Holding

Both Rule 71 (Hyderabad) and Rule 81 (Bombay) are valid as they contain adequate guidelines and do not amount to excessive delegation of legislative power.

Summary

The State of Mysore and its officers appealed against High Court orders that had set aside demands for non‑agricultural (N.A.) assessment levied under Rule 71 of the Hyderabad Land Revenue Rules (amended 4 July 1958) and Rule 81 of the Bombay Land Revenue Rules (amended 27 March 1958). The petitioners argued that the rules gave revenue officers unfettered discretion, amounted to excessive delegation of legislative power and violated Article 14 of the Constitution. The Supreme Court examined the statutory scheme, noting that the rules prescribe a floor‑and‑ceiling range, tie assessment to land use, profit derived and population, and provide for appeal and revision. It held that these safeguards constitute sufficient guidelines and that the delegation is constitutionally permissible. Consequently, the Court allowed the appeals, set aside the High Court judgments and dismissed the writ petitions.

Issues considered

Whether Rule 71 of the Hyderabad Land Revenue Rules and Rule 81 of the Bombay Land Revenue Rules constitute excessive delegation of legislative functions.
Whether the rules confer unguided, arbitrary discretion on revenue officers in levying non‑agricultural assessment, thereby violating Article 14 of the Constitution.

Legislation cited

Bombay Land Revenue Act, 1879s. 214, s. 48
Constitution of Indias. Article 14
Hyderabad Land Revenue Act (VIII of 1917)s. 172, s. 24, s. 48, s. 50

Subjects

non‑agricultural assessmentland revenuedelegation of legislative powerArticle 14rule‑making authorityHyderabad Land Revenue RulesBombay Land Revenue Rulestaxationfloor and ceiling ratesconstitutional validity

Judgment

93
STATE OF MYSORE ETC.
A
v.
M. L. NAGADE AND GADAG & ORS.

May 6, 1983
B
[D. A. DESAI AND 0. CHINNAPPA REDDY JJ.j

Hyderabad Land Revenue Rules subsequently repealed and re-enacted as.
Andhra Pradesh (Te/engana 11.rea) Land Revenue,. Rules, 1951 framed under
Hyderabad Land Revenue Act (V/11of1317 F)~r. 71 as amended on July 4, 1958
-Diversion of agricultural land to non-agricultural purposes-mode of assessment
of/and revenue-Whether rule valid. ' C
Bombay Land Revenue Rules framed under Bombay Land Revenue Act,
1879-r. 81 as amended on March 27, 1958-Whethe_r rule valid.
,
Rule 71 of the Hyderabad Land·Revenue RuleS', Which is si:tbilat tO·r. 81
of the BombaY'Land Revenue Rules, provides for mode of assessment of land ·D
revenue in the event o~ diversion of agricultural lands to non-agticultural
purposes.

The respondents in these appeals had filed certain writ petitions challe~g
ing the levy and demand of non-agricultural assessment made by the appellants,
on the ground, among others, that the -.above rules. conferred unguided and E
. uncontrolled power and there was excessive delegation of legislative functions
and"therefore·the rules were violative of Art. 14 of the Constitution. The l·!igh
Court accepted ihe contention and quas11ed the demand of assessment. .

Allowing the appeals,
F
HELD : Delegation of some part of legislative power becomes a com-
pulsive necessity for viability and functioning. of the vatious institutions ereated·
by the Constitution. The legislature cart delegate details to 6e' wotked out tsy
the delegate and the details may be numerous and significant yet they tJlay wen
be made over to the appropriat~ agency. The guideline ne·ed nOf be found iri
the impugned provisiort. The same may be co1lected: from the setting iti which·
the provision is pl<lced, the purpose for Which the Act is enacted and even the
G
preamble of the statute in which the Provision is incorporated. The object
sought to be achieved by legisla_tion or statute can furnish reliable guideline for..
the exercise of discretionary power. [104 ~, F-G, 100 H·, 101 AJ

Constitutional Law by .Prof. Wills, p, 587; Kunnathat Thathunni Moopil
Nair v~ The State of Kerala and Another, [1961) 3 SCR 67; New Manck Chowk H
Spinning and Jl"eaving Mills. Co. Ltd. and Ors. v. Muni9ipal Corporation of the
Ci1y of Ahmedabad and Ors. (19671 2 SCR 679; State of Andhra Pradesh & Anr.
v. Na/la Raia Reddy & Ors .. [ 1967) 3 SCR 28; State of Kera/a v. Haji K. Haji K,
94 SUPREME COURT REPORTS (198312 S.C.R,

K11tty Naha & Ors. etc. [1969] I SCR 645; Rangi/das Varajdas Khandwala v.
A Collector of Surat & Ors. (1961] 1 SCR 951; and Avinder Singh etc. v. State of
Punjab & Anr. etc. [1979] I SCR 845, referred to.

