B. Majmudar, J.
1. In the these two petitions under Article 226 of the Constitution of India the petitioners of the respective petitions who are carrying on the industry of manufacturing salt in the leased lands situated in different Talukas of Kutch District have brought in challenge the action of the respondent authorities in seeking to levy Education Cess on the leased lands under the provisions of the Gujarat Education Cess Act, 1962 (hereinafter referred to as 'the Act'). The petitioners contend that the respondent authorities have no power to levy education cess on these lands under the Act. In order to highlight the grievances of the petitioners' it is necessary to note a fex introductory facts leading to these petitions.
2. Facts leading to Special Civil Application No. 1229 of 1980:
Petitioner No. 1-M/s. Bharat Salt and Chemical Industries (Mundra-Kutch) Ltd., is a Company registered under the Indian Companies Act, 1956. It is carrying on the business of manufacture, storage and selling of salt and its by-products. The Government of India had leased to the petitioner-Company a piece of land admeasuring 2488.18 acres situated at Village Mundra, in Kutch District under an Indenture of Lease executed on 25th August, 1962. The said land was leased to the petitioner-Company for the purpose of manufacturing, storage and sale and its by-products and for the works connected therewith. According to the terms of the lease the petitioner-Company had only to pay annual rent at the rate of Rs. 2/- per acre and royalty at the rate of Rs. 0.50/- paise per ton of salt. The petitioner-Company was not liable to pay land revenue or non-agricultural assessment or education cess or any other taxes as per terms of the said lease. It is not in dispute between the parties that the annual rent payable under the lease was later on increased to Rs. 3/- per acre. The petitioner's case is that the aforesaid land leased to it is within the village site and has not been assessed to land revenue and it is an unalienated land. It is contended that no non-agricultural assessment was ever levied under the Land Revenue Code on the leased land. It appears that somewhere in the year 1977 the third respondent, Taluka Development officer, Mundra, Kutch, raised a demand against the petitioner-Company requiring it to pay education cess under the Act presumably relying on Section 7(1A) of the Act. The petitioner-Company, therefore, submitted a representation dated April 1, 1977 to the Collector, Kutch requesting him to direct the Mamlatdar and Taluka Development Officer, Mundra, not to recover education cess from the Company. However the Collector, Kutch by his order dated 9th May, 1978 directed that the Company was liable to pay the impugned education cess and local cess. The petitioner carried the matter in revision before the Special Secretary, Revenue, Government of Gujarat. The Special Secretary by his order dated 17th February, 1979 held that in view of the insertion of Section 7(1A) by virtue of Gujarat Act No. 17 of 1972 education cess can be levied in respect of the lands in question. Consequent upon the Special Secretary's order the third respondent by his letter dated 15th June, 1979 addressed to the District Development Officer, Kutch, informed the letter that a sum of Rs. 3,29,271/- is recoverable from the petitioner-Company, on the basis of the statement annexed with the said letter. When we turn to the said letter at Annexure 'E' we find that the demand of Rs. 3,29,271-80 is spread over five years from 1972-73 to 1978-79 and the education cess is calculated at the rate of 10% of the notional non-agricultural assessment and the non-agricultural assessment is fixed at Rs. 0.02 np per sq. mtr. for 10,315,100 sq. mtrs. representing 2488 acres and 18 gs. of the leased lands. On that basis oer year the education cess was calculated at Rs. 41260-40. For four years from 1972-73 to 1975-76 the education cess was demanded at a higher figure of Rs. 54743-40 per year on the basis of N.A. Assessment being calculated at the rate of 0.03 nps. per sq. mtr. for reduced quantity of land, namely, 22 acres and 37 gs. for last three years working out at 91,23,900 sq. mtrs. It appears that lot of correspondence ensued between the petitioner on the one hand and the Taluka Development Officers and District Development Officer on the other in connection with the said demand. However, nothing fruitful could be achieved and that is how the petitioner-Company filed the present petition. As vires of Section 7(1A) of the Act have been challenged, when the petition was admitted notice to Advocate General was issued. Ad interim relief was also granted in terms of para 13(D) on condition that the petitioners have security to pay education cess at the rate at which the petitioners were paying the same till 1972. Hence during the pendency of this petition the respondents have been restrained from recovering the amount of impugned education cess as demanded vide Annexure 'E'.
