Judgment

RAMASWAMI, J.: In these appeals which have hard together a common question of law arises for determination, namely, whether the Madras Urban Land Tax Act, 1966 (12 of 1966) is constitutionally valid.

2. In 1963 the Madras Legislature enacted the Madras Urban Land Tax Act, 1963 which came into force in the city of Madras on the 1st of July, 1963. In the Statement of Objects and Reasons of the 1963 Act it was stated that the Taxation Enquiry Commission and the Planning Commission were suggesting the need for imposing a suitable levy on lands put to non-agricultural use in urban areas. The State Government, after examining the report of the Special Officer, decided to levy a tax on urban land on the basis of market value of the land at the rate of 0.4 per cent on such market value. Section 3 of the Act of 1963 (which will be referred to as the old Act) provided that there shall be levied and collected for every fasli year commencing from the date of the commencement of the Act, a tax on urban land from every owner of urban land at the rate of 0.4 per cent of the average market value of the urban land in a sub-zone as determined under sub-section (2) of Section 6. Section 7 provided for the determination of the highest and lowest market value in a zone. For determining the average market value, the Assistant Commissioner shall have regard to any matters specified in clauses (a) to (e) of sub-section (2) of Section 6, namely;

(a) the locality in which the urban land is situated;

(b) the predominant use to which the urban land is put, that is to say, industrial commercial or residential;

(c) accessibility or proximity to market, dispensary, hospital, railway station, educational institution, or Government offices;

(d) availability of civil amenities like water supply, drainage and lighting; and

(e) such other matters as may be prescribed.

The constitutional validity of Act 34 of 1963 was challenged and in Buckingham and Carnatic Co. Ltd. v. State of Madras, 1966-2 Mad LJ 172 a Division Bench of the Madras High Court held that the impugned Act fell under Entry 49, List II of Schedule VII to the Constitution and was within the legislative competence of the State Legislature. But the Act was struck down on the ground that Art. 14 of the Constitution was violated, because the charging section of the Act levied the tax on urban land not on the market value of such urban land but on the average value of the lands in the locality known as a sub-zone. The new Act (Act 12 of 1966) was passed by the State Legislature after the decision of the Madras High Court. In the new Act provisions relating to fixation of average market value in the sub-zone were omitted. Instead, Section 5 of the new Act provides that there shall be levied and collected from every year commencing from the date of the commencement of the Act a tax on each urban land from the owner of such urban land at the rate of 0.4 per cent of the market value of such urban land. Section 2 (10) defines "owner" as follows:

"Owner" includes-

(i) any person (including a mortgagee in possession) for the time being receiving or entitled to receive, whether on his own account or as agent, trustee, guardian, manager or receiver for another person or for any religious or charitable purposes, the rent or profits of the urban land or of the building constructed on the urban land in respect of which the word is used;

(ii) any person who is entitled to the kudiwaram in respect of any inam land; but does not include-

(a) a shortriamdar; or

(b) any person who is entitled to the melwaram in respect of any inam land but in respect of which land any other person is entitled to the kudiwaram.

Explanation - For the purposes of Clause (9) and Clause (10) inam land includes lakhiraj tenures of land and shrotriam land.

Section 2 (13) defines land to mean any land whch is used or is capable of being used as a building site and includes garden or grounds, if any, appurtenant to a building but does not include an