judgement:
Appeals Nos. 1619 and 1620 Appeals from the judgment and order dated April 17, 1964 of the Andhra Pradesh High Court in Appeal Suits Nos.
21 of 1959 and 362 of 1958 respectively.
D. Narsaraju, B. Parthasarathy and Subba Rao, for the appellants (in both the appeals).
A. V. Rangam, for respondents Nos.
1 3, (in the appeals).
K. R. Chaudhuri and K. Rajendra Chaudruri, for respondent No. 6 (in both the appeals).
The Judgment of the Court was delivered by Dua, J.
These two appeals (Civil Appeals Nos. 1619 and 1620 of 1968) on certificate by the High Court arise out of the same suit and are directed against a common judgment and decree of the High Court disposing of two cross appeals pre sented in that Court and will, therefore, be disposed of,by one judgment.
The principal question canvassed lies within a narrow compass.
It relates to the jurisdiction of the Civil Courts to entertain and decide the present suit questioning the legality of the notification exhibit A 13 dated November 2, 1949 reducing the rates of rent in respect of the delta dry ryoti lands in village Kalipatnam under the, Madras Estates Land (Reduction of Rent) Act XXX of 1947, (hereafter called the Reduction of Rent Act).
The trial Court decreed the suit in part but the High Court to which both parties preferred appeals held that the Civil Courts had no jurisdiction to entertain the suit.
It is this short question which requires determination in these appeals.
It is unnecessary to state at length the past history of the landed estate in question.
The necessary relevant facts in brief may only be mentioned.
Shree Raja Kandrrgula Srinivasa Jagannadha Rao Panthulu Bahadur was the Inamdar of village Kalipatnam in Narsapuram Taluk in the West Godavari District.
On November 2, 1948, the Government issued a notification (exhibit A 13) under section 3(2) of the Reduction of Rent Act reducing the rates of rent payable in respect of delta dry ryoti lands in Kalipatnam village.
The Inam Settlement Officer, Vijayawadha, then took proceedings to determine whether Kalipatnam was an, inam estate" as defined in section 2 (7) of the Madras Estates (Abolition and Conversion into Ryotwari) Act XXVI of 1948.
After inquiry he made the order dated May 31, 1950 (exhibit A 1) holding that the suit village was an inam estate.
Feeling aggrieved by these two orders the appellant instituted the suit.
out of which the present appeals arise.
Me short question canvassed before us, as observed earlier, is whether the Civil Courts have jurisdiction to entertain the suit.
CI/70 15 716 It may be stated at the outset that the appellant counsel.
conceded at the bar that the question as to the kind of grant can only be decided by the Tribunal appointed under the Reduction of Rent Act and Civil Courts have no jurisdiction to adjudicate upon such a controversy.
The suit challenging the validity of exhibit A 1 declaring Kalipatnam village as an inam estate was accordingly conceded to be incompetent.
Challenge to exhibit A 1 was thus not pressed in this Court.
It was, however, submitted that any finding by the, Civil Court on the kind of grant would have to be completely ignored, by the Tribunal while considering this question under the Reduction of Rent Act.
The submission seems to us to be justified.
We are thus left only with the relief,sought in respect of exhibit A 1 3.
The appellant questioned the validity of this notification on the ground that it cannot be considered in law to have been made under section 3 (2) of the Reduction of Rent Act so as to be immune from challenge in the Civil Courts.
In order to appreciate and determine this argument it is desirable to the first to the provisions of the Reduction of Rent Act.
This Act was enacted in order to provide for the reduction of rents payable by ryots 'in estates governed by the Madras Estates Land Act, 1908 approximately to the level of the assessments levied on lands in ryotwari areas in the neighbourhood and for the collection of such rents exclusively by the State Government.
The purpose of collection of rent exclusively by the State 'Government was added in 1951 with retrospective effect.
