DANTULURI RAM RAJU AND ORS. versus STATE OF ANDHRA PRADESH AND ANR.

DANTIJLURI RAM RAJU AND ORS.

STATE OF ANDHRA PRADESH AND ANR.

December 16, 1971

[S. M. S!KRI, C.J., J. M. SHELAT, I. D. DUA, H. R. KHANNA AND G. K. MITTER, JJ.J

Andhra Pradesh (Krishna and Godavari Delta Area) Drainage Cess Ac:: 1968-Whetliei• vio{utive of Art. 14 of the Constitution.

The vires of the Andhra Pradesh (Krishna ancl Godavari Delta area) Draina~ Cess Act 1968 has been challenged in C.A . ...No. 223 of 1970 and in writ petition No. 251 of 1971. The Act of 1968 applies to all the lands comprised within the delta :ireas of "Krishna & Godavari rivers in the State of Andhra Pradesh. The Act provided fdr levy and collec-tion of drainage cess on all lands comprised within the delta area of Krishna & Godavari rivers, for tbc purpo!e of raising funds to meet the expenses incurrc.U on drainage t>chcmes undc'rlakcn in the said area for its protection from floods and for matters connected therewith. Under the Act, -fer- 6 yea'rs, tax at the rate varying from Rs. 10/- for the-Godavari eastern Delta to Rs. 20/ - per acre per annum for Godavari Western Delta .was levied. number of points were raised by the Appel-lants but the High Court rl!jcctcd all their contentions.

In appeal, th'J Appellants contended that the provisions of tile Act is violative of ~rt. 14 of the Constitution, that the ~ight of appeal pro· vitled by s. 5 of the Act is illusdry and lastly, there is excessive delega-tion of the legislative function inasmuch as no ininimum rate of the ccss has hccn prescribed. Disn1issing thi'.! appeal and the writ petition,

HELD : ( l) 111c. pro,•isions of. the impugned Act •are not violativl! oi Art. 14 of tho Constitution. The floods and drainage problems of all rho land<; in the delta area \\·ere not similar oi:: of equ~I m~itude. The\ vn'ried considerably from one part of the delta area to the other and the c~timatetl cost of the proposed work a1so varied from area to area. 'fhe. flo<jd strike equally all lands in the area and make no discrimination so f::;.r as quality and productive c<lpacity of those lands are ~once{ncd. In th~ circumstances, it appears to be just and reasonable that each aci'e in division should bear equal hurden of the amount which is sought to be raisec.l to fight the danger of flood anc.l provide for an efticient sy•-rcr.1 of drainage. Furth·~r a~ the cost of draioa~ scheme varies in th: di.fferent divisions, the rate of ccs-s has hee11 fixed at· different rates for the divisions keeping ln view the cost of Jrainage scheme in ea~h. division. The differential in tb.: cost o( -rlr~i!1age -schemes for the four divlsions has been properly rcfiecited in the vnrying rat"!s of cess for each division. l n the present cnse, the Act cont?. ins sufficient guidelines for the fixation of rate of ccss and th"!Ie is justification for uniform rate· of ccss for cnch acre of land in .division of the deltaic area. Therefore, there is no discrimination and tl'f&·provisions of the in1pugncd Act arc not viola· tive of Art. 14 of the Gonstitution. Th~ fact that on account of topo-gr~phical situ<:tion some land-0\\·n~rs get greater benefit of the drainage :')cheme because of their ]ands being -1nore prone to damage by fl£XX!s · is fortuitous circumst'lnce and the s~mc would not be va1i4 g:rotind for srriking down the impugnetl legislation. [916 D-917 G]

(2) The right of appeal provided by sec. 5 of the Act is not illusory. An aggrieved· person can agitate in appeal about ·the area for which the cess is levied or the ownership of that area or that he owned an area which is Jess than that for which cess is levied. Therefore, this right is not i."llagin~<ry. ·

( 3) Thero is also no excessive ddegation of the legislative power. The S1'1tc Govt. has adhered to the maximum prescribed by the Act. The absence of nlinimum limit \Viii 11ot vitiate taxing statute.

KiiandiRe Shch Bhat .& Others v. The Agricultural Income-lax Officer, I, [ 1963] 3 S.C.R. 809. Eru•t India Tobacco Co. v. S!ate of Artdhra Pra· aesh, [1963] I S.C.R. 404, Twyford Tea Co. Ltd v. The State of Kera/a, [1970} 3 S.C.R. 383, State of A.P. v. Na/la Raja Reddy, [1969] J S.C.R. 28, State o(Kerala V.. Haji K. Haji K. Kurty Nalw, [1969] 1 S.C.R. 645 referred to.

°CIVIL APPELLATE JURISDICTION: C.A. No. 223. of 1970.

Appeal from the judgment and order dated March 27, 1969 of the Andhra Pradesh High Court i'll Writ Petition No. 998 of 1969.

AND

ORIGINAL JURISDICTION : Writ Petition No. 251 of 1971. Under Article 32 of the Constitution of India for the enforce-n1ent of the Fundamental Rights.

L. M. Singhvi, Krovid; Narasimhan, S. K. Dhingrd. and A. Subbu Rao. for the appellants (in C.A. No. 223 of 1970).

K. R. Chaudhuri and K. Rajendra Chowdhary, for the peti-tioners (in W.P. No. 251 of 1971).

P. Ram Reddy and P. Porameswara Jl.ao, for respondents

(in both the matters).

