JUDGMENT B.C. Basak, J. These writ petitions represent a series or cases whereby the constitutional validity of the Bihar Restoration and Improvement or Degraded Forest Land Taxation Ordinance, 1992 (hereinafter referred to as the 'said Ordinance'), which has been replaced by the Bihar Restoration and Improvement of Degraded Forest Land Taxation Act (hereinafter referred to as ‘the said Act’) and the Rules framed thereunder have been challenged on various grounds. As common questions of law arise, all these cases have been heard together. The hearing or all these cases and the argument on behalf of all the learned Advocates appearing was concluded in the second week of November, 1993, when the judgment was reserved. However, filing or written arguments on behalf of all of them was completed about 10 days thereafter. 2. I shall set out the facts relevant to the points involved, in respect of the different writ petitions as follows : (a) C.W.J.C. No. 1790 of 1992 (R) Indian Aluminium Company Ltd. The petitioner no. 1 is a Company incorporated under the Companies Act, which is engaged in the business of manufacturing and selling of aluminium and aluminium products. The majority directors and share-holders of petitioner no. 1, including the petitioner no. 2, are citizens of India. It is stated that they carry on business through the instrumentality of petitioner no. 1. One of the basic raw materials required by the petitioner no. 1 for manufacturing aluminium is bauxite. Petitioner no. 1 holds six mining leases for mining of bauxite in the State of Bihar. The said leases have been granted under and in accordance with the Mines and Minerals (Regulation and Development) Act of 1957 (hereinafter referred to as 'the MMRD Act) and are executed in the form prescribed by the Mineral Concession Rules, 1960, (hereinafter referred to as Rules under M.M.R.D. Act). By one of the said mining leases dated 23rd of August, 1970, the State of Bihar had granted on lease, subject to the terms and conditions contained in the said mining lease, tracts of lands situate in village Hunrap, Serandag and Punari in the Registration District of Ranchi, Sub-District Lohardaga and Thana Kisko (Lohardaga), presently under (iumla District, containing an area 346.10 acres (equivalent to 140.06 hectares) or thereabouts. Clause 4(a) of Part III of the said lease provides as hereunder: "4 (a) Notwithstanding anything in this schedule contained, the lessees shall not enter upon any reserved forest included in the said lands without previous sanction in writing of the Divisional Forest Officer nor fell out and use any timber of trees without obtaining the sanction in writing of that officer nor otherwise than in accordance with such conditions as the State Government may prescribe. (b) (i) The mining leasees or their agents and workmen shall after the Divisional Forest Officer's permission has been accorded under clause 4 (a) of this Part III has the right and liberty at all times to enter upon any part of the private protected forest or reserved forest or Government protected forest under this lease without let or hindrance for purpose of prospecting, quarrying or mining but they shall do nothing in respect of any forest produce nor shall they disturb the surface in any way except as hereinafter provided. (ii) Where prospecting, quarrying of mining operation does not involve the clearing or cutting any forest growth, it may be done without the permission of or without reference to the Forest Officer. (iii) Where - prospecting, quarrying or mining involves clearance of undergrowth such as shrubs or bushes over an area not exceeding one-tenth of an acre, but does not involve the cutting of any tree or pole or saplings or bamboo, the clearance may be done without the permission of the Divisional Forest Officer, but a report thereof shall immediately be submitted to the Divisional Forest Officer. This right of the lessees shall be exercised only once every year. This right of the lessees shall be exercised only once every year. (iv) Where prospecting mining or quarrying may necessitate clearance of undergrowth over an area exceeding one tenth of an acre or the Cutting down of trees or poles or sapplings or bamboos, the previous permission in writing of the Divisional Forest Officer shall be necessary and the clearance shall not be done until these have been marked by the Forest Department for felling and the royalty thereof assessed and paid : Provided that in case the Forest Officer decided to refuse such permission he shall consult the Mining Officer of the District before doing so and if they agree, the permission may be refused but if they disagree, the matter may be referred to the Chef Conservator of Forest, Bihar, who will consult the Chief Mining Officer, Bihar (sic) disagree, the matter should be referred to Government for orders. (v) If the mining lessees desire to construct any road or building or any other work or structure for purpose of mining or quarrying, they shall obtain the previous permission of the Forest Officer and shall pay compensation and follow regulations issued by the Forest Officer in this behalf. (vi) The lessees must carry on mining of quarrying operations down to the maximum economic depth or quarrying already taken up and obtain a certificate from the Mining Officer of the District that the economic depth had been reached before proceeding to any other areas. The rents and royalties reserved by the said lease are contained in Part V thereof. It is contended by the petitioner that no further money is payable to the State of Bihar for mining of the said area other than the amounts specified in the said mining lease. (b) C.W.J.C. no. 10 of 1993 (R). Indian Iron & Steel Co. Ltd. The petitioner carries on the business of manufacturing Iron and Steel and its various products. The petitioner is a Government Company as defined in section 617 of the Indian Companies Act. As per section 3 of the Indian Iron & Steel Co. (Acquisition of Shares) Act, 1976, the shares of the petitioner Company stand transferred to, and vested in the Central Government. All the Directors of the petitioner Company are citizens of India and carry on business through the instrumentality of the petitioner. As per section 3 of the Indian Iron & Steel Co. (Acquisition of Shares) Act, 1976, the shares of the petitioner Company stand transferred to, and vested in the Central Government. All the Directors of the petitioner Company are citizens of India and carry on business through the instrumentality of the petitioner. The basic raw materials required by petitioner for manufacturing Iron and Steel are Ore Iron and Manganese only. The petitioner holds several mining leased for minerals iron and manganese ores in the district of Singhbhum West, under the MMRD Act, and are executed in the form prescribed by the Rules framed thereunder. The liberties, powers and privileges exercisable by the petitioner and the restrictions and conditions as to the exercise of such liberties, powers and privileges are enumerated in detail in the model form of mining lease which is similar to the one we have set out in Indian Aluminium case. The rents and royalties reserved by the said lease are contained in part V thereof. The petitioner contends that no further money is payable to the State of Bihar for mining of the said area other than the amounts specified in the mining lease. (C) C.W.J.C. no. 3282 of 1992 (R) Uranium Corporation of India Limited. The petitioner is a Govt. Company registered under Section 617 of the Companies Act, 1956. The entire production of uranium concentrate is compulsorily acquired by the Department of Atomic Energy, Government of India for fuel for use of Atomic Power Reactor Plant. The petitioner has obtained mining lease for obtaining uranium from the Govt. of Bihar. The leased area appertaining to tracts of land over an area of 1312-62 Acres situate at village Judugoda in the district of Singhbhum (East), Bihar, by virtue of lease dated 31.1.1987 which was a renewal of the earlier lease. (d) C.W.J.C. no. 740 of 1993 (R) Steel Authority of India Ltd. The petitioner is a Government Company within the meaning of section 617 of the Companies Act, 1956 and all its Directors are citizens of India. The petitioner states that the Government of Bihar was interested in setting up a Steel Plant in its State and accordingly agreed to give certain concession and facilities to the then Government Company namely Hindustan Steel Limited for public purpose. The petitioner states that the Government of Bihar was interested in setting up a Steel Plant in its State and accordingly agreed to give certain concession and facilities to the then Government Company namely Hindustan Steel Limited for public purpose. A meeting took place on August 17, 1962 in the office of the Chief Secretary, Government of Bihar, which was attended by the representatives of the Government of India as well as Hindustan Steel Ltd. The Secretary to the Government of Bihar, Development (Industries) Department in his letter no 20-2D Dated January 15, 1955 communicated the following to the Government of India, Ministry of production “A ceiling cost will be fixed in advance for the acquisition of the remaining lands which are privately owned and any cost in excess over the ceiling would be met by the State Government.” The petitioner states that the Government of India in their no.16/HMSMF/62 dated February 3, 1962 to the Government of Bihar (From Hon’ble Minister for steel, Mines and Fuel to Hon’ble Minister of Bihar reiterated the same as follows: “The Bihar Government had agreed to meet any excess over such ceiling cost. I draw your attention in this connection to Bihar Government’s assurance contained in Shri R. Prasad’s letter No. 20-2-D dated 15.1.1955, an assurance which was repeated in his letter no. 697/DIR dated the 26th July, 1956 which referred specifically to the ‘Fourth Government Steel Plant. The details of concessions given by the State Government are more precisely described in the D.O. letter no. 75 C from the Chief Minister of Bihar to the Minister of Steel & Heavy Industries. The petitioner craves leave of this Hon’ble Court to refer the said letter no. 75C at the time of hearing of this application.” The petitioner state that a ceiling price was fixed and Hindustan Steel Limited was required to pay the price of the land subject to the ceiling. The ceiling price fixed in the meeting held on August 17, 1962 was Rs.1900/- per acre in respect of the lands acquired by the State Govt. for setting up the Steel Plant and other amenities vide notifications issued in the year 1956. In so far as the notifications issued in the year 1964 the ceiling price fixed by the Government of Bihar was Rs. 3800/- per acre. for setting up the Steel Plant and other amenities vide notifications issued in the year 1956. In so far as the notifications issued in the year 1964 the ceiling price fixed by the Government of Bihar was Rs. 3800/- per acre. Even after 1964 further land was acquired for Bokaro Steel Project for which no ceiling price has been fixed as yet. The Government of Bihar further agreed to transfer free of cost, all Government lands, required by the then HSL for setting up the Steel Plant, associated Projects and Township and these lands included forest lands, but compensation was payable only for the trees growing thereon and the erstwhile HSL also agreed to pay compensation for cutting down of the trees. The decision of the State Govt. to transfer the Forest land free of cost, excepting that compensation was payable by erstwhile HSL for the trees standing thereon, was duly conveyed by the Secretary to the Government of Bihar, Department of Revenue in their letter dated 29th January, 62 to the Chief Conservator of Forest, Bihar, P.O. Hinoo District Ranchi. A copy of the said letter dated 29th Jan, 62 was also forwarded fro information to the Chairman of erstwhile HSL and a request was made for taking steps for transferring the forest lands including trees. The petitioner states that a series of correspondence ensued regarding the transfer of the forest land and evaluation of the amount of compensation to be paid by erstwhile HSL and subsequently Bokaro Steel Project/Bokaro Steel Plant of Steel Authority of India Limited. The Petitioner states that the Forest lands were transferred in 10 villages the details are given in the sheet showing handing over and taking over the forest lands on 24.5.1962. The land in village Dumarjoor surrendered on 9.12.1966 to forest authorities. The petitioner states that thereafter several correspondence ensued between the forest officials and the officials of Bokaro Steel Project/Bokaro Steel Limited regarding the compensation to be paid for the trees standing on the forest lands. The Divisional Forest Officer, Dhanbad Division estimated the cost of the trees at Rs. 20.58 lakhs and out of these a sum of Rs.10 lakhs stands paid by the Bokaro Steel Plant and the balance amount will be paid for which the Forest Department has to furnish further details as demanded by the Bokaro Steel Plant in their letter. The Divisional Forest Officer, Dhanbad Division estimated the cost of the trees at Rs. 20.58 lakhs and out of these a sum of Rs.10 lakhs stands paid by the Bokaro Steel Plant and the balance amount will be paid for which the Forest Department has to furnish further details as demanded by the Bokaro Steel Plant in their letter. The petitioner states that the land acquired through the process of acquisition under the Land Acquisition Act as well as the forest lands which were transferred along with the Government lands or Bokaro Steel Plant were contiguous. These lands including raiyati lands acquired were utilized for the purpose of setting up the Steel Plant as well as Developing township and other amenities and associated projects in terms of the notification subject to which the acquisition was made by the Govt. of Bihar. The Steel Plant, township and other projects standing on the forest and other contiguous land acquired have been set up by spending over three thousands crores. The petitioner states that the transfer of the Forest land was completed as far back as in the year 1962. A steel plant was set up in different stages commencing from 1965. The sketch map shows an area of the forest land which ceased to be the forest land in the month of May, 62 whereupon the Steel Plant associated Projects and township were set up. The petitioner states that on the strength of the promise/understanding and the agreement reached by and between the State Government, Central Govt. and erstwhile HSL and subsequently by the Bokaro Steel Project/Bokaro Steel Plant, the said forest land along with the other contiguous land acquired through the process of acquisition was used for setting up of the Steel Plant and other amenities. On the strength of the said promises not only the total complexion and the nature of the land stated changed right from the year 1962 but it is now absolutely impossible to upgrade and improve the said area for the purpose of the aforestation as envisaged in the object of the Ordinance. (e) C.W.J.C. no. 3348 of 1992 (R) Hindustan Copper Ltd. The Petitioner is a Govt. Company within the meaning of Section 617 of the Companies Act, 1956. The petitioner carries on the business of manufacturing Copper. (e) C.W.J.C. no. 3348 of 1992 (R) Hindustan Copper Ltd. The Petitioner is a Govt. Company within the meaning of Section 617 of the Companies Act, 1956. The petitioner carries on the business of manufacturing Copper. It is stated that the majority of Directors and shareholders of the petitioner are citizens of India and that they carry on business through the instrumentality of the petitioner. One of the basic raw materials required by petitioner for manufacturing Copper is Copper ore and Kynite. The petitioner holds three mining leases for mineral Copper ore in the district of Singhbhum East and one mining lease for Mineral Kynite in the West Sinhbhum district, both in the State of Bihar, under the MMRD Act and executed in the form prescribed by The Rules framed thereunder. The liberties, powers and privileges exercisable by the petitioner and the restrictions and conditions as to the exercise of such liberties, powers and privileges are enumerated in detail in the said lease. Clause 4 (a) of Part III of the said leases provide similarly as we have quoted in respect of Indian Aluminium Company. The rents and royalties reserved by the said leases are contained in Part V thereof. The petitioner contends that no further money is payable to the State of Bihar for mining of the said area other than the amounts specified in the mining lease. (f) C.W.J.C. no. 3347 of 1992 (R) The Tata Iron & Steel Co. Ltd. The petitioner is a Public Limited Company within the meaning of the Companies Act, 1956 having its Registered Office at 24, Homi Mody Street, Fort Bombay. The petitioner is primarily engaged in the business of manufacture of iron and steel which is carried on in the petitioner’s Steel Plant in Jamshedpur in the district of Singhbhum (East) in Bihar. It is stated that in the entire country. There are six major steel plants including the petitioner’s. They are all ore based integrated Steel plants depending almost entirely on their captive mines for supply of iron ore. Accordingly orders were issued by the Conservator of forest to the Divisional Forest Officer to permit the petitioner to break up 100 acres of forest land. There are six major steel plants including the petitioner’s. They are all ore based integrated Steel plants depending almost entirely on their captive mines for supply of iron ore. Accordingly orders were issued by the Conservator of forest to the Divisional Forest Officer to permit the petitioner to break up 100 acres of forest land. From what is stated above, out of a to total area of 2866.84 acres leased out to the petitioner for mining purposes, a small portion of the forest land has been cleared by the petitioner for mining purposes. On the other hand, the petitioner has taken up the work of aforestation which is being done at a huge cost. (g) C.W.J.C. no. 3823 of 1992 (R) M/s Tribeni Prasad Rungta. Petitioner No.1 is a partnership firm registered under the Indian Partnership Act. The petitioner No.2 is one of the partners. All the partners are citizens of India. The petitioners have been granted mining lease with regard to 10.53 hectares of forest land for magnetite mines situated at village Nawadih in the district of Palmau. The said lease was renewed in 1985 for twenty years. The petitioners are doing mining operation on the said land and excavating magnetite ore and are paying all the Government dues. The lands used by the petitioners have been broken up. The respondents under the signature of respondent No.3 issued a notice demanding certain amount as tax for lease hold land. (h) C.W.J.C. no. 3313 of 1992 (R) M/s. Shah Brothers. The petitioner is a partnership firm and all its partners are citizens of India. The petitioner has been granted a mining lease for mineral iron ore and manganese ore in West Singhbhum District. The liberties, powers and privileges exercisable by the petitioner and the restrictions and conditions as to the exercise of such liberties, powers and privileges are enumerated in details in the said lease. The petitioner states that Clause 4 of the III of the said lease provides inter alia that the leasee shall not fell any trees or timber without obtaining sanction of the Forest officials. The rents and royalties reserved by the said lease are contained in Part V thereof and that no further money is payable to the State of Bihar for mining of the said area other than the amounts specified in said mining lease. (i) C.W.J.C. no. 3320 of 1992 (R) M/s Rattanlall Prakashchand. The rents and royalties reserved by the said lease are contained in Part V thereof and that no further money is payable to the State of Bihar for mining of the said area other than the amounts specified in said mining lease. (i) C.W.J.C. no. 3320 of 1992 (R) M/s Rattanlall Prakashchand. (j) C.W.J.C. no. 3201 of 1992 (R) Nirmal Kumar Pradeep Kumar. (k) C.W.J.C. no. 3172 of 1992 (R) Singhbhum Mineral Company. (l) C.W.J.C. no. 3170 of 1992 (R) M/s Nirmal Kumar Pradeep Kumar (m) C.W.J.C. no. 3195 of 1992 (R) M/s Harilal Variang Rathor. (n) C.W.J.C. no. 3045 of 1992 (R) M/s Misrilal Jain & Sons. (o) C.W.J.C. no. 3196 of 1992 (R) Gyan Chand Jain. (p) C.W.J.C. no. 3197 of 1992 (R) M/s Thakur Prasad Sao. The facts of these cases are similar to those in C.W.J.C. no. 3313/92 (R) (q) C.W.J.C. no. 3054 of 1992 (R) M/s R. Modill & Co. Pvt. Ltd. The petitioner is a private limited company and all its directors are citizens of India. The petitioner had been granted a mining lease for mineral iron ore in Saranda Division in the district of Singhbhum West at Chaibasa. The liberties, power and privileges exercisable by the petitioner and the restrictions and conditions as to the exercise of such liberties, power and privileges are enumerated in details in the said lease provides, inter alia, that the lessee shall not fell any trees or timber without obtaining the sanction of the Forest Officials. The rents and royalties reserved by the said lease are contained in part V thereof. The petitioner also states that no further money is payable to the State of Bihar for mining of the said area other then the amount specified in the said mining lease. (r) C.W.J.C. no. 9442 of 1992. Krishna Trading Company. The petitioner is a firm represented by its Proprietor and is holder of three mining leases for stone since the year 1971 over an area of 08.23 acres appertaining to portion of Daag no. 162, 163 and 322 situated in mouza Kalyani and Motijhorna and 7.30 acres and 2.80 acres of Daag No. 163 (P) of mouza Kalyani in the district of Sahibganj. The petitioner's mining lease was renewed for ten years by order dated 2.9.91. The petitioner installed a plant of stone crusher on the authority of the State Government. 162, 163 and 322 situated in mouza Kalyani and Motijhorna and 7.30 acres and 2.80 acres of Daag No. 163 (P) of mouza Kalyani in the district of Sahibganj. The petitioner's mining lease was renewed for ten years by order dated 2.9.91. The petitioner installed a plant of stone crusher on the authority of the State Government. The petitioner further states that in the last survey of Sahibganj, conducted some time in the year1926, a portion of Daag no. 163 was recorded as ‘Jungle Jhori’, as would appear from the revenue records. The case of the petitioner is that lease for stone mining of the area was first granted sometime in the year 1933 and thereafter the petitioner was granted such lease in 1971 after the area was declared vacant and available for regrant. By that time the physical feature of the area had changed. There was no objection raised from any quarter in regard thereto till 1986. The parliament enacted Forest (Conservation) Act, 1980, with a view to protect the forest and for maintaining environmental balance as the forests were ruthlessly being destroyed by Scrupulous holders of mining lesses. As required under the law, the petitioner applied for renewal of his mining lease and after due enquiry and necessary verification renewal was granted by respondent no.3 by order dated 2.9.91 on being satisfied that the area under the lease in question was not a forest land. However, this was objected to by the Divisional Forest Officer, Sahibganj, on the granted that the Deputy Commissioner Dumka on 4.10.1978 had sent a proposal to the State Government for declaring the area as protected forest which was still under consideration. According to the petitioner, out of the three plots (Daag Nos.) only Daag No. 163 with an area of nearly 170 bighas was included in the said proposal. However the said objection was rejected. It appears that in Mining Misc. Case no.25 of 1991-92 respondent no.3 directed the Divisional Forest Officer to take steps for Finalizing the proposal dated 4.10.78 and/or issuance of notification within six months declaring the proposed area as protected forest. The respondent No.3 did not pass any order for execution of the deed of lease but he permitted the petitioner to work in the area till the expiry of the said period of six months without execution of the deed of lease. The respondent No.3 did not pass any order for execution of the deed of lease but he permitted the petitioner to work in the area till the expiry of the said period of six months without execution of the deed of lease. The petitioner filed a revision before the revisional authority against the order of respondent no.3, and by order dated 31.8.1992 the Mines Commissioner directed the respondent no.3, to execute the deed of lease since the notification under the provisions of the Forest Act was yet to be issued. According to the petitioner, respondent no.3, having been annoyed with the petitioner because of his filing revision against his order, directed the Assistant Mining Officer (respondent no.5) to issue notice under the provisions of the said Bihar Ordinance No.11 of 1992 in spite of the fact that respondent no.3 had already adjudicated the matter and passed order on 2.9.91 allowing the application of the petitioner for grant of renewal of the lease on being fully satisfied that the land in question was not forest land as defined in section 2 (c) of the said Ordinance. (s) C.W.J.C. no. 2366 of 1992 (R) M/s Hindalco Industries Ltd. In this case the petitioner no.1 is a limited Company and petitioner no.2 is one of its share-holders. The petitioner Company has challenged the validity of the said ordinance and the Act and the Rules framed thereunder, on the ground that it is a colourable exercise of power. It is stated that it represents the third attempt on the part of the State of Bihar to levy a tax on the extraction of minerals. The first attempt was to make the Cess Act, 1880, applicable, which was struck down by this Court by a judgment dated 6.11.1990 in C.W.J.C. no. 368 of 1990 (R) and related matters, on the ground that the State Legislature lacked the legislative competence to impose cess on the royalty in respect of minerals. The appeal preferred by the State Government against that judgment was dismissed by the Supreme Court. The second attempt to impose Tax thereon was made by the Cess and other Taxes on Minerals (Validation) Act, 1992, Passed by the Parliament, which purported to retrospectively validate the Cess Act, 1880. Against that Act a large number of writ petitions were filed in this Court, including C.W.J.C. No. 1280 of 1992 (R) by Tisco Vs. The second attempt to impose Tax thereon was made by the Cess and other Taxes on Minerals (Validation) Act, 1992, Passed by the Parliament, which purported to retrospectively validate the Cess Act, 1880. Against that Act a large number of writ petitions were filed in this Court, including C.W.J.C. No. 1280 of 1992 (R) by Tisco Vs. Union of India, as also by the present petitioners in C.W.J.C. No. 1702 of 1992 (R). The petitioner submits that the impugned Ordinance and the Act amount to tax simpliciter on mining and is merely camouflaged as a law to provide for resources for restoration of degraded land and improvement in forest areas. 3. Arguments All the learned Advocates appearing in these matters, whether for the petitioner or the respondents, have submitted written arguments and have also made oral submissions. 3.1. Arguments – On behalf of the petitioners. 3.1.1. Indian Aluminium case The main submission on behalf of the petitioners was made by Mr. S. Pal appearing on behalf of Indian Aluminium Co. 3.1.1.1. It was firstly submitted that when ever the constitutional validity of any legislation is in issue, the first exercise is to ascertain the true meaning, scope and effect of the law. In This connection he has relied on The Assistant Commissioner of Urban Land Tax & Ors. Vs. Buckingham & Carnatic Co. Ltd. : AIR (1970) SC 169. In this context he has taken us through the different provisions of the said Act in details. 3.1.1.2. On the question of the “taxable event” under the said Act he has submitted that “taxable event” means the event on the happening of which the liability to pay tax arises. The taxable even will have to be identified from the provisions of the Act including the charging provisions. In this connection he has relied on – Goodyear India Ltd. Vs. State of Haryana : (1990) 2 SCC 71 , Jiyajeeran Cotton Mills Ltd. Vs. State of M.P. : AIR (1963) SC 414, State of Mysore V. M/s T.V. Sundaram Iyengar & Sons: AIR (1980) SC 148, Wallace Flour Mills Co. Ltd. V. Collector of Central Excise, Bombay Div. III : (1989) 4 SCC 592 , Buxa Dooars Tea Co. Ltd. V. State of West Bengal : (1989) 3 SCC 211 and Central Coalfields Ltd. Vs. Ltd. V. Collector of Central Excise, Bombay Div. III : (1989) 4 SCC 592 , Buxa Dooars Tea Co. Ltd. V. State of West Bengal : (1989) 3 SCC 211 and Central Coalfields Ltd. Vs. State of Bihar & Others : AIR (1991) Pat 27 : 1992 (1) PLJR 573 3.1.1.3 On the question of the relevant provisions of the said Act constituting the charge/taxable event, he has submitted as follows : Sec.3(1) of the Act does not by itself constitute the charging section because there is no taxable event specified therein. Referring to sec.3 (2) of the Act he submitted that the same provides as to by whom the tax shall be payable. It identifies the assessee. It also indicates why it is payable, namely; (i) use of forest land for non-forest purpose and (ii) creation of voids by indulging in any developmental activities including mining. Sub-sections (1), (3) and (4) of Section 3 do not throw any light on the nature of the charge/taxable event. 3.1.1.4. So far as the Schedule referred to in section 3(1) is concerned, he has submitted that it is in two columns : The heading of column 1 expressly states “….tax on excavation and use of forest land for non forest purposes.” The different activities mentioned in (a)(b) and (c) relate to excavation. The use in respect of (d) (e) and (f) relates to the use of forest land for non-forest purpose. The charge/taxable event is to be gathered from sub-section (2) of section 3 read with the schedule. A combined and harmonious analytical reading of sub-section (2) of section 3 and the schedule leads to the following conclusion : (a) the charging provisions contemplate two different taxable events; (b) the two different taxable events are : (i) excavation for developmental activities (not defined) including mining and creating voids as a consequence thereof. In other words, the following are the components of this taxable event : (1) Excavation (Presumably) of forest land; (2) such excavation is in the course of developmental activity including mining. (3) The consequential creation of voids, (ii) Use of forest land for non-forest purposes pursuant to user allowed by the State Government. 3.1.1.5. The next broad submission of Mr. Pal was that the Act is unconstitutional. The first ground on which the constitutionality of the Act has been challenged is that it lacks legislative competency. (3) The consequential creation of voids, (ii) Use of forest land for non-forest purposes pursuant to user allowed by the State Government. 3.1.1.5. The next broad submission of Mr. Pal was that the Act is unconstitutional. The first ground on which the constitutionality of the Act has been challenged is that it lacks legislative competency. In support of this contention he has made the following submission The State Legislature lacked legislative competence to enact the Act. The different entries in the three Lists of the Seventh Schedule indicate the fields of legislation. In this connection he has referred to The India Cement Ltd. etc. Vs. State of Tamil Nadu : AIR (1990) SC 85, Synthetics and Chemicals Ltd. Vs. State of U.P. & Others : (1990) 1 SCC 109 The entries must be interpreted broadly and liberally – The India Cement Ltd. etc. Vs. State of Tamil Nadu: AIR (1990) SC 85. If the legislation purports to be under an entry in List II but appears to encroach upon a field assigned to List I, the principle of pith and substance has to be applied to ascertain under which entry the legislation really falls. The India Cement Ltd. etc. Vs. State of Tamil Nadu : AIR (1990) SC 85. 3.1.1.6. In the instant case the only entry relied upon on behalf of the State is that the Act is covered by Entry 49 of List II. He has submitted that the power to make tax laws is under Article 265 of the Constitution. Taxation Entries and General Entries are distinct i.e. taxation field : is not included in the general field M.P.V. Sundararamier & Co. Vs. State of Andhra Pradesh : AIR (1958) SC 468, Fields of taxation, as far as State legislation is concerned, are exclusively specified in List II, i.e., there is no entry relating to taxation in List III. It follows that when the legislative competence of the State Legislature is questioned in relation to a taxation statute the only question to be asked is : is the Act covered by any of the taxation entries in List II? If the answer is in the negative, the lack of legislative competence of the State Legislature is established and no further question is relevant. If the answer is in the negative, the lack of legislative competence of the State Legislature is established and no further question is relevant. In the absence of any specific power to tax it comes within the competency of the Parliament in view of Art. 248 and List I Entry 97. 3.1.1.7. Tax on land within Entry 49 List II contemplates (a) levy on land as a unit : (b) levy must be directly imposed on land and must bear a definite relationship to it; (c) a direct levy by reason of general ownership of land. Levy on a particular use of land is not contemplated by Entry 49 List II. In this connection he has referred to the Second Gift Tax Officer Vs. D.H. Hazareth : AIR (1970) SC 999, The India Cement Ltd. etc. Vs. State of Tamil Nadu : AIR (1990) SC 85, Sudhir Chandra Nawn Vs. Wealth Tax Officer : AIR (1969) SC 59 and Western India Theatre Vs. Cantonment Board : AIR (1959) SC 582. Tax on activity on land is not tax on land; it pertains to user. If there is no user or excavation, then there is no tax under the Act. The India Cement Ltd. etc. Vs. State of Tamil Nadu : AIR (1990) SC 85, Western India Theatre Vs. Cantonment Board : AIR (1959) SC 528 and Kamta Prasad Vs. Executive Officer : AIR (1974) SC 685. The charging provisions identifying the taxable event clearly establish that this Act purports to tax activity on land and not land as such. In this connection he has referred to section 3 (2), 3(3) and the Schedule. The Schedule heading is the key. It Says “assessment of tax on excavation and use of forest land for non-forest purpose.” The two events are kept separate and not distinct but the essential common denominator is ‘activity’. If there is no excavation then there is no tax and if there is no user, then there is no tax. 3.1.1.8. Further reasons why impugned Act is not tax directly on land as a unit: 1. Schedule shows different types of activity leading to different rates e.g. mechanished and non-mechanised excavation attract different rates. 2. Mere relationship with land or indirectly on land will not suffice. It must be “on” land and not “with respect to” or “in relation to” land. 3. Schedule shows different types of activity leading to different rates e.g. mechanished and non-mechanised excavation attract different rates. 2. Mere relationship with land or indirectly on land will not suffice. It must be “on” land and not “with respect to” or “in relation to” land. 3. Apart from the declarations made by the Supreme Court, the scheme and content of the entries in List II establish that a levy which is indirectly on land or has some connection with land will not suffice to bring it within Entry 49 List II. Cf. General Entries – List II – 10, 14, 16, 17, 18 & 23 Taxation Entries List II – 45, 46, 47, 48 & 49. Each of the above mentioned General entries are connected with land but entry 18 deals directly with land. 4. Nomenclature of object is not the determining factor. 5. The true test is : Is the tax payable irrespective of the activities specified in the Schedule read with section 32 (b) of the Act ? If the tax payable is in the negative, then it cannot be tax on land. 3.1.1.9. In pith and substance it is a tax on the activities of mining at least as far as section 3(2) (b) read with items (a) to (c) of the Schedule is concerned. Section 3 (2) (b) expressly refers to mining. Combined effect of section 3 (2) (b) and the Schedule is that developmental activities are restricted to open cast excavation and underground excavation ‘Open Cast’ refers to mining activity. In this connection he has referred to (The Concise Oxford Dictionary Eight Edn. P. 831, Chambers Dictionary of Science & Technology, P.826, Collin Combined Dictionary, p. 1008). In this connection he has also referred to section 2(kk) of Mines Act, 1952. “open cast working”. 3.1.1.10. Since in pith and substance it is a tax on mining operations it will be covered by Entry 54 List I read with Entry 97 List I and Art. 248 and it is not covered by Entry 49 of List II (The India Cement Ltd. etc. Vs. State of Tamil Nadu, AIR (1990) SC 85, Orissa Cement Ltd. Vs. State of Orissa : AIR 1994 SC 1976, Federation of Mining Association of Rajasthan Vs. Vs. State of Tamil Nadu, AIR (1990) SC 85, Orissa Cement Ltd. Vs. State of Orissa : AIR 1994 SC 1976, Federation of Mining Association of Rajasthan Vs. State of Rajasthan : AIR 1992 SC 103 and Central Coalfields Ltd V. The State of Bihar : AIR 1991 Patna 27 1992 (1) PLJR 573 . 3.1.1.11. In any event he has submitted that tax on land will not include land for which mining lease has been granted under MMRD Act 1957. Tax on land comprised in mining leases is included in the field occupied by Entry 54 of List I. In this connection he has submitted as follow: (a) There is declaration of expediency under S.2 of MMRD 1952 which covers taxation. That is how royalty is tax. In this connection he has referred to Orissa Cement Case: AIR (1991) SC 1676, India Cement Case : AIR (1990) SC 85. The power of taxation in Entry 49 List II becomes occupied by Parliament to the extent of land covered by mining leases or the State is denuded of such power. Taxation of land comprised in mining lease become ‘any other matter’ within Entry 97 List I. (b) Special provision prevails over the general Entry 49 List II – land generally. Entry 54 List I – Mines (Land) Specifically. (c) Royalty is tax, Royalty is imposed by 1957 – Accordingly the State’s power is excluded. 3.1.1.12. His next broad submission regarding the unconstitutionality of the Act was to the effect that there is conferment of unguided/uncanalised power of excessive delegation by legislation power. He has submitted that the following provisions of the Act are ultra vires the Constitution by reason of conferment of unguided/uncanalised power on the State Government and/or by reason of delegation of essential legislative function. (a) The proviso to section 3 (1) of the Act confers powers to amend the Schedule by rule as and when considered necessary. This will involve not only changing the rate but changing the taxable event. (b) Sub-section (4) of section 3 confers power on the State Government to impose taxation – “To impose a lump-sum tax in addition to the tax under sub-section (1) of Section 3”. (c) Section 7 authorises the State Government to appoint appellate authority. (d) Section 11 authorises the State Government to invest any authority or any functionary with drastic powers. (b) Sub-section (4) of section 3 confers power on the State Government to impose taxation – “To impose a lump-sum tax in addition to the tax under sub-section (1) of Section 3”. (c) Section 7 authorises the State Government to appoint appellate authority. (d) Section 11 authorises the State Government to invest any authority or any functionary with drastic powers. (e) Section 12 authorises the State Government to lay down procedure and impose fees, taxes lump-sum taxes and their enhancement. 3.1.1.13. The conferment of unguided/uncanalised power results in investing the authorities with arbitrary powers violating Article 14 of the Constitution. Dwarka Prasad Laxmi Narain Vs. State of Uttar Pradesh: AIR (1954) SC 224, 227, Air India Vs. Nergesh Meerza : AIR (1981) SC 1829 (p. 1859 – pr. 117), B.B. Rajwanshi Vs. State of U.P. : AIR (1988) SC 1089 (p.1093 – prs. 8, 10) A.N. Parasuraman Vs. State of Tamil Nadu : AIR (1990) SC 40 (p. 43, 44). Delegation of essential legislative function (or excessive delegation) violates Article 246 of the Constitution. In the present context, each Delegation violates Article 246 (3) of the Constitution. Essential legislative functions are those functions which must be performed by the Legislature itself. In the context of a taxing statute such functions would include: (a) Specifying the taxable event; (b) Specifying the rates without any guidelines. (c) the basis for assessment. The two concepts, namely, conferment of unguided/uncanalised power and delegation of essential legislative functions arc sometimes overlapping. But, if it is demonstrated that legislation transgresses any of these limitations, the same would he ultra vires the Constitution. 3.1.1.14. His next broad submission was that there was no methodology or machinery for assessment. In this connection he has pointed out that the Act does not contain any methodology and/or machinery for assessment of tax. No machinery and methodology have been laid down for ascertainment of fundamental facts contemplated by the Act on which the levy, assessment and collection of the tax is based. The Act does not provide as to how different areas of forest land having different vegetative densities would be ascertained. The Act does not provide any machinery for ascertaining as to whether any land has been voided at all or for the proper adjudication of the measurement of such land voided is to achieved. The Act does not provide as to how different areas of forest land having different vegetative densities would be ascertained. The Act does not provide any machinery for ascertaining as to whether any land has been voided at all or for the proper adjudication of the measurement of such land voided is to achieved. The problem 'defies resolution, particularly in view of the definition of 'void' in Sec. 2 (6) of the Act. Absence of such methodology and/or machinery renders the Act ultra vires amongst others on the following grounds: (a) Article 265 of the Constitution provides that no tax shall be levied or collected except by authority of law. A taxation law, which does not provide for machinery of assessment, is an incomplete law and is, therefore, no law within the meaning of Art. 265. Jaswant Theater v. State of Punjab : (1987) 168 ITR 38 al page 42. (b) A taxation statute, which does not provide for machinery of assessment is ex facie violative of Art. 14 of the Constitution, inasmuch as the taxing authority is free to act at its whims and therefore, arbitrary in assessing the tax. - Kunnathat Thathunni Moopil Nair etc. v. State of Kerala AIR (1961) SC 552. (c) There is no provision for hearing and the principle of natural justice is a part of Art. 14 of the Constitution ; Union of India and others vs. Ex-Constable Amrik Singh : (1991) 1 SCC 654 : (1993) 3 SCC 259 3.1.1.15. If it is contended that such machinery can be provided by rules made under the rule-making power contained in Sec. 12, then the answer will be : (i) Section 12 does not refer to making rules for the purpose of assessment. (ii) If it is contended that the generality of the power in the first limb of section 12, i.e. “carrying out all or any of the purpose of this Act,” would be technically wide enough to include the power to make rules of assessment. Section 12 to that extent would suffer from the vice of excessive delegation of legislative powers. To that extent it would also be violative of Article 14 because it would confer unguided power for framing rules relating to assessment. Section 12 to that extent would suffer from the vice of excessive delegation of legislative powers. To that extent it would also be violative of Article 14 because it would confer unguided power for framing rules relating to assessment. In any event, It was submitted that if the substantive provision of the Act is ultra vires, the same cannot be rendered intra vires by subordinate legislation made under the Act. In the instant case, even the rules framed under notification GSR 19 dated 5th June, 1992 (Bihar Restoration and Improvement of Degraded Forest Land Taxation Rules) are arbitrary, so far as the assessment is concerned, violating Art. 14 of the Constitution on the following ground. (i) The return in From I assumes identification and determination of vegetation density, although in fact it has not been done and cannot be done; (ii) Rule 5 does not lay down any standards against which the Collector's satisfaction must be based. The exercise of assessment under Rule 5 is dependent on the ipse dixit of the Collector. (iii) No provision for giving any opportunity to the assessee in the event of the Collector not being satisfied with the return. 3.1.1.16. His next broad submission was that the Act is void for uncertainty. The following provisions of the Act are vague and uncertain and are not capable of being made certain and, therefore, ultra vires Art. 246 (1) of the Constitution as well as Art. 14 thereof. In this connection he has drawn our attention to several provisions of the said Act and particularly Sections 1 (2), 2(b), 2(e), 2(f), 2(h), 2(i), 2(j), 2(k), 2(m), 2(n), 2(o), 3(2)(b), 3(3)(c), 11(c), Schedule Item (c). He has submitted that if the law is vague or appears to be vague, then the Court will try to construe the same, if possible, in a manner so as to achieve the object of the Legislature. If no such construction is possible and the persons applying it arc in a boundless sea of uncertainty, then it will he unconstitutional. Invalidity arises from the probability of the misuse of the law to the detriment of the individual. State of M.P. v. Baldeo Prasad : AIR (1961) SC 293, Harakchand Ratanchand Banthia. If no such construction is possible and the persons applying it arc in a boundless sea of uncertainty, then it will he unconstitutional. Invalidity arises from the probability of the misuse of the law to the detriment of the individual. State of M.P. v. Baldeo Prasad : AIR (1961) SC 293, Harakchand Ratanchand Banthia. v. Union of India: AIR (1970) SC 1453 (Para 18), K.A. Abbas v. Union of India : AIR (1971) SC 481 (Paras 47 & 48), Union of India v. The Tata Iron & Steel Company Ltd., AIR (1975) SC 769 (Para 9). 3.1.2. Arguments by Mr. S.C. Bose. Sr. Advocate appearing for Indian Iron & Steel Co. Ltd. Mr. Bose appearing on behalf of Indian Iron & Steel Co. has made it clear at the very outset that he is adopting the arguments of Mr. Pal. Over and above, he has made the following submissions. 3.1.2.1. In the xerox copy of the Act, as submitted by the petitioner in ‘Indal’ it does not appear that there is any repealing or saving section. The Act came into force immediately and not retroactively. Section 8 of the General Clause Act does not apply. If, however, It is found from the bill, the legislative proceedings, and the Gazette notification that there is a repealing and the saving provisions, in that case by reason of Section 8 of the General Clauses Act (corresponding provisions in the Bihar General Clause Act) the actions taken under the Ordinance and the Rules framed under the Ordinance can survive. Otherwise the Ordinance being a temporary statute and there being no saving Clause of actions taken under the Ordinance or the Rules made thereunder, the orders made and actions taken under the Ordinance lapses on the expiry of this Ordinance. In this connection reference was made to a Full Bench judgment of the Calcutta High Court reported in Tarak Chandra Mukherjee and others Vs. Ratan Chandra Ghosal & Ors.: AIR (1957) Calcutta 257. 3.1.2.2. On the question of distribution of Legislative power within the scheme of Indian Constitution between the State and the Centre with regard to subject matter and taxation power he has relied on the following : M.P.V. Sundraramier & Co. v. State of A.P. : (1958) SCR 1422 at pp. Ratan Chandra Ghosal & Ors.: AIR (1957) Calcutta 257. 3.1.2.2. On the question of distribution of Legislative power within the scheme of Indian Constitution between the State and the Centre with regard to subject matter and taxation power he has relied on the following : M.P.V. Sundraramier & Co. v. State of A.P. : (1958) SCR 1422 at pp. 1480-82 : AIR (1958) SC 468 at p. 494-5, Synthetics & Chemicals v. State of U.P. : AIR (1990) SC 1927 at page 1952 (Para 67). Hoechst vs. State of Bihar : AIR (1983) SC 1019 at page 1044 (Para 67). It was further submitted that in the Constitution of India the legislative field is distributed between the Union and the State in Articles 246 (1), 246 (2), 246 (3), 248 and where there is a repugnancy between a Central law and a State law in the concurrent List the consequences are laid down in Article 254. It was submitted that it is to be noted that in distributing the field of legislation in the Constitution the subject matter or the topics of legislation are also separately enumerated, 'Land', which is normally a comprehensive expression, finds its place in Entry 18 List II of the Seventh Schedule of the Constitution. But there has been further classification of the corporal and incorporal right in and arising out of 'Land' as 'Forest' (now Entry 17A in the concurrent list) 'Fishery' (Entry 21 of List II of the Seventh Schedule), 'Mineral development and its regulation' (Entry 23 of list II subject to Entry 54 of List I). As such, 'Land' as a corporal entity is allotted a distinct and separate field of legislation (Item 18 of List II) from 'Forest' (17 A of List III), Fishery' (21 of List II) and 'Mineral development' (23 of List II) which arc incorporal rights arising out of 'Land'. In the land laws of India this has been noted by the Privy Council as early as in 1910 with regard to the grants made by Zamindars to the grantees when the Privy Council in the case of Kumar Harinarayan Singh v. Sriram Chakroborty reported in 37 Indian Appeals, p.136; at page 145 Privy Council. 3.1.2.3. In the land laws of India this has been noted by the Privy Council as early as in 1910 with regard to the grants made by Zamindars to the grantees when the Privy Council in the case of Kumar Harinarayan Singh v. Sriram Chakroborty reported in 37 Indian Appeals, p.136; at page 145 Privy Council. 3.1.2.3. On the constitutional validity of a taxing statue he has submitted as follow : (a) If it is a State law it must be in one or more entries in List II or List III of the Constitution. (b) An entry in List II may be subject to List I of the Seventh Schedule as in the case is Entry 23 and Entry 50 in List II of the Seventh Schedule to the Constitution. (c) It the taxing power of a particular State Law cannot be found either in List II or List III of the Constitution the Residuary power is in the Parliament. (B) The provisions of the Act must be definite, clearly ascertainable free from ambiguity or vagueness. So that otherwise it may not he violative of Part III or any other provision of the Constitution. (C) There must be an adequate machinery of assessment providing for reasonable opportunity to the assessee, casting a duty upon the assessing authority to act judicially, provision for approaching a superior Civil Court. 3.1.2.4. So far as Legislative competence of taxing statute is concerned he has submitted that in order to find out as to whether a State Act comes within one or more Entries in List II or List III of the Seventh Schedule the first exercise will be to find out the 'Taxable" event, identifying the charge and fixing the point a location of the charge and determine the character of the levy. On the question of "Taxable event" he submitted as follows : (a) Taxable event is the event on the occurrence or happening of which the liability to pay tax arises. If the event docs not occur then the liability to pay tax does not exists. In the case of the impugned Act the liability to pay tax does not arise upon owning or occupying or possessing the land. The liability to pay tax arises only upon carrying on mining activity or developmental activity or having been allowed to occupy forest land using such land for non-forest purpose. In the case of the impugned Act the liability to pay tax does not arise upon owning or occupying or possessing the land. The liability to pay tax arises only upon carrying on mining activity or developmental activity or having been allowed to occupy forest land using such land for non-forest purpose. Further if the activity as aforesaid is carried on by mechanical process than the rate of tax is 55 lacs per hectre which is equal to : One hectre is about a little less than 3 acres i.e. a little less than 60 cottahs, one cottah of land being 720 sq. of land where mining or development activity has been carried on by mechanical process comes to about Rupees Ninety Thousand. If however, in the same land mining or developmental activities is carried on by non-mechanised process the ceiling limit of the tax is Rs. 30 lacs per hectre. As such it is submitted that the taxable event does not occur upon owning or occupying or possessing the land which is the normal criterion for determining and levy of land tax but hire although the nomenclature of the Act is "Bihar Restoration and Improvement of Degraded Forest Land Taxation of 1992 the taxable event occurs upon carrying on mining or developmental activity and thereby voiding land or for using forest land for non-forest purpose. If a person holds thousand hectres of forest land either as owner, lessee, occupier or having only possessory interest he does not have to pay tax if he does not use forest laud for non-forest purpose or docs not carryon any development activity including mining. On the question of Identification or Location of the charge, a further principle for identification and location of the charge is that where the nature and character of the tax is not clearly found in one provision one has to look to the entire provision of the Act. In this connection he has placed reliance on the case of R.R. Engineering Vs. Zilla Parishad, Bereilly reported in AIR 1980 SC p-1008 the Supreme Court (at paragraph 22) and Buxa Dooars Vs. In this connection he has placed reliance on the case of R.R. Engineering Vs. Zilla Parishad, Bereilly reported in AIR 1980 SC p-1008 the Supreme Court (at paragraph 22) and Buxa Dooars Vs. State of West Bengal ( AIR 1989 SC 2015 pages 35 to 41 of the Case Book) As such it was submitted that the said Act is not on tax on land but a tax on mining or developmental activity or user of Forest Land for non-forest purpose and therefore the taxation provision or the taxable event is not a tax on land or property but on mining or developmental activity or deforestation. Such taxes are not be found either in List II or List III of the Constitution. The levy of such tax not having been conferred on the State Legislature such taxing power rests in the Parliament which is the repository of residuary power under Article 248 read with Entry 97 of List I of the 7th Schedule to the Constitution. Normally a tax on land or property have a direct relation or nexus on the holding, owning or occupying the land. The measure of such tax is sometimes according to the area of the land occupied as is found in the case of K.P. Mopil Nair Vs. State or Kerala, 1961 SC P-552 where rate of Land Tax is Rs. 2/- per acre. In some other laws Land tax is charged on the basis of fractional percentage of the value of the property as is generally found in the municipal ratings. 