The heading of the Act, as originally enacted, was changed, on the creation of Andhra Pradesh, to, A.P. (Andhra Area) Estates Land (Reduction of Rent) Act XXX of 1947.
Suitable adaptations necessitated by the creation of the separate Andhra Pradesh were also duly made.
Section 2 of this Act which empowers the State Government to appoint a _Special Officer for any estate.
or estates for the purpose of recommending fair and equitable rates of rent for the ryoti land provides as under "Appointment of Special Officer to recommend rates of rent in estates.
2 (a)(1) The State Government may a point a Special Officer for any estate or estates for the purpose of recommending fair and equitable rates of rent for the ryoti land in such estate or estates. (b) The Special Officer so appointed shall recommend fair and equitable "rates of rent for all lands in such estate or estates which became ' ryoti lands after the commencement the Act.
717 (2) The Special Officer shall first determine in respect of each village (hereinafter in this section referred to as "Principal village") in an estate : (a) the average rate of cash rent per acre prevailing at the commencement of this Act for each class of ryoti land which was in existence in the principal village at such commencement, such as wet, dry and garden; Provided that where no cash rents are prevalent in the principal village in respect of any class of land the Special Officer shalt determine the average rate of cash rent per acre prevailing at such commencement for such class of land in the nearest village in the estate in which cash rents are prevalent for such class of land and in which conditions are generally similar to those obtaining in the principal village, or where there is no such village in the estate, in the nearest village in the nearest estate in respect of which village both the requirements specified above are satisfied; (b) the average rate of assessment per acre prevailing at such commencement in respect of each of the s classes of land in the nearest ryotwari area in which conditions are generally similar to those obtaining in the principal village.
(3) The Special Officer shall then compare the average rates of cash rent as determined under clause (a) of sub section (2) with the average rates of assessment as determined under clause (b) of that sub section, and after making due allowance for any difference in the conditions prevailing in the two cases.
and also in cases falling under the proviso to clause (a) of sub section (2), for any difference in the conditions prevailing in the village referred to in that proviso and in the principal village, determine (i) the extent, if any, to which the rates of rent payable for each class of ryoti land in the principal village should, in his opinion, be reduced and (ii) the rates of rent payable for each such class of lands after such reduction.
Explanation 1.
The Special Officer shall have power only to determine that the rents payable for any class of ryoti land in the principal village shall be reduced; and he shall have no power to determine that such rents shall be enhanced.
718 Explanation 2.
The) extent of reduction, if any, determined by the Special Officer under this sub section shall also apply where rent in the principal village is paid in kind or on the estimated value of a portion of the crop or at rates varying with the crop, whether in cash or in kind, or partly in one of these ways and partly in another, or partly in one or more of these ways and partly in cash.
In every such case the Special Officer shall also determine the rent payable, whether in kind or in cash or partly in kind and partly in cash, as the case may be.
(3 A) In the case of lands in an estate which became ryoti lands after the commencement of this Act, the Special Officer shall determine for each class of such lands in the principal village the rates of rent per acre payable therefore under this Act.
The rates of rent so determined shall be the same as those fixed under sub section (2) of section 3 for similar ryoti lands in the same, village; Provided that where the rates of rent payable in respect of ryoti lands in the principal village have not been fixed under sub section (2) of section 3, or where there are no similar ryoti lands in the principal village, the rates of rent so determined shall be the same as those fixed under sub section (2) of section 3 for similar ryoti lands in the nearest village in the estate, or, if there is no such village, in the nearest village in the nearest estate in which conditions are generally similar to those obtaining in the principal village.
(4) Where the conditions in a group of two or more village,, in an estate are generally similar the Special Officer may perform the functions under subsections 2, 3 and 3 A in respect of such group of villages as a whole, instead of separately in respect of each village in the group.
" Section 3 so far as relevant for our purpose may now be reproduced.
"Power of State Government to reduce rates of rent after considering Special Officer 's recommendations.
