revenue authorities for payment of surcharge under the provisions of the Madras Land Revenue (Surcharge) Act, 1954, Madras Act XIX of 1954, for the three Fazlis, 1364, 1365 and 1366. 2. So far as O. P. No. 985 is concerned, there an attack is made regarding the final assessment made for Fazli 1364, namely the period 1-7-1954 to 30-6-1955 as determined by the revenue authorities by their final order dated 23-6-1959, Ext. P. 8, and the consequential demand made under Ext. P. 9 dated 29-6-1959. 3. So far as O. P. No. 986 of 1960 is concerned, there the attack is made regarding the final assessment made under Ext. P. 8 dated 20-5-1960 for the two Fazlis, 1365 and 1366, covering the period 1-7-1955 to 30-6-1957. 4. Before I take up the various grounds of attack levelled against these orders passed by the revenue authorities by Mr. Rama Shenoi, learned counsel for the petitioner, it is necessary to note one objection that has been taken on behalf of the State Government and specially regarding the considerable delay in the petitioner coming to this Court so far as O. P. No. 985 of 1960 is concerned. As I mentioned earlier, the final order of assessment is Ext. P. 8 dated 23-6-1959 and the notice of demand is issued on 29-6-1959. But Mr. Rama Shenoi, learned counsel for the petitioner, urged that there is no question of any delay because the petitioner filed an application on 2-9-1959 to the authorities to reconsider the previous order that has been passed under Ext. P. 8 and that again was rejected on 8-9-1959 and in the meanwhile the proceedings for the subsequent years had commenced by the revenue authorities and therefore, ultimately when the various objections raised by his client in respect of the subsequent Fazlis were also overruled his client has come to this court challenging the orders passed for all the three Fazlis together. 5. 5. Though no doubt there is some force in the contention of the learned Government Pleader that there has been some delay on the part of the petitioner, and that the application for reconsideration itself may not have justified the petitioner coming to this court after such delay, in the circumstances of this case and in view of the various aspects that have been presented before me, I do not think I will be justified in rejecting O. P. No. 985 of 1960 on the ground of mere delay alone. At this stage I may also state that O. P. No. 985 of 1960 and also the connected O. P. were both filed in this court on 11-8-1960. 6. Mr. Rama Shenoi, learned counsel for the petitioner, has raised several grounds of attack against the proceedings initiated by the respondents under the Madras Land Revenue (Surcharge) Act, 1954. 7. According to the learned counsel the provisions of the Land Revenue (Surcharge) Act, 1954, will clearly show that it is really a levy of tax on tax and the basis of the tax itself is the land revenue which is payable on the properties in question and, therefore, that is, invalid. In this connection, the learned counsel for the petitioner, referred me to the different phraseology used in the particular sections in the Kerala Surcharge on Taxes Act, XI of 1957. In particular, the learned counsel drew my attention to S.2 and 3 of that enactment. S.2 relates to the levy of surcharge on Agricultural Income Tax and it is stated specifically that the income tax or super tax payable by any person assessed to such tax under the Agricultural Income Tax Act, 1950, shall be increased by a surcharge at the rate of five per centum of the tax payable each year. The other part of the section is not necessary to be noted. Similarly in S.3, which relates to surcharge on sales and purchase taxes, it is stated that the tax payable under the Travancore Cochin General Sales Tax Act, 1125 or the Madras General Sales Tax Act, 1939, shall in the case of a dealer whose turnover exceeds thirty thousand rupees in a year be increased by a surcharge at the rate of two and a half per centum of the tax payable for that year. That is, according to the learned counsel, both these sections use the expressions that the income tax or super tax levied either under the Agricultural Income Tax Act, 1950, or under the Travancore Cochin General Sales Tax Act, 1125, or the Madras General Sales Tax Act, 1939, shall be increased by a surcharge at the rate mentioned in those sections and, therefore, it was really in consequence of this particular wording that a Division Bench of this Court in the decision reported in Kunhammed Haji v. Agricultural Income Tax Officer ( 1960 KLJ 517 ), has held that the effect of these sections is only to levy an additional tax over and above the tax already levied either under the Agricultural Income Tax Act or the Travancore Cochin General Sales Tax Act, or the Madras General Sales Tax Act. No such indication, according to the learned counsel, is available in this particular