The Judgment of the Court was delivered by

Khanna, J. The vires of the Andhra Pradesh (Krishna and Godavari Delta Area) Drainage Cess Act, 1968 (Act No. 11 of 1968), hereinafter referred to as the Act. has been challenged in Civil Appeal No. 223·of 1970 as well as in Writ Petition No. 251 of I 971. Civil Appeal No. 223 has been filed on certificate granted bv the Andhra Pradesh High Court against ithe judgment of that Court whereby petition under article· 226 of ti).e Constitu-tion of India presented on behalf of the eight appellants to assail the vires of the Act was dismissed at the stage of admission. Writ Petition No. 251 of 1971 has ken filed by 434 petitioners. The respondents in the appeal are [1]the State of Andhra Pradesh and the Collector of West Godavari District while those in the writ petition are the State of Andhra Pradesh and the Collector of Kri>hna District.

Tho? apnellants in the civil appeal belong to different Talub of the West Godavari District and own. extensive area5 of land in Jt1-L736S •PCl(n

that district. As such, they are liable to pay land revenue. Peti-tioners Nos. 1 to 38 in the writ petition are residents of Tenneru within the .area of Vijayawada Taluk. They own about 500 acres of !dnd in and around that village. The rest of the peti-tioners are residents of different villages in Krishna district and own an area of about 4,000 acres in that district.

As the petition under article 226 of the Constitution of India which. is the subject of civil appeal was dismissed at the stage of admission, no affidavit on behalf of the respondents was filed in the High Court. The respondents were consequently permitted to file an affidavit in this Court. Affidavit of Shri D. Venkatdri, Assistant Secretary, Government of Andhra Pradesh was there-after filed on behalf of the respondents. more detailed supple-mentary a!fidavit of Shri Venkatdri has also been filed on behalf of the respondents and the same officer has filed his affidavit in opposition to the petition under article 32 of the Constitution.

Before dealing with the different provisions of the Act and the contentions advanced, it would be apposite to reproduce the State-ment of Objects and Reasons of the Bill for the purpose of under-standing the historical background and the antecedent state of affairs leading up to ihe impugned legislation. The Statement of Objects and Reasons reads as under . :

"The coastal distriots of East Godavari, West Goda-vari, Krishna and Guntur are being subjected. to floods every year which cause immense damage to crops as well as private properties besides disrupting rail and road communications. for considerable periods in the year. The intensity of the floods which occurred in 1953, 1962 and 1964 have highlighted the need for immediate action for solving this recurrin1t problem and to sug-gest remedial measures for mitigating or avoiding in future the damage to crops and property in the area on account of similar floods. The Committee after having an extensive tour in the area, made some recommenda-tions for improvit:ig all the drains in the delta area of the Krishna and Godavari rivers and also formation of flood moderating reservoirs across Budameru, Y erra-kalva. Tammileru etc. The total cost of all the drain improvement sGlJemes as well as the flood moderating reservoirs as reC(Jmmended bv the Expert Committee is a~timated roughly to be Rs: 27 crores. It is considered that it might be necessary to undertake in the delta area noi onlv the schemes' and works suggested by the Ex-oert Committee but also some other schemes and works for the purpose in view. The actual" cost of all the schemes and works ·required to be undertaken in the

delta area is likely to exceed the cost, as estimated above. In view of the present difficult ways and means posi-- tion, it is not possible to provide the necessary funds required for the purpose either under the flood control sector Qr under the irrigation sector of the State. It is, therefore, considered necessary to leyy drainage cess on all the lands comprised within each of the divisions in the delta of the Krishna and Godavari rivers, for period of six years, at rate not exceeding rupees ten per aqe per annum in respect of lands in the Godavari eastern deltaic division and Godavari Central deltaic division, JUpees twenty-five per acre per annum in res-c pect of lands in the division comprising the Godavari western deltaic division and the Krishna eastern and Krishna Central del'taic divisions and at rupees fifteen per acre per annum in respect of lands in the Krishna western deltaic division.

It is also proposed to constitute the proceeds of the drainage cess into separate fund and to establish Board to administer the said Fund and to apply the proceeds of the drainal(e _ cess derived in division to-wards meeting the cost of drainage schemes undertaken in '°1at division.

This Bill is intended to give effect to the above objects."

The Act carne into force on 20th December, 1968. It applies to all the lands comprised within the delta areas of Krishna and Godavari rivers in the State of Andhra Pradesh. According to the preamble of the Act, it is "an Act to provide for 'the leyy and collection of drainage cess on all lands comprised within the delta area of the Krishna amd Godavari rivers in the State of Andhra Pradesh for the purpose of raising funds to meet the expenses in-curred on drainage schemes undertaken in the said delta area and for matters connected therewith." Section 2 of the Act contains various definitions. "Board" has been defined in clause (a) to mean the Krishna and Godavari Delta Drainage Board estab-G lished under section 7 of the Act. "Delta area" .according to clause ( c) means the area comprising the lands in the deltas of Krishna and Godavari rivers, irrigated whether by flow or lift, under the network of canals taking off from the barrage near Vijayawada on the Krishna river and the anicut near Dowlaish-waram on the Godavari river. "Division" has been defined in clause ( d) to mean any of the following difisions in the delta area, namely :-

(i) the Godavari eastern delta;

(ii) th~ Godavari central delta;

(iii) the area comprising the Godavari western delta, the Krishna eastern delta and the Krishna central delta;

(iv) the Krishna western delta;

According to clause ( e), "drainage cess' means th~ tax leviable and collectable under section 3. Clause (f) defines 'drainage scheme" as under :