3(1) "After completing his work in any estate, the Special Officer shall submit his recommendations to the State Government through the Board of Revenue specifying in case of ryoti lands which were in existence at the commencement of this Act, (i) the 719 extent, if any, to which the rents for each class of such lands in each village or group of villages in the estate, should in his opinion, be reduced and (ii) the rate of rent payable for each such class after such reduction, and in the case of lands in each village or group of villages in the estate which became ryoti land after the commencement of this Act, the rate of rent determined by him in accordance with the provisions of sub section (3 A) of section 2.
(2) After considering the recommendations of the Special Officer and the remarks of the Board of Revenue thereon, the State Government shall, by order published in the Fort.
St. George Gazette, fix the rates of rent payable in respect of each class of ryoti land in each village in the estate." "Provided that where the rate of rent so fixed in respect of any class of ryoti lands which were in existence at the commencement of this Act, or in respect of any class of lands which became ryoti lands in any fasli year after such commencement exceeds the rate of rent payable in respect thereof at such commencement or in that fasli year, as the case may be, only the latter rate of rent shall be payable in respect of such land.
It is not necessary to reproduce the rest of the sections.
Section 7 empowers the State Government to make rules to carry out the purpose of the Act and section 8 ousts the jurisdiction of the Courts of Law to question the validity of certain orders and proceedings.
Section 8 reads as under : "Validity of certain orders and proceedings not to be questioned.
The validity of the following orders and proceedings shall not be liable to be questioned in any Court of Law.
(i) any order made under section 3 sub section (2); (ii) any recovery of rent effected by the Provincial Government under section 3 sub section (4) or any payment made by them to the landholder under the same subsection: (ii a) any order made under sections 3a and 3c; 720 (iii) any determination of the net income or average net income, or average net income made under section 5, sub section (2).
" The precise question requiring decision by us is whether the present sut questioning the validity of the fixation of rent in Ex A 13 is excluded from the jurisdiction of the Civil Courts by virtue of section 8 (1).
There is no dispute that clause (i) is the only relevant clause to be considered in this connection.
The appellant 's learned counsel submitted that the exclusion of jurisdiction of the Civil Courts cannot be extended to orders which were not made in, strict compliance with the provisions of section 3 (2) because unless so made they cannot be considered to be hit by section 8 (1).
According to the respondent 's learned counsel, on the other hand, exhibit A 13 was made, pursuant to the power conferred by section 3(2) and 'is therefore covered by section 8(1).
He further submitted that there being a complete machinery provided 'by the statute itself for challenging the orders made in proceedings taken thereunder, the Civil Courts are precluded from considering the correctness of those orders.
According to him sections 3A and 3B provide for rectification of errors committed by the Special Officer and that looking at the statutory scheme it must be held that an order purporting to be made under section 3 (2) of the Reduction of Rent Act is immune from challenge in the Civil Courts.
The general principle on which the jurisdiction of Civil Courts can successfully be excluded in respect of decisions by special Tribunals is well settled.
The difficulty usually arises in its application to, given cases.
As observed by the Privy Council in Secretary of State vs Mask and Company(1) the exclusion of the jurisdiction of the Civil Courts must either be explicitly expressed or clearly implied.
Further even if the jurisdiction, is so excluded the Civil Courts have jurisdiction to examine into the cases where the provisions of the Act have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure.
It is unnecessary to refer to other cases dealing with this question.
We need only refer to the recent decision of this Court in Dhulabhai and others vs The State of Madhya Pradesh and another(2) in which after an exhaustive discussion of the case law the legal position was summarised by the Court speaking through Hidayatullah, C.J. as follows : (1) Where the statute gives a finality to the orders of the special tribunal the Civil Courts ' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would (1) [1940] 67 I.A. 222.
(2) ; 721 normally do in a suit.
Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.
(2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.
Where there is no express exclusion the ex amination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive.
In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.
(3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act.
Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.
(4) When a provision is already declared unconstitutional or the unconstitutionality of any provision is to be challenged, a suit is open.
