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Judgment
Ramanujam, J.—In these writ petitions the petitioners have sought the issue of a writ of declaration from this Court declaring the Tamil Nadu
Urban Land Tax Act, 1966 as amended by Tamil Nadu Act 30 of 1971, 14 of 1973 and 49 of 1975 to be unconstitutional and void. The urban
lands involved in Writ Petition No. 4397 of 1978 are town survey Nos. 108/2 and 108/3 measuring 11 grounds and 1826 sq. ft. comprised in
Door No. 127, Lloyds Road, Madras and the same has been originally assessed under the Tamil Nadu Urban Land Tax Act, 1966, hereinafter
referred to as the Act at the rate of Rs. 1,366-50 per year. On 22nd November, 1977, a notice was issued by the Assistant Commissioner of
Urban Land Tax tentatively fixing the market value per ground in regard to that property at Rs. 42,000. After considering the objections of the
owner, the value has been fixed at Rs. 28,000 per ground as on 1st July, 1973 and subsequently the Urban Land Tax Officer has issued a demand
in 1978 calling upon the petitioner to pay the urban land tax at the rate of Rs. 1,999 per fasli years 1385 to 1387. At that stage the petitioner has
come forward with the writ petition seeking relief of declaration that the said Act is unconstitutional and void.
The petitioner in Writ Petition No. 4439 of 1978 is the owner of premises No. 31 (old No. 25) Santhome High Road, Madras.4 comprising 24
grounds and 1568 sq. ft., in survey No. 2426/4 and 2526/5. That property has been subjected to assessment under the Act by an order of the
second respondent in the said Writ Petition dated 31st August, 1974 at Rs. 3,078 50 per year taking the market value of the land at Rs. 12.000
per ground. Subsequently, on 27th June, 1978 the second respondent issued a notice under S. 11(1) read with Ss. 7B and 40A of the Act as
amended in 1975 proposing to revise the value at Rs. 24,000. After considering the objections, the second, respondent has passed an order dated
27th July, 1978 assessing the property to a tax of Rs. 12,313 60 per year, on the basis of the value of the lands at Rs. 24,000 per ground for
entire extent of 25 grounds and 1,568 sq. ft. deducting two grounds as used for residential purpose which is exempted. Following the said
assessment, demands under S. 14 have been issued by the third respondent for faslis 1385 to 1388 aggregating to Rs. 49,254-40. It is at this
stage the petitioner has approached this Court seeking a declaration that the Act under which the assessment has been made is unconstitutional and
void.
Since the contentions raised in both the writ petitions are substantially the same, the writ petitions are dealt with together and the grounds of
attack which are common are set out below:-(1) Though the validity of the original Act of 1966 was upheld by the Supreme Court in The Assistant
Commissioner of Urban Land Tax and Others Vs. The Buckingham and Carnatic Co. Ltd., etc., the Act as amended from time to time makes it an
Act imposing tax on the capital value of the assets of individuals and companies and, therefore, it has ceased to be a law on ""tax on lands and
building"" found in Entry 49 of List 2, of Schedule 7 to the Constitution. (2) The impugned Act in so far as it encroaches upon the field covered by
Entry 86 of List I it has to be struck down as incompetent and unconstitutional (3) The Act is violative of Art. 14 of the Constitution in that there
are no guidelines for arriving at the market value of the whole extent and the provisions of the Act operate differently in the case of different
persons. The tax which is levied at a progressive rate operates unevenly on the landowners depending on the extent of their holding. (4) The Act, in
so far as it makes a difference in the exemption limits between Parts I and II and Parts III and IV of the Schedule to the Act is arbitrary,
discriminatory and violative of Art. 14 of the Constitution (5) In any event the tax imposed by the impugned Act being unreasonable, ex-
proprietary, it infringes on the petitioner''s right to hold and dispose of property.