"(f) "drainage scheme" means any scheme for the improvement of drains in the delta area and for the formation of flood moderating reservoirs in the upland areas across the rivers and streams flowing into the delta area and includes any scheme relating to the following works in the delta area which are owned or controlled by the Government or constructed or maintained by them and not handed over to any person :-

( i) channels, whether natural or artificial, for the discharge of waste or surplus water, and escape chan-nels from an imgation work, together with dams, em-bankments, weirs, sluices, groynes, pumping sets and other works connected with or auxilliary to all such channels;

(ii) all works for the protection of lands from floods or from erosion;

Exp/JJnation.-For the purpose of this clause, any part or stage of scheme shall be deemed to be scheme." .,,

"Governn1ent" according to clause (g) means the· State Govern· meat, while "land" has been defined in clause (h) to mean wet or dry land. Clause (j) defines "owner" in relation to any land as meaning the person liable to pay the land revenue due o°' the land and includes ryot having permanent right of occupancy with" in the meaning of the Andhra Pradesh (Andhra Area) Estates Land Act, 1908. According to the explanation to that ·clause, the expression "person liable to pay the public revenue" in rela-tion to any land in respect of which no public revenue is payable means ithe person who would have been liable to pay public reve-G nue had it been payable on such land.

Section 3 of the Act deals with levy and collection of drainage cess. According to sub-section ( 1 ) of the section, there shall be levied and collected by the Government. for period of six years from the date of the commencement of the Act. as drainage cess on every land in the delta area comprised within division speci-lied in column (2) ·of the Schedule, for the purposes of this Act in ihat division. tax at such rate per acre per annum, not exceed· in.!! the rnte specified in the corres1rndinj! entry in column (3)

thereof, as the Government may, by notification, specify in respect of that division. According to sub-section (3) of that section, the drainage cess leviable under the section on any land shall be payable by the owner of such land while according to sub-section ( 2), nothing i11 sub-section ( 1) >hall prevent the Government from levying and collecting at anv time after the expiration of the period of six years the drainage cess or any arrears pertaining thereto, which is foviable or collectable during 1the said period of six years. The Schedule referred to in the se9\ion fixes the maxi-nium rate at which drainage cess may be collected and according to it the maximum rate shall be Rs.· 10 per acre per annum for the Godavari eastern delta and the Godavari central delta, Rs. 20 per acre per annum for the area comprising the Godavari western delta, Krishna eastern delta and tho~ Krishna central dealta and Rs. 15 per acre per annum for 'the Krishna western delta.

Section 4 of the Act gives the procedure to be followed be-forn levying drainage cess. According to this seotion, the col· lector before levying the cess in respect of any land, shall cause notice 1to be served on the owner of the land, requiring him to make payment of the amount of the drainage cess within 45 days of the service of the notice. Section 5 gives right of appeal to the perrnn aggrieved by the levy o~ the drainage cess, while sec-tion 6 makes provision for order in revision by the Go\l'~rnmem. Section 7 provides for the establishment of the Krishna and Godavari Delta Drainage Board. Provision for the constitution of the proceeds of the drainage cess into fund and its ?timinis-trn:ion and :n:iplication is made in se.ction 8 which 1 ;ads as under :

"8 ( 1) The ,ll·oceeds of the drainage cess levied and collected under this Act. reduced by the cost of col-F lection as determined by the Government. shall after due appropriation nrnde by the State Legislature by law, be constituted in1o fund It'll'~ called the "Krishna and Godavari Delta Draina.ge Cess Fund.

( 2) Jn addition to the proceeds referred to in sub-section ( 1), any moneys received from the State or Central Government or any other source for the pur· poses of this Act, shall be credited to 'the Fund.

( 3) The Fund shall vest in, and be administered b~·. the Board in such manner as may be prescribed.

( 4) The Fund. in so far as it relates to the proceeds of the draina~e cess leyied and collected in division, shall be applied towards meeting the cost of the drain-age schemes which the Board may, with the concur-rence of the Government. undertake in that division.

The exl>(:nses of the Board and its Committees shall also be met out of the Fund :

Provided that it shall not be necessary to obtain the concurrence of the Government as aforesaid in res-pect of such class of drainaf!,e schemes as may be prescribed;

Provided further that the expenditure incurred by the Board for any purpose common 1to all or any of the divisions shall be apportioned amonf!, the divisions concerned in such manner as may be prescribed."

Accordinf!, 1o section 9, the drainaf!,e ce>s payable under the Act by an owner in respect of any land shall be deemed to be public revenue· due upon the said land and the provisions of the Andhra Pradesh Revenue Recovery Act, 1864, shall apply. Section 10 f!,ives power to tlle Government to fix instalments for payment of drainaf!,e cess while section 11 empowers the Gove1Ilment to f!,rant exemn.tion or make reduction in case of undue hardship on account of unseen calamity or any other reasonable cause to an owner or class of owners of land. Section 12 pertains to the bar of iurisdi~•;r.-" of civil courts in respect of matters fallillf!, within the scope of the authorities actinf!, under the Act. Accordinf!, to section 13, the provisions of the Andhra Pradesh Irrigation (Levy of Bettermen1 Contribu'tion and Advance Betterment Contribu-tion) Act, 1955 in so far as they relate to drainaf!,e work, shall not apply to any drainaf!,e schem~ under the Act. Section 14 f!,ives powers to the Government [1]to give directions to the Board. Rules under the Act are made bv the Government under section 15 of the Act for carrying out all or any of the purpose> of the Act.

