Lawful tax levy requires clear authority and workable assessment machinery; Ninth Schedule protection cannot cure a defective levy.

Inclusion of the Kerala Land Tax Act in the Ninth Schedule did not by itself save it from challenge where the levy operated as confiscatory taxation or lacked lawful machinery. The majority held that the amended scheme, including concessional and provisional assessment provisions, prevented the Act from being characterised as confiscatory in substance, though a concurring view treated it as colourable and invalid. Separately, the demand and collection of basic tax failed because the Act did not clearly specify the authority empowered to levy and assess the tax, and the incomplete assessment machinery could not be cured by revenue recovery provisions. The tax demand and recovery proceedings were therefore unsustainable.

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Issues: (i) Whether the Kerala Land Tax Act was protected by Article 31-B of the Constitution from challenge on the ground that it was colourable and confiscatory. (ii) Whether the demand, levy and collection of basic tax were invalid for want of authority of law under Article 265 because the Act did not specify the authority to levy and assess the tax.

Issue (i): Whether the Kerala Land Tax Act was protected by Article 31-B of the Constitution from challenge on the ground that it was colourable and confiscatory.

Analysis: The Act, though included in the Ninth Schedule, was examined to see whether its real object was taxation or confiscation of property. The reasoning drew a distinction between a taxing statute that is merely severe and one that is a device to take property under the guise of taxation. The amended scheme of the Act, including concessional assessment under Section 6(2), provisional assessment for unsurveyed lands under Section 7, and appellate and revisional remedies, was treated as relevant in assessing whether the enactment still retained a confiscatory character. On that basis, the majority concluded that the Act could not, in the main, be characterised as confiscatory merely because of its burden, and the concurring opinion independently held that the Act remained colourable because the provisions still produced confiscatory results and lacked a proper machinery for determining liability in many situations.

Conclusion: The challenge based purely on confiscatory character was not accepted by the majority as an independent ground, though the concurring opinion treated the Act as colourable and invalid.

Issue (ii): Whether the demand, levy and collection of basic tax were invalid for want of authority of law under Article 265 because the Act did not specify the authority to levy and assess the tax.

Analysis: Article 265 requires tax to be levied and collected only by authority of law. The Act provided for the charge of basic tax, recovery as public revenue, concessional assessment in certain cases, and appeals from some orders, but it did not specify the authority empowered to levy the normal statutory tax under Section 5 or provide a complete machinery for assessment where disputes arose about liability, incidence, or apportionment between landholder and tenant. The absence of a prescribed authority for the foundational levy, together with the incomplete assessment machinery, meant that recovery through the Revenue Recovery Act could not stand on its own. Article 31-B could not cure a defect going to the existence of lawful authority for levy and collection.

Conclusion: The levy and collection of basic tax were held illegal and unauthorised for want of a validly specified authority under Article 265.

Final Conclusion: The petitions and writ appeal succeeded because the tax demand and recovery proceedings could not be sustained in the absence of lawful authority for levy and assessment under the Act.

Ratio Decidendi: A taxing statute must itself provide lawful authority and a workable machinery for levy and assessment of the tax, and inclusion in the Ninth Schedule does not validate a levy that fails that constitutional requirement.

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