3. Facts leading to Special Civil Application No. 1380 of 1981:
The petitioner-Company registered under the provisions of Indian Companies Act is engaged inter alia in the business of manufacture and storage and sale of salt and its by-products. It is carrying on its activities at Kandla, Taluka Anjar, District Kutch under an indenture of lease licence executed on 10th April, 1934 for a period of 40 years. By an assignment dated 17th June, 1942, the land and benefits of the contract were assigned by the then leasees to the present petitioner-Company. The aforesaid area of 506 acres was then extended to 1400 acres with effect from 1st October, 1947 by the order of Divan of Kutch dated 21st April, 1948. The aforesaid extended area after survey held in 1951 was agreed to comprise of 1357.56 acres. After the formation of the Gujarat State the old licence of 1934 was converted into lease deed by the State of Gujarat. The said lease is dated 23rd June, 1966. It contains the old terms and conditions of the indenture of 1934. The 1966 lease was also granted for the purpose of manufacture and storage and sale of salt and its byproducts and for the works connected therewith. According to the terms of the lease the petitioner-Company had to pay ground rent at the rate of Rs. 21- per acre per annum and royalty at the rate of Rs. 0.50 ps. per ton of salt. The period of lease expired on 10th April, 1974. A fresh indenture of lease was thereunder executed on 19th March, 1976. Under the said indenture the petitioner-Company had to pay ground rent at the rate of Rs. 3/- per acre per annum and royalty at the rate of Rs. 1/- per ton of salt and its by-products. The petitioner's case is that the said land leased to the petitioner-Company is within village site and has not been assessed to land revenue and it is an unalienated land. The petitioner further submitted that no non-agricultural assessment was ever levied on this land under the Land Revenue Code. It appears that the third respondent exercising powers under the Gujarat Education Cess Act, 1962 raised a demand on the petitioner-Company calling upon it to pay education cess under the said Act for the leased land. Earlier the demand was less but thereafter by communication dated 1-12-1980, which is at Annexure I the petitioner-Company was called upon to pay education cess to the tune of Rs. 10,986-36 per year beginning from 1972-73 for 8 years ending with year 1979-80 and a total demand of Rs. 87,790-88 was raised. Under the circumstances the petitioner has approached this Court by way of this Special Civil Application challenging the said levy of education cess. In this petition vires of Section 7(1A) of the Act also have been challenged. Notice was therefore issued to the Advocate General while ad interim relief was granted on condition that the petitioner furnishes security for the amount of cess at the old rate.
4. As both these petitions involved identical questions they were heard together and are being disposed of by this common judgment. Learned Counsel for the petitioners in these two petitions raised the following contentions:
1. The respondents have no jurisdiction or authority to impose education cess under the Act on a combined operation of Sections 3(1), 7(1) and 7(1A) of the Act.
2. If it is held that the levy can be imposed under Section 7(1A) of the Act, then the said provision is ultra vires Articles 14 and 19 of the Constitution of India.
3. In any case the respondents cannot levy education cess on the basis other than the one under which any assessment can be said to be equivalent to the ground rent fixed under the concerned leases and hence the impugned orders adopting different basis are null and void.
We shall deal with these contentions one by one.
5. So far as the first contention is concerned the Scheme of the Act may be seen at the outset. The Act is to provide for the creation of a fund for the promotion of education in the State of Gujarat and for the levy of education cess for the purpose and for matters connected therewith. Section 3 which occurs in Chapter II deals with Education Cess and the State Education Cess Fund. It lays down that for the purpose of providing for the cost of promoting education in the State of Gujarat, there shall be levied and collected in accordance with the provisions of this Act an education cess which shall consist of: (a) a surcharge on all lands except lands which are included within a village site and not assessed to land revenue; and (b) a tax on lands and buildings in urban areas. So far as Education Cess is concerned it is defined in Section 2(iv) to mean a surcharge or tax on lands and buildings levied under this Act. Chapter III deals with Surcharge on Lands. Section 5 of the Act deals with levy of surcharge on agricultural lands. As the lands leased to the concerned petitioners are put to non-agricultural use, we may not dilate on the aforesaid provisions. So far as surcharge on use of non-agricultural land is concerned, Part B of Chapter III becomes relevant. Section 7(1) lays down that notwithstanding any usage, custom or settlement or anything contained in any agreement, sand or order of a Court or any law for the time being in force, on all unalienated lands on which non-agricultural assessment is levied under the relevant Code and on all alienated lands except lands included within a village site which are used, or may hereafter be used, for a purpose unconnected with agriculture there shall be levied and collected a surcharge at the rate mentioned in clauses (i) to (iv) of the said Sub-section (1) of Section 7. Then follows Section 7(1A) which was inserted by Gujarat Act 17 of 1972. The said provision reads as under:
1(A) Where any land is leased by the Government for a purpose unconnected with agriculture and under the terms of such lease non non-agricultural assessment is leviable on such land, then, notwithstanding anything contained in the terms of such lease, there shall be levied and collected on such land a surcharge at the rate specified in Sub-section (1) on the amount which would have been assessed on such land as non-agricultural assessment had such assessment been leviable thereon.