3.1.2.5. It was next submitted that the said Act is vague, arbitrary and discriminatory and therefore violative of Articles 14, 19, 301 read with 304 (b) of the Constitution. It was submitted that the provision of an Act must be definite, clearly ascertainable, free from ambiguity or vagueness. Otherwise this may be violative of the provision of Part III (fundamental rights Articles 14 & 19 1(g) of any other provisions of the Constitution. In this connection reference was made to the following decisions (i) Govinda Saran, Ganga Saran, 60 STC P-1 (ii) Harakchand Banthia & Ors. Vs. Otherwise this may be violative of the provision of Part III (fundamental rights Articles 14 & 19 1(g) of any other provisions of the Constitution. In this connection reference was made to the following decisions (i) Govinda Saran, Ganga Saran, 60 STC P-1 (ii) Harakchand Banthia & Ors. Vs. Union or India, AIR 1970 SC 1453 Section 27 (6) as it stood before its amendment read as follows : "On receipt of an application for the issue of renewal of a licence under this section, the Administrator may, after making such inquiry, if any, as he may consider necessary, by order in. writing either issue or renew the licence, or reject the application for the same : Provided that no licence shall be issued or renewed under this section unless the Administrator, having regard to the following matters, is satisfied that the licence should be issued or renewed, namely : (a) the number of dealers existing in the region in which the applicant intends to carryon business as a dealer. (b) the anticipated demand, as estimated by him for ornaments in that region. (iii) Hamdard Dawakhana &. Ors. Vs. Union or India, AIR 1960 SC 554 . (iv) Union of India & Ors. Vs. Tata Iron & Steel Co. Ltd., AIR 1975 SC 769 . Considering the above principles of law enunciated by the Supreme Court if some of the provisions of the Act are examined, it will be found that the said provisions are vague, indefinite, unascertainable and ambiguous. The provisions of the said Act have been set out in some detail to the note submitted by Sri S. Pal, Sr. Advocate. As such what is set out hereunder is some of the provisions in which ambiguity, indefiniteness etc. are glaring. For such purpose reference was made to the following provisions : 2 (b) Biological reclamation means restoration of vegetal cover by such means as may be deemed suitable. But how one can ascertain about the original cover which is to be restored. No guideline. 2 (d) Excavation means making hollows either on surface or underground by whatsoever means. 2 (e) "Forest Land" means any land notified as such under any Act and or recorded as Forest in revenue record. But how one can ascertain about the original cover which is to be restored. No guideline. 2 (d) Excavation means making hollows either on surface or underground by whatsoever means. 2 (e) "Forest Land" means any land notified as such under any Act and or recorded as Forest in revenue record. It was submitted that inasmuch as the rate of tax is uniform as specified in the schedule, Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992, irrespective of the nature of forest land as defined in section 2 (c) in equals are treated as equals and thereby upon the principle enunciated by the Supreme Court in Mopil Nair’s case (1961 SC 552) the levy is discriminatory. All forest land as defined in that section throughout the State of Bihar differ on quality of the tree, number of the tree in a forest, height of the tree, or the rate of growth. There are innumerable varieties of trees in various forest areas in Bihar. To name a few, Eucalyptus tree height of which is about 150 ft., Mahua tree with half of its size, Sal, Palash, Arjun, Sishu, trees newly grown or drying. Firewood trees and trees scattered in a sporadic manner whereas there are other Forests where aforestation is done on Scientific and systematic basis. In some forests trees are thickly grown and in some other trees are scattered. But in the Schedule to the Act rate of tax are uniform according to the method of excavation. The same rate of taxation is levied upon' all persons whether "voiding of land" was done by felling cheap type of trees such as Fire Wood Trees or even useless trees as with trees of higher value. In section 3 (2) (b) the tax shall be payable by every occupier responsible for creating void or void by indulging in any "developmental activity including mining." The expression "developmental activity" has nowhere been defined in the Act and is wholly vague. It is difficult to understand that how one can indulge in "developmental activity" which is prescribed in every mining lease granted under the Mines and Minerals Regulation and Development Act 1957, viz. construction of Roads, Workers Colony, Hospital etc., which arc statutory requirements but these activities are not distinguished from unauthorised activity. It is difficult to understand that how one can indulge in "developmental activity" which is prescribed in every mining lease granted under the Mines and Minerals Regulation and Development Act 1957, viz. construction of Roads, Workers Colony, Hospital etc., which arc statutory requirements but these activities are not distinguished from unauthorised activity. In absence of any clear definite identifiable meaning as to what is developmental activity" the entire charge appears to be vague. Further the rate of tax for such developmental activity if it is done by mechanised open cast excavation process is Rs. 55 lacs per hectre as ceiling limit and if it is by non-mechanised process the ceiling limit is Rs. 30 lacs. This clause is therefore wholly arbitrary and violative of Article 14 of the Constitution. Then again although such developmental or mining activity may be done by mechanised or non-mechanised process, but the resultant effect of voiding forest land is the same. As such there is no rational nexus of voiding land between "mechanical excavation" and "non-mechanised excavation" which determines the levy of higher rate of tax according to the method used for mining or development purpose. The rate of tax is at so much variance and disproportionate and excessive between 55 lacs as ceiling and 30 lacs as ceiling in one hectare of land by reason of using the method of voiding that in the principle enunciated by the Supreme Court in the case of Ganga Saran (60 STC page 1 at P 4) the charge is arbitrary, discriminatory and violative of the provision of Articles 14 and 19 (1) (g) of the Constitution. The cost of biological reclamation of the forest or restoring to its original contour can never be the same having regard to the different varieties of tree and different kind of forest. In Section 2 (h) "mechanical reclamation" is defined as restoring the original colour as far as possible or filling up of void. With regard to this expression no clue or date or guideline is given as to how the original contour or voidness is ascertainable. It is wholly left to the executive discretion. Since this is the pivotal clause in the Act if this clause is vague or otherwise indefinite which is not severable, the whole Act is liable to be struck down on the ground of arbitrariness being vague, indefinite and ambiguous. 3.1.2.6. The next argument of Mr. It is wholly left to the executive discretion. Since this is the pivotal clause in the Act if this clause is vague or otherwise indefinite which is not severable, the whole Act is liable to be struck down on the ground of arbitrariness being vague, indefinite and ambiguous. 3.1.2.6. The next argument of Mr. Bose was that no proper machinery was provided under the said Act and accordingly it is ultra vires Art. 14, 19 (1) (g) & 301 read with 304 (b) of the Constitution. A further requirement in a taxing statute to be immune from a challenge of being vitiated as arbitrary and thereby violating the provisions of Article 14 of the Constitution is that the taxing statute must lay down a regular machinery for making assessment of the tax proposed to he imposed by the statute. The absence of a proper machinery in a taxing statute was held to be ultra vires the Constitution by the Supreme Court in the case of K.T. Moopil Nair vs. State of Kerala reported in AIR 1961 SC 552 at page 559 para 9, Jaswant Theatre vs. State of Punjab reported in 168 ITR 38. In that view of the matter the court was pleased to strike down the notification as invalid. The petitioner concludes with the observations made by the Supreme Court in the case of India Cement, 1990 (1) SCC P-12 at P-26. "It appears that in the instant case also no tax can be levied or is leviable under the impugned Act if no mining activities are carried on Hence, it is manifest that it is not related to land as a unit which is the only method of valuation of land under Entry 49 of List II, but is relatable to minerals extracted." 3.1.3. Arguments by Mr. K.D. Chatterji learned counsel appearing on behalf of the petitioners. C.W.J.C. 2336, 3356, & 3347 of 1992 (R) and 740 of 1993 (R). 3.1.3.1. Mr. K.D. Chatterjee, learned Senior Advocate appearing on behalf of the petitioners made submissions in support of a written argument submitted by him. At the outset it was made clear by him that his submission was not exhaustive, but a supplement to the argument advanced by Counsel in C.W.J.C. 1720/92 (R) and others (by Mr. Pal and Mr. Bose). 3.1.3.1. Mr. K.D. Chatterjee, learned Senior Advocate appearing on behalf of the petitioners made submissions in support of a written argument submitted by him. At the outset it was made clear by him that his submission was not exhaustive, but a supplement to the argument advanced by Counsel in C.W.J.C. 1720/92 (R) and others (by Mr. Pal and Mr. Bose). He has submitted that basically, the challenge to the said Act falls under two heads: (a) Colourable Legislation and (b) Violative of Article 14. 3.1.3.2. On the question of colourable legislation he has submitted that the Act in its own terms does not purport to tax land as a unit. But if it purports to be such a tax, it is colourable legislation. The land not taxed as a unit: The charging Section (Sec. 3) nowhere says that it is a tax on land per unit (that is per bigha or katha or acre). Sub-sec. (1) recites the object of the Act, Sub-Sec. (2) who shall pay the tax and Sub-Sec. (3) the rate of taxation. The tax payable under Clauses (a), (b) and (c) of the Schedule is on cubic metres of void created by removal of soil, minerals etc. and not on land as a unit. A unit of land is not measured in terms of cubic measurement. The pith and substance of this Act is a tax on the volume of soil removed by excavation measured in cubic metres. On the question what pays the tax, if the section is meaningful at all the only reference can be to the two activities specified in clauses (a) and (b) of Sub-sec. (2) i.e. excavation and use for non-forest purpose. Sub-sec. (3) only refers to the rates given in the Schedule. As will appear hereafter the rates in the six' clauses of the Schedule are the taxes on the activities namely excavation and user. Thus, the Act in its own terms does not purport to levy tax on land as such. 3.1.3.3. On the question of 'pith and substance' he has submitted that even if it is assumed that the Act purports to levy a tax on land as a unit and if it is found that in pith and substance it is a tax on something else then it is a piece of colourable legislation. 3.1.3.3. On the question of 'pith and substance' he has submitted that even if it is assumed that the Act purports to levy a tax on land as a unit and if it is found that in pith and substance it is a tax on something else then it is a piece of colourable legislation. (i) The Act selects two activities namely "voiding" of land by excavation and use of forest land for non-forest purpose. It says the tax is to be paid for creating void and for using forest land for non-forest purpose. This is the pith and substance of the tax. If this is ignored you ignore the pith and substance of the Act. 3.1.3.4. On the question of Tax on land and tax on matters in relation to land, he has submitted as follows : In the Seventh Schedule to the Constitution there can be found a broad distinction between the general power to make laws on a certain subject and the power to make a fiscal statute on that subject. The general power is given by indicating broadly the field or area of legislation. This does not include the power to make taxing laws. This clearly highlights the difference between tax on a subject matter, say land and a tax on a matter relatable to land. For example, the power to make laws in matter, say land and a tax on a matter relating to land under Entry 18 List II is bereft of the power to tax; whereas a taxing entry is confined to a tax on the very object of taxation mentioned in the entry. In short, unless the impost is a tax on the land itself - a corporeal thing which is part of the surface of the earth, you can not pretend to tax land by taxing some activities upon the land or some transaction relatable to land. Another example given was as follows : Under Entry 8 List II the field of legislation is "intoxicating liquors". Under Entry 51 the State can impose duty of excise on "alcoholic liquors for human consumption". Only potable liquor can be taxed but a fiscal law concerning any intoxicating liquor regarding which laws can he made under Entry 8 can not be supported by Entry 51 (a). Under Entry 51 the State can impose duty of excise on "alcoholic liquors for human consumption". Only potable liquor can be taxed but a fiscal law concerning any intoxicating liquor regarding which laws can he made under Entry 8 can not be supported by Entry 51 (a). He has submitted that the doctrine of pith and substance means that you can not do indirectly what you can not do directly. In this connection he has relied on K.C.G. Narayan Deo v. State of Orissa : AIR 1953 SC 375 , State of Bihar v. Kameshwar Singh : AIR 1952 SC 252 and Seervai - 4th Edn. Vol.1, pages 269 – 275. "It is not competent either for the Dominion or a Province under the guise, or the pretence or in the form of an exercise of its own power, to carry out an object which is beyond its power and a trespass on the exclusive power of the other". (reported in 1939 A.C. 117 at page 130) (quoted in 1953 S.C., 375 at 380). See 1924 S.C. page 328 (referred to in 1953 SC, 375). An Act or the Dominion of Canada regulating insurance was declared ultra vires by the Privy Council. Thereafter, the Dominion Parliament tried to achieve the same object of controlling insurance by amending the Criminal Code which was within its legislative power. The Privy Council refused to uphold the law in this case and observed "it is one thing to declare corruption in municipal election or negligence of a given order in the management or railway trains, to be a criminal offence and punishable under the Criminal Code; it is another thing to make use of the machinery or the criminal law for the purpose of assuming control of municipal corporations or of provincial railways" - Ibid at page 343. In this case it is' not difficult to see the veiled object. The State having lost the revenue from cess on the activities of mining realised over decades, has now enacted this law to tax the same activity by measuring the injury caused by mining. It had profited so long by causing degradation through lessees and now wants to earn revenue for the same act by taxing degradation. This is an extreme case of colourable legislation. He has submitted that what has been said above falls squarely within the ratio of India Cement Case. It had profited so long by causing degradation through lessees and now wants to earn revenue for the same act by taxing degradation. This is an extreme case of colourable legislation. He has submitted that what has been said above falls squarely within the ratio of India Cement Case. The only difference is that whereas cess was levy on the output of the activity of mining the tax in question is on the injury caused to the land by the same activity, it is the other ides of the same coin. There is no difference in principle. 3.1.3.5. On the next broad point, that is, the Act being violative of Art. 14 he has submitted as follows: On the assumption that the tax imposed by this Act is ostensibly supported by Entry 49, List II the question that arises is whether it is void under Article 14. As will appear hereafter, the provisions of this Act are so arbitrary and vague, uncertain and discriminatory that it is hit by Article 14. 3.1.3.6. On the question of user of Forest Land: within the meaning of Section 3 (2) (a) he has submitted as follows : (i) Under Section 3 (2) (a) every user allowed by the State Government to use forest land for non-forest purpose will pay the tax (according to Clause (d), (e) and (f) of the Schedule). Allowed by the State Government must mean lawfully allowed, that is allowed in compliance with Section 2 of the Forest (Conservation) Act, 1980 by permission of the Central Government. Thus, atleast from 1980, persons lawfully allowed will he taxed but those who have not been lawfully allowed (but have been using forest land for non-forest purpose) will escape the liability. This is strange discrimination. (ii) User is defined in Section 2 (m). It includes persons who used in the past or shall use in the future. Strangely it does not include the person who is using forest land. However, that may he, taking a. long period of years (50 years shown in clauses (d) to (f) of the Schedule) the person who is the user is taxed for past use without any means of determination who was user in the past and for which period. Strangely it does not include the person who is using forest land. However, that may he, taking a. long period of years (50 years shown in clauses (d) to (f) of the Schedule) the person who is the user is taxed for past use without any means of determination who was user in the past and for which period. If the person to be taxed at present have started the use of forest land recently he will have to pay for a long period of use by others before him. The incidence of this tax is so arbitrary that it cannot stand the test of Article 14. So far as the question of user with reference to density of the Forest is concerned he has submitted as follows : This is wholly arbitrary. The Act contains no means to determine at which period of time in the past, what was the density of a 'particular area of forest. ‘For example, in C.W.J.C 2366/92 the demand notice page 170 shows that for 17 years the density of the forest land used is taken to be 0.5 and at Rs. 1.25 lacs per hectare the demand has been made at Rupees Ten crores sixty-two lacs fifty thousand. This shows a total absence of any rationale in computation of the Tax'. So far as tax on occupier is concerned he has submitted as follows : (i) The tax on the occupier is in respect of the extent of excavation measured in cubic metres. Section 2 (o) defines "void" with reference to the volume of soil removed. As will appear hereafter, operation of this tax will be disastrous to mining. But apart from that it is palpably discriminatory. A person who has excavated an area of say 10 acres by mining and has found no minerals will have to pay the same tax as a person who has raised minerals over another area of to acres. A flat rate is bound to cause discrimination. (ii) In an area which has been excavated for a long period there is no means to determine who had excavated, how many cubic metres and during what period. A flat rate is bound to cause discrimination. (ii) In an area which has been excavated for a long period there is no means to determine who had excavated, how many cubic metres and during what period. On the question of 'Forest land' as referred to in Section 2 (c) is concerned he has submitted as follows : Forest land has been defined in Section 2 (e) as any land notified as such under any Act or recorded as forest in revenue records. The tax with reference to such land is arbitrary. (i) By definition forest land is a territorial concept. It speaks of the area and not land covered by forest". Now, such of the forest lands notified or so recorded long ago has been denuded of forest. Much of it may have become barren and abandoned or a part of it may be under water. But the impact of the tax will be as much on such barren land as on the land which still has forest. (ii) To tax the occupant and the user of and on which forest does not exist merely on the ground that it 'is within the territory notified as forest area in the past is highly arbitrary. On the question of annual or one time tax, he has submitted as follows: (i) The Act does not indicate one way or the other. But the rules require annual return in respect of forest land, voided in the past or being voided, and used in the past or being used. If an annual tax is to be paid by the present occupier or user in the aforesaid terms the result would be mind boggling. Take an example. Under clause (a) of the Schedule for an excavation of one hectare a maximum of fifty-five lacs is the tax. If this is annual the result will speak for itself. (ii) Even as a one lime tax the result may be so fantastic that all mining and all enterprises and development work will have to be abandoned. (iii) The retrospective application of the Act will result in the aforesaid consequence and will clearly violate Article 14. 3.1.3.7. Next he has submitted that there is absence of any procedure for assessment. He has submitted that the matter is contained in a single section, Section 4, with no guidelines whatsoever. (iii) The retrospective application of the Act will result in the aforesaid consequence and will clearly violate Article 14. 3.1.3.7. Next he has submitted that there is absence of any procedure for assessment. He has submitted that the matter is contained in a single section, Section 4, with no guidelines whatsoever. Under this section the Collector shall levy, collect and realize the tax and issue a demand notice. On such notices payment has to be made within 30 days. This is all the assessment proceeding in the Act. The Rules do not carry it any further except to provide for filing of return. He has further submitted that mere provision of appeal does not cure infirmity of assessment. The defects pointed out above, regarding arbitrariness in the matter of procedure for assessment is not cured by providing an appeal. In this connection he has relied on the case of Jagbir Singh & others Vs. General Manager Punjab Roadways and others : AIR (1987) S.C., 70. 3.1.4. Arguments of Mr. M.M. Banerjee. Mr. M.M. Banerjee, learned Counsel, appearing on behalf of the petitioners in C.W.J.C. no. 3348 of 1992 (R) has generally adopted the submissions made by the learned Counsel appearing for the petitioners in other cases. In addition he has submitted as follows : 3.1.4.1. The impugned Tax is not Tax on Land as a unit for the following reasons: Section 3(2)(b) provides that the Tax shall be payable by every occupier responsible for creating void/voids. Void has been defined in Section 2(c) as any area of left over forest land from where any soil, mineral or rock or ore on any thing being fastened with earth have been removed for non-forest purpose, transported, dumped at a place other than the place from where the same was taken. This means that the tax is on the mineral removed and the tax is not on Land. As such even if one makes excavation he is not liable to pay tax unless and until he removes the mineral. In other words, it is just like Royalty payable under section 9 of the MMRD Act, 1957, which is levied on minerals removed. Royalty is a Tax and it is levied in proportion to the mineral worked. 3.1.4.2. Even assuming that the impugned Tax is a tax on land, the same is not applicable to a mine for the following reasons. Royalty is a Tax and it is levied in proportion to the mineral worked. 3.1.4.2. Even assuming that the impugned Tax is a tax on land, the same is not applicable to a mine for the following reasons. The Constitution makes a distinction between LAND and MINE. Entry 54 of List 1 of the VIIth Schedule provides for regulation of Mine and Mineral. Entry 18 of List II of the Seventh Schedule provides for the field of legislation of the State so far Land is concerned. Entry 23 of List II of the Seventh Schedule provides for the field of Legislation of the State so far mine and mineral development is concerned. Entry 49 of List II of the Seventh Schedule is in relation to Tax on Land. The aforesaid entries go to show that there is certainly a distinction between Land and Mine. All land cannot be mine. As such the State Legislature cannot in the guise of taxing Land tax a mine. 3.1.4.3. The impugned tax is applicable to all forest Land of Bihar. That means that the pre-requisite of the applicability of the provisions of the Act must be that it is a Forest land. A mine can not be said to be a Forest Land. A mine includes all types of land but once different types of land becomes a Mine, the nature and character of other lands changes and they no longer remain forest land, agriculture land etc. A Mine includes the surface land also, Reference has been made in this connection to AIR (1989) SC 1530 (at page 1533 para 15). 3.1.4.4. The Parliament in its wisdom knowing fully well that the State Legislature does not have any competence to legislate in relation to a Mine, has itself enacted various laws in relation to regulation & development of Mines which take care of every aspect including degradation of land and environmental aspects so far a mine is concerned. If land is interpreted to also include mine then the enactment made by Parliament in relation to a mine will be without any competence. 3.1.4.5. Under the provisions of Rules 72 & 73 of the Mineral Concession Rules 1960 read with clause 23 of the Condition of lease, a lessee is bound to pay compensation for damage done to the surface of the land. 3.2. On behalf of the State respondents. Mr. 3.1.4.5. Under the provisions of Rules 72 & 73 of the Mineral Concession Rules 1960 read with clause 23 of the Condition of lease, a lessee is bound to pay compensation for damage done to the surface of the land. 3.2. On behalf of the State respondents. Mr. Kapil Sibal, learned Senior Advocate appearing on behalf of the State respondents made the following submissions. 3.2.1. At the outset he made some general observations in respect of the genesis of the legislation and the purposes sought to be achieved to the following effect: (a) The title of the Act itself suggests what the legislation seeks to achieve, inherent in the enactment is the recognition of the reality that the activity of mining and use of forest land for non-forest purposes has resulted in the degradation of forest land, which condition requires restoration and reclamation of the said degraded forest land. The enactment serves the purpose of raising revenue through taxation in an attempt to restore and improve the said degraded forest land. (b) The general contention that the levy imposed under this enactment is a charge relatable to mining activity is unfounded for the simple reason that the charge has no nexus to the quantum of mineral which is won in the course of mining activity but is relatable to the extent of degradation resulting from the use of forest land for such activity and for activity which can be referred to as non-forest user. (c) The activity of mining entitles the holder of the lease, legitimately granted to the lessee to win the mineral and pay royalty thereon, but does not entitle the holder of the lease to leave the mined area in a degraded condition. (d) The holder of a mining lease, who does not leave the mining land in a degraded condition, is not subject to any levy under the impugned legislation thereby demonstrating that the levy imposed under the impugned legislation has no nexus whatsoever with the mining activity and with the extent of mineral recovered from the mines. (e) It follows from the above that the Act imposes a levy not on the activity of mining but on the restoration and reclamation of areas "voided" and left degraded, which is not the entitlement of the holder of the lease. The levy is not on the legitimate user of the holder of the lease. (e) It follows from the above that the Act imposes a levy not on the activity of mining but on the restoration and reclamation of areas "voided" and left degraded, which is not the entitlement of the holder of the lease. The levy is not on the legitimate user of the holder of the lease. (f) A perusal of the Schedule referred to in Section 3 of the Act would indicate that the extent of levy under the Schedule has no nexus to the quantity of mineral mined. It is clear that the extent of levy is relatable to the degradation of the land used for non-forest purposes and that the ill-effects of the mining activity and the degradation cost thereby has no nexus to the quantity or value of the mineral which is mined. (g) The levy is not in terms of per unit of mineral recovered and is relatable to the deleterious consequences of mining activity and the cost of reclamation of "voided" land as the said expression is used in the Act. (h) The provisions of the Act in respect of issues relating to legislative competence, vagueness, uncertainty and arbitrariness are viewed in the context of the abovementioned general observations. 3.2.2. Thereafter Mr. Sibal put forward the following proposition on behalf of the State of Bihar Proposition 1 - It is the contention of the State of Bihar that the impugned legislation being the Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992 (hereinafter referred to as the "Impugned Legislation" falls within Entry 41) of List II, which reads as under: List II – State List. Proposition 2 – The taxable event under the Act is set out in Section 3 read with the Schedule referred to therein which forms part of the said Section. Proposition 2 – The taxable event under the Act is set out in Section 3 read with the Schedule referred to therein which forms part of the said Section. Proposition 3 - None of the provisions of the Act nor can the Act be struck down on any of the following grounds: (a) That certain provisions of the Act suffer from excessive delegation of legislative power, (b) that some of the provisions of the Act suffer from the vice of vagueness and indefiniteness, (c) that there is no methodology for the machinery contemplated by the Act for the assessment and levy of tax, and (d) that the Act suffers from the vice of uncertainly Proposition 4 - The Forest Conservation Act of 1980 and the Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992 operate in different fields. There is no basis to contend that the Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992 is repugnant to the Forest Conservation Act of 1980. The impugned legislation cannot also be struck down on the basis of the concept of "Occupied Field" in the context of the Mines and Minerals (Regulation and Development) Act, 1957. 3.2.3. On the point of Legislative competence he submitted as follows : (a) It is a well established principle of interpretation of legislative entries in the Seventh Schedule that each of the entries must be liberally construed. In this connection he relied on the following decisions ; AIR 1935 PC 158 at 162 Column 2 – British Coal Corporation AIR 1941 PC 16 at 25 (B) - Mt. Atiqa Begum. AIR 1951 SC 318 al 322 para 7 - F.N. Balsara. AIR 1955 SC 367 at pg. 370 para 14 - Hans Muller. AIR 1955 SC 58 at pg. 61 para 6 - Navin Chandra Mafatlal. AIR 1959 SC 459 at pg. 463 paras 12 & 13 - Sri Ram Narain's case. AIR 1961 SC 552 at 564 paras 34 & 35 Moopil Nair. AIR 1961 SC 652 at 655 paras 10 & 11 – Diamond Sugar Mills AIR 1965 SC 1387 at 1389 - 90 paras 6 & 7 - Banarsi Das AIR 1992 SC 21 at 2180 para 23 - Indian Aluminium Co. AIR 1961 SC 552 at 564 paras 34 & 35 Moopil Nair. AIR 1961 SC 652 at 655 paras 10 & 11 – Diamond Sugar Mills AIR 1965 SC 1387 at 1389 - 90 paras 6 & 7 - Banarsi Das AIR 1992 SC 21 at 2180 para 23 - Indian Aluminium Co. (b) The Court in the context of a challenge to the constitutionality of the enactment must keep in mind the principle that the presumption is always in favour of its constitutionality and unless the court on a reading of the provisions finds the Act wholly unworkable or without legislative competence or otherwise arbitrary the court will hesitate to strike down a legislative enactment. In this connection, he relied on the following decisions : AIR 1953 SC 375 at 379 - Gajapati Narayan Deo AIR 1956 SC 503 at 512 para 21 - B.N. Bhup AIR 1959 SC 860 para 5 at page 864 – Swarup Singh AIR 1959 SC 308 at 366 - G.N. Rao AIR 1960 SC 554 para 8, 9, 12 at page 559, 560, 561 – Hamdard Dawakhana AIR 1965 SC 1017 al 1025 para 16 - Vajravelu AIR 1978 SC 1675 para 38 at 1686 - Sunil Batra AIR 1992 SC 1277 para 85 at 1302 - K.C. Mahajan (c) The third principle is that when construing legislation in order to determine the entry in the Seventh Schedule to which it relates, the pith and substance of the legislation is to be seen and thereafter related to a particular entry in the Seventh Schedule. Merely because a part of the State legislation may affect another entry in the Union List in the Seventh Schedule it will not render the State Legislation unconstitutional as long as the pith and substance of the impugned legislation falls within an entry in the State List. In this connection, he cited the following decisions : 1962 SC 1044 at 1049-50 para 8 - Calcutta Gas. AIR 1970 SC 1453 at 1458 para 6 – Harakchand AIR 1972 SC 1061 at 1069 – 70 para 20 – H.S. Dhillon 1985 Supp. In this connection, he cited the following decisions : 1962 SC 1044 at 1049-50 para 8 - Calcutta Gas. AIR 1970 SC 1453 at 1458 para 6 – Harakchand AIR 1972 SC 1061 at 1069 – 70 para 20 – H.S. Dhillon 1985 Supp. SCC 476 at 493 para 11 at 495 para 17 onwards – ITC Ltd. at 571 para 216 onwards at 575 para 230 AIR 1990 SC 85 at 90 para 18 – India Cement AIR 1990 SC 1927 at 1950 para 66 onwards – Synthetics & Chemicals AIR 1990 SC 781 at 797 para 39 onwards – M/s Goodyear. He further submitted that the theory of pith and substance in the context of the present legislation in the event the legislation is challenged on the ground of the concept of “Occupied Field” that it falls within the Entry 54 of List I is to be applied with reference to Entry 23 of List II. The doctrine is being erroneously applied with reference to Entry 49 of List II, which is entirely unrelated either to Entry 23 of List II or Entry 54 of List I. Entry 54 of List I and Entry 23 of List II relate both to regulation of mines and minerals development. However in terms of the constitutional scheme relatable to these two Entries, if Parliament by law in the public interest through a declaration seeks the regulation of mines and mineral development, then in terms of the law declared by the Supreme Court the entire field relatable to the regulation of mines and mineral development is occupied by Parliament, leaving no area of legislation within the domain of the State Legislation. However, the issue for this Court is to consider whether the impugned legislation is relatable to Entry 49 of List II or entry 23 of List II. The impugned legislation which seeks to tax “voided” land for the purposes of its restoration and reclamation cannot per se be relatable to regulation of mines and mineral development. The taxes levied are not relatable to : (i) quantum or value of mineral recovered (ii) quantum of royalty paid by the lessee on the extent of mineral recovered, (iii) any mineral development by funding the development of a particular mineral and (iv) the development and regulation of mining activity. The taxes levied are not relatable to : (i) quantum or value of mineral recovered (ii) quantum of royalty paid by the lessee on the extent of mineral recovered, (iii) any mineral development by funding the development of a particular mineral and (iv) the development and regulation of mining activity. Consequently, by no stretch of imagination can it be contended that the impugned legislation has any nexus to entry 23 of List II. (d) Entries are fields and not powers of legislation and the fields of each of Entries are to be liberally construed. In this connection reference was made to AIR 1962 SC 1044 (Calcutta Gas Co.) and AIR (1990) SC 781 (M/s Goodyear Co.). The impugned legislation relates to land and not regulation of mines and mineral development is demonstrated by reference to the terms of the legislation itself. A reading of the definitions under Section 2 (b) meaning of "biological reclamation", Section 2 (d) meaning of "excavation", Section 2 (h) meaning of "mechanical reclamation", Section, Section 2(m) "user", Section 2(n) "vegetative density", Section 2 (o) "void", Section 2 (p) meaning of "zero density" with section 3 stipulates that the tax is to be assessed and collected for mechanical and. biological reclamation of forest land and for rehabilitation so that the land is reclaimed as far as possible. Section 3 (2) (a) & (b) imposes a liability on every user for use of forest land for non-forest purposes and every occupier responsible for creating voids by indulging in any developmental activities including mining. Section 3 (3) (a) read with Sr. Nos. (a), (b) and (c) of the Schedule again relate to land already voided, being voided or may by voided as referred to therein. Section 3 (3) (b) relates to Sr. Nos. (d) to (f) of the Schedule for use of forest land used for non-forest purposes. A reference to the Schedule of its own will indicate that the extent of rate of levy is directly relatable to the extent of land voided or the extent to which its density is effected. The Act, therefore, relates to the consequences of mining activity and using forest land for non-forest purposes and not related to the regulation of mines and mineral development. The contention, therefore, that the Act is unconstitutional for lack of legislative competence on the theory of occupied field by the Parliament is per se incorrect. 3.2.4. The Act, therefore, relates to the consequences of mining activity and using forest land for non-forest purposes and not related to the regulation of mines and mineral development. The contention, therefore, that the Act is unconstitutional for lack of legislative competence on the theory of occupied field by the Parliament is per se incorrect. 3.2.4. On the point of taxable event under the Act Mr. Sibal submitted that section 3 of the Act read along with the Schedule appended to it specifics the taxable event which occurs when the land is 'voided' either on account of mechanised open cast excavation and for that matter in respect of underground excavation. Section 3 stipulates that the tax shall be levied, assessed and collected at the rates specified under the Schedule appended to the Act in the manner as may be prescribed. The levy of the tax is in respect of 'voided' land resulting either from mechanised open cast excavation, non-mechanised open cast excavation or underground excavation with reference to excavation and use of forest land for non-forest purposes. It is clear from a reading of Sec. 3 along with the Schedule that where land is not voided pursuant to excavation and use of forest land for non-forest purposes, the question of levy of tax would not arise. Once tax is to be levied for 'voiding', Section 3 further stipulates that the tax shall be assessed and collected at the rates specified under the Schedule. The rate in respect of voided land pursuant to mechanised or non-mechanised open cast excavation or underground excavation is separately provided for in column 2 of the Schedule in respect of each of the activities adumbrated therein. The manner in which the collection of the tax levied and assessed specified in the Schedule is to take place is a matter stipulated in the Rules. The same logic applies in respect of levy, assessment and collection of tax in relation to denudation of forest land on account of any activities of her than excavation. The taxable event in respect of items (d), (e) and (f) in the Schedule is related to the density per unit of land relatable to effective growth of tree and green canopy. It is, therefore, idle to contend that the taxable event is not stipulated under any of the provisions of the impugned legislation. The taxable event in respect of items (d), (e) and (f) in the Schedule is related to the density per unit of land relatable to effective growth of tree and green canopy. It is, therefore, idle to contend that the taxable event is not stipulated under any of the provisions of the impugned legislation. The Court in ascertaining the taxable event must not only look at the relevant section but also the entire scheme of the Act: and in the event, the court is unable to find any taxable event which in law must be the basis of the levy, then alone must the court strike down the legislation. In the present case it is dear that upon a reading of Sec.3 and the Schedule appended thereto the taxable event in the case of excavated land through various means is the voiding of the said land and in the case of any other activity, if relatable to the density per unit of land, is as specified in the Schedule. It is this reasonable interpretation which must commend itself in the court when deciding upon the Constitutional validity of the impugned legislation. It is a well established principle of law that the taxable event will have to be identified by reading the charging section along with all other relevant provisions of the impugned legislation. 3.2.5. On the question of constitutionality of the Act it was contended that the provisions of the Act are liable to be struck down on the grounds: (a) that certain provisions of the Act suffer from excessive delegation of legislation power; (b) that some of the provisions of the Act suffer from the vice of vagueness and indefiniteness; (c) that there is no methodology for the machinery contemplated by the Act for the assessment and levy of tax; and (d) that the Act suffers from the vice of uncertainty. So far as the charge of unconstitutionality is concerned it was contended that it is not sustainable on the following grounds: (i) The rate at which tax is to be levied is specified in the Schedule in respect of each of the activities referred to therein. In respect of mechanised open cast excavation it is Rs. 40 per cubic meter of land voided, subject to a maximum of Rs.55 lakhs per hectare of land excavated. In respect of mechanised open cast excavation it is Rs. 40 per cubic meter of land voided, subject to a maximum of Rs.55 lakhs per hectare of land excavated. In the case of non-mechanised open cast excavation, the rate is Rs.21 per cubic meter of land voided with no maximum prescribed. In respect of underground excavation, it is at the rate of Rs.30 per cubic meter of land voided/subsided, subject to a maximum of Rs.45 lakhs per hectare of land excavated or subsided. This is in respect of voiding of land on account of excavation. In respect of use of forest land for non-forest purposes in relation to activities other than excavation the rate prescribed is Rs.125 lakhs per hectare of land for use for 50 years making it Rs.2.5 lakhs per hectare for one year. This is in respect of use of forest land of density. In respect of use of forest land for non-forest purpose, land of varying density from 0.9 to 0.1 the extent of levy is proportionally determined. (ii) The assessment of tax is levied, collected and realised by the Collector at the rate mentioned in the Schedule as prescribed in Section 4. This is done pursuant to a demand notice on the occupier/user of the forest land, who is required to deposit the tax with the authority prescribed, within 30 days of the service of the notice. The Rules operative under the Act, pursuant to Bihar Ordinance 11 of 1992, set forth the procedure for the furnishing of returns by every user and occupier as defined in the Act. Consequently the Rules read along with the provisions of the Act suggest that the impugned legislation does suffer from excessive delegation. (iii) The power with the Government to amend the Schedule by rules as and when considered 'necessary cannot also be challenged on grounds of excessive delegation, since the Government is entitled to amend the rates of the levy from time to time. There are enough guidelines which can be discerned from the provisions of the Act and the rules that the amendment of such rates cannot possibly be challenged on grounds of excessive delegation of legislative power. There are enough guidelines which can be discerned from the provisions of the Act and the rules that the amendment of such rates cannot possibly be challenged on grounds of excessive delegation of legislative power. (iv) So far as Sec. 3 and sub-section (4) of Sec. 3 of the impugned Act are concerned, the rules to be framed by the State Government may impose a lumpsum tax not in addition to but in lieu of the tax stipulated under sub-section (1) of Sec. 3 read along with the Schedule. This Court may make note of this fact in its judgment. No other provisions of the Act can be challenged on grounds of excessive delegation of power. The Act in defining the expressions 'Biological reclamation', 'excavation', 'forest land', 'forest use', 'mechanical reclamation', 'open cast excavation', 'vegetative density', and the expression 'void' as well as the expression 'zero density' suggest that there is no basis to contend that the Act suffers from indefiniteness and vagueness. As already enunciated, Sec. 3 read along with the Schedule stipulates the basis for the levy of tax and the taxable event with reference thereto. The Schedule also stipulates the rates at which the tax has to be levied. Section 4 of the Act further stipulates that the Collector shall levy, collect and realise the tax at the rates mentioned in the Schedule. The manner of the levy and the manner of collection is stipulated under Sec. 4 read along with the applicable rules. There is no ground, therefore, to contend that any of the provisions of the Act relating to levy, assessment and collection suffer from vagueness, uncertainty or indefiniteness. As far as the fixation of the rates in the Schedule is concerned, the rates have been prescribed with reference to the Government of India’s guidelines for diversion of forest land for non-forest purposes. These guidelines were issued vide letter No.2-3/86 F.C. dated July 31, 1986. The guidelines refer to the losses and the cost of reclamation accruing over a period of 50 years : for losses on account of soil erosion, effect on hydrological cycle and upsetting of the ecological balance. The basis for the stipulation of Rs.55 lakhs and Rs.45 lakhs with reference to the land voided on account of excavation are also part of the guidelines. The basis for the stipulation of Rs.55 lakhs and Rs.45 lakhs with reference to the land voided on account of excavation are also part of the guidelines. Consequently, on the basis of these guidelines, the Government itself worked out the rate per cubic meter as the basis of the levy in respect of voided lands on account of different modes of excavation. Having provided the basis, it is not for this Hon’ble Court to scrutinise in detail the calculations in respect of the levy, as the jurisdiction of this Hon’ble Court is limited to the consideration by the appropriate Government of relevant criteria for the fixation of the levy which has been demonstrated. Consequently, the modalities in respect of the levy, assessment and collection of tax do not suffer from vagueness, uncertainty or indefiniteness. 3.2.6 On the question of repugnancy of the Act and the concept of Occupied Field it was contended that the Forest Conservation Act, 1980 in Section 2 stipulates that no State Government or other authority shall, except with the prior approval of the Central Government make any order directing that any forest land or any portion thereof may be used for any non-forest purpose. The issues involved in this case do not involve the resolution of any question in respect of use of any forest land for any non-forest purpose without the approval of the Central Government. It is relevant to note that the Act came into force with effect from October 25, 1980 and applies in respect of such forest lands which are directed to be used for any non-forest purpose for which the prior approval of the Central Government is necessary. If an issue arises in respect of any individual lease where forest land is sought to be used for a non-forest purpose without the prior approval of the Central Government, the remedy lies in either terminating the lease or seeking a direction from a court of appropriate jurisdiction that the lease should not be allowed to operate. The provisions of the impugned legislation, however, proceed on the assumption that forest land covered by the provisions of the Act are legitimately being used for non-forest purposes and in the event of such legitimate user, the Act provides for reclamation and rehabilitation of the said land which has been voided on account of such use for non-forest purpose. The provisions of the impugned legislation, however, proceed on the assumption that forest land covered by the provisions of the Act are legitimately being used for non-forest purposes and in the event of such legitimate user, the Act provides for reclamation and rehabilitation of the said land which has been voided on account of such use for non-forest purpose. Consequently, the two Acts operate in different spheres and there can be no valid basis to strike down the impugned legislation on the ground of repugnancy. 3.2.7. In response to the subsequent submissions filed on behalf of the petitioners, Mr. Sibal, appearing for the State of Bihar Submitted that the basic contention on behalf of the petitioners is that the tax in essence is sought to be levied on mining activity. The degraded land, it is contended, is the result of such activity and any levy on the restoration of degraded land is directly relatable to mining activity. This approach is erroneous when determining the validity of a taxation statute. The Supreme Court in Orissa Cement Ltd. v. State of Orissa, AIR 1991 SC 1676 and in India Cement v. State of Tamil Nadu, AIR 1990 SC 85 has held that as long as the tax levied is on a unit of land it would fall within the ambit of Entry 49 of List II. In determining the nature of the levy the first question to be considered is whether in the impugned legislation land is being taxed as unit. Section 3 read with the Schedule referred to therein stipulates that in respect of land degraded on account of mechanised open cast excavation the Unit of taxation is Rs. 40/- per cubic meter of land voided. The extent of levy in the same terms varies in respect of non-mechanised open cast excavation and underground excavation/subsidence area. In the case of use of forest land for non-forest purposes the levy is per hectare of forest land used for non-forest proposes. Consequently, the levy is on a unit of land. This directly falls within the ratio of India Cement and Orissa Cement as referred to above. In this connection he has referred to (a) paragraphs 34 to 37 at pages 1699-1700 in Orissa Cement case and (b) Paragraphs 23 and 29-34 at pages 93-94 and pages 95-96 in India Cement Case. The Court is always entitled to determine the true nature of levy. In this connection he has referred to (a) paragraphs 34 to 37 at pages 1699-1700 in Orissa Cement case and (b) Paragraphs 23 and 29-34 at pages 93-94 and pages 95-96 in India Cement Case. The Court is always entitled to determine the true nature of levy. In the cases of Orissa Cement and India Cement the levy was a cess on royalty. Since royalty is a charge on the value of the minerals, cess on royalty was consequentially also a levy on the value of the minerals. Justification by the State of such a levy under Entry 49 could not be sustained since the said Entry only entitles the State Government to levy a charge on land as a unit. This was obviously' not the case there. Therefore, both in the case of Orissa Cement and India Cement the levies were struck down. In the present case, admittedly, the levy cannot be related to either the quantity or the value of mineral recovered. There may be void land without recovery of mineral. The extent of voided land may also be unrelated to the quantum of value of the mineral recovered. In any event the charging section read with the Schedule specifies the extent of the levy. The subject matter of the levy determines the nature of the charge. Since the subject matter of the levy is cubic meter of voided land, the nature of the charge is taxation on land as a unit. Consequently, there can be no doubt that such a levy is justified under Entry 49 or List II. If this conclusion is correct no other exercise is required to be undertaken. The test that because of consequence of mining activity, any levy on voided land cannot be relatable to Entry 49 of List II is to suggest that in no case can any State Legislature levy charge on the consequences of mining activity. This proposition of law is per se not supported by any authority. Had this been the case both in India Cement and in Orissa Cement the Supreme Court would have merely opined that since the levy is relatable to mining activity, the question of this being justified under Entry 49 of List II does not arise. However, that was not the test applied by the Supreme Court in determining the validity of those legislations. However, that was not the test applied by the Supreme Court in determining the validity of those legislations. On the contrary the Supreme Court considered that even in respect of mining activity if the levy was on a land as a unit it could be justified. A fortiori it is clear that even in relation to mining activity as long as the impugned legislation relates to a charge based on land as a unit, unrelated to the value or quantum of mineral recovered or recoverable, the levy would fall and be justified under Entry 49 of List II. The above response in essence would cover the main objection of the petitioners before this Hon'ble Court since the only argument advanced is that the impugned legislation falls within Entry 54 of List I on account of the fact that the voided land is the result of mining activity which is regulated under the Mines and Minerals (Regulation and Development) Act, 1957. Such a wide interpretation of Entry 54 is not justified on any legal basis. Entry 54 is not an entry entitling the Union to levy a tax but relates to Regulation and Development of mines and minerals. The corresponding Entry in that State List is Entry 23 of List II. The pith and substance of the impugned legislation which falls within Entry 49 of List II is unrelated to Entry 54 of List I. Entry 54 of List I not being an Entry relating to taxation, the power to levy a tax cannot be found in the said Entry. That is the only rational and reasonable way of interpreting Entries in the VIIth schedule, in order to give effect to each entry and not to deny legislative power to the State Legislatures under Entry 49 of List II. Such would be the result in the event the interpretation of the petitioners that Entry 54 of List I alone would entitle the Union Parliament to levy tax on land which is ravaged by mining activity. Such an interpretation is per se contrary to all norms and accepted principles of interpretation of legislative Entries. 3.3. Reply by Mr. S.C. Bose In respect of the submissions made by Mr. Sibal appearing on behalf of State of Bihar it was submitted by Mr. Somendra Chandra Bose appearing on behalf of some of the petitioners as follows: 3.3.1. Such an interpretation is per se contrary to all norms and accepted principles of interpretation of legislative Entries. 