statute and, therefore, being a tax on a tax there is no jurisdiction in the Legislature to impose such a levy. 8. On the other hand, learned Government Pleader has drawn my attention to the provisions contained in S.3 and S.4 of the Madras Land Revenue (Surcharge) Act, 1954 and it is the contention of the learned Government Pleader that there is no intention on the part of the Legislature to levy a tax on a tax but to levy an additional amount by way of land revenue over the properties which are already subject to payment of land revenue. The learned Government Pleader also urged in this connection that under S.3 the basis of the tax is not really the land revenue that is payable which becomes relevant only for the purpose of calculating the surcharge payable under the Madras Land Revenue (Surcharge) Act, 1954. The learned Government Pleader also referred me to a decision of Mr. justice Ramachandra Iyer, as he then was, reported in C. V. Rajagopalachariar v. State of Madras (AIR 1960 Madras 543) where the learned Judge had to consider the scope of the levy under the Madras Land Revenue (Surcharge) Act, 1954, and it is the view of the learned Judge that the levy is really by way of an additional land revenue on the properties in question and, therefore, this levy of surcharge is perfectly valid. Respectfully adopting the views expressed by the learned Judge in the decision referred to above I am in agreement with the views urged by the learned Government Pleader that the statute imposes only an additional levy by way of land revenue and, therefore, it cannot certainly be considered to be an imposition of tax on tax. Therefore, this contention of Mr. Rama Shenoi, learned counsel for the petitioner, has to be rejected. 9. The second and more serious contention that has been raised before me by Mr. Rama Shenoi, learned counsel for the petitioner, is no doubt a very interesting one, namely, that the levy of land revenue in the Madras State either on a ryotwari basis or in any other manner is contrary to the provisions of Art.265 of the Constitution. Art.265, as is well known, states that no tax shall be levied or collected except on authority of law. According to the learned counsel, S.3 of the Madras Land Revenue (Surcharge) Act, 1954, is the charging section and under that section it is very essential that before a landlord can be made liable for payment of surcharge there must be a legal liability already existing on the part of the landlord to pay land revenue in respect of the lands held by him. In this case, according to the learned counsel, for the particular Fazlis, 1364, 1365 and 1366, his client cannot certainly be held liable for payment of land revenue because the system, as I mentioned earlier, of collecting land revenue obtaining in Madras area which took in also Malabar prior to 1-11-1956, is illegal and void. 10. This contention of Mr. Rama Shenoi will certainly have to be considered and all aspects that have been presented before me have to be adverted to and adjudicated upon if the question of assessment, levy and collection of land revenue as such arises for consideration in these proceedings. At this stage I may also mention that the learned Government Pleader appearing for the State has drawn by attention to a Division Bench ruling of the Madras High Court of Mr. Justice Rajagopalan and Mr. Justice Ramachandra Iyer, as he then was, reported in Gopalan v. State of Madras (AIR 1958 Madras 539). At this stage I may also mention that the learned Government Pleader appearing for the State has drawn by attention to a Division Bench ruling of the Madras High Court of Mr. Justice Rajagopalan and Mr. Justice Ramachandra Iyer, as he then was, reported in Gopalan v. State of Madras (AIR 1958 Madras 539). The learned Judges in that case had to consider the nature of the levy of land revenue in the Madras area and the learned Judges had also to consider the scope of Art.265 of the Constitution. Ultimately, no doubt, the learned Judges have upheld the levy of ryotwari assessment which was very strongly attacked before the learned Judges. 11. Mr. Rama Shenoi, learned counsel for the petitioner, urged that the decision of the Madras High Court requires reconsideration at the hands of this Court in view of the various other aspects that he has presented before me. 12. As I mentioned earlier, if this question regarding the legality or liability of the petitioner for payment of land revenue during Fazlis 1364, 1365 and 1366 directly arises for consideration before this Court, this Court will have to consider the matter more closely and make a more detailed investigation and find out whether the contentions that have been urged by Mr. Rama Shenoi have to be accepted or not. 13. In my view, it is really not necessary to go into that aspect in these proceedings. So far as I could see, at the material