A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.
(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected a suit lies.
(6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the 722 particular Act.
In either case the scheme of the particular Act must be examined because it is relevant enquiry.
(7) An exclusion of the Jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply." According to the appellant 's counsel the first proposition covers the present case.
He submitted that there is no statutory definition to which one can turn for the purpose of determining wet, dry and garden lands as contemplated by the Reduction of Rent Act.
The matter has therefore necessarily to be decided by holding an inquiry into the factual position.
This, the counsel argued, was not done.
We were taken through the relevant portions of exhibit B 24 which is a report from the Special Assistant to the Special Officer for rent reduction.
It is observed therein that there are no wet or garden lands in village Kalipatnam and that the entire land is delta dry in which wet paddy is raised under Kalipatnam project channel.
The ryots pay to the Government Rs. 51 per acre by way of water rate.
It was emphasised by the appellant 's learned counsel that the fact that wet paddy is raised in this land, which is described as delta dry and that water rate is paid to the Government, must conclusively show that the land is not delta dry but wet.
It is the factual position and not bare entry in the settlement register which should be the guiding factor.
Support for this submission was also sought from the recent unreported decision of this Court in O. K. Muthuswamy Mudaliar & Ors.
vs State of Madras(1) in which the following observations occur : "The mere fact that the lands are registered dry does not affect their value.
The lands are fertile and are cultivated with wet crop.
They are irritable with the waters of the river Bhavani.
There is abundant supply of water throughout the year.
The landowners had the right to take water for the irrigation of 400 acres.
" In this connection the appellant 's learned counsel also criticised the following observation in the judgment of the High Court "In the Statements exhibit B 5 and exhibit B 6.
furnished by the plaintiff himself, the classification of the land is shown as dry though it is also mentioned that the lands were cultivated with double crop of paddy.
If a proprietor owns a certain land but does not own the water source from which water is being taken for irrigating that land, he will not be in a position to classify it as wet land for the benefit of claiming rent for himself in the same way as he would be if he owned a water source and supplied water therefrom as a guaranteed supply to 723 lands registered under that source as ayacut.
In the present case, water, was Government water which was brought from Government project.
" On behalf of the appellant it was submitted that this observation is unsound and is not supportable 'by any provision of law.
The respondent 's counsel was unable to support this observation of the High Court.
Reverting to exhibit B 24 Kalipatnam village was compared with Losaragutlapadu, an adjacent village.
In regard to that village also it is mentioned that there is an extensive wet cultivation in delta dry land under project channels as in Kalipatnam.
Shri J. Sambamurthy, to whose inspection note dated July 1, 1948 reference is made in exhibit B 24 appeared as D.W. 5 and the counsel took us through his statement.
In cross examination he deposed as follows : "I cannot say whether there are 4,000 acres of land which are double crop land.
There are some lands in which double crops are grown.
I cannot say their extent.
There are small extents of garden lands.
There are single crop lands under extension channel.
AR these lands are treated as dry lands rents reduced.
The Kalipatnam is at the tail end of the delta.
The Losaragutlapadu is in Bhimavaram taluk.
Yanamadula Drain intervenes Kalipatnam and Losaragutlapadu.
Gollavanithippa lands have come under cultivation previously.
It is part of Losaragutlapadu.
I cannot say whether there are 11,000 acres of land uncultivated in Losaragutlapadu.
Probably it is forest area.
There were small extents of land in Muthyalapalli and Vempa under the Project Channel.
exhibit B 4 shows that there are lands of double crop.
Under the Act the plaintiff has to furnish a statement of lands etc.
The plaintiff 's agent furnished Exhibit B 6.
The soil of Losaragutlapadu was examined.
This is contained in Exhibit B 24.
The Settlement Officer classified the soils under contained Diglot Registers.
An extract of it is contained in Exhibit B.24.
I cannot say readily now without reference to Settlement Manual what the figures given in the Diglot Register are relating to the soils.