The said grounds of attack are met in the counter-affidavit filed by the respondents as follows: The petitioner has not exhausted the alternative
remedy provided under S. 20 of the Act and therefore, the writ petitions are liable to be dismissed on that ground alone. The Act as amended from
time to time is quite legal and valid and it has already been upheld by the Supreme Court. The tax levied is a tax on land and therefore, it is within
the competence of the State Legislature to enact the Act in question. Thus the stand taken by the respondents is that the Act has already been
upheld by the Supreme Court as constitutional and therefore no further constitutional attack is possible by the petitioners. They also rely on a
decision of Varadarajan, J., as he then was in Cosmopolitan Club v. State of Tamil Nadu W.P. No. 3491 of 1976 dated 16-10-1979 holding that
the Act as amended is constitutionally valid as falling with Entry 49 of List II of 7th Schedule to the Constitution.
To appreciate the constitutional attack made by the writ petitioners it has become necessary to trace the legislative history of the said statute.
Tamil Nadu Urban Land Tax Act, 1966 (Tamil Nadu Act 12 of 1966) received the assent of the President on 9th September, 1966 and the same
was published in the Fort St. George Gazette on 10th September, 1966. All the provisions of the Act except Ss. 19, 47 and 48 came into force in
the City of Madras on the first day of July, 1963 and Ss. 19 and 47 were made effective in the City of Madras on the 21st of May, 1966 and S.
48 was to come into force on the 10th of September, 1966, the date on which it was published in the Fort St. George Gazette. The provisions of
the Act shall come into force in any other municipal town or township or any area specified in the notification and within sixteen kilometres of the
City of Madras or such municipal town or township on such dates as may be specified in a notification issued by the Government for the purpose.
It is unnecessary to deal with the various provisions of the Act in the light of the contentions urged before us and we have to consider the scope of
only Ss. 5, 5A, 6, 6A and 6B of the Act and the Schedule thereto Ss. 5 and 6 as originally enacted were as follows:-
Subject to the other provisions contained in this Act, there shall be levied and collected for every fasli year commencing from the date of
commencement of this Act, a tax on each urban land (hereinafter referred to as the urban land tax) from the owner of such urban land at the rate
specified in the schedule.
For the purpose of this Act, the market value of any urban land shall be estimated to be the price which in the opinion of the Assistant
Commissioner or the Tribunal, as the case may be such urban land would have fetched or fetch, if sold in the open market on the date of the
commencement of this Act.
Ss. 6-A and 6-B were inserted into the Act by Tamil Nadu Amending Act 30 of 1971. By amending Act 19 of 1973 the Schedule to the Act was
altered. Then came Tamil Nadu Act 49 of 1975 under which Ss. 6-A and 6-B and the Schedule to the Act were re-cast. S. 6A as amended
directed that the area comprised in (a) City of Madras, (b) the Madras City Belt Area, (c) any municipal town, (d) the area within sixteen
kilometers of the outer limits of such municipal town, (e) any of the township, (f) the area within sixteen kilometres of the outer limits of such
township, shall each constitute a separate urban area and for the purpose of assessment under the Act, the extent of urban land held by the owner
in one urban area shall not be included in the extent of the urban land held by him in another urban area. S. 6(b) provided (i) that the total extent of
the urban land which is vacant or which is used for residential purposes in an urban area shall be taken into account for applying the rates specified
in Parts I and III of the Schedule, and (ii) the total extent of the urban land used for non-residential purposes in an urban area shall be taken into
account for applying the rates specified in Parts II and IV of the Schedule. The said amending Act also substituted a new Schedule containing Parts
I to IV. Part I deals with urban land which is vacant or is used for residential purposes and it provides that in respect of such urban land two
grounds will get exempted and the rest of the extent will suffer a progressive rate of tax ranging from 7% to 25% depending on the extent. Part II
deals with urban land used for non-residential purposes and it provides an exemption for half a ground and brings to tax the land in excess of half a
ground at a progressive rate of tax ranging from 5% to 2.5% depending upon extent. Part III deals with urban land to the Madras City Belt area
which is vacant or as used for residential purposes and it provides for an exemption limit of three grounds and the rest of the extent is subjected to
a progressive rate of tax ranging from 7% to 25%. Part IV deals with urban land in the Madras City Belt Area which is used for non-residential
purposes and it provides for an exemption of one ground and subjects the excess extent to progressive rate of tax ranging from 5% to 25%
depending upon the extent of the land. Thus there are three prominent features in the Act as amended by Tamil Nadu Act 49 of 1975: (1) There is
an aggregation of the extent of the urban land for the purpose of tax (2) Basic exemption upto a particular limit has been provided, and (3) there is
a progressive rate of tax depending upon the extent of urban land held by an individual. Then the State Government has passed G.O.Ms. No.
