The Maharashtra Education (Cess) Act, 1962 was intra vires the State Legislature and did not violate the directive principles of the Constitution or the principles of natural justice.

Headnote:
EDUCATION CESS - MAHARASHTRA EDUCATION (CESS) ACT, 1962 - CONSTITUTIONALITY - LEVY OF EDUCATION CESS ON LANDS AND BUILDINGS - VALIDITY - INTERPRETATION OF ENTRIES IN THE SEVENTH SCHEDULE OF THE CONSTITUTION - DIRECTIVE PRINCIPLES OF STATE POLICY - ARTICLE 45 - TAXATION FOR EDUCATION - NATURAL JUSTICE - ASSESSMENT PROCEDURE - ARTICLE 276(2) OF THE CONSTITUTION - LIMIT ON TAXATION - APPLICABILITY.
Fact of the Case:

The petitioner, a resident of Malkapur, challenged the demand notice for education cess issued by the Malkapur Municipal Council under the Maharashtra Education (Cess) Act, 1962. The petitioner contended that the Act was ultra vires the State Legislature, violated the directive principles of the Constitution, and was discriminatory and violative of natural justice principles.
Finding of the Court:

The court held that the Maharashtra Education (Cess) Act, 1962 was intra vires the State Legislature and was enacted under Entry No. 11 (Education) and Entry No. 49 (Taxes on lands and buildings) of List II of the Seventh Schedule of the Constitution. The court further held that the levy of education cess did not violate the directive principles of the Constitution, as the State had the obligation to provide free education and could raise funds for this purpose through taxation. The court also held that the Act did not violate the principles of natural justice as it provided for objections to be raised during the assessment process under the Municipalities Act.
Issues: 1. Whether the Maharashtra Education (Cess) Act, 1962 was ultra vires the State Legislature. 2. Whether the levy of education cess violated the directive principles of the Constitution. 3. Whether the Act was discriminatory and violative of natural justice principles.
Ratio Decidendi: 1. The court held that the Act was intra vires the State Legislature as it fell under Entry No. 11 (Education) and Entry No. 49 (Taxes on lands and buildings) of List II of the Seventh Schedule of the Constitution. The court observed that the levy of education cess was for the purpose of promoting education in the State and was thus covered by Entry No. 11. Additionally, the court held that the cess was a tax on lands and buildings and thus fell under Entry No. 49. 2. The court held that the levy of education cess did not violate the directive principles of the Constitution, as the State had the obligation to provide free education and could raise funds for this purpose through taxation. The court observed that Article 45 of the Constitution, which provides for free and compulsory education, did not prohibit the State from levying taxes for this purpose. 3. The court held that the Act did not violate the principles of natural justice as it provided for objections to be raised during the assessment process under the Municipalities Act. The court observed that the annual letting value of lands and buildings was already determined by the municipalities for the purpose of levying municipal taxes, and thus there was no need for a separate assessment procedure for the education cess.
Final Decision: The petition was dismissed with costs.

JUDGMENT - Padhye, J.

1. By this petition under Articles 226 and 227 of the Constitution, the petitioner seeks to challenge the demand notice dated 21st January 1967 as being illegal and prays for a writ of prohibition to the respondents from making the recovery of the education tax on the basis of the said demand notice dated 21st January 1967. The petitioner also seeks a direction that the respondent No. 2, the State oi Mahara-shtra, bo ordered to restore and repay the amount of Rs. 775.50 to the petitioner which has been collected by the respondent No. 1 for respondent No. 2 towards the education tax for the period from 1962-63 to 1964-65. The petitioner further wants a prohibition against the respondents prohibiting them from further recovering any amount under the Maharashtra Education (Cess) Act, 1962 and the Rules thereunder. A relief is also claimed for a declaration that the Maharashtra Education (Cess) Act 1962 be declared as ultra vires of the Constitution.

2. The petitioner is a resident of Malkapur, taluq Malkapur, District Buldana and owns several lands and buildings in the town of Malkapur. Most of these buildings are let out to tenants and the petitioner gets rent for those buildings. Besides, the petitioner is also a cultivator and carries on business of moneylendiug. The petitioner has set out in paragraph 1 of his petition the several houses in different wards of the town of Malkapur. Education cess is being demanded by the Malkapur Municipal Council from the petitioner since October 1962 at the rate of two per cent of the annual letting value of lands and buildings owned by the petitioner within the limits of the Malkapur Municipal Council. By a notice dated 16-2-1965 an amount of Rs. 775.00 was demanded by the Municipal Council towards the education cess tor the period 1962-63 to 1964-65 along with other municipal taxes. The petitioner protested against the said demand contending that it was illegal and ultra vires and requested the Municipal Council to withdraw the demand or education tax. The petitioner, however, was further served with other demand bills dated 2-12-1966 for Rs. 190 and Rs. 174 for the years 1965-66 and 1966-67 respectively on account of the education tax and the petitioner was further pressed to pay the education tax for the period 1962-63 to 1964-65, in order to avoid any coercive process, the petitioner is alleged to have paid under protest on 3-12-1966 an amount of Rs. 775.50 towards the education cess for the years 1962-63 to 1964-65. The petitioner again received another demand bill on 19th December 1966 for Rs. 82 towards the education tax for the period 1965-66 and 1966-67. The representation by the petitioner to the Chief Officer of the Municipal Council was rejected on or about 5th January 1967. The petitioner again received another demand bill dated 21st of January 1967 for Rs. 364-50 towards the education tax with a threat that in case of failure to pay the amount, the amount would be recovered by issuing a warrant under the provisions o-E the Maharashtra Municipalities Act, 1965. The petitioner has given a schedule in paragraph 7 of his petition showing the amount of education cess or tax paid by him or demanded of him during each of the years 1962-63 to 1966-67. The education cess demanded for 1962-63 for the second half was Rs. 153.50, for 1963-64 was Rs. 307, for 1964-65 Rs, 295, for 1965-66 Rs. 223 and for 1966-67, it was Rs. 223. In view of the demand made by the Municipal Council for tho unpaid education cess, coupled with the threat by the Municipal Council to recover the amount by coercive process, the petitioner is led to file this writ petition for the reliefs claimed by him as stated above.

3. The petitioners contentions are: (1) The Maharashtra Education (Cess) Act, 1962, Act No. XXVII of 1982, is ultra vires the powers of the State Legislature of Mahara-shara because the State List prescribed under the Seventh Schedule of the Constitution of India does not empower

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