1. This is an appeal against the dismissal of the Writ Petition No. 3668 of 1977 which was filed for quashing a portion of the order in G.O.Ms. No. 2625, Revenue dated 27.12.1976 and for appropriate directions.
2. The appellant is a Company owning certain lands in Thiruvottiyur village. The Assistant Commissioner of Urban Land Tax in his proceedings dated 17.8.1976 determined the total area of the land held by the appellant and the market value thereof as on 1.7.1971 and levied urban land tax in the sum of Rs. 93,873.77 and made a demand for payment of the same for the period from 1st July, 1975. This assessment order is questioned on the ground that in determining the market value as on 1.7.1971 for the purpose of determining the urban land tax payable by the appellant, the Assistant Commissioner should have taken the value as on 1.7.1971 at double the value as on 1.7.1963 as in the case of the urban land within the city of Madras applying G.O.Ms. No. 2625, Revenue dated 27.12.1976. It may be mentioned, however, that under this Government Order this principle of adopting the double value as on 1.7.1963 is to be applied only in respect of urban lands 'as far as the city is concerned'. It is because of the restrictive application of this double valuation of the market value as on 1.7.1963, in order to determine the market value as on 1.7.1971 only to the Madras City is concerned, the writ petitioner questioned the validity of the Government Order and contended that the restriction of the applicability of the method of valuation for the City of Madras alone is arbitrary, unreasonable and has no relation to the nexus sought to be achieved and that therefore it offends Article 14 of the Constitution and has to be quashed.
3.The learned Counsel for the appellant did not want the entire Government Order to be quashed, but only that portion which restricts its application to the City of Madras, is to be omitted so as to make it applicable to all the areas. That portion of the impugned Government Order which calls for consideration reads as follows:
The market value of land for purposes of assessment to the tax will continue to be determined as on 1.7.1971. As far as Madras City is concerned, however, in every case where the revised market value as on 1.7.1971 is more than double the value as on 1.7.1963, the value for purposes of assessment to tax will be limited to double the 1963 value.
This Government Order is stated to have been made for granting a relief in urban land tax in exercise of the powers under Section 27 of the Act.
4. Before we deal with this main contention, we may refer to the provisions of the Act itself. Originally the Madras Urban Land Tax Act, 1963 was enacted which levied Urban Land Tax with effect from 1.7.1963. The constitutional validity was questioned in this Court and a Division Bench of the Court by a judgment reported in Buckingham & Carnatic Co,, Ltd, v. State of Madras : (1966)2MLJ172 struck down the Act as violative of Article 14 of the Constitution of India. Subsequently the Act was re-enacted as Tamil Nadu Act 12 of 1966 with certain modifications. The validity of this Act also was questioned. Though a Full Bench of this Court in the decision reported in V. Pattabiraman v, Asst. Commissioner, Urban Land Tax, : AIR1971Mad61 held that certain provisions of the Act are ultra vires, yet the Supreme Court, on an appeal, however, reversed that judgment and held that the entire Act is valid and the judgment of the Supreme Court is reported in Asst, Commissioner of Urban Land Tax v. B, & C. Co., Ltd. ( : 75ITR603(SC) .
5. Tamil Nadu Act 12 of 1966 received the assent of the President on 9th September, 1966, and published in the Fort St. George Gazette on 10th September, 1966. However, Section 1(2)(a) brought into force all the provisions except Sections 19, 47 and 48 with effect from 1st day of July, 1963. The charging Section 5 provided that subject to the other, provisions contained in the Act, there shall be levied and collected for every fasli year commencing from the date of commencement of the Act namely 1.7.1963, a tax on each urban land (hereinafter referred to as the urban land tax) from the owner of such urban land at the rate of 0.4 per centum of the market value of such urban land. Section 6 provided that for the purpose of this Act, the market value of the urban land shall be estimated to be the price which such urban land would have fetched, or fetch, if sold in the open market on the date of the commencement of the Act. The original Act 12 of 1966 enabled the Government by notification to bring into force the provisions of the Act to any other Municipal town or any township or any areas specified in the notification and within 16 kms of the City of Madras or such Municipal town or township. It may be seen from the provisions as it was originally enacted, the owners of urban land in the City of Madras are liable to pay urban land tax on and from 1.7.1963 with reference to the market value as on that date. However, in view of the pendency of the writ petition in which the validity of the provisions were questioned in this Court, which was the subject-matter of the decision in v. Pattabhiraman v. Asst. Commissioner Urban Land Tax, : AIR1971Mad61 the provisions were not given effect to fully at that time itself. As already stated a Full Bench of this Court in the decision in Pattabhiraman v. Asst. Commr. Urban Land Tax : AIR1971Mad61 struck down certain provisions in the judgment dated 10th April, 1968. The Judgment of the Supreme Court holding the validity was dated 11th April, 1969. In the light