Honniah, J.
(1) The questions that arise for decision in these petitions are substantially the same.
(2) The petitioner in W.P. 1165/63 is carrying on business in Ginning and Pressing Cotton in the name and style of Shah Manikantha Lakhamsey Ladha at Gadag. The factory is situated in C.T.S. Nos. 3775/2, 3779/2 and 3780/1 and 2 measuring about 8 acres and assessed to non-agricultural assessment at Rupees 111-33. The petitioner in W.P. 1166/63 is the Managing Partner of Rao Saheb Beedi Manvi Ginning and Pressing Factory situated in C.T.S. Nos. 3778/1 and 3778/2/1 and 43 measuring about 6 acres in Gadag town. This area is assessed at Rs. 236-69. The petitioner in W.P. 1167/63 is the owner of a Ginning and pressing factory at Gadag, which is situated in C.T.S. No. 6706/50-51 measuring about 14, 663 Sq. yards and assessed to non-agricultural assessment at Rs. 38. He also is the owner of C.T.S. No. 6706/31 assessed to non-agricultural assessment at Rs. 1-10. The petitioner in W.P.1168/63 is the Gadag Ginning and Trading Co., Ltd. which is situated in C.T.S. 3787/49 measuring 1acre and 39 guntas, assessed to non-agricultural assessment at Rs. 37-02. The petitioner in W.P. 1198/63 is the owner in possession of C.T.S. No. 3855/7/6B in Gadag town measuring 1 acre 38 guntas and assessed to non-agricultural assessment at Rs. 45-1-0. The petitioner in W.P. 1119/63 is the Gadag Mahalakshmi Pressing and Ginning Co., Ltd., which is located in C.T.S. No. 3790/1/7 measuring 11,518.5 sq. yards assessed to non-agricultural assessment at Rs. 178.10. The petitioner in W.P 2619/26isthe Gadag-Betageri Municipal Borough and was paying annually non-agricultural assessment of Rs. 388.
(3) Under the old rules, the maximum rate of non-agricultural assessment of class I lands was 2 pies per square yard which works out at Rs. 50 per acre. The then Government of Bombay modified this by Revenue Department Resolution No. 5143/33 dated 25-6-1937 by dividing Gadag Betageri area into 4 zones by fixing the following rates:--
I Zone Rs. 3-2-0 Per 100 sq. yardsRs. 150/- roughlyper acre.II Zone Rs. 2-1-0 Per 100 sq. yardsRs. 100/- roughlyper acre.III Zone Rs. 1-9-0 Per 100 sq. yardsRs. 75/- roughlyper acre.IV Zone Rs. 1-0-0 Per 100 sq. yardsRs. 50/- roughlyper acre.
These rates were in force in Gadag-Betageri City surveyed area from 1-5-1938 till they were amended as per order No. L. and D. 1280, dated 27-1-1959. These rates were fixed with reference to the rising in the market value of the lands.
(4) After re-organisation, in 1958 the State Government thought that it was necessary to raise the non-agricultural assessment with respect to non-agricultural lands in conformity with the rise in the market value of such lands. Therefore, they published draft rules providing the new maximum and minimum rates of non-agricultural assessment, in the Gazette on 27-2-58 and called for objections, if any. After taking into consideration the various objections and the prevailing market value of non-agricultural lands, the Government promulgated the new rules by notification dated 27-3-1958 after following the procedure laid down in Section 214 of the Bombay Land Revenue Code, 1879, to be hereinafter referred to as the 'Code'. That notification reads as follows:--
'Notification No. R.D.36 LEA 57, dated Bangalore 27th March 1958.
In exercise of the power conferred by sub-sections (1) and (2) of Section 214 of the Bombay Land Revenue Code 1879(Bombay Act V of 1879), as in force in Bombay area, the Government of Mysore hereby makes the following amendments to the Bombay Land Revenue Rules 1921, the draft of the said amendments having been previously published as required under sub-section (3) of the said section, in Notification No. RD 36 LEA 57 dated 21st February 1958 in Section 2-C of Part IV of the Mysore Gazette, dated 27th February 1958.
AMENDMENTS.
In the said rules:-
1.Fr Rule 81, the following rules shall be substituted, namely;
'81(1) Rate of non-agricultural assessment:
The rate of non-agricultural assessment leviable shall be as follows:--
(a) in the case of land situated in any village, the population of which does not exceed 5,000 the rate of non-agricultural assessment leviable shall be not less than the Agricultural assessment leviable on such land and not more than Rs. 40 per acre.
(b) in the case of land situated in any village or town other than a town coming under Clause (c) of this rule, the population of which exceeds 5,000, the rate of non-agricultural assessment leviable shall be not less than Rs. 40 per acre and not more than Rs. 80 per acre.
'(c) in the case of land situated in any city or town referred to in the Table to Rule 100, the rate of non-agricultural assessment leviable shall be not less than Rs. 150 per acre and not more than Rs. 250 per acre.
(d) non-agricultural assessment will be levied at uniform rates for the entire extent converted for non-agricultural purposes, irrespective of the extent actually built upon.
(2) Where unalienated land assessed or held for purposes of agriculture is subsequently used without permission for any other purposes, the rate of non-agricultural assessment leviable shall be one and one-fourth of the rates specified under sub-rule (1)'. (G.N.R.D. No. Rd 10 CCF, 60 dated 22-8-1960 DC's No. REV dated 5-11-1960.
81(3) The D.C. with the previous sanction of the Divisional Commissioner which shall be given for only specified reasons to be recorded in writing may levy on any land.