The Krishna and Godavari Delta Drainage Board Cess Fund Rules made under section 15 ot the Act were issued in April 1969. It is not necessary to refer to the different rules. For our purposes it would suffice. to reproduce clauses (1) to ( 3) of rule 21 as under :

"(I). The drainage cess shall be collected along with the land revenue and credited 'to "M.H. IX-Land Revenues''. Subject to the provision under sub-section (I) of section 8 at the end of each financial year, an equivalent amount shall be transferred to the Krishna and Godavari draina)!e cess fund account by debit to "9. Land Revenue".

(2) The expenditure on the drainage schemes shall be debited to the appropriate head of account within the Consolidated Fund of the State, either in the revenue

or capital head according to the expenditure falling under revenue or capital head and at the end of each financial year, an equivalent amount shall be transferred from the Krishna and Godavari Drainage Cess Fund account to the concerned head by means of deduct entry.

( 3) The expenditure incurred by the Board for purposes common to all or any of the divisions, 'llke the establishment, tools and plants, shall be apportioned among the division concerned as far as possible in the proportion in which the expenditure is incurred on the drainage schemes in these respective divisions."

Following notifica>tion was issued on December 17 /20, 1968 under sub-s•ection (1) of section 3 of the Act :

"In exercise of the powers conferred by sub-section ( 1 ) of section 3 of the Andhra Pradesh (Krishna and Godavari Delta Area) Drainage Cess Act, 1968 ( Andhra Pradesh Act 11 of 1968), the Governor of Andhra Pradesh hereby specifies in column ( 3) of the Table below in respect of the division mentioned in column (2) thereof, the rate of tax per acre per annum that shall be levi·~d and collected by the Government for the first year commencing on the 20th December, 1968 (date of commencement of the Act) as drainage cess on everv land in the delta area comprised within the said division :-

TABLE

The High Court while dismissing the appellants writ petition repelled the contention that the provisions of the Act were violative of article 14 of the Constitution and 'that the cess levied by the Act was fee and not tax. Likewise. the argument put forth on behalf of the appellants that the State Legislature was not compe-tent to levy drainage oess and there were no effective provisions for appeal and revision did nut find favour with the High Court.

In appeal Dr. Singh vi on behalf of the appellants has cha!· lenged the vires of ithe provisions of the Act on three grounds. It is urged in the first instance that the provisions of the Act are violative of article 14 of the Constitu1ion. Secondly, according to the learned counsel, the right of appeal provided by section 5 of the Act·is illusory. Lastly, it is submitted, there is excessive delegation of the legislative function inasmuch as no minimum rate of tlie cess has been prescribed. The grounds that drainage cess amounted to fee and that the State Legislature was not com-petent to enact •the Act have not been pressed in appeal.

In the writ petition under article 32 of the Constitution, Mr. Choudhury on behalf of the petitioners, has adopted the conten-tions advanced by Dr. Singhvi.

The above contentions have been controverted by Mr. Reddy on behalf of the respondents and according to him, the provisions of the Act suffer from no legal cir constitu1ional infirmity.

Before dealing with •the question as to whether there has been an infringement of article 14 of the Constitution, we may mention that the material on record shows that the State of Andhra Pradesh is one of the major rice producing State in the country. The Krishna Godavari D~lta area has most fertile lands and paddy crop is raised thereon at an extensive scale. The Krishna-Godavari Delta system provides irrigation facilities primarily for paddy crop over an ayacut area of about 22 lakh acres annually in the coastal districts of Guntur, Krishna, West and East Godavari. The irri-gated lands in the above delta system are subject to frequent floods and drainage congestion resulting in heavy loss of crores of rupees per annum because of the damage to the crops. The flood; are caused mainly by rivers _ like Budameru, Thammileru and Yerrakalva. Apart from causing damage to crops, the floods dis-rupt rail and road communications for long periods. Plans for ameliorating the situation were under consideration for nearly half century. The floods of 1964 highlighted the need for immediate action for solving ithe recurring problem. The Government of India in the Ministry of Irrigation and Power as per resolution dated October 9, 1964 constituted an Exeprt Committee under the Chairman~hip of Shri A. C. Mitra, Engineer-in-Chief, Uttar Pradesh for suggesting comprehensive plan for controlling the floods. The terms of reference of the Committee were :

"(i) To suggest comprehensive Plan for control of floods in the coastal rivers like Budameru, Thammileru and Y errakalva by construction of detention reservoirs or by diversion · into ad-joining valley or any other methods.

(ii) To consider and recommend proposals for lowering the flood level of Kelleru lake either by improving the outfall channel Upputeru or by pumping or by both.

(iii) To consider and recommend proposals for im-proving the drainage system in the area and;

(iv) Any other recommendation that the Committee desires 1o make for prevention of floods and in-undation."

The Committee in its report submitred in January 1966 suggested various measures and schemes for tackling the problem of floods and drainage. The Committee noted that most of the existing drains were small in size and short in length. One of the recom-mendations of the Committee was that tho~ aforesaid drains should be improved b_y deepening and widening 'them to suitable sec-tions. Recommendation was also made that "all drains should be brought to their design section and maintained in that condition".

