Property tax levy under Entry 49 must meet Article 14 equality standards and use a rational basis for classification.

A property tax under Entry 49 of List II was upheld as within State legislative competence, and the use of floorage as a measure did not convert it into a tax on income or capital. The doctrine of colorable legislation was rejected because legislative motive was irrelevant where competence existed. Section 3(2), giving the Government unguided exemption power, was treated as void for unconstitutional delegation and potential inequality, while Section 4 and the floorage-based levy scheme were held to violate Article 14 because they created arbitrary and discriminatory incidence. The levy was also held not to infringe Article 301 or require prior Presidential sanction under Article 304(b).

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Issues: (i) Whether the Mysore Buildings Tax Act, 1962 was within the legislative competence of the State Legislature and whether it was a colorable piece of legislation; (ii) whether Section 3(2) conferring exemption power on the State Government was an unconstitutional delegation and violative of equality; (iii) whether Section 4 and the scheme of levy based on total floorage were violative of Article 14 of the Constitution; (iv) whether the levy offended Article 301 and required previous Presidential sanction under Article 304(b).

Issue (i): Whether the Mysore Buildings Tax Act, 1962 was within the legislative competence of the State Legislature and whether it was a colorable piece of legislation.

Analysis: The charging provisions were examined in the setting of Entry 49 of List II, which empowers the State to tax lands and buildings. The tax was held to be a property tax on buildings, and the use of floorage as a measure did not convert it into a tax on income or capital merely because the owner was made liable or because the tax burden varied with the number of buildings owned. The doctrine of colorable legislation was rejected because motive is irrelevant where legislative competence exists, and the substance of the enactment remained within the State's taxing field.

Conclusion: The Act was within the State's legislative field and was not struck down as colorable legislation.

Issue (ii): Whether Section 3(2) conferring exemption power on the State Government was an unconstitutional delegation and violative of equality.

Analysis: Section 3(2) conferred a broad and unguided power to exempt any class of buildings from tax on the Government's subjective opinion of public interest. No policy, principle, or legislative guidance was provided to control the exercise of that power, and the provision itself created a potential for unequal treatment of similarly situated buildings.

Conclusion: Section 3(2) was held void, but it was treated as severable and did not by itself invalidate the entire Act.

Issue (iii): Whether Section 4 and the scheme of levy based on total floorage were violative of Article 14 of the Constitution.

Analysis: The levy was imposed without regard to the age, location, rental value, or capital value of the building and rested substantially on floorage alone. The classification of towns and buildings produced serious inequality in incidence, and the burden was not apportioned by a reasonable standard having a rational relation to the value of the property taxed. The charging section and its schedules were therefore held to create arbitrary and discriminatory treatment among similarly situated property owners.

Conclusion: Section 4 and the connected scheme were held violative of Article 14.

Issue (iv): Whether the levy offended Article 301 and required previous Presidential sanction under Article 304(b).

Analysis: The restraint, if any, arising from the building tax was indirect and remote, not a direct and immediate restriction on trade, commerce, or intercourse. On that basis, the levy did not attract the prohibition in Article 301, and the want of prior Presidential sanction under Article 304(b) did not invalidate the Act on that ground.

Conclusion: The Act was not held invalid on the ground of Article 301 or Article 304(b).

Final Conclusion: The tax enactment was ultimately declared unconstitutional and void because the charging scheme failed the equality test, and the connected machinery provisions could not survive independently.

Ratio Decidendi: A property tax under Entry 49 of List II must be apportioned by a reasonable standard having a rational relation to the property taxed, and a charging scheme that produces arbitrary inequality among similarly situated owners is liable to be struck down under Article 14.

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