Now a combined reading of Sections 3(1) and 7(1) apart from Section 7(1A) makes it clear that so far as lands are concerned a surcharge can be levied on all the lands except the lands which are included within a village site and not assessed to land revenue as per Section 3(1) of the Act. The petitioners contend that the lands leased to them are within village site and not assessed to land revenue. This contention of the petitioner is not seriously controverted by the other side in the affidavit-in-reply which is filed in Special Civil Application No. 1380 of 1981. We may note that so far as Special Civil Application No. 1229 of 1980 is concerned even no affidavit-in-reply has been filed. However the learned A.G.P. was permitted to make oral submissions on the basis of written instructions which were with him. On the basis of the instruction and ven on the basis of the affidavit-in-reply the learned A.G.P. was not in a position to controvert the averments made in the petitions that the leased lands in possession of the petitioners are situated within village site and are not assessed to land revenue under the Land Revenue Code. Consequently Section 3(a) would obviously not apply to these lands. So far as Section 7(1) is concerned, the petitioners lands are unalienated lands. Section 7(1) would cover them provided non-agricultural assessment was levied on these lands under the relevant Code, namely, Land Revenue Code. The petitioners have contended that no non-agricultural assessment was ever levied under the Land Revenue Code so far as their lands were concerned. Even this averment has remained uncontroverted by the respondents. Hence the provisions of Section 7(1) of the Act also would not apply to these lands. If these provisions under the Act had stood at the stage of Sections 3(a) and 7(1) only, then the argument of learned Counsel for the petitioners would have remained unanswerable.
6. However on behalf of the respondents reliance is placed on Section 7(1A) of the Act. The said provision is squarely got attracted on the fact of the present case. It is not in dispute that the lands were leased to the petitioners by the State of Gujarat for the purposes unconnected with agricultural viz., for manufacturing salt. It is also not in dispute under the terms of these leases that no non-agricultural assessment is leviable on these lands. Once that is so, the new charge imposed by the later part of 7(1A) would get attracted. The said provision in terms states that there shall be levied and collected on such land a surcharge at the rate specified in Sub-section (1) on the amount which would have been assessed on such land as non-agricultural assessment had such assessment been leviable thereon. It is, the therefore, not possible to agree with the contention of the learned Counsel for the petitioners that under the Scheme of the Act respondents are entitled to levy education cess on the lands based to the petitioners by the Government for the purpose of manufacturing salt. It is to be noted that Section 7(1A) was inserted in 1972 by the Gujarat Amending Act 17 of 1972. Hence what might have been the situation earlier, at least after the coming into operation of Section 7(1A) the respondents can validly demand education cess by way of surcharge over the deemed non-agricultural assessment on these lands. The first contention of the learned Counsel for the petitioners that the respondents have no power or authority to do so therefore must be repelled. We may mention at this stage that similar view is taken by a learned single Judge (M.B. Shah, J.) of this Court in Special Civil Application No. 102 of 1979 decided on 25th September, 1984. Placing reliance on Section 7(1A) the learned Judge has held that the respondent authorities can validly demand education cess from leasees of such land and if the demand is made for the period commencing after the coming into operation of Section 7(1A) on the statute book, it cannot be said to be a demand by way of any retrospective levy and such demand would be within the framework of Section 7(1A) of the Act and would be well justified. We agree with the aforesaid reasoning and conclusion of the learned single Judge.