3.3. Reply by Mr. S.C. Bose In respect of the submissions made by Mr. Sibal appearing on behalf of State of Bihar it was submitted by Mr. Somendra Chandra Bose appearing on behalf of some of the petitioners as follows: 3.3.1. It is argued on behalf of the State of Bihar that impugned tax is a "Tax on Land" coming within entry 49 of list II of the VIIth Schedule to the Constitution of India. The respondent submitted that land means all lands from surface upwards to the bottom of the earth. The impugned tax on the basis of one cubic meter of land extracted or voided is "tax on land". The taxable event is extraction from land as a unit. 3.3.2. The submission made on behalf of the petitioner is that such contention is an ever simplification of the true and correct legal propositions and cannot be sustained inter alia for several reasons : (a) In the Constitution of India the legislative field with regard to ‘land’, ‘forest’, ‘mineral development’ and ‘tax on land’,’ tax on mineral resources are separately allotted to separate entries in the VIIth schedule to this Constitution. Tax on ‘minerals’ or mineral produce is not allotted expressly to any of the list. As such as held by the Supreme Court in the case of India Cement V. State of Madras, 1990 Supreme Court Pg 85 as also in the Orissa Cement Vs. State of Orissa, 1991 SC 1676 that taxes on minerals or mineral produce is a residuary item and parliament alone can legislate. The Bihar Act in so far as it purports to levy tax on all persons responsible for voiding of land by extraction of one cubic meter, such tax in relation to mining land is in pith and substance a tax on extraction of minerals either by open cast excavation or otherwise in such land. In the cases of Indal, Indian Iron and Steel Company and the Hindalco all the petitioners are carrying on open cast mining excavation on the mining lands under leases granted by the State of Bihar. Such leases are governed by the provisions of Mineral Concession Rules, 1960. In the cases of Indal, Indian Iron and Steel Company and the Hindalco all the petitioners are carrying on open cast mining excavation on the mining lands under leases granted by the State of Bihar. Such leases are governed by the provisions of Mineral Concession Rules, 1960. For carrying in such mining activity a holder of a lease has not only to comply with the provisions laid on in the aforesaid Act of 1957 and Mineral Concession Rules of 1960 but have also to observe the statutory requirements of Mines Act and other allied provisions. (b) In the written notes of submission on behalf of Indian Iron and Steel the statutory form of the mining leases which is in form K has been referred to wherein elaborate provisions made for felling down trees from a "reserve Forest" as also from unreserved forest land. (c) Our submission is that upon reading the entire provisions of the Bihar Act of 1992 and its Rules the purported imposition is not levy on land as such but on account of extraction of minerals per cubic meter from such mining lands by open cast mining excavation or deep mining activities by the persons holding such mining leases and carrying on mining activities in such land. Such extraction of mineral per cubic meters of the lands may be from surface to undergrounds or by underground mining. But in reality and substance it is a tax on mining actually for extraction of minerals and not a tax on land. (d) "Taxes on land" is normally understood to have been imposed upon a person owning or occupying the land. The rate of tax is determined either according to the area of land held by such person or at a percentage of the value of land. For example : (i) In the case of Mopil Nair (reported in AIR 1961 SC pg 552) the land tax is levied @ 2.50 per acre. (ii) In the case of Assistant Commissioner, Madras Vs, Buckingham and Carnatic Co. Ltd, (AIR 1970 SC 160), the tax is levied on urban land on the basis of market value of the land @ 0.4% on such market value (pg 172 para 2). (ii) In the case of Assistant Commissioner, Madras Vs, Buckingham and Carnatic Co. Ltd, (AIR 1970 SC 160), the tax is levied on urban land on the basis of market value of the land @ 0.4% on such market value (pg 172 para 2). So far as "land and building" in Municipal areas are concerned such tax is normally calculated upon the actual value of the holding which may be either letting value of the holding or the market value of the holding. 3.3.3. However, in case of mineral land payment by the lessee to its lessor on the basis of extraction of minerals from such land such payment is called "royalty". 3.3.4. It is submitted on behalf of the petitioner that under entry 18 of list II of the VIIth Schedule, the field of legislation with respect of "land" is allotted to the States. Similarly under entry 49 of list II "taxes on land" and property is within the legislative field of the State Legislature. But in view of express provisions of entry 23 and entry 50 of list II the field of legislation Converted by these two entries is excluded from entry 18 and entry 49. Entry 23; Regulation of mines and mineral development subject to the provisions of list I with respect to regulation and development under the control of the Union. Entry 50; Taxes of mineral rights subject to any limitations imposed by parliament of law relating to mineral development. 3.3.5. Concurrent list Entry 17A Forests: However there is no provision for imposing tax on forest under list II or III of the Constitution. As such it is submitted that the expression land in entry 18 means land upwards from the surface or downwards to the bottom of earth but within such entry the States Legislature do not posses power to legislate with respect to mines or mineral development or imposing tax on mineral resources or a tax on a person because of extraction of Minerals from such land by reason of entry 23 and entry 50 of list II of the VIIth Schedule. In this connection reliance was placed on observations made by Supreme Court in India Cement case. In this connection reliance was placed on observations made by Supreme Court in India Cement case. It is therefore submitted that by reason of the enactment of Mines and Mineral Regulation and Development Act, 1957 the provision of 3 (2) (b) in so far as the levy is imposed on occupier for voiding land by extraction of minerals from such land by indulging in mining activity is ultravires. It has already been submitted that in the Constitution of India the legislative field relating to land have been dealt with differently as “land being a corporal unit” and “benefits arising out of the lands Viz. Mining, Fishery, Forest which are incorporeal rights as separate unit”. In India such distinction between corporeal rights in the land and incorporeal rights arising out of land have been recognised by the Privy Council as early as in early part of this Century. In this connection reference was made to the case of Harinarayan Singh Vs. Sriram Chakrabarty reported in 37 Indian Appeals pg. 136. 3.3.6. A question was asked by this Hon'ble Court to Sri Kapil Sibal, learned Senior Advocate as to whether in view of the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 and section 13 (1) of the said Act in particular, it would be open to the Central Government to impose a levy on persons responsible for extraction of minerals from minerals lands, taking such land as unit by open cast excavation by mechanised or non-mechanised process in the same manner as in the Bihar Act. It was submitted that the question raised by this Hon'ble Court as above must be answered in the affirmative particularly after the judgment of the Supreme Court in the Cases of India Cement (AIR 1990 SC pg. 85) and Orissa Cement (AIR 1991 SC 1976). As such it is submitted that as a power of taxation exists in MMRD Act, 1957 then it can certainly provide for compulsory levy for creation of void by extraction of minerals from the land by reason of indulgence in mining activity. Such being the position in law the State of Bihar had lost its legislative competence to levy the impugned tax after the enactment of MMRD Act, 1957. 3.3.7. Such being the position in law the State of Bihar had lost its legislative competence to levy the impugned tax after the enactment of MMRD Act, 1957. 3.3.7. On the question of vagueness, apart from what was submitted earlier, it was submitted as follows: Referring to Section 3 and the Schedule, the expression "mechanical reclamation" have been defined in section 2 (h) meaning restoring the original contour as far as possible or filling up of void. The Act or the rules nowhere have provided for any machinery to ascertain what was the original contour of the land as also which should be the date to determine such contour. Referring to Section 2 (n) which defines "Vegetative density" it was submitted that there is no provision in the Act or in the Rules as to how such vegetative density can be measured. In a vast area of land which is forest land there may be various points wherein the sunlight is received at various degrees between 1.0, 0.9 to 0.1 and 10% of a unit area. Then again the sunlight may be less in the winter than in the summer. The concept in the science of physics light or "luminosity" is a very advance subject of study for determination as to how much sunlight is received. But there being no guideline for such determination either in the Act or the Rules it leads to the executive to decide this highly technical question according to his own method. As has been decide by the Supreme Court in the case of Union of India v. Tisco, AIR (1975) SC 769 at paragraph 9 this can, not be permitted. Since the respondents have not yet argued on these points the aforesaid illustration are given to demonstrate that there are so many uncertainties or indefiniteness in arriving at the quantum of tax. That the provisions of the Act for assessment of quantification for the tax can not be reasonably implemented. 3.4. Reply by Mr. S. Pal Another set of written arguments in reply was submitted on behalf of Indian Aluminium Company on whose behalf Mr. S. Pal advanced the principal arguments in support of the petitions which we have specified hereinabove. This dealt with the oral submissions made and the written arguments submitted on behalf or the State. However, it is not necessary to set out the same. 4. S. Pal advanced the principal arguments in support of the petitions which we have specified hereinabove. This dealt with the oral submissions made and the written arguments submitted on behalf or the State. However, it is not necessary to set out the same. 4. Relevant provisions of (i) Constitution - (ii) Impugned Acts & Rules - (iii) Other Acts & Rules. 4.1. Relevant provisions of the Constitution. Art. 245 : (1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State. (2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation. Art.246 : (1) Notwithstanding anything in clauses (2) and (3) Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the ‘Union List’) (2) Notwithstanding anything in clause (3) Parliament and subject to clause (1) power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the ‘Union List’). (3) Subject to clause (1) and (2), the Legislature of any State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the ‘State List’) (4) Parliament has power to make laws with respect to any matter for any part of the territory of India and included in a State notwithstanding that such matter is a matter enumerated in the State List. Art. 248 : (1) Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List. (2) Such power shall include the power of making any law imposing a tax not mentioned in either of these Lists. SEVENTH SCHEDULE List I - Union List Entry 52: Industries, the control of which by the Union is declared by Parliament by law to be expedient in the Public interest. (2) Such power shall include the power of making any law imposing a tax not mentioned in either of these Lists. SEVENTH SCHEDULE List I - Union List Entry 52: Industries, the control of which by the Union is declared by Parliament by law to be expedient in the Public interest. Entry 54: Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest. Entry 55: Regulation of labour and safety in mines and oilfields. Entry 96: Fees in respect of any of the matters in this List, but not including fees taken by any court. Entry 97 : Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists. List II – State List Entry 18 : Land, that is to say, right in or over land, land tenures including the relation of landlord and tenant, and the collection or rents, transfer and alienation of agricultural land, improvement and agricultural loans, colonization. Entry 23 : Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union. Entry 45 : Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues. Entry 49 : Taxes on lands and buildings. Entry 50: Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development. Entry 66 : Fees in respect of any of the matters in this List, but not including fees taken in any court. List III- Concurrent List Entry 17 A : Forest. Entry 47 : Fees in respect of any of the matters in this List, but not including fees taken in any court. 4.2. Impugned State Act : 1. Short title extent and Commencement – (1) This Act may be called the Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992. (2) It extends to the whole of the forest land in the State of Bihar. (3) It shall come into force at once. 2. Definition. 4.2. Impugned State Act : 1. Short title extent and Commencement – (1) This Act may be called the Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992. (2) It extends to the whole of the forest land in the State of Bihar. (3) It shall come into force at once. 2. Definition. - In this Act unless the context otherwise requires (a) "appellate authority" means an authority appointed under sub-section (1) of section 7 by the State Government. (b) "biological reclamation" means restoration of vegetal cover by such means as may be deemed suitable; (c) "collector" means the Collector of the District, and the Additional Collector and any other officer, specially empowered as Collector by the State Government under this Act; (d) "excavation" means making hollows either on surface or underground by whatsoever means; (e) "forest land" means any land notified as such under any Act and/or recorded as forest in revenue record; (f) "forest use" means use of forest land for the purpose of forestry, agriculture, horticulture, or any allied and ancillary activities; (g) "government" means the Government of the State of Bihar. (h) "mechanical reclamation" means restoring the original contour as far as possible and/or filling up of void; (i) "non-forest use" means any use other than forest use; (j) "open cast excavation" means an excavation confined to land surface only; (k) "occupier" means a person in possession of an area of excavated and voided land; (l) "prescribed" means prescribed by the rules framed under this Act; (m) "user" means a person who used or shall use an area of forest land for non-forest purpose or proposes to use such area of forest land; (n) "vegetative density" 1.0, 0.9, 0.8, 0.7, 0.6, 0.5, 0.4, 0.3, 0.2, and 0.1 density means 100, 90, 80, 70, 60, 50, 40, 30, 20 and 10 per cent respectively of a unit area of the forest land not receiving sunlight due to effective tree growth or green canopy; (o) "void" means any area of left over forest land from where soil, any mineral or rock or ore or anything being fastened with the earth has been removed for non-forest purpose, transported or dumped at a place other than the place from where the same was taken; (p) "zero density" means a forest land having only bushes and grass but no tree. 3. Levy and Collection of Tax. 3. Levy and Collection of Tax. - (1) There shall be levied, assessed and collected a tax called the Bihar Restoration and Improvement of Degraded Forest Land Tax for mechanical and biological reclamation of forest land and for rehabilitation so that the land is reclaimed as far as possible and the tax shall be levied, assessed and collected at the rate specified under the schedule appended to this Act in the manner as may he prescribed : Provided that the Government shall have the power to amend the Schedule by rules as and when considered necessary. (2) The tax under sub-section (1) shall be payable by- (a) every user allowed by the State Government to use forest land for non-forest purpose; (b) every occupier responsible for creating void/voids by indulging in any developmental activities including mining. (3) (a) The rate of taxation given against serial numbers (a), (b) and (c) of the Schedule shall apply to forest land already voided immediately before the date of commencement of this Act and the area of the forest land being voided, or the area that may be voided after the date of commencement of this Act. (b) The rate of taxation given against serial numbers (d) to (f) of the Schedule shall be applicable in case of use of forest land with different vegetative density which is used for non-forest purpose. (c) An user/occupier engaged in excavational activities against serial numbers (a), (b) and "(c) and also using forest land for non-forest purpose against serial numbers (d), (e) and (f) shall be liable for taxation at the rate as specified in the Schedule. (4) The State Government may frame rules to impose a lump-sum tax in addition to the tax under sub-section (1). 4. Assessment of Tax – (1) The Collector shall levy, collect and realize the tax at the rate mentioned in the Schedule. (2) The Collector shall cause a demand notice served on the occupier/user of the forest land who shall, within 30 days of service of the notice, deposit the tax in the State Treasury under the appropriate Revenue Head. 5. Penalty for non-payment within the specified time. – If any amount of tax payable is not paid within the period specified in the demand notice, the Collector may impose a penalty on the assessee which shall not be more than the amount of the tax. 7. Appeals. 5. Penalty for non-payment within the specified time. – If any amount of tax payable is not paid within the period specified in the demand notice, the Collector may impose a penalty on the assessee which shall not be more than the amount of the tax. 7. Appeals. – (1) Any user/occupier on levy of tax aggrieved by an order or demand or an order of imposing penalty may prefer appeal, in such form and in such manner and within such period as may be prescribed, before an appellate authority appointed under this sub-section by the State Government. (2) No such appeal shall be entertained unless 40 percent of the tax levied/demanded is deposited along with the appeal: Provided that the appellate authority on its discretion in appropriate cases, may after granting relaxation by an order, entertain the appeal on an application by the party. (3) After the receipt of an appeal under sub-section (1) the appellate authority shall, after giving the appellant an opportunity of being heard in the matter, dispose of appeal as expeditiously as possible (4) Every order passed in the appeal shall be final and shall not be called in question in any court of law. 8. Recovery of money due to Government. – All money payable to the State Government under this Act or under any rule framed thereunder may, if not paid when due, be recovered as an arrear of land revenue. 12. Power to make Rules – The State Government may, by a notification in the official gazette, make Rules for carrying out all or any of the purpose of this Act without prejudice to the generality of the provisions of this Act and such Rules may provide for all or any of the following matters : (a) Guidelines, forms and procedures wherever required. (b) Fees, taxes and lump-sum taxes and its enhancement as and when necessary to meet the objective. (c) Any other matter which has to be or may be prescribed under the provisions of this Act. 4.3. Rules under the impugned State Act 3. Furnishing of returns. (b) Fees, taxes and lump-sum taxes and its enhancement as and when necessary to meet the objective. (c) Any other matter which has to be or may be prescribed under the provisions of this Act. 4.3. Rules under the impugned State Act 3. Furnishing of returns. – (1) Every user and occupier under clauses (a) and (b) to sub-section (2) of section 3 shall furnish within 30 days from the date of notification of these rules in the official Gazette and thereafter by the 31st January of every year to the Collector, a return in Form I showing the area of forest land voided and/or being voided and the area of forest land used and/or being used for non-forest purposes. (2) Such returns shall be furnished with the details as on 27th Feb, 1992 and for subsequent period as on the 31st December of every year. 4. Failure to file return. – In case any user/occupier fails to file return by the due date as specified in Rule 3 the Collector may, on his own motion, at the cost of user/occupier ascertain the area of forest land voided and/or being voided and area of forest land used and/or being used for non-forest purposes. 5. Assessment of Tax. – Tax Collector after receiving the return under rule 3 or after ascertainment, under rule 4, shall satisfy himself with the particulars stated therein, and shall assess the tax and there after cause a demand notice to be served in Form II indicating the amount of tax payable by the user and/or occupier as the case may be. 6. Manner of Service of Demand Notice – (1) The demand notice in Form II shall be served on the user/occupier either by registered post with acknowledgment or in person. (2) In case the notice is returned without being received by the user/occupier, the service of notice shall be effected by affixing it on the house where the user/occupier ordinarily resides in the presence of two witnesses. 7. Appeal. – (1) An appeal from any order passed by the Collector under the ordinance shall lie to the Commissioner. (2) In case the notice is returned without being received by the user/occupier, the service of notice shall be effected by affixing it on the house where the user/occupier ordinarily resides in the presence of two witnesses. 7. Appeal. – (1) An appeal from any order passed by the Collector under the ordinance shall lie to the Commissioner. (2) Every such appeal shall be presented within thirty days from the date of order : Provided that the appellate authority, if satisfied that the appellant was prevented by sufficient cause from filing the appeal in time, may entertain the appeal after the expiry of the said period of 30 days. 4.4 THE MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT. 1957. 2. Declaration as to expediency of Union Control. - It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided. 3. Definitions. – In this Act, unless the context otherwise requires – XX XX (c) “mining lease” means a lease granted for the purpose of undertaking mining operations, and includes a sub-lease granted for such purpose; (d) “mining operation” means any operations undertaken for the purpose of winning any mineral; XX XX XX 9. Royalties in respect of mining leases. – (1) The holder of a mining lease granted before the commencement of this Act shall notwithstanding anything contained in instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor of sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor of sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (3) The Central Government may, by notification in the Official Gazelle, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification : Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years. In. Application for prospecting licences or mining leases. - (1) An application for a prospecting licence or a mining lease in respect of any land in which the minerals vest in the Government shall be made to the State Government concerned in the prescribed form and shall be accompanied by the prescribed fee. (2) Where an application is received under sub-section (1), there shall be sent to the applicant an acknowledgment of its receipt within the prescribed time and in the prescribed form. (3) On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any' rules made thereunder, grant or refuse to grant the licence or lease. 13. Power of Central Government to make rules in respect of minerals. – (1) The Central Government may, by notification in the Official Gazette, make rules for regulating the grant of prospecting licences and mining lease in respect of minerals and for purposes connected therewith. 13. Power of Central Government to make rules in respect of minerals. – (1) The Central Government may, by notification in the Official Gazette, make rules for regulating the grant of prospecting licences and mining lease in respect of minerals and for purposes connected therewith. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely : (g) the terms on which, and the conditions subject to which any other prospecting licence or mining lease may be granted or renewed; (i) the fixing and collection of fee for prospecting licences or mining lease, surface rent, security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable; (j) the manner in which rights of third parties may be protected (whether by payment of compensation or otherwise) in cases where any such party may by prejudicially effected by reason of any prospecting or mining operations; (m) The construction, maintenance and use of roads, power transmission lines, tramways, railways, aerial ropeways, pipelines and the making of passages for water for mining purposes on any land comprised in a mining lease: (q) the period within which applications for revision of any order passed by a State Government or other authority in exercise of any power conferred by or under this Act, may be made the fees to be paid therefore and the documents which shall accompany such applications and the manner in which such applications shall be disposed of; (qq) the manner in which rehabilitation of flora and other vegetation such as trees, shrubs and the like destroyed by reason of any prospecting or mining operations shall be made in the same area or in any other area selected by the Central Government (whether by way of reimbursement of the cost of rehabilitation or otherwise) by the person holding the prospecting licence or mining lease, and (r) Any other matter which is to be or may be, prescribed under this Act. 14. Sections 5 to 13 not to apply to minor minerals. – The provisions of Sections 5 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals. 15. Power of State Governments to make rules in respect of minor minerals. 14. Sections 5 to 13 not to apply to minor minerals. – The provisions of Sections 5 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals. 15. Power of State Governments to make rules in respect of minor minerals. - (1) The State Government may, by notification in the Official Gazette, make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith. (1-A) In particular and without prejudice: to the generality of the foregoing power, such rules may provide for all or any of the following mailers, namely: XX XX XX (d) the terms on which, and the conditions subject to which and the authority by which quarry leases, mining leases or other mineral concessions may be granted or renewed ; (f) the facilities to be afforded by holders of quarry leases, mining leases or other mineral concessions to persons deputed by the Government for the purpose of undertaking research or training in matters relating to mining operations; (g) The fixing and collection of rent, royalty, fees, dead rent, fines or other charges and the time within which and the manner in which these shall be payable; (h) the manner in which rights of third parties may be protected (whether by way or payment of compensation or otherwise) in cases where any such party is prejudicially affected by reason of any prospecting or mining operations; (i) the manner in which rehabilitation of flora and other vegetation such as trees, shrubs and the like destroyed by reason of any quarrying or mining operations shall be made in the same area or in any other area selected by the State Government (whether by way or reimbursement of the cost of rehabilitation or otherwise) by the person holding the quarrying or mining lease; (o) any other matter which is to be, or may be, prescribed. (3) The holder of a mining lease or any other mineral concession granted under any rule made under sub-section (1) shall pay royalty or dead rent whichever is more in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals: Provided that the State Government shall not enhance the rate of royalty or dead rent in respect of any minor mineral for more than once during any period of three years. 18. Mineral Development.-(1) It shall be the duty of the Central Government to take all such steps as may be necessary for the conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling any pollution which may be caused by prospecting or mining operations and for such purposes the Central Government may, by notification in Official Gazette, make such rules as it thinks fit. (2) In particular, and without prejudice to the generality of foregoing power, such rules may provide for all or any of the following matters, namely: (a) the opening of new mines and the regulation of mining operations in any area: (b) the regulation of the excavation or collection of minerals from any mine; (c) the measures to he taken by owners of mines for the purpose of beneficiation of ores, including the provisions of suitable contrivances for such purpose; (d) the development of mineral resources in any area; (e) the notification of all new borings and shaft sinkings and the preservation of bore-hole records, and specimens of cores of all new bore holes (f) the regulation of the arrangements for the storage of minerals and stocks thereof that may be kept by any person; (g) the submission of samples of minerals from any mine by the owner thereof and the manner in which and the authority to which such samples shall be submitted; and the taking of samples of any minerals from any mine by the State Government or any other authority specified by it in that behalf; (h) the submission by owners of mines of such special or periodical returns and reports as may be specified, and the form in which and the authority to which such returns and reports shall be submitted. (i) the regulation of prospecting operations; (j) the employment of qualified geologists or mining engineers to supervise prospecting or mining operations; (k) the disposal or discharge of waste slime or tailings arising from any mining or metallurgical operations carried out in a mine; (l) the manner in which and the authority by which directions may be issued to the owners of any mine to do or refrain from doing certain things in the interest of conservation or systematic development of minerals or for the protection of environment by preventing or controlling pollution which may be caused by prospecting or mining operation. (m) the maintenance and submission of such plans, registers or records as may be specified by the Government; (n) the submission of records or reports by persons carrying on prospecting or mining operations regarding any research in mining or geology carried out by them; (o) the facilities to be afforded by persons carrying out prospecting or mining operations to persons authorized by the Central Government for the purpose of undertaking research or training in matters relating to mining or geology; (p) the procedure for and the manner of imposition of fines for the contravention of any of the rules framed under this section and the authority who may impose such fines; and (q) the authority to which, the period within which, the form and the manner in which applications for revision of any order passed by any authority under this Act and the rules made thereunder may be made, the fee to be paid and the documents which should accompany such applications. 25. Recovery of certain sums as arrears of land revenue. – (1) Any rent, royalty, tax fee or other sum due to the Government under this Act or the rules made there under or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such officer as may be specified by the State Government in this behalf by general or special order, be recovered in the same manner as an arrear of land revenue. (2) Any rent, royalty, tax, fee or other sum due to the Government either under this Act or any rule made thereunder or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such officer as may he specified by the State Government in this behalf by general or special order, be recovered in the same manner as if it were an arrear of land revenue and every such sum which becomes due to the Government after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972 (56 of 1972) together with the interest due thereon, shall be a first charge on the assets of the holder of the prospecting licence or mining lease, as the case may be. 4.5. MINERAL CONSERVATION AND DEVELOPMENT, RULES, 1988 3. Definitions. - In these rules, unless the context otherwise requires- 3(d). "beneficiation" means processing of minerals or ores for the purpose of (i) regulating the size of a desired produce; (ii) removing unwanted constituents and (iii) improving quality, purity or assay grade of desired product. (e) "boring" or "drilling" means the penetration of alluvial material, rocks or formations by holes for obtaining geological information and for drawing samples therefrom. (i) "development" means the driving of an opening to, or in an ore-body or scam or removing overburden or unproductive or waste materials as preparatory to mining or stoping. (j) "environment" and' "environmental pollution" shall have the same meanings, assigned respectively to these terms in the Environment (Protection) Act, 1986 (29 of 1986) 15. Open cast working. - (1) In opencast workings the benches formed shall be so arranged that the benches in ore/mineral and overburden are separate so as to avoid mixing of waste with the ore/minerals. (2) The Benches in overburden shall be kept sufficiently in advance so that their workings do not interfere with the working of ore/minerals. (3) Orientation of the workings' and sequence of mining operations shall be such that different grades of ore/minerals can be obtained simultaneously for blending with a view to achieve optimum recovery of ore/minerals from the deposit. 16. Separate stacking of non - saleable minerals. – (1) The overburden and waste material obtained during mining operations shall not be allowed to be mixed with non-saleable or subgrade minerals/ores. They shall be dumped and stacked separately on the ground earmarked for the purpose. 16. Separate stacking of non - saleable minerals. – (1) The overburden and waste material obtained during mining operations shall not be allowed to be mixed with non-saleable or subgrade minerals/ores. They shall be dumped and stacked separately on the ground earmarked for the purpose. (2) The ground selected for dumping of overburden, waste material, the subgrade or non-saleable ores/minerals shall be away from working pit. It shall be proved for absence or presence of underlying mineral deposits before it is brought not use for dumping. (3) Before starting mining operations, the ultimate size of the pit shall be determined and the dumping ground shall be so selected that the dumping is not carried out within the limits of the ultimate size of the pit except in cases where concurrent back-filing is proposed. 17. Underground mining operations. – (1) Mining operations in underground shall be carried out in such a way so as to achieve optimum ore/mineral recovery. (2) The method of underground development of the deposit shall be planned in accordance with the method of stoping which shall be selected with due consideration of the geology of the deposit and geomechanical properties of the ore and the adjoining rocks. (3) The size of development openings, size of blocks and pillars shall be such that the workings remain stable during the development and stoping stages and between such stages. (4) The stoping practices shall be such as to cause minimum disturbance to the surface. (5) In case of a doubt as to the optimum ore/mineral recovery under sub- rule (1), or the method of underground development under sub-rule (2) or size of openings, blocks or pillars under sub-rule (3) or the stoping practices under sub-rule (4), it shall be referred to the Chief Controller of Mines for decision. (6) The Chief Controller of Mines may order such investigations and tests to be carried out as arc considered necessary before arriving at a decision on any matter referred to him under sub-rule (5) 31. Protection of environment. - Every holder of a prospecting licence or a mining lease shall take all possible precautions for the protection of environment and control of pollution) while conducting prospecting, mining, beneficiation or metallurgical operations in the area. 32. Removal and utilization of top soil. Protection of environment. - Every holder of a prospecting licence or a mining lease shall take all possible precautions for the protection of environment and control of pollution) while conducting prospecting, mining, beneficiation or metallurgical operations in the area. 32. Removal and utilization of top soil. – (1) Every holder of a prospecting licence or a mining lease shall, wherever top soil exists and is to be excavated for prospecting or mining operations, remove it separately. (2) The top soil so removed shall be utilised for restoration or rehabilitation of the land which is no longer required for prospecting or mining operations or for stabilising or landscaping the external dumps. (3) Whenever the topsoil cannot be utilised concurrently, it shall be stored separately for future use: 33. Storage of overburden, waste rock, etc. - (1) Every holder of a prospecting licence or a mining lease shall take steps so that the overburden, waste rock, rejects and fines generated during prospecting and mining operations or tailings, slimes and fines produced during sizing, sorting and beneficiation or metallurgical operations shall be stored in separate dumps. (2) The dumps shall be properly secured to prevent escape of material therefrom in harmful quantities which may cause degradation of environment and to prevent causation of floods. (3) The site for dumps, tailings or slimes shall be selected as far as possible on impervious ground to ensure minimum leaching effects due to precipitations. (4) Wherever possible, the waste rock, overburden, etc. shall be back- filled into the mine excavations with a view to restoring the land to its original use as far as possible. (5) Wherever back-filling of waste rock in the area excavated during mining operations is not feasible, the waste dumps shall be suitably terraced and stabilised through vegetation or otherwise. (6) The fines, rejects or tailings from mine, beneficiation or metallurgical plants shall be deposited and disposed in a specially prepared tailing disposal area such that they are not allowed to flow away and cause land degradation or damage to agricultural field, pollution of surface water bodies and grounds water or cause floods. 34. Reclamation and rehabilitation of land. – Every holder of prospecting licence or mining lease shall undertake the phased restoration, reclamation and rehabilitation of lands affected by prospecting or mining operations and shall complete this work before the conclusion of such operations and the abandonment of prospect of mine. 35. 34. Reclamation and rehabilitation of land. – Every holder of prospecting licence or mining lease shall undertake the phased restoration, reclamation and rehabilitation of lands affected by prospecting or mining operations and shall complete this work before the conclusion of such operations and the abandonment of prospect of mine. 35. Precaution against ground vibrations. – Whenever any damage to public buildings or monuments is apprehended due to their proximity to the mining lease area, scientific investigations shall be carried out by the holder of mining lease so as to keep the ground vibrations caused by blasting operations within safe limit. 36. Control of surface subsidence. – Stoping in underground mines shall be so carried out as to keep surface subsidence under control 37. Precaution against air pollution – Air pollution due to fines, dust, smoke or gaseous emissions during prospecting, mining, beneficiation or metallurgical operations and related activities shall be controlled and kept within ‘Permissible Limits’ specified under various environmental laws of the country including the Air (Prevention and Control of Pollution) Act, 1981 (14 of 1981) and the Environment (Protection) Act, 1986 (29 of 1986) by the holder of prospecting licence or a mining lease. 38. Discharge of toxic liquid. – Every holder of prospecting licence or a mining lease shall take all possible precautions to prevent or reduce the discharge of toxic and objectionable liquid effluents from mine workshop, beneficiation or metallurgical plans, tailing ponds into surface water bodies, ground water aquifer and usable lands, to a minimum. These effluents shall be suitably treated, if required to conform to the standards laid down in this regard. 39. Precaution against noise. – Noise arising out of prospecting, mining beneficiation or metallurgical operations shall be abated or controlled by the holder of prospecting or a mining lease at the source so as to keep it within the permissible limit. 40. Permissible limits and standards. The standards and permissible limits of all pollutants, toxins and noise referred to in rules 37, 38 and 39 shall be those notified by the concerned authorities under the provisions of the relevant statutes from time to time. 41. Restoration of flora. 40. Permissible limits and standards. The standards and permissible limits of all pollutants, toxins and noise referred to in rules 37, 38 and 39 shall be those notified by the concerned authorities under the provisions of the relevant statutes from time to time. 41. Restoration of flora. - (1) Every holder of prospecting licence or a mining lease shall carry out prospecting or mining operations, as the case may be, in such a manner so as to cause least damage to the flora of the area held under prospecting licence or mining lease and the nearby areas. (2) Every holder of prospecting licence or a mining lease shall- (a) take immediate measures for planting in the same area or any other area selected by the Controller General or the authorised officer not less than twice the number of trees destroyed by reason of any prospecting or mining operations. (b) look after them during the subsistence of the licence/lease after which these trees shall be handed over to the State Forest Department or any other authority as may be nominated by the Controller General or the authorised officer, and (c) restore to the extent possible, other flora destroyed by prospecting or mining operations. 4.6. Forest (Conservation) Act, 1980 2. Restriction on the dereservation of forests or use of forest land for non-forest purpose. - Notwithstanding anything contained in any other law for the time being in force in a State, no State Government or other authority shall make, except with the prior approval of the Central Government, any order directing : (i) that any reserved forest (within the meaning of the expression "reserved forest" in any law for the time being in force in that State) or any portion thereof, shall cease to be reserved ; (ii) that any forest land or any portion thereof may be used for any non-forest purpose. (iii) that any forest land or any portion thereof may be assigned by way of lease or otherwise to any private person or to any authority, corporation, agency or any other organisation not owned, managed or controlled by Government ; (iv) that any forest land or any portion thereof may be cleared of trees which have grown naturally in that land or portion, for the purpose of using it for afforestation. Explanation. Explanation. - For the purpose of this section "non-forest purpose" means the breaking up or clearing of any forest land or portion thereof for (a) the cultivation of tea, coffee, spices, rubber, palms, oilbearing plants, horticultural crops or medicinal plants; (b) any purpose other than reafforestation, but docs not include any work relating or ancillary to conservation, development and management of forests and wild life, namely, the establishment of check-posts, fire lines, wireless communications and construction of fencing, bridges and culverts, dams, waterholes, trench marks, boundary marks pipelines or other like purposes. 4.7. Forest (Conservation) Rules, 1981 4. Procedure to make proposal by a State Government or other authority – (1) Every State Government or other authority which seeks prior approval of the Central Government under Section 2 shall send its proposal to that Government along with the particulars specified in the Annexure to these rules. Annexure to Rule (Under Rule 4) Submission of proposals by the State Government and other authorities regarding dereseravtion of reserved forests or use of forest land for non-forest purpose : 1. Short narrative of the proposal and project/scheme for which the forest land is required with maps and sketches. 2. Location of the Project/Scheme. (i) State/Union Territory. (ii) District. (iii) Forest Division, Forest Block, Compartment etc. 3. Total land required for the Project/Scheme along with its existing land use. 4. Details for forest land involved: (i) Legal status of Forests (Namely reserved, unclassed, etc.) (ii) the detail of flora existing in the area including the density of vegetation; (iii) topography of the area indicating gradient, aspect altitude, etc., (iv) its vulnerability to erosion, whether it forms a part of a seriously eroded area or not; (v) whether it forms a part of a national park, wildlife sanctuary, nature reserve, biosphere reserve etc., if so, details of the area involved; (vi) rare endangered species of flora and fauna found in the area; (vii) whether it is a habitat for migrating fauna or forms a breading ground for them; and (viii) any other feature of the area relevant to the proposal. 5. If the project for which forest land is required involved displacement of people or requires raw material from any forest area the details of proposals for their rehabilitation and procurement or raw material respectively should be furnished. 6. 5. If the project for which forest land is required involved displacement of people or requires raw material from any forest area the details of proposals for their rehabilitation and procurement or raw material respectively should be furnished. 6. Proposed steps to be taken to compensate for the loss of forest area, the vegetation and wildlife. 7. Detailed opinion of the Chief Conservator of Forests/Head of the Forest Department concerned covering the following aspects, namely; (i) Out turn to timber, fuel wood and other forest produce from the forest land involved; (ii) whether the district is self-sufficient in timber and fuel wood, and (iii) the effect of the proposal on: (a) Fuel wood supply to rural population; (b) economy and livelihood of the tribals and backward communities; (iv) specific recommendations of the Chief Conservator of forests/Head of the Forest Department for acceptance or otherwise of the proposal with reasons thereof. Certified that all other alternatives for the purpose have been explored and the demand for the required area is the minimum demand for forest land. Signature of the authorised Officers of the State Government/Authority. 5. Principle of interpretation of Constitution including the entries in the seventh schedule with particular reference to Taxing Statutes : Before I deal with the specific points raised, I shall set out at the outset certain will known principles regarding interpretation of Acts, Constitution and particularly the different entries in the different lists of the seventh Schedule. I shall also deal with the interpretation of taxation provisions separately. 5.1.1. The first principle of interpretation is that the nomenclature of an Act is not the true test of ascertaining the scope of the Act. The true nature of a law has to be determined not on the label given to it in the statute but on its substance. M.P.V. Sundraramier & Co. Vs. State of Andhra Pradesh; AIR (1958) SC 468 (Para 31) 5.1.2. As pointed out in the case of Buxa Dooars Tea Company Ltd. and others Vs. State of West Bengal and others : (1989) 3 SCC 211 , (Paras 9 & 10) for determining the true nature of a legislation, The Court must take into account all the relevant provisions of the legislation and ascertain the essential substance to it. 5.1.3. In this context, we may also refer to the observations made by the Supreme Court in the case of Goodyear India Vs. 5.1.3. In this context, we may also refer to the observations made by the Supreme Court in the case of Goodyear India Vs. State of Haryana, (1990) 2 SCC 71 as follows: "It is well settled that the nomenclature of the Act is not conclusive and for determining the true character and nature of a particular tax, with reference to the legislative competence of a particular Legislature, the Court will look into its pith and substance. See the observations of Governor General in Council v. Province of Madras. There Lord Simonds observed as follows : "...For in a Federal Constitution, in which there is a division of legislative powers between central and provincial legislatures it appears to be inevitable that controversy should arise; whether one or other legislature is not exceeding its own, and encroaching on the other Constitutional Legislative powers, and in such a controversy it is a principle, which their Lordships do not hesitate to apply in the present case, that it is not the name of the tax, but its real nature, 'its pith and. substance', as it has sometimes been said which must determine into what category it falls." (Para 38) "We must therefore, look not to the form but to the substance of the levy. See the observations of the Federal Court in Ralla Ram v. Province of East Punjab (Para 39)". "Therefore, the nomenclature given by the Haryana legislature is not decisive. One has to find out whether in pith and substance, a consignment tax is sought to be imposed, a tax on despatch in the course of inter-State trade or commerce. I have no hesitation in holding that it is a tax on despatch. Inter-state trade or commerce, it has been emphasised, is of great national importance and is vital to the federal structure of our country. I have no hesitation in holding that it is a tax on despatch. Inter-state trade or commerce, it has been emphasised, is of great national importance and is vital to the federal structure of our country. As the imposition of consignment tax requires very deep consideration of all its aspects and certain amount of consensus among the States concerned, especially with regard to the' rates, grant of exemption, and ratio relating to distribution of proceeds amongst the State inter se, the actual imposition of tax is bound to take some time till an agreeable solution is found, but that would not make the consignment tax to be in suspended animation in the State, and make us hold that a tax which is in essence a tax on consignment should be taxed by the States by the plea either that otherwise there is ample scope of evasion and further States are without much resources in these days when there is such a tremendous demand on the revenue of the States." (Para 40) 5.2. On general principles of interpretation of Constitution and particularly the distribution of legislative powers in the Seventh Schedule I may refer to the following: 5.2.1. In the case of the India Cement Ltd. etc. Vs. State of Tamil Nadu, AIR (1990) SC 85, it was observed as follows : "Courts of law are enjoined to gather the meaning of the Constitution from the language used and although one should interpret the words of the Constitution on the same principles of interpretation compel one to take into account the nature and scope of the Act which requires interpretation. It has to be remembered that it is a Constitution that requires interpretation. Constitution is the mechanism under which the laws are to be. made and not merely an Act which declare what the law is to be." (Para 16) In re: C.P. and Berar Sales of Motor Spirit & Lubricants Taxation Act, 1938 : 1939 FCR p.18: (AIR 1939 FC 1), Chief Justice Gwyer of the Federal Court of India relied on the observations of Lord Wright in James Commonwealth of Australia, (1936) AC 578 and observed that a Constitution must not be construed in any narrow or pedantic sense, and that construction most beneficial to the widest possible amplitude of its powers must be adopted. The learned Chief Justice emphasised that a broad and liberal spirit should inspire those whose duty it is to interpret the Constitution, but they are not free to stretch or pervert the language of the enactment in the interest of any legal or constitution theory, or even for the purposes of supplying omissions of correcting supposed errors. A Federal Court will not strengthen, but can derogate from, its position, if it seeks to do anything but declare the law; but it may rightly reflect that a Constitution of a country is a living and organic thing, which of all instruments has the greatest claim to be construed ultres magis valeat quam pereat, is better that it should live than that it should perish. (Para 17) Certain rules have been evolved in this regard and it is well settled now that the various entries in the three lists are not power but fields of legislation. The power to legislate is given by Art. 246 and other articles of the Constitution. See the observations of the Court in Calcutta Gas Co. v. State of West Bengal, (1962) Suppl. 3 SCR 1: (AIR 1962 SC 1040). The entries in the three list of the Seventh Schedule' to the Constitution are legislative heads of fields of legislation. These demarcate the area over which appropriate Legislature can operate. It is well settled that widest amplitude should be given to the language of these entries, but some of these entries in different lists or in the same list may overlap and sometimes may also appear to be in direct conflict with each other. Then, it is the duty of the court to find out its true intent and purpose and to examine a particular legislation in its pith and substance to determine whether it fits in one or the other of the lists. See the observations of this Court in H.R. Banthis v. Union of India, (1970) 1 SCR 479 at p. 489 : ( AIR 1970 SC 1453 of p. l 1458); Union of India v. H.S. Dhillon, (1971) 2 SCC 779 at p. 792: ( AIR 1972 SC 1061 at pp. 1069 - 70). The lists, are designed to define and delimit the respective areas of respective competence of the Union and the States. 