The basic purpose for which a Land Revenue Act is enacied is for
empowering the State and its agencies and its officials t-b assess and levy land
revenue The land revenue is a tax and the validity of a taX.ing statute has to
·be determined keeping in view the fact that in the matter of taxation the Court
allows wide area of picking and choosing and the slab system. [105 A, G·H]

In the instant case·r. 71,is made in exercise of the rule making power
conferred bys. 172 of the Hyderabad Land Revenue Act. This rule making
power is to be e;ercised for the purpose of carrying out the "provisiqns of the
c Act. Whenever land is diverted to use other than agricultural, powef: is con-
ferred to levy non-agricultural assessment or special assessment but this assess-
m~p.t is to be determin_ed under the amended-r. 71, keeping in view the purpose
of the Act, nan1ely, levying and collection of revenue, the use to which
the land is put, the profit deri~'ed from such deviated _use of the and a"nd
again correlated to population as set out in various sub-clauses of amended
r. 71 and within floor and ceiling prescribed in the impugned rule. The High
D Court fell into an error in holding that rule7 l allowed a wide margin to the
revenue officers in the 1natter of determining the special· assessment to be levied
on !and used for non-agricultural purposes. The High Court failed io notice
that area within which the discretion of the revenue officer can operate is cir-
cUmscribed both by the· fl.oaf and ceiling fixed and while deternlining the
quantum of assessment, the revenue officer h;:ts to bear in mind the use to which
land is ·pufas also the profit derived fron1 the use of the of land. The order
E made by· the revep.ue officer i~ appealable. When a demand is raised, it can
always be controverted under the various provisions of the rele"'.ant :~ules and
the concerned assessee will have full opportunity to vindicate his stand. ·
[104 H; 105 A-B; E-GJ

F There is no excessive delegation of legislative functions in the I-Jyderabad
Land Revenue Act. Section 50 of the Act clearly confers power on the State
Legislature to levy assessffient and When the land is diverted to a use other than
agriculture, the legislature conferred to power to levy non-agricultural assess-
ment. Elaborate provision has been nlade for levying assessment. Section 172
conferred power to enact rules for giving effect to the provision of the Act and
the guideline was provided as herein atmve indicated. [106 B-CJ
G
•
Bombay Land Revenue C~de was enacted in the year 1879 to consolidate
and ·amend law relating to revenue officers and _to t!1e assessment and iecovery
of land revenue and other n1atters connected with Land Revenue Administra-
tion. Section 48 confers power to levy and assess the land revenue with refe-
H rence to the use of the land. Chapter XI makes detailed provision for the proce-
dure to be followed by the revenue officers while discharging their duties and
carrying out the functions in1posed by the Code. Chapter XIlt provides for
appeals and "revisions against the orders of the revenue officers. [106 E-G} .
MYSORE v. M.L. NAGADE (Desai, J.) 95
Rule 81 of the Bombay Land Revenue Rules framed under s. 214 of
the Act, as amended on March 27, 1958, provides for ordinary rates of non-
agricultural assessment. Floor a~d ceiling rates vary from area to area demar-
A
cated on the basis of population and it is further provided that in :fixing the
rates within the floor and the ceiling, due regard sha11 be had to the general
level of the value of the ]ands in the locality used for non-agricultural purposes.
The Act and· the Rules provide for sufficient guideline.>, and it cannot be said
that the Commissioner enjoys wide ai:bitrary discretionary power. The discre- /
tion has to operate within the floor and the ceiling; the yardstick is the value B
of the land used for non-agricultural purpos~s in the locality, the area has to be
divided village-wise, town-wise, city-wise and overall what is being assessed is
none-the-less land r"evenue. The High Court was in error in striking down the
provision on the ground that the Commissioner enjoyed wide arbitrary discre-
tion uncontrolled by any guidelines. The discretion is not only controlled but
.
· there is sufficient
. guidelines in the Act and the Rules. [106 H, 107 A-G]
c
We would expect revenue authority ordinarily to hear the person affected
by the order levying non-agricultural assessment or at the time of its appeal or
revision, but on this count the demand eannot be struck down because when a
demand is served it can be objected to and the decision is appealable. It cannot
. be said that the Rule would be bad as it does not inhere the principles of
natural justice. [107 G-H, 108.A] D
CIVIL A~1'.ELLATE JuRISDICTION : Civil Appeals Nos. 1221-1222
& 1407-1413 of 1970

From the Judgment and Order dated the -30th September, 1965
of the Mysore High Court in Writ Petitions No. 1934/64, 672 of E
··--i;
1963, 1165-1168, 1198-1199 & 2619of1963 respectively.