time when the liability for payment of land revenue or impost as against the petitioner, especially for the Fazlis 1364, 1365 and 1366 now before us, there is no material on record to show that the petitioner at any stage disputed his liability for payment of land revenue as such. On the other hand, there is absolutely no allegation in the affidavits filed in support of these petitions to show that the petitioner has really disputed the liability or has not paid the land revenue as such which is due from these properties. Even in the affidavits, so far as I could see, the petitioner has not stated that the impost, if any, that has already been paid by way of land revenue for these three Fazlis has been paid notwithstanding the fact that the levy, assessment and collection were illegal. Even in the affidavits, so far as I could see, the petitioner has not stated that the impost, if any, that has already been paid by way of land revenue for these three Fazlis has been paid notwithstanding the fact that the levy, assessment and collection were illegal. Therefore, the question of liability for payment of land revenue really arises under S.3 of theMadras Land Revenue (Surcharge) Act, 1954, only, as pointed out by the learned Government Pleader, for the purpose of fixing the rate at which surcharge is to be collected. No doubt, Mr. Rama Shenoi, learned counsel for the petitioner, urged that even though his client may have paid the amounts demanded of him by way of land revenue at the material time without any protest, now that the executive is again trying to collect another impost by way of land revenue already collected from him that by itself will not stand in the way of the petitioner asking this court to strike down the present levy also on the ground that the original levy of land revenue is itself illegal and void. That is, according to the learned counsel, under S.3 unless the landholder is held liable to pay land revenue exceeding Rs. 500/- as indicated therein there will be no further liability on the part of the petitioner to pay a surcharge either and that liability which is contemplated under S.3 should be a legal and valid liability enforcible in law and from the mere fact that his client may have paid the amount either in ignorance of his right to protest or challenge the levy as illegal or without making any protest whatsoever cannot certainly be held that the petitioner is a landholder who is liable to pay the land revenue. 14. Now I am free to admit that this arises a very interesting argument, but in my view, it is not necessary to go into that aspect any further, at any rate, in this case. 15. At one stage I felt that the question regarding the nature of the levy by way of land revenue in the Malabar area which formed originally part of Madras State may arise for consideration. That is why by my order dated 15-3-1962 I desired the State Government to file a statement regarding the stand taken by them. 15. At one stage I felt that the question regarding the nature of the levy by way of land revenue in the Malabar area which formed originally part of Madras State may arise for consideration. That is why by my order dated 15-3-1962 I desired the State Government to file a statement regarding the stand taken by them. But on going through the matter in greater detail I find that that question does not arise for consideration, and therefore I have not waited for any statement being filed by Government. 16. As I mentioned earlier, the petitioner has at no time controverted or challenged his liability for payment of land revenue for Fazlis 1364, 1365 and 1366. From the various averments made in the affidavits in these two writ petitions it does not appear that he is conscious of the fact that the levy of land revenue itself is illegal, and ultra vires the powers of the State Government. 17. Therefore, I have to proceed on the basis that so far as these three Fazlis are concerned, the petitioner is a person who has already paid the land revenue and therefore his liability or otherwise to pay land revenue is no longer open to question. It is really on the basis that the petitioner is liable that the amounts by way of land revenue for the three Fazlis must have been paid. If that is so, then the charging S.3 of the Madras Land Revenue (Surcharge) Act, 1954 comes into play and fixes the rate at which the surcharge is to be collected or, in other words, it enables one to ascertain the actual quantum of surcharge that is payable. 18. Therefore, the attempt of the revenue authorities to collect the surcharge from the properties in question for these three Fazlis under the Madras Land Revenue (Surcharge) Act, 1954, cannot certainly be struck down as being either illegal or ultra vires. 