2625, Revenue Department, dated 27th December, 1976 giving the following directions: (1) The distinction introduced by the 1975 amendment
between lands used for residential purposes and lands used for non-residential purposes will be given up, and all urban lands in any given area will
be subject to the same rate structure. (2) The market value of the land for purposes of assessment to the tax will continue to be determined as on
1st July, 1971 provided where the revised market value as on 1st July, 1971 is more than double the value as on 1st July, 1963, the value for
purposes of assessment to tax will be limited to double the 1963 value. (3) As a result of 1975 amendment, the first two grounds would be
exempted from tax wherever the total holding does not exceed five grounds, but however, this exemption will be extended to all holdings
irrespective of the total extent (4) The rate of tax on holdings exceeding 10 but not exceeding 20 grounds will be reduced from 2 per cent to 1.5
per cent and on holdings exceeding 20 grounds from 2.5 per cent to 2 per cent. Thus as per the said G.O., the revised rates structure will be as
follows:
All urban lands in areas other than the Madras Belt area All urban lands in the Madras belt area
First 2 grounds Nil First 3 grounds. Nil
Where the aggregate 0.7 per cent of Market Value. Where the aggregate 0.7 per cent of Market Value.
extent does not exceed 5 extent does not exceed
grounds. 7 grounds.
Where the aggregate 1 per cent of Market Value. Where the aggregate 1 per cent of Market Value.
extent exceeds 5 grounds extend exceeds 7 but
but does not exceed 10 does not exceed 10
grounds. grounds.
Where the aggregate 1.5 per cent of On the extent in Where the aggregate 1 per cent of Market On the extent
extent exceeds 10 but Market Value. excess of 2 grounds. extent exceeds 30 but Value. in excess of 3
does not exceed 20 does not exceed 20 grounds
grounds. grounds.
Where the aggregate 2 per cent of Where the aggregate 2 per cent of Market
extent exceeds 20 Market Value. extent exceeds 20 Value.
grounds grounds.
The G.O. also provided for remission of tax to 50 per cent in the case of any building occupied only by the owner for residential purposes in
respect of the land on which the building is constructed and the urban land appurtenant to it. However the statute has not vet been amended to give
effect to the said G.O. It is in the light of the above provisions, we have to consider the tenability of the contentions urged by the petitioners.