The execution of the schemes and implementation of the measures su_g,gested by the Mitra Committee along with the other drainage schemes as might be found nece,,ary after detailed in-vestigation involved an expenditure of several crores of rupees. As the financial resources of the Andhra Pradesh Government were already over-strained, the Government had to think of other measures for raising the necessary funds. The matter was there-after discussed with the representatives of 'the people belonging to the area- and proposal was adopted for collection of drainage cess for tackll!lg the problem of floods and drainage in th.e Krishna-Godavari delta. The Estima1es Committee of the Andhra Pradesh Legislative Assembly in its report also recognized the need for solving the problem of drainago~ in the area and observed that the amount of drainage cess collected should be kept sepa-rate. The Bill which formed the basis of the Act was thereafter introduced in the Andhra Pradesh Le_~islativc Assemblv in June 1968.

The affidavit filed on behalf of the respondents shows that the floods and drainage problems of all the lands in tho~ delta area were not similar or of equal magnitude. As such, the need for improving the existing drainage works and constructing new works for the contr9l of floods and drainage problems variP.d consider-ably from one part of the delta area to the other. This fact re-sulted in difference in the magni,tude of the proposed work and the estimated expenditure for one part of the delta area and those H. for the other. It was, therefore, considered unjust and irrational to treat the entire delta area as single unit and collect drainage cess at uniform rate from all the lands. The whole delta area

was consequently divided into four compact and contiguous units which were •termed "divisions" by broadly adopting the following criteria :

1. The geographical features' of the area.

2. The drainage characteristics and the unity of draim1ge system, or systems in the area.

3. The extent of improvement needed in the existing flood control and drainage work in the area and their estimated expenditure; and

4. The need to construct further flcod control and drainage works in the area and their estimated expenditure.

The four divisions were : ( l) Godavari Eastern Delta; (ii) th~ Godavari C~ntral Delta; (iii) the area comprising the Godavari, Western Delta, Krishna Eastern Delta and the Krishna Central Delta and (iv) Krishna Western Delta.

The above division of [1]the delta area into four units was in accordance with the findings of the Mitra Committee. It was also feH that in view of ithe nature of floods and the drainage problems, the unity of the existing drainage systems, the geographical situa-tion and the benefits likely to be derived from the improvements proposed, it would be neither desirable nor technically feasible to further su'2cdivide any of the above d(visions into smaller units. On account of the difference in the nature of problems and the needs of improvement requiring diffurent scales of expenditure in each division, it was decided that the levy of drainage cess on •the lands in each <;livision should vary in rate in accordance with the estima1ed expenditure for drainage work in that division. The Chief Engineer of Andhra Pradesh expres&~d the view that the proposed flood control and drainag.e schemes could be implemented in period of six to seven years if adequate financial resources, in-cluding foreign exchange for the required dredging equipment. well~ made available. It was after taking into account the quantum of expenditure on the schemes proposed and the, irrigated area which would be benefited as resu1't of those schemes in each division and :also keeping in view the fact that the peri<Jd' of collec-tion of drainage cess was six years that the State Legislature pro-vided the rates of drainage cess per acre per annum for the four divisions. Originally in the Bill as ill'troduced in the Legislature rate of Rs. 25 oer "ere ner annum was prescribed in respect rl division comprising the Godavari western delta, Krishna eastern 11 delta and the Kri<hna central delta but the Legislature reduced the rate for ;that division from Rs. 25 to Rs. 20 ' per acre per annum.

At the time the above-mentioned Bill was introduced in the Legislature in July 1968 the following estimate in tabular form of the vario_ys expenditures was given on behalf of the Govern-ment :

It may be noted that as against the total estimated expenditure of Rs. 2,923 !akhs, the Government proposed to raise only sum of Rs. 2,592 !akhs through collection of drainage cess over period of six years. The estimated expenditure, according to the affidavit filed on behalf of the respondents, was expected to go up by 10 to 20 per cent during the course of six to seven years of the completion of the scheme. Tue total expenditure was thus ex-. pec'ted to go up to Rs. 35 crores and the excess over th·~ anticipated collection amounting to about Rs. 9 crores would be borne by the State Government.

As regards the argument about the infringement ofthe equality clause embodied in article 14, it may be men'tioned that taxing statute is as much subject to article 14 as any other statute. In the application. however.- of the principle embodied in ihat article, the Courts, in view of the inherent complexity of fiscal adjustment of diverse elements, permit larger discretion to the Legislature in the matter of classification so long it adheres to the fundamental principles underlying the doctrine of equality. The power of the Legislature to classify is of "wide range and flexibility'', so thaf it II can adjust its system of taxation in all proper and reasonable ways. (see Khandige Shah Bhat and Others v. The Agricultural Tncome Tax Officer('_) ,as well as the recent decision of this Court

(I) [1963) 3 S.C.R. 809.

in Vivian Joseph Ferreira and Anr. v. The M,unieipal Corporation of Greater Bombay & Ors., Writ petition No. 187 of 1970 decided on November 4, 1971). Willis in his Constitution Law has summed up the position as under on page 587 :

"A State does not have to tax everything in order to tax sQmething. It is allowed to pick and choose dis-tricts, objects, persons, methods and even rates for taxation if it does so reasonably. . . . . . The Supreme Court has been practical and has permitted V'~ry wide latitude in classification for taxation."

The above principle was approved by this Court in East 1 ndia Tobacco Co. v. State of Andhra Pradesh(') and Twyford Tea Co. Ltd. and Another v. The State of Kera/a and Another('). It was also observed in the last mentioned case that burden is on person complaining of discrimination and, for this purpose, it is neo!ssary ·to prove not possible inequality but hostile unequal ·treatment. ·

The modern trend in all progressive countries is towards establishment of welfare State, and with this end in view, the State has to prepare plans and devise beneficrent schemes for the good of (he common people. The implementation of those plans and schemes entails colossal expenditure. The State has conse-quently to tap various sources for augmenting its income and rais-in_g, the revenue. Taxes are levied for this purpose, and the State is give!) wide range of choice.for the purpose of taxation. It is axiomatic that different situations call 'for different fiscal measures. The State is presumed to know the requirements of the &ituation and act accordingly. No .,rigidity being possible, it is difficult to a_pply any set formula. Much greater latitude and discretion has. therefore, to be allowed to the State for the purpdse of taxation in the context of article 14 of the Constitution.