M. Veerappa and Ashok Kumar Sharma for the appellants in all
appeals ..

Naunit Lal. Kai/ash Vasdev and Krishna Kumar for Respondents
F
in CA. Nos. 1407-1412/73.

M.N. Phadke, Vinod Bobde, D.N. Misra arid Mrs. A.K. Verma
with him for the Respondents in CA. f222 & 1413/70.
G
S.S. Java/i and B.P. Singh for the Respondent in CA. 1221 of·
1970.

The Judgment of the Court was delivered by H
DESAI, J." Civil Appeals Nos. 1221-1222/70 arise from a
decision of the Division Bel\ch of the then Bish Court of Mysore at
'

96 SUI'JtilME COURt REPORtS [1983] 3 s.c.R.

Bangalore in Writ Petition Nos. 672/63 and 193/64 by which the
A High Court quashed the demand of Non-Agricultural assessement
(N. A. assessment for short) made by the respondents on the ground
that Rule 71 as amended on July 4, 1958 of. the Hyderabad Land
Revenue Rules which appeared to have been repealed and re-enacted
as the Andhra Pradesh (Telengana Area) Land Revenue Rules, 1951
B was unconstitutional being violative of Ait. 14 of the Constitution
and hence void.

Civil Appeals Nos. 1407 to 1413/70 arise frorri a decision of the
Division Bench of the same High Court in a group of writ petitions
c- by which the High Court quashed the demand of Non-Agricultural
assessment on the ground that Rule 81 of the Bombay Land Revenue
Rules as amended ori March 27, 1958 was unconstitutional being
violative of Art. 14 and hence void.

I) Appellants in both the groups are the State of Myso're and
some officers. Respondents are the original petitioners in both the
groups.

·Rule 71 of the Hyderabad Land Revenue Rules and Rule 81 of
E the Bombay Land Revenue Rules were amended in an identical
manner but on two different dates and the validity of .each amended
rule was questioned on identical grounds and more or less the High
Court for identical reasons quashed both the Rules as amended and
almost identical grounds were convassed in support of rival conten-
F tions before us and therefore, all these appeals are disgosed of by this
common jucfgment.

The boundaries of old Mysore State underwent a change con-
sequent upon the re'6rganisation of States in 1.956. Some portion of
former Bombay State as weUas.some portion of the old Hyderabad
G State were allocated to Mysore State. This historical phenomenon
led to different Land Revenue Code remaining in-operation in· diffe-
rent parts of the State of Mysore. To be precise that area of forme.r
Bombay State forming part of Mysore State continued to b" governed
H in respect ofland revenue by the Bombay Land Revenue Code, 1879
and the rules made thereunder. Similarly that area of former
Hyderabad State which was allocated to Mysore· State continued to
be governed by .the Hyderabad Land. Revenue Act (VIII of 13 l 7F).
MYSORE v. N.L. NAGADE (Desai, J.) 91
In Re C. A. Nds. 1221-1222/70 : Respondents questioned the
v·alidity of the amended Rule 71 of the Hyderabad Land Revenue A
Rules which came into force from July 4, 1958. It reads as
under :

"71 (I) : Mode of assessment in the event of diversion
of agricultural lands to non-a-gricultural purposes, the
special assessment shall be levied as follows :-
B
!a) in the case of. land situated in any village the
population of which does not exceed. 5,000 the rate
of special asse.ssment Jeviab!e shall be not less than
the agricultural assessment leviable on such land and
note more Rs. 40 per acre. c
(b) in. the case of land situated in any village or town
other.then a town coming under Sub-Rule (c) of this.
Rule, the population of which exceeds 5,000 the rate
. of special assessment leviable shall be not less than D
Rs. 40 per acre and not more. than Rs. 80 per acre. ·

(c) 'in the case of land situated within an area compiis-
. ing the Municipality limits of the town of Raichur,
Gulbarga and Bidar the rafo of special assessment
leviable shall be not less than Rs.· J 50 per acre and
- E
not more than Rs. 250 per acre."

