Government is empowered to enhance lease rent and royalty, at any time during lease period.

W.P.No.4610/2001 is filed challenging G.O.Ms.No.242 Rev. dated 14.05.1999, revising rate of amount payable on Salt Pans, at Rs.135 per acre.

2. W.P.No.22200/2005 is filed challenging the notice issued to the Petitioner Pakben & Co., calling upon the Petitioner Company to pay the arrears of Rs.15,13,000/-, payable towards the Salt Tax.

3. Since same set of facts arise in both the Writ Petitions, they have been taken together and disposed of by this common Order.

4. Relevant facts in brief are as follows:-

In Marakkanam Village, Villupuram District and adjoining villages, the Central Government as well as State Government own several thousands of acres of salt pans, which are periodically leased out to salt manufacturers. In consideration of the leases, Government secures lease rent per annum as well as royalty stipulated per metric tonne of salt manufactured, subject to minimum sum per acre/per annum.

5. G.O.Ms.No.208 Rev. dated 12.03.1993 has been issued in the year 1993, raising the lease rent from Rs.2/- to Rs.60/- and revising the rates as amount of Rs.445/-payable per acre per annum, as noted below

Lease Rent per acre ... Rs.60/- Local Cess on lease amount ... Rs.60/- [at the rate of 100%] Local Cess Surcharge on lease amount ... Rs.300/- (500%)

... Rs.420/- Minimum royalty ... Rs.25/-

Total Rs.445/-

G.O.Ms.No.202 was challenged by means of Writ Petition No.20469/1993.

6. In consideration of representations of various salt manufacturers that salt rates fixed are high, the State Government revised the lease rent and minimum royalty relating to salt produced. As per G.O.Ms.No.242 Revenue Department dated 14.05.1999, total amount payable per acre/ per annum is Rs.135/-. G.O.Ms.No.242 dated 14.05.1999 reads as under:-

"The Government have examined the suggestion of the special Commissioner and Commissioner of Land Administration and Director of Industries and Commerce in greater detail and pass the following Order fixing uniform rate of lease rent and royalty on salt production.

Lease Rent: Rs.5/- per acre per annum Royalty: Rs.2/- per metric tonne of salt produced subject to a minimum of Rs.100/-per acre per annum"

As per the revised rates, lessee is to pay only Rs.135/- and benefited by Rs.310/-per acre per annum. G.O.Ms.No.242 is subject matter of challenge in W.P.No.4610/2001.

7. Contending that salt being an essential commodity for all sections of the Society, the learned Counsel for the Petitioner submitted that any decision of taxing salt, manufacturers must be visited with rationality. It was further submitted that while the Central Government Salt Pan lessees are enjoying privilege, lessees who operate on State Government lands are discriminated, as they have to pay higher lease rent and royalty. It was further submitted that when Director of Industries and Commerce requested waiver of royalty without any rational basis, the Government has fixed minimum royalty of Rs.100/- per acre per annum.

8. Drawing the attention of the Court to the comparative levy, the learned Government Advocate has submitted that under G.O.Ms.No.242, lessee is benefitted with saving of Rs.310/- per acre and the lease rent now fixed is a reasonable one and the same cannot be challenged.

9. By objecting to the revised rates of Salt Pans, Petitioner challenges the policy of the Government in revising the lease amount and royalty.

10. The lease Rent of Rs.2/- per acre per annum, royalty per acre at Rs.25 total amount of Rs.27/- per acre per annum were earlier fixed through G.O.Ms.No.1076, Rev. dated 22.06.1982. As of right, the Petitioner cannot claim that the rates revised in 1982 has to be maintained all the time.

11. Salt is produced by preparing earth for salt crystallisation with traditional method of solar evaporation. The learned Senior Counsel for the Petitioner contended that with more labour orientation involved, maximum production capacity per acre could never be more than two metric tonnes per acre and at present when