99. Limit of line leviable for appropriating agricultural land for non-agricultural purposes with permission:--
(1) The limit of fine leviable under Section 65 may at the discretion of the Deputy Commissioner, be fixed at any sum not exceeding twenty-five times the assessment of the land actually appropriated to any purpose unconnected with agriculture, but shall in no case exceed Rs. 2000 per acre. 100. Fine leviable under Section 65: Notwithstanding anything contained in Rule 99, the amount of fine leviable under section 3 of the Table below in respect of the areas specified in the corresponding entry of column thereof:--
TABLE
S.No Place Rate of fine per acre 1 2 3 1 Hubli City and Belgaum City, Gadag Dharwar Bijapur and Ranibennur Five Hundred Rupees
(2) Fine will be levied at uniform rates for non-agricultural purposes, irrespective of the extent actually built upon.
4. In rule 101, for the word and figures 'Rule 100' the words and figures 'Rule 99 or 100 as the case may be' shall be substituted.
5. In rule 103, for the word and figure 'Rule 100' the words and figures 'Rule 99 or 100 as the case may be' shall be substituted.
By order and in the name of the Government of Mysore
R. Balasubramanyam,
Secretary to Government
Revenue Department.
N.A. Assmt. at the rate higher than the maximum fixed under sub-rule (1) to respect of any village, town or city in which such land is situated in cases where the land is either situated on an exceptionally favourable position or where it is used temporarily for N.A. use or where the purpose for which it is used is of a special kind such higher rate shall not however exceed 50% of the estimated annual rental value of the land when put to N.A. use in question.'
(5) By this notification amendments were made to Rules 81, 99 and 100 of the Bombay Land Revenue Rules, 1921, to be hereinafter referred to as the 'Rules'. Then the Legislature passed Act 13 of 1961, called the 'Mysore Land Revenue (Surcharge) Act 1961' applicable to the new State. This Act was amended by Act 31 of 1963 and the provisions of this Act were made applicable from 1st of April 1962. As per this Act, no surcharge is payable in respect of any land for which non-agricultural assessment is payable. The petitioners, therefore, cannot complain against the provisions of this Act as they do not affect them.
(6) In accordance with the amended rules, the Deputy Commissioner, Dharwar, passed the Order No. LND 1280, dated 27-1-1959 levying non-agricultural assessment in respect of lands situated in Hubli City and the towns of Dharwar, Gadag and Ranebennur, the rates being not less than Rs. 150/- and not more than Rs. 250/- per acre. The said order is as follows:
'Subject: N.A. Assessment in Hubli City and Towns of Dharwar, Gadag and Ranebennur under Amended R. 81(1)(c) LR Rules.................................Revision of.
No. LND 1280 Dharwar,
27-1-1959.
Read: (1) Mysore Government Notification No. 36 LEA/57 dated 27-3-1958.
(2) Proposals of the Tahsildars and Commercial Tax Officers of Dharwar, Hubli, Gadag and Ranebennur received through the respective Asst. Commissioners for fixing revised rates of NA Assessment.
ORDER
As per amended R. 81(1)(c) of LB rules the rates of non-agricultural assessment to be levied in respect of the lands situated in Hubli City and the towns of Dharwar, Gadag and Ranebennur shall be nor less than Rs. 150/- per acre and not more than Rs. 250/- per acre. To have uniformity in levying the non-agricultural assessment in the said areas within the range of rates sanctioned by Government, the Deputy Commissioner is pleased to fix the rates of N.A. Assessment for Hubli City and the towns of Dharwar, Gadag and Ranebennur as shown below, in place of the previous rates, taking into consideration, the present zonal rates fixed according to the importance of the places and the proposals of the respective Officers.
Name of the City or Town Zone No. Locality S. Nos or CTS Nos Existing rate per 100 sq yards Revised rate per acre
1 2 3 4 5 6
Gadag I Area consisting of whole of Shahapur eth and Gadag Gaonthana (excluding CTS No. 711, 712, 716, 718, 814, 810, 805, 796 to 801, 3596, 3594, 3606, 3605, 3707, 3608/1, 3495, 3487, 3486, 3485, 3481, 3480, 3473, 3212, 3211, 3199, 3197/B and Sy Nos. 1 to 8, 20 to 32, 873, 874, 889, 890, 892 to 899, 906, 600, 604, 5 to 607 of Gadag extending up to Gadag. Dambal road on its East, Palala-Badami Rd to its North and Bhisma tank road to its South. 3-2-0 250/- per acre
II Area consisting of the whole of Betageri Gaithana (Excluding Maharwada, Horgeri and Korwargeri) Railway yard excluding a portion of the same bounded by Sy. Nos 434, 436, 437, 472 to its East and by Nos.476, 179/B and 489/A to its west and Sy Nos.471 to its South, Sy.Nos.19, 19-A and 19-B of Gadag and Sy Nos.467 468 466-A, 466-B 465, 469-A, 469-B, 476 to 478, 479-A, 479-B and 480 to 485, 490 to 495, 496-A, 496-B, 497-A, 497-B, and 480 to 485, 490 to 495, 496-A, 496-B, 497-A 498 and 499, 488, 432, 180 to 187 20 part, 21 224 of Betageri. 2-10 200/-
III Area consisting of Sy Nos 173 to 175, 216 to 219, 320 part, 598 599, 601, 602, 603, 608 to 613 875, 876, 872 part 884 part 885 to 887 of Gadag and CTS Nos. 711 712 716, 718, 814, 810, 805, 796 to 801, 596, 3594, 3605 to 3601/1, 3495, 3485 to 3487, 3473, 3430 and 3481, 3211, 3212, 3197 and 3199 of Gadag. The area consisting of Sy.Nos.1 to 7-A, 7-B, 7-C, 7-D, 8-B, 9-A to D, 10,11,14 part 15, 15-A, 15-B, 16-A and B, 176 to 179 188, 202 to 205 207, 208 Part 209 A part, 222 part and 223 of Betageri, Holigeri, Maharwada and Korwargalli of Betageri and also CTS Nos.6077/5 and 6, 6600 part of Betageri and area consisting of Sy. Nos 232 233, 234 Part 231-A, 231B, 423 part 428, 421 part 420 part 419 part 417 part 416 part 434 to 439 457 to 464 470 to 472 and Southern portion of Railway yard lying between Sy Nos. 434 436 437 and 472 to its East Sy. Nos 471 to its South 1-9-0 175/-
IV All the remaining lands i.e. sites situated within the Municipal limits of Gadag-Betageri which are not included in the CTS limits of Gadag-Betageri town 1-0-0 150/- per acre
Sd/- V S Hiremath
Deputy Commissioner Dharwar.'