1069 - 70). The lists, are designed to define and delimit the respective areas of respective competence of the Union and the States. These neither impose any implied restriction on the legislative power conferred by Art. 246 of the Constitution, nor prescribe any duty to exercise that legislative power in any particular manner. Hence, the language of the entries should be given widest scope D.C. Rataria v. Bhuwalka Brothers Ltd. (1955 1 SCR 107) : ( AIR 1955 SC 182 ). To find out which of the meanings is fairly capable because these set up machinery of the Govt. (sic). Each general word should be held to extend to all ancillary or subsidiary mailers which can fairly and reasonably be comprehended in it. In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other one in the same list. It is in this background that one has to examine the present controversy. (Para 18) 5.2.2. In the case of Synthetics and Chemicals v. State of U.P. and others, (1990) 1 SCC 109 it was observed as follows : "It is well to remember that the meaning of the expression used in the Constitution must be found from the language used. We should interpret the words of the Constitution on the same principle of interpretation as one applies to an ordinary law but these very principles of interpretation compel one to take into account the nature and scope of the Act which requires interpretation. A Constitution is the mechanism under which laws are to be made and not merely an Act which declares what the law is to be. It is also well settled that a Constitution most not be construed in any narrow or pedantic sense and that construction which is most beneficial to the widest possible amplitude of its power, must be adopted. An exclusionary clause in any of the entries should be strictly and, therefore, narrowly construed. No entry should, however, be so read as not (sic) to rob it of entire content. An exclusionary clause in any of the entries should be strictly and, therefore, narrowly construed. No entry should, however, be so read as not (sic) to rob it of entire content. A broad and liberal spirit should, therefore, in spite those whose duty it is to interpret Constitution, and the Courts are not free to stretch or to pervert the language of an enactment in the interest of any legal or constitutional theory Constitutional adjudication is not strengthened by such an attempt but it must seek to declare the law but it must not try to give meaning on the Theory of what the law should be, but it must so look upon a Constitution that it is a living and organic thing and must adapt itself to the changing situations and pattern in which it has to be interpreted. It has also to be borne in mind that where division of powers and jurisdiction in a federal Constitution is the scheme, it is desirable to read the Constitution in harmonious way. It is also necessary that in deciding whether any particular enactment is within the purview of one legislature or the other, it is the pith and substances of the legislation in question that has to be looked into. It is well settled that the various entries in the three lists of the Indian Constitution are not powers but fields of legislation. The power to legislate is given by Article 246 and other Articles of the Constitution. The three lists of the Seventh Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over which the appropriate legislatures can operate. It is well settled that widest amplitude should be given to the language of the entries in three Lists but some of these entries in different lists or in the same list may override and sometimes may appear to be in direct conflict with each other, then and then only comes the duty of the court to find the true intent and purpose and to examine the particular legislation in question. Each general word should he held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list. Each general word should he held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list. It has to be interpreted as the Constitution must he interpreted as an organic document in the light of the experience gathered. In the constitutional scheme of division of powers under the legislative lists, there are separate entries pertaining to taxation and other laws. The aforesaid principles are fairly well settled by various decisions of this Court and other Courts. Some of these decisions have been referred to in the decision of this Court in Civil Appeal No. 62 (N)/70 - India Cement Ltd. v. State of Tamil Nadu" (para 67). "The Balsara case was in the context of the business of potable alcohol. Problems arose with regard to auctions, vends, licences and the business of manufacturing, selling, etc. of potable alcohol. Until the case of Synthetics & Chemicals, which is under challenge here, all other cases since then have dealt with potable alcohol. The only case which has dealt with alcohol used for industrial purposes was the case of Indian Mica and Micanite Industries Ltd. Vs. State of Bihar. The Constitution of India, it has to be borne in mine, like most other Constitutions, is an organic document. It should be interpreted in the light of the experience. It has to be flexible and dynamic so that it adapts itself to the changing conditions and accommodates itself in a pragmatic way to the goals of national development and the industrialisation of the country. The Court should, therefore, endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of undisputed national goals, as permitted by the Constitution. As mentioned hereinbefore, the relevant entries in the Seventh Schedule to the Constitution demarcate legislative fields and are closely linked and supplement one another. The Court should, therefore, endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of undisputed national goals, as permitted by the Constitution. As mentioned hereinbefore, the relevant entries in the Seventh Schedule to the Constitution demarcate legislative fields and are closely linked and supplement one another. In this connection, reference may be made to Entry 84 of List I which deals with the duties of excise on tobacco and other goods manufactured or produced in India except, inter alia, alcoholic liquors for human consumption Similarly Entry 51 of List II is the counter Part of Entry 84 of List I so far as the State list is concerned. It authorises the state to impose duties of excise on alcoholic liquors for human consumption and opium etc. manufactured or produced in the State and the countervailing duties at the same or lower rates on similar goods produced or manufactured elsewhere in India. It is clear that all duties of excise save and except the items specifically excepted in Entry 84 or List I are generally within the taxing power of the Central Legislature. The State Legislature has power, though limited it is, in imposing duties of excise. That power is circumscribed under Entry 51 of List II of the Seventh Schedule to the Constitution. As we have noted hereinbefore, the correct principles of harmonious interpretation of legislative entries have been laid down in several cases. We have mentioned hereinbefore some of the decision as noted in the decision of this Court in India Cement. In. M.P.V. Sundararamier & Co. V. State of A.P. this Court has laid down that (i) Legislative entries are to be liberally construed. But when a topic is governed by two entries, then they have to be reconciled. It cannot be that one entry is to be liberally construed and the other entry is not to be liberally construed: (ii) Under the constitutional scheme of division of powers under legislative lists, there are separate entries pertaining to taxation and other laws. A tax cannot be levied under a general entry. (iii) A Constitution is an organic document and has to be so treated and construed. (iv) If there is a conflict between the entries, the first principle is to reconcile them, But the Union power will preveil by virtue of Article 246 (1) and (3). A tax cannot be levied under a general entry. (iii) A Constitution is an organic document and has to be so treated and construed. (iv) If there is a conflict between the entries, the first principle is to reconcile them, But the Union power will preveil by virtue of Article 246 (1) and (3). The words "notwithstanding" and "subject to" are important and give primacy to the Central legislative power." (Para 68) 5.2.3. In the case of Good Year India v. State of Haryana, (1990) 2 SCC 71 it was observed as follows : “It is well to remember that in construing the expressions of the Constitution to judge whether the provisions like Section 9 (1) (b) of the Act, are within the competence of the State Legislature, one must bear in mind that the Constitution is to be construed not in a narrow or pedantic sense. Constitution is not to be construed as mere law but as the machinery by which laws are to be made. It was observed by Lord Wright in James Vs. Commonwealth of Australia, that the rules which apply however, apply equally to the interpretation of a constitutional enactment. In this context Lord Wright referred to the observations of the Australian High Court in Attorney General for the State of New South Wales Vs. Brewery Employees Union, where it was observed that the words of the Constitution must be interpreted on the same principles as any ordinary law, and these principles compel us to consider the nature and scope of the Act, and to remember that the Constitution is a mechanism under which laws are to be made, and not a mere Act which declares what the law is to be. Hence, such mechanism should be interpreted broadly, bearing in mind in appropriate cases, that a Supreme Court like ours is a nice balance of jurisdictions. A Constitutional Court, one must bear in mind, will not strengthen, but only derogate from its position if it seeks to do anything but declare the law; but it may rightly reflect that a Constitution is a living and organic: thing, which of all instruments has the greatest claim to be construed broadly and liberally. See the observations of Gwyer, C.J. in Re Central Province and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1939. Mr. See the observations of Gwyer, C.J. in Re Central Province and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1939. Mr. Justice Sulaiman in his judgment at p.22 of the report observed that the power to tax the sale of goods is quite distinct from any right to impose taxes on use or consumption. It cannot he exercised at the earlier stage of production nor at the later stage of use of consumption, but only at the stage of sale (emphasis supplied). The essence of a tax on goods manufactured or produced is that the right to levy it accrues by virtue of their manufacture. On the other hand, a duty on the sale of goods cannot be levied merely because goods have been manufactured or produced. Not can it be levied merely because the goods have been consumed or used or even destroyed. The right to levy the duty would not at all come into existence before the time of the sale. In this connection, reference may be made to the observations of Chief Justice Gwyer in Province of Madras v. Boddu Paidanna and Sons." (Para 16) “It is well settled that the entries in the Constitution only demarcate the legislative fields of the respective legislatures and do not confer legislative powers as such. The tax on dispatch of good outside the territory of the State certainly is in the course of inter-State trade or commerce, and in other words, amounts to imposition of consignment tax and hence the latter part of Section 9 (1) (b) is ultra vires and void." (Para 41) 5.2.4. In the case of M.P.V. Sundaramier & Co. v. State of Andhra Pradesh, AIR 1958 SC 468 it was observed as follows : "... This conclusion is further strengthened, when regard is had to the scheme of the Lists in the Seventh Schedule and the principle under-lying the enumeration of heads of legislation therein." (Para 50) "... Under the scheme of the Entries in the Lists taxation is regarded as a distinct matter and is separately set out." (Para 55) "We must now consider the arguments that have been put forward as supporting the opposite conclusion. Under the scheme of the Entries in the Lists taxation is regarded as a distinct matter and is separately set out." (Para 55) "We must now consider the arguments that have been put forward as supporting the opposite conclusion. It is firstly contended that the Entries in the Legislative Lists must be construed broadly and not narrowly or in a pedantic manner, and that, in accordance with this principle, Entry 42, should be construed, there being no limitation contained therein, as inclusive of the power to tax sales in inter-State trade and commerce. The rule of construction relied on is no doubt well-established, but the question is as to the application of that rule in the present case. The question here is not simpliciter whether a particular piece of legislation falls within an Entry or not. The point in dispute before us in whether between two Entries assigned to two different Legislatures the particular subject of legislation falls within the ambit of the one or the other. If Entry 42 in List I is to be construed liberally, so must Entry 54 in List II be, and the point is not settled by reference to Art. 246, Cls. (1) and (3) and to the principle laid down in Union Colliery Company of British Columbia v. Bryden, 1899 A C 580 (z2) that where there is a conflict of jurisdiction between a Central and a Provincial Legislature, it is the law of the Centre that must prevail. Article 246, Cls (1) and (3) have to be invoked only if there is a conflict as to the scope of two Entries in the two Lists and not otherwise. What has therefore first to be decided is whether there is any conflict between Entry 42 in List I and Entry 54 in List II. If there is not, the application of the non-obstante clause in Art.246(1) or of the words “subject to” in Art. 246(3) does not arise.” (para 56) "There is another rule of construction also well-settled that the Entries in two Legislative Lists must be construed if possible so as to avoid a conflict. If there is not, the application of the non-obstante clause in Art.246(1) or of the words “subject to” in Art. 246(3) does not arise.” (para 56) "There is another rule of construction also well-settled that the Entries in two Legislative Lists must be construed if possible so as to avoid a conflict. In Province of Madras V. Bodhu Paidanna and Sons, 1942 FCR 90: (AIR 1942 FC 33) (3), the question was as to whether the first sales by a manufacturer of goods were liable to be taxed by the Province under Entry 48 in List II, or whether it was really a tax on excise which was within the exclusive competence of the Centre under Entry 45 in List I. It was held by the Federal Court that the correct approach to the question was to see whet her it was possible to effect a reconciliation between the two Entries so as to avoid a conflict and overlapping, and that, in the view, though excise duty might in an extended sense cover the first sales by the manufacturer, in the context of Entry 48 in List II it should be held not to include it, and that therefore the Province had the right to tax the first sales. This view was approved by the Privy Council in Governor General in Council v. Province of Madras, 72 Ind App 91 : (AIR 1945 PC 98) (z4). If it is possible therefore to construe Entry 42 as not including tax on inter-State sales, then on the principle enunciated in Province of Madras v. Boddu Paidanna and Sons (z3) and Governor-General in Council v. Province of Madras (z4) (supra), we should so construe it, as that will avoid a conflict between the two Entries." (Para 57) “It was also argued in support of the contention that Entry 42 in List I must be held to include the power to tax, that was the interpretation put by the American authorities on the Commerce Clause, and that there was no reason why a different construction should be put on Entry 42 in List I of our Constitution. It is true that our Constitution-makers had before them the Commerce Clause and the authorities thereon, but it is a mistake to suppose that they intended to bodily transplant that clause in Entry 42. It is true that our Constitution-makers had before them the Commerce Clause and the authorities thereon, but it is a mistake to suppose that they intended to bodily transplant that clause in Entry 42. We had in the Government of India Act, 1935, a full-fledged Federal Constitution in force in this Country, and what the Constitution-makers did was to draw from other Federal Constitutions of the world, adapt and modify the provisions so as to suit our conditions and fit them in our Constitution. In this new context, those provisions do not necessarily mean what they meant in their old selling. The threads were no doubt taken from other Constitutions, but when they were woven into the fabric of our Constitution, their reach and their complexion underwent changes. Therefore, valuable as the American decisions are as showing how the question is dealt with in a sister Federal Constitution. We should not forget that it is our Constitution that we are to interpret, and that interpretation must depend on the context and setting of the particular provision which has to be interpreted. Applying these principles and having regard to the features already set out, we must hold that Entry 42 in List I is not to be interpreted as including taxation. The same remarks apply to the argument based upon S. 92 of the Commonwealth of Australia Act 1900 and Art. 301 of our Constitution. We should also add that Art. 304 (a) of the Constitution cannot be interpreted as throwing any light on the scope of Art. 301 with reference to the question of taxation, as it merely reproduces S.297 (1) (b) of the Government of India Act, and as there was no provisions therein corresponding to Art.301, S.297 (1) (b) could not have implied what is now sought to be inferred from Art. 304 (a)." (Para 58) 5.2.5. In the case of Western India Theatres Ltd. Vs. Cantonment Board, Poona Cantonment, reported in A.I.R. 1959 S.C. 582, the subject-matter before the Supreme Court was relevant, power exercised by the authorities under the Cantonments Act, 1924. On the question of interpretation of the Entries in the legislative lists, the Supreme Court observed as follows: “As pointed out by this Court in Navinchandra Mafatlal Vs. Cantonment Board, Poona Cantonment, reported in A.I.R. 1959 S.C. 582, the subject-matter before the Supreme Court was relevant, power exercised by the authorities under the Cantonments Act, 1924. On the question of interpretation of the Entries in the legislative lists, the Supreme Court observed as follows: “As pointed out by this Court in Navinchandra Mafatlal Vs. The Commissioner of Income Tax, Bombay City, 1955 SCR 829 : (S) A.I.R. 1955 (SC 58), following certain earlier decisions referred to therein, the entries in the legislative list should not be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. It has been accepted as well settled that in construing such an entry conferring Legislative powers the widest possible construction according to their ordinary meaning must be put upon the words used therein. In view of this well established rule of interpretation, there can be no reason to construe the words “taxes on luxuries or entertainments or amusements and both may, with equal propriety, be made amenable to the tax. It is true that economists regard an entertainment tax as a tax on expenditure and indeed, when the tax is imposed on the receiver of the entertainment, it does become a tax on expenditure, but there is no warrant for holding that entry 50 contemplates only a tax on moneys spent on luxuries, entertainments or amusements. The entry, as we have said, contemplates a law with respect to these matters regarded as objects and a law which imposes tax on the act of entertaining is within the entry whether it falls on the giver or the receiver of that entertainment. Nor is the impugned tax a imposed for the privilege of carrying on any trade or calling. It is a tax imposed on every show, that is to say, on every instance of the exercise of the particular trade, calling on employment. If there is no show, there is no tax. A lawyer has to pay a tax or fee to take out a licence irrespective of whether or not he actually practices. That tax is a tax for the privilege of having the right to exercise the profession if and when the person taking out the licence chooses to do so. If there is no show, there is no tax. A lawyer has to pay a tax or fee to take out a licence irrespective of whether or not he actually practices. That tax is a tax for the privilege of having the right to exercise the profession if and when the person taking out the licence chooses to do so. The impugned tax is a tax on the act of entertainment resulting in a show. In our opinion, therefore, S.73 is a law with respect to matters enumerated in entry 50 and not entry 46 and the Bombay legislature had ample power to enact this law.” (Para 7) 5.2.6. In the case of Rai Ramkrishna v. State of Bihar, AIR 1963 SC 1667 it was observed that the entries in the 7th Schedule conferring legislative power on the Legislatures must receive the widest denotation. 5.2.7. In the case of Assistant Commissioner of Urban Land Tax, Madras and others etc. v. Buckingham and Carnatic Co. Ltd. etc. : AIR 1970 SC 169 it was observed as follows : "The problem in this case is the problem of characterisation of the law or classification of the law. In other words the question must be asked: what is the subject matter of the legislation in its "pith and substance" or in its true nature and character for the purpose of determining whether it is legislation with respect to Entry 49 of List II or Entry 49 of List II. In Gallahghar v. Lynn, 1937 AC 863 at p. 870 the principle is slated as follows: "It is well established that you are to look al the true nature and character of the legislation, the pith and substance of the legislation. If on the view of the statute as a whole, you find that the substance of the legislation is within the express powers, then it is not invalidated if incidentally it affects mailers which are outside the authorised field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field. Nor are you to look only at the object of the legislator. An Act may have a perfectly lawful object e.g. to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g. direct prohibition of any trade with a foreign country. Nor are you to look only at the object of the legislator. An Act may have a perfectly lawful object e.g. to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g. direct prohibition of any trade with a foreign country. In other words, you may certainly consider the clauses of an Act to see whether they arc passed" in respect of the forbidden subject." In the ease of Subrahmanyan Chettiar Vs. Muttuswami Goudan, 1940 FCR 185 at p. 201 (AIR 1941 FC 47 at (51) Sir Maurice Gwyer, C.J. said: "It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its 'pith and substance', or its true nature and character', for the purpose of determining whether it is legislation with respect to matters in this list or in that : Citizens Insurance Company of Canada list or in that : Citizens Insurance Company of Canada v. Parsons, 1881-7 AC 96 : Russell v. The Queen, 1882-7 AC 829, Union Colliery Co. of British Columbia v. Bryden, 1899 AC 580 ; Att. Gen. for Canada v. Att. Gen. for British Columbia, 1930 AC 111 ; Board of Trustees of Lethbridge Irrigation District v. Independent order of Foresters 1940 AC 513. In my opinion, this rule of interpretation is equally applicable to the Indian Constitution Act." For the reasons already expressed we hold that in pith and substance the new Act in imposing a tax on urban land at a percentage of the market value is entirely within the ambit of Entry 49 of List II and within the competence of the State Legislature and does not in any way trench upon the field or legislation of Entry 86 of List 1.”(Para 7) 5.2.7. In the case of Sudhir Chandra Nawn v. Wealth Tax Officer, AIR (1969) SC 59 after quoting Article 240 it was observed as follows : "Exclusive power of the State Legislature has therefore to be exercised subject to clause (1) i.e. the exclusive power which the Parliament has in respect of the matter enumerated in List I. Assuming that there is a conflict between entry 86, List I and entry 49, List II, which is not capable of reconciliation, the power of Parliament to legislate in respect of a matter which is exclusively entrusted to it must supersede protanto the exercise of power of the State Legislature. The problem viewed from any angle is incapable of a decision in favour of the assessee." (para 7) 5.2.8. In the case of the second Gift Tax Officer, Mangalore v. D.H. Hazareth etc., reported in 1970 S.C. 999, the question involved was whether the Parliament had any power to legislate with respect to tax as on gift of lands and buildings. Before considering the objection to the Gift Tax Act. Certain general principles were laid down as follows : “To consider the objection to the Gift Tax Act which was sustained by the High Court a few general principles may be borne in mind. Under Article 245 Parliament makes laws for the whole or any part of the territory of India and the Legislatures of the States for the whole or pat of their respective States. The subject-matters of laws are set out in three lists in the Seventh Schedule. List I (Usually referred to as the Union List) enumerates topics of legislation in respect to which Parliament has exclusive power to make laws and List II (usually referred to as the State List) enumerates topics of legislation in respect to which the State Legislatures have exclusive power to make laws. List III (usually referred to as the Concurrent List) contains topics in respect to which both Parliament and Legislature of a State have power to make laws. Inconsistency between laws made by Parliament and those made by the Legislatures of the States, both acting under the Concurrent List, is resolved by making Parliamentary law to prevail over the law made by the State Legislature. So long as the Parliamentary law continues, the State law remains inoperative but becomes operative once the Parliamentary law, throwing it into shadow, is removed. So long as the Parliamentary law continues, the State law remains inoperative but becomes operative once the Parliamentary law, throwing it into shadow, is removed. Then there is the declaration in Article 248 of the residuary powers of legislation. Parliament has exclusive power to make any law in respect to any matter not enumerated in the Concurrent List or State list and this power includes the power of making any law imposing a tax not mentioned in either of those lists. For this purpose, and to avoid any doubts, an entry has also been included in the Union List to the following effect : “97. Any other matter not enumerated in List II or List III including any tax not mentioned in either of those lists.” (Para 4) "It will, therefore, be seen that the sovereignty of Parliament and the Legislatures is a sovereignty of enumerated entries, but within the ambit of an entry, the exercise of power is as plenary as any legislature can possess, subject, of course to the limitations arising from the Fundamental Rights, The entries themselves do not low nay logical classification or dichotomy, As was said in State of Rajasthan v. S. Chawla (1959) Supp. 1 SCR 904 - ( AIR 1959 SC 544 ) the entries in the list must be regarded as enumeratio simplex of broad categories. Since they are likely to overlap occasionally, it is usual to examine the pith and substance of legislation with a view to determining to which entry they can be substantially related, a slight connection with another entry in another list notwithstanding. Therefore, to find out whether a piece of legislation falls within any entry, its true nature and character must be in respect to that particular entry. The entries must of course receive a large and liberal interpretation because the few words of the entry are intended to confer vast and plenary powers. If however, no entry in any of the three lists covers it, then it must be regarded as a matter not enumerated in any of the three lists. Then, it belongs exclusively to Parliament under Entry 97 of the Union List as a topic of legislation." (Para 5) 5.3. Apart from the general principles of interpretation as indicated above, there are certain principles regarding the taxing statutes which I shall 'indicate hereinbelow. 5.3.1. Then, it belongs exclusively to Parliament under Entry 97 of the Union List as a topic of legislation." (Para 5) 5.3. Apart from the general principles of interpretation as indicated above, there are certain principles regarding the taxing statutes which I shall 'indicate hereinbelow. 5.3.1. In this context it may be pointed out that under the scheme of the Entries in the Lists, taxation is regarded as a distinctive matter and is separately set out (M.P. Sunderamier & Co. v. State of Andhra Pradesh. AIR (1958) SC 468). 5.3.2. In the case of Second Gift Tax Officer v. D.H. Hazareth, AIR (1970) SC 999 it was observed as follows : "The Constitution divides the topics of legislation into three broad categories: (a) entries enabling laws to be made, (b) entries enabling taxes to be imposed, and (c) entries enabling fees and stamp duties to be 'collected. It is not intended that every entry gives a right to levy a tax. The taxes are separately mentioned and in fact contain the whole of the power of taxation. Unless a tax is specifically mentioned it cannot be imposed except by Parliament in the exercise of its residuary powers already mentioned. Therefore, Entry 18 of the State List does not confer additional power of taxation. At the most fees can be levied in respect of the items mentioned in that entry, vide Entry 66 of the same list. Nor is it possible to read a clear cut division of agricultural land in favour of the States although the intention is to put land in most of its aspects in the State List. But, however wide that entry, it cannot still authorise a tax not expressly mentioned. Therefore, either the pith and substance of the Gift Tax Act falls within Entry 49 of State List or it does not. If it does, then Parliament will have no power to levy the tax even under the residuary powers. If it does not, then Parliament must undoubtedly, possess that power under Article 248 and Entry 97 of the Union List.” (Para 10) 5.3.3. Taxing Statutes are also subject to the provisions of the Constitution including Part III thereof and accordingly it can be struck down if it violates Arts. 14, 19, 31, 265, 301 or any other provisions of the Constitution. In this context we may refer to the decision of K.T. Moopil Nair Vs. Taxing Statutes are also subject to the provisions of the Constitution including Part III thereof and accordingly it can be struck down if it violates Arts. 14, 19, 31, 265, 301 or any other provisions of the Constitution. In this context we may refer to the decision of K.T. Moopil Nair Vs. State of Kerala, AIR (1961) SC 552 “On behalf of the State of Kerala, the learned Advocate General has argued that, though in most of the cases, that is to say, except in seven petitions (petitions 21, 22, 47, 49, 50, 51 and 54) the lands have not been surveyed, the areas mentioned in the notices proposing provisional assessment have been ascertained through the local agencies of the Government. It was further contended that the State had only declared the liability to the payment of the tax at a flat rate of Rs.2 per acre in respect of land, irrespective of the income to be deprived therefrom. Hence there was no necessity for making provision for a detailed enquiry or investigation. The rate of the tax being known, and the area of the land to be taxed having been locally ascertained, even though without any regular survey, what remained was merely quantifying the tax, which was of a purely administrative character. The local agencies estimated the land in possession of particular persons. Those persons were called upon to pay provisionally at the rate fixed by the statute. The State has, by executive action, appointed authorities who are expected to act in accordance with the principle of natural justice. There was, therefore, no need for laying down any elaborate procedure as in other instances of taxing statutes. There is a presumption that the authority appointed by the Government would act bona fide and in a proper manner. If there was any case of unfair dealings, the matter could be brought to the Court. It was greatly emphasised that as a flat rate of taxation had been envisaged by the Act and as ultimately the tax at that rate would be realised from land found to be in possession of particular persons after a regular survey, the regular survey to be ultimately made would automatically determine the amount of tax to be paid and the adjustment of the taxes already paid could be made on that basis. On the legal aspect of the controversy raised on behalf of the petitioners it was argued that the Act has its justification in Art.265 of the Constitution, which was not subject to the provisions of Part III of the Constitution and that, therefore, Arts.14, 19, 31 could not be pressed in paid of the petitioners. It was also contended that even if the Act is, in effect, confiscatory, it can not be questioned, being a taxing statute. Finally, it was urged that the question of the amount of income derived by the petitioners from the property sought to be taxed is wholly irrelevant, because the Act was not a tax on income but it was a tax on the property itself.” (Para 6) It was held that a taxing statute is not wholly immune from the attack on the ground that it infringes the equality clause in Art. 14. In this context, it was held as follows: "The most important question that arises for consideration in these cases, in view of the stand taken by the State of Kerala, in whether Art. 265 of the Constitution is a complete answer to the attack against the constitutionality of the Act. It is, therefore, necessary to consider the scope and effect of that Article. Article 265 imposes a limitation on the taxing power of the State in so far as it provides that the State shall not levy or collect a tax, except by authority of law, that is to say, a tax cannot be levied or collected by a mere executive fiat. It has to be done by authority of law, which must mean valid law. In order that the law may be valid the tax proposed to be levied must be within the legislative competence of the Legislature imposing a tax and authorizing the collection thereof and, secondly, the tax must be subject to the conditions laid down in Art. 13 of the Constitution. One of such conditions envisaged by Art. 13 (2) is that the Legislature shall not make any law which takes away or abridges the equality clause in Art. 14 of which enjoins the State not to deny to any persons equality before the law or the equal protection of the laws of the country. One of such conditions envisaged by Art. 13 (2) is that the Legislature shall not make any law which takes away or abridges the equality clause in Art. 14 of which enjoins the State not to deny to any persons equality before the law or the equal protection of the laws of the country. It cannot be disputed that if the Act infringes the provisions of Art. 14 of the Constitution, it must be struck down as unconstitutional. For the purpose of theses cases, we shall assume that the State Legislature had the necessary competence to enact the law, though the petitioners have seriously challenged such a competence. The guarantee of equal protection of the laws must extend even to taxing statutes. It has not been contended otherwise. It does not mean that every persons should be taxed equally. But it does mean that if property of the same character has to be taxed, the taxation must be by the same standard, so that the burden of taxation may fall equally on all persons holding that kind and extent of property. If the taxation, generally speaking, imposes a similar burden on everyone with reference to that particular kind and extent of property, on the same basis of taxation, the law shall not be open to attack on the ground of inequality, even though the result of the taxation may be that the total burden on different persons may be unequal. Hence, if the Legislature has classified persons of properties into different categories, which are subjected to different rates of taxation with reference to income or property, such a classification would not be open to the attack of inequality on the ground that the total burden resulting from such a classification is unequal. Similarly, different kinds of property may be subjected to different rates of taxation, but so long as there is a rational basis for the classification, Art. 14 will not be in the way of such a classification resulting in unequal burdens on different classes of properties. But if the same class of property similarly situated is subjected to an incidence of taxation, which results in inequality, the law may be struck down as creating an inequality amongst holders of the same kind of property. But if the same class of property similarly situated is subjected to an incidence of taxation, which results in inequality, the law may be struck down as creating an inequality amongst holders of the same kind of property. It must therefore, be held that a taxing statute is not wholly immune from attack on the ground that it infringes the equality clause in Art. 14, though the Courts are not concerned with the policy underlying a taxing statute or whether a particular tax could not have been imposed in a different way or in a way that the Court might think more just and equitable. The Act has, therefore, to be examined with reference to the attack based on Art.14 of the Constitution.” (Para 7) 5.3.4. This was followed in the case of M/s East India Tobacco Company Vs. State of Andhra Pradesh, AIR (1962) SC 1733. In this case also it was held that taxation laws must pass the test of Article 14. That it must not be confiscatory in character and effect, was decided in the case of K.T. Moopil Nair v. State of Kerala, AIR (1961) SC 552 in which it was observed as follows : "That the provisions aforesaid of the impugned Act are in their effect confiscatory is clear on their face. Taking the extreme case, the facts of which we have stated in the early part of this judgment, it can he illustrated that the provisions of the Act, without proposing to acquire the privately owned forests in the State of Kerala after satisfying the conditions laid down in Art. 31 of the Constitution have the effect of eliminating the private owners through the machinery of the Act. The petitioner in petition 42 of 1958 has been assumed to own 25 thousand acres of forest land. The liability under the Act would thus amount to Rs. 50,000/- a year, as already demanded from the petitioner on the basis of the provisional assessment under the provisions of S.5 (A). The petitioner is making an income of Rs.3,100/- per year out of the forests. Besides, the liability of Rs. 50,000/- as aforesaid, the petitioner has to pay a levy of Rs. 4,000/- on the surveyed portions of the said forest. Hence, his liability for taxation in respect of his forest land amounts to Rs. 54,000/- whereas his annual income for the time being is only Rs. Besides, the liability of Rs. 50,000/- as aforesaid, the petitioner has to pay a levy of Rs. 4,000/- on the surveyed portions of the said forest. Hence, his liability for taxation in respect of his forest land amounts to Rs. 54,000/- whereas his annual income for the time being is only Rs. 3,100/- without making any deductions for expenses of management. Unless the petitioner is very enamoured of the property and of the right to hold it, it may be assumed that he will not be in a position to pay the deficit about Rs. 51,000/- every year in respect of the forests in his possession. The legal consequences of his making a default in the payment of the aforesaid sum of money will be that the money will be realised by the coercive process of law. One can easily imagine that the property may be sold at auction and may not fetch even the amount for the realisation of which it may be proposed to be sold at public auction. In the absence of a bidder forthcoming to bid for the offset amount the State ordinarily becomes the auction purchaser for the realisation of the outstanding taxes. It is clear, therefore, that apart from being discriminatory and imposing unreasonable restrictions on holding property, the Act is clearly confiscatory in character and effect. It is not even necessary to tear the veil, as was suggested in the course of the argument, to arrive at the conclusion that the Act has that unconstitutional effect. For these reasons, as also for the reasons for which the provisions of Ss.4 and 7 have been declared to he unconstitutional, in view of the provisions of Art. 14 of the Constitution, all these operative sections of the Act, namely 4, 5A and 7 must be held to offend Art. 19(1)(f) of the Constitution also." (Para 10) 5.3.5. In the case of Asstt. Commissioner v. Buckingham & Carnatic, AIR (1970) SC 169 it was held as follows : “It is of course true that the power of taxing the people and their property is an essential attribute of the Government and Government may legitimately exercise the said power by reference to the objects to which it is applicable to the utmost extent to which Government thinks it expedient to do so. The objects to be taxed so long as they happen to be within the legislative competence of the Legislature can be taxed by the Legislature according to the exigencies of its needs, because there can be no doubt that the State is entitled to raise revenue by taxation. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered are all matters within the competence of the Legislature and in dealing with the contention raised by a citizen that the taxing statute contravenes Article 19 Courts would naturally be circumspect and cautious. Where for instance it appears that the taxing statue is plainly discriminatory, or provides no procedural machinery for assessment and levy of the tax, or that it is confiscatory, Courts, would be justified in striking down the impugned statue as unconstitutional. In such cases, the character of the material provisions of the impugned statute is such that the Court would feel justified in taking the view that, in substance, the taxing statue is a cloak adopted by the legislature for achieving its confiscatory purposes. This is illustrated by the decision of this Court in the case of Kunna that Thathunni Moopil Nair Vs. State of Kerala, A.I.R. 1961 SC 552 where a taxing statute was struck down because it suffered from several fatal infirmities. On the other hand, we may refer to the case of A.I.R. 1962 SC 1963 where a challenge to the taxing statute on the ground that its provisions were unreasonable was rejected and it was observed that unless the infirmities in the impugned statute were of such a serious nature as to justify its description as a colourable exercise of legislative power the Court would uphold a taxing statue. As a general rule it may be said that so long as a tax retains its character as a tax and is not confiscatory, or extortionate the reasonableness of the tax cannot be questioned. Mr. As a general rule it may be said that so long as a tax retains its character as a tax and is not confiscatory, or extortionate the reasonableness of the tax cannot be questioned. Mr. Chari submitted that the existing property tax under S.100 of the City Municipal Corporation Act and the tax on urban lands under the new Act both enacted under Entry 49 of the State List, one of them imposing a tax on the capital value of urban lands and the other on the annual value of land and buildings exhaust an unreasonably high proportion of income. For instance it is pointed out that in W.P. No. 2835 of 1967 the annual income on property was Rs. 6000 and the proposed market value for the lands. alone comes to Rs. 10,40,000/-. The urban land tax at 0.4 per cent of the market value is Rs. 4,160 and the income-tax at the rate applicable to the petitioner was Rs. 1,234. The total tax burden in the aggregate under the three heads was Rs. 6,794, which exceeds the rental income. In W.P. No. 3686 of 1967 the municipal annual value was 4,095, the property tax was Rs. 1,098 and the urban land tax at 0.4 per cent was Rs. 1,523. The proportion of the two taxes together to yearly or annual Municipal value worked out to Rs. 62.5 percent. It was, therefore, said that the taxes put together would practically exhaust the total income and the charging section in the new Act was unreasonable. The answer to the contention is that the charge is on the market value of the urban land and not on the annual letting value on which the municipal property tax is based. The basis of the two taxes being different it is not permissible to club together the two taxes and complain of the cumulative burden. If the tax is on the market value of the urban land as it is in this case it does not admit of a complaint that it takes away an unreasonably high proportion of the income. A tax on land values and a tax on letting value, though both are taxes under Entry 49 of List II, cannot be clubbed together in order to test the reasonableness of one or the other for the purposes of Article 19 (1). A tax on land values and a tax on letting value, though both are taxes under Entry 49 of List II, cannot be clubbed together in order to test the reasonableness of one or the other for the purposes of Article 19 (1). But so far as the new Act is concerned we consider that the levy at 0.4 per cent of the market value of the urban land is by no means confiscatory in effect. It was also pointed out by Mr. V.K.T. Chari that in certain cases the market value of the urban land was arrived at by applying what is known as the contractor's method not to the building which stands on the land whose value is ascertained by that means but to some other building on a different land taken for compensation. It was said that it was difficult enough for a man to apply the contractor's method of valuation to his own building which could be done by a competent architect after taking into account all measurements. But it is absolutely an impossible task to check up or make objections to the contractor’s method applied to another man’s property which cannot be trespassed upon. It was said that the contractor’s method was the last resort in valuation when a building has to be valued apart from the land and that it was a wrong application of the formula to use it to value the land without the building particularly when valuation of land can be made by applying the principles of the Land Acquisition Act. But this argument has no bearing on the constitutional validity of the charging section or the machinery provisions of the Act. It is, however, open to the writ petitioners to challenge the validity of the particular valuation in any particular case by way of an appeal under a statute or to move the High Court for grant of writ under Article 226 of the Constitution.” (Para 11) 5.3.6. In the case of M/s R.R. Engineering & Co. Vs. Zila Parishad, Bareilly and others, AIR 1980 SC 1088 it was observed as follows: “While doing so, we would like to utter a word of caution. In the case of M/s R.R. Engineering & Co. Vs. Zila Parishad, Bareilly and others, AIR 1980 SC 1088 it was observed as follows: “While doing so, we would like to utter a word of caution. The fact that one of the components of the impugned tax namely, the component of circumstances is referable to other entries in addition to Entry 60, should not be construed as conferring an unlimited charter on the local authorities to impose disproportionately excessive levies on the assesses who are subject of their jurisdiction. An excessive levy on circumstances will tend to blur the distinctions between a tax on income and a tax on circumstances. Income will then ceases to be a mere measure or yardstick of the tax. Restraint in this behalf will be a prudent prescription for the local authorities to follow.” (Para 22) 5.3.7. In this case of Govind Saran Ganga Saran Vs. Commissioner of Sales Tax & Others, 60 STC 1 it was observed as follows: “The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity.” 5.3.8. In the case of Union of India & others Vs. The Tata Iron & Steel Company Limited, AIR 1975 SC 769 it was observed as follows: "The short question, therefore, that arises for consideration is whether in the above background the High Court was right in interfering with the orders under Article 226 of the Constitution. It is not for the High Court nor for this Court to come to a conclusion on facts as to whether the product can truly come under the description of skelp. It is not for the High Court nor for this Court to come to a conclusion on facts as to whether the product can truly come under the description of skelp. That undoubtedly would require some evidence be taken al the level of the taxing authority provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip. In the mass of documents filed before us and the extensive arguments addressed at the bar with regard to the definitions called from various dictionaries, handbooks and authorities, we are not at all surprised that the three authorities came to the same conclusion by depending upon their own chosen tests. A particular type of strip may according to certain definitions he skelp and according to others not skelp. This, however, cannot he permitted in a fiscal legislation which by all standards should adopt a clear definition of an excisable item which is incapable of giving rise to a confounding controversy as in this case' unless the matter is beyond doubt in view of the popular meaning or meaning ascribed to the term in commercial parlance. In absence of any criterion to determine what is skelp and not strip no useful purpose would be served by even remanding the matter to the Excise authorities for a decision after taking necessary evidence. It is only when a taxing law provides for a clear and unequivocal test for determination as to whether a particular product would fall under strip or skelp it may be possible for the authorities to address itself to the evidence submitted by the parties in order to come to a decision on the basis of the test. This, however, is not possible in this case in view of the fact that there is no identifiable standard. The best way is to define the product for the purpose of excise duty in appropriate terms demarcating clearly the distinction between the two terms." (Para 9) 5.3.9. In the case of Hoechst Pharmaceuticals & others v. State of Bihar & others, AIR 1983 SC 1019 . it was observed as follows: "It would therefore appear that there is a distinction made between general subjects of legislation and taxation. The general subjects of legislation are dealt with in one group. In M.P. Sundararamier and Co. In the case of Hoechst Pharmaceuticals & others v. State of Bihar & others, AIR 1983 SC 1019 . it was observed as follows: "It would therefore appear that there is a distinction made between general subjects of legislation and taxation. The general subjects of legislation are dealt with in one group. In M.P. Sundararamier and Co. v. State of Andhra Pradesh, 1958 SCR 1422 : ( AIR 1958 SC 468 ) this Court dealt with the scheme of the separation of taxation powers between the Union and the States by mutually exclusive lists. In List I, Entries 1 to 81 deal with general subjects, of legislation: Entries 82 to 92-A deal with taxes. In List II, Entries 1 to 44 deal with general' subjects of legislation; Entries 45 to 63 deal with taxes. This mutual exclusiveness is also brought out by the fact that in List III, the Concurrent Legislative List, there is no entry relating to a tax, but it only contains an entry relating to levy of fes in respect of matters given in that list other than court-fees. Thus, in our Constitution, a conflict of the taxing power of the Union and of the States cannot arise. That being so, it is difficult to comprehend the submission that there can be intrusion by a law made by Parliament under Entry 33 of List III into a forbidden field viz. the State's exclusive power to make a law with respect to the levy and imposition of a tax on sale or purchase of goods relatable to Entry 64 of List II of the Seventh Schedule. It follows that the two laws viz. sub-sec. (3) of Section 5 of the Act and para 21 of the Control order issued by the Central Government under sub-section (1) of Section 3 of the Essential Commodities Act, operate on two separate and distinct fields and both are capable of being obeyed. There is no question of any clash between the two laws and the question of repugnancy does not come into play." (Para 76) 5.3.10. In the case of Buxa Dooars Tea Co. Ltd & others, Vs. State of West Bengal & others, AIR 1989 SC 2015 it was observed as follows: “But what is the position here? There is no question of any clash between the two laws and the question of repugnancy does not come into play." (Para 76) 5.3.10. In the case of Buxa Dooars Tea Co. Ltd & others, Vs. State of West Bengal & others, AIR 1989 SC 2015 it was observed as follows: “But what is the position here? The statute speaks of a levy “in respect of a tea estate” and it says that the levy will not exceed Rs.6/- on cash Kilogram of tea on the despatches from such tea estate of tea grown therein. The statute also provides that in calculation the dispatches of tea for the purpose of levy of rural employment cess, the dispatches for sale made at such tea auction centres as may be recognised by the State Government shall be excluded. And there is a proviso which empowers the State Government to fix different rates on dispatches of different classes of tea. There is also S.4 (4) which empowers the State Government to exempt such categories of despatches or such percentage of despatches from the liability to pay the whole or any part of the rural employment cess, or to reduce the rate of the rural employment cess payable thereon under Clause (aa) of Sub-S. (2) on such terms and conditions as it may specify by notification. As from 1 October, 1982 the position remained the same except that the first proviso of S.4 (2) (aa) excluding the despatches for sale made at recognised tea auction centres was deleted. The remaining provisions continued as before. Now, for determining the true nature of the legislation. Whether it is a legislation in respect of tea estates, and therefore of land, or in we have said, take all the relevant provisions of the legislation into account and ascertain the essential substance of it. It seems to us that although the impugned provisions speak of a levy of cess in respect of tea estates, what is really contemplated is a levy on despatches of tea instead. The entire structure of the levy points to that conclusion. It seems to us that although the impugned provisions speak of a levy of cess in respect of tea estates, what is really contemplated is a levy on despatches of tea instead. The entire structure of the levy points to that conclusion. If the levy is regarded as one in respect of tea estates and the measure of the liability is defined in terms of the weight of tea dispatched from the tea estate there must be a nexus between the two indicating a relationship between the levy on the tea estate and the criteria for determining the measure of liability. If there is no nexus at all it can conceivably be inferred that the levy is not that it purports to be. The statutory provisions for measuring the liability on account of the levy throws light on the general character of the tax as observed by the Privy Council in Re: A reference under the Govt. of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934, (1936) 2 ALLER 11. In R.R. Engineering Co. Vs. Zila Parishad, Bareilly, (1980) 3 SCR 1 : ( AIR 1980 SC 1088 ). This Court observed that the standard on which the tax is levied was a relevant consideration for determining the nature of the tax, although it could not be regarded as conclusive in the matter. Again in The Hingir-Rampur Coal Co. Ltd. Vs. State of Orissa (1961) 2 SCR 537 : ( AIR 1961 SC 459 ) this Court observed that the method of determining the rate of levy would be relevant in considering the character of the levy. All these cases were referred to in Bombay Tyre International Ltd., 1984 (1) SCR 347 : ( AIR 1983 SC 420 ) (supra) where in the discussion on the point at page 367 (of SCR) : (at p. 430-of AIR) this Court said: "Any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy". (Para 10) 5.3.11. In the case of The Member Secretary, A.P.S.P. for P. & C.W.P. Vs. A.P. Rayons Ltd., A.I.R. (1989) S.C. 611, it was observed as follow: "It has to be borne in mind that this Act with which we are concerned is an Act imposing liability for cess. The Act is fiscal in nature. (Para 10) 5.3.11. In the case of The Member Secretary, A.P.S.P. for P. & C.W.P. Vs. A.P. Rayons Ltd., A.I.R. (1989) S.C. 611, it was observed as follow: "It has to be borne in mind that this Act with which we are concerned is an Act imposing liability for cess. The Act is fiscal in nature. The Act must, therefore, be strictly construed in order to find out whether a liability is fastened on a particular industry. The subject is not to be taxed without clear words for that purpose; and also that every Act of Parliament must be read according to its natural construction of words. See the observations in Re Nicklethwait, (1885) 11 Ex 452 at p. 456. Also see the observations in Tenant V. Smith, (1892) AC 150 and Lord Halsbury's observations at page 154. See also the observations of Lord Simonds in St. Aubyn v. Att. Gen., (1951) 2. All ER 473 at p. 485. Justice Rowlatt of England said a long time ago, that in a taxing Act one has to look merely at what is dearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One has to look fairly at the language used. See the observations in Capte Brandy Syndicate v. IRC, (1921 - 1 KB 64 at p.71). This Court has also reiterated the same view in Gursahai Saigal v. C.I.T., Punjab, (1963) 3 SCR 893 : ( AIR 1963 SC 1062 ), C.I.T. Madras v. V.M.R.P. Firm, Muar, (1965-1 SCR 815), Controller of Estate Duty, Gujarat v. Kantilal Trikamlal, (1977-1 SCR 9 : AIR 1976 SC 1935 ). (Para 6) The question as to what is covered must be found out from the language according to its natural meaning fairly and squarely read. See the observations in IRC v. Duke of Westminster, 1936 AC 1 at p.24, and of this Court in A.V. Fernandez Vs. State of Kerala, 1957 SCR 837 : ( AIR 1957 SC 637 ). Justice Krishan Iyer of this Court in Martand Dairy & Farm Vs. See the observations in IRC v. Duke of Westminster, 1936 AC 1 at p.24, and of this Court in A.V. Fernandez Vs. State of Kerala, 1957 SCR 837 : ( AIR 1957 SC 637 ). Justice Krishan Iyer of this Court in Martand Dairy & Farm Vs. Union of India, 1975 Supp SCR 265 : ( AIR 1975 SC 1492 ) has observed that taxing consideration may stem from administrative experience and other factors of life and not artistic visualisation or neat logic and so the literal, though pedestrian, interpretation must prevail.” (Para 7) 5.3.12. In interpreting a section in a taxing statute, according to LORD SIMONDS, "the question is not at what transaction the section is according to some alleged general purpose aimed, but what transaction its language according to its natural meaning fairly and squarely hits" : St. Aubyn (LM) v. A.G., (1951) 2 All ER 473 (HL), p 485. 