That statement contained in the file relates to the Losaragutlapadu.
A similar statement for Kalipatnam was not taken.
There is no such statement for that village.
I did not write to the Settlement Department to prepare such a statement for suit village.
I do not know whether the Government 724 analise the soil through Agricultural Department before the project was started. .
I examined the soils at one or two, places and I consulted the Settlement Register at that time.
I cannot say whether those one or two places were under extension project.
I remember I have taken description of the soil from the Settlement Register and Manual.
I do not know about the construction of the project.
" Shri J. Satyanarayana, Tahsildar, who appeared as D.W. 7 stated in his cross examination that the lands in Kalipatnam were sanctioned with two crops, though he could not say whether they were under cultivation since 1948.
He was also unable to say whether the settlement register from Kalipatnam was available in Taluk Office.
According to him water rate in the year 1958 was increased 50 % for all lands including Kalipatnam.
The cess was also increased proportionately.
He was unable to explain the figures, given under the description of the soil in exhibit B 24 and indeed he expressed his ignorance about the existence of any register for Kalipatnam on this subject.
The appellant 's argument strongly pressed before us was that the class of land had been determined to be delta dry land exclusively on the basis of the settlement register which did not contain any entry with respect to Kalipatnam.
The entry in the settlement register with respect to the soil of Losaragutlapadu could not be taken to cover the soil in Kalipatnam in the absence of evidence that the soil in these two villages was similar in this respect.
Stress was also led on the submission that description in the settlement register could not be considered to be conclusive and that proper factual inquiry was necessary because the termination affects the appellant 's proprietary rights.
The submission appears to us to possess merit.
The Special Officer had an obligation under s.2 of the Reduction of Rent Act to determine in respect of Kalipatnam village the average rate of cash rent per acre for each class of ryoti land in existence at the time of the commencement of the Act, such as, wet, dry and garden.
This had to be determined on the basis of relevant material.
The Special Officer, however, proceeded to found his determination only on the report of the Special Assistant (exhibit B 24) which, as discussed above, only took into account the entry in the settlement register with respect to the soil of Losaragutlapadu.
This really means that the determination of the Special Officer is solely based on the settlement register containing no entry in regard to Kalipatnam.
This material is irrelevant and cannot constitute a rational basis for founding thereon the determination of the Special Officer.
His determination must, therefore, be held 725 to be based on no evidence, with the result that it must be held to be in violation of the fundamental principles of judicial procedure.
A fortiori the order of the Government made under section 3 (2) exclusively on the basis of the recommendation of the Special Officer must in consequence be held to be not in conformity with the provisions of the Reduction of Rent Act and, therefore, outside the purview of section 3 (2) of that Act.
Section 8 (1) would accordingly be inapplicable and the jurisdiction of Civil Courts cannot be excluded.
The notification exhibit A 13 must, therefore, be struck down as contrary to law and ultra vires the Reduction of Rent Act.
We accordingly allow the appeals with costs and strike down the report of the Special Officer as also the notification exhibit A 13.
As observed earlier challenge to Exhibit A 1 was not pressed at the hearing by the appellant.
It would be open to the authorities concerned to proceed to reduce the rent in accordance with law.
One set of costs.
Y.P. Appeals allowed.

summary:
Sub section (2) of section 3 of the Madras Estates Land (Reduction of Rent) Act XXX of 1947 authorises the State Government to fix the rates of rent payable in respect of each class of ryoti land in each village in the estate after considering the recommendations of the special officer and the remarks of the Board of Revenue thereon and by virtue of section 8(1) no order under this subsection is liable to be questioned in a court of law.
The appellants filed a suit questioning the legality of the notification reducing the rates of rent in respect of the delta dry ryoti lands in a village.
They contended that the class of land had been determined to be delta dry land exclusively on the basis of the settlement register which did not contain any entry with respect to the village in question, that the settlement register could not be considered to be conclusive, and that proper factual inquiry was necessary, because, the determination affected the appellant 's proprietary rights.