The validity of the amended rule was challenged on the ground
that it provides no gu.idelines for determining N.A. assessment for
v.arious plots and that it suffers from the vice of excessive delegatio~ F
of essential legislative functions and therefore any demand raised m
exercise of the power conferred by the amended Rule 71 would be
arbitrary and therefore violative of Art.14 of the Constitution.·

In Re. C.A. Nos, 1407 to 1413/'70 : Respondents who were
G
petitioners in the. High Court questioned the validity of Rule. 81 of
the Bombay Land Revenue Rules as amended. on March 27, 1958.
It reads as under :

"81 '(1): Rate of Non-Agricultural assessment:
H
The· rate of Non-Agric1dtural assessment \eviabl~
shall be as follows :-
i.l

98 SUPRBMB COURT REl'ORTS it983) 3 S.C:.R.

(a) in the case of land situated in any village the popula-
A tion of which does not exceed 5,000 the rate of Non-
Agricultural assessment leviable shall be not ·less
than the agricultural assessment Jeviable on such
land and not more than Rs. 40 per acre.

B
(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 wpich exceeds 5,000 the rate of
Non-Argicultral assessment leViable shall be not foss
than Rs. 40 per acre and not more than Rs. 80 per ·
c acre.

(c) in the case of land situated in any City or Town
referred to in the Table to Rule 100, the rate of No11-
Argicultural assessment leviable shall be not less than
Rs. 150 per acre and not more than Rs. 250 p•:r
D acre.

(d) Non-Argicultural assessment win be levied at uniform
rates'for the entire extent converted for non-agricul-
tural purposes,, irrespective of the extent actually
E built upon.''

The game contention which was advanced in the former .group of
petitions was repeated in this group of petitions.

Validity of both the Rules was questioned on other diverse
F grounds but except the one herein mentioned, other contention.s did
not find favour with the High Court and therefore, they need not be
recapitulated Jiere.

The sole contention which found favour with the High C~urt
was that the Rule under challenge confers unguided and uncontrolled
G power and there is no guideline either in the Act or the Rules and ·
there is excessive delegation of legislative functions and thet•!fore,
both the amended Rules are violative of Art. 14 of the Constitution.

Thus the question which falls for consideration is ·whether the
H amended Rule 71 of the Hyderabad Land Revenue Rules and amen-
ded Rule 81 of the Bombay Land Revenue Rules suffer from the vice
of excessive delegation of legislative functions or that. it confers
ncanalised and unsuided arbitrary power on the officers or there is
MYSORE v. M.L. NAGADE (Des?i, J.) 99
no guideline to govern the discretion while enforcing and implement·
ing the !WO Rules. A
We would first examine the validity of amended Rule 71 of the
Hederabad Land Revenue Rules. The Hyderabad J,and Revenue Act
(VIII of 1317F) was enacted to amend and consolidate the orders
and regulations relating to land revenue. It is an exhaustive Code
divided into 12 Chapters. Chapter U deals with appointment of
B
Revenue Officers and their respective powers. Chapter IV 'contains
provision in respect of land and land revenue. Sec. 24 provides that
· all unalienated lands belong to Government. Sec .. 48 provides that all
land, whether applied to agricultural or any other purpose and
c
... wherever i;ituate shall be liable to payment of land revenue to the
Government in accordance with provisions of this Chapter and
Chapters VII and IX except in case title to land has been transferred
to any municipality or the revenue thereof bas been wholly remitted
under any special contract with the Government or under any order or
law. Sec. 50 which is material for the present purpose confers power
for assessment and levy of land revenue. It reads as under : .
:p

"50. Land revenue shall be assessed according to the
various modes of use-

(a) agricultural use.

(b) In addition to agricultural use any other use from
which profit or advantage is derived.

.. . When rate is assessed on any land for any one of the
aforesaid purposes and the land is,' appopriat~ for any
other purpose the rate thereof shall be altere<) and fixed
F

again, although the term of subsisting settlement may not
have expired."

It becomes clear that the land revenue was to be assessed
G
according to the use to which the land is put and especially in the
case of use of land for purposes other than agriculture, the N.A.
assessment would be assessed keepin11 in view the use to which the
land is put and the profit or advanta11e derived from •uch use of the
H
land. Chapter VII contains provisions for Survey and settelement
·of land which would include assessment in respect of each survey,
piece and parcel ofland. Sec. 84 provides for a11nouncement of .th~
100 SUPREME COURT REPORTS [1%3] 3 s.c.R.