The petitioners'' submission is as follows :- The Act imposes a tax on each urban land as is seen from S. 5 which imposes a levy for every fasli
year a tax on each urban land from the owner of such urban land at the rates specified in the Schedule to the Act. ""Each urban land"" is defined
under S. 2(6) of the Act as the urban land comprised in a survey number or a sub-division number. Thus the unit of assessment is a land comprised
in each survey number or sub-division number. When the charging Section imposes a tax on each survey number or sub-division number which is
taken as a unit for purpose of assessment, S. 6-B aggregates the units of urban land for purposes of tax as that Section directs that the total extent
of the urban land in an urban area held by a person should be taken into account for applying the rates specified in the Schedule. The rate of tax
provided for in the various parts of the Schedule also proceed on the basis of the said aggregation, and the tax levied also depends on such
aggregation. According to the petitioner such aggregation of the units of urban land and applying a progressive rate of tax depending upon the total
extent will clearly take the Act out of Entry 49 of List II and bring it within the scope of Entry 86 of List I. This aspect of the matter was not and
could not be considered by the Supreme Court in The Assistant Commissioner of Urban Land Tax and Others Vs. The Buckingham and Carnatic
Co. Ltd., etc., while upholding the constitutional validity of Tamil Nadu Act 12 of 1966 in its unamended form. This peculiar situation arises for
consideration for the first time now in view of the amendment brought about by Tamil Nadu Act 49 of 1975. The petitioner''s learned counsel
refers to the decision of the Supreme Court in Assistant Commissioner, Madras v. B. & C. Co. Ltd., in support of his submission that the Supreme
Court was dealing with the provisions of the Act which are substantially different from those which operate now and, therefore, the decision of the
Supreme Court upholding the validity of the Act cannot prevent them from raising the question of the constitutional validity of the Act based on the
provisions of the Act as amended now. The predecessor to the present Act, the Madras Urban Land Tax Act, 1963 which levied a tax by S. 3 on
every owner of urban land at the rate of 0.4 per cent of the average market value of the urban land as determined under S. 6(2) of the Act was
challenged as violating Art. 14 of the Constitution of India, because the charging section levied the tax on urban land not on the basis of the market
value of such land, but on the average value of the land in a sub-zone and the said challenge was upheld by a Division Bench of this Court in The
Buckingham and Carnatic Company Ltd. and Others Vs. The State of Madras and Others, . Thereafter Act 12 of 1966 came to be enacted
omitting the provisions relating to fixation of average market value in the sub-zone and instead introducing S. 5 providing for a charge on each
urban land from the owner of such urban land at the rate of 0.4% of the market value of such urban land. The validity of Act 12 of 1966 was also
challenged before this Court and it was held by a Full Bench of this Court that though the Madras Legislature was competent to enact the new Act,
under Entry 49 of List II the Act is violative of Arts. 14 and 19(1)(f) of the Constitution. The matter was taken to the Supreme Court. The
challenge before the Supreme Court was (1) that the Act fell under Entry 86 of List I and not under Entry 49 of List II and that the State legislature
is incompetent to pass the Act. (2) That the machinery provided for determining the market value is violative of Art. 14 of the Constitution, and (3)
that the Act imposes an unreasonable restriction on the right to acquire and dispose of the property and, therefore, violative of Art. 19(1)(f). The
Supreme Court held that the Act was constitutionally valid, for, (1) the pith and substance of the new Act in imposing a tax on urban land of a
percentage of the market value is entirely within the ambit of Entry 49, List II and it does not in any way trench upon the field of legislation under
Entry 86 of List I, (2) that the provisions of S. 6 of the Act were not violative of Art. 14 as the opinion which the Assistant Commissioner has to
form under that section is not subjective but should be reached objectively upon the relevant evidence after following the requisite formalities laid
down in Ss. 7 to 11 of the Act, (3) that the Act is not violative of Art. 19(1)(f) of the Constitution as the power of taxation has to be regarded as
an essential attribute of sovereignty and the object to be taxed, the quantum of tax to be levied, the condition subject to which it is levied and the
social and economic policies which a tax is designed to subserve are all matters of political character entrusted to the Legislature and not to the
Courts and therefore, so long as the tax imposed is not confiscatory or extortionate, the reasonableness of the tax cannot be questioned. Thus the
point urged before the Supreme Court was that S. 5 in so far as it imposes a tax on urban land at a percentage of the market value is outside the