That takes us to the alternative contention canvassed by the learned Counsel for the petitioners. He submitted that if Section 7(1A) is to be pressed into service by the respondents for supporting the impugned levy, then the section must be held to be ultra vires Articles 14 and 19 of the Constitution of India, inasmuch as no guidelines are discernible from the said section as to how non-agricultural assessment is to be made in connection with the concerned lands covered by the sweep of the said provision. It is also contended that the Act nowehre gives any guidelines or machinery for the purpose and in the absence of such machinery the exercise of power under the provision would be patently illegal and arbitrary and would not stand the scrutiny of Articles 14 and 19 of the Constitution of India.
7. Now we must at this stage mention that vires of the Parent Act, viz. Gujarat Education Cess Act were upheld by the Supreme Court years back in the decision in the case of Ahmedabad . v. State, reported in . The challenge to the provisions of the said Act before the Supreme Court was in connection with the absence of machinery provided by the Act for valuing the urban properties for the purpose of the Act for levying education cess on land and buildings. Repelling the argument that such absence in the Act made the provisions violative of Article 14 of the Constitution of India, the learned Judge (Hidayatullah, J.) speaking for the Constitution Bench[1968] 9 GLR 461 of the Supreme Court observed as follows:
The Education Cess is nothing more than an addition to existing taxes. It is an arithmetical calculation based on the result of assessment under other Act or Acts. The argument that the Cess Act, in not providing its own procedure of assessment and in not giving the taxpayers an opportunity for putting forward their objection by way of representation, appeal or otherwise, before the tax. is finally fixed, offends the principle of natural justice, cannot be accepted. The legislation on the subject of the imposition, levy and collection of a cess is made complete by incorporation of and reference to another piece of legislation. This practice is neither ineffective nor in constitutional and cannot be said to be bad.
The Supreme Court upheld the virs of the impugned provision of the Act on the ground that the machinery was supplied for valuation so far as the urban properties, lands and buildings were concerned, by what was enacted in the Bombay Provincial Municipal Corporations Act for arriving at valuation of these properties. It may also be noted that a Division Bench of this Court in the case of Atmanand Jain Punjab Dharmashala v. State of Gujarat, reported in [1980(2)] 21 GLR 787 upheld the vires of the Gujarat Education Cess (validating) Act, 1977. The challenge made in the said case was on the ground that the validating Act made hostile discrimination between different types of urban areas. Repelling that contention it was held that in the light of the definition of the term urban area in the Act there was no question of any hostile discrimination between different urban areas.
8. The learned Counsel for the petitioners submitted that none of these decisions had an occasion to consider the vires of the impugned provision, i.e., Section 7(1A) of the Act. To that extent the learned Counsel is right. However, the challenge which he has mounted on the said impugned provisions has impliedly got answered by the decision of the Constitution Bench of the Supreme Court in the case of Ahmedabad Mfg. and Calico Printing Co. Ltd. 1968 GLR 461 (S.C.) the challenge to the impugned provision under Section 12 of the Gujarat Education Cess Act, 1962 was on the ground that there was no machinery under the Act for fixing the was arbitrary and violative of Article 14 of the Constitution of India. This contention was repelled by the Supreme Court by holding that the machinery available under the provisions of Municipal Corporated Act was available for that purpose as education cess was merely an addition to Municipal Tax. Thus the Supreme Court examined one type of properties subjected to education cess. Court are concerned with the other type of properties also covered by the sweep of the said legislation i.e. lands. So far as lands are concerned, whether they are agricultural lands or non-agricultural lands, the provision for levy of surcharge has been made under Section 3 and Section 7 of the Act. Consequently by analogy and on the lines on which the Supreme Court upheld the vires of Section 12 of the Act in connection with tax on lands and building, vires of Section 7(1A) can be upheld by holding that if adequate machinery is provided by any other Statute which is incorporated by reference in the Cess Act the said machinery would be available for carrying out the exercises contemplated by the impugned provision of Section 7(1A). With that end in view we may turn to the other relevant provisions of the Act which will have to be read in the context of Section 7(1A). First of all the may turn to definition. Section 2, Sub-section (ix) which defines relevant Code to mean in relation to the Kutch area of the State, the Bombay Land Revenue Code, 1879, as applied to that are. We may also turn to Section 2(xvii) of the Act which states that words and expression used but not defined in the Act shall so far as the provisions of the Act relate to a surcharge on lands have the meanings assigned to them in the relevant Code and the Rules made thereunder. The third relevant provision is found in Section 26 of the Act which lays down that nothing in the Act shall, in any way be deemed to affect the application of any of the provisions of the relevant Code and the Rules and orders made thereunder to lands to which the Act applies and to the right and obligations of persons in respect of such lands, in so far as the said provisions are not in any way inconsistent with the express provisions of the Act.