assessment and the manner in which it is made, and the 'announce-
A ment should include the assessment fixed in m.pect of each plot of
land called survey number. Chapter IX ma~es . provision for
responsibility:of payment of revenue apd the method of. its rec9ve~y ,
and the priority of payment .in 'respect of land revenue. Chapter · X
deals with the procedure prescribed for revenue . officers in dealing
B with cases under the Land Revenue Act. Chapter XI provides for
appeal, review and revision of the orders of revenue officers. Sec; 172
confers power. on the Government to make .rules by publication in
the Jarida (presumably Official Gazette) consistent with the provisions
of the Act to carry out the purpose and objects of the Act and for
the guidance of .all persons in matters connected with the enforce-
c ment of the Act or in matters not expressly provided for in the Act.
In exercise M this power, Hyderabad Land Revenue Rules have been
enacted and promulgated subsequently repealed and re-enacted ·as ""'.
the Andhra Pradesh (Telengana Area) land Revenu<> Rules, 1951.
Rule 71 a~ ame~ded on July 4, 1958 has been extracted hereinbefore.
It provides for mode of assessment in the event of diversion of· agri-
cultural lands to non-agricultural purposes. Briefly, N.A. assessment
also styled as special assessment has to be levied within the minimum
and the max'mum as provided in sub-clauses (a), (b) and (c) of
Rule 71 (I). The amended ru.le also confers power for upward revision·
of N .A. assessment at intervals.
E -r·
'
ls this power uncan(llised, unguided or arbitrary? Rule 71 (I)
as amended recites that in different ar~as correlated. to population
between th~ !looi and the.ceiling therein prescribed, N.A. assessment
has to be levied. Ordinarily the land is put to agricultural use and
the assessment is to be levied depending upon the use of the, land
F
for agricultural purp<:>ses. Where there is a diversion in .the use of ...
land, a special assessment called N.A. assessment can be levied. The
right to levy N.A. assessment is not in dispute. And N.A. aSS<'8Sment
is none-tj1e-Jess assessment of revenue to be paid for the use of· the
]and. What is questioned is that the power conferred by the rule
G gives ~o much wide arbitrary disceretion to the officers that in the
··absence. of guidelines the revenue nfficers indifferent areas may act
arbitrarily and therefore, in the absence .of guicelines this rule is
violative of Art. 14. ,

H The question therefore, is whether there is any guideline for_ the
exercise of this power ? It is by now well-recognised that guideline
µ~ed not be found iii. tji.e· impugned provision. The same may be
MYSORE V. M.L. NAGADE (Desai, J.) 101

collected from the setting in which the provision is placed, the
purpose for which the Act is enacted and even the preamble of the A
statute in ·which the provision is incorporated. A legisiation or
statute is enacted to achieve some public purpose and ihe policy of
law and the object sought to be achieved can furnish reliable guide-
lines for the exercise of discretionary power. Prof. Wills .in his
Constitutional Law, P·. 587 observes as under:
B
"If a statute declares a definite policy, there is a
sufficiently definite standard·for the.rule against the dele-
gation of legislative power, and also for equality if the
standard is.reasonable. If no standard is scfup, to avoid
the violation of equality" those exercising ihe power must c
... act as though they were ad.ministering a valid standard."

In Kunnathat Thatizunni Moopil Nair v. The State of Kera/a
and Another('), a Constitution Dench of this Court struck down the
Travancore-Cochin Land Tax Act, 1955 as being violative of Art.
14 on the ground that unequals were treated equally. By the D
impugned Act all lands in the State of wbatever description and held
under whatever tenure wei;c to be charged and leVied a uniform rate
of tax to be called tlie basic tax. This· Court held tliat the Act
obliged every· person who held land t.o pay the tax at the flat rate
prescribed, whether or not he made any income out of the 'Property, E.
·-. or whether or not the property was capable of yi_elding any income.
Consequently, the Court held there was no attempt at classification
in the provisions of the Act and it was one of those cases where the
lack of classification created inequality. In reaching this conclusion,
Sinha, q speaking for the majority observed ·as under :
"' .
"The Act thus proposes to imowa liability' on land-
F
holders to pay a tax which is nono be levied on a judicial
basis, because (I) the procedure to be adopted does not
require a notice to be given. to the proposed_[assessee;
(2) there is no procedure for rectification of mistakes .
committed by the Assessing Authority; (3) there is no.
G,
procedure prescribed for obtaining the opinion of a
superior Civil Conrt on questions of law~ as is generally
found in all taxing statutes; and ,(4) no duty is cast upon·
the Assessing Authority to act judicially in the matter of
H

(1) (1961J 3 S.C.R,. 67,
•
102 SUP!UlME COURT REPORTS

assessment proceedings. Nor is there any right of appeal
A provided to such assessee as may feel aggrieved by the
order of assessment."

