SANKAR S B Vs. STATE OF KERALA

JUDGEMENT

(1.) THIS original petition is by the managing trustee of the Sree Kombai Subramania Swamy Koil Devasthanam, Madurai. The Devasthanam is a religious and charitable trust situated outside the State of Kerala. The trust owns a cardamom estate in Udum-banchola Village in the State of Kerala. The entire income of the trust is to be utilised for religious and charitable purposes in connection with the affairs of the Devasthanam situated in Tamil Nadu. Thus the entire income of the estate situated in Kerala and owned by the trust is to be spent for religious and charitable purposes in Tamil Nadu.

(2.) THE agricultural income derived from the estate was exempted from levy of agricultural income-tax for the periods up to 1973-74, but from 1973-74 onwards, the income from the cardamom estate is subjected to levy of agricultural income-tax for the reason that under the amended provisions of Section 4(1)(b) of the Agricultural Income-tax Act, such income spent for religious and charitable purpose outside the State of Kerala does not qualify for exemption. Section 4(1)(b) of the Act was amended by the Kerala Act 9 of 1974 which came into force on April 1, 1974. THE petitioner challenges the validity of the amended Section 4(1)(b) of the Act as violative of Article 14 of the Constitution.

(3.) IT is now well-established by the decisions of the Supreme Court that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purpose of legislation. The classification must be founded on intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and the differentia must have a rational nexus to the object sought to be achieved by the statute in question. The classification may be founded on different bases, it may be geographical or according to objects or occupations or the like (vide Budhan Choudhry v. State of Bihar, AIR 1955 SC 191). Even though taxation law is also subject to Article 14 of the Constitution, it has been held that the State has a wide discretion in selecting the persons or objects it will tax and the statute is not open to attack on the ground that it taxes some persons or objects and not others. IT is only when within the range of its selection, the law operates unequally, and that cannot be justified on the basis of any valid classification, that it would be violative of Article 14 (vide the decision of the Supreme Court in East India Tobacco Co. v. State of Andhra Pradesh [1962] 13 STC 529). Holmes J. in Bain Peanut Co, v. Pinson [1930] 282 US 499 stated at page 501 :