5.3.13. It is, therefore, not the function of a court of law to give to words a strained and unnatural meaning to cover loopholes through which the evasive tax-payer may find escape or to tax transactions 'which, had the legislature thought of them, would have been convered by appropriate words. : IRC v. Wolfson, (1949) 1 All ER 865 (HL), p.868. 5.3.14. In the case of W.M. Cory & Sons Ltd. v. IRC (1965) 1 All ER 917 (HL), p.921, Lord Reid said- "The words of a taxing Act must never be stretched against a tax-payer. There is a very good reason for that rule. So long as one adheres to the natural meaning for the charging words the law is certain, or at least as certain as it is possible to make it, but if courts are to give to charging words what is sometimes called a liberal construction who can say just how far this will go. It is much better that evasion should be met by amending legislation." 5.3.15. The subject is not to be taxed unless the words of the taxing statute unambiguously impose the tax on him : Russel v. Scott, (1948) 2 All ER 1 (HL), p.5 (Lord Simonds). 5.3.16. If the taxing provisions is so wanting in clarity that no meaning is reasonably clear, the courts will be unable to regard it as of any effect: IRC v. Ross Hod Coulter, (1948) 1 All ER 616 (HL), p.625. 5.4. 5.3.16. If the taxing provisions is so wanting in clarity that no meaning is reasonably clear, the courts will be unable to regard it as of any effect: IRC v. Ross Hod Coulter, (1948) 1 All ER 616 (HL), p.625. 5.4. The aforesaid decisions lay down the general principles of interpretation of the Constitution and the legislative entries of the Seventh Schedule. It is not necessary to refer to various other decisions referred to in the written argument of Mr. Sibal inasmuch as the general principles propounded by him regarding the same under the heading 'Legislative Competence' cannot be disputed generally. However, his interpretation of the scope of Entry 49 of List II, with or without reference to any Entry of List I, is the subject matter of dispute in the present proceedings and the same will be considered while dealing with the question of legislative competence specifically. 6. Legislative competency. One of the main arguments advanced before the Court was on the question of legislative competency of the State Legislature to enact the said Act. It was made clear on behalf of the State at the very outset that the only Entry relied upon in this connection was Entry 49 of List II, i.e. “Tax on land and building”. On behalf of the petitioners the main submission was that it is not a tax on land but a tax on certain use and activities relating to land. It was next argued on behalf of the petitioners that in any event, in view of certain Central Acts, viz. M.M.R.D. Act and Forest (Conservation) Act etc. the State Legislature was not competent to enact the present Act under Entry 49 of List II. 6.1. I shall first consider the relevant decisions in this regard. 6.1. Case Laws 6.1.1. In the case of Sudhir Chandra Nawn Vs. Wealth Tax Officer, Calcutta and others, reported in A.I.R. 1969 S.C. 59, the validity of the Wealth Tax Act enacted by the Parliament was challenged. On the question of legislative competency, particularly whether it was a tax on lands and buildings within the meaning of Entry 49 List II it was held as follows: “The Parliament enacted the Wealth-tax Act in exercise of the power under List I of the Seventh Entry 86 – “Taxes on the capital value of assets, exclusive of agricultural lands, or individuals and companies”. That was so assumed in the decision of this Court in Banarsi Dass Vs. Wealth-tax Officer, Special Circle, Meerut (1965) 5 ITR 224 ( AIR 1965 SC 1387 ) and counsel for the petitioner accepts that the subject of Wealth-tax Act falls within the terms of Entry 86, List I of the Seventh Schedule. He says, however, that since the expression “net wealth” includes non-agricultural lands and buildings of an assessee, and power to levy tax on lands and buildings is reserved to the State Legislatures by Entry 49, List II of the Seventh Schedule, the Parliament is incompetent to legislate for the levy of Wealth-tax on the capital value of the assets which include non agricultural lands and buildings. The argument advanced by counsel for the petitioner is wholly misconceived. 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 tax 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 asessee. It is imposed on the total assets which the assessee owns, and in determining the net wealth not only the encumbrances specifically charged against any item of asset, but the general liability of the assessee to pay his debts and to discharge his lawful obligations have to be taken into account. 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 visualising the possibility of exceptional cases of taxes under two different heads operating similarly on taxpayers. 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 visualising the possibility of exceptional cases of taxes under two different heads operating similarly on taxpayers. Again entry 49 List II of the Seventh Schedule contemplates the levy of tax on lands and buildings or both as units. It is normally not concerned with the division of interest or ownership in the units of lands or buildings which are brought to tax. Tax on lands and buildings is directly imposed on lands and buildings which may form a component of the total assets of the assessee. By legislation in exercise of power under Entry 86 List I tax is contemplated to be levied on the value of the assets. 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 buildings for determining tax liability will not, in our judgment, make the fields of legislation under the two entries overlapping." After referring to the decision of the Federal Court in Ralla Ram Vs. Province of East Punjab, 1948 FCR 207 (AIR 1949 F.C. 81) it was held as follows: “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 obligation 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.”(Para 5) On the question of overlapping it was held as follows: “Assuming that there is some overlapping between the two entries, it cannot on that account be said that the Parliament had no power to legislate in respect of levy of wealth tax in respect of the lands and buildings which may form part of the assets of the assessee. As observed by Gwyer, C.J., in re, Central Provinces and Berar Act No. XIX of 1938 (1939) FCR 18 at p.49 : (AIR 1939 1 at p.10) “that a general power ought not to be so construed as to make a nullity of a particular power conferred' by the same Act and operating in the same field when by reading the former in a more restricted sense effect can be given to the latter in its ordinary and natural meaning. Apparently an entry "taxes on lands and buildings" is a more general entry than the entry in respect of a tax on the annual value of assets of an individual or a company, and by conferring upon Parliament the power to legislation capital value of the assets including lands and buildings, the power of the State legislature was protanto excluded." (Para 6) Having considered the scheme of Article 246 of the Constitution which distributes legislative powers between the Parliament and State Legislature. "Exclusive power of the State legislature has therefore to be exercised subject to clause (1) i.e. the exclusive power which the Parliament has in respect of the matters enumerated in List I. Assuming that there is a conflict between entry 86, List I and entry 69, List II, which is not capable of reconciliation, the power of Parliament to legislate in respect of a matter which is exclusively entrusted to it must supersede protanto the exercise of power of the State legislature. The problem viewed from any angle is incapable of a decision in favour of the assessee." (Para 7) On the question of respective scope of Entry 86, List I and Entry 49 List II it was observed as follows: "The High Courts have consistently taken the view in cases in which the question under discussion expressly fell to be determined, that the power to levy tax on lands and buildings under Entry 49, List II does not trench upon the power conferred upon the Parliament by entry 86, List I, and therefore the enactment of the Wealth-tax Act by the Parliament is not ultra vires. In C.K. Mammad Kevi v. Wealth tax Officer, Calicut, 1962-44 ITR 277 - ( AIR 1962 Ker 110 ) the High Court of Kerala held that Wealth-tax is specifically and in substance covered by entry 86 of the Union list of the Seventh Schedule to the Constitution of India, and there is really no conflict and no overlapping between the jurisdiction of the Parliament under Entry 86 of the Union List to enact a law levying a tax on the capital value of assets, and of the State Legislature under Entry 49 of the State List, to enact a law levying a tax on lands and buildings. A similar view was expressed by the Orissa High Court in Badri Narayanamurthy v. Commissioner of Wealth-tax, Bihar and Orissa, 1965-56 ITR 298 ( AIR 1964 Ori. 128 ), and also in Sri Krishna Rao v. Third Wealth tax Officer, A.I.R. 1963 Mys. 111." (Para 8) It was further held that failure to make Rules for valuation of any asset as provided in Section 7 did not affect the vires of the said section. (Para 10) 6.1.2. In the case of Assistant Commissioner of Urban land Tax, Madras and other etc. Vs. Buckingham and Carnatic Co. Ltd. etc., reported in A.I.R. 1970 S.C. 169, the question of law which arose for determination was whether Madras Urban Land Tax Act, 1966 was constitutionally valid. Section 5 of the said Act provided that there shall be levied and collected from every year, a tax on each urban land from the owner of such urban land at the rate of 0.4 percent of the market value of such urban land. The first question to be considered was whether the State Legislature was competent to enact the Legislation under Entry 49 of List II. In this context the Supreme Court observed as follows : ..... It was argued on behalf of the petitioners that the impugned Act fell under Schedule VII, List I, Entry 86 that is "Taxes on the capital value of the assets, exclusive of agricultural land of individuals and companies”. The argument of Mr. V.K.T. Chari may he summarised as follows: The impugned Act was, both in form and substance, taxation of capital and was hence beyond the competence of the State Legislature. The argument of Mr. V.K.T. Chari may he summarised as follows: The impugned Act was, both in form and substance, taxation of capital and was hence beyond the competence of the State Legislature. To tax on the basis of capital or principle value of assets was permissible to Parliament under List I, Entries 86, and 87 and to State under Entry 48 of List II. Taxation of capital was the appropriate method provided for effecting the directive principle under Article 39 of the Constitution, namely, to prevent concentration of wealth. Article 366, (9) contains a definition of estate duty with reference to the principal value. Entry 86 of List I (Taxes on capital value of assets exclusive of agricultural land) and Entry 88 (Duties in respect of succession to such property) form is to carry out the directive principle of Article 39 (c). The Constitution indicated that capital value or principal value shall be the basis of taxation under these entries and, therefore, the method of taxation of capital or principle value was prohibited even to Parliament in respect of other taxes and to the State except in respect of Estate Duty on agricultural land. Such in effect is the argument of Mr. V.K.T. Chari. But in our opinion, there is no warrant for the assumption that Entries 86, 88 of List I and Entry 48 of List II form a special group embodying any particular scheme. The directive principle embodied in Article 39 (c) applies both to Parliament and to the State Legislature and it is difficult to conceive how entries 86 to 88 of List I would exclude any power of the State Legislature to implement the same principle. The legislative entries must be given a large and liberal interpretation, the reason being that the allocation of the subjects to the lists is not by way of scientific or logical definition but by way of a mere simplex enumeration of broad categories. We see no reason, therefore, for holding that the Entries 86 and 87 of List I preclude the State Legislature from taxing capital value of lands and buildings under Entry 49 of List II. In our opinion there is no conflict between entry 86 of List I and Entry 49 of List II. The basis of taxation, under the two entries is quite distinct. In our opinion there is no conflict between entry 86 of List I and Entry 49 of List II. The basis of taxation, under the two entries is quite distinct. As regards Entry 86 of List I the basis of the taxation is the capital value of the asset. It is not a tax directly on the capital value of assets of individuals and companies on the valuation date. The tax is not imposed on the components of the assets of the assessee. The tax under Entry 86 proceeds on the principle of aggregation and is imposed on totality of the value of all the assets. It is imposed on the total assets which the assessee owns and in determining the net wealth not only the encumbrances specifically charged against any item of asset, but the general liability of the assessee to pay his debts and to discharge his lawful obligations have to be taken into account. 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 levied on the capital or annual value under 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 lands or buildings which are brought to tax. Tax on lands and buildings, is directly imposed on lands and buildings, and bears a definite relation to it. Tax on the capital value of assets bears no definable relation to lands and buildings which may form a component of the total assets of the assessee. By legislation in exercise of power under Entry 86, List I, tax is contemplated to be levied on the value of the assets. 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. By legislation in exercise of power under Entry 86, List I, tax is contemplated to be levied on the value of the assets. 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 buildings for determining tax liability will not make the fields of legislation under the two entries overlapping. The two taxes are entirely different in their basic concept and fall on different subject matter. (Para 5) After referring to various decisions the Supreme Court held that in pith and substance the new Act was within the ambit of Entry 49 List II. In this context the Supreme Court held as follows : "The problem in this case is the problem of characterisation of the law or classification of the law. In other words the question must be asked what is the subject matter of the legislation in its "pith and substance or in its true nature and character for the purpose of determining whether it is legislation with respect to Entry 41) of List II or Entry 86 of List I. In Gallahagher v. Lynn, 193 AC 863 at P.870 the principle is stated as follows : “It is well established that you are to look at the true nature and character of the legislation, the pith and substance of the legislation. If on the view of the statute as a whole, you find that the substance of the legislation is within the express powers, then it is not invalidated if incidentally it affects mailers which are outside the authorised field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field. Nor are you to look only at the object of the legislator. An Act may have a perfectly lawful object e.g. to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g. direct prohibition of any trade with a foreign country. In other words, you may certainly consider the clauses of an Act to see whether they are passed in respect of the forbidden subject”. An Act may have a perfectly lawful object e.g. to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g. direct prohibition of any trade with a foreign country. In other words, you may certainly consider the clauses of an Act to see whether they are passed in respect of the forbidden subject”. In the case of Subrahmanyan Chettier v, Muttuswami Goudan, 1940 FCR 188 p.201 (AIR 1941 FC 47 at p.51) Sir Maurice Gwyer C.J. said: "It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its 'pith and substance', or its 'true nature and character', for the purpose of determining whether it is legislation with respect to maters in this list or in that: Citizens Insurance Company of Canada v. Parsons, 1881 - 7 AC 96: Russel v. The Queen, 1882 - 7 AC 829; Union Colliery Co. of British Columbia v. Bryden, 1899 AC 580; Att. Gen. for Canada v. Att. Gen. for British Columbia, 1930 AC 111; Board of Trustees of Lethbridge Irrigation District v. Independent Order of Foresters, 1940 AC 513. In my opinion, this rule of interpretation is equally applicable to the Indian Constitution Act: For the reasons already expressed we hold that in pith hand substance the new Act in imposing a tax on urban land at a percentage of the market value is entirely within the ambit of Entry 49 of List II and within the competence of the State Legislature and does not in any way trench upon the field of legislation of Entry 86 of List I" (Para 7). The next contention raised was that Entry 49 List II provides taxes on land "and buildings" and impugned Act tax on lands alone and accordingly it cannot be said to fall under that Entry. This contention was rejected by Supreme Court. 6.1.3. In the case of Second Gift Tax Officer Vs. The next contention raised was that Entry 49 List II provides taxes on land "and buildings" and impugned Act tax on lands alone and accordingly it cannot be said to fall under that Entry. This contention was rejected by Supreme Court. 6.1.3. In the case of Second Gift Tax Officer Vs. D.S. Hazareth, AIR 1970 SC 999 , it was observed as follows: “The Gift Tax Act was enacted by Parliament and it is admitted that no entry in the Union List or the Concurrent List Mentions such a tax. Therefore, Parliament purported to use its powers derived from Entry 97 of the Union List read with Article 248 of the Constitution. This power admittedly could not be invoked if the subject of taxes on gifts could be said to be comprehended in any entry in the State List. The High Court has accepted the contention of the Tax-payers that it is so comprehended in entries 18 and 49 of the State List. Those entries read: “18 Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents: transfer and alienation of agricultural land, land improvement and agricultural loans; colonisation.” “49. Taxes on land and buildings.”(Para 6) “The argument is that by Entry 18, ‘land’ of all description is made subject to legislation in the States and by Entry 49 taxes of whatever description on lands in that larges sense and buildings generally fall also in the jurisdiction of the State. Reference is made to Entries 45, 46, 47 and 48 of the State List in which certain taxes are to be imposed on land and agricultural land or income from agriculture exclusively by the State in contrast with Entries 82, 86, 87 and 88 where the taxes are imposed on properties other than agricultural land or' income from agriculture. It is submitted, therefore, that the general scheme of division of taxing and other entries by which land, particularly agricultural land, and income therefrom is reserved for the Slates shows that taxes on lands and buildings read liberally must also cover taxes in respect of gifts of land particularly agricultural land and buildings. It is submitted, therefore, that the general scheme of division of taxing and other entries by which land, particularly agricultural land, and income therefrom is reserved for the Slates shows that taxes on lands and buildings read liberally must also cover taxes in respect of gifts of land particularly agricultural land and buildings. If the entry so read can be reasonably said to include the tax, then there can be no question of recourse to the residuary powers of Parliament." (Para 7) After consideration of various decisions it was observed as follows: "The subject of Entry 49 of the State List in relation to imposition of Wealth Tax came up for consideration in Sudhir Chandra Nawn v. Wealth Tax officer, Calcutta, 1968-69 ITR 897- ( AIR 1969 SC 59 ) and the view of the High Court on the construction of this entry was affirmed. Although the judgment under appeal was not referred to expressly the result is that it must be taken to be impliedly overruled. In view of the decision of this Court it is not necessary to deal with the matter except briefly." (Para 9) "The Constitution divides the topics of legislation into three broad categories: (a) entries enabling laws to be made, (b) entries enabling taxes to be imposed, and (c) entries enabling fee and stamp duties to be collected. It is not intended that every entry gives a right to levy a tax. The taxes are separately mentioned and in fact contain the whole of the power of taxation. Unless a tax is specifically mentioned, it cannot be imposed except by Parliament in the exercise of its residuary powers already mentioned. Therefore, Entry 18 of the State List does not confer additional power of taxation. At the most fees can be levied in respect of the items mentioned in the entry, vide Entry 66 of the same list. Nor is it possible to read a clear cut division of agricultural land in favour of the States although the intention is to put land in most of its aspects in the State List. But, however, wide that entry, it cannot still authorise a tax not expressly mentioned. Therefore, either the pith and substance of the Gift Tax Act falls within Entry 49 of State List or it does not. But, however, wide that entry, it cannot still authorise a tax not expressly mentioned. Therefore, either the pith and substance of the Gift Tax Act falls within Entry 49 of State List or it does not. If it does, then Parliament will have no power to levy the tax even under the residuary powers. If it docs not, then Parliament must undoubtedly possess that power under Article 248 and Entry 97 of the Union List." (Para 10) “The pith and substance of Gift Tax Act is to place the tax on the gift of property which may include land and buildings. It is not a tax imposed directly upon the lands and buildings but is a tax upon the value of the total gifts made in a year which is above the exempted limit. There is no tax upon lands or buildings as units of taxation. Indeed the lands and buildings are valued to find out the total amount of the gift and what is taxed is the gift. The value of the lands and buildings is only the measure of the value of the gift. A gift-tax is thus not a tax on lands and buildings as such which is a tax resting upon general ownership of lands and buildings but is a levy upon a particular use, which is transmission of title by gift. The two are not the same thing and the incidence of the tax is not the same. Since Entry 49 of the State List contemplates a tax directly levied by reason of the general ownership of lands and buildings, it cannot include the gift tax as levied by Parliament. There being no other entry which covers a gift tax, the residuary powers of Parliament could be exercised to enact a law. The appeals must, therefore, by allowed but there shall be no order about costs throughout. The appeal 666/67 however abates as the sole respondent died.” (Para 11) 6.1.4. In the case of District Council of Jowai Autonomous Distt. Vs. Dwet Singh, AIR (1986) SC 1930 the respondents before the Supreme Court were forest contractors and they were parties in two - forests within the jurisdiction of the appellant District Council. The forests were alleged to be belonging to some private person. In the case of District Council of Jowai Autonomous Distt. Vs. Dwet Singh, AIR (1986) SC 1930 the respondents before the Supreme Court were forest contractors and they were parties in two - forests within the jurisdiction of the appellant District Council. The forests were alleged to be belonging to some private person. The Secretary of the Executive Committee of the District Council issued notice levying royalty, in exercise of his powers under the United Khasi and Jaintia Hills Autonomous District (Management and Control of Forests) Act, 1958, on red pine, white pine and log pine timber grown in the private forests situated within the jurisdiction of the District Council at the rates specified therein. The challenge of the petitioners were upheld by the High Court against which the appeal was preferred to the Supreme Court. The question before the Supreme Court was, inter alia, whether the royalty levied by the impugned notification could be realised by the District Council in respect of trees in private forest. In this context, it was observed that in the true sense what is sought to be recovered under the Act was not royalty since the forest did not belong to the District Council. It was held that the amount claimed by way of royalty under the Notification was a compulsory exaction of money by a public authority for public purposes enforceable by law and is not a payment for services rendered. It was truly in the nature of a tax. It was next argued before the High Court that the levy came within sub-paragraphs (1) and (2) or Paragraph 8 of the Sixth Schedule to the Constitution, which authorised levy of tax on lands on the ground that the trees were growing on the land. In this context the Supreme Court held: "... We find it difficult to agree with the above submission since if the levy is land revenue then it should have been fixed in accordance with the principles for the time being followed by the Government of the State in assessing lands for the purpose of land revenue in the State generally as required by sub-paragraph (1) of Paragraph 8 of the Sixth Schedule to the Constitution. It cannot be sustained as any other kind of tax on land since the royalty payable has no reference to the extent of the land and the nature of the land and its potentialities. It is a tax only on the timber which is brought from private forests. The notification in unambiguous terms says that the royalty shall be on the squared log pines. It has no reference to the land on which those trees have grown. In pith and substance it is a tax on forest produce grown on private lands. The District Council has no power to levy such a tax on forest produce under Paragraph 8 of the Sixth Schedule to the Constitution. Reliance was, however, placed on the minority judgment of Justice Sarkar in K.T. Moopil Nair Vs. State of Kerala (1961) 3 SCR 77 : ( AIR 1961 SC 552 ) in support of the plea that lands on which forest grew could be taxed under entry ‘tax on lands and building’. The impugned levy being not a tax levied on land as we have pointed out above, the said, observation in the above decision is not useful to the appellants. We may add that the very same learned Judge has observed at page 106 (of ITR) : (at p.564 of AIR) that no tax could be levied by a State Legislature on forests as such while tax may be levied on the land on which forest grew. But we are convinced that the levy in question is not a levy on land. This contention has, therefore, to fail.” 6.1.5. In the case of Buxa Dooar Tea Co. Ltd. Vs. State of West Bengal, (1989) 3 SCC 211 on the question of legislative competence, it was held that if it was a levy in respect of tea estates, it would be referable to Entry 49 in List II. But if it was in respect of despatches of tea, legislative authority must be found for it with reference to some other Entry. It was pointed out that the Court was not shown any entry in List II or in the List III of the Seventh Schedule which would be pertinent. But if it was in respect of despatches of tea, legislative authority must be found for it with reference to some other Entry. It was pointed out that the Court was not shown any entry in List II or in the List III of the Seventh Schedule which would be pertinent. In this connection it was pointed out that Parliament had made a declaration in Section 2 of the Tea Act, 1953 that it was expedient in the pubic interest that the Union should take under its control the tea industries under the Tea Act. The Parliament had assumed control of the Tea industry including the tea trade and control of the prices. Under Section 25 of the Act a cess on tea produced in India had also been imposed. Accordingly it was held that the impugned legislation was also void for want of legislative competence, as it pertained to a covered field. 6.1.6. The question before the seven Judges Bench in the case of The India Cement Ltd. etc. Vs. State of Tamil Nadu etc., A.I.R. 1990 S.C., 85 was whether the levy of cess on royalty was within the competence of the State Legislature. The Petitioner Company used to manufacture cement in its factory situate in Tamil Nadu. The Tamil Nadu Government had sanctioned the grant of mining lease in favour of the appellant for limestone and Kankar. The lease deed was in accordance with the Mineral Concession Rules, 1960 which provided for rates of royalty, deed rent and surface rent. The appellant was required to pay local cess under the provisions of Madras Panchayats Act, 1958 (as amended by 1964 Act) the liability in respect of which was disputed by the appellant on the ground that the cess on royalty could not be levied. The Supreme Court pointed out that the question was whether the cess on royalty was a demand of land revenue or additional royalty. In this context, it was observed that the royalty had been fixed under the statutory rules and protected under those Rules. The royalty was fixed under the Mines and Minerals (Regulation and Development) Act, 1957, which was a Central Act by the control of mines and minerals has been taken over by the Central Government. It was an Act for regulation of mines and development of minerals under the control of Union of India. The royalty was fixed under the Mines and Minerals (Regulation and Development) Act, 1957, which was a Central Act by the control of mines and minerals has been taken over by the Central Government. It was an Act for regulation of mines and development of minerals under the control of Union of India. That Act was to provide for regulation of mines and development of minerals under the control of Union of India. Section 2 of the Act declares that it was expedient in the public interest that Union of India should take under its control the regulations of mines and development of minerals to the extent provided in the Act. The Central Act was passed by virtue of the power of the Parliament under Entry 54 of List I of the Seventh Schedule. It was pointed out by the Supreme Court that since the control of the mines and the development of minerals were taken over by the Parliament the question that arises was whether the levy or the impost by the State Legislature imposed in the case could be justified or sustained, either under Entry 49, 50 or 45 of List II of the 7th Schedule. On the question as to what is really “cess” reference was made to observations of Justice Hedayatullah in M/s Guruswamy & Co. V. State of Mysore, (1967) 1 S.C.R. 548 (: AIR (1967) S.C. 1512) where it was pointed out that cess means a tax and is generally used when levy is for some special administrative expenses, which the name (health cess, education cess, road cess etc.) indicates. It was further pointed out in that case that when levied as an increment to an existing tax, the same matters not (sic) for the validity of the cess must be judged of in the same was as the validity of the tax to which it is an increment. Negativing the contention in this regard Supreme Court held that cess in not on land, but on royalty which is included in the definition of ‘land revenue’. None of the three lists of the 7th Schedule of the Constitution permits or authorises a State to impose tax on royalty. Supreme Court pointed out that this levy was sought to be justified under Entry 45 of List II of the 7th Schedule. None of the three lists of the 7th Schedule of the Constitution permits or authorises a State to impose tax on royalty. Supreme Court pointed out that this levy was sought to be justified under Entry 45 of List II of the 7th Schedule. Upon consideration of what was meant by land revenue it was held rejecting the contention of the State that the expression “royalty” in section 115 and 116 of the Act cannot mean land Revenue properly called or conventionally known, which is separate and distinct from royalty. Such impost was sought to be justified on behalf of the State under Entry 49 of List II As taxes on lands and buildings and in this context reference was made to the decision in Raja Jagannath Baksh Singh Vs. State of U.P. (1963) 1 SCR 220 (: AIR (1962) SC 1563). Dealing with the same Supreme Court observed as follows : "But in the instant case, royalty being that which is payable on the extraction from the land and cess being an additional charge on that royalty cannot, by the parity of the same reasoning, be considered to be a tax on land. But since it was not a tax on land and there is no entry like entry 46 in the instant situation like the position before this Court in the aforesaid decision, enabling the State to impose tax on royalty in the instant situation, the State was incompetent to impose such a tax. There is a clear distinction between tax directly on land and tax on income arising from land. The aforesaid decision confirmed the above position. In New Manek Chowk Spinning & Weaving Mills Co. Ltd. v. Municipal Corpn. of the City of Ahmedabad, (1967) 2 SCR 679 at p.696 : ( AIR 1967 SC 1801 at pp. 1811-12), this Court after referring to the several decisions observed that entry 49 of list II of the 7th Schedule only permitted levy of tax on land and building. It did not permit the levy of tax on machinery contents in or situated on the building even though the machinery was there for the use of the building for a particular purpose. Rule 7 (2) of the Bombay Municipal Corporation was held to be accordingly ultra vires in that case. It did not permit the levy of tax on machinery contents in or situated on the building even though the machinery was there for the use of the building for a particular purpose. Rule 7 (2) of the Bombay Municipal Corporation was held to be accordingly ultra vires in that case. In S.C. Nawn vs. W.T.O., Calcutta (1969) I SCR 108 : ( AIR 1969 SC 59 ) this Court had occasion to consider this and upheld the validity of the Wealth Tax Act, 1957 on the ground that it fell within entry 86 of List I and not entry 49 of List II. Construing the said entry, this Court observed that Entry 49 list II contemplated a levy on land as a unit and the levy must be directly imposed on land and must bear a definite relationship to it. Entry 49 of List II was held to be more general in nature than entry 86, List I, which was held to be more specific in nature and it was well settled that in the event of conflict, between entry 86, List I and entry 49 of List II, entry 86 prevails as per Art. 246 of the Constitution." (Para 22) “In Asstt. Commissioner of Urban Land Tax Vs. The Buckingham & Carnatic Co. Ltd., (1970) 1 SCR 268 at p.278 ( AIR 1970 SC 169 at p. 175) this Court reiterated the principles laid down in S.C. Nawn’s case ( AIR 1969 SC 59 ) (supra) and held that entry 49 of list II was confined to a tax that was directly on land as a unit. In Second Gift Tax Officer, Mangalore Vs. D.H. Nazareth (1971) 1 SCR 195 at p. 200 : ( AIR 1970 SC 999 ) at p. 1002. it was held that a tax on the gift of land is not a tax imposed directly on land but only on a particular user, namely, the transfer of land by way of gift. In Union of India Vs. G.S. Dhilion ( AIR 1972 SC 1061 ) (supra), this Court approved the principle laid down in S.C. Nawn’s case as well as Nazareth’s case (supra). In Bhagwan Dass Jain Vs. In Union of India Vs. G.S. Dhilion ( AIR 1972 SC 1061 ) (supra), this Court approved the principle laid down in S.C. Nawn’s case as well as Nazareth’s case (supra). In Bhagwan Dass Jain Vs. Union of India (1981) 2 SCR 808 at p.816 : ( AIR 1981 SC 907 at p.911) this Court made a distinction between the levy on income from house property which would be an income-tax and the levy on house property itself which would be referable to entry 49 list II. It is, therefore, not possible to accept Mr. Krishnamurthy Iyer’s submission and that a cess on royalty cannot possible be said to be a tax or an impost of land. Mr. Nariman is right that royalty which is indirectly connected with land cannot be said to be a tax directly on land as a unit. In this connection, reference may be made to the differentiation made to the different types of taxes for instance, one being professional tax and entertainment tax. In the Western India Theaters Ltd. Vs. The Cantonment Board, Poona Cantonment (1959 2 Supp. SCR 63 at p. 69: ( AIR 1959 SC 582 at p. 585), it was held that an entertainment tax is dependant upon whether there would or would not be a show in a cinema house. If there is no show, there is no tax. It cannot be a tax on profession or calling, profession tax does not depend on the exercise of one’s profession but only concerns itself with the right to practice. It appears that in the instant case also no tax can be levied or is leviable under the impugned Act. if no mining activities are carried on. Hence it is manifest that it is not related to land as a unit which is the only method of valuation of land under entry 49 of list II, but is relatable to minerals extracted. Royalty is payable on a proportion of the minerals extracted. It may be mentioned that the Act does not use dead rent as a basis on which land is to be valued. Hence, there cannot be any doubt that the impugned legislation in its pith and substance is a tax on royalty and not a tax on land.”(Para 23) On behalf of the State it was next sought to urge that such impost could be sustained under entry 50 List II. Hence, there cannot be any doubt that the impugned legislation in its pith and substance is a tax on royalty and not a tax on land.”(Para 23) On behalf of the State it was next sought to urge that such impost could be sustained under entry 50 List II. In this connection it was observed by Supreme Court as follows: "Entry 50 of list II of the 7th Schedule deals with taxes on mineral rights subject to limitation imposed by Parliament relating to mineral development. Entry 23 of list II deals with regulation of mines and mineral development subject to the provisions of list I with respect to regulation and development under the control of the Union and entry 54 in list I deals with regulation of mines and minerals under the control of Union declared by the parliament by law to be expedient in public interest. Even though minerals are part of the State list they are treated separately, and therefore, the principle that the specific excludes the general must be applied. See the observations of Waverly Jute Mills Co. Ltd. v. Raymon & Co. (1) Pvt. Ltd. (1963) 3 SCR 209 at p. 220: ( AIR 1963 SC 90 at p. 95), where it was held that land in entry 49 of list II cannot possibly include minerals." (Para 24) "In this connection, learned Attorney General appearing for the Union of India submitted before us that in order to sustain the levy, the power of the State Legislature has to be found within one or more of the entries or list II of the 7th Schedule. The levy in question has to be either a tax or a fee or an impost. If it is neither a tax nor a fee then it should be under one of the general entries under list II. The expression 'land' according to its legal significance has an infinite extent both upward and downwards, the surface of till: soil and would include not only the face of the earth but everything under it or over it. See the observations in Anant Mills Co. Lid. Vs. State of Gujarat (1975) 3 SCR 220 at p. 249) : (AIR (1975 SC 1234 at p. 1249). See the observations in Anant Mills Co. Lid. Vs. State of Gujarat (1975) 3 SCR 220 at p. 249) : (AIR (1975 SC 1234 at p. 1249). The minerals which are under the earth can in certain circumstances fall under the expression 'land' but as tax on mineral rights is expressly covered by entry 50 of list II, if it is brought under the head taxes under entry 49 of list II, it would render entry 50 of list II redundant. Learned Attorney General is right in contending that entries should not be so construed as to make any one entry redundant. It was further argued that even in pith and substance the tax fell to entry 50 of list II, it would be controlled by a legislation under entry 54 of list I." (Para 25) "On the other hand, learned Attorney General submitted that if it be held to be a fee, then the source of power of the State Legislature is under entry 66 read with entry 23 of list II. Here also the extent to which regulation of mines and mineral development under the control of the Union is declared by Parliament by law to be expedient in the public interest, to the extent such legislation makes provisions will denude the State Legislature of its power to override the provision under entry 50 of list II. In view of the Parliamentary legislation under entry 54, list I and the declaration made under S.2 and provisions of S.9 of the Act, the State Legislature would be overridden to that extent. S.2 declares that it is expedient in the public interest that Union should take under its control the regulation of mines and the development of minerals to the extent provided therein. In this connection, reference may be made to the decision of this Court in the Hingir-Rampur Coal Co. Ltd. Vs. State of Orissa (1961) 2 SCR 537 : ( AIR 1961 SC 459 ). See also the observations in State of Orissa Vs. M.A. Tulloch & Co. (1964) 4 SCR 461 : ( AIR 1964 SC 1284 ) and Bajinath Kedia Vs. Ltd. Vs. State of Orissa (1961) 2 SCR 537 : ( AIR 1961 SC 459 ). See also the observations in State of Orissa Vs. M.A. Tulloch & Co. (1964) 4 SCR 461 : ( AIR 1964 SC 1284 ) and Bajinath Kedia Vs. State of Bihar (1970) 2 SCR 100 at pp.111 - 115 : ( AIR 1970 SC 1436 at pp.1442-1445).”(Para 26) “Our attention was drawn to the decision of the division bench judgment of the High Court of Mysore in M/s. Laxminarayana Mining Co., Bangalore v. Taluk Dev. Board, A.I.R. 1972 Mys. 299. There, speaking for the court, one of us, Venkataramiah J. of the Mysore High Court, as the learned Chief Justice then was, observed that a combined reading of entries 23 and 50 in list II and entry 54 of list I, establishes that as long as the Parliament does not make any law in exercise of its power under entry 54, the powers of the State Legislature in entries 23 and 50 would be exercisable by the State Legislature. But when once the Parliament makes a declaration by law that it is expedient in the public interest to make regulation of mines and minerals development under the control of the Union, to the extent to which such regulation and development is undertaken by the law made by the Parliament, the power of the State Legislature under entries 23 and 50 of list II are denuded. There, the Court was concerned with the Mysore Village Panchayats and Local Boards Act, 1959. Thus, it was held that it could not, therefore, be said that even after passing of the Central Act, the State Legislature by enacting S.143 of the Act intended to confer power on the Taluk Board to levy tax on the mining activities carried on by the persons holding mineral concessions. It followed that the levy of tax of mining by the Board 'as per the impugned notification was unauthorised and liable to be set aside. At p.306 of the said report, it was held that royalty under S. 9 of the Mines and Minerals Act was really a tax." (Para 27) "To the similar effects are the observations of the High Court of Patna in L. Mal v. The State of Bihar, AIR 1965 Pat. 491 at p. 494. Mr. At p.306 of the said report, it was held that royalty under S. 9 of the Mines and Minerals Act was really a tax." (Para 27) "To the similar effects are the observations of the High Court of Patna in L. Mal v. The State of Bihar, AIR 1965 Pat. 491 at p. 494. Mr. Krishnamurthy Iyer-, however, referred to the decision of this-Court in H.R.S. Murthy's case ( AIR 1965 SC 177 ) (supra). There, under the terms of a mining lease the lessee worked the mines and won iron-ores in a tract of land in a village in Chittor district and bound himself to pay a dead rent if he used the leased land for the extraction of iron ore, to pay a royalty on iron ore if it were used for extraction of iron and in addition to pay a surface rent in respect of the surface area occupied or used. In the said decision the legislative competence of Ss. 78 and 79 of the Madras District Boards Act was upheld by which land cess was made payable on the basis of royalty. This Court proceeded on the basis that other cess related to land and would therefore, be covered by entry 49 of list II. It was held that land cess paid on royalty has a direct relation to the land and only a remote relation with mining. This, with respect, seems to be not a correct approach. It was further observed that it was not necessary to consider the meaning of the expression ‘tax on mineral right’ falling under entry 50 of list II in as much as according to this Court, Parliament has not made any tax on mineral rights. This is not a correct basis.” (Para 25) Dealing with H.R.S. Murth's case (1964 – 6 SCR 666) : ( AIR 1965 SC 177 ), it was observed by Supreme Court as follows : "It seems, therefore, that attention of Court was not invited to the provisions of Mines and Minerals (Regulation and Development) Act, 1957 and S. 9 thereof. S.9 (3) of the Act in terms states that royalties payable under the 2nd Schedule of the Act shall not be enhanced more than once during a period of 4 years. S.9 (3) of the Act in terms states that royalties payable under the 2nd Schedule of the Act shall not be enhanced more than once during a period of 4 years. It is, therefore, a clear bar on the State Legislature taxing royalty so as to in effect amend 2nd Schedule of the Central Act. In the premises, it cannot be right to say that tax on royalty can be a tax on land, and even if it is a tax, if it falls within entry 50 will be ultra vires the State legislative power in view of S. 9 (3) of the Central Act. In Hingir Rampur Coal Co. Ltd. V. The State of Orissa ( AIR 1961 SC 459 ) (Supra), Wanchoo J, in his dissenting judgment has stated that a tax on mineral rights being different from a duty of excise, pertains only to a tax that is leviable for the grant of the right to extract minerals and is not a tax on minerals as well. On that basis, a tax on royally would not be a tax on mineral rights and would therefore in any event be outside the competence of the State Legislature." (Para 10) It was next contended on behalf of the State that the State has a right to tax minerals. It was further contended that if tax is levied, it will not be irrational to corelate it to the value of the property and to make some kind of annual value basis of tax without intending to tax the income. Dealing with the same, the Supreme Court observed as follows: "In view of the provisions of the Act, as noted hereinbefore, this submission cannot be accepted. Mr. Krishnamurthy Iyer also further sought to urge that in entry 60 of List II, there is no limitation to the taxing power of the State. In view of the principles mentioned hereinbefore and the expressed provisions of S.9 (2) of the Mines & Minerals (Regulation & Development) Act, 1957, this submission cannot be accepted. Mr. Krishnamurthy Iyer also further sought to urge that in entry 60 of List II, there is no limitation to the taxing power of the State. In view of the principles mentioned hereinbefore and the expressed provisions of S.9 (2) of the Mines & Minerals (Regulation & Development) Act, 1957, this submission cannot be accepted. This Field is fully covered by the central legislation." (Para 32) It was further observed : "In any event, royalty is directly relatable only to the minerals extracted and on the principle that the general provision is excluded by the special one, royalty would he relatable to entries 23 and 50 of List II, and not entry 49 of List II. But as the fee is covered by the central power under entry 23 or entry 50 of list II, the impugned legislation cannot be upheld. Our attention was drawn to a judgment of the High Court of Madhya Pradesh in Misc. Petn. No. 410/83 – M/s Hiralal Rameshwar Prasad v. The State of Madhya Pradesh, which was delivered on 28th March, 1986 (reported in 1986 MPLJ 514 ) by a Division Bench of the High Court J.S. Verma, Acting Chief Justice, as his Lordship then was, held that development cess by S. 9 of the Madhya Pradesh Karadhan' Adhiniyam, 1982 is ultra vires. It is not necessary in the view taken by us, and further in view that the said decision is under appeal in this Court to examine it in detail." (Para 33) Accordingly, the Supreme Court came to the following conclusion: “In the aforesaid view of the matter, we are of the opinion that royalty is a tax, and as such a cess on royalty being a tax on royalty is beyond the competence of the State Legislature because S.9 of the Central Act covers the field and the State Legislature is denuded of its competence under entry 23 of list II. In any event, we are of the opinion that cess on royalty can not be sustained under entry 49 of list II as being a tax on land. Royalty on mineral rights is not a tax on land but a payment for the user of land.” (Para 34) 6.1.7. In the case of M/s Orissa Cement Ltd. Vs. In any event, we are of the opinion that cess on royalty can not be sustained under entry 49 of list II as being a tax on land. Royalty on mineral rights is not a tax on land but a payment for the user of land.” (Para 34) 6.1.7. In the case of M/s Orissa Cement Ltd. Vs. State of Orissa and others, reported in AIR (1991) SC 1676, before a seven Judges Bench of the Supreme Court the validity of the levy of a “cess” on the royalty derived from mining lands by the States of Bihar Orissa and Madhya Pradesh was challenged. A seven Judges Bench of the Supreme Court had earlier in India Cement Case struck down a similar levy under a Tamilnadu Act, as beyond the legislative competence of the State Legislature. The assessee in the Orissa Cement Case claimed that the issue there was directly and squarely governed by the above decision. On the other hand, it was claimed on behalf of the States that the nature and character of the levies imposed by them was totally different from that of the Tamil Nadu levy, and that they were entirely within the scope of the States’ legislative powers under the Constitution. After a detailed consideration of the different Legislative entries and the “Earlier History”, which led to the India Cement Cases and after consideration of Hingir Rampur Case, (1961) 2 SCR 537 : AIR (1961) SC 459 : Tulloch Case, (1964) 4 SCR 461 : AIR (1964) SC 1284 : Murthy Case, (1964) 6 SCR 666 : AIR (1965) SC 177, the Supreme Court summarized the salient conclusions in the India Cement Case, (1990) 1 SCC 12 as follows : “1. The levy could not be supported under : (a) Entry 45 of List II: as it is not land revenue, an expression which has a word defined connotation. 'Land revenue' is separate and distinct from 'royalty'. The Explanation to S. 115 (1) itself proceeds on the basis that royalty cannot be land revenue properly so called or conventionally so known. (b) Entry 49 bf List II: as it is not a tax on land. A tax on land can only be levied on land as a unit must be imposed directly on land and must bear a definite relationship to it. (b) Entry 49 bf List II: as it is not a tax on land. A tax on land can only be levied on land as a unit must be imposed directly on land and must bear a definite relationship to it. There is a clear distinction between a tax directly on land and a tax on income arising from land. The cess is not a tax directly on land as unit but only a tax on royalty which is indirectly connected with land. In the words, of Oza, J. it is a tax not only on land but on labour and capital as well. It could have been treated as a tax on land if it had been confined to 'surface rent’ instead of ‘royalty’. (c) Entry 50 of List II : as a tax on royalty as it is not a tax on mineral rights and so is outside the purview of Entry 50. Even otherwise, Entry 50 is subject to the provisions of List I and is, therefore, subject to the declaration contained in, and the purview of, the MMRD Act, 1957. 