Equality in building taxation fails when a uniform floor-area tax ignores material differences between buildings.

The Kerala Buildings Tax Act, 1961 was criticised for levying building tax solely on floor area, without regard to differentiating factors such as the building's nature, use, location, construction cost, rental potential or other relevant circumstances. In fiscal legislation, broad legislative classification is permissible, but the tax base must still rest on a rational basis and comply with the equality guarantee. A uniform charge applied indiscriminately to materially dissimilar buildings may therefore amount to denial of equal protection. On that reasoning, the charging provision was held to violate the equality clause and could not be sustained.

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Issues: Whether the Kerala Buildings Tax Act, 1961, in levying building tax solely on the basis of floor area and without regard to relevant differentiating factors, violated the equality guarantee under the Constitution.

Analysis: The charging scheme imposed tax on all buildings completed on or after the specified date by reference only to floor area, without considering the nature of the building, the purpose of its use, its location, construction, cost, rental potential, or other relevant circumstances bearing on taxation. In fiscal matters the Legislature has wide latitude to classify, but the classification must still rest on a rational basis and conform to the equality clause. A tax that treats materially dissimilar buildings alike by applying a uniform measure without rational differentiation may amount to denial of equal protection. The Court also noted that the impugned Act operated throughout the State and applied indiscriminately to all covered buildings, making the defect more pronounced.

Conclusion: The Act's charging provision was violative of the equality clause and could not be sustained.

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