The contentions of the petitioner are that:
(1) Section 214(2)(b) and (h) of the Code, in the basis of which Rules 81(1)(a), (b), (c), (d), (2) and (3) and also 99 and 100 have been framed amounts to excessive delegation of legislative power and therefore, it is ultra views of Article 245 of the Constitution.
(2) Rule 81 is violative of Article 265 of the Constitution;
(3) as Rule 81 confers arbitrary and unguided power on the Deputy Commissioner to levy non-agricultural assessment at varying rates that Rule is violative of Article 14 of the Constitution; and
(4) the power conferred under Rule 81 being a quasi judicial power, and the rule-making authority having not regulated the manner in its exercise, the same is liable to be struck down.
(7) Before considering the contentions raised by the petitioners, it is necessary to set out the main features of ryotwari system of land tenure and the basis of assessment of lands. It is a historical fact that from a very ancient times, long before the Mogul Expire the Kings or Rajas and other lesser Chiefs were accustomed to take from the cultivators of the soil in their dominions a certain share of the produce of every cultivated acre, unless, as a special favour that share was remitted. The earliest literary mention of the State share is in Sanskrit books especially in the 'Laws of Manufacture'. Manu tells us that Raja has need of land revenue to maintain his armies and administration and he is therefore entitled either to 'one-sixth' or 'one-eighth' or 'one-twelfth' of the gross produce. According to his description of the fiscal administration of an ancient Hindu State the main source of the State revenue was the share of gross produce of all land varying according to the soil and the labour necessary to cultivate it. The revenue was collected not from individual cultivators but from the community represented by the headman. The aggregate harvest was collected into a common heap and the share of the State was set aside by the headman before the general distribution. (Encyclopedia Britannica). Between the village headman and the king was a chain of Civil Officers consisting of Lords of single village, Lords of 10 villages, Lords of 100 villages and Lords of 1000 villages. These were responsible for the collection of revenue for which they were remunerated by fees in kind, by a portion of the King's share of the produce or by holding land revenue from lands by virtue of their office. This plan of raising a revenue is obviously associated with the early kingdom resulting from the Aryan immigration. Among non-Aryan tribes there was a curious method of giving the ruling chief an income in a somewhat different way; at first they allotted a portion of the land in each village group for the Chief; and this was cultivated by slaves or by some special arrangement. But from whatever cause, whether by the influence of the contact with the Aryan or otherwise the time came when a share in the produce was levied from all land except certain privileged holdings of the priests and of the old founders and head of the village.
(8) In the earlier days of the Muhammadan administration, the state share of the gross produce demanded by the Hindu kings was converted into the Khiraj or tribute payable on land in countries under Muhamadan rule, though the share taken was greater than before. The existing agency of collection was also utilised. The rapid expansion of some of the Muhammadan kingdoms, however, made the collection of the revenue under this system a different process, and measures were adopted for regulating the collection and securing a complete or partial commutation of the State's share of the produce into money. The Institutes of Timur embodied the first systematic attempt in this direction. Sher Shah made the next, but did not reign long enough to give general effect to his measures. The third and the most famous settlement was that of Todar Mal during the reign of Akbar. He had the land measured carefully and then divided into four classes according to the fertility of the soil. The Government share, which was fixed at one third of the gross produce, was commuted into money with reference to the prices of the previous years. This practice was found to be administratively inconvenient and therefore settlements were concluded on the basis of a ten years average. The system involved the maintenance of an elaborate set of accounts and the employment of a host of tax-gatherers, who intervened between the cultivator and the Supreme Government. One of these was the Zamindars. Todar Mal's settlement continued in force without material alteration for nearly a century, but as the authority of he Central Government declined, a number of imposts (known as abwabs) were added by the provincial rulers. The main points of this system were that the assessment was based upon a land classification and fixed for a term of years. During the time of Maratha period the settlement of the land revenue was an annual affair and it consisted of two operations viz., first, a settlement of the revenue in bulk for each individual village between the Mamlatdar and the Patel, added by the old hereditary district officers. Deshmukhs and Deshpandes and secondly, a distribution of the amount so agreed upon by the Patel over the holdings of the individual cultivators. The first this operation was carried out upon consideration of the general state of the cultivation and crops of the current year in comparison with those of the previous year. On this basis a total amount was fixed to be levied from the village as a whole for the year. The Patel then made the individual distribution over the various holdings. The assessment was divided into two parts mainly, the land assignment proper, and extra assessments over and above the land assessments called parties.
(9) Under the last Peshwa, the methods of administration took a distinct turn for the words. The ordinary revenues of the districts proved insufficient to meet the heavy cost of the wars and the extravagance of his Court. The result was the introduction of the farming system. When the administration passed into the hands of the British, farming was abolished, the revenue was levied according to the actual cultivation. Ultimately the ryotwari system was adopted. Therefore, it is clear that from very early time, land revenue was the most recognised item of revenue for the State. Land Revenue was collected by the State mainly for the purpose of protecting the life, the liberty and the property of the people under its charge. In all countries it has been recognised that the sovereign is entitled to levy tax on all lands within its territory. Such a right is one of the prerogatives of the sovereign. In India the prerogative right to tax was recognised in the rule and there has been no abrogation of such a right as in England, where the Sovereign lost the right later as a result of the Bill of Rights.
(10) In Bell v. Municipal Commissioner for the City of Madras, (1905) ILR 25 Mad 457 at p. 482, Bashyam Iyengar J. observed:
'On the other hand it is probably true that the Crown has according to the common law of India certain prerogatives which it may exercise in India though not in England, notably the prerogative of imposing by an executive act assessment of lands and varying the same from time to time.'