2. Even if the cess is regarded as a fee, the State’s competence to levy the same can, if at all, only be justified with reference to Entry 23 and Entry 50 of List II but this recourse is not available as the filed is already covered by Central legislation referable to Entry 54 of List I. Murthy was not rightly decided. The view of the Rajasthan, Punjab, Gujarat and Orissa decisions was overruled. In the view taken by the court, the Madhya Pradesh ruling was not examined in detail particularly as it was said to be pending in appeal before the Supreme Court. (Para 16) After dealing with various enactment of different States, the respective contentions raised on behalf of the different States were dealt with, Regarding the contention raised on behalf of the State of Orissa it was recorded as follows : “Basically, it will be seen, two questions arise : (1) Can the cess be considered a ‘land revenue’ under Entry 45 or as a ‘tax on land’ under Entry 49 or as a ‘tax on mineral rights’ under Entry 50 of the State List? (2) If the answer to question (1) is in the negative, can the cess be considered to be a fee pertaining to the field covered by Entry 23 of the State List or has the State been denuded of the legislative competence under this Entry because of Parliament having enacted the MMRD Act, 1957? (Para 24) On the first question, so far as Entry 45 of State List is concerned (“Land Revenue”), it was held that the cess cannot be brought under the said Entry, on the ground of, amongst others, the decision in India Cement Case as to the connotation of the expression "Land Revenue" (Para 26). So far as Entry 50 ('Taxes on mineral rights subject to any limitation imposed by Parliament by law relating to mineral development') is concerned, it was held that India Cement case had chosen to approve the contrary view of Wanchoo, J. in his dissenting judgment in Hingir-Rampur case. However, it was pointed out that the observations of Wanchoo, J. were not fully examined in India Cement case. It was pointed out that Wanchoo, J. held that the tax in the case before him was not a tax on mineral rights because it was levied on the value of minerals extracted. It was further pointed out that if the observation of Wanchoo, J. was read as a whole, it would seem that he also was of the opinion that a tax on royalty would be a tax on mineral rights In this connection, the observation of Wanchoo, J. was exhaustively quoted. Ultimately it was pointed out that the conclusion of India Cement is clear that a tax on royalties cannot be a tax on minerals and that the Supreme Court was bound by the same. It was further pointed out that this apart, there was another hurdle, which was discussed in connection with the second question, in the way of the State's attempt to have recourse to Entry 50 List II which was also touched upon by India Cement case. (Paras 26 & 27) On the question as to whether cess could be described as a "tax on land" it was held as follows : "Can, then the cess be described as a 'tax on land? The statute considered in India Cement (1991) 1 SCR 12, as Sri Iyer correctly points out, was differently worded. (Paras 26 & 27) On the question as to whether cess could be described as a "tax on land" it was held as follows : "Can, then the cess be described as a 'tax on land? The statute considered in India Cement (1991) 1 SCR 12, as Sri Iyer correctly points out, was differently worded. It purported to levy a cess on land revenue "and 'royalty' was brought within the definition of that expression. It was, therefore, a case where the levy had no reference to land at all but only to Income from the land in, the case of Government lands, got by way of land revenue or otherwise. Here the statute is different. The objective of the Cess Act, as set out earlier, is to levy a cess on all land Indeed, originally the idea was to levy a uniform cess at 25% of the annual value of all land which was subsequently raised to 50%. It is argued that the tax here is, therefore, a tax on land and it is immaterial that this tax is quantified with reference to the income yielded by the land. A tax on land may be levied, inter alia, with reference to its capital value, or with reference to its annual value. One realistic measure of such capital or annual value will be the income that the land will yield just as, for property tax purposes the annual value is based on the amount for which the property can reasonably be let from year to year. The income from the land may be more or less due to a variety of reasons. In the case of agricultural land, it may depend on the fertility of the soil, the sources of irrigation available, the nature of crops grown and other such factors. Likewise, where the land is one containing minerals, naturally the value (whether annual or capital value) will be more if it contains richer minerals and can be legitimately measured by reference to the royalties paid in respect thereof. The mere fact, it is argued, that the annual value is measured with reference to the royalty, dead rent or pit's mouth value of the mineral does not mean that it ceases to have the character of a tax on land. The mere fact, it is argued, that the annual value is measured with reference to the royalty, dead rent or pit's mouth value of the mineral does not mean that it ceases to have the character of a tax on land. In this context, Sri Iyer places strong reliance on the decision of a Constitution Bench of this Court in Ajay Mukherjee Vs. Local Board of Barpeta (1965) 3 SCR 47 : ( AIR 1965 SC 1561 ). There a local Board was authorized to ‘grant…… a licence for the use of any land as a market and impose an annual tax thereon;. The Court held, examining the scheme and the language of the provisions in question, that the tax imposed was a tax on land under Entry 49. The Court indicated the following approach to the issue before it: “The first question which fails for consideration therefore is whether the impost in the present case is a tax on land within the meaning of Entry 49 of List II of the Seventh Schedule to the Constitution. It is well settled that the entries in the three legislative lists have to be interpreted in their widest amplitude and, therefore, if a tax can reasonably be held to be a tax on land, it will come within Entry 49. Further, it is equally well settled that tax on land may be based on the annual value of the land and would still be a tax on land and would not be beyond the competence of the State Legislature on the ground that it is a Tax on income. See Ralla Ram Vs. The Province of East Punjab (1948 FCR 207 : AIR 1949 FC 81). It follows therefore that the use to which the land is put can be taken into account in imposing a tax on it within the meaning of Entry 49 of List II for the annual value of land which can certainly be taken into account in imposing a tax for the purpose of this entry would necessarily depend upon the use to which the land is put. It is in the light of this settled proposition that we have to examine the scheme of S.62 of the Act which imposes a tax under challenge.” (Para 28) After referring to the decision in Buxa Dooars’s case and other cases it was held as follows : “There is force in the contention urged by Sri T.S.K. Iyer that there is a difference in principle between a tax on royalties derived from land and a tax on land measured by reference to the income derived therefrom. That a tax on buildings does not cease to be such merely because it is quantified on the basis of the income it fetches is nowhere better illustrated than by the form of the levy upheld in Ralla Ram (1948 FCR 207) : (AIR 1949 FC 81) followed by Bhagwan Das Jain (1981) 2 SCR 808 : ( AIR 1981 SC 907 ) which illustrates the converse situation. Mukherjee (supra) also supports this line of reasoning. But here the levy is not measured by the income derived by the assessee from the land. As is the case with lands other than mineral lands. The measure of the levy is the royalty paid, in respect of the land, by the assessee to his lessor which is quite a different thing. Moreover, interesting as the argument is, we are constrained to observe that it is only a reiteration of the ratio in Murthy, which has been upset in India Cement (1990) 1 SCC 12 . We may point out that this is of significance because, unlike in India Cement, the statute considered in Murthy ( AIR 1965 SC 177 ) as the one here, only purported to levy a cess on the annual value of all land. India Cement draws a "clear distinction between tax on land and tax on income arising from land". The former must be one directly imposed on land, levied on land as a unit and bearing a direct relationship to it. India Cement draws a "clear distinction between tax on land and tax on income arising from land". The former must be one directly imposed on land, levied on land as a unit and bearing a direct relationship to it. In para 23 of the judgment, the court has categorically stated that a tax on royalty cannot be said to be a tax directly on land as a unit." (Para 31) Referring to the argument of Sri Iyer regarding the scope and effect of India Cement case it was observed as follows: "The answer to this contention appears to be that the plea of the assessee need not go to the extent of saying that the levy is a colourable piece of legislation. It is sufficient to restrict oneself to the issue of a proper determination of the pith and substance of the legislation. There is no doubt an apparent anomaly in considering S.7 (1) and (2) as levying a tax on land but construing S.7 (3) as imposing a tax on royalties and this anomaly has been noticed in India cement (1990) 1 SCC 12 (vide para 42). But the question is, what is it that is really being taxed by the Legislature? So far as mineral-bearing lands are concerned is the impact of the tax on the land or on royalties? The change in the scheme of taxation under S.7 in 1976; the importance and magnitude of the revenue by way of royalties received by the State; the charge of the cess as a percentage and indeed, as multiples of the amount of royalty’ and the mode and collection of the cess amount along with the royalties and as part thereof are circumstances which go to show that the legislation in this regard is with respect to royalty rather than with respect to land.” (Para 34) With reference to the submissions of Sri Iyer on the basis of R.R. Engineering Company Vs. Zilla Parishad, (1980) 3 SCR 1 (AIR (1980) SC 1088) it was observed as follows: “The manner in which the levy, initially introduced a uniform cess on all land was slowly converted qua mining land into a levy computed at multiples of the royalty amounts paid by the leseess thereof seem to hear out the contention that it is being availed of as a tax on the royalties rather than one on the annual value of the land containing the minerals. In the words of Chandrachud, J. (as he then was) one can legitimately conclude that royalty has ceased to be a mere measure or yardstick of the tax and has become the very subject matter thereof.” (Para 35) For the aforesaid reasons the contention of the State seeking to justify the levy under Entries 45, 49 and 50 of List II of the Seventh Schedule was repelled. (Para 36) The Court further held that it was not necessary to decide whether royalty itself was a tax or not. In this respect it was observed as follows: “We do not think that it is necessary for us to express an opinion either way on this controversy for, it seems to us, it is immaterial for the purposes of the present case. If royalty itself were to be regarded as a tax, it can perhaps be described properly as a tax on mineral rights and has to conform to the requirements of S. 50 which are discussed later. We are, however, here concerned with the validity of the levy of not royalty but of cess. If the cess is taken as a tax, then unless it can be described as land revenue or a tax on land or a tax on mining rights, it cannot be upheld under Entry 45, 49 or 50. On the contrary, if it is treated as a fee, the State's competence to levy the same has to be traced to Entry 23, a proposition the effect of which will be considered later. The question whether royalty is a tax or not does not assist us much in furnishing an answer to the two questions posed in the present case and set out earlier. We shall, therefore, leave this question to rest here.” (Para 38) On the second question referred to above which turns on the effect of M.M.R.D. Act, 1957 and the declaration contained in sec. We shall, therefore, leave this question to rest here.” (Para 38) On the second question referred to above which turns on the effect of M.M.R.D. Act, 1957 and the declaration contained in sec. 2 thereof, it was pointed out that this question would arise if the levy is treated as a tax failing under Entry 50 of List II or alternatively, as a fee though it may not affect the State's competence if it can be attributed to Entry 9 of List II. (Para 39) So far as Entry 50 is concerned, it was observed as follows : "To take up Entry 50 first, a perusal of Entry 50 would show that the competency of the State Legislature with respect thereto is circumscribed by "any limitations imposed by Parliament by law relating to mineral development". The M.M.R.D. Act, 1957, is - there can be no doubt about this - a law of Parliament relating to mineral development, S. 9 of the said Act empowers the Central Government to fix, alter, enhance or reduce the rates of royalty payable in respect of minerals removed from the land or consumed by the lessee. Sub-sec. (3) of S.9 in terms states that the royalties payable under the Second Schedule to that Act shall not be enhanced more than once during a period of three years. India Cement (1990) 1 SCC 12 has held that this is a clear bar on the State Legislature taxing royalty so as, in effect to amend the Second Schedule to the Central Act and that if the cess is taken as a tax falling under Entry 50 it will be ultra vires in view of the provisions of the Central Act.”(Para 40) The Supreme Court further held that the levy could not be treated as fee under Entry 66 of State list. In this context, it was observed as follows : "... S. 10 as it stands now earmarks the purposes of utilisalion of only fifty per cent of the proceeds of the cess and that too is limited to the cess collected in respect of "lands other than lands held for carrying on mining operations". In other word, the levy cannot be correlated to any services rendered or to be rendered by the State to the class of persons from whom the levy is collected. In other word, the levy cannot be correlated to any services rendered or to be rendered by the State to the class of persons from whom the levy is collected. Whether royalty is a tax or not, the cess is only a tax and cannot be properly described 'as a fee'. (Para 41) XX XX XX "This consideration apart, even assuming it is a fee, the State Legislature can impose a fee only in respect of any of the matters in the State List. The entry in the State List that is relied upon for this purpose is Entry 23. But Entry 23, it will be seen, is "subject to the provisions of List I with respect to regulation and development" of mines and minerals under the control of the Union. Under Entry 54 of List I, regulation of mines and minerals development is in the field of Parliamentary legislation "to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". Such a declaration is contained in S.2 of the M.M.R.D. Act 1957, which has been set out earlier. It, therefore, follows that any State legislation to the extent it encroaches on the field covered by the M.M.R.D. Act 1957, will be ultra vires. The assessees contend, in this case, that the legislation in question is beyond the purview of the State Legislature by reason of the enactment of the M.M.R.D. Act. It would appear, prima facie that the contention has to be upheld on the basis of the trilogy of decisions referred to at the outset viz. Hingir-Rampur ( AIR 1961 SC 459 ), Tulloch ( AIR 1964 SC 1284 ) and India Cement (1990) 1 SCC 12 . They seem to provide a complete answer to this question. It would appear, prima facie that the contention has to be upheld on the basis of the trilogy of decisions referred to at the outset viz. Hingir-Rampur ( AIR 1961 SC 459 ), Tulloch ( AIR 1964 SC 1284 ) and India Cement (1990) 1 SCC 12 . They seem to provide a complete answer to this question. The argument is, however, discussed at some length, because it has been put forward, mutatis mutandis, in support of the levy of cess by the other States as well." (Para 42) Regarding the respective scope and effect of Entry 52 and Entry 54 of List I it was observed as follows : "Before dealing with the contentions of the counsel for the State in this behalf, a reference may be made to a difference in wording between Entry 52 and Entry 54 of List I. The language of Entry 52 read with Entry 24 would suggest that, once it is declared by Parliament by law that the control of a particular industry by the Union is expedient in the public interest, the State legislatures completely lose all competence to legislate with respect to such an industry in any respect whatever, Indian Tobacco Co. Ltd. v. Union; 1985 Supp 1 SCR 145. But, even here, there are judicial decisions holding that such declaration does not divest the State Legislature of the competence to make laws the pith and substance of which fall within the entries in List II, (see for e.g. Kannan Dewan Hills Co. v. State of Kerala (1973) 1 SCR 856 : ( AIR 1973 SC 2361 ) and Ishwari Khetan Sugar Mills Ltd. v. State of U.P. (1980) 3 SCR 331 : ( AIR 1980 SC 1955 ) to which reference will also be made later, merely on the ground that it has some effect on such industry. Compared to that of Entry 52, the language of Entry 54 is very guarded. It deprives the States of legislative competence only to the extent to which the law of Parliament considers the control of Union to be expedient in the matter of regulation of mines and mineral development. Emphasising this difference, learned counsel for the State of Orissa submits that the intent, purpose and scope of the M.M.R.D. Act is totally different and does not cross the field covered by the impugned Act. Emphasising this difference, learned counsel for the State of Orissa submits that the intent, purpose and scope of the M.M.R.D. Act is totally different and does not cross the field covered by the impugned Act. It is a law to provide for the proper exploitation and development of minerals and regulates the persons to whom, the manner in which and procedure according to which licences for' prospecting of leases for minerals should be granted. That enactment is concerned with the need for a proper exploitation of minerals from lands. The impugned Act, on the other hand, concentrates on the need for development of mineral areas as such and provides for the collection of cess to cater to these needs. The scope of the subject-matter of legislation 'under the two. Acts are entirely different and the M.M.R.D. Act cannot be considered to exclude State legislation of the nature presently under consideration." (Para 43) After taking into consideration the decisions in State of West Bengal v. Union of India, (1964) I SCR 371 : (AIR 1963 SC 124); Baijnath Kedia v. State of Bihar, (1970) 2 SCR 100 : ( AIR 1970 SC 1436 ); State of Haryana v. Channa Mal, (1976) 3 SCR 688 ; Ishwari Khetan Sugar Mills (P) Ltd. v. State of U.P., (1980) 3 SCR 331 ; Western Coalfields Ltd. v. Special Area Development Authority, (1982) 2 SCR 1 : ( AIR 1982 SC 697 ) it was observed as follows : “It is clear from a perusal of the decision referred to above that the answer to the question before us depends on a proper understanding of the scope of M.M.R.D. Act 1957, and an assessment of the encroachment made by the impugned State Legislation into the field covered by it. Each of the cases referred to above turned on such an appreciation of the respective spheres of the two legislation. As pointed out in Ishwari Khetan ( AIR 1980 SC 1955 ) the mere declaration of a law of Parliament that it is expedient for an industry or the regulation and development of mines and minerals to be under the control of the Union under Entry 52 or Entry 54 does not denude the State Legislature of their legislative powers with respect to the fields covered by the several entries in List II or List III. Particularly, in the case of a declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration. While the legislation in Hingir-Rampur ( AIR 1961 SC 459 ) and Tulloch ( AIR 1964 SC 461 ) was found to fall within the pale of the prohibition, those in Chanan Mal ( AIR 1976 SC 1654 ), Ishwari Khetan, ( AIR 1980 SC 1955 ) and Western Coalfields, were general in nature and traceable to specific entries in the State List and did not encroach on the field of the Central enactment except by way of incidental impact. The Central Act, considered in Chanan Mal, seemed to envisage and indeed permit State legislation of the nature in question." (Para 50) Thereafter, after referring to the relevant provisions of M.M.R.D. Act Hingir-Rampur case, Tulloch case and Haijnath Kedia case it was held as follows : "If one looks at the above provisions and bears in mind that, in assessing the field covered by the Act of Parliament in question, one should be guided as laid down in Hingir Rampur ( AIR 1961 SC 459 ) and Tulloch ( AIR 1964 SC 1284 ), not merely by the actual provisions of the Central Act or the Rules made thereunder but should also take into account matters and aspects which can legitimately be brought within the scope of the said statute, the conclusion seems irrestible, particularly in view of Hingir-Rampur ( AIR 1961 SC 459 ) and Tulloch, that the State Act has trespassed into the field covered by the Central Act. The nature of the incursion made into the fields of the Central Act in the other cases were different. The present legislation, traceable to the legislative power under Entry 23 or Entry 50 of the State List which stands impaired by the Parliamentary declaration under Entry 54, can hardly be equated to the law for land acquisition or municipal administration which were considered in the cases cited and which are traceable to different specific entries in List II or List III.” (Para 52) Referring to the decision in Bharat Cooking Coal Vs. State of Bihar, (1990 – 2 Scale 256 : 1991 (1) PLJR SC 3) it was observed as follows : “The question whether the State of Bihar had the authority to grant a lease for lifting coal slurry coming out of the appellants’ washeries and getting deposited on the river bed or other lands was answered in the negative. The Court, in coming to the conclusion held that no rules had been framed under S.18(1) or 18 (2) (k) disposal or discharge of waste, slime or tailing arising from any mining or metallurgical operations carried out but held that this was immaterial in view of the principles laid down in Hingir-Rampur. AIR 1961 S.C. 451), Tulloch, ( AIR 1964 SC 1284 ) and Baijnath Kedia, ( AIR 1970 S.C. 1436 ). These observations establish on the one hand that the distinction sought to be made between mineral development and mineral area development is not a real one as the two types of development is not a real one as the two types of development are inextricably and integrally interconnected and, on the other, that fees of the nature we are concerned with squarely fall within the scope or the provisions or the Central Act. The object of S. 9 or the Central Act cannot be ignored. The terms of S.13 of the Central Act extracted earlier empower the Union to frame rules in regard to matters concerning roads and environment. Section 18 (1) empowers the Central Government to take all such steps as may be necessary for the conservation and development of minerals in India and for protection of environment. These, in the very nature of things" cannot mean such amenities only in the mines but take in also the areas leading to and all around the mines. The development or mineral areas is implicit in them. Section 25 implicitly authorises the levy of rent, royalty, taxes and fees under the Act and the Rules. The scope or the powers thus conferred is very wide. Read as a whole, the purpose of the Union control envisaged by Entry 54 and the M.M.R.D. Act, 1957, is to provide for proper development of mines and mineral areas and also to bring about a uniformity all over the country in regard to the minerals specified in Schedule I in the matter of royalties and consequently' prices. Read as a whole, the purpose of the Union control envisaged by Entry 54 and the M.M.R.D. Act, 1957, is to provide for proper development of mines and mineral areas and also to bring about a uniformity all over the country in regard to the minerals specified in Schedule I in the matter of royalties and consequently' prices. Sri Bobde, who appears for certain Central Government undertakings, points out that the prices of their exports are fixed and cannot be escalated with the enhancement of the royalties and that, in different States, their working would become impossible. There appears to be force in this submission. As pointed out in India Cement, (1990) 1 SCC 12 , the Central Act bars as enhancement of the royally directly or indirectly, except by the Union and in the manner specified by the 1957 Act, and this is exactly what the impugned Act does. We have, therefore, come to the conclusion that the validity of the impugned Act cannot be upheld by reference to Entry 23 or Entry 50 of List II." (Para 54) It was further held that the legislation in question did not come within Entry 18 List II for the same reasons that it was held that it does not come under Entry 49 List II. It was further held that if the levy in question cannot be described as Tax on land, it cannot be described as fee with regard to land either. (Para 55) In respect of Bihar Act also, it was held Similarly. The contention under Art.277 was also rejected. (Paras 57 to 60) 6.2. Case laws summarized From the aforesaid decisions, amongst others the following aspects are clear. A-Re : Entry 49 List II generally 1. For the purpose of determining whether it is a Legislation with respect to Entry 49, List II, the Court must ascertain the subject matter of the legislation in its pith and substance or its true nature or character. There is a difference between the “object” of the Act and its “subject”. The court must not look only at the object of the legislations. An Act may have a perfectly lawful object but may seek to achieve the object by invalid method which is not permitted. An Act may also have nothing to do with the “object”. Gallagher Vs. Lynn, (1937) AC 863 (at pg. 870); Assistant Commissioner Vs. The court must not look only at the object of the legislations. An Act may have a perfectly lawful object but may seek to achieve the object by invalid method which is not permitted. An Act may also have nothing to do with the “object”. Gallagher Vs. Lynn, (1937) AC 863 (at pg. 870); Assistant Commissioner Vs. Buckingham Carnatic : AIR (1970) SC 169 (Para 7); Orissa Cement Ltd. Vs. State of Orissa : AIR (1991) SC 1976 (Para 54). 2. Entry 49 of List II contemplates the levy of the tax on land and building or both as units. Tax on lands and buildings is directly imposed on lands and buildings and must bear a definite relation to it. Sudhir Chandra Nawn Vs. Wealth Tax Officer, AIR (1969) SC 59 (Para 3) ; Second Gift Tax Officer Vs. D.H. Nazareth, AIR (1970) SC 999 (Para 11) ; Assistant Commissioner’s case (Para 5); Hingir-Rampur case; Tullock case; India Cement case (Para 22); Orissa Cement Ltd. Vs. State of Orissa, AIR (1991) SC 1676 3. A tax on land can only be levied on tax as a unit must be imposed directly on land and must bear a definite relationship to it. There is a clear distinction between a tax directly on land and a tax on income arising form land. India Cement cast’ as summarised in Orissa Cement Case. (Para 17) 4. Payment for the user of land is not a tax on land India Cement cast. (Para 34) 5. If in an instant case no tax can be levied or is leviable under the impugned Act if no mining activity is carried on, it is manifest that it is not related to land as a unit which is the only method of valuation of land under Entry 49 List II but it is relatable to minerals extracted. India Cement case (Para 23) 6. The statutory provisions for measuring the liability on account of levy throws light on the general character of the tax. The standard on which the tax is levied was a relevant consideration for determining the nature of the tax, although it could not be regarded as conclusive in the matter. The method of determining the rate of levy would be relevant in considering the character of levy. A Reference under the Government of India Act, (1936) 1 All E.R. 111, R.R. Engineering Co. Vs. The method of determining the rate of levy would be relevant in considering the character of levy. A Reference under the Government of India Act, (1936) 1 All E.R. 111, R.R. Engineering Co. Vs. Zilla Parishad, (1980) 3 SCC 330 , Hingir-Rampur Coal Co. Ltd. Vs. State of Orissa, (1961) 2 SCR 537 , Buxa Dooars Tea Co. Ltd. Vs. State of West Bengal, (1989) 3 SCC 211 ; India Cement Ltd. Vs. State of Tamil Nadu : A.I.R. (1990) SC 85.(Para 22) 7. There is a clear distinction between a ‘tax’ directly on land and tax on income on land. India Cement Ltd. Vs. State of Tamil Nadu, A.I.R. (1990) SC 85 (Para 22). 8. Tax on timber, which is brought from private forest, is, in pith and substance, a tax on forest produce grown on private forest land. It is not a tax on land. District Council Vs. Dwet Singh, AIR (1986) SC 193.(Para 18) 9. A Tax on gift of land is not a tax imposed directly on land but only on a particular user, namely, the transfer of land by way of gift. Second Gift Tax Officer (Para 11); India Cement (Para 23); Union of India v. H.S. Dhilion, AIR (1972) SC 1061. 10. A gift tax is not a tax on land and building as such which is a tax resting upon general ownership of land but it is a levy upon particular use of the land which is transmission of title by gift. The two are not the same thing and the incidence of tax is not the same. Since Entry 49 contemplates a tax directly levied by the general ownership of lands and buildings it cannot include gift tax as levied by the Parliament. Second Girt Tax Officer (Para 11). 11. In the case of a levy in respect of tea estate it would be referable to Entry 49 List II but if the legislation is in substance legislation in respect of despatch of tea, it does not come under the said Entry or any other entry in List II or List III. Buxa Door's Case. (Para 14) 12. An Act, which does not use dead rent as a basis on which the land is to be valued is not a tax on land. India Cement case. (Para 23) 13. Buxa Door's Case. (Para 14) 12. An Act, which does not use dead rent as a basis on which the land is to be valued is not a tax on land. India Cement case. (Para 23) 13. Tax on land within the meaning of Entry 49 may be based on the annual value of land and would be still tax on land and would not be beyond the competence of the legislature on the ground that it is tax of income. Rallaram v. Province of East Punjab, (1948) FCR 207 quoted with approval in India Cement case and Orissa Cement case. 14. In the case of a tax on lands and buildings, the value, capital or annual, would be determined by taking the land or buildings or both as a unit and subjecting the value to a percentage of tax. S.C. Nawn's case. (Para 5) 15. Land in Entry 49 List II cannot include minerals. Waverly Jute Mills Company Ltd. v. Raymon & Company, (1963) 3 SCR 209 at pg. 220 : AIR (1963) SC 90 at pg. 95 approved in India Cement case (Para 24). ‘B' Re: Entry 49 List II vis-a-vis other Entries. (1) Exclusive power of the State Legislation has to be exercised subject to clause (1) of Art. 246 i.e., the exclusive power which the Parliament has, in respect of the matters enumerated in List I. Assuming that there is conflict between an Entry in List I and Entry 49 of List II which is not capable of reconciliation, the power of Parliament to legislate in respect of the matter which is exclusively entrusted to it must supersede protanto the exercise of power of the Legislature. S.C. Nawn’s case (para 7) approved in India Cement case (Para 22 & 23) (2) Mere declaration of a law of Parliament that it is expedient for an industry or the regulation and development of mines and minerals to be under the control of the Union and Entry 52 or Entry 54 does not denude the State Legislature of their legislative powers with respect to the fields covered by several entries in List II or List III. Particularly, in the case of a declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. Particularly, in the case of a declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. Orissa Cement case (Para 50) (3) In assessing the field covered by an Act of the Parliament, one should be guided, not merely by the actual provisions of the Central Act and the Rules made thereundcr but should also take into account matters and aspects which can legitimately be brought within the scope of the said statute. On such assessment if it appears that the State Act has trespassed into the field covered by the Central Act, it would be unconstitutional. Hingir-Rampur case; Tullock's case; Bharat Coking Coal v. State of Bihar, (1990) 2 Scale 256 : 1991 (1) PLJR (SC) 3; Orissa Cement case (Paras 51 to 54). (4) In view of Parliamentary legislation under Entry 54 List II and the declaration made under section 2 of the M.M.R.D. Act and provisions of Section 9 of the Act, the power of the State Legislature is overridden to that extent. Hingir-Rampur Coal Co. Ltd. v. State of Orissa, (1961) 2 SCR 537 : AIR (1961) SC 459; State of Orissa v. M.A. Tullock & Co., (1964) 4 SCR 461 : AIR (1964) SC 1284 ; Baijnath Kedia v. State of Bihar, (1970) 2 SCR 100 (page 111) : AIR (1970) SC 1430, (at p. 1442) al)proved in India Cement case (Para 26) (5) Entry 49 List II is more general in nature than Entry 86 List I which is more specific in nature and in the event of conflict between Entry 86 List I and Entry 49 List II, Entry 86 prevails as per Art. 246 of the Constitution. S.C. Nawn's Case (Para 6) approved in India Cement case. (6) Taxes on 'mineral rights' within the' meaning of Entry 50 of List II are taxes on the right to extract minerals and not taxes on minerals extracted. [View of Wanchoo, J. in Hingir-Rampur Case approved in India Cement Case and Orissa Cement case.] (7) Appropos Entry 50 List II, Entry 23 List II and Entry 54 List I, even though minerals are part of the State List they are treated separately and therefore the principle that specific excludes the general must be upheld. [View of Wanchoo, J. in Hingir-Rampur Case approved in India Cement Case and Orissa Cement case.] (7) Appropos Entry 50 List II, Entry 23 List II and Entry 54 List I, even though minerals are part of the State List they are treated separately and therefore the principle that specific excludes the general must be upheld. India Cement case (Para 24) (8) Minerals which are under the earth can in certain circumstances fall under the expression ‘land’ but as tax on mineral right is expressly ‘covered by Entry 50 List II if it is brought under the head ‘taxes’ under Entry 49 List II, it would render Entry 50 of List II redundant : India a Cement case (Para 25) (9) Entry 50 List II is subject to provisions of List I and is, therefore, subject to the declaration contained in, and the purview lf, MMRD Act, 1957. India Cement case as summarised in Orissa Cement case (Para 17) (10) In view of MMRD Act, it is a clear bar on the State legislation taxing royalty so as, in effect, to amend the Schedule to the Central Act and if the cess is taken as a tax falling under Entry 50, it will be ultra vires in view of the provisions of the Central Act. India Cement Case ; Orissa Cement Case. (11) Similar to M.M.R.D. Act, Parliament had assumed control of the tea industry by making a declaration in Section 2 of Tea Act. Accordingly, it is a covered field and the State Legislature has no legislative competency in respect of despatch of tea. Buxa Dooars Case (Para 14) (12) Whether any rules had been framed under S.18 (1) or 18 (2) (k) of MMRD Act is immaterial. Hingir-Rampur case; Tullock & Bajinath Kedia’s cases, as approved in Orissa Cement Case (Para 54) (13) The object of S.9 of MMRD Act cannot be ignored. The terms of S.13 of the Central Act empower the Union to frame rules in regard to matters concerning roads and environment. Section 18(1) empowers the Central Government to take all such steps as may be necessary for the conservation and development of minerals in India and for protection of environment. These, in the very nature of things, cannot mean such amenities only in the mines but take in also the areas leading to and all around the mines. Section 18(1) empowers the Central Government to take all such steps as may be necessary for the conservation and development of minerals in India and for protection of environment. These, in the very nature of things, cannot mean such amenities only in the mines but take in also the areas leading to and all around the mines. The development of mineral areas is implicit in them. Section 25 implicitly authorises the levy of rent, royalty, taxes and fees under the Act and the Rules. The scope of the powers thus conferred is very wide. Read as a whole, the purpose of the Union control envisaged by Entry 54 and the MMRD Act, 1957, is to provide for proper development of mines and mineral areas and also to bring about a uniformity all over the country in regard to the minerals specified in Schedule I in the matter of royalties and consequently prices. The prices of their exports are fixed and cannot be escalated with the enhancement of the royalties and if different royalties were to be charged in different States, their working would become impossible. The Central Act bars an enhancement of the royalty directly or indirectly, except by the Union and in the manner specified by the 1957 Act. India Cement Case, (1990) 1 SCC 12 ; Orissa Cement case (Para 54). 6.3. Decision 6.3.1. Keeping the aforesaid in view, it is to be ascertained whether it is a ‘tax on land’ within the meaning of Entry 49 List II, I have quoted and discussed the provisions of the Act in details while considering the argument that the Act is otherwise ultra vires the Constitution. The preamble states that it is an Act to provide for resources for restoration of degraded land and improvement in forest areas. Section 3 (1) states that there shall be levied, assessed and collected a tax called the Bihar Restoration and Improvement of Degraded Forest Land Tax for mechanical and biological reclamation of forest land and for rehabilitation so that the land is reclaimed as far as possible. We should point out that though the last portion is supposed to be the object of the Act, there is nothing in the Act making any provision as to how this object is to be achieved. We should point out that though the last portion is supposed to be the object of the Act, there is nothing in the Act making any provision as to how this object is to be achieved. It is well settled that even if the object is treated to be lawful, merely having a perfectly lawful object is not sufficient. Such lawful object must be achieved by a valid legislation. 6.3.2. Though the said section 3 mentions about one tax, in reality and in substance, the tax imposed is of two types, as would be clear from section 3 (2) itself. One kind of tax is upon the 'user' within the meaning of Sec. 3 (2) (a) read with section 2 (m), 2 (e), 2 (i) and 2 (f) of the Act. The other type of tax is on the 'occupier' within the meaning of section 3 (2) (b) read with section 2 (k), 2 (d) and 2 (o) of the Act. This is also clear' from sub-section (3) of Sec. 3 and the Schedule itself. Therefore, we have to examine the scope of these two different imposts separately. 6.3.3. Let us first examine the nature and scope of tax payable by the 'user' under section 3 (2) (b). This tax is payable by an 'user' who has been allowed by the State Government to use 'forest land' for 'non-forest purpose'. 'Forest use' means 'use of forest land for the purpose of forestry, agriculture, horticulture or, any allied and ancillary activities.' This clearly specifies that such a tax is not directly on land. This is also made clear from section 3 (3) (b). It is not a tax levied on land as a unit. It has nothing to do with the annual value of the land. It is only a tax on a particular user of the land. It is a tax relating to particular activities carried on in relation to the land. This is also made clear from the Schedule, which is part of section 3. The heading of Schedule itself mentions that it is an assessment of tax "on excavation and use of forest land for non-forest purpose". Under the Schedule when it is a case of liability of an ‘user’ within the meaning of section 3 (2) (a), in that case clauses (d), (e) and (f) of the Schedule applies. The heading of Schedule itself mentions that it is an assessment of tax "on excavation and use of forest land for non-forest purpose". Under the Schedule when it is a case of liability of an ‘user’ within the meaning of section 3 (2) (a), in that case clauses (d), (e) and (f) of the Schedule applies. These clauses, apart from the heading, expressly mention that the tax is in respect of 'use' of forest land. It relates to certain activities relating to land. Column 1 of the Schedule expressly refers to 'use'. The rates specified in Col. 2 are not fixed on the land or on the basis of the area or value of the land, but it is on the basis of use in respect of the land and calculated on the basis of 'use' for a particular number of years. From the aforesaid it is clear that liability of tax imposed on the 'user' under section 3 (2) (a) is not directly on land as a unit; it does not bear any relation to it; but it is a tax on a particular "use" of land. It is in respect of certain activities carried on in respect of a land. The tax is by way of payment for the user of the land. If there is no such use, then there is no tax. 6.3.4. So far as the other tax i.e. the tax payable by the 'occupier' under Sec. 3 (2) (b) is concerned, it is a tax payable by the "occupier" responsible for creating 'void' by indulging in any development activities including "mining". An 'occupier' within the meaning of Sec. 2 (k) is made liable and not the 'owner' or a 'lessee' of the land. Under Section 2 (k) 'occupier' means a person in possession of an area of 'excavated' and 'voided' land. 'Excavation' means, under section 2 (d), "making hollows either on surface or underground by whatsoever means". By Section 2 (o) "void” means "any area or left over forest land From where soil, any mineral or rock or ore or anything being fastened with the earth has been removed for non-forest purpose, transported or dumped at a place other than the place from where the same was taken", Therefore, it is only when any forest land is used for "excavation'; and "voiding" that an "occupier" becomes liable. Moreover, such tax is to be payable by the "occupier" only if he is' "responsible" for such "excavation" and "void" and further if he had "indulged in any development activities including mining". Until and unless such activities, within the meaning of section 2 (o), had been carried out there is no "voiding". Further the liability of the "occupier" arises only if he is "responsible" for creating "void". Therefore, merely a person in possession of land is not liable. If he is also the person responsible for creating "void", then only he is liable. Therefore, it is the activity of such "occupier" which creates the liability. Moreover, it is not also the case of every 'occupier' who has created "void" who is made liable; but only those occupier creating void "by indulging in development activity including mining". Though this is not defined, 'it clearly shows that it is certain user of the land and certain activities relating to the land, including mining, which is being taxed. "Mining" by itself, by the inclusive definition, is treated as an activity for which the tax is payable. This amounts to a tax on "mining" itself. This is not a tax directly on land. It is not a tax or levy on land as a unit. It does not hear any definite relationship to it. It is not a tax resting upon general ownership of the land whether as an owner or as a lessee or as a licensee, but it is a tax on certain user or activity relating to the land. Unless such activities, including mining activities, are carried out, no such tax is payable by the occupier. It is the levy upon use of a land levy on activities carried on a land. This is not tax on land. This will also be clear from the Schedule itself which is to be treated as part of section 3 read with section 3 (2) (b). The heading of the Schedule is, so far as section 3 (2) (b) is concerned, assessment of tax on "excavation". It is made quite clear that the basis of tax or the rate of tax is not on the nature 'of the land or the value of the land, but in respect of certain use of the land, certain activities carried out in respect of the land. It is made quite clear that the basis of tax or the rate of tax is not on the nature 'of the land or the value of the land, but in respect of certain use of the land, certain activities carried out in respect of the land. Under Column (1) "in respect of" mechanised open cast excavation", certain rates specified in corresponding Column (2) is to be applied. If there has been "non-mechanised open cast excavation", then a different rate is applied. If "underground excavation" has been carried out or "subsidence" has taken place, then it is under a third type of rate. From Col. 2, relating to rate, also it is clear that the rate is not on the land as such, but land which has been "voided" or "subsided". The taxation is at a particular rate depending on the nature of the activities carried on in respect of the said land. From the Schedule also it is clear that this is not a tax on land as such but it is a tax in respect of certain activities carried on in respect of a forest land. 6.3.5. Accordingly I am unable to accept the contention of Mr. Sibal that this is a Tax on Land within the meaning of Entry 49 of List II. So far as the principle of interpretation of Legislative Lists enunciated by him in this regard is concerned, I have already considered the same in details and also set out some of the decisions in this regard. It is not necessary to deal with all the other decisions referred to by him mainly because there is and can be no major difference of opinion with regard to such principles. I have also dealt with his submissions on merits regarding Entry 49 List II in detail. I have considered this aspect of the matter from the “voided” point of view and the “use” point of view both separately. In this context I may point out that if his contention that the Act relates to the “consequent activity” and “using forest land for non – forest purpose”. – which is also repealed in his “Written Argument” – is accepted, then clearly it is not a tax directly on land as an unit or bearing any definite relationship to land within the meaning of Entry 49 List II. 6.3.6. – which is also repealed in his “Written Argument” – is accepted, then clearly it is not a tax directly on land as an unit or bearing any definite relationship to land within the meaning of Entry 49 List II. 6.3.6. For the aforesaid reason, I am of the opinion that the tax imposed under section 3 read with the Schedule, whether payable by the “user” or the “occupier” under section 3 (2), is not a “tax on land” within the meaning of Entry 49 List II. Accordingly the State Legislature did not have the legislative competence to enact the said Act. Accordingly, the said Act and the Ordinance is unconstitutional and void. 6.4. M.M.R.D. Act. 6.4.1. I shall next consider the question of the competency of the State Legislature to enact the said Act in view of certain Central Acts and particularly the M.M.R.D. Act. Having regard to the fact that I have held that it is not a "Tax on land" within the meaning of Entry 49 List II, which is the only entry relied upon on behalf of the State to support the competency of the State Legislature regarding the said Act, it is not strictly necessary to go into the other questions of competency. However, as the said contentions were also strenuously argued before us, I shall deal with the same shortly. 6.4.2. As I have pointed out, it is now well settled that Entry 49 List II is general in nature. In the case of any conflict between such a general entry in List II and any specific entry in List I, the specific entry shall prevail. In view of the declaration made by section 2 of the M.M.R.D. Act, the Parliament has assumed control over the matter in respect of which the M.M.R.D. Act has been enacted. The legislative power of the State is eroded to the extent control is assumed by the Union pursuant to such Act. Reference may also be made in this connection to the M.M.R.D. Act and the Rules framed thereunder and particularly sections 9, 13 and 18 of the M.M.R.D. Act and Rules 15 to 17 and 31 to 41 thereof. The development of the mineral area is implicit in the M.M.R.D. Act and the Rule making power conferred therein. Reference may also be made in this connection to the M.M.R.D. Act and the Rules framed thereunder and particularly sections 9, 13 and 18 of the M.M.R.D. Act and Rules 15 to 17 and 31 to 41 thereof. The development of the mineral area is implicit in the M.M.R.D. Act and the Rule making power conferred therein. In any event it may be pointed out that the relevant consideration is not the actual provisions of M.M.R.D. Act and the Rules made thereunder, but the Court must take into account matters and aspects which can legitimately be brought into the scope of the M.M.R.D. Act. Whether any specific Rule had been framed under any of the provisions of the said Act or not is immaterial. In this connection it is also relevant to note that the Central Act bars enhancement of royalty directly or indirectly except by the Union and in the manner specified by the 1957 Act. In this connection it may be pointed out that Section 3 (2) (b) expressly mentions "mining" as an activity which makes the "occupier" liable to pay the tax. From the Schedule also it is clear that tax is being imposed on the mining activity. The rate differs depending on the nature of the mining activity carried on. It is in pith and substance a tax on mining operation. It is covered by Entry 54 List I. In any event it is not covered by Entry 49 List II. In this connection it is also necessary to keep in mind, the provisions of Art.246 and Entry 971 List I. 6.4.3. Reference may be made in this connection to the various decisions referred to above particularly Hingir-Rampur case, Tullock's case, Baijnath case, India Cement case, Orissa Cement case and Rajasthan case. 6.4.4. I am unable to accept the contention of Mr. Sibal that the concept of 'occupied field', so far as it relates to Entry 54 of List I is concerned, is relevant only when Entry 23 of List II is involved and that it cannot be applied when Entry 49 of List II is involved. As discussed above, it is now well settled that if the field is covered by any Central Act under Entry 54 List I, containing such declaration, then the power of State Legislature under Entry 49 is denuded and excluded to that extent. As discussed above, it is now well settled that if the field is covered by any Central Act under Entry 54 List I, containing such declaration, then the power of State Legislature under Entry 49 is denuded and excluded to that extent. Whether the impugned legislation has any nexus to Entry 23 of List II or not, the question whether it is covered by a legislation under Entry 54 List I containing such declaration still remains. 6.4.5. Accordingly, in my opinion, in view of the MMRD Act also, the State Legislature had no legal competency to enact the State Act. For this reason also the Ordinance and the State Act must be held to be unconstitutional and void. 6.5. I shall now deal with the argument made on behalf of the petitioners based on another Central Act, viz., Forest (Conservation) Act, 1980 (hereinafter referred to 'as 'the 1980 Act'). Having regard to the conclusion I have arrived at as indicated above, regarding the validity of the State Act on other grounds, it is strictly not necessary to examine the merits of this contention. However, having regard to the fact that such an argument was advanced before the Court, I shall shortly refer to the same without going into the details. In the case of Rural Litigation and Entitlement Kendra v. State of U.P., 1989 Supp (1) SCC 504 in connection with the 1980 Act it was pointed out as follows : "Forest was initially in the State List covered by Entry 19. In 1976 under the 42nd Amendment the Entry was deleted and Entry 17-A in the Concurrent List was inserted. The change from the State List to the Concurrent List "was brought about following the realisation of the Central Government that forests were of national importance and should be placed in the Concurrent List to enable the Central Government to deal with the matter. The same amendment of the Constitution brought in Article 48-A in Part IV is providing thus: The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country. The same amendment of the Constitution brought in Article 48-A in Part IV is providing thus: The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country. Art. 51-A in Part IV-A of the Constitution inserted by the same amendment provided a set of fundamental duties and clause (g) runs thus : It shall be the duty of every citizen of India XX XX XX (g) to protect and improve the natural environment including forests, lakes, rivers, and wild life and to have compassion for living creature 1972 marks a watershed in the history of environmental management so far as India is concerned. The National Committee of Environment and Planning and Coordination was set up and various steps were taken to implement the recommendations already made and to be made thereafter. The National Commission on Agriculture 1976 noticed the inadequate implementation of the 1952 National Forest policy and proposed the following amendments : (i) Provision for prior approval of the Central Government before taking steps for de-reservation or diversion of forest land to non-forest use. (ii) Preventing and evicting encroachment of forest land. (iii) Safeguarding against monoculture practices in raising forest plantations so that preservation of habitats for natural flora and fauna is ensured. (iv) Encouraging large scale industrial plantation to foster growth of forest industries." As pointed out in the aforesaid decisions the 1980 Act attracts mining in forest area. Whether it is reserved forest area or not and whether it is first grant or renewal of mining lease, the provisions of 1980 Act has to be complied with. I ought to point out in this context that section 2 of 1980 Act was amended by Amending" Act 69 of 1988 with effect from 15.3.1989. I have set out the relevant provisions of the 1980 Act, as amended hereinabove. In view of Section 2, the State cannot permit such' acts as specified therein without prior approval of the Central Government. Once such order has been made by the State Government, with the approval of the Central Government, the activity carried on is a perfectly legal activity, even if it amounts to use of any forest land for any non-forest purpose as defined in the 1980 Act. Once such order has been made by the State Government, with the approval of the Central Government, the activity carried on is a perfectly legal activity, even if it amounts to use of any forest land for any non-forest purpose as defined in the 1980 Act. Further the Form in the Appendix under Rule 4 provides for steps to be taken to compensate for the loss of forest area, vegetation and wild life. It provides for ‘restoration of vegetal cover, within the meaning of biological reclamation under section 2(b) of the State Act. This also takes care of ‘voiding’ within the meaning of Section 2 (o) of the State Act. Accordingly, the competency of the State Act to enact in this respect is doubtful. In any event, if any tax is to be imposed for the purpose, then it seems to be within the competence of the Parliament only under Entry 97 List I. The other question is whether it can be said that the State Act is violative of Article 254 of the Constitution of India as it is repugnant to the Central Act being 1980 Act to this extent. Admittedly, there is no assent of the President to the State Act. 7. Art. 14. 7.1. I shall now take up the other broad contention raised to the effect that irrespective of the question of legislative competency (If the said Act, the said Act is violative of the provisions of the Constitution and particularly Part III thereof. 7.2. I shall first take up the question whether the present Act is violative of Article 14 of the Constitution. I shall consider this aspect of the matter from the point of view whether the State Act is vague or uncertain or whether it otherwise confers naked and arbitrary power without any guiding principles or it is otherwise discriminatory and accordingly unconstitutional and void. 7.3. I shall first deal with certain decisions on this question. 7.3.1. In the case of Messrs Dwarka Prasad Laxmi Narain Vs. 7.3. I shall first deal with certain decisions on this question. 