Dr. Singhvi on behalf of the appellants has referred to the fact tha't there is {lat and uniform rate of cess for each acre in respect of all lands in division irrespective of the quality and productive capacity of the land. It is ur~ed tha-t flat and uniform rate for all lands in division results in i!lequality and is violative of article 14. Jn this conneC'tion, we find that the material on record, t:J which reference has been made. earlier.shows that the rate of cess rirescribed for· each division has rational nexus with the object of the Act .and is based on intelligible differentia. The object of the Act is to raise funds for 1the implementaiion of schemes to secure protection of the lands in the deltaic area from ravages of ·the floods. As the Act is designed to benefit the land-in/the divi-sions of the deltaic area, ithe levy of cess at uniform rate for ·~ach acre of the fond in division cannoi be considered to offend the (1) [19631 t S.C.R. 404. (2) [!970] l S.C.R. l8l·

principle of equality. The floods strike equally all lands in the· area and make no discrimination so far as the quality and produc-tive capacity of those lands are concerned. In the circumstances, it appears to be just and reasonable that each acre in division should bear equal burden of the amount which is sougM to be raised to fight the danger of floods and provide for an efficient system of drainage. Further, as the cost of drainage scheme varies in the different divisions, the rate of cess has been fixed at diffe-rent rates fo_r the divisions keeping in view the cost of drainage scheme in each division. The differential in. the cost of drainage schemes for the four divisions, in our opinion, has been properly reflected in the varying rates of ces.s for each division.

Reference has been made on behalf of the appellants, with

view to show that Jack of classification in the matter of tax can create inequality, to the following cases :

Kunnathat Thathunni Moopil Nair v. The State of Kera/a and Another(')

New Manek Chowk Spinning and Weaving Mills Co. Ltd. and Ors. v. Municipal Corporation of Ahmedabad and Ors.([2 ]).

State of Andhra Pradesh & Anr. v. Nal/a Rafa Reddy & Ors.([8 ])

State of Kerala v. Haji K. Haji K. Kutty Naha & Ors. Etc.(')

In the case of K.T. MoopiJ Nair this Court considered the pro-

visions of Travancore Cochin Land Tax Act, 1955 and found that all lands in the Sta!te of whatever description were to be chllrged basic tax at uniform rate per acre irrespective of the quality of the land and the fact whether it yielded or was capable of yielding any income.

In the case of Nalla Raja Reddy this Court held the provisions

of Andhra l;'radesh Land Revenue (Additional Assessment) and Cess Revision Act, 1962 to be violative of article 14. The said Act was passed to. bring uniformity in assessment of land revenue in the Telengana and Andhra areas of the State of Andhra Pra-desh. An additional assessment at the ·rate of 75 per cent of the vearly assessment was imposed on dry land and the total assess-ment was not fo be less than 50 paise per acre. On wet land the additional as§essmetit was to be 100 per cent for land irrigated from Government source and 50 per cent in case of other wet lands. The minimum total demand was also prescribed. The Act was considered to be discriminatory as the minimum had no·

(!) [1961] 3 S.C.R. 77. (3) [1967) 3 S.C.R. 28.

(2) [1967] 2 S.C.R. 679.

(4) [1969j I S.C.R. 645

relation to the fertility of the land. It was also found that tire assessment was left to the arbitrary discretion of an officer with-out an opportunity to question his findings. This case, as observed in the lwter case of Twyford Tea Co. v. The Stare of Kera/a and Another(') was peculiar to itself.

In the case of New Manek Chowk Spinm'ng and Weaving Mills and Haji K. Haji K. Kutty Naha, the question was one of rating. What was held in those cases was thwt taking only the floor area .of building as the basis for determination of tax was an arbitrary method· when buildings bad different rental values depending upon the nature of 1he construction and •the purpose for whicli they were used. These facts were held to be vital in the rating of buildings. It is manifest that the principle involved in these cases has not much relevance for the preseni case.

So far as the case of K. T. Moopil Nair is concerned, we find that the majority quoted with approval the following observations i0f Das C.J. in Shri Ram Krishna Dalmi11. v. Shri Justice S. R. Tendolkar and Others(').

"In determining the question of the validity or other-wise of ~uch statute the Court will not strike down the law out of hand only because no classification appears on its face or .because discretion is given ito the Govern-ment to make the selection or classification but will _go on to examine and ascertain if the sta1ute has laid down any principle or policy for the guidance of the exercise of discretion by 'the Government in the matter of the selection or classification. After such scrutiny the Court will strike down the statute if .it does not Jay down any principle or policy for guiding the exercise of dis-cretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as •to enable it to discriminate between persons or things similarly situate ·and that, therefore, the discrimination is inherent in the· sta•.ute itself."Keeping the above .observa1ions in vi·~w wi find that in the present case the Act contains sufficient guidelines for the fixation of the rate of cess and there is also enough maierial on record to justify uniform rate of cess for each acre of land in division of the deltaj_c area. The imposi1ion of tax on land for· rai~in'! general revenue is substantially diff.erent from the levy of cess fo; 111 [t970J J s.c.R. JRJ (2) [i961] 3.S.C.R. 77.

implementation of 1 drainage scheme for the benefit of lands in an area and the principles applicable in one case would not neces-sarily hold good in the other.

