JUDGMENT T.C. Raghavan, J. 1. The Mattancherry Municipality (now the Corporation of Cochin) proposed to assess the petitioners, the White Jews Synagogue (the second petitioner being a tenant of the first petitioner, the Synagogue), to property tax for section Nos. 471, 692 and 156. Later on, the proposal regarding the latter two survey numbers was dropped and the tax was confined to 20 cents in section No. 471 leaving 8 cents therein also. The capital value of the land was proposed at Rs. 500 per cent, which again was reduced on representation to Rs. 400 per cent. Thus, the petition is confined to the tax on 20 cents in section No. 471, which is not agricultural land, nor land occupied by, or adjacent and appurtenant to, a building. 2. Two contentions are urged by Mr. S. Boothalingam Iyer, the counsel of the petitioners. The first is that section 99 (3) of the Kerala Municipalities Act of 1960 as amended by the Kerala Municipalities (Amendment) Act of 1963 is ultra vires the powers of the State Legislature, because the subject legislated upon is covered by Entry 86 in List I, the Union List, in the Seventh Schedule of the Constitution and not covered by Entry 49 of List II, the State List. Entry 86 of the Union List reads: "Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies : taxes on the capital of companies "; and Entry 49 of the State List reads: " Taxes on lands and buildings ". 3. In another connection, this question came to be considered by a Division Bench of this Court in Mammad Keyi v. Wealth Tax Officer, Calicut 1961 K.L.T. 905. That case arose under the Wealth Tax Act; and in considering a similar contention, the Division Bench held that there was no conflict or overlapping between the two entries mentioned above. Entry 86 in List I contemplates a tax on the capital value of the assets of a person or company exclusive of agricultural lands, which means that the subject of taxation therein is the capital value of the entire assets, within which will be included all lands excepting agricultural lands. Entry 86 in List I contemplates a tax on the capital value of the assets of a person or company exclusive of agricultural lands, which means that the subject of taxation therein is the capital value of the entire assets, within which will be included all lands excepting agricultural lands. In other words, the taxation is on the total assets of an individual or company; and in fixing the value of the totality of the assets, the value of the lands, less the charges or encumbrances thereon, which form part of the assets will also be taken into account. Whereas, Entry 49 in List II contemplates a tax on lands and buildings lands generally, irrespective of the fact that they are agricultural or otherwise as a unit. In the latter case, the tax is on the lands and the buildings as a unit, whereas a tax of the former kind is on the total assets and not on the component parts of the totality of the assets. It may be that in both cases, ultimately, the impost falls on the owner of the lands and the buildings: all the same, the fields of taxation are quite different and the one does not overlap the other. 4. The decision of the Supreme Court in Patel Gordhandas Hargovindas v. The Municipal Commissioner; Ahmedabad A.I.R. 1963 S.C. 1742, has been brought to my notice. In that case the decision of the Bombay High Court in Municipal Commissioner, the Municipal Corporation of the City of Ahmedabad v. Gordhandas Hargovindas A.I.R. 1954 Bombay 138 was reversed by the Supreme Court. The Bombay High Court was considering the Bombay Municipal Boroughs Act of 1925, more specially sections 73 and 75 of the Act, and rule 358 read with rule 243 framed under the Act. The rules based the rate of the " rate " on the capital value of the land ; and the Bombay High Court held that the rule was not ultra vires section 73 of the Act. The rules based the rate of the " rate " on the capital value of the land ; and the Bombay High Court held that the rule was not ultra vires section 73 of the Act. The Supreme Court considered the history of the meaning of the word "rate" in legislations in England and in India and held that the term had acquired a special meaning that it was a tax on the annual value of lands and buildings fixed in one of the three modes of valuation based on (1) actual rent fetched by the, lands or the buildings where they were actually let out, (2) where they were not let out, rent based on a hypothetical tenancy, particularly in the case of buildings, and (3) where either of these two modes was not available, by valuation based on capital value from which annual value had to be found by applying a suitable percentage which might not be the same for lands and buildings. In view of this special meaning of the word '' rate '', the Supreme Court further held that the relevant rule" which made the capital value as the basis of the rate (a percentage of the capital value) was ultra vires the Act. 5. Before the Supreme Court two contentions were raised: one, whether the subject matter of the Act came within Item 55, List I of the Seventh Schedule to the Government of India Act or within Item 42, List II thereof; and two, whether the rate of the ''rate'' should not be based on the capital value and should be based only on the annual value. The learned Judges who constituted the majority of the Bench did not consider the first question and based their decision only on the second aspect that the rate should be based on the annual value and not on the capital value. Sarkar, J. differed; and His Lordship considered both the questions. The learned Judge held on the first question that there was no conflict and that the Act fell squarely within the Entry in the Provincial List. On the other, question Sarkar, J., held that the term " rate" did not acquire any special meaning in England, much less in India. Sarkar, J. differed; and His Lordship considered both the questions. The learned Judge held on the first question that there was no conflict and that the Act fell squarely