competence of the Legislature. It is that point which was rejected by the Supreme Court. It is significant to note that the Act as originally enacted
which was considered by the Supreme Court in the above case did not contemplate aggregation of the urban lands in the hands of the owner for
purposes of tax. S. 5 contemplated a levy of tax on each urban land in the hands of the owner at the rate of 4% of the market value of such urban
land and if a person happens to own more than one urban land then the tax is levied on each urban land and the tax is aggregated to determine the
total tax liability of the person concerned. Thus earlier there was no aggregation of the urban land for the purpose of adopting the rate of tax but it
is only the tax as levied on each urban land which was aggregated in the hands of the person. But, now after the amending Act 1975, came into
force, the situation is different. Now there is an aggregation of the urban lands as such. Though the Act provides for a levy of tax on each urban
land, S. 6-B along with the Schedule brings to charge the total urban land owned by an individual at the appropriate rate of tax as provided in the
various parts of the Schedule. In the Act as originally enacted, there was a uniform levy of tax at 4 per cent of the market value of each urban land
whereas now after the amendment though S. 5 imposes a charge on each urban land the rate of tax does not depend upon each urban land but
depends upon the aggregate extent of land owned by a person and there is a progressive rate of tax depending upon the extent of the land owned
by the person. According to the petitioner, once there is an aggregation of the urban lands and the tax is levied on the aggregate extent then the Act
will cease to fall under Entry 49 of List II but will fall under Entry 86 of List I. It is said that the principle of aggregation and the imposition of tax on
the totality of the net value of the assets is peculiar to Entry 86 of List I, and Entry 4, of List II can only enable the State Legislature to levy tax on
land or building or both as units and it is not concerned with the ownership in the units of the land or buildings which are brought to tax and that in
this case the ownership of the lands by the particular person has alone been taken as the basis for imposition of tax and hence the Act goes outside
the purview of Entry 49 of List II. In support of this submission the following passage in The Assistant Commissioner of Urban Land Tax and
Others Vs. The Buckingham and Carnatic Co. Ltd., etc., was relied on:
In our opinion there is no conflict between Entry 86 of List I and Entry 49 of List II.
The basis of taxation under the two entries is quite distinct. As regards Entry 96 of List I the basis of the taxation is the capital value of the asset. It
is not a tax directly on the capital value of assets of individuals and companies on the valuation data. The tax is not imposed on the components of
the assets of the assessee. The tax under Entry 86 proceeds on the principle of aggregation and is imposed on the totality of the value of all the
assets. It is imposed on the total assets which the assessee owns and in determining the net wealth not only the encumbrances specifically charged
against any item of asset, but the general liability of the assessee to pay his debts and to discharge his lawful obligation have to be taken into
account. In certain exceptional cases where a person owes no debts and is under no enforceable obligations to discharge any liability out of his
assets it may be possible to break up the tax which is leviable on the total assets into components and attribute a component to lands and buildings
owned by an assessee. In such a case, the component out of the total tax attributable to lands and buildings may in the matter of computation bear
Similarity to tax on lands and buildings levied on the capital or annual value under Entry 49, List II. But in a normal case a tax on capital value or
assets bears no definable relation to lands and buildings which may or may not form a component of the total assets of the assesses. But Entry 49
of List II contemplates a levy of tax on lands and buildings or both as units. It is not concerned with the division of interest or ownership in the units
of lands or buildings which are brought to tax. Tax on lands and buildings, is directly imposed on lands and buildings, and bears a definite relation
to it. Tax on the capital value of assets bears no definable relation to lands and buildings which may form a component of the total assets of the
assessee. By legislation in exercise of power under Entry 86 of List I tax is contemplated to be levied on the value of the assets. For the purpose of
levying tax under Entry 49, List II, the State Legislature may adopt for determining the incidence of tax, the annual or the capital value of the lands
and buildings. But the adoption of the annual or capital value of lands and buildings for determining tax liability will not make the field of legislation
under the two entries overlapping. The two taxes are entirely different in their basic concept and fall on different subject matters.