Reference has then been made on behalf of it11e appellants to an American case, Village of Norwood v. Ellen R. Baker('). In that case the Court considered special assessment upon an abutting property by the front door without taking special benefits into account for 1the entire cost and expenditure of opening street. It was held that othe exaction from the owner of private property of the·cost of public improvement in substantial excess of the special benefits accruing to him is ito the extent of such excess taking under the· guise of •taxation of private property for public use without compensation. Perusal of that authority shows that 'the Court invoked the doctrine of due process of law in arriving at the above conclusion. The aforesaid doctrine of due process of law is not applicable to India and, as such, the appellants can-not derive much assistance from that authority. Another American case referred to on behalf of the appellants is Kansas City South-D ern Railway Co. v. Road Improvement Dist. No. 6('). The question involved in that case was whether railway property in an area is subieet to assessment to help cost of constructing local improvement in the nature of country highway. The Court observed :

"Ob.viously, the railroad companies have not been treated like individual owners, and we think the dis-crimination so palpable and arbitrary as to amount to denial of the equal protection of the law. Benefits from local improvements must be estimated upon contiguous property according to some standard which will probably produce approximately correct general results. To say that 9.7 miles of railroad in purely farming section, treated _as an aliquot part of the whole system, will re-ceive benefits amounting to $ 67 ,900 from the construc-tion of 11.2 miles of gravel road seems wholly improb-able, ii not impossible. Classification, of course, is per-missible, but we ca:n find no adequate reason for what has been attempted in the present case."

The question involved in the above case, in our view, was mate-rially different and, as such, the appellants cannot derive muc)i assistance from it also.

It has also been argued on behalf of the appellants that their lands are not benefited by the proposed drainage schemes as those lands are not subject ito floods. Refereflce in this context has (t) 43 L. ed. 443. (2) 65 L. ed. 1157.

been made to statement which constitutes Appendix to Vol. lI of the report of~e Mitra Committee wherein details are given of 'the areas damaged by floods. According to that statement, the average area damaged in floods in Godavari western delta, to which the appellants.belong, during the years 1955 to 1964 was 33,091 acres. The land on which cess is proposed to be levied in the Godavar_i western delta, according to the estimate in tabular form given on behalf of the State Government to State Legislature in July 1968, measured 4,90,000 acres. Dr. Singhvi accordingly concludes that only 7 per cent of the land in Godavari western delta is to be benefited as result of the drainage scheme and that 93 per cent of landowners in the Godavari w~stern delta are being made to pay the cost of the scheme which would benefit 7 ~t: cent of the lands in that area.

We are not impressed by the above contention. The floods have vagary and caprice of their own, and it is difficult to pre-dicate about the behaviour of flood waters. The problem which arises in one year cannot afford proper ,guidance for the follow-ing year because the dimensions of the problems in the subsequent o year may be hundredfold compared to those of the previous year. This is evident from the figures in the table relied upon by Dr. Singh.vi. It would appear therefrom that in the year 1961 only 1, 149 acr~ of land in 'the Godavari western delta were damaged by floods, while in the year 1959 the damage caused by the floods in that area covered 89,528 acres of land. The material on record further shows that during 1969 floods, an area· of as much as 3,69,395 acres out of total of 4,90,000 acres, that is, about 75 per cent of the arna was damaged by floods in the Godavari wesitern ddta. It is, therefore, plain that we cannot stick to the average damage referred to by Dr. Singhvi in considering the scheme of drainage. An effective system of drainage has in the very nature of things to make provision not only for normal rain-r fall but also to meet those contingencies as arise when there are unusual raiQs and heavy floods. It is indeed only then 'that the efficacy of drainage system is proved. We also find it difficult to accede to the submission made on behalf of the appellants that we should not take into account the figures of damage done in the 1969 floods. The proposed drainage scheme has to provide for years tp come adequate safeguards and protect against contin-gencies created by unusually heav)r. rains and floods. The fact that the impu1med Act enacted 'in 1968 covered 4,90,000 acres of land in the Godavari western 'delta shows. in the light of subsequent 1969 floods, the foresight of the authors of the drainage scheme which is the subiect of the impugned lP~islartion.

The ano.ellants lands are admittedly irrigated in the deltaic '

area. The benefit to the appellants land, in the circumstances, is implicit in the scheme of drainage. It is not disputed that proper

drainage is an essential concomitant of an efficient system of irri· gation. Without adequate drainage the irrigated land gradually loses its fertility, becomes saline and water logged. The following extracts from· the proceedings of the Fir&! Inter-Society Conference on Irrigation and Drainage would show the importance of drainage .for irrigation :

"Drainage is the removal of both excess water and salines from agricultural soils. Surface drainage is the removal. of excess precipitation and irrigation wastes at the surface io prevent flooding and 'to minify the more costly sub-surface drainage requirements. Efficient engi-neering designs of surface drains require only an under-standing of topographic conditions, pumping. Effective surface drainage is comparatively inexpensive and is essential to permanance of irrigation agriculture."

The affidavit of Shri Venkatadri shows that apari from preven-tion of damage to crop by floods, the following indirect benefit& are derived by irrigated land as result of drainage :

"(1) Facilitates early ploughing and planting, (2) lengthens the crop-growing season, ( 3) provides more available soil moisture and plant food by increasing the depth of root-zone soil ( 4) helps in soil ventilation ( 5) decrees soil erosion and gullying, by increasing wa1er infiltration into soils, ( 6) favours growth of soil bacteria, (7) leaches excess salts from soil and (8) assures )Jigher soil temperatures."

