The main legal principle established in the judgment is that the State Legislature has the legislative power to impose a tax on specified lands, including crude oil and natural gas bearing land, under Entry 49 of List II.

Ranjan Gogoi, J.

1. The challenge projected being identical both the writ petitions were heard together and are being disposed of by this common judgment and order.

2. Both the writ petitioners are public sector undertakings engaged, inter alia, in the exploration of hydrocarbons from which the petitioners extract crude oil and natural gas. Crude oil and natural gas bearing land having been brought within the definition of "specified land" by the Assam Taxation (on Specified Lands) (Amendment) Act, 2004 and such land having been made exigible to payment of tax under the provisions of the principal Act, i.e., the Assam Taxation (on Specified Lands) Act, 1990, it is the validity of the aforesaid amendment Act that is the subject-matter of challenge in both the writ applications under consideration.

3. The Assam Taxation (on Specified Lands) Act, 1990 was enacted by the State Legislature of Assam with a view to providing additional revenue to the State by imposing a tax on certain categories of land. The Act, as originally enacted, defines specified lands to mean any land used or intended to be used for growing tea and for purposes ancillary thereto as well as any land held for the purposes of obtaining or extracting coal. Section 3, which is the charging section, empowers and authorises the levy of a tax in respect of specified lands calculated on the annual productivity of such land. Section 4 of the Act lays down the principles for determination of annual productivity of the land whereas Section 5 provides for the rate of tax. Under Section 6 it is the owner of the specified land, as defined, who has been made liable to pay the tax. By Assam Ordinance II of 1994 and subsequently by Assam Act XXIV of 1994 amendments were carried out which had the effect of excluding coal bearing land from the purview of the provisions of the Act. Thereafter, by the impugned Amendment Act of 2004 elaborate amendments were carried out so as to include coal, once again, and crude oil and natural gas bearing land within the meaning of the definition of specified land so as to make such coal, crude oil and natural gas bearing land exigible to tax under the Act by determination of the annual productivity as laid down in Section 4 and at the rate specified in Section5. It is the validity of the aforesaid amendment insofar as crude oil and natural gas bearing land is concerned, that is the subject-matter of the present challenge, such challenge, primarily, being on the ground that the amendment Act of 2004 is beyond the power of the State legislature, as the Act, in pith and substances, imposes a tax on crude oil and natural gas.

4. The arguments advanced on behalf of the petitioners, though has been long and elaborate, has projected a simple issue. Regulation and development of oil fields and mineral oil resources; petroleum and petroleum products has been made an exclusive subject for the Union Parliament to legislate and over which the State Legislatures have no legislative power. The attempted levy by the Amendment Act of 2004, though it purports to be a tax on land and hence covered by Entry No. 49 of List II, has in essence imposed a tax on crude oil and natural gas which are species of petroleum and petroleum products. The impugned levy, therefore, is contended to be ultra vires the powers of the State Legislature. This, in essence, is the conclusion that the elaborate arguments advanced on behalf of the petitioners seeks to make out which argument is sought to be countered by the State by contending that the tax levied by the amendment, in pith and substance, is a tax on land and hence covered by Entry 49 of List II of the Seventh Schedule to the Constitution. The arguments and counter arguments advanced on behalf of the rival parties being by a detail reference to the relevant provisions to the Seventh Schedule to the Constitution and the pari materia provisions contained under the Government of India Act, 1935 and the several legislations