19. Therefore, it follows that the order of final assessment dated 23-6-1959 which is attacked in O. P. 985 of 1960 and the order of final assessment Ext. P. 8, dated 20-5-1960 which is the subject of attack in O. P. 986 of 1960 will have to be sustained and upheld. 20. Then the question is what exactly is the relief that the petitioner can be given in these two writ petitions. 21. P. 8, dated 20-5-1960 which is the subject of attack in O. P. 986 of 1960 will have to be sustained and upheld. 20. Then the question is what exactly is the relief that the petitioner can be given in these two writ petitions. 21. Before I consider that aspect, there is one other minor contention raised by the learned counsel for the petitioner, namely, that the assessment under Ext. P. 8 dated 20-5-1960 which is the subject of attack in O. P. No. 986 of 1960 takes in two Fazlis covering two years, namely, 1-7-1955 to 30-6-1957. So far as the period 1-11-56 to 31-6-57 which will be part of the Fazli 1366 is concerned, after the States' Reorganisation the Kerala Legislature has no jurisdiction to collect any amount on the basis of that enactment. No doubt, that has been met by the learned Government Pleader on the ground that proceedings had already been taken by the Madras Government for recovering the surcharge and they are only being continued by the Kerala State as the successor Government. Even apart from this contention raised by the learned Government Pleader on facts the position is now concluded as against Mr. Rama Shenoi by a recent decision of this Court to which I was also a party reported in Ravjee Anant Goray & Sons v. Sales Tax Officer ( 1961 KLJ 931 ). No doubt, there the question arose under a different enactment, namely," Madras General Sales Tax Act and Travancore Cochin General Sales Tax Act, 1125 and there the position has been established that it is open to the Kerala State to levy and collect arrears of tax under the Madras enactment even after the States Reorganisation in 1956. Therefore, applying those principles it follows that this contention of Mr. Rama Shenoi that the Kerala State has no jurisdiction to collect surcharge under this Act, at any rate, for the period 1-11-1956 to 31-6-1957 which is part of Fazli 1366 cannot also be accepted. 22. There was also another minor contention raised by Mr. Rama Shenoi, learned counsel for the petitioner, that the proceedings initiated by the District Collector, Kozhikode, by way of making an assessment even in respect of properties which are situated outside his jurisdiction are illegal and void. I am not satisfied that this contention can be accepted. 22. There was also another minor contention raised by Mr. Rama Shenoi, learned counsel for the petitioner, that the proceedings initiated by the District Collector, Kozhikode, by way of making an assessment even in respect of properties which are situated outside his jurisdiction are illegal and void. I am not satisfied that this contention can be accepted. On the other hand, the scheme of the enactment and in particular the provisions contained in S.5 clearly show that it is open to a landholder to send a return to a Collector of the District where he resides or even to the Collector of any of the Districts in which he holds the lands with the necessary declaration. It is brought to my notice by the learned Government Pleader that the Board of Revenue in order to have some sort of uniformity in these matters has given executive instructions that the Collector of the District where the party has got the maximum extent of land can initiate proceedings. In my view, having regard to the scheme of the Act, the proceedings started by the District Collector, Kozhikode, cannot be said to be in any way invalid or irregular. 23. Then the only point that survives is to consider what relief has to be given to the petitioner. 24. According to Mr. Rama Shenoi, a suit, for partition had been already instituted in 1950 and the properties were also placed in the possession of a receiver in 1951 and finally a decree for partition has been passed in 1955. Therefore, the learned counsel urged that apart from technicalities the position is this. There are several sharers who are in possession of the properties allotted to them in their own rights whereas the revenue is now trying to exact the full amount of tax payable from and out of the entire properties not only belonging to the petitioner but also to all the other sharers from the petitioner himself. That the learned counsel urged, is absolutely arbitrary and unjust. 25. So far as this is concerned, the learned Government Pleader quite naturally relied upon the definition of the expression "landholder" contained in S.2(b) of the Madras Land Revenue (Surcharge) Act, 1954 and urged that it is open to the petitioner, if more amount is collected from him, to claim rateable distribution from the other sharers. 