(11) Subramanya Iyer, J. in Madathapu Ramayya v. Secretary of State, (1904) ILR 27 Mad. 368 at p. 388 observed as follows:
'Such imposition is in the due exercise of the prerogative possessed in this country by the Crown, viz., that of exacting from a subject holding arable land the Crown's proper share of the product thereof or the equivalent of such produce, which is the modern land revenue.'
(12) From these observations, it is clear that it is an inherent feature of the ryotwari system that the Government has a share, which represents the commuted value of the Government's share of the cultivation and the assessment is by virtue of the prerogative right of the Government. Such was the basis for assessing lands.
(13) Bombay Regulation XVII of 1827 purported to consolidate the laws relating to recovery of land revenue and this put the collection of revenue on a statutory basis. Section 2(1) of this Regulation laid down that all land where applied to agricultural to other purposes, shall be liable to the payment of land revenue, according to the established principles which govern the assessment of that description of land to which it belongs, except such as may British India proved to be either wholly or partially exempt from the payment of land revenue, under any of the provisions contained in Chapters IX and X of the Regulation. Then the Code (the Bombay Land Revenue Code, 1879--Bombay Act No. V of 1879) was introduced consolidating and amending the law relating to Revenue Officers; and to the assessment and recovery of land revenue and to other matters connected with the land Revenue Administration. The right of the State to demand land revenue is asserted by the earliest as well as the latest Bombay enactments on the subject viz. Bombay Regulation XVII of 1827 and Section 45 of the Code respectively and that in terms practically identical.
(14) Section 45 of the Code lays down that all land, whether applied to agricultural or other purposes, and wherever situate, is liable to the payment of land revenue to the Government according to the rules hereinafter enacted except such as may be wholly exempted under the provisions of any special contract with the Government or any law for the time being in force. But nothing in the Code shall be deemed to affect the power of the Legislature to direct the levy of revenue on all lands under whatever title they may be held whenever and so long as the exigencies of the State may render such levy necessary.
Section 48 provides:
'(1) The land revenue leviable on any land under the provisions of this Act shall be deemed to have been assessed, as the case may be, with reference to the use of the land:--
(a) for the purpose of agriculture,
(b) for the purpose of building, and
(c) for a purpose other than agriculture or building.
(2) Where land assessed for use for any purpose is used for any other purpose of assessed fixed under the provisions of this Act upon such land shall notwithstanding that the term for which such assessment may have been fixed has no expired be liable to be altered and fixed to such rules as the State Government may prescribe in this behalf.
(3) Where land held free of assessment on condition of being used for any purpose is used at any time for any other purpose, it shall be liable to assessment.
(4) The Collector or a survey Office may subject to any rules made in this behalf under section 214, prohibit the use for certain purposes of any unalienated land liable to the payment of land revenue, and may summarily evict any holder who uses or attempts to use the same of any such prohibited purpose.'
From the provisions of this section it is clear that the assessment fixed shall be liable to be altered and fixed at different rates by such authority and subject to such rules as the State Government may prescribe in this behalf. Land Revenue is assessed with reference to the use of the Land for the purpose of (a) agriculture, (b) building, and (c) a purse other than agriculture or building. In these cases we are concerned with lands used for purposes other than agriculture or building and the lands have been assessed as such
(15) Section 214 provides:
'(1) The Provincial Government may, by notification published in the Official Gazette, make rules not inconsistent with the provisions of this Act to carry out the purposes and objects thereof and for the guidance of all persons in matters connected with the enforcement of this Act or in cases not expressly provided for therein.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may be made--(a) regulating the appointment of revenue officers and the exercise by them of their powers and duties;
(b)regulating the assessment of land to the land revenue and the alteration and revision of such assessment and the recovery of land revenue:
* * * * (h) fixing the maximum amount of fine leviable under Section 61:* * * *
(16) The State Government has power to make rules under section 214(1) of the Code, not inconsistent with the provisions of the Code to carry out the purposes and objects thereof and for the guidance of all persons in matters connected with the enforcement of the Code or in cases not expressly provided for therein. Rules in this behalf have been framed by the State Government. The object of investing the Government with the power to make rules in regard to matters enumerated in sub-section (2) appears to be to carry out the general principles laid down in the Code and for the convenience of the public. Recently the Legislature has reserved to itself in certain Acts the power to made the rules. But no such power has been reserved in the Code, which was passed as early as in 1879. In exercise of the powers conferred by Section 214, the State Government has amended the old rules 81,99 and 100 and substituted the impugned rules.
(17) Amended rule 81(1)(a) provides that in the case of land situate in any village of population of which does not exceed 5000, the rate of non-agricultural assessment leviable shall be not less than the Agricultural assessment leviable on such land and not more than Rs. 40 per acre. Sub-clause (b) provides that in the case of land situated in any village or town other than a town coming under clause (c) of this rule, the population of which exceeds 5000, the rate of non-agricultural assessment leviable shall be not less than Rs.40/- per acre and not more than Rs. 80/- per acre. Sub-clause (c) provides that in the case of land situated in any city or town referred to in the Table to Rule 100, the rate of non-agricultural assessment leviable shall be not less than Rs. 150/- per acre and not more than Rs. 250/- per acre. Sub-clause (d) provides that non-agricultural assessment will be levied at uniform rates for the entire extent converted for non-agricultural purposes, irrespective of the extent actually built upon.