9. Reading the aforesaid three provisions together no doubt is left in our mind that for the purpose of computation of non-agricultural assessment for the purpose of Section 7(1A), the entire machinery of the Land Revenue Code for computing such non-agricultural land would always be available. Section 26 of the Act in terms attracts the operation of the relevant provisions of the said Land Revenue Code. There is nothing in the Act which indicates any contrary intention. There is no expression in the provisions of the Act which is inconsistent with such applicability of the Land Revenue Code for the purpose of computing non-agricultural assessment for the purpose of Section 7(1A). It is therefore held that Section 7(1A) supported by the relevant machinery provisions under the Land Revenue Code can be pressed in service for fixing or computing surcharge on the concerned lands. Once it is held that this machinery provision is available, the challenge to this provision on the ground of arbitrariness and absence of guidelines would fail. It is not possible for us to agree with the contention of the learned Counsel for the petitioners that Section 7(1A) stands by its own and has nothing to fall back upon by way of guidelines for computing non-agricultural assessment for the concerned lands and therefore the provision would become arbitrary. On the same lines on which the Constitution Bench of the Supreme Court in Ahmedabad Calico Mill's case (supra) sustained the vires of Section 12 of the Act, on the ground that the machinery provision was available under the Bombay Provincial Municipal Corporations Act for computing education cess on lands and buildings in urban areas, the vires of Section 7(1A) can be sustained on the ground that as the provision deals with lands used for non-agricultural purposes, the entire machinery provision for fixing non-agricultural assessment under Land Revenue Code is available for successful working of the said impugned provision of Section 7(1A). The challenge to the vires to this provisions, therefore, is devoid of any substance and is rejected.
10. That takes us to the last contention canvassed by the learned Counsel for the petitioners. It was vehemently contended that so far as Special Civil Application No. 1380 of 1981 is concerned, the concerned authority had nowhere indicated how the education cess was worked out at Rs. 10,986-36 per year; that even if Section 7(1A) was applicable this tax would be by way of surcharge or additional tax on the amount which would have been assessed on such amount as non-agricultural assessment was fixed up for these lands and thereafter the rate of surcharge was worked out as per Section 7(1) with reference to the relevant Sub-clauses (i) to (iv) the huge amount of tax levied would be totally arbitrary and de hors the provisions of Section 7(1A). So far as Special Civil Application No. 1229 of 1980 is concerned it was submitted that it is difficult to appreciate how the education cess is worked out for the years 1972-73 to 1975-76 at the rate of 0-02 np. per sq. metre and at the rate of 0-03 np. per sq. metre for the years 1976-77 to 1978-79 by order at Annexure 'E'. It is also difficult to appreciate how 20% of the non-agricultural assessment so computed is sought to be levied by way of education cess for the concerned years, especially when Section 7(l)(i) to (iv) provide sliding rates at 12.50%, 25%, 50% and 75% of the amount of non-agricultural assessment for the purpose of fixation of education cess. Next placing reliance on the affidavit-in-reply filed by the respondents on Special Civil Application No. 1380 of 1981, especially paragraphs 5 and 11 thereof it was contended that the respondents themselves have come forward with a specific case and it is the respondents, own case that in such cases the ground rent fixed under the lease would be treated as land revenue for the purpose of education cess and under the circumstances in no case the demand of education cess as put forward by the respondents can be justified.