7.3.1. In the case of Messrs Dwarka Prasad Laxmi Narain Vs. State of Uttar Pradesh and others, AIR (1950) SC 224, the constitutional validity of the U.P. Coal Control Order (1953) (hereinafter referred to as the 'said order'), framed under Section 3 (2) of the Essential Supplies Act, 1946 was assailed before the Supreme Court substantially on the ground that its provisions vest an unfetterred and unguided discretion in the Licensing authority or the State Coal Controller in the matter of granting or revoking licences etc. and that these arbitrary powers cannot only be exercised by the officers themselves but may be delegated at their option to any person they like. In this context, it was observed as follows: "Nobody can dispute that for ensuring equitable distribution of commodities considered essential to the community and their availability at fair prices it is quite a reasonable thing to regulate sale of these commodities through licensed vendors to whom quotas are allotted in specified quantities and who are not permitted to sell them beyond the prices that are fixed by the controlling authorities. The power of granting or withholding licences or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters. So far no exception can be taken; but the mischief arises when the power conferred on such officers is an arbitrary power unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. A law or order, which confers arbitrary and uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable. As has been held by this Court in - 'Chintaman Rao v. State of Madhya Pradesh, A.I.R. 1951 SC 118 (A) the phrase "reasonable restriction" connotes that the limitation imposed upon a' person in enjoyment of a right should not be arbitrary or' of an excessive nature beyond what is required 'in the interest of public. As has been held by this Court in - 'Chintaman Rao v. State of Madhya Pradesh, A.I.R. 1951 SC 118 (A) the phrase "reasonable restriction" connotes that the limitation imposed upon a' person in enjoyment of a right should not be arbitrary or' of an excessive nature beyond what is required 'in the interest of public. Legislation, which arbitrarily or excessively invades the right, cannot be said to contain the quality or reasonableness, and unless it strikes a proper balance between the freedom guaranteed under Article 19 (1) (g) and the social control permitted by clause (6) of Article 19, it must be held to be wanting in reasonableness. It is in the light of these principles that we would proceed to examine the provisions of this Control Order, the validity of which has been impugned before us on behalf of the petitioners” (Para 6). "The provisions contained in Clause 3 (1) of the Order that “no person shall stock, sell, store for sale or otherwise utilise or dispose of coal except under a licence granted under this Order” is quite unexceptional as a general provision; in fact, that is the primary object which the Control order is intended to serve. There are two exceptions engrafted upon this general rule; the first is laid down in sub-clause (2) (a) and to that no objection has been or can be taken. The second exception, which is embodied in sub-clause (2) (b) has been objected to by the learned counsel appearing for the petitioners. This exception provides that nothing in Clause 3 (1) shall apply to any person or class of persons exempted from any provision of the above sub-clause by the State Coal Controller, to the extent of such exemption. It will be seen that the Control order nowhere indicates what the grounds for exemption are, nor have any rules been framed on this point. An unrestricted power has been given to the State Controller to make exemptions, and even if he acts arbitrarily or from improper motives, there is no check over it and no way of obtaining redress. Clause 3 (2) (b) of the Control Order seems to us therefore, ‘prima facie’ to be unreasonable. We agree,. However, with Mr. An unrestricted power has been given to the State Controller to make exemptions, and even if he acts arbitrarily or from improper motives, there is no check over it and no way of obtaining redress. Clause 3 (2) (b) of the Control Order seems to us therefore, ‘prima facie’ to be unreasonable. We agree,. However, with Mr. Umrigar that this portion of the Control Order, even though bad, is severable from the rest and we are not really concerned with the validity or otherwise of this provision in the present case as no action taken under it is the subject-matter of any complaint before us” (Para 7). "The more formidable objection has been taken on behalf of the petitioners against Cl. 4 (3) of the Control Order which relates to the granting and refusing of licences. The licensing authority has been given absolute power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any licence under this Order and the only thing he has to do is to record reasons for the action he lakes. Not only so, the power could be exercised by any person to whom the State Coal Controller may choose to delegate the same, and the choice can be made in favour of any and every person. It seems to us that such provision cannot be held to be reasonable. No rules have been framed and no directions given on these matters to regulate or guide the discretion of the Licensing Officer. Practically the Order commits to the unrestrained will of a single individual the power to grant, withhold or cancel licenses in any way he chooses and there is nothing in the order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Mr. Umrigar contends that a sufficient safeguard has been provided against any abuse of power by reason of the fact that the licensing authority has got to record reasons for what he does. This safeguard, in our opinion, is hardly effective; for there is no higher authority prescribed in the Order who could examine the propriety of these reasons and revise or review the decision of the subordinate officer. This safeguard, in our opinion, is hardly effective; for there is no higher authority prescribed in the Order who could examine the propriety of these reasons and revise or review the decision of the subordinate officer. The reasons, therefore, which are required to be recorded are only for the personal or subjective satisfaction of the licesing authority and not for furnishing any remedy to the aggrieved person. It was pointed out and with perfect propriety by Mr. Justice Mathhews in the well-known America case of - 'Yick Wo v. Hopkins', (1986) 118 U.S. 356 at p. 373 (B) that the action or non-action of the officers placed in such position may proceed from enmity. or prejudice, from partisan zeal or animosity, from favouritism and other improper influences and motives which are easy of concealment and difficult to be detected and exposed, and consequently, the injustice capable of being wrought under cover of such unrestricted power becomes apparent to every man, without the necessity of detailed investigation. In our opinion, the provision of Clause 4 (3) of the U.P. Coal Control Order must be held to be void as imposing an unreasonable restriction upon the freedom of trade and business guaranteed under Article 19 (1) (g) of the Constitution and not coming within the protection afforded by CI. (6) of the Article.” (Para 8) Ultimately, it was held that Claus 4(3) of the Control Order as well as the cancellation of the petitioner licence should be held to be invalid and a writ in the nature of mandamus was issued accordingly. The petition was partly allowed. 7.3.2. In the case of State of Madhya Pradesh and another V. Baldeo Prasad, reported in A.I.R. (1961) Supreme Court 293, the subject matter of consideration was the question of validity of Central Province and Berar Goondas Act (as amended by M.P. Act 49 of 1950). The Act was passed because it was thought expedient to provide for the Control of Goondas and for their removal in certain circumstances from one place to another. Section 2 defined a "goonda" as meaning a hooligan, rough, or a vagabond and as including a person who is dangerous to public peace and tranquil. The Act was passed because it was thought expedient to provide for the Control of Goondas and for their removal in certain circumstances from one place to another. Section 2 defined a "goonda" as meaning a hooligan, rough, or a vagabond and as including a person who is dangerous to public peace and tranquil. It was pointed out by the Court that the word "goonda" was an inclusive definition and it included even persons who may not be hooligans, rough or vagabonds, if they were otherwise dangerous to public peace or tranquility. In this context, it was observed as follows : "The argument against the validity of the Act is, however, based on one serious infirmity in S.4 and S.4-A which contain the operative provisions of the Act. This infirmity is common to both the sections, and so what we will say about S.4 will apply with equal force to S.4-A. It is clear that S. 4 contemplates preventive action being taken provided two conditions are satisfied; first', that the presence, movements or acts of any person sought to be proceeded against should appear to the District Magistrate to be prejudicial to the interests of the general public, or that a reasonable suspicion should exist that such a person is committing or is likely to commit acts calculated to disturb public peace or tranquility; and second that the person concerned must be a goonda. It would thus be clear that it is only where prejudicial acts can he attributed to a goonda that S.4 can come into operation. In other words, the satisfaction of the first condition alone would not be enough; both the conditions must be satisfied before action can be taken against any person. That clearly means that the primary condition precedent for taking action under S. 4 is that the person against whom action is proposed to be taken is a goonda; and it is precisely in regard to this condition that the section suffers from a serious infirmity." (Para 7) "The section does not provide that the District Magistrate must first come to a decision that the person against whom he proposes to take action is a goonda, and gives him no guidance or assistance in the said matter. It is true that under S.4 a goonda is entitled to have an opportunity to be heard after he is given a copy of the grounds on which the order is proposed to be made against him; but there is no doubt that all that the goonda is entitled to show is response to the notice is to challenge the correctness of the grounds alleged against him. The enquiry does not contemplate an investigation into the question as to whether a person is a goonda or not. The position, therefore, is that the District Magistrate can proceed against a person without being required to come to a formal decision as to whether the said person is a goonda or not; and in my event no opportunity is intended to he given to the person to show that he is not a goonda. The failure of the section to make a provision in that behalf undoubtedly constitutes a serious infirmity in its scheme." (Para 8) "Incidentally it would also be relevant to point out that the definition of the word "goonda" affords no assistance in deciding which citizen can be put under that category. It is an inclusive definition and it does not indicate which tests have to be applied in deciding whether a person falls in the first part of the definition. Recourse to the dictionary meaning of the word would hardly be of any assistance in this matter. After all it must be borne in mind that the Act authorises the District-Magistrate to deprive a citizen of his fundamental right under Art. 19 (1) (d) and (e), and though the object of the Act and its purpose would undoubtedly attract the provisions of Art. (1) (5) care must always be taken in passing such Acts that they provide sufficient safeguards against casual, capricious or even malicious exercise of the powers conferred by them. It is well-known that the relevant provisions of the Act are initially put in motion against a person at a lower level than the District Magistrate, and so it is always necessary that sufficient safeguards should be provided by the Act to protect the fundamental rights of innocent citizens and to save them from unnecessary harassment. It is well-known that the relevant provisions of the Act are initially put in motion against a person at a lower level than the District Magistrate, and so it is always necessary that sufficient safeguards should be provided by the Act to protect the fundamental rights of innocent citizens and to save them from unnecessary harassment. That is why we think the definition of the word "goonda" should have given necessary assistance to the District Magistrate in deciding whether a particular citizen falls under the category of goonda or not; that is another infirmity in the Act. As we have already pointed out S.4-A suffers from the same infirmities as S.4.” (Para 9) "Having regard to the two infirmities in Ss. 4, 4-A respectively we do not think it would be possible to accede to the argument of the learned Advocate-General that the operative portion of the Act can fall under Art. 19 (5) of the Constitution. The person against whom action can be taken under the Act is not entitled to know the source of the information received by the District Magistrate is based that action should be taken against him under S.-4 or S.4A. In such a case it is absolutely essential that the Act must clearly indicate by a proper definition or otherwise when and under what circumstances a person can be called a goonda, and it must impose an obligation on the District Magistrate to apply his mind to the question as to whether the person against whom complaints are received is such a goonda or not. It has been urged before us that such an obligation is implicit in Ss.4 and 4-A. We are, however, not impressed by this argument. Where a statute empowers the specified authorities to take preventive action against the citizens it is essential that it should expressly make it a part of the duty of the said authorities to satisfy themselves about the existence of what the statute regards as conditions precedent to the exercise of the said authority. If the statute is silent in respect of one of such conditions precedent it undoubtedly constitutes a serious infirmity which would inevitably take it out of the provisions of Art. 19 (5). The result of this infirmity is that it has left to the unguided and unfettered discretion of the authority concerned to treat any citizen as a goonda. If the statute is silent in respect of one of such conditions precedent it undoubtedly constitutes a serious infirmity which would inevitably take it out of the provisions of Art. 19 (5). The result of this infirmity is that it has left to the unguided and unfettered discretion of the authority concerned to treat any citizen as a goonda. In other words, the restrictions which it allows to be imposed on the exercise of the fundamental right of a citizen guaranteed by Art. 19 (1) (d) and (e) must in the circumstances be held to be unreasonable. That is the view taken by the High Court and we see no reason to differ from it." (Para 10) 7.3.3. In the case of K.A. Abbas v. Union or India, AIR (1971) S.C. 481 (Paras 46 to 48) it was observed that it cannot be said as an absolute principle that no law will be considered bad for sheer vagueness. It was observed that there is ample authority for the proposition that a law affecting fundamental rights may be so considered. Reference was made in this connection to the aforesaid State of M.P. decision. 7.3.4. In the case of Air India v. Nargesh Meerza and others reported in AIR (1981) SC 1829 constitutional validity of certain provisions of Air India Employees Service Regulations was the subject matter of appeal before the Supreme Court. On the question of scope of Art.14 it was held as follows : "In order to appreciate the arguments of the parties on this point it may be necessary to refer to the law on the subject which is now well settled by a long course of decisions of this Court. It is undisputed that what Art. 14 prohibits is hostile discrimination and not reasonable classification]. In other words, if equals and unequals are differently treated no discrimination at all occurs so as to amount to an infraction of Art.14 of the Constitution. A fortiori if equals or persons similarly circumstanced are differently treated, discrimination results so as to attract the provisions of Art. 14” (Para 26) "In our opinion, therefore, the inescapable conclusion that follows is that if there are two separate and different classes having different conditions of service and different incidents, the question of discrimination does not arise. A fortiori if equals or persons similarly circumstanced are differently treated, discrimination results so as to attract the provisions of Art. 14” (Para 26) "In our opinion, therefore, the inescapable conclusion that follows is that if there are two separate and different classes having different conditions of service and different incidents, the question of discrimination does not arise. On the other hand, if among the members of the same class, discriminatory treatment is meted out to one against the other, Art. 14 is doubtless attracted." (Para 27) After referring to various decisions, the law in this regard was summarised as follows : "Thus, from a detailed analysis and close examination of the cases of this Court starting from 1952 till today, the following propositions emerge- (1) In considering the fundamental right of equality of opportunity a technical pedantic or doctrinaire approach should nor be made and the doctrine should not be invoked even if different scales of pay, service terms, leave, etc. are introduced in different and dissimilar posts. Thus, where the class or categories of service are essentially different in purport and spirit, Art. 14 cannot be attracted. (2) Art. 14 forbids hostile discrimination but not reasonable classification. Thus, where persons belonging to a particular class in view of their special attributes, qualities, mode of recruitment and the like are differently treated in public interest to advance and boost members belonging to backward classes, such a classification would not amount to indiscrimination having a close nexus with the objects sought to be achieved so that in such cases Art. 14 will be completely out of the way. (3) Article 14 certainly applies where equals are treated differently without any reasonable basis. (4) Where equals and unequals are treated differently, Art. 14 would have no application. (5) Even if there be one class of service having several categories with different attributes and incidents, such a category becomes a separate class by itself and no difference or discrimination between such category and the general members of the other class would amount to discrimination or to denial of equality of opportunity. (5) Even if there be one class of service having several categories with different attributes and incidents, such a category becomes a separate class by itself and no difference or discrimination between such category and the general members of the other class would amount to discrimination or to denial of equality of opportunity. (6) In order to judge whether a separate category has been carved out of a class of service, the following circumstances have generally to be examined (a) the nature, the mode and the manner of recruitment of particular category from the very start, (b) the classifications of the particular category, (c) the terms and conditions of service of the members of the category, (d) the nature and character of the posts and promotional avenues, (e) the special attributes that the particular category possess which are not to be found in other classes, and the like." (Para 37) On the question of excessive delegation of power reference was made to various decisions of Supreme Court and ultimately it was held that conferment of power of a wide and uncontrolled power to the Managing Director of Air India, regarding extension of the retirement of an Air Hostess being entirely at the mercy and sweetwill of the Managing Director was clearly violative of Art. 14. Similarly, certain powers conferred on the Managing Director under Regulation 46 was also struck down on the same ground. "This brings us now to the question as to whether or not the impugned regulation suffers from any constitutional infirmity as it stands. The fixation of the age of retirement of AHs who fall within a special class depends on various factors which have to be taken into consideration by the employers. In the instant case, the Corporations have placed good material "before us to show some justification for keeping the age of retirement at 35 years (extendable up to 45 years) but the regulation seems to us to arm the Managing Director with uncanalised and unguided discretion to extend the age of AHs at his option which appears to us to suffer from the vice of excessive delegation of powers. It is true that discretionary power may not necessarily be a discriminatory power but where a statute confers a power on an authority to decide matters of moment without laying down any guidelines or principles or norms the power has to he struck down as being violative of Art. 14. (Para 115) The doctrine of a provision suffering from the vice of excessive delegation of power has been explained and discussed in several decisions of this Court. In Anwar Ali Sarkar's case (AIR 1952 SC 74) (supra) which may justly be regarded as the locus classicus on the subject. Fazal Ali, J. (as he then was) clearly observed as follows (at pp. 84, 85) 'but the second criticism cannot be so easily met, since an Act which gives uncontrolled authority to discriminate cannot but be hit by Article 14 and it will be no answer simply to say that the legislature having more or less the unlimited power to delegate has merely exercised that power. Secondly, the Act itself does not state that public interest and administrative exigencies will provide the occasion for its application. Lastly, the discrimination involved in the application of the Act is too evident to be explained away. And Mahajan, J. agreeing with the same expressed his views thus (at p.86) 'The present statute suggests no reasonable basis or classification, either in respect of offences or in respect of cases. It has laid down no yardstick or measure for the grouping either of persons or of cases or of offences by which measure these groups could be distinguished from those who are outside the purview of the Special Act. The Act has left this matter entirely to the unregulated discretion of the provincial Government. Mukherjee, J. observed thus (at p.91): ‘In the case before us the language of Section 5 (1) is perfectly clear and free from any ambiguity. It vests an unrestricted discretion in the State Government to direct any cases or classess of cases to be tried by the Special Court in accordance with the procedure laid down in the Act…I am definitely of opinion that the necessity, of a speedier trial is too vague, uncertain and elusive a criterion to form a rational basis for the discriminations made… But the question is : how is this necessity of speedier trial to be determined? Not by reference to the nature of the offence or the circumstances under which or the area in which they are committed, nor even by reference to any peculiarities or antecedents of the offenders themselves, but the selection is left to the absolute and unfettered discretion of the executive Government with nothing in the law to guide or control its action. This is not a reasonable classification at all but an arbitrary selection. And Chandrasekhara Aiyar, J. elucidated the law thus (at p. 99) ‘If the Act does not state what exactly are the offences which in its opinion need speedier trial and why it is so considered, a mere statement in general words of the object sought to be achieved as we find in this case, is of no avail because the classification. If any, is illusive or evasive. The policy or idea behind the classification should at least be adumbrated, if not stated, so that the Court which has to decide on the constitutionality might be seized of something on which it could base its view about the propriety of the enactment from the standpoint of discrimination or equal protection. Any arbitrary division or ridge will render the equal protection clause moribund or lifeless. Apart from the absence of any reasonable or rational classification, we have in this case the additional feature of carte blanche being given to the State Government to send any offences or cases for trial by a Special Court. And Bose, J. held thus (at p. 104) It is the differentiation which matters, the singling out of cases or groups of cases, or even of offences, or classes of offences, of a kind, fraught with the most serious consequences to the individuals concerned, for special, and what some would regard as peculiar treatment. The five Judges whose decisions we have extracted constituted the majority decision of the Bench.” (Para 114) “In Hari Chand Sarda Vs. Mizo District Council (1967) SCR 1012 : ( AIR 1967 SC 829 ), it was highlighted that where a Regulation does not contain any principles or standard for the exercise of the executive power, it was a bad regulation as being violative of Art.14. In this connection, the Court observed as follows (at pp. Mizo District Council (1967) SCR 1012 : ( AIR 1967 SC 829 ), it was highlighted that where a Regulation does not contain any principles or standard for the exercise of the executive power, it was a bad regulation as being violative of Art.14. In this connection, the Court observed as follows (at pp. 833 of AIR) 'A perusal of the Regulation shows that it nowhere provides any principles or standards on which the Executive Committee has to act in granting or refusing to grant the licence... There being no principles or standards laid down in the Regulation there are obviously no restraints or limits within which the power of the Executive Committee to refuse to grant or renew a licence is to be exercised. The power of refusal is thus left entirely unguided untrammelled. "A provisions which leaves an unbriddied power to an authority cannot in any sense be characterised as reasonable. Section 3 of the Regulation is one such provision and is therefore liable to be struck down as violative of Article 19 (1) (g).' (Para 115) “To the same effect is another decision of this Court in State of Mysore Vs. S.R. Jayaram (1968) 1 SCR 349 : ( AIR 1968 SC 346 ), where the following observations were made (at pp. 348, 349 of AIR): The Rules are silent on the question as to how the Government is to find out the suitability of a candidate for a particular cadre…. It follows that a under the latter part of Rule 9 (2) it is open to the Government to say at its sweet will that a candidate is more suitable for a particular cadre and to deprive him or his opportunity to join the cadre for which he indicated his preference. We hold that the latter part of R. 9 (2) gives the Government an arbitrary power of ignoring the just claims of successful candidates for recruitment of offices under the State. It is violative of Articles 14 and 16 (1) of the Constitution and must be struck down. Here also the Rules were struck down because no principles or guidelines were given by the statute to determine the suitability of a particular candidate." (Para 116) "Regulation 46 (i) (c) provides that AH would retire on attaining the age of 35 years or on marriage if it takes place within four years of service. Here also the Rules were struck down because no principles or guidelines were given by the statute to determine the suitability of a particular candidate." (Para 116) "Regulation 46 (i) (c) provides that AH would retire on attaining the age of 35 years or on marriage if it takes place within four years of service. The last limb of this provision relating to first pregnancy in the case of AHs has already been struck down by us and the remaining sub-clause (e) has to be read with Regulation 47 which provides that the services of any employee may, at the option of the Managing Director on the employee being found medically fit, be extended by one year beyond the age of retirement, the aggregate period not exceeding two years. This provision applies to employees who retire al the age of 58. So far as the AHs are concerned, under the Regulation the discretion is to be exercised by the Managing Director to extend the period up to ten years. In other words, the spirit of the Regulation is that an AH, if Medically fit, is likely to continue up to the age of 45 by yearly extension given by the Managing Director. Unfortunately, however, the real intention of the makers of the Regulation has not been carried out because the Managing Director has been given an uncontrolled, unguided and absolute discretion to extend or not to extend the period of retirement in the case of AHs after 35 Years. The words 'at the option' are wide enough to allow the Managing Director to exercise his discretion in favour of line AH and not in favour of the other which may result in discrimination. The Regulation does not provide any guidelines, rules or principles which may govern the exercise of the discretion by the Managing Director. Similarly, there is also no provision in the Regulation requiring the authorities to give reason for refusing to extend the period of retirement of AHs. The provision does not even give any right of appeal to higher authorities against the order passed by the Managing Director. Under the provision, as it stands, the extension of the retirement of an AH is entirely at the mercy and sweetwill of the Managing Director. The provision does not even give any right of appeal to higher authorities against the order passed by the Managing Director. Under the provision, as it stands, the extension of the retirement of an AH is entirely at the mercy and sweetwill of the Managing Director. The conferment of such a wide and uncontrolled power on the Managing Director is clearly violative of Article 14, as the provision suffers from the vice of excessive delegation of powers." (Para 117) “For these reasons, therefore, we have no alternative but to strike down as invalid that part of Regulation 47 which gives option to the Managing Director to extend the service of an AH. The effect of striking down this provision would be that an AH, unless the provision is suitably amended to bring it in conformity with the provisions of Article 14 would continue to retire at the age of 45 years and the Managing Director would be bound to grant yearly extension as a matter of course, for a period of ten years if the AH is found to be medically fit. This will prevent the Managing Director from discriminating between one AH and another.” (Para 118) "The first part of the Regulation has become redundant in view of the Notification dated 12.4.80, referred to above, but the latter part which gives the General Manager a blanket power to retain an AH till the age of 40 years, still remains. As, however, the bar of marriage is gone, the Rules of 1972 which empower the General Manager to retain an AH in service will have to he read as a power to retain an AH up to the age of 40 Years. Thus, the Notification as also the Rules suffer from two serious constitutional infirmities which are present in the case of Regulation 46, framed by the A.I. The clauses regarding retirement and pregnancy will have to be held as unconstitutional and therefore struck down. Secondly, for the reasons that we have given in the case of A.I. AHs that Regulation 46 contains an unguided and uncontrolled power and therefore suffers from the vice of excessive delegation of powers on a parity of reasoning the power conferred on the General Manager to retain an AH up to the age of 40 years will have to be stuck down as invalid because it does not lay down any guidelines or principles. Furthermore, as the case of A.I. AHs and I.A.C. Ahs are identical, an extension upto the age of 45 in the case of one and 40 in the case of other, amounts to discrimination inter se in the same class of Ahs and must be struck down on that ground also.” (Para 128) “The result of our striking down these provisions is that like A.I. AHs, IAC Ahs Also would be entitled to their period of retirement being extended up to 45 years until a suitable amendment is made by the Management in the light of the observation made by us.” (Para 129) 7.3.5. In the case of B.B. Rajwanshi Vs. State of U.P. and others, reported in A.I.R. 1988 S.C. 1089 before the Supreme Court the constitutional validity of section 6 (4) of U.P. Industrial Disputes Act, 1947 was questioned. Section 6 of the said Act provided as follows : "6. Awards and action to be taken thereon. – (1) Where an industrial dispute has been referred to a Labour Court or Tribunal for adjudication, it shall hold its proceedings expeditiously and shall soon as it is practicable on the conclusion thereof, submit its award to the State Government. (2) The award of a Labour Court or Tribunal shall be in writing and shall be signed by its Presiding Officer. (2A) An award in an industrial dispute relating to the discharge or dismissal of a workman may the direct the setting aside of the discharge or dismissal and reinstatement of the workman on such terms and conditions, if any, as the authority making the award may think fit, or granting such other relief to the workman, including the substitution of any lesser punishment for discharge or dismissal, as the circumstances of the case may require. (3) Subject to the provisions of sub-section (4) every arbitration award and the award of a Labour Court or Tribunal, shall, within a period of thirty days from the date of its receipt by the State Government be published in such manner as the State Government thinks fit. (4) The State Government may before publication of an award of a Labour Court or Tribunal under sub-section (3), remit the award for reconsideration of the adjudicating authority, and that authority shall, after reconsideration, submit its award to the State Government, and the State Government shall publish the award in the manner provided in sub-section (3). (4) The State Government may before publication of an award of a Labour Court or Tribunal under sub-section (3), remit the award for reconsideration of the adjudicating authority, and that authority shall, after reconsideration, submit its award to the State Government, and the State Government shall publish the award in the manner provided in sub-section (3). (5) Subject to the provisions of Section 6A, an award published under sub-section (3) shall be final and shall not be called in question in any Court in any manner whatsoever. (6) A Labour Court, Tribunal or Arbitrator may either of its own motion or on the application of any party to the dispute correct any clerical or arithmetical mistakes in the award, or errors arising therein form any accidental slip or omission; whenever any correction is made as aforesaid, a copy of the order shall be sent to the State Government and the provision of this Act relating to the publication of an award shall mutatis mutandis apply thereto.” After consideration of the relevant principles laid down in this regard the Supreme Court held that sub-section (4) of Section 6 was violative of Art. 14 in as much it conferred unguided and uncontrolled powers on the State Govt. Accordingly the same was struck down. 7.3.6. In the case of Harakchand Ratanchand Banthia & others Vs. Union of India & others, A.I.R. 1970 S.C. 1453, the constitutional validity of the Gold (Control) Act, 1968 (Act No. 45 of 1968) was challenged. Accordingly the same was struck down. 7.3.6. In the case of Harakchand Ratanchand Banthia & others Vs. Union of India & others, A.I.R. 1970 S.C. 1453, the constitutional validity of the Gold (Control) Act, 1968 (Act No. 45 of 1968) was challenged. Section 27 (2) (d) of the said Act provided as follows : “(2) In particular, and without prejudice to the foregoing power, such rules may provide for all or any of the following matters, namely : (d) conditions, limitations and restrictions subject to which - (i) a dealer may sell, deliver, transfer or otherwise dispose of any gold on the hypothecation, pledge, mortgage or charge of which he had advanced any load; (ii) a refiner may refine gold; (iii) a lincensed refiner may buy, acquire, accept or receive, gold, or melt, assay, refine, extract or alloy gold or subject it to any other process, or sell, deliver, transfer or otherwise dispose of any gold; (iv) a licensed dealer may buy, acquire, accept or receive or sell, deliver, transfer or dispose of gold.” The Supreme Court upheld the contention on behalf of the petitioner that the said section 27 (2) (d) must be struck down as it confers such wide and vague power on the Administrator that it is difficult to limit its scope. In this context the Supreme Court observed as follows : "We now come to S. 27 of the Act which relates to licensing of dealers. It was stated on behalf of the petitioners that the conditions imposed by sub-sec(6) of S.27 for the grant or renewal of licences are uncertain, vague and unintelligible and consequently wide and unfettered power was conferred upon the statutory authorities in the matter of grant or renewal of licence In our opinion, this contention is well founded and must be accepted as correct. Section 27 (6) (a) states that in the matter of issue or renewal of licences the Administrator shall have regard to “the number of dealers existing in the region in which the applicant intends to carry on business as a dealer”. But the word “region” is nowhere defined in the Act. Similarly S. 27 (6) (b) requires the Administrator to have regard to “the anticipated demand, as estimated by him, for ornaments in that region”. But the word “region” is nowhere defined in the Act. Similarly S. 27 (6) (b) requires the Administrator to have regard to “the anticipated demand, as estimated by him, for ornaments in that region”. The expression “anticipated demand” is a vague; expression which is not capable of objective assessment and is bound to lead, to a great deal of uncertainly similarly the expressions “suitability of the applicant” in S. 27 (6) (e) and “public interest” in S. 27 (6) (g) do not provide any objective standard or norm or guidance. For the these reasons it must be held that clauses (a), (b), (e) and (g) of S.27 (6) impose unreasonable restrictions (In the fundamental right of the petitioner to carry on business and are constitutionally invalid. It was also contended that there was no reason why the conditions for renewal of licence should be as rigorous the conditions for initial grant to licence. The requirement of strict conditions for the renewal of licence renders the entire future of the business of the dealer uncertain and subjects it to the caprice and arbitrary will of the administrative authorities. There is justification for this argument and the requirement of S. 26 of the Act imposing the same conditions for the renewal of the licence as for the initial grant appears to be unreasonable. In our opinion clauses (a), (b), (e) and (g) are inextricably bound up with the other clauses O.S. 27 (6) and form pari of single scheme. The result is that clauses (a), (b), (c), (e) and (g) are not severable and the entire Section 27 (2) (d) of the Act states that a valid licence issued by the Administrator “may contain such conditions, limitations and restrictions as the Administrator may think fit to impose and different conditions, limitations and restrictions may be imposed for different classes of dealers”. On the face of it, this sub-section confers such wide and vague power upon the Administrator that it is limit its scope. In our opinion Section 27 (2) (d) of the Act must be struck down as an unreasonable restriction on the fundamental right of the petitioners to carry on business. It appears, however, to us that if section 27(2) (d) and Section 27 (6) of the Act are invalid the licensing scheme contemplated by the rest Section 27 of the Act cannot be worked in practice. It appears, however, to us that if section 27(2) (d) and Section 27 (6) of the Act are invalid the licensing scheme contemplated by the rest Section 27 of the Act cannot be worked in practice. It is, therefore necessary for parliament to enact fresh legislation imposing appropriate Conditions and restrictions for the grant and renewal of licences to dealers. In the alternative the Central Government may make appropriate rules. for the same purpose in exercise of its rule-making power under S.114 of the Act." ...... (Para 18) 7.3.7. In the case of Hamdard Dawakhana and others Vs. Union of India and others, A.I.R. 1960 SC 554, the power given to the authority under the provisions of section 3 or the Drugs and Magic Remedies (Objectionable Advertisements) Act (Act 21 of 1954) as contained in clause (d) provided as follows: S.3. "Subject to the provisions of this Act, no person shall take any part in the publications of any advertisement referring to any drug in terms which suggest or are calculated to lead to the use of that drug for……………………………… (d) the diagnosis, cure, mitigation, treatment or prevention of any venereal disease or any other disease or condition which may be specified in rules made under this Act. S. 16, (1) "The Central Government may be notification in the official gazette make rules for carrying out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may- (a) specify any disease or condition to which the provisions of S.3 shall apply; (b) prescribe the manner in which advertisement of articles or things referred to in cl. (c) of sub-s. (1) or S.14 may be sent confidentially.” It was urged that section 3 (d) was delegated legislation and not conditional legislation and the power delegated therein is only to specify conditions and diseases in the rules. In this context it was observed as follows : "The interdiction under the Act is applicable to conditions and diseases set out in the various clauses of S.3 and to those that may under the last part or clause (d) be specified in the rules made under S.16. The first Sub-section or S.16 authorises the making or rules to carry out the purposes of the Act and cl. The first Sub-section or S.16 authorises the making or rules to carry out the purposes of the Act and cl. (a) of Sub-Section (2) of that section specifically authorizes the specification of diseases or conditions to which the provisions of S.3 shall apply. It is the first sub-section or S. 16 which confers the general rule making power i.e., it delegates to the administrative authority the power to frame rules and regulations to subserve the objective and purpose of the Act. Clause (a) of the second sub-section is merely illustrative of the power given under the first sub-section; Emperor V. Sibnath Bannerjee, 72 Ind App 241: (AIR 1945 PC. 156). Therefore sub-section 2 (a) also has the same object as sub-section (1) i.e. to carry out the purposes of the Act. Consequently when the rule making authority specifies conditions and diseases in the schedule' it exercises the same delegated authority as it does when it exercises powers under Sub-s. (1) and makes other rules and therefore it is delegated legislation. The question for decision then is, is the delegation constitutional in that the Administrative authority has been supplied with proper guidance. In our view the words impugned are vague, parliament has established no criteria, no standards and has not prescribed any principle on which a particular disease or condition is to be specified in the Schedule. It is not slated what facts or circumstances are to be taken into consideration to include a particular condition or disease. The power of specifying disease and conditions as given in S.3.(d) must therefore be held to be going beyond permissible boundaries of valid delegation. As a consequence the Schedule in the rules must be struck down. But that would not affect such conditions and disease which properly fall within the four clauses of S.3 excluding the portion of cl. (d) which has been declared to be unconstitutional. In the view we have taken it is unnecessary to consider the applicability of (1909) 8 CLR 626.” (Para 34) “We are of the opinion therefore that the words “or any other disease or condition which may be specified in the rules made under this Act” confer uncanalised and un-controlled power to the Executive and are therefore ultra vires. But their being taken out of cl. But their being taken out of cl. (d) of S.3 does not affect the constitutionality of the rest of the rest of the clause or section as they are severable; 1957 SCR 930 : (S) AIR 1957 SC 628 )." (para 35) 7.3.8. In the case of Delhi Transport Corporation Vs. D.T.C. Mazdoor Congress, 1991 Supp (1) SCC 600 at p. 716 & 718 (Paras 230 & 237) it was observed as follows : "There is need to minimise the scope of the arbitrary use of power in all walks of life. It is inadvisable to depend on the good sense of the individuals, however high-placed they may be. It is all the more improper and undesirable to expose the precious rights like the rights of life, liberty and property to the vagaries of the individual whims and fancies. It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness dues not go with the posts, however high they may be. There is only a complacent presumption that those who occupy high posts have a high sense of responsibility. The presumption is neither legal nor rational. History does not support it and reality does not warrant it. In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolite to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law. (Para 230) “The reliance placed on the decision in Ram Krishna Dalmia Vs. Justice S.R. Tendolker to support the above theory is also according to me not correct. As has been pointed out there, the Commissions of Inquiry Act, 1952 the validity of which was challenged on the ground of unguided powers to institute inquiries, was not violative of Article 14 because the long title and section 3 of the Act had contained sufficient guidelines for exercise of the power Section-3 has stated that the appropriate Government can appoint a commission of Inquiry only for the purpose of making inquiry into any definite matter of public importance. It is in the context of this guideline in the Act, that it is further stated there that even that power is to be exercised by the Government and not any petty official. It is in the context of this guideline in the Act, that it is further stated there that even that power is to be exercised by the Government and not any petty official. Hence a bare possibility that the power may be abused cannot per se invalidate the Act itself. The proposition of law stated there is to be read as a whole and not in its truncated form. The authority does not lay down the proposition that even in the absence of guidelines, the conferment of power is valid merely because the power is to be exercised by a high official. It must further be remembered that in this case, the contention was that although the appropriate Government was given power to appoint commission of inquiry into any definite matter of public importance, the delegation of power was excessive since it was left to the Government to decide for "itself in each case what constituted such matter. The court repelled the argument by pointing out that 'definite matter of public importance' constituted sufficient guideline to the government. It was not, therefore, a case of no guideline but of the absence of details of the guideline." (Para 237) 7.3.9. In the case of Naraindas Indurkhya v. The State of Madhya Pradesh and others, A.I.R. 1974 S.C. 1232, it was observed as follows: "That takes us to the challenge based on Article 14 of the Constitution. This Article ensures equality before law and strikes at arbitrary and discriminatory State action. Where State Government exercises any power, statutory or otherwise, it must not discriminate unfairly between one person and another. Every State action must be guided by certain norms and standards which are in themselves not objectionable as being discriminatory in character. If power conferred by statute on any authority of the State is vagrant and unconfined and no standards or principles are laid down by the statute to guide and control the exercise of such power, the statute would be violative of the equality clause, because it would permit arbitrary and capricious exercise of power, which is the antithesis of equality before law. Such a case, would fall within the second proposition laid down by this Court in Jyoti Pershad v. Administrator for The Union Territory of Delhi, (1962) 2 SCR 125 at P. 137 : ( AIR 1961 S.C. 1602 )." "The enactment or the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated. This would happen when the legislature vests a discretion in an authority, be it the Government or an administrative official action either as an executive officer or even in a quasi-judicial capacity by a legislation which does not lay down any policy or disclose any tangible or intelligible purpose thus clothing the authority with unguided and arbitrary powers enabling it to discriminate." (Para 21) 7.4.1. I shall now consider the merits of the said contention and for this purpose I shall examine in details the true scope, effect and implications of the different provisions of the said Act, particularly having regard to the fact that this is a taxing statute. For this purpose, I shall examine all the relevant provisions of the said Act with particular reference to Section 3 stated to be the charging section - read with the definition section and the Schedule In the said Act. 7.4.2. However, at the outset I may make one thing dear. To ascertain what is the charging provision or taxing event, the Court must look into not merely the section which is called 'charging section', but it must look into all the provisions of the Act. In this context at the outset, attention of Mr. Sibal, learned Advocate appearing on behalf of the State in these series of cases, was drawn to an argument sought to be advanced before another Division Bench or this High Court in the case of Central Coalfields Ltd. v. State of Bihar, reported in A.I.R. (1991) Patna 27 : 1992 (1) PLJR 573 by the learned Advocate General appearing un behalf of the State - respondents therein, that in order to judge legislative competency for levy of tax, the Court is required only to identify the subject matter of the tax and the same is to be found in the charging section of any statute and for that purpose it is impermissible to look into any other provision of the statute. This contention was rejected by the Court and, in my opinion, rightly. Such contention is against the elementary principles of interpretation laid down by the various decisions of the Supreme Court including the decisions referred to in this judgment. However, I need not deliberate on this matter any further having regard to the fact that, upon clarification sought for that effect, Mr. Sibal has frankly submitted before us that he does not support such contention made on behalf of the State in the said case. On the contrary, for obvious reasons, he has invited the Court to look into all the provisions of the Act, and not merely section 3, the charging section, to ascertain the true scope and effect thereof. 