25. So far as this is concerned, the learned Government Pleader quite naturally relied upon the definition of the expression "landholder" contained in S.2(b) of the Madras Land Revenue (Surcharge) Act, 1954 and urged that it is open to the petitioner, if more amount is collected from him, to claim rateable distribution from the other sharers. No doubt that is one aspect from which the question can be considered. But if no loss as such to the revenue will be occasioned by a direction being given to the petitioner to pay the amount that he is liable to pay in proportion to the land revenue payable on the lands allotted to him in partition and if the State can be allowed to recover the balance amount from and out of properties allotted to the various other sharers in proportion to the land revenue payable by them, in my view, there is absolutely no injustice or hardship caused either to the State or to the party himself. 26. Again, there is some slight difficulty in accepting this request of Mr. Rama Shenoi, at any rate, for the period 1-7-1954 to 30-6-1955, namely, Fazli 1364, which is covered by O. P. No. 985 of 1960. Even according to the facts stated it is seen that the partition decree was passed only in September 1955. The learned Government Pleader at this stage represents that this decree passed in September 1955 was modified and there was a final decree passed only on 31-7-1957. So far as this is concerned, that seems to be only a minor adjustment and substantially the decree for partition must be considered to be the one that was passed in September 1955. It is really not necessary for me to consider the effect of variation or modification effected by the decree passed on 31-7-1957 because I am not really adjudicating upon the rights of the various sharers in these writ petitions. 27. As I mentioned earlier, inasmuch as the partition can be said to have been effected only in September 1955 no relief can be given to the petitioner so far as Fasli 1364 is concerned. Right or wrong, the revenue has treated the petitioner as landholder for the particular period and according to the terms of the statute it is open to the State to proceed to collect the surcharge from the landholder in whose name the patta stands. Right or wrong, the revenue has treated the petitioner as landholder for the particular period and according to the terms of the statute it is open to the State to proceed to collect the surcharge from the landholder in whose name the patta stands. If that is so, the petitioner will be liable to pay the amounts that are demanded of him for Fazli 1364 and it is open to the petitioner if there is an excess payment by him to claim rateable distribution from the appropriate parties in other proceedings. Therefore, subject to the directions contained herein O. P. No. 985 of 1960 will have to be dismissed. 28. As far as O. P. 986 of 1960 is concerned, as I mentioned earlier, the partition must be considered to have taken place with effect from September 1955. It is really hard to make the petitioner alone to pay the entire amount demanded of him for Fazlis 1365 and 1366. After all, one should not forget that the liability is really that of the property and if once it is established that the petitioner is not in possession of the entire properties that are covered by the assessment orders for Fazlis 1365 and 1366 it is only equitable to give a direction to the effect that the petitioner will be liable to pay forthwith the amount of surcharge that can be ascertained with relation to the land revenue payable during the material time from and out of the properties that have been allotted to him finally in the partition proceedings. The assessment proceedings passed by the revenue authorities will stand and no interference is called for regarding those proceedings, But in the matter of recovery of the amounts the Revenue will collect the amounts due from the petitioner in proportion to the land revenue payable by him in respect of the properties that have been finally allotted to him. The balance amount will be collected from the other sharers to whom the properties have been allotted in proportion to the land revenue that is payable by those properties at the relevant period. The petitioner is certainly bound to file a statement before the Collector regarding the properties that have been actually allotted to his share as also a list of the properties allotted to the various sharers under the final partition. The petitioner is certainly bound to file a statement before the Collector regarding the properties that have been actually allotted to his share as also a list of the properties allotted to the various sharers under the final partition. This statement the petitioner will have to give to the Collector within three months from today. 29. Subject to these directions and observations O. P. No. 986 of 1960 will have to be dismissed. Both parties will tear their costs in this petition.