In Sudhir Chandra Nawn Vs. Wealth-tax Officer, Calcutta and Others, the respective ambit of Entry 49 of List II and Entry 86 of List I was
considered and explained. It was pointed out that unlike the tax contemplated by Entry 49 of List II, the tax under Entry 86 is not a direct tax on
lands and buildings but on assets the components of which may be lands and buildings and other items of assets including such liabilities that may
exist, that the incidence of tax is not on lands and buildings which is unit of taxation but on the net assets of which lands and buildings are only some
of the components. The Supreme Court pointed out that the tax under Entry 86 of List I is a tax on the aggregate value of the components while
the tax under Entry 49 of List II is a tax on units of taxation. In Prithvi Mills v. Broach Munic 1970-1-S.C.R. 388, the Supreme Court reiterated
the principle laid down in Sudhir Chandra Nawn Vs. Wealth-tax Officer, Calcutta and Others, that the tax under Entry 86 of List I is a tax on net
assets, the components of which may be lands and buildings while the incidence of tax under Entry 49 of List II is on the unit of taxation. To the
same effect is the decision in Union of India (UOI) Vs. Shri Harbhajan Singh Dhillon, where again the relative scope of Entry 49 of List II and
Entry 85 of List I was considered and it was held that the concept of tax on net wealth is one entirely different from the concept of tax attributable
to lands and buildings as such, that the levy on land and building has no direct relationship to the aggregate value of the assets of an individual and
that even assuming that Entry 49 of List II envisages imposition of a tax on lands and buildings, adopting the mode of certain percentage of the
capital value of lands and buildings must still be subject to taxation as units and no aggregation is possible. In Patel Gordhandas Hargovindas Vs.
Municipal Commissioner, Ahmedabad, the Ahmedabad Municipality levied a tax on the vacant land at the rate of 1% on the valuation based upon
capital on the basis of R. 350A framed under the Bombay Municipal Boroughs Act, 1925. The said levy was challenged on the ground that the
Municipality cannot levy the rate at a percentage of the capital value of the open lands and that if the Act permitted the levy of a rate on a
percentage of the capital value of the land, that is ultra vires the provincial legislature. Dealing with the said contention the Court pointed out that the
Act imposes a tax on lands and was within. Item 42 of List II of the Government of India Act, 1935 (corresponding to Entry 49 of List II), that the
fact that the Act authorised the tax being quantified on the basis of the capital value of the land does not take it out of the said Item and place it
under Item 55 of List I dealing with tax on capital value of the assets which only the Central Legislature can levy, that the identification of the
subject matter of the tax is to be found in the charging section only and the subject-matter of the charging section which imposes a levy on land and
not the capital value of it, that the subject-matter of taxation is something different from the measure provided for quantification of the tax and one
has got no effect on the other and the measure of tax being based on the capital value, the tax is none-the less a tax on land.
6A. Based on the distinction pointed out in the above cases as to the relative scope of Entry 86 of List I and Entry 49 of List II the submission of
the petitioners is that the subject-matter of tax as found in the charging S. 5 is an urban land which is defined as land comprised in a survey number
or sub-division number and in so far as the Act proceeded to levy tax not only on the subject matter of the charge but on the aggregate extent of
the lands held by the person, it ceases to be a legislation under Entry 49 of List II.
After a due consideration of the matter we are inclined to agree with the submission made by the learned counsel for the petitioners on questions
1, 2 and 3. The unit of assessment is a Survey Number or subdivision number as per S. 5 read with the definition of ""each urban land"" occurring in
S. 2(6) of the Act as land comprised in a survey number of a sub-division number. So the subject-matter of the charge is only a survey number or
a sub division number held by the owner. The said charging section stands as it is without any modification. While the subject-matter of the tax is
only the land comprised in a survey number or sub-division number, we do not see how the aggregation could be made of all the lands held by a
person within an urban area and bring the same to charge by adopting a progressive rate of taxation. No doubt, if the tax is levied on a unit of
urban land, that is, in respect of each survey number or sub division number, there cannot be any objection for the progressive rate of tax to be
applied for such unit of land. Even in levying income tax taking the income of the year as a unit, progressive rate of tax has been adopted and
merely because a progressive rate of tax is adopted as a measure the levy of income tax cannot be challenged. Similarly, the levy of tax whether at
a flat rate or at a progressive rate depending upon the size of the unit cannot make the tax invalid provided the tax is levied on the subject matter of
tax, that is, the unit of urban land in this case. Thus the mere adoption of a progressive rate of tax cannot make levies illegal. However, in this case
the progressive rate of tax is levied not on the subject-matter of the charge but on the aggregate of the units of urban land which alters the tax from
a tax on land and building into a tax on the agreement extent of one''s holding and this makes it a tax on the aggregate extent of one''s wealth. As
pointed out already, in the decisions of the Supreme Court referred to above, the distinguishing characteristics of a tax on land is that it is a tax on a
unit of land and not a tax on the aggregate of one''s holding. A tax on one''s total holding of urban land is a tax on the partial wealth of a person.