(18) Rule 81(2) provides that where unalienated land assessed or held for purposes of agriculture is subsequently used without permission for any other purposes, the rate of non-agricultural assessment leviable shall be one and one-fourth of the rates specified under sub-rule (1). Under Rule 81(3) the Deputy Commissioner with the previous sanction of the Divisional Commissioner which shall be given for only specified reasons to be recorded in writing, may levy on any land, generally. Rule 99 limits the fine leviable for appropriating agricultural land for non-agricultural purposes unconnected with agriculture, but shall in no case exceed Rs. 2000 per acre. Rule 100 provides that notwithstanding anything contained in Rule 99, the amount of fine leviable shall be at the rate specified in column 3 of the Table, i.e. Rs. 500 per acre in respect of areas situated in Hubli City and Belgaum City, Gadag, Dharwar, bijapur and Ranebennur. These rates of non-agricultural assessment within the range of minimum and maximum rates provided for by rule 81(c) are said to have been arrived at by the Deputy Commissioner taking into consideration the present zonal rates fixed according to the importance of the places and the proposals of the respective officers. These rates appear to have been fixed with reference to the rising in the market value of the land within the cities and towns. It is said on behalf of the Government that the rates of non-agricultural assessment leviable on lands in the four Districts of the former State of Bombay were revised with a view to bring uniformity as in different areas of Mysore having regard to the factors like the population of the city or town or its importance.
(19) The first contention of the petitioners is that section 214(2)(b) and (h) of the Code on the basis of which rules 81(a), (b), (c), (d), (2) and (3) and also 99 and 100 have been framed amounts to excessive delegations of legislative power and therefore, it is ultra vires of Article 245 of the Constitution. According to them the power to fix the rate of tax cannot be delegated by the Legislature to the Government, much less the Government to its subordinate body viz. the Deputy Commissioner. It is contended by them that fixation of rate of tax is an essential part of legislation and that such a power cannot be delegated. On the other hand it is contended by the learned Advocate-General that fixation of rate is not an essential part of legislation. According to him, the power to fix the rate of tax can be delegated by the Legislature to any other authority and that the same is not the essence of taxing legislation.
(20) Section 214(1) of the Code confers the general rule making power, namely, it delegates to the administrative authority, the power to fame rules to subserve the objective and purpose of the Code. In particular, sub-section 2(b) authorises the State Government to make such rules for regulating the assessment for land to the land revenue. Delegated legislation involves delegation of rule making power, which constitutionally may be exercised by the administrative agent. This means that the legislature having laid down the broad principles of its police in the legislation can then leave the details within the limits prescribed by the statute. When the delegate is given the power of making rules in order to fill in the details to carry out and subserve the purposes of the legislation the manner in which the requirements of the statute are to be met and the rights therein created to be enjoyed is an exercise of delegated legislation. 'The Legislature cannot delegate in power to make a law, but it can make a law to delegate a power to determine some fact of state of things upon which the law makes or intends to make its own action depend. There are many things upon which an useful legislation must depend which cannot be known to the law making power, and, must therefore be subject of enquiry and determination outside the hall of Legislature.' (In Locker's Appeal 72 Particularly.491; Field & Court. v. Clerk, (1892) 143 US 649. But the discretion given to the rule making authority should not be so wide enough that it becomes impossible to discern its limits. There must be indication of the power delegated with in which the powers of the administrative authority could be exercised. Delegation should not be so indefinite as to amount to abdication of the legislative function. In exercise of the powers conferred under section 214 of the Code the State Government has issued the impugned notification fixing the rate of non-agricultural assessment. The question, therefore, that arise for consideration is whether such a power is an essential part of legislation.
The fixation of rates is not an essential part of legislation has been considered in a number of cases by the Supreme Court. In Banarsi Das v. State of Madh Pra, : [1959]1SCR427 , Section 6(1) of the Sales Tax Act provided that no tax would be payable on any sale of goods specified in a schedule to it. Item 33 of the Schedule read: 'goods sold to or by the State Government'. Section 6(2) of the Act authorised the State Government to amend the Schedule by notification. In exercise of the powers of legislation to the State Government Venkatarama Aiyar, J. delivering the judgment of the majority of the Court, rejected this contention. The learned Judge referred to three authorities. The first case was Powell v. Appolo candle Co. Ltd., (1885) 10 AC 282. Therein the validity of a statute passed by the Legislature of New South Wales which conferred power on the Governor of that Province to impose duty on certain articles in the circumstances prescribed was challenged. The Judicial Committee rejected the contention that the tax had not been imposed by the Legislature which alone could do it in the view that the duties levied under the Order in Council are really levied by the authority of the Act. The next case was Syed Mohamed and Co. v. State of Madras, : AIR1953Mad105 . Therein a power to an authority to determine who shall pay the tax was upheld. The last case was Hampton Jr. and Co. v. United States, (1928) 72 Ed. 624 in which the power conferred by a statute on the President to make an increase or decrease in the rate of customs duty was challenged. In that case it was stated:
'It is conceded by Counsel that Congress may use executive officers in the application and enforcement of a policy declared in law by congress and authorise such officers in the application of the Congressional declaration to enforce it by regulation equivalent to law. But it is said that this never has been permitted to be done where Congress has exercised the power to levy taxes and fix customs duties. The authorities make no such distinction.
'The same principle that permits Congress to exercise its rate making power in inter-state commerce by declaring the rule which shall prevail in the legislative fixing of rates, and enables it to remit to a rate-making body created in accordance with its provisions the fixing of such rates, justifies a similar provision for the fixing of customs duties on imported merchandise.' Venkatarama Aiyar J. observed at page 435(of SCR)(at page 913 of AIR) as follows: 'On these observations, the point for determination is whether the impugned notification relates to what may be said to be an essential feature of the law, and whether it involves any change of policy. Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods and the like.
(21) In Western India Theatres Ltd. v. Municipal Corporation of the City of Poona, : AIR1959SC586 the question for decision was concerned with a statute under which the respondent Corporation had been set up and which have the corporation power to levy any other tax. It was contended that such a power amounted to abdication of legislative function as there was no guidance provided. This contention was rejected.