7.4.3. From a detailed examination of the said Act, it appears as follows: (a) Section 1 (2) - It is made clear by this provision that this Act applies only to “Forest Land” in the State of Bihar’ and no other land in the State. No material has been placed before us or any argument advanced, why only the Forest lands have been singled out and not all lands have been brought within the scope of the Act when the object is "reclamation" and "rehabilitation" because of certain "user" and "voiding". Whether "voiding" is subject and/or object, why "voiding" of only forest lands have been included but voiding of non-forest lands have been left out of the scope of the said Act, there is no explanation either by way of intrinsic or extrinsic evidence. No intelligible differentia appears from the Act or otherwise. Classification for legitimate purpose is permissible but not discrimination. There is nothing to show that there way any reasonable classification. (b) Section 2 – Definition : (i) Section 2(a) - "Appellate Authority” within the meaning of Section 7 (1) is to be appointed by the State. No qualification or the kind of persons to be appointed or their tenure or termination of tenure has been specified anywhere in the Act. The appeal is from the order of the Collector or anyone appointed as Collector for the purpose of the Act. Anyone can be appointed as Appellate Authority. It may be an appeal from “Caeser to Caeser’s wife as pointed out by the Supreme Court in the case of Ram and Shyam Company Vs. State of Haryana, AIR (1985) SC 1147 (at page 1151). Anyone can be appointed as Appellate Authority. It may be an appeal from “Caeser to Caeser’s wife as pointed out by the Supreme Court in the case of Ram and Shyam Company Vs. State of Haryana, AIR (1985) SC 1147 (at page 1151). (ii) Section 2 (b) & (h) : The tax is being imposed for "mechanical" and "biological" reclamation (section 3 (1) which expressions have been defined in sections 2 (b) and 2 (h) respectively of the said Act. So far as the "biological reclamation" is concerned, it means "restoration of vegetal cover by such means as may be deemed suitable". What is meant by "vegetal cover"? What kind of "vegetal cover" is contemplated? This is vague and uncertain. This has not been defined. There is no guideline. Further it means restoration of vegetal cover by "such means as may be deemed suitable". What is meant by "suitable"?, "Suitable" to whom and by what process? This is vague and uncertain. It confers naked and arbitrary power for which there is no guideline. It is not merely "such means as may be suitable” but it is such means as may be “deemed” suitable. A “deeming” clause? How or on what basis it is to be deemed? By whom it is to be deemed” Again “mechanical reclamation” has been defined in Section 2(h) as “restoring the original contour as far as possible and/or filling up of void”. What is meant by “original contour” and how it is to be ascertained particularly having regard to the fact that it refers to “voiding” and “use” in the past without any limit. Then it is stated “as far as possible”. Who is going to determine the same and how? Is it personal satisfaction or subjective because no guideline has been specified. Further, it mentions restoring such original countour "and/or" filling up the void. By such definition in 2 (h) there may be restoring the "original contour" without any question of filling up the "void" being involved. There can be question of filling up the "void" without the question of restoring the "original contour" being involved. There can be both the question of "contour" and "void". So far as the "filling up of void" is concerned, the question of "filling up" of the "void" is vague, because definition or "void" in section 2 (o) is very wide. There can be question of filling up the "void" without the question of restoring the "original contour" being involved. There can be both the question of "contour" and "void". So far as the "filling up of void" is concerned, the question of "filling up" of the "void" is vague, because definition or "void" in section 2 (o) is very wide. In respect of all these aspects this is not only vague and uncertain but also inconsistent. This also confers naked and arbitrary power without any guiding policy. (iii) Section 2 (c) - "Collector" has been defined to include not only the Collector of the District or any Additional Collector or any one otherwise performing their duties, but also "any other officer specially empowered as Collector by the State Government under this Act". Therefore it authorises the State Government to appoint any "officer" who is neither Collector or otherwise performing' the duties of the collector but who is to be appointed as Collector for the purpose of this Act only. There is no restriction or minimum qualification or condition laid down for such appointment. The expression “officer” does not mean any thing. It may include any person holding any post under the State Government This is very important because under Section 4, it is the Collector who has been empowered to levy, collect and realize the tax at the rate mentioned in the Schedule. I have pointed out the complicated nature of the charging section read with the definition section and the Schedule. Accordingly, the “Collector” under the Act is a very important authority. This confers an arbitrary power to appoint any Government employee as “Collector” though all such matters are left for his decision. (iv) Section 2(e) – “Forest land” means any land notified as under any Act “and/or” recorded as forest in revenue record. How is such "recording" going to be ascertained or challenged for the purpose of this Act? (v) Section 2 (n) - "Vegetative density" is defined as certain percentage of a unit area or the forest land "not receiving sunlight due to effective tree growth land "not receiving sunlight due to effective tree growth or green canopy". This is vague and uncertain. (c) Section 3 (1) (i) This is supposed to be the charging section. It does not mention the "subject" of tax. It mentions the supposed "object" of tax. This is vague and uncertain. (c) Section 3 (1) (i) This is supposed to be the charging section. It does not mention the "subject" of tax. It mentions the supposed "object" of tax. It is "supposed" because though the alleged purpose or subject of the tax is specified but not how it is to be achieved. In any event it is not clearly specified upon what it is sought to be levied. The object of the imposition but not the subject of imposition has been mentioned. As pointed out in Callagher v. Lywn (1937) A.C. 863 (at page 870) which was cited with approval by Supreme Court in Assistant Commissioner of Urban Land tax Act, Madras v. Buckingham & Carnatic Co. Ltd. reported in AIR (1970) SC 169) (Para 7) and in Orissa Cement v. State of Orissa, AIR (1991) SC 1676 (Para 54) the Court must not look only at the object of the legislation. An Act may have a perfect lawful object e.g. to promote the health of the inhabitants, but may seek to achieve that object by invalid methods e.g. direct prohibition of any trade with a foreign country. An Act may also have nothing to do with the object. It is mentioned that the tax, called the "Bihar Restoration and Improvement of Degraded Forest Land Tax”, shall be levied "for mechanical and biological reclamation of Forest land and for rehabilitation of the same". This is the "object" and not the "subject" of the Act. (ii) The tax is "called" a particular tax by name, but it is not stated that such tax shall be imposed on land. (iii) What is meant by "Degraded Forest" has not been defined in the Act. It cannot be treated as synonymous with "void" within the meaning of section 2 (o), as it is made clear from sub-section (2) of section 3 and the Schedule itself that the tax is not only for "voiding" but also for "user" without any "voiding". Such "voiding" as such is also not attracted but "voiding" by way of indulging in certain activities as specified in section 3 (2) (b). Further, "mechanical reclamation" within the meaning of section 2 (h) is not confined to filling up of "void" but also restoring the "original contour" "as far as possible". Such "voiding" as such is also not attracted but "voiding" by way of indulging in certain activities as specified in section 3 (2) (b). Further, "mechanical reclamation" within the meaning of section 2 (h) is not confined to filling up of "void" but also restoring the "original contour" "as far as possible". Moreover, "voiding" is relevant only so far as the liability of the occupier is concerned but not the "user". (iv) Section 3 (1) does not stop at "mechanical" and "biological reclamation". It also refers to "rehabilitation" What is meant by "rehabilitation" has not also been defined or otherwise provided for in the Act. (v) The name of the Act is stated in the Title and section 3 (1) as the "Bihar Restoration and Improvement of Degraded Forest Land Tax Act". It is stated therein that this is a tax for mechanical and biological reclamation of forest land for rehabilitation so that the land is reclaimed "as far as possible". What is meant by as far as possible". To what Extent? By whom? "Whose satisfaction"? Is it subjective or objective? What is the guideline? Nothing is provided therein. (vi) The proviso to the sub-section (1) confers power on the Government to amend the Schedule by rules "as and when considered necessary". This confers a wide power. No guideline has been laid down as to when such power of amendment is to be exercised. The power to "amend" includes, under the general principles, which is well settled, the power to add, vary, omit or substitute the existing provision. This is important from another aspect. The Schedule does not only specify the rate. It prescribes different rates for different types of "voiding" and different types of "use". In view of such proviso, by exercise of the Rule making power the State Government can change the rate by way of increasing the same to any extent they like without any limit. Further apart from the rate they can introduce any change they like in respect of any other matter specified in the Schedule. The whole concept, basis, condition, requirements and the measures of liability for ascertaining the liability for fixation of rate can be 'amended' in exercise of such rule making power conferred by the said Proviso. The whole schedule can be replaced by another schedule making 'a wholesale change. The whole concept, basis, condition, requirements and the measures of liability for ascertaining the liability for fixation of rate can be 'amended' in exercise of such rule making power conferred by the said Proviso. The whole schedule can be replaced by another schedule making 'a wholesale change. An executive authority cannot be authorised to modify either existing or future law in any essential feature. Rajnarain v. Chairman P.A. Committee, AIR (1954) S.C. 569. (b) Re: Section 3 (2) : (i) So far as Section 3 (2) (a) is concerned it is payable by every user allowed by the State Government to use forest land for non-forest purpose. However, when such non-forest use has not been allowed by the State Government there is no liability of such user. This is a permissible classification with intelligible differentia but pure and simple discrimination. More over, it covers such user for any period in the past viz. whether 2 or 3 or 5 or 10 or 20 or 50 years back. (ii) So far as section 3 (2) (b) is concerned, it is said that such tax shall be payable by every occupier "responsible for creating void/voids by indulging in any developmental activities including mining". What is meant by "responsible"? How the responsibility is to be ascertained? Is it subjective or objective? What overt or other act would fix such responsibility. Further, under section 2 (h) "occupier" means "a person in possession of an area of excavated and voided land". How that responsibility is to be ascertained has not been mentioned. It is not a question of every occupier being made liable but it is only those occupier "responsible" for creating "void" in the manner specified is made liable. Accordingly the question of "responsibility" is an important aspect which has not been dealt with. What is meant by "indulging". What is meant by "development activities", This is vague. It is not defined. (c) Re : Section 3 (3) : According to sub-section (3) (a) of Section 3, the rate of taxation given against serial numbers (a), (b) and (c) of the schedule shall apply to the forest land already voided "immediately before the date of commencement of the Act", apart from any existing work of voiding or any future voiding. (c) Re : Section 3 (3) : According to sub-section (3) (a) of Section 3, the rate of taxation given against serial numbers (a), (b) and (c) of the schedule shall apply to the forest land already voided "immediately before the date of commencement of the Act", apart from any existing work of voiding or any future voiding. It does not merely state that it applies to all forest lands already voided before the date of the commencement of the Act but only those voided "immediately" before the date of commencement of the Act. What is meant by "immediately"? It is not to be treated as a surplusage. It does not mean all past "voiding" but only 'immediate" past voiding. But what is "immediate" has not been specified. Such voiding in the past might have been one day, one year, 10 years or 20 years back. On the other hand, the word "immediately" cannot mean any indefinite period. It only means a very short period. What is this short period? (d)- Re : Section 3 (4) : This confers power on the State Government to frame Rules to impose a "lump sum tax” "in addition" to the tax under sub-section (1). This power to impose an additional tax, over and above the tax referred to in sub-section (1) which refers to the Schedule; confers a very wide power for which there is no guidance and no schedule. I have considered (his aspect of the matter specifically in details elsewhere in this judgment. (e) Re : Section 4 : It confers the power on the Collector to levy, collect and realise the tax. Sub-section (2) of Section 4 empowers him to cause a demand notice to be served for deposit of the tax. There is no provision for submission of any return, issue of any notice, any provision for survey, assessment, enquiry of any kind in spite of the fact that liability for the same depends on various factors as described in the body of the Act and the Schedule. This aspect of the matter has been dealt with hereinabove. (f) Re : Section 12 : Power to make Rules. So far as the rule making power is concerned, this is an unusual rule making power. This aspect of the matter has been dealt with hereinabove. (f) Re : Section 12 : Power to make Rules. So far as the rule making power is concerned, this is an unusual rule making power. Generally, in an Act, in sub-section (1) of the section conferring rule-making power, such power is conferred to make rules to carry out the purpose and object of the Act and the sub-section (2) thereof only refers to some specific matters which are only by way of illustration and not exhaustive. The conferment of power in the Act in favour of the executive to make rules is to carry out the object and purpose as laid down in the Act itself. It is ancillary and subsidiary to the main provisions which are provided in the Act itself. Essential and main provisions are specified in the Act and the Rules are framed merely to give effect to the same by way of providing the details. Legislature cannot delegate uncanalised and uncontrolled power to the Executive : Hamdard Dawakhana v. Union of India, AIR (1960) SC 554 (Para 35). An executive cannot be authorised to modify any law in any essential feature Rajnarain Singh v. Chairman P.A. Committee, AIR (1954) SC 569. However, in the present case, under the rule making power, the State Government has not only been conferred to make rules as usual and normal for carrying out all or any of the purpose of the Act, but the State Government has also been authorised to provide for, by way of rules, fees, taxes, lump sum taxes and its enhancement This enable the State Government to impose fees, taxes and lump sum taxes including the power to enhance the same to whatever extent they like by way of executive fiat. There is no limit to such power. Moreover in exercise of such rule making power, even the 'guiding policy' can be laid down in the form of 'guideline'. This is my opinion is beyond the permitted power of delegated legislation. This confers arbitrary and uncanalised power. In this context another aspect of the matter may be pointed out. The rules made under this Act are not required to be laid before the Legislature. If there had been any such provisions, then there would have been no question of abdication, as the delegate is kept under strict vigilance and control : D.S. Garewal Vs. In this context another aspect of the matter may be pointed out. The rules made under this Act are not required to be laid before the Legislature. If there had been any such provisions, then there would have been no question of abdication, as the delegate is kept under strict vigilance and control : D.S. Garewal Vs. State of Punjab, AIR 1959 SC 512 , M.K. Papiah Vs. The Excise Commissioner, (1975) 1 S.C.C. 492 (g) Schedule- It is clear that clause (a), (b) & (c) under Col. 1 relates to liability of "occupier" under section 3 (2) (b) and clauses (d), (e) & (f) refer to the liability of "user" under section 3 (2) (a) of the Act. Col. l relates to certain "use" and "activities" and Col. 2 specifies certain rates depending on such "use" and/or such "activity". I have considered this aspect of the matter in details in another context. It may be pointed out, however, that though in respect of "mechanical open cast excavation and underground excavation/subsidence area" there is a maximum limit of impost specified in the Schedule, there is no such limit of impost specified in the Schedule, there is no such limit specified in respect of "non-mechanical" of open-cast excavation though all of them come under one class i.e. "voiding" by "occupiers" within the meaning of Section 3 (2) (b). There is intelligible differentia. Further different rates have been provided for "voiding" by different methods. If the purpose is "reclamation" for "voiding" what difference does it make how the voiding has been done'? Why different rates for different manner followed though the result is the same - which is "voiding". The object of the Act seems to be reclamation of forest land and rehabilitation so that the land is reclaimed as far as possible. Biological reclamation means restoration of vegetal cover and mechanical reclamation means restoring the original contour. However, vegetal cover and original contour may not be the same. However, in the Schedule the rate is on the basis of activity carried on for' creating void in (a), (b) and (c) but this is without any relation to or having any connection with the nature of excavation or subsidence. The extent of void is not the criteria. The tax does not depend on the nature of excavation. However, in the Schedule the rate is on the basis of activity carried on for' creating void in (a), (b) and (c) but this is without any relation to or having any connection with the nature of excavation or subsidence. The extent of void is not the criteria. The tax does not depend on the nature of excavation. The rate is on the area basis and not on the basis of vegetal cover or original contour. So far as non-forest use is concerned, it is based on density irrespective of the nature of the use though reclamation depends on the nature of the use. The measure of density is not based on measure of vegetal cover which requires to be restored or original contour which requires to be restored. Inspite of such purported object, the extent of vegetal cover affected or original contour affected are not taken into consideration. Only the manner in which such vegetal cover or original contour was affected has been taken into consideration. There does not seem to be any connection between the measure of activity and the extent of damage which requires reclamation us proposed. In all forest lands there is difference in the nature of the trees, number of the same, height of the same and rate of growth of the same. These are relevant to the question of reclamation of vegetal cover. However, in the schedule of the Act rate of tax are uniform according to the method of excavation and not on the basis of vegetal cover or original contour which requires restoration. Rate of taxation depends on the area of the land and not on the extent, nature and manner of voiding. It is well-settled that discrimination takes place not only when equals are treated unequally but "also when unequals are treated equally. Here having regard to the purported object of such taxation, which does not specify how such object is to he achieved - unequals have been treated equally. Even the maximum limit does not depend on the nature of voiding. This is not a permissible classification. There is no intelligible differentia for the same. 7.4.4. For the aforesaid reason, in my opinion, the said Act confers a naked and arbitrary power which is also vague and uncertain. Accordingly, the Act is violative of Article 14 of the Constitution. 8.1. This is not a permissible classification. There is no intelligible differentia for the same. 7.4.4. For the aforesaid reason, in my opinion, the said Act confers a naked and arbitrary power which is also vague and uncertain. Accordingly, the Act is violative of Article 14 of the Constitution. 8.1. I shall next take up separately the question of "machinery" for levy and imposition of tax. 8.2. The question is whether a proper machinery has been provided for imposition of tax in the present case. It is well settled that it is mandatory not only to prescribe the Assessing Authority but to provide for machinery for adjudication of dispute regarding the amount of tax. Reference may be made in this connection to the following: 8.3.1 In the case of K.T. Moopil Nair v. State or Kerala, AIR 1961 SC 552 it was observed as follows : "... Ordinarily, a taxing statute lays down a regular machinery for making assessment of tax proposed to be imposed by the statute. It lays down detailed procedure as to notice to the proposed assessee to make a return in respect of property proposed to be taxed, prescribes the authority and the procedure for hearing any objections to the liability for taxation or as to the extent of the tax proposed to be levied, and finally, as to the right to challenge the regularity of assessment made, by recourse to proceedings in a higher Civil Court. The Act merely declares the competence of the Government to make a provisional assessment, and by virtue of S.3 of the Madras Revenue Recovery Act, 1864, the land-holders may be liable to pay the tax. The Act being silent as to the machinery and procedure to be followed in making the assessment leaves it to the Executive to evolve the requisite machinery and procedure. The whole thing from beginning to end, is treated as of a purely administrative character, completely ignoring the legal position that the assessment of a tax on person or property is at least of a quasi-judicial character. Again, the Act does not impose an obligation on the Government to undertake survey proceedings within any prescribed or ascertainable period, with the result that a land-holder may be subjected to repeated annual provisional assessments on more or less conjectural basis and liable to pay the tax thus assessed. Again, the Act does not impose an obligation on the Government to undertake survey proceedings within any prescribed or ascertainable period, with the result that a land-holder may be subjected to repeated annual provisional assessments on more or less conjectural basis and liable to pay the tax thus assessed. Though the Act was passed about five years ago, we were informed at the Bar that survey proceedings had not even commenced. The Act thus proposes to impose a liability on land-holders to pay a tax which is not to be levied on a judicial basis, because (1) the procedure to be adopted does not require a notice to be given to the proposed assessee; (2) there is no procedure for rectification of mistakes committed by the Assessing Authority; (3) there is no procedure prescribed for obtaining the opinion of a superior Civil Court on questions of law, as is generally found in all taxing statutes, and (4) no duty is cast upon the Assessing Authority to act judicially in the matter of assessment proceedings. Nor is there any right of appeal provided to such assessees as may feel aggrieved by the order of assessment." (Para 9) 8.3.2. The law laid down in K.T. Moopil Nair’s case was followed in the case of Rai Ramkrishna v. State of Bihar, AIR 1963 SC 1667 wherein it was held, that where the taxing statute provides no procedural machinery for assessment and levy of tax, the courts would be justified in striking down the impugned statute as unconstitutional. 8.3.3. In the case of Union of India & others v. The Tata Iron & Steel Company Limited, AIR 1975 SC 769 , it was observed as follows : "The short question therefore, that arises for consideration is whether in the above background the High Court was right in interfering with the orders under Article 226 of the Constitution. It is not for the High Court no for this Court to come to a conclusion on facts as to whether the product can truly come under the description of skelp. That undoubtedly would require some evidence be taken at the level of the taxing authority provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip. That undoubtedly would require some evidence be taken at the level of the taxing authority provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip. In the mass of documents filed before us and the extensive arguments addressed at the bar with regard to the definitions culled from various dictionaries, handbooks and authorities, we are not at all surprised that the three authorities came to the same conclusion by depending upon their own chosen tests. A particular type of strip may according to certain definitions be skelp and according to others not skelp. This, however, cannot be permitted in a fiscal legislation which by all standards should adopt a clear definition of an excisable item which is incapable of giving rise to a confounding controversy as in this case unless the matter is beyond doubt in view of the popular meaning or meaning ascribed to the term in commercial parlance. In absence of any clear criterion to determine what is skelp and not strip, no useful purpose would be served by even remanding the matter to the Excise authorities for a decision after taking necessary evidence. It is only when a taxing law provides for a clear and unequivocal test for determination as to whether a particular product would fall under strip or skelp it may be possible for the authorities to address itself to the evidence submitted by the parties in order to come to a decision on the basis of the test. This is, however, not possible in this case in view of the fact that there is no identifiable standard. The best way is to define the product for the purpose of excise duty in appropriate terms demarcating clearly the distinction between the two terms." (Para 9) 8.3.4. In the case of Jaswant Theatre Vs. State of Punjab, 1987 (168) I.T.R., 38, a Single Judge of Punjab & Haryana High Court made a reference to a Division Bench decision of the same High Court, which followed the decision of the Supreme Court in C.I.T. Vs. Ajax Products Ltd., (1965) 55 I.T.R. 741 wherein the Supreme Court made the following observations : “The notification provides regarding imposition of tax at the rate of 10 paise per sold ticket which was later reduced to 5 paise. 11 prescribes only the rate of assessment and not the system. Ajax Products Ltd., (1965) 55 I.T.R. 741 wherein the Supreme Court made the following observations : “The notification provides regarding imposition of tax at the rate of 10 paise per sold ticket which was later reduced to 5 paise. 11 prescribes only the rate of assessment and not the system. It also does not prescribe as to who was liable to pay the tax, i.e., whether the person who purchases the ticket is liable to pay the tax or the person who sells it. It is an established principle of law that the subject cannot be taxed unless the charging provision clearly imposed the obligation (see Ajax Products Ltd's case (1965) 55 ITR 741 (SC). It is also not clear from the notification that in case of dispute regarding the amount of tax, as to who will determine the same. The matter has been dealt with above at a considerable length. In view of the above observations, the notification is liable to be struck down." On the basis of the same, it was held by the learned Single Judge that it is mandatory not only to prescribe the assessing authority but to provide for the machinery for adjudication of a dispute regarding the amount of tax which may arise between the assessee and the Municipal Committee. 8.3.5. In the case of Assistant Commissioner of Urban Land Tax & others Vs. Buckingham & Carnatic Co. Ltd. reported in A.I.R. 1970 SC 169 while rejecting the contention that no machinery was provided for determining the market value and accordingly the impugned Act was ultra vires Art. 14, the Supreme Court observed as follows: "We proceed to consider the argument that no machinery is provided for determining the market value and the provisions of the new Act therefore, violate Article 14 of the Constitution. The argument was stressed by Mr. V.K.T. Chari that the guidance given under the 1963 Act has been dispensed with and the Assistant Commissioner is not bound to take into account, among other matters, the sale price of similar sites, the rent fetched for use and occupation of the land the principles generally adopted in valuing land under the Land Acquisition Act and the compensation awarded in recent land acquisition proceedings. We see no justification for this argument. The procedure for determining the market value and assessment of urban land is described in Chapter III of the new Act. We see no justification for this argument. The procedure for determining the market value and assessment of urban land is described in Chapter III of the new Act. Section 6 provides that the market value of the urban land "shall be estimated to be the price which in the opinion of the Assistant Commissioner, or the Tribunal, as the case may be, such urban land would have fetched or fetch, if sold in the open market on the date of the commencement of this Act." It was said on behalf of the petitioners that the opinion which the Assistant Commissioner has to form is purely subjective and may be arbitrary. We do not think that this contention is correct. Having regard to the language and context of Section 6 of the new Act we consider that the opinion which the Assistant Commissioner has to form under that section is not subjective but should be reached objectively upon the relevant evidence after following the requisite formalities laid down in Sections 7 to 11 of the new Act. Instead of the Assistant Commissioner classifying the urban land and determining the market value in a zone, the present Act requires a return to be submitted by the owner mentioning the amount which, in the opinion of the owner, is the market value of the urban land. On receipt of the return, if the Assistant Commissioner is satisfied that the particulars mentioned are correct and complete, he may determine the market value as given by the owner of the land. If he is not satisfied with the return, he shall serve a notice to the owner asking him to attend his office with the relevant evidence in support of his return. After hearing the owner and considering the evidence produced, the Assistant Commissioner may determine the market value. Incase the owner fails to attend or fails to produce the evidence, the Assistant Commissioner is empowered to assess the market value on the basis of an enquiry made by him. Section 11 prescribes the procedure for determining the market value when the owner fails to furnish a return as required under Section 7. Incase the owner fails to attend or fails to produce the evidence, the Assistant Commissioner is empowered to assess the market value on the basis of an enquiry made by him. Section 11 prescribes the procedure for determining the market value when the owner fails to furnish a return as required under Section 7. The Section requires the Assistant Commissioner to serve a notice on the owner specifying amongst other things the amount, which in the opinion of the Assistant Commissioner, is the correct market value and directing the owner to attend in-person at his office on a date specified in the notice or to produce any evidence on which the owner may rely. After hearing such evidence as the owner may produce and considering such other evidence as may be required, the Assistant Commissioner may fix the market value. The proceeding before the Assistant Commissioner is judicial in character and his opinion regarding the market value is reached objectively on all the materials produced before him. Section 20 provides for an appeal by the assessee objecting to the determination of the market value made by the Assistant Commissioner to a Tribunal within thirty days from the date of the receipt of the copy of the order. The Act requires that the Tribunal shall consist of one person only who shall be a judicial officer not below the rank of a Subordinate Judge. By section 30, the Board of Revenue is empowered either on its own motion or on application made by the assessee in this behalf, to call for and examine the records of any proceedings under the Act (not being a proceeding in respect of which an appeal lies 'to the Tribunal under Section 20), to satisfy itself as to the regularity of such proceeding or the correctness, legality or propriety of any decision or order passed therein, and if it appears to the Board of Revenue that any such decision or order should be modified, annulled, reversed or remitted for reconsideration, it may pass order accordingly. Section 32 enables the urban land tax officer, or the Assistant Commissioner, or the Board of Revenue or the Tribunal to rectify any error apparent on the face of the record at any time within three years from the date of any order passed by him or it. Section 32 enables the urban land tax officer, or the Assistant Commissioner, or the Board of Revenue or the Tribunal to rectify any error apparent on the face of the record at any time within three years from the date of any order passed by him or it. Section 33 confers power on the Assistant Commissioner to take evidence, to require discovery and production of documents and to receive evidence on affidavit. Thus, the Act envisages a detailed procedure regarding submission of returns, the making of an assessment after hearing objection and a right to appeal to higher authorities. We are hence unable to accept the contention of the petitioners that the provisions of section 6 of the new Act are violative of Article 14 of the Constitution". (Para 9) 8.4.1. The first question is, if there is no proper machinery laid down or guideline for the same is laid down in the Act itself, then whether by framing Rules, the position can be improved. In my opinion, it cannot. Otherwise it would amount to leaving it to the executive to evolve the procedure and machinery which cannot be permitted as pointed out in Moopil Nair's case. The Rules are to be framed by the executive merely for the purpose of carrying out the object of the Act. The principle and scope of delegated legislation is well settled. Essential legislative functions cannot be delegated to the rule-making authority. By rules unlimited power cannot be conferred. That would be beyond the scope of permissible delegated legislation. Details may be provided for in the Rules but the essential provisions have to be made in the Act itself and it cannot be left to the executive to exercise such powers in exercise of its rule making power. I have considered the scope and validity of the Rule making power conferred by the Act separately. 8.4.2. There is another aspect of the matter. In the case of Deep Chand Vs. State of U.P., AIR 1959 SC 648 (Para 13) the Supreme Court pointed out the distinction between Art. 13 (1) and Art. 13 (2), that is, a pre-Constitution law and a post-Constitution law. It was pointed out that if a post-Constitution Act violates the fundamental rights guaranteed by Chapter III of the Constitution, then it is a nullity from its inception. It was pointed out that if a post-Constitution Act violates the fundamental rights guaranteed by Chapter III of the Constitution, then it is a nullity from its inception. The prohibition imposed by Art. 13(2) goes to the root of the matter and limits the State’s power to make law; the law made inspite of the prohibition is a still-born law: Accordingly, if the Act is violative of the provisions of the Constitution, it cannot be saved by the Rules framed under the Act. 8.4.3. There is another aspect of the matter. Enforcement of the provisions of the Act is not postponed till the Rules are framed. The Act can be enforced without the Rules. Reference may be made in this connection to the decision of the Supreme Court in Sudhir Chandra Nawn Vs. Wealth Tax Officer, AIR 1969 SC 59 (Para 10). Moreover, a statutory rule cannot enlarge the meaning of the section; if a Rule goes beyond what the section contemplates, the rule must yield to the statutes - Central Bank of India v. Their Workmen, AIR 1960 SC 12 (para 20). 8.5.1. Accordingly I shall consider the relevant provisions of the Act itself, without referring to the Rules, to ascertain whether proper machinery has been provided therein. In this connection I may point out that no fresh rules were framed under this Act but the old rules framed under the ordinance, which was replaced by this Act, is treated as Rules framed under this Act. Apart from setting out the relevant portions of the Act itself, I have also analysed the different provisions in details and it need not be repeated. To put it shortly Section 3 (1) merely provides for levy, assessment and collection of tax at the rates specified in the schedule. Clauses (a), (b), (c), (d), (e) and (f) of the Schedule only specifies different rates for assessment of the tax. Accordingly, it is clear that no machinery is provided in sub-section (1) of section 3 itself. Section 3 (2) merely specifies by whom such tax is payable. No machinery is provided therein. Section 4 (1) only provides that the Collector shall levy, collect and realise the tax at the rate mentioned in the Schedule. How it is to be levied has not been provided. Section 3 (2) merely specifies by whom such tax is payable. No machinery is provided therein. Section 4 (1) only provides that the Collector shall levy, collect and realise the tax at the rate mentioned in the Schedule. How it is to be levied has not been provided. Sub-section (2) of section 4 only provides that the Collector shall cause a demand notice to be served on the occupier/user of the forest land who shall within 30 days of service of' the notice, deposit the tax in the State Treasury. Section 8 provides for recovery of money due as an arrear of land revenue. The question of demand notice and recovery of money arise only after assessment proceedings are completed. These are the only provisions regarding imposition of the tax in the Act. These cannot be described as "machinery". In effect no. "machinery" at all has been provided for in the Act. How such tax is to be assessed, nothing has been specified in the. Act, particularly having regard to various complicated questions of fact involved finding in respect of which has to be arrived at before such tax can be assessed. I have considered this aspect of the matter in details while considering the different aspects of the said Act in the context of the argument based on Art. 14. I may give only one example of the same. The object of the Act is sought to be reclamation of forest land and rehabilitation so that the land is reclaimed as far as possible. Reclamation is Biological and mechanical. Biological reclamation means restoration of vegetal cover. Mechanical reclamation means restoring the original contour. There is no machinery contemplated to ascertain what was the original vegetal cover and what was the original contour. There is no provision for filing any return in the Act itself. There is no provision for hearing at all at the assessment stage though all such various aspects have to be determined. In this context reference may be made to provision for appeal as provided by Section 7 which provides for a hearing. However, such provisions for appeal, with hearing, cannot cure the defect of absence of such provision at the assessment stage. In this context reference may be made to provision for appeal as provided by Section 7 which provides for a hearing. However, such provisions for appeal, with hearing, cannot cure the defect of absence of such provision at the assessment stage. Reference may be made in this connection to Mysore State Road Transport Corporation v. Mirja Khasim Ali Beg, AIR 1977 SC 747 at page 754 (Paras 14 and 15) where it was pointed out that the initial defect in the original order cannot be cured by proceeding in appeal therefrom. As pointed out in Serajuddin and Co. v. State of Orissa, AIR 1974 Calcutta 296 at page 300 (Para 16): "If the foundation of a structure is removed, the superstructure cannot stand and must collapse". Having regard to the constitution of the "appellate authority" under the Act, the "cliché of "appeal from Caesar to Caesar's wife" should also be kept in mind. In this connection reference may be made to Ram and Shyam Company v. State of Haryana, AIR 1985 SC 1147 at p. 1151 (Para 9). There is no provision for any survey. The tax is imposed on 'forest land' only but there is no provision to ascertain whether it is 'forest land' or not. The definition of 'forest land' empowers the authorities to record a land as 'forest land' in revenue record though it is not notified as such by any Act and though it was not previously treated as' such in revenue records. There is no provision for questioning the existing revenue record or further recording. No provision for any enquiry or hearing has been made in this regard. It is clear from section 3 read' with the schedule that the rate specified in (d), (e) and (f) of the Schedule relates to tax payable by ‘user’ under section 3 (2) (a) and that the rate specified in (a), (b) and (c) of the Schedule relates to ‘occupier’ under Sec. 3(2) (b) but the ascertainment of the particular rate to be applicable involve various factors. There is no provision for surveyor any enquiry to ascertain the nature or area of the land "voided" or "used". 8.5.2. So far as the liability of the 'user' for using the land for 'non-forest purpose' is concerned, it involves various questions. 'Forest purpose' has not been defined but 'forest use' has been defined. There is no provision for surveyor any enquiry to ascertain the nature or area of the land "voided" or "used". 8.5.2. So far as the liability of the 'user' for using the land for 'non-forest purpose' is concerned, it involves various questions. 'Forest purpose' has not been defined but 'forest use' has been defined. In this context it may also be pointed out that "non-forest use" within the meaning of this Act is not the same as "non-forest use" within the meaning of Forest (Conservation) Act, 1980. However, proceeding on the basis that 'use' and 'purpose' under this State Act means the same, still some questions remain for determination : (i) whether one is the 'user' within the meaning of Sec. 2 (m) in this context it is important to remember that wide definition of "user" including user in the indefinite past, apart from "proposed" user. (ii) Whether it is actually used for non-forest purpose within the 'meaning of Sec. 2 (f) read with 2 (i) ; (iii) for the purpose of assessment of tax it would depend on the rate to be applicable i.e., whether it would attract (d) or (e) or (f) of the Schedule. To ascertain the rate to be applicable the question of the extent of 'density' has to' be ascertained. Whether it is of some particular 'vegetal density' has to be ascertained for the purpose of fixing the rate. It has to be ascertained whether it is a forest land having "zero density', that is, a forest land having only bushes and grass but no tree within the meaning of Sec. 2 (f) read with clause (b) of Schedule or whether it is of certain 'vegetative density' within the meaning of sec. 2 (n). Over and above the same, whether it is receiving 'sunlight due to effective tree growth or green canopy' - whatever may be the meaning of the same - has to be ascertained. Further, the extent of the area has to be ascertained because the tax is to be paid according to the area. Total area has to be ascertained. There is no provision for survey. There is no machinery laid down to ascertain any of the same. 8.5.3. Further, the extent of the area has to be ascertained because the tax is to be paid according to the area. Total area has to be ascertained. There is no provision for survey. There is no machinery laid down to ascertain any of the same. 8.5.3. So far as the liability of the 'occupier' within the meaning of Sec. 3 (2) (b) read with Sec. 2 (k) is concerned, the rates specified in clauses (a), (b) and (c) of the Schedule would apply. There is no procedure or machinery laid down so as to ascertain the various aspects involved. I shall give some instances : (i) Whether it is a 'voided' land within the meaning of S.2 (o) has to be ascertained. This imolves ascertainment of various aspects. Whether it is a 'left over' forest land. Whether it is a land from where soil, any mineral or rock or ore or anything being fastened with the earth has been removed. Whether it has been removed for non-forest purpose or transported or, dumped at a place other than the place from where the same was taken. (ii) For the purpose of S.3 (2) (b) it is to be ascertained who is the occupier who is 'responsible' for creating such 'void'. It has also to be ascertained whether he had 'indulged' in any 'development activities including mining'. (iii) Further, for the purpose of fixing rates as prescribed in the Schedule, various factors have to be ascertained. Whether it is or was a case of ‘excavation;’ if ‘excavation’ whether it was a case of “open cast excavation” or “underground excavation” or whether it is a case of “subsidence area”. Then again it has to be ascertained whether. It is a case of “mechanized” open cast excavation or a case of “non-mechanised” open cast excavation. The rate of tax also depends on “M” of land involved. How to measure the same. No machinery is provided to ascertain the same. 8.6. Accordingly, in my opinion, no proper “machinery” or “methodology” has been provided in the Act without which imposition of a tax is not permissible. Provision for taxation must be made in clear terms with proper machinery set out. Otherwise it cannot be treated as a levy or collection by authority of law within the meaning of Art. 265. 8.6. Accordingly, in my opinion, no proper “machinery” or “methodology” has been provided in the Act without which imposition of a tax is not permissible. Provision for taxation must be made in clear terms with proper machinery set out. Otherwise it cannot be treated as a levy or collection by authority of law within the meaning of Art. 265. Power to tax is a sovereign power and is legislative in character and it has to be within the Constitutional limitations : Yadlapati Vs. State of A.P., AIR 1991 S.C. 704 at p.710 (Para 7). Such lack of adequate “machinery” violates the provisions of Article 14. Further, principle of natural justice is part of Art. 14 Violation of the same amounts to violation of the provisions of Art. 14 : Union of India and others Vs. Ex Constable Amrik Singh, (1991) 1 S.C.C. 654 , D.K. Yadav Vs. J.M.A. Industries Ltd., (1993) 3 S.C.C. 259 , Cantonment Board Dinapore Vs. Taramoni Devi, (1992) Suppl. 2 S.C.C. 501, Delhi Transport Corporation vs. D.T.C. Mazdoor Congress, (1991) Suppl. (1) SCC 600, Maneka Gandhi case, (1978) 1 SCC 248 , Union of India vs. Tulsiram Patel, (1985) 3 SCC 398 at 476 (Para 95). 8.7. For the aforesaid reasons I hold that the said Act is unconstitutional and void as it does not provide adequate machinery for levy and imposition of the tax payable. 8.8. The next question is whether it can be saved by the Rules even if the Rules can be taken into consideration for this purpose. I have set out the relevant portion of the Rules hereinbefore, Even if the said Rules can be referred to for this purpose, these Rules do not improve the situation. The Rules merely provide for filing of Returns in Form I "showing the area of forest land voided and/or being voided and the one of forest land used and/or being used for non-forest purpose" (Rule 3), the effect of failure to file return (Rule 4), assessment of tax (Rule 5), manner of serving notice (Rule 6) and filing of appeal (Rule 7) and nothing else. It does not provide for anything else. It does not provide for any machinery, as referred to hereinbefore, which is required before such tax may be assessed or payable or recoverable. The Rules and the Return proceeds on same assumption. It does not provide for anything else. It does not provide for any machinery, as referred to hereinbefore, which is required before such tax may be assessed or payable or recoverable. The Rules and the Return proceeds on same assumption. As a matter of fact Rule 5 empowers the Collector to assess the tax after satisfying himself with the particulars stated in the return filed under Rule 3 or after ascertainment of the area under Rule 4 when the return is not filed. This "satisfaction" also is subjective. No machinery provided. No survey/inspection is contemplated. No hearing is contemplated even if the Collector is not satisfied himself. No enquiry is contemplated if the Collector is not satisfied. Accordingly, even if the present Rule can be looked into for this purpose, in my opinion, still there is absence of proper "machinery" for imposition and levy of the tax. 8.9. The fact that there is no machinery provided in the Act would be borne out by the following amongst others. Annexure 3 to the petition of the India Aluminium Co., (CWJC 1790 of 1992 (R) is memo no. 603/DC dated 18th May, 1992 whereby a sum of Rs. 227.70 lac was imposed on the Company by way of tax under this Act. They were required to deposit this amount within a period of 30 days of the receipt of the notice failing which they were informed that recovery proceedings would be started against them under the Public Demand Recovery Act. The said notice mentions that the Company has been granted mining lease in Serengdag area which includes 61.65 hectares of forest land out of which 5.06 hectares have been used by Indian Aluminium Company for mining purposes. How this has been ascertained it has not been mentioned. It has also been mentioned therein that a report from the Divisional Forest Officer, Ranchi Forest Division has been received to the effect that the Company had used 5.06 hectares of forest area having density of 0.5. Only on the basis of such a report from D.F.O., Ranchi Forest Division that such a huge sum of money being Rs. 227.70 lacs has been imposed as tax on the Company. Similar notices have been issued to Hindustan Aluminium Co. (C.W.J.C. No. 2366 of 92 (R) whereby on the basis of a report from the D.F.O. that Hindustan Aluminium Co. 227.70 lacs has been imposed as tax on the Company. Similar notices have been issued to Hindustan Aluminium Co. (C.W.J.C. No. 2366 of 92 (R) whereby on the basis of a report from the D.F.O. that Hindustan Aluminium Co. has used 50.00 hectares of forest area having density of 0.5, that the sum of Rs. 2,250.00 lac has been imposed as tax. So far as Bokaro Steel Ltd. (C.W.J.C. No. 740 of 1993 (R) is concerned demand notice under section 4 was issued for the period for 1966-67 to 1992-93, imposing Rs. 5,46,48,000/- as tax. In the case of M/s Tribeni Prasad Rungta and another (C.W.J.C. No. 3823 of 1992 (R) notice was issued whereby Rs. 43,98,300/- was claimed. In the case of M/s Ratanlal Prakash Chand (C.W.J.C. No. 3320 of 92 (R) Rs.38,25,900/- was claimed. 9. Additional tax 9.1. I shall now take up the question of the constitutional validity of Sub-section (4) of Section 3 of the said Act which purports to confer power on the State Government to impose a lump sum tax by way of framing Rules, in addition to the tax imposed under sub-section (1). Having regard to my" conclusion regarding the validity of the main tax, it is not strictly necessary to go into the question of validity of this power of imposition of additional tax. This cannot exist unless the main imposition exists. However, in my opinion, even if the main taxation be held to be valid and competent, this power to impose additional tax by framing rules, cannot in any event be supported. 9.2. This is the most peculiar and unusual taxing provision I have ever come across. This violates all the canons of permissible taxation. It not only violates all the principles relating to taxation, but also all other provisions of the Constitution particularly Part III thereof. Firstly, power has been conferred to impose such tax by rules to be framed by the State Government. Taxation is not by legislature but by executive fiat under delegated legislation. Secondly, this is a lump-sum tax in addition to the tax under Sub-section (1). There is no indication of any "subject" or "object" of this additional tax. The Schedule has not been made applicable in respect of the same. The rate or measure of such liability has not been indicated; who is liable to pay such tax and under what circumstances is not indicated. There is no indication of any "subject" or "object" of this additional tax. The Schedule has not been made applicable in respect of the same. The rate or measure of such liability has not been indicated; who is liable to pay such tax and under what circumstances is not indicated. The most peculiar aspect of the matter is that under section 4, the Collector has been conferred with the power to levy, collect and realise tax at the rate mentioned in the Schedule. However, the Schedule relates only to sub-sections (1), (2) and (3) of section 3 but not to sub-section (4). Accordingly there is no provision as to how, by whom, to what extent and how such lump-sum additional tax shall be levied or collected or realized. How is it to be imposed? There is not even any pretence of any machinery set up for such imposition or levy or collection. 9.3. The other peculiar feature being that both the object or subject of the tax being silent, it is beyond the legislative competency of the State Legislature. The State has no general or residuary power regarding taxation. Only certain specific entries confer such power. It is a fraud upon the legislative power to tax. 9.4. In my opinion, it is not permissible taxation within the meaning of Article 265. This confers naked and arbitrary power on the executive. It is violative of Article 14. It is violation of Article 19 (1) (g) and not protected by Article 19 (6) of the Constitution. This is violative of Article 301 and not protected by Article 304 (b). In this context it may be pointed out that there is no limit or any rate specified. This is violative of the principles of permissible delegated legislation. This violates the principles of natural justice. 9.5. However, I need not labour on this aspect of the matter in details as no attempt was made even by Mr. Sibal, appearing on behalf of the State, to support such imposition under the said sub-section (4). He did not offer any argument in support of this conferment of power. 9.6. Accordingly, I hold that sub-section (4) of Section 3 is, in any event, clearly illegal, void and unconstitutional. 10. Article 19 (1) (g) read with Article 19 (6). 10.1. Sibal, appearing on behalf of the State, to support such imposition under the said sub-section (4). He did not offer any argument in support of this conferment of power. 9.6. Accordingly, I hold that sub-section (4) of Section 3 is, in any event, clearly illegal, void and unconstitutional. 10. Article 19 (1) (g) read with Article 19 (6). 10.1. So far as the argument based on Article 19 (1) (g) is concerned having regard to the conclusion arrived at as aforesaid, it is not necessary to deal with this matter again in details. In view of my finding as above particularly my finding that no machinery has been laid down for such levy and impost, to that extent such taxation, in my opinion, amounts to unreasonable restriction violative of the fundamental right to carryon trade and business guaranteed by Article 19 (1) (g) and not protected by Article 19 (6) at least from procedural point of view. 10.2. There is another aspect of the matter to be considered in this context. This is not really a taxation but "expropriation". Where it appears that the taxing statute is confiscatory, the courts would be justified in striking down the impugned statute as unconstitutional (Rai Ramkrishna v. State of Bihar, AIR 1963 SC 1667 ). If the land is excavated by mechanised open cast process, the taxation may go upto 55 lakhs per hectare. One hectare is about 3 bighas or 60 kathas. Accordingly, it comes to about Rs. 90,000/- per katha. If it is non-mechanised open-cast excavation, rate per katha is fixed but there is no upper limit. If it is underground excavation or subsidence it is 45 lakhs per hectare. So far as the liability of the user under section 3 (2) (a) is concerned, where (d) of schedule applies it is 125 lakhs per hectare for 50 years or Rs. 2.50 lakhs per hectare for one year. I have also referred to the amount of tax imposed in several cases. This is also unreasonable from substantive point of view. 11. Article 301 read with Article 304 (b). Having regard to my finding as above, it is not necessary to deal with the question of Article 301 read with Article 304 (b) separately in details. Taxation laws are not outside the purview of Part XIII of the Constitution. The imposition in this cannot be termed as regulatory or compensatory measure. 11. Article 301 read with Article 304 (b). Having regard to my finding as above, it is not necessary to deal with the question of Article 301 read with Article 304 (b) separately in details. Taxation laws are not outside the purview of Part XIII of the Constitution. The imposition in this cannot be termed as regulatory or compensatory measure. Having regard to the nature of the State Act, it directly and immediately interferes with the flow of inter-State trade and commerce within the meaning of Article 301. Further, it is so excessive and prohibitive that it becomes an impediment in the free flow of trade and commerce. It is confiscatory in nature. No facility is provided by this Act. Concept of reasonableness of restriction under Article 304(b) being the same as under Article 19 (6), this is also violative of Article 304 (b). Reference may be made in this connection to Atiabai Tea Co. v. State of Assam, AIR 1961 SC 232 , State of Madras v. Nataraja Mudalier : AIR 1969 SC 147 , India Cement v. State of A.P., AIR 1988 SC 567 , State of Tamilnadu & Ors. v. M/s Sangeetha Trading Co. & others, (1993) 1 SCC 236 and other decisions. 12. Without any intention to summarise the conclusions arrived at as aforesaid, I shall specify some of the salient features of the same: (1) Such Ordinance could not be promulgated and the Act could not be enacted as the State Legislature did not have the legislative competency to enact the State Act for the following reasons : (a) In pith and substance it is not a ‘tax on land or building’ which the meaning of Entry 49, List II, which is the only entry relied upon on behalf of the State in support of the legislative competency of the same. (b) In any event, in view of the provisions of the MMRD Act, 1957, enacted under Entry 54, List I, and the Rules framed thereunder, it is on ‘occupied field’ and the State Legislature was denuded of its power to legislate the said Act under Entry 49, List II. (c) So far as Forest (Conservation) Act, 1980 is concerned, it is doubtful whether in view of the provisions of the said Act, such tax for such purpose could be Imposed by the State Act. (c) So far as Forest (Conservation) Act, 1980 is concerned, it is doubtful whether in view of the provisions of the said Act, such tax for such purpose could be Imposed by the State Act. (2) The Act and the Ordinance are also unconstitutional and void for the following reasons : (a) The material provisions of the said Act and the Ordinance are vague and uncertain and confers naked and arbitrary power. (b) No adequate machinery has been provided in the said Act for the purpose of levy, imposition and assessment of the tax introduced. (c) Section 3(4) of the Act permitting imposition of Additional tax is in any event unconstitutional and void. (3) The Act and the Ordinance are violative of Articles 19 (1) (g) and not saved by Art. 19 (6) of the Constitution of India. (4) The Act and the Ordinance are violative of Art. 301 read with Art. 304 (b) of the Constitution. 13. Accordingly, it is declared that the “Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992”, and the earlier Ordinance to that effect, is unconstitutional and void. It is further declared that all action taken under the said Act, Ordinance and the Rules framed thereunder, are unconstitutional and void. There will be a writ of mandamus directing the respondents and their Officers not to give effect to the said Act or the ordinance or Rule or any order or direction or instruction or notification issued thereunder in any manner whatsoever. 14. All these applications are allowed accordingly. There will be no order as to costs. I agree.