of the decisions certain provisions were also amended by the Tamil Nadu Urban Land Tax Amendment Act, 1971. This Act in particular amended the charging Section 5 and introduced Section 5-A, among other amendments. In the place of the rate of tax at 0.4 per centum, the charging section provided that the tax shall be at the rate specified in the schedule. The schedule gave a graded rate of tax with reference to the total extent of urban land held by the owner as against the uniform rate of 0.4 per centum originally provided. Section 5-A further provided that the tax shall be levied with reference to the urban land in the City of Madras with effect from the 1st day of July, 1971 as against the original levy with effect from 1.7.1963. However, Clause (2) of Section 5-A stated that for the purpose of determining the amount of urban land tax under Sub-section (1) of Section 5-A, the market value as on the 1st day of July, 1963, shall be the basis. Thus though the levy itself is made to be effective from 1st day of July, 1971, the basis of the market value to be adopted for the purpose of such taxation so far as the lands in the city are concerned, was the 1st day of July, 1963. In 1975, the Act was further amended by Tamil Nadu Act 49 of 1975. This Act introduced Clause (1-A) in Section 1 and Section 5-C among the various other consequential provisions in the main Act. By Clause (1-A), it was provided that the Act shall be deemed to have come into force on the 1st day of July, 1975 in the area comprised within sixteen kilometres of the outer limits of the City of Madras (hereinafter referred to as the Madras City Belt Area). Provided however, that for the purpose of determining the amount of urban land tax under the Act in respect of the City Belt Area, the market value as on the 1st day of July, 1971, shall be the basis. Corresponding to Section 1-A a main charging section also was introduced in Section 5-C levying urban land tax in the Madras City Belt Area with effect from the 1st day of July, 1975. Sub-section (2) of Section 5-C further provided that for the purpose of determining the amount of urban land tax under Sub-section (1) in respect of Madras City Belt Area, the market value as on the 1st day of July, 1971 shall be the basis. The schedule also correspondingly was amended providing for different rates for residential and non-residential purposes and for the City Belt Area.
6. It may be seen from the various provisions that the Act as it is, applied to the urban land in the City of Madras with effect from the 1st day of July, 1971. But in determining the tax, the market value as on the 1st day of July, 1963 shall be the basis. So far as the Madras City Belt Area is concerned, the tax is levied with effect from the 1st day of July, 1975 and the market value as on the 1st day of July, 1971, shall be the basis. This was with reference to the history of the legislation itself and the various stages in which it has undergone amendments. Naturally, therefore, the charging provision is given effect to with reference to various urban areas on different dates and necessarily therefore the market value has to be ascertained with reference to the different dates. It is clear that there is no question of discrimination and that the differentiation is historical and not by reason of any hostile discrimination. We may also mention that the appellant had not questioned the constitutional validity of Section 5-A or Section 5-C which alone makes a distinction in ascertaining the market value for the purpose of levy of tax.
7. The impugned Government Order is stated to have been made under Section 27(1) which reads as follows:
27(1). The Government, if satisfied that the payment of urban land tax in respect of any class of urban lands or by any class of persons will cause undue hardship, they may, subject to such rules as may be made in this behalf, by order, -
(a) exempt such lands or persons from the payment of the urban land tax, or
(b) reduce the amount of such urban land tax whether prospectively or retrospectively.
We are not sure as to how the principles to be adopted in determining the market value for the purpose of levy of tax could be brought within those provisions of Section 27 of the Act. If at all, the owners of the Madras City Urban Lands may be able to contend that they are liable to pay tax as on 1.7.1963 and not as on 1.7.1971 or at double the value as on 1.7.1963. But that question does not arise for consideration. Suffice it to say that there is nothing discriminatory so far as the Madras Belt Area owners are concerned. The Act provided as already stated, that they are liable to pay tax with effect from 1.7.1971. That is a clear provision under the Act itself and that could not be modified. This Government Order also did not purport to modify that provision. No question of discrimination therefore could arise on the facts and circumstances of this case. The discrimination, if any, as already stated in bringing into force on different dates and applying different market values with reference to different dates was due to the fact that the Act was made applicable to the Urban Land in the City of Madras on different dates and that with reference to the lands in the Madras City Belt Area on a later date. There is therefore no substance in the contention of the learned Counsel for the appellant that there was any invidious discrimination in the impugned Government Order offending any of the provisions of the Constitution of India. The writ appeal accordingly fails and it is dismissed. But there will be no order as to costs.