(22) In Vasanlal Maganbhai v. State of Bombay, : 1978CriLJ1281 , the appellants challenged the validity of the notification issued by the Government of Bombay on October 17, 1952 under the provisions of Section 6(2) of the Bombay Tenancy and agricultural lands Act, 1948. The Government had issued a notification fixing:
'In the case of an irrigated land 1/5 and in the case of any other land 1/4 of the crops of such land or its value as determined in the prescribed manner as the maximum rent payable by the tenants of the lands situate in the areas specified in the schedule appended thereto.' By this notification, the Government purported to prescribe a rate as the lower rate of maximum rate rent at which the rent shall be payable by the tenants in respect of the lands situate in the in the areas specified in Schedule 1 appended to it. The rate of maximum rent prescribed by this notification was very much lower than the rate which had fixed by the earlier one. By their petitions filed in the Bombay High Court the appellants contended that S. 6(2) was ultra vires, and that even if S. 6(2) was valid the impugned notification was invalid. The High Court negatived their contention holding that Section 6(2) was intra vires and the impugned notification was legal and valid. Against this decision the appellants went up in appeal before the Supreme Court. By a majority judgment, the Supreme Court held:
'It is now well established that the power of delegation is a constituent element of the legislative power as a whole, and in modern times when the Legislatures enact laws to meet the challenge of the complex souci-economic problems, they often find it convenient and necessary to delegate subsidiary or ancillary powers to delegates of their choice for carrying out the policy laid down by their Acts.
The extent to which such delegation is permissible is also now well settled. The Legislature cannot delegate its essential legislative function in any case. It must lay down the Legislative, policy and principles and must afford guidance for carrying out the said policy before it delegates its subsidiary powers in that behalf.
In dealing with the challenge to the views of any statute on the ground of excessive delegation it is necessary to enquire whether the impugned delegation involves the delegation of an essential legislative function or power and whether the Legislature had enunciated its policy and principle and given guidance to the delegate or not.
In applying this test the Supreme Court has taken into account the statements in the preamble to the Act and if the said statements afford a satisfactory basis for holding that the legislative policy and principle has been enunciated with sufficient accuracy and clarity the preamble itself would satisfy the requirements of the relevant tests.
In every case it would be necessary to consider the relevant provisions of the Act in relation to the delegation made and the question as to whether the delegation is ultra vires or not will have to be decided by the application of the relevant tests.
Having regard to the legislative policy laid down by the Bombay Tenancy and Agricultural lands Act, 1948 in its preamble and in the other relevant sections and having regard to the guidance which has been provided for fixing a reasonable rent under S. 12(3), it would not be possible to hold that the power delegated to the Provincial Government by S. 6(2) suffers from the infirmity of excessive delegation. The fact that no minimum has been prescribed would not materially affect this position.
Further, if S. 6(2) is valid, then the exercise of the power validly conferred on the Provincial Government cannot be treated as fresh legislation which offends against Article 31 and as the Act is saved by Article 31B, S. 6(2) is also saved, and the power must be held to be validly conferred on the Provincial Government, and a notification issued by virtue of the said powers cannot be challenged on the ground that it violates Article. 31.'
(23) More or less is similar question arose the decision before the Supreme Court in Corporation of Calcutta v. Liberty Cinema, : [1965]2SCR477 . The facts of that case were that the appellant Corporation was constituted by the Calcutta Municipal Act, 1951, an Act passed by the Legislature of the State of West Bengal. The Act was intended to consolidate and amend the law relating to the Municipal affairs of Calcutta and it defined the duties, powers and functions of the Corporation in whose charge those affairs were placed. The respondent was a firm owning a cinema shows. Section 443 of the Calcutta Municipal Act, 1951 provides that no person shall without a licence granted by the Corporation keep open any cinema house for public amusement. Sub-Section (2) of Section 548 lays down that for every licence under the Act, a fee may, unless otherwise provided be charged at such rate as may from time to time be provided. In 1948, the Corporation had fixed the scale of fees on the basis of the annual valuation of the cinema-houses by some method. The respondent had under these sections obtained a licence for its cinema-house and had been paying a licence fee for calculated was Rs.400/- per year. By a resolution passed on March 14, 1958 the Corporation changed the basis of assessment of licence fee of Rs. 6000/- per year. The respondent then moved the High Court of Calcutta under Article 226 of the Constitution for a Writ quashing the resolution. The application was first heard by Sinha J. who allowed it. This order was confirmed by an appellate Bench of the same Court consisting of Bose C.J. and G.K. Mitter J. on appeal by the Corporation. On appeal to the Supreme Court by a majority judgment, it was held.
'A statute has to be read so as to make it valid and. If possible, an interpretation leading to a contrary position should be avoided; it has to be construed ut res magis pleat quam pareat.
Section 548, Calcutta Municipal Act is not invalid on ground that it amounted to illegal delegation of legislative functions to the Corporation because it left it entirely to the latter to fix the amount of tax and provided no guidance for that purpose.
No doubt a delegation of essential legislative power would be bad. But the fixation the rates of taxes is not of the essence of legislative power of taxation. The fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority, for there is no distinction in principle between delegation of power to fix rates of taxes to be charged on different classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated. No doubt when the power to fix rates of taxes is left to another body, the legislature must provide guidance for such fixation. The validity of the guidance cannot be tested by a rigid uniform rule, that must depend on the object of the Act giving power to fix the rate. The specification of the maximum rate does not supply any guidance as to how that amount of the tax which no doubt has to be below the maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance.
For a statutory provision for raising revenue for the purposes of the delegates the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid.