This decision is of no assistance because Hyderabad Land
Revenue Act prescribed a detailed method of assessment and relve·
vant provisions would be followed while levying N.A. Assessment .
.B The Rule circumscribes the operation of the discretion between the
floor and the ceiling. The various slabs are correlated to population.
Sec. 50 itself provides that the N.A. assessment will be assesed keep·
ing in view the use of the land and the profit derived from· the use.
Further the orders made by the Revenue Officers are not only
c appealable but even a review petition is contemplated at the instance
of the person aggrieved by the order of assessment. Therefore, the
criteria which appealed to the Constitution Bench in striking down
the Travancore·Cochin Land Tax Act, 1955 are not available in this
case. Ori. the contrary where are such detailed provisions for. assess·
ment of Non-Agricultural assessment such as use of land, profit
D derived by the use of the land, the maxima and minima and the
various rates correlated to population.

In New Manek Chowk Spinning and Weaving Mills Co. Ltd and
ors. v. Municipal Corporation of the City of Ahmedabad and Ors.( 1),
E a Constitution Bench of this Court struck down the assessment of
property tax by the Municipal Corporation inter a/ia on the ground
that the method of levy of tax on the basis of floor area was against
r
the provisions of the Act and the Rules made thereunder. The Court
held that the method of taxation on the basis of floor area was sure
to give rise to inequalities as there had been no classification of
F fuctories on any. rational basis and the (:orporation failed to observe ·>
the law to determine the annual rental value of each building and land
comprised in each of the Textile factories. We fail to see how this
decision would be of any use because there is no flat rate levy here
and the N.A. assessment has to be levied in respect of each plot of
G land keeping in view its location, use and the profit derived by the use
of the lari.d.

Reference was next made to State of Andhra Pradesh & A11r. v:
Nal/a Raja Reddy & Ors.(') Affirming the decision of the Andhra High
.H
(I) (1967) 2 S.C.R. 679.
(2) [1967) 3 S.C.R. 28.
MYsoRt-v. M.L. NAGADE (Desai, i.) •

Court which declared Andhra Pradesh Lartd Revenue (Additional
Assessmet1t) and Cess Revision Act, 1962 as unconstitutional, the A
Court held that the classification based on ayacuts has no reasonable
relation to the duration of water suppl}' Or to the <tuality or the pro·
. ductivity of the soil and that Secs. 3 and 4 fidrtg tile minimum fiat
rate for dry or waste land as the case may be, have ignored the well·
established tarams. principle and therefore, the classification attempted
in either ~ase has no teasonable relation to the objects sought to be
achieved, namely, imposition of fair asssessment and rationalisation of
revenue assessmelflt structure. Agairt we fail to see how. the decision
would help us because geographicaf classification based on population
criterion is a valid basis for classincation. ·
c
The next case to which out attention was drawn was State.of
Kera/a v. Haji K. Haji k. Kutty Naha & Ors. etc,(') in which this
Court upheld the decision of the Kerala High Court dedarirtg Kerala
Buildings tax Act, 1961 ultra -vites the Cortstitution in that. it
infiringed the equality clause of the Constitution. The Court following
its decision in New Manek ChoWk case held that in the absence of
any rational classilication which was not even attempted, the tax
levied on ftoot area alone ignoring the use to which the building is
put, the materials used in putting up the structure ·had the pernicious
effect of treating unequals as eqnals aird therefore, violative of Art. 14
of the Cortstitutimi: This decision hM hatdly any relevance to the E
issue raised before us.
•
As agaihst the afore-mentioned decisions, it would be advantageous
to refer to Rangildas VarajdtJJ Khattdwala v. Collector of Silrat and
Ors.('} 'l'he power to levy N.A. assessment was questioned, before
this Court albeit under different set of citcumstanc~s. 1he land
involved in the dispute wa:s governed by the Bombay Personal Inams
Abolition Act, 1952, whose constitutional validity was chailenged.
The Court held the Act was protected by the umbrella of Art. 31A
~f the Constitution,
c·
the next contention raised irt that case was that the Collector
could not have levied N.A. assessment under Sec, 52 .of the Bombay
Land Revenue Code. Negativing this contention, this Court held
.... . tha:t when the land is being used t'or· non-agricultural purpose, Sec.
H
(!) [1969] 1 S.C.R. 645.
(2) [1961] 1 S.C.R. 951,
104 SUPREME COURT REPORTS [1983] ~ s.c.R..