within the Entry in the Provincial List. On the other, question Sarkar, J., held that the term " rate" did not acquire any special meaning in England, much less in India. Thus, if any authority relevant for the present case is to be gathered from this decision of the Supreme Court, it is the pronouncement of Sarkar, J., that section 73 of the Bombay Act was within the competence of the State Legislature, 6. Recently the question came up again before the Supreme Court in Sudhir Chandra Nawn v. Wealth-tax Officer, Calcutta W.P. Nos. 153 to 155 of 1967 (S.C.) (Blue print not yet reported): This case was also under the Wealth Tax Act as was the Division Bench ruling of this Court. The Supreme Court has referred to the Division Bench ruling of this Court with approval and has also stated thus: "The tax which is imposed by Entry 86, List I of the Seventh Schedule is not directly a tax on lands and buildings. It is a fax imposed on the capital value of the assets of individuals and companies, on the valuation date. The tax is not imposed on the components of the assets of the assessee it is imposed on the total assets which the assessee owns. In certain exceptional cases, where a person owes no debts and is under no enforceable obligation to discharge any liability out of his assets, it may be possible to break up the tax which is leviable on the total assets into components and attribute a component to lands and buildings owned by an assessee. In such a case, the component out of the total tax attributable to lands and buildings may in the matter of computation bear similarity to a tax on lands and buildings levied on the capital or annual value under Entry 49, List II. But the legislative authority of Parliament is not determined by visualizing the possibility of exceptional cases of taxes under two different heads operating similarly on tax-payers. Again, Entry 49, List II of the Seventh Schedule contemplates the levy of tax on lands and buildings or both as units. But the legislative authority of Parliament is not determined by visualizing the possibility of exceptional cases of taxes under two different heads operating similarly on tax-payers. Again, Entry 49, List II of the Seventh Schedule contemplates the levy of tax on lands and buildings or both as units. Tax on lands and buildings is directly imposed on lands and buildings, and bears a definite relation to it. Tax on capital value of assets bears no definite relation to lands and buildings which are brought to tax. For the purpose of levying tax under Entry 49, List II the State Legislature may adopt for determining the incidence of tax the annual or the capital value of the lands and buildings. But the adoption of the annual or capital value of lands and building's for determining tax liability will not, in our judgment, make the fields of legislation under the two entries overlapping. " This pronouncement of the highest tribunal of the land positively shows that there is no overlapping" between entry 49 of List II and entry 86 of List I. In another portion of the judgment the Supreme Court has said : " In the case of a tax on lands and buildings, the value; capital, or annual, would be determined by taking the land or building or both as a unit and subjecting the value to a percentage of tax. In the case of wealth-tax the charge is on the valuation of the total assets' (inclusive of lands and buildings) less the value of debts and other obligations which the assessee has to discharge. Merely because in determining the taxable quantum under taxing statutes made in exercise of power under entries 86 List I and 49 List II, the basis of valuation of assets is adopted, trespass on the field of one legislative power over another may not be assumed. " 7. The first contention has thus no force whatsoever. Incidentally, another contention has also been raised. Section,99 (3) of the Municipalities Act provides for a levy at such percentages of the capital value or at such rates with reference to the extent of the lands, as the municipal council may fix. It is argued that since the levy is on the capital value, it is ultra vires, and the levy should be on the annual value as in the case of a "rate". It is argued that since the levy is on the capital value, it is ultra vires, and the levy should be on the annual value as in the case of a "rate". This argument has also no force, though it may appear at the first blush that the decision of the Supreme Court in Patel Gordhandas Hargovindas''s case might support it. The case before the Supreme Court related to the levy of "rate"; and the Supreme Court stated in paragraph 31 of the judgment that the position might have been different if it was a tax instead of a "rate". The decision of the Supreme Court was the result of the special meaning of the term " rate ". Again, in the recent decision in Sudhir Chandra Nawn's case, the Supreme Court has stated that for the purpose of levying tax under entry 49 List II, the State legislature may adopt for determining the incidence of tax the annual or the capital value of the lands and buildings. Thus, for the reason that the basis of the tax is the capital value of the land, the levy cannot be impugned. 8. The second contention urged by Mr. Boothalingam Iyer is that under the relevant rules the market value is to be taken as the capital value; and that the market value is an arbitrary value for taxation. The Kerala Municipalities (Determination of Capital Value of Lands) Rules of 1961 provide for the, assessment of the capital value; and. from the provisions in these rules it appears that there is no arbitrariness in the mode of assessing the market value, the capital value. Again, under G.O. No. 1008/61/H & LD, dated 8th September 1961, the maximum percentages of the tax leviable are also fixed. Therefore, the mode of assessing the capital value and the percentages of the tax of the capital value cannot also be impugned. The writ petition has thus no force and the same is dismissed. However, I pass no order regarding costs.