11. We find considerable substance in the aforesaid contention of the learned Counsel for the petitioners. As provided by Section 7(1A) education cess can be levied and collected on lands leased by the Government for the purpose of unconnected with agriculture and under the terms of such lease no non-agricultural assessment is leviable. Education cess can be levied and collected on such lands by computing non-agricultural assessment on the assumption that it was leviable only for the limited purpose of the said provision and on that basis education cess is to be worked out as per Section 7(1A). Learned Counsel for the petitioners is right when he contends that so far as Special Civil Application No. 1380 of 1981 is concerned no such exercise appears to have been undertaken by the respondent and the demand of education cess to the time of Rs. 10,986-36 per year appeasr to be patently arbitrary and do hors even the provision of Section 7(1A) of the Act, as the procedure required therein does not appear to have been followed before arriving at the said figure. So far as Special Civil Application No. 1229 of 1980 is concerned it is true that non-agricultural assessment has been worked out for the concerned years at 0-02 np. or 0-03 np. per sq. metre and that would obviously be under the relevant provisions of Land Revenue Code. However, there is an insurmountable difficulty on the way of respondents in sustaining the levy on that basis. The respondents themselves while contesting these petitions have come forward with a specific case in affidavit-in-reply in Special Civil Application No. 1380 of 1981 and also in written instructions which are supplied to the learned A.G.P. so far as Special Civil Application No. 1229 of 1980 is concerned that for the leased lands the ground rent fixed under the leases is treated as land revenue for the purpose of relevant provisions i.e. Section 7(1A). It will be appropriate to note the stated of the respondents themselves as reflected in the affidavit-in-reply in the exact terms in which such stand is put forward. In paragraph 11 of the affidavit-in-reply of the Taluka Development Officer in Special C.A. No. 1380 of 1981 it is averred that it is not true that land revenue is collected from the land occupied by the petitioner-Company; that ground-rent at the rate of Rs. 2 per acre and royalty at the rate of Rs. 1/- per on have been collected from the petitioner-Company and that amount of ground-rent has been deposited under the Head of Land Revenue and the account for the same is maintained in the Revenue Record. It is further stated that the amount of ground-rent collected from the petitioner-Company has been considered as land revenue for the land occupied by the petitioner-Company. The same stand is reiterated in paragraph 11 of the said affidavit-in-reply to the effect that the depondent has already made it clear in the earlier paragraph of the affidavit-in-reply that the ground-rent recovered from the petitioner-Company is nothing but Land Revenue, and hence it is not true to say that the land occupied by the petitioner-Company is not assessed for the Land Revenue. Thus, it becomes clear that it is a case of respondents themselves before us in the present proceedings that concerned lands leased to the petitioners have been assessed to land revenue by accepting the basis of ground-rent fixed under the lease. In this connection it would be profitable to have a look at Section 48 of the Bombay Land Revenue Code which provides that the land revenue leviable on any land under the provisions of the Act shall be assessed, or shall be deemed to have been assessed, as the case may be with reference to the use of the land for the purpose of agriculture; for the purpose of residence; for the purpose of industry and for the purpose of commerce, or for any other purpose. It is not in dispute between the parties that the lands leased to the petitioners were not used for the purpose of agriculture. On the facts of the present case, admittedly, the lands leased to the petitioners in both these cases are being utilised for the purpose of running salt industry. Consequently the stand of the respondents in the affidavit-in-reply that these lands are assessed to land revenue means that it is assessed to non-agricultural assessment for the purpose of industry, and the non-agricultural assessment as submitted by the respondents before us, on these lands will be treated to have been fixed at a rate which is equivalent to the ground-rent fixed under the lease. Now in both these cases admittedly the ground-rent fixed is Rs. 3/- per acre.