The validity of the guidance required to make delegation of power good cannot be judge by a stereotyped rule. The guidance furnished must be held to be good if it leads to the achievement of the object of the statute which delegated the power. The validity of the power to fix rates of taxes delegated to the Corporation by Section 548 of the Act must be judged by the same standard. All taxes including the one under Section 548 can be collected and used by the Corporation only for discharging its functions under the Act. The Corporation, subject to certain controls is an autonomous body. It has to perform various statutory functions. It is often given power to decide when and in what manner the functions are to be performed. For all this it needs money and its needs will vary from time to time with the prevailing exigencies. Its power to collect tax, however, is necessary limited by the expenses required to discharge those function. It has, therefore, where rate have not been specified in the statute, to fix such rates as may be necessary to meets its needs. That would be sufficient guidance to make the exercise of its power to fix the rates valid. The Act in the present case impliedly provides the same guidance, see S. 127(3) and (4). It would be impracticable to insist on a more rigid guidance. In the case of a self-governing body with taxing powers, a large amount of flexibility in the guidance to be provided for the exercise on that power must exist. In the case of a big Municipality like that of Calcutta, its needs would depend on various and changing circumstance. There are epidemics, influx of refuges, labour strikes, new amenities to be provided for, such as hospitals, schools and various other such things may be mentioned which makes it necessary for a colossal municipal corporation like that of Calcutta to have a large amount of flexibility in its taxing powers. These considerations lead to the view that S. 548 is valid legislation. There is sufficient guidance in the Act as to how the rate of the levy is to be fixed.
(24) Therefore, from the various pronouncements by the Supreme Court, referred to above, it is clear that fixation of rate of taxes may be legitimately left by a statute to a non-legislative authority. There are clear authorities for the proposition that the fixing of rates may be left to a non-legislative body. An examination of the relevant provisions of the Code and the rules framed thereunder makes it clear that the Legislature itself has laid down the policy in the matter of assessing lands on the basis for which they are used. The details of fixing the rate have been left to the State Government and that cannot be said to be delegating an essential part of the legislative power nor could be it be said that it is an excessive delegation of power. The essential legislative function consists in the determination of the legislative policy. The legislature cannot abdicate its functions in favour of the Executive. But in view of the complex nature of the activities of the State, the Legislature cannot in the very nature of things work out every detail to suit the situation. Therefore it must necessarily delegate the working out the details to the executive or any other agency. The delegation of powers to fix the rate in relation to the purpose for which the lands are used and the income derived, to the executive is consistent with the nature and history of ryotwari tenure. The fixation of rate of assessment depends upon so many uncertain factors, which may vary time to time from place to place, that it would be idle to contend that the delegation of such power is an essential part of the legislative power. Hence, we are of the view that section 214(2)(b) and (h) is not ultra vires of Article 245 and the Rules 81, 99 and 100 framed under Section 214 are not ultra vires of the Code.
(25) The next contention of the petitioners is that the Government had no statutory right to levy and collect assessment on non-agricultural lands and as such the collection of non-agricultural assessment is contrary to Article 265 of the Constitution. Article 265 of the Constitution provides:
'No tax shall be levied or collected except by authority of law'
We have discussed in the earlier paragraphs the main features of ryotwari system of land revenue and the basis for assessment on lands. The origin of the right to levy assessment on lands was the prerogative of the Crown. That prerogative right has been followed by legislation by enacting the Code. The principles on which the ryotwari assessment was made in the olden times were accepted by the legislature and the legislature provided for a machinery to levy and collect the same. The actual levy and collections were the subject matter of delegation to the Government within permissible limits and thus there was a valid legal sanction prior to the Constitution for the levy, assessment and recovery of land revenue. Article 372 of the Constitution provides for continuance in force of the existing laws and their adaptation. Therefore, unless there is some provision in the Constitution which makes the levy of assessment on land illegal, the law that previously existed will continue to be valid even after the Constitution.
(26) In Gopalan v. State of Madras : AIR1958Mad539 , the question that arose for consideration was that the State of Madras had no statutory right to levy and collect assessment ryotwari lands and as such the collection of land revenue was contrary to Article 265 of the Constitution. The petitioners in that case is a ryotwari pattadar of certain wet and dry lands. He filed a suit in the Court of the District Munsiff at Karur against the State of Madras.....for the recovery of a sum of Rs. 24-12-0 collected from him as land revenue for fasli 1365 of such levy and collection of the tax was illegal and unconstitutional by reason of Article 265 of the Constitution of India, which proved that no tax shall be levied or collected except by authority of law. Negativing the contention of the petitioner, the Court held as follows:
'The levy assessment and collection of revenue are not rendered illegal by reason of Article 265 as such levy, assessment and collection were valid prior to the Constitution they are continued by the force of Art. 37'.
(27) Lastly it is contended that rule 81 gives uncanalised, unlimited and arbitrary power to the Deputy Commissioner. There is a wide gulf between the maximum and the minimum rates fixed; in between these rates the Deputy Commissioner is given full power to fix in respect of any land such rate as he consider as proper; no principles are laid down in the Rule to guide him in the exercise of his powers; unlike other taxing statutes, the Rule does not make any provision for issue of notice to the land owner nor is there any provision for the landowner to represent his case. The Deputy Commissioner is not required to hear the concerned parties or to give reasons in support of his conclusions; hence the rule in question should be struck down as being violative of Article 14 of the Constitution.
(28)There is no doubt that this rule gives a wide margin to the Deputy Commissioner in the matter of determining the non-agricultural assessment to be levied on lands used for non-agricultural purposes. This rule does not regulate the exercise of that power. The Rule in question does not provide for issue of notice to the parties before determining the assessment. It is also true that the Deputy Commissioner is not required to give any reasons in support of his order. But his order is made appealable under Section 203 of the Code. The Advocate-General contended that in determining the rate of assessment on land, the Deputy Commissioner is discharging only an effective function and his function in that regard cannot be considered either as judicial or quasi-judicial.
