Ayyangar, J. - (1.) The two civil appeals and the petition under Art, 32 of the Constitution which have been heard together raise a common point regarding the validity of notices of demand for the payment of land cess under the Madras District Boards Act (Madras Act XIV of 1920) which for shortness we shall call the Act, and the legality of the procedure for the recovery of the amount of the said cess, The impugned notices made a demand also for education cess but as this cess is merely a proportion of the land cess, and as the validity of that demand stands or falls with that of the land cess, it is sufficient if we refer to and consider the challenge to the demand of land cess alone, as that will determine the validity of the entire sum demanded.
(2.) The appellant's father obtained a mining lease from the Government of Madras dated September 15, 1953 under which he was permitted to work and win iron ore in a tract of lands in a village in Chittoor district. The terms upon which the lessee was to work the mines are not very relevant but what is material is that under this instrument the lessee bound himself to pay a dead rent of Rs. 1140/ 2 per year if he used the leased land for the extraction of iron ore and a higher amount if it used for other purposes. Besides, he also bound himself to pay a royalty of 8 annas per ton of iron ore if the ore were used for extraction of iron and if the iron ore was used for any other purpose such as for sale in specie, at Re. 1 / - per ton. In addition, the lease also stipulated for the payment of surface rent at Rs. 1 / 8 / 3 per acre per annum in respect of the surface area occupied or used. The lessee worked the mines, extracted ore and marketed it.
(3.) To raise finances for carrying on the local administration in the District Boards, several taxes are leviable. Among them S. 78 of the Act imposes a land cess on lands in the district in these terms: '78. The land cess shall be levied on the annual rent value of all occupied lands on whatever tenure held and shall consist of a tax of two annas in the rupee of the annual rent value of all such lands in the district." The "annual rent value" on the basis of which the land cess to be levied was to be computed in the manner laid down in S. 79 and this section ran: "79. The annual rent value shall, for the purposes of S. 78, be calculated in the following manner: (i) In the case of lands held direct from Government on ryotwari tenure or on lease or licence, the assessment, lease amount, royalty or other sum payable to Government for the lands, together with any water-rate which may be payable for their irrigation shall be taken to be the annual rent value. (ii) In the case of inam lands or lands held wholly or partially free from assessment the full assessment which such lands would bear if they were not inam, together with any water-rate which may be payable for their irrigation shall be taken to be the annual rent value; and such full assessment and water-rate shall be determined by the district collector under the general orders of the Board of Revenue. (iii) In the case of lands held on any other tenure, the annual rent payable to the landholder, sub-landholder or any other intermediate landholder holding on an under-tenure created continued or recognized by a land-holder, or sub-landholder, as the case may be, by his tenants, together with any water-rate which may be payable for their irrigation, shall be taken to be the annual rent value; and where such lands are occupied by the owner himself or by any person holding the same from him free of rent or at a favourable rent, the annual rent value shall be calculated according to the rates of rent usually paid by occupancy ryot for ryoti lands in the neighbourhood with similar advantages, together with any water-rate which may be payable for the irrigation of the lands so occupied. (iv) In the case of lands, the assessment of rent of which is paid in kind, the annual rent value shall be calculated according to the rates of rent established or paid for neighbouring lands of a similar description and quality, together with any water-rate which may be payable for the irrigation of the lands first mentioned, or if such method of calculation is, in the opinion of the Board of Revenue, impracticable in any particular case, according to any method which the Board of Revenue may approve for that case: Provided that, where any landholder or sub-landholder has obtained under the provisions of Ss. 30(iii) and 33 of the Madras Estates Land Act, 1908, a decree empowering him to increase his rent in consequence of any additional payment by way of water-rate made by him to Government, the annual rent value shall be the balance remaining after deducting such increase of rent up to the amount of the water rate from the sum ascertained as aforesaid." ;