12. It appears that there is some inconsistencies between the parties in their pleadings in connection with the fixation of ground-rent. The petitioners contended that it is Rs. 3/- per acre per year while in the affidavit-in-reply the respondents stated that it was still less being Rs. 21- per year. However, the learned Counsel for the petitioners fairly submitted that the ground-rent fixed in both these cases should be taken at Rs. 3/- per acre per year. We must therefore accept for the purpose of the present proceedings that the ground-rent fixed for both these lands under the lease at Rs. 3/- per acre per year. On the stand of the respondents in their affidavit-in-reply in Special Civil Application No. 1380 of 1981 and on the basis of similar identical instruction to learned A.G.P. in Special Civil Application No. 1229 of 1980 the non-agricultural assessment for these land for the purpose of Section 7(1A) can validly be taken at the rate of Rs. 3/- per acre per year. But for the aforesaid stand taken by the respondents before us we would have been required to remand the proceedings to the competent authority for arriving at the proper notional non-agricultural assessment on these lands with a view to computing the appropriate education cess as per Section 7(1) of the Act. But on the facts of the present case and in the light of the stand taken by the respondents before us, we deem it unnecessary to remand this proceeding for that purpose. We must, proceed on the admitted position on the record of this case that the notional non-agricultural assessment for these lands for the purpose of Section 7(1A) of the Act he taken as Rs. 3/- per acre per year. Once that conclusion is reached, the computation of surcharge as per Section 7(1A) would present no difficulty. Admittedly the petitioners' lands are being utilised for the purpose of running industry viz., salt manufacturing industry which is not a village industry. However, these lands are also admittedly used for the purpose of business of storage or sale of salt and its by-products as mentioned in the very first paragraph in both petitions. Consequently it can be said that these lands are used by the petitioners partly for manufacturing salt which will be an industry other than village industry and partly for other commercial purposes or business. In such case the proviso to Section 7(1) would become relevant. It lays down that where any land is simultaneously used for two or more purposes and the part used for each such purpose is not separate, the surcharge shall be levied at the highest rate applicable in relation to any of the purposes for which the land is used. As per Section 7(l)(iii) the rate applicable is 50% of the amount of non-agricultural assessment so levied or leviable, where the land is used for any industry other than a village industry. But under Section 7(l)(iv) it is held laid down that cess will be at the rate of 75 per cent of the amount of non-agricultural assessment so levied or leviable, where the land is used for a commercial purpose or for the purpose of any trade, profession or business. Therefore, the petitioner's lands would be liable to pay education cess by way of surcharge on lands at the rate of 75 per cent of non-agricultural assessment leviable thereon. As the non-agricultural assessment leviable on these lands is found by us to be at the rate of Rs. 3/- per acre per year, the education cess by way of surcharge would work upto 75 per cent of Rs. 3/- per acre per year i.e. Rs. 2-25 per acre per year. That would be the permissible education cess by way of surcharge leviable on the petitioners' lands as per Section 7(l)(iv) read with the proviso and alsoread with Section 7(1A) of the Act.
13. As the authorities below have not computed non-agricultural assessment on the aforesaid basis, these petitions will have to be allowed and the proceedings will have to. be remanded to the concerned Taluka Development Officer, i.e., respondent No. 2 in Special Civil Application No. 1380 of 1981 and respondent No. 3 in Special Civil Application No. 1229 of 1980 for calculating the appropriate education cess being surcharge leviable on petitioners' lands in the light of the aforesaid observations and directions in this judgment. The third contention of the learned Counsel for the petitioners stands accepted. We make it clear that we have arrived at the figure of notional non-agricultural assessment for the purpose of 7(1A) so far as the petitioners' lands are concerned only on the basis of the peculiar facts and circumstances of the case before us and in the light of the stand taken by the respondents in this connection.
14. Rule issued in Special Civil Application No. 1229 of 1980 is made absolute to the extent of quashing the demand at Annexure 'E' and the communication addressed to the petitioner as per Annexure 'G' and 'H'. Respondent No. 3 is directed to recompute the education cess payable by the petitioners for the relevant years in the light of the directions and observations contained in this judgment and thereafter inform the petitioners the appropriate demand of the recomputed education cess which may be found payable by the petitioners. As the basis for such computation is already fixed by us in the present judgment, Mr. Y.S. Mankad, learned Counsel for the petitioners did not insist for any personal hearing by the respondent No. 3 before such computation is made. However he reserves liberty to raise appropriate contention in case the said computation is found to be containing any factual error. Similarly, rule issued in Special Civil Application No. 1380 of 1981 is made absolute by quashing and setting aside the demand at Annexure 'I'. The proceedings are remanded to respondent No. 2 for recomputing the education cess for the relevant years in the light of the observations and directions contained in this judgment. In this case also the learned Counsel for the petitioners did not insist for any personal hearing before such computation, as we have already fixed the basis on which such computation has to be made. He, however, reserves his liberty to raise appropriate contentions if necessary against the said fixation in accordance with law if it contains any factual error. The respondents will be permanently restrained from enforcing the impugned recovers of education cess pursuant to their orders in both these petitions as those recoveries are found to be illegal and unauthorised. In the facts and circumstances of the case there will be no order as to costs.