There is one integrated drainage scheme for the division in which the appellants lands are situated and the appellants, in· our opinion, are beneficiaries of ithat scheme in the same wav as the other landowners in that division. The fact that on account of topographical situation some landowners get greater benefit of the drainage s9heme because of their lands being more prone to damage by floods is fortui'tous circumstance and the same would not be valid ground for striking down the impugned legislation. It is well established that if there is equality and uniformity with· in each group, the law will not be condemned as discriminative though due [1]to some fortuitous circumstances arising out of peculilar situation, some included in class get an advantage over others so long as they are not singled out for special treat-ment. (Khandige Sham Bhat and Others v. The Agricultural focome Tax Officer, Supra).

In the case of Vivian Joseph Ferriera and Anr. v. The Muni-H cipal Corporation of Greater Bombay & Ors. (Supra), this Couti dealt with the validity of the Bombay Building Repairs and Reconstruction Board Act of 1969. The said Act related to the problems arising out of the collapse of residential buildings and ll-L736S•.•p Cli72

acute short3,j\e of housinll: accommodation. Provision was made in the Act for establishinll: Board to deal with the said problem by carryinJl: out structural repairs to dangerous buildings by ac-quiring and reconstructinll: buildings which were beyond repair and for the re-housinll: of occupiers who because of such repairs would be dishoused. Temporary levy of an additional cess on buildings and lands to meet the expenditure for the aforesaid purposes was provided for in that Act. One of the grounds which was urJl;ed on behalf of the petitioners was that the Act was violative of a11icle 14 in •!hrut it failed to recognire the material difference between various buildinJl:S with regard to their physical conditions and treated unequals as equals. The petitioners in that case· were owners of residential building which by reason of its having been recently constructed was neither dilapidated nor in danJl;erous condition. RepellinJl: the above contention this Court observed :

"The contention that some of the buildings falling in categories and would not need structural repairs throu11,l\,out the life of the Act or that such repairs would be carried out in buildings not cared for by de-faultinll: landlords, talces no notice of the fact that the primary object of the Act is not to repair all buildings subiect to cess but to prevent the annually recurrent mischief of house collapses and the human tra.i;edy and deprivations they cause. The cess being thus levied to prevent such disasters, there is no question of un-equal treatment between one class of owners and an-other." 1

We are, •therefore, of the view that the provisions of the im-pujl;ned Act are not violative of article 14 of the Constitution.

There is no substance i:n the contention advanced on behalf of the appellants that the. rill:ht of appeal provided by section 5 of the Act -is illusory. The lejl;islature has prescribed the maxi-mum limit of the rate of cess and the notification issued under the Act has fixed that rate. The procedure to be adopted be-fore the levy of the cess has been prescribed in section. 4 of the Act. Section 5 Jtives right of appeal to person aggrieved by the levy of the drainall:e ~ess under section 4. The matters which can be aJl;ifated in appeal may relate to the area for which the cess is levied or the ownership of that area. In case land-owner's stand is that the area owned by him is less than that for which cess is levied or that he has. transferred the said land or part of iit, he can agitate the matter in appeal. The fact that no discretion is given to the appellate authority to determine the rate of cess would not introduce an infirmity or make the riJl:hf of appeal to be illusory.

The argument that there has been excessive delegation of the legislative power in the matter of determining the rate of cess is equally de~oid of force. According to Dr. Singhvi, the legisla-ture has merely prescribed the maximum rate at which cess may be levied but has not fixed •the minimum rate of 1the cess. The precise rate of cess is left to the Government by section 3 of the Act and, as such, according to the learned conusel, there has been excessive delegation of the legisl~tive power. In this connection, we find that it is open to the -legislature to prescribe the maxi-mum rate of cess. The authority mentioned in the statute. sub· ject to other legal requirements, cam levy cess up to that ·limit. As things are the State Governmen1 in the present case has adhered to tbe maximum prescribed by the Act vide notification dated December 17 /20, 1968. The power of the legislature to fix or change the limit of tax has been discussed in para 165 of the Law of Taxation by Cooley, 4th Edition, in the following words :

"Power of legislature to fix or change limit : In addition to, or in place of, constitutional provisions, there are statutes in many states limiting the amount or rate of taxation by country, town, municipality, .or other local subdivision; and sometimes the limitation imposed upon municipality is found in its charter. valid limitation on the rate, where fixed by the legis-lature, is just as binding on counties and municipali-ties as is such limitation fixed by the constitution."

No authority has been cited before ·us to show that even though maximum limit of the tax has been prescribed, the absence of minimum limit vitiates the taxing s<tatute. It is not necessary, however, to dilate upon this aspect of the matter as we find that there are enough guidelines in the Act in respect of the rate of cess because the rate of cess in division has to be correlated to the amount of expenditure to be incurred on 'the drainage scheme in that division.

It may also be mentioned that subsequent to the decision of the writ petitio)l which is the subject of the present appeal, validity of the' provisions of the Act was challenged in batch of writ petitions before 'the Andhra Pradesh High Court. The matter was then referred to full bench. The learned judges constituting the full bench by means of three separate judg-ments upheld the constitutional validity of the provisions of the Act.

As result of tfie above. the appeal and the writ petition are oism.issed, but. in the circumstances. without cost.