GAUTAMLAL AGRAWAL Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) This petition, the petitioner challenges the validity of Act No. 15 of 1982 of M. P. Karadhan Adhiniyam, 1982, Part II School Building Cess as ultra vires the Constitution of India.

(2.) M. P. Karadhan Adhiniyam, 1982 as published in M. P. Rajpatra dated 6/05/1982 Part II is quoted below : "Part II School Building Cess- Definitions: In this part, unless the context otherwise requires- (a) "Code" means the Madhya Pradesh Land Revenue Code, 1959 (No. 20 of 1959); (b) "school building cess" means the school building cess levied under Section; (c) "holder of land" means a tenure holder, occupancy tenant or a Government lessee; (d) "holding means all land held by a holder in the State in any one or more than one of the capacities specified in clause (c); (e) "member of a Scheduled Caste" means a member of any caste, race or tribe or part of a group within a caste, race or tribe specified as Scheduled Caste with respect to the State of Madhya Pradesh under Article 341 of the Constitution of India; (f) "member of a Scheduled Tribes" means a member of any tribe, tribal community or part of or group within a tribe or tribal community specified as such with respect to the State of Madhya Pradesh under Article 342 of the Constitution of India; (g) words and expressions used in this part and not defined herein but defined in the Code shall have the meaning assigned to them to the Code.

(3.) Levy of School building cess- (1) There shall be levied and collected for every revenue year school building cess on every holding of six hectares and above held by a holder at the rate of three rupees and seventy five paise per hectare: Provided that the provision of this subsection shall, in respect of a holding held by a member of Scheduled Castes or Scheduled Tribes shall, have effect as if for the words "six hectares", the words "ten hectares" were substituted. (2) The school building cess levied and collected under sub-section (1) shall be in addition to land revenue or rent or any other cess or tax payable by the holder of the land in respect of the holding under the Code or any other enactment-for the time being in force and shall be payable by the holder of the land in the same manner as, and along with, land revenue. (3) The provisions of the Code in relation to assessment, collection and recovery of land revenue shall, so far as may be, apply to the assessment, collection and recovery of school building cess under this part as if the cess were land revenue assessed on the holding under the Code. (4) (1) The proceeds of the school building cess under Section 3 shall first be credited to the Consolidated Fund of the State and the State Govt. may, at the commencement of each financial year, after due appropriation has been made by law withdraw from the Consolidated Fund of the State an amount equivalent to the proceeds of the school building cess realised by the State Government in preceding financial year and shall place it to the credit of a separate fund to be called the Primary School Buildings Construction Fund and such credit to the said fund shall be an expenditure charged on the Consolidated Fund of the State of Madhya Pradesh. (2) The State Government shall every year make its contributions to the fund equal to fifty per cent of the amount credited to the fund under sub-sec. (1). (3) The amount in the credit of the fund shall be utilised for construction and furnishing of Primary School building in non-urban areas as defined in clause (2-z) of Section 2 of the Code and for that purpose only so much amount in the credit of the fund shall be allotted to a district as recovered by way of school building cess from that district together with fifty percent of the contribution of the State Government for that district. The maintenance and operation of the Primay School Buildings Construction Fund, including the investment or re-investment of sums in its credit, shall be in accordance with the rules made under this part." 3A. The petitioner challenges the validity on the ground that it is in excess of legislative power conferred under the Entries 45 and 49 of List II of Seventh Schedule of the Constitution of India. Secondly, it is also stated that the Act is arbitrary as it operates differently on the holders of land belonging to Scheduled Castes, Scheduled Tribes and General Categories. It is also said that the building cess is nothing but land revenue payable and thus amounts to double taxation. It is submitted that in view of the Ceiling on Agricultural Holding Act, 1961 the levy of cess on the holdings could operate prejudicially inasmuch as the holders would reduce their holdings below six hectares by sale or otherwise. Lastly, it is also submitted that there is no procedure for assessment, hence, the scheme of the Act cannot be implemented.