Thus by levying a tax on the aggregate extent of the holding of the urban land owned by a person, the tax levied under the Act ceases to be a tax
on land and becomes a tax on one''s holding of urban land. We are clearly of the view that such a tax cannot be comprehended within the scope of
the Entry ""tax on land"". As already stated this situation has been brought about by the amending Act 49 of 1975 when the present schedule to the
Act has been introduced which contemplates the rate of tax being applied on the aggregate extent of urban land held be a person in the urban area.
Though the charging S. 5 contemplates the rates specified in the Schedule being applied on each urban land, before the introduction of S. 6B and
the schedule to the Act, the Act clearly fell within Entry 49 of List II and it has been so held categorically by the Supreme Court. It is only after the
introduction of S. 6B and the introduction of the idea of aggregation in the schedule the character of the tax is changed and instead of taxing the unit
of land the aggregate holding of a person is brought to charge. It is well-established that to find out whether a particular statute comes within the
legislative competence of the Legislature it is the pith and substance of the legislation that will be determinative. The pith and substance of a taxation
stature has to be determined with reference to the charging section. The charging section imposes a charge only on a unit of urban land which
according to the definition is a survey number or a sub-division number. Therefore the charge of tax under the statute falls squarely within Entry 49
of List II. However, S. 68 which is a machinery provision goes beyond the charging section and levies the tax mentioned in the schedule on the
total extent of urban land and not on each urban land which is taken as a unit for the purpose of tax. It is S. 6B which alters the nature of the tax
and converts the tax as one on the aggregate holding of a person. In respect of the holding of a person there can be an aggregation of the tax
payable on each urban land, for, such aggregation is only for the purpose of finding out the total tax due by such person. But, if the aggregation of
the various urban lands held by a person for the purpose of imposing the charge under the charging section is made, then that becomes
objectionable as it amounts to a tax on the value of the aggregate extent and not on the value of a unit of land which is made the subject-matter of
the charge. Section 6B not only runs counter to the charging section but also makes the entire statute open to constitutional a tack that the tax
levied falls outside Entry 49 of List II and therefore it should be struck down. Even without S. 6B the Schedule to the Act stands attracted by S. 5
The Entry in Column 1 in Parts I to IV of the Schedule uses the expression ""where the aggregate extent of urban land held by the owner in the
urban area. ""Since the principle of aggregation alters the character of the impost from tax on urban land to a tax on one''s holding of urban land
which is part of his wealth, the word, ''aggregate'' occurring therein will have to be struck down. By striking down S. 6B and the word ''aggregate''
occurring in the first column of Parts I to IV of the Schedule, the Act as such will continue to be constitutionally valid as apiece of legislation falling
under Entry 49 of List II. Therefore, we strike down the entire S. 6B and the expression ''aggregate'' occurring in column I of Parts I to IV of the
Schedule. With respect we are not inclined to agree with the view expressed by Varadarajan, J., as he then was, in W.P. No. 3491 of 1976 batch
referred to above.
Coming to question No. 4, it is already seen that the Government in exercise of its powers under S. 27 of the Act had passed G.O.Ms. 2625,
Revenue, dated 27th December, 1976 giving a uniform exemption of 2 grounds irrespective of the total extent and abolishing the distinction
between lands used for residential and non-residential purposes. In view of this the said question does not arise for consideration. Finally, coming
to question No. 5, we are of the view the Act cannot be challenged on the ground that the tax is harsh and excessive, in view of the decision of the
Supreme Court in Hari Krishna Bhargav v. Union of India 1966 1 I.T. J. 77 wherein it has been held that a taxing statue cannot be challenged
merely on the ground that it is harsh and excessive, Hence there is no merit in that contention. The writ petitions are therefore allowed to the extent
indicated above with reference to questions 1 to 3. There will, however be no order as to costs.