48 makes it obligatory upon the assessing officer when assessing the
A land revenue to look to the use to which it is put at the time of the _
assessment and assess it according to such use. . Rule 71 provides
for three safeguards against arbitrary exercise of power viz. (i) use of
the land, (ii) profit derived from the use of the land and, (iii) location
of the land. ·
8
In this connection we may refer to the latest decision of this
Court in Avinder Singh etc. v. State of Punjab & Anr. etc.(') After a
review of large .number of decisions this Court held that delegation
of some part of leeislative power· becomes a compulsive nece,ssity for
viabilty and functioning of the various institutions created by the
c · Constitution. Pertinent observation may be extracted :

. "The Law-making is not a turnkey project ready-
made in all detail and once this situation is grasped the
dynamics of dclagation easily follow. Thus we reach the
- second constitutional rule that the essentials of legislative
D
functions shall not be delegated but the - inessentials
however numerous and significant they be, may well be.
made over. to appropriate agencies. Of course, every
delegate is subject to the authority and control of the
principal and exercise of delegated power can always be
E directed, corrected or cancelled by the principal. There-
fore, the third principle that emerges is that even. if there r
be delegation, parliainentary control . over delegated '
legislation should be a living• countinuity as a constitu-
tional necessity. Within these triple principles, Operation
Delegation is at once expedient, exigent and even essential
F if the legislative process is not to get stuck up or bogged
down or come to' a grinding halt with a few, complicated
bills."

Thus it is crystal clear that the legislature can delegate details
G to be worked out by the the delegate and the details may be numer-
ous and significant. yet they may well be made over to the appropriate
agency.
. I
Applying this yardstick, what emerges in this case. Rule 71 is
H mad~ in exercise of the rule making power conferred by Sec. 172 of

(1.) [19791 I S.C.R. 845,
MYSORE V. M.L. NAGADE (Desai, J.) 105

the Hyderabad Land Revenue Act. This rule making power is to be
exercised for the purpose of earring out the provisions of Act. The A
basic purpose for which the Land Revenue Act is enacled is for
empowering the State and its agencies and its official to assess and
levy land revenue. Whenever land is diverted to use other tjlan
agriculture, power is conferred to levy N .A. assessment or special
assessment but this assessment is to be determined under· the amen.ded
Rule 71 keeping in view the purpose of the Act, namely, levying and
n
collection of revenue,'the use to which the land is put, the profit
derived from such deviated. use of the land and again correlated to
popul~tion as set out in various sub-clauses of amended Rule 71 and
within jloor and ceiling prescribed in the impugned rule. Further the
order made by the assessing authority is made appealable and review· c
able. In out opinion, there is· sufficient guideline.in the Act and the
Rules following which the assessing authority has to assess the N.A.
assessment. In this connection, it will be advantageous to refer to
the oft quoted passage from Wills which bears repetition. It reads as
under:
D
"A State does. not have to tax everything in order' to
tax something. It is allowed to pick and choose districts,
objects, persons, methods.and even rates for taxation, if'it
does" so reasonably ...... " .
E
.The High Court in .our opinion unfortunately fell into an error
in holding that Rule 71 allowed a wide margin to the revenue officers
in the matter of determining the special assessment to .be levied on
land used for non-agricultural purposes. The High Court failed to
notice that area within which the discretion of the revenue officer can F
operate is circumscribed b'oth by the floor and ceiling fixed and while
determining t.he quantum of assessment, the revenue officer has to
bear· in mind the use to which land is put as also the profit derived
from the use of the land. The order made by the revenue officer is
appealab!e. Now when a demand· is raised, it .can always be con·
troverted under the various provisions of the relevant rules and the· G
concerned assessee will have full opportunity to yirdicate his stand.
It should not be over-looked thadhe land revenue is a tax and the
validity of the taxing statute has to be d~termine.d keeping in vfow
the fact that in the matter of taxation, the .Court allows wide area of
picking and" choosing and the slab system. ·we are therefore, of ·the H
opinion that there wa"s sufficient guideline to govern "the .discretion of
~he revenl!e .officer and the rule could not be struck down on · the
106 SUl'lilME CotillT Rill>OllTS l19i\3j 3 s.c.il..
ground that it confers wide arbitrary, uncanalised discretionary power
A \~uncontrolled by any guidelines.

A very feeble attempt was made to urge that there was exceS•
. sive delegation of essential legislative functions to thll executive
·giving.it the power not only to enact the rule bat to ll!fl1md it so as
to vary the N. A. assessment. Sec. 50 clearly confers power on the
B
State Legislature to levy assessment and when the land is diverted to
a use other than agriculture, the legislature · conferred the power· to
levy N.A. assessment. Elaborate provision· has been niade for levying
assessment. Sec. 172 conferred power to enact rules for givi·og effect
·. to the provision of the Act and the guideline was· provided as herein
c above indicated. Therefore, we are not impressed by the submission
that in the case the legislature was guilty of delegating its essential
. 'legislative functions in favour of the executive.