(29) If the power is held to be an administrative power, the same being unguided and uncontrolled and capable of being discriminatively used, has to be held to be violative of Article 14 of the Constitution. The Deputy Commissioner himself cannot fix the assessment on non-agricultural lands. He had to depend largely on his subordinates, some of whom may not be holding high positions. If the Deputy Commissioner has to act on his subjective satisfaction, then it is obvious that arbitrariness is writ large on the face of the power conferred. If on the other hand, the power conferred on the Deputy Commissioner is judicial or quasi judicial the same has to be exercised on the basis of some rational and objective standards. Further, the Deputy Commissioner has to exercise his powers in accordance with the principles natural justice. Persons affected should be to an opportunity to represent their case with the Deputy Commissioner has necessarily to consider the grounds urged by them and after render his decision supported by reaction. As the parties aggrieved are entitled to the appeal under section 203 of the Code of higher authorities against the determination he assessment by the Deputy Commissioner power to be exercised by the Deputy Commissioner under this Rule cannot be said to be administrative power.
(30) On the other hand, it is contended by learned counsel for the petitioners that the in question is a judicial power or at least quasi-judicial power. In support of their conclusion, they placed reliance on the decision of Supreme Court in Kunnathat Thathunny Moopil Nair v. State of Kerala, AIR 1961 SC. The facts therein were that the constitutionally of the Travancore-Cochin Land Tax Act of 1955, as amended by the Travancore-Cochin Land Tax (Amendment) Act X of 1957 impugned. In the said Act, a basic land of Rs. 2/- per acre was levied on all irrespective of their productivity. The validity of that levy came up for consideration of their Lordships of the Supreme Court learned Chief Justice speaking for the Court read thus:
'The Act (Travancore-Cochin Land Tax Act, as amended by Act 10 of 1957) merely of the competence of the Government to the provisional assessment, and by virtue of section 3 of the Madras Revenue Recovery Act, 1864, on the landholders may be liable to pay the tax. The act being silent as to the machinery procedure to be followed in making the assessment leaves it to the Executive to evolve the requisite machinery and procedure. The whole from beginning it end is treated as of a purely administrative character, completely of the legal position that the assessment on person or property is at least of a trial character.'
What constitutes a quasi-judicial act has been Parker J in R. v. Manchester Legal Committee 1952-2 Q.B. 413 thus:
'Now it may be mentioned that the statute is not likely to provide in so many words that the authority passing the order is required to act judicially; that can only be inferred from the express provisions of the statute in the first instance in each case and no one circumstance alone will be determinative of the question whether the authority set up by the statute has the duty to act judicially or not. The inference whether the authority acting under a statute where it is silent has the duty to act judicially will depend on the express provisions of the statute read along with the nature of the rights affected, the manner of the disposal provided, the objective criterion if any to be adopted, the effect of the decision on the person affected and other indicia afforded by the statute. A duty to act judicially may arise in widely different circumstances which it will be impossible and indeed inadvisable to attempt to define exhaustively.
The old rule 81 read as follows:
'81. (1) for the purpose of determining generally the rate of altered assessment leviable each Commissioner shall, from time to time by notification published in the official Gazette divide the villages, towns and cities in each district in his division (to which a standard rate under Rule 82 has not extended) into two classes. (2)The assessment shall then be fixed by the Collector at his discretion, subject to the general or special orders of Government at a sum per square yard within the following limits:
Maximum--For Class I land 2 pies. For Class II land I pi. Minimum--The agricultural assessment. In fixing the rate within the above limits due regard shall be had to the general level of the value of lands in the locality used for non-agricultural purposes.
'Provided that the altered assessment of plots of land not built upon in Development Department Schemes shall be limited to maximum rate of Regarded.1 per 250 square yards or part thereof.'
(3) The Collector with the previous sanction of the Commissioner which shall only be given for special reasons to be recorded in writing, may levy on any land altered assessment at a rate higher than the maximum fixed under Sub-rule (2) in respect of any village, towns or city in which such land is situated, in cases where the land is either situated in an exceptionally favourable position, or where it is used temporarily for a non-agricultural purposes, or where the purpose for which it is used is of a special kind. Such higher rate shall not however exceed 50 per cent of the estimated annual rental value of the land when put to non-agricultural use in question.
Under that rule the Collector was empowered to fix the assessment at his discretion subject to general or special orders of the Government within the limits prescribed. In fixing the rate within the limits specified, the Collector was bound to give due regard to the general level of the value of lands in the locality used for non-agricultural purposes. In the present Rule 81, there is no guidance at all. Ordinarily assessment of land is fixed on the actual or potential productivity of the land. The alternative basis is the value of the land concerned. Rule 81 does not lay down any basis on which the Deputy Commissioner can levy land revenue. Even if we assume that the Deputy Commissioner was bound to adopt one of the two bases for levying the assessment still there is uncertainty and in fact is most unlikely that all the Deputy Commissioner in the State would adopt a common basis. There is every likelihood of some Deputy Commissioner adopting the capital value basis while others proceeding on the basis of productivity, actual or potential.
(31) In determining the non-agricultural assessment to be levied on a particular land, the Deputy Commissioner has necessarily to find out whether the land in question is used for non-agricultural purposes, if so from what date? He has also to find out the extent of the land used for non-agricultural purpose and incidentally he has to make enquiries regarding the ownership of the land. He is required to find out the profit derived from the land. Then he has to fix the rate between Rs. 150/- and Rs. 250/-. These are some of the objective tests that he has to apply before levying non-agricultural assessment on land. To arrive at a conclusion the Deputy Commissioner has necessarily to issue notices to the parties concerned and hear them. It is only after his he will be in a position to decide. As the decision of the Deputy Commissioner is subject to appeal, he is bound to give reasons for the decision. This is essentially a quasi--judicial function. Rule 81 does not provide any guidance in these matters. Under Rule 81 the Deputy Commissioner can act arbitrarily. Hence the power conferred on the Deputy Commissioner should be held to be an unguided and uncontrolled power. Therefore, it is violative of Article 14 of the Constitution.
(32) For the reasons mentioned above, we are of the opinion are entitled to their costs from the State advocate's fee Rs.100/-
(33) In the result, these petitions are allowed and the impugned notifications are quashed. The petitioners are entitled to their costs from the State. Advocate's fee Rs. 100/-
(34) Petition allowed.