Re C.A. Nos. 1407 to 1413/70: In this group of appeals, vires of
D amended rule 81 of the Bombay Land Revenue Rules was questioned
on the same identical grounds and the challenge. must fail for the
same reasons. We may however, briefly point out the scheme of the
relevant. Act and the rules governing this case.

E Bombay Land Revenue Act was enacted in the year 18 79 to
consolidate and amend law relating to revenue officers and to the
assessment and recovery of land revenue and other matters connected
with the Land Revenue Administration·. Sec. 48 confers power to
. levy and assess the land revenue with reference to the use of the land
-(a) for the purpose of agriculture, (b) for the purpose of building,
F , and (cl for a purpose other than agriculture or building. Chapter
VIII includes provision for Surveys, Assessments and Settlements of
Land Revenue. Chapter VIII-A makes forther provisions for assess-
ment and settlement of land revenue on agricnlturaj land. Chapter
xr. makes detailed provision for the procedure to be followed by the
revenue officers while discharging their duties and carrying out the
G
functions imposed by the Code. Chapter Xlil provides foi· appeals
and.revisions against the orders of the revenue officers.. Sec~ 21'4
confers power on the State Government to make rules not inconsis-
tent with the provisions of the Act to carry put the purpose and
H object thefeof and for the guidance ?fall persons in mattetf 1:onnect-
cd with the enforcement of the Act. Armed with this povv€fr; Land
Revenue Rules, 1951 were enacted. Chapter XIV headed 'imp()sitlon
MYSORE v. M.L. NAGADE (Desai, J.)

and revision of non-agricultural assessment' make detailed provisions
for assessment and levy of N.A. assessment. Rule 80 confers power A
for alteration of assessment when land assessed or held for agricul·
tural purpose if used for non-agricultural purpose. Rule 80A confers
power for revision of N.A. assessment on the expiry of the period
for which assessment on any land was assessed and levied. Rule 81
provides for ordinary rates of N.A. assessment.. It was amended and
the validity of the amended rule is in question. Floor and ceiling
B
rates vary from area to area demarcated on the basis of population
and it is further provided that in fixing the rates within floor and the
ceiling, due regard shall be had to the general level of the value of
, the lands in the locality used for non-agricultural purposes. Rule 82
makes detailed provision for the rate of non-agricultural assessment c
to be determined in accordance with that provision where special
rate of non-agricultural assessment is in 'force. Where N.A. assess-
ment is levied at an ordinary rate, the Commissfoner before detor·
.·mining the rate at which N.A. assessment will be levied on any parti·
cular plot has by notification to divide the villages, towns and cities
in each district in his division to which a standard rate under Rule D
82 has not been extended into two classes. Even while assessing
N.A. assessment, the Commissioner has to keep in view the level of
value of land in the locality used for non-agricultural purposes. In
our opinion, both the Act and Rules thus provide for sufficient
guidelines, and it cannot be said that the Commissioner enjoys wide
arbitrary discretionary power. The discretion has to operate within
the floor and the ceiling; the yardstick is the value of the land used
for non-agricultural purposes in the .locality, the area has to be
divided village-wise, town-wise, city-wise and overall what is being
assessed is land revenue because N .A. assessment is none·the·less
land revenue. In our opinion, the High Court was in error in
striking down the provision on the ground that the Commissioner
enjoyed wide arbitrary discretion uncontrolled by any guidelines.
The discretion is not only controlled but there is sufficient guidelines
in the Act and the Rules and therefore, the High Court was in error
in striking down the demanded Rule 81.
G,
It was in passing urged that there is no prov1S1on for notice
before N.A. assessment is levied. We would expect revenue autho-
rity ordinarily to hear the person affected by the order levying N.A.
assessment or at the time of its appeal or revision, but on this count
the demand cannot be struck down because when a demand is served,
it can be objec"ted · to and the decision is appealable. It cannot
108 SUPREME COUltT REPORTS (1983) 3 S.C.R.

be said that the Rule would be bad as it does not inhere the princi-
A 'ples of natural justice.

The decisions of the . High Court were not sought to be
supported on any other ground. Accordingly, these appeals must
succeed.

B All the appeals are allowed and the judgments 'of the High
Court in both the groups are quashed and set aside and the writ
petitions filed by the respondents are dismissed with costs throughout.

c H.S.K. Appeals allowed.

r