The trial court decreed the suit.
The High Court held that the civil courts had no jurisdiction to entertain the suit.
Allowing the appeals, HELD : The Special Officer had an obligation, under section 2 of the Reduction of Rent Act, to determine in respect of a village the average rate of cash rent per acre for each class of ryoti land in existence at the time of the commencement of the Act, such as, wet, dry and garden.
had to be determined on the basis of relevant material.
The Special Officer, however, proceeded to found his determination only on the report of the Special Assistant which only took into account the entry in the settlement register with respect to the soil of another village.
This really meant that the determination of the Special Officer was solely based on the settlement register containing no entry in regard to the village in question.
This material is irrelevant and cannot constitute a rational basis for founding thereon the determination of the Special Officer.
His determination must, therefore, be held to be based on no evidence, with the result that it must be held to be in violation of the fundamental principles of judicial procedure.
A fortiori the order of the Government made under section 3(2) exclusively on the basis of the recommendation of the Special Officer must in consequence be held 10 be not in conformity with the provisions of the Reduction of Rent Act and.
therefore, Outside the purview of section 3(2) of that Act.
Section 8(1) would accordingly be inapplicable and the jurisdiction of civil courts cannot be excluded.
[724 F 725 C] Secretary of State vs Mask and Company, (1940) 67 I.A. 222 and O. K. Mitthuswamy Nudaliar & Ors.
vs State of Madras, C.A. Nos.
1011 1017 '65, dt. 31 7 68.
referred to.
Dhujabhai and Ors.
vs State of Madhya Pradesh & Ors.
; , followed.


judgement:
315 of 1954.
Petition under article 32 of the Constitution for enforcement of Fundamental Rights.
H.J. Umrigar, Narain Andley, J. B. Dadachanji and Rajinder Narain for the petitioner.
M. C. Setalvad, Attorney General for India, and C. K. Daphtary, Solicitor General for India (G. N. Joshi, Porusa Mehta and P. G. Gokle, with them) for the respondents.
October 2 1.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J.
The petitioner in this matter is a resident of Akola in the State of Madhya Pradesh and carries on business in various lines, i.e., oil mills, banking, money lending, etc.
It is alleged that during the war years he made huge profits but evaded payment of tax.
In the year 1948 the Central Government, acting under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947, referred his case to the Investigation Commission for investigation and report, in respect of the profits made by him during the period commencing with 1st of January, 1939, and ending on 31st of December, 1947.
The Commission, after investigation, reported on the 28th of February, 1951, that the income of the petitioner concealed and withheld from taxation was in the sum of Rs. 27,25,363 and the tax payable by him amounted to Rs. 18,44,949.
During the pendency of the investigation the peti tioner applied for settlement under the provisions of section 8 A of Act XXX of 1947.
This application was forwarded along with the report by the Commission to the Central Government.
In the settlement application the applicant proposed that he was prepared to pay the sum of RE;.
18,44,949 as under: 775 On or before 25 6 1951 Rs.
3,44,949 On or before 25 3 1952 Rs. 5,00,000 On or before 25 3 1953 Rs.
5,00,0000 On or before 25 3 1954 Rs.
5000,000 and that, he be given credit for a sum of Rs, 32,034 4.6 already paid by him, The Central Government accepted this proposal and the claim for evaded income tax was thus finally settled by mutual agreement.
The assessee, subsequently, asked for more time to pay these instalments and this was, also granted from time to time.
Commencing from 16th of July, 1951, ,and till the 10th April, 1954.
the petitioner paid a total sum of about Rs. 14,00,000 towards discharge of the liability voluntarily agreed to by him on account of the tax evaded.
A sum of Rs. 4,50,000 still remains due and is payable in instalments up to the 25th of March, 1955.
By one of the terms of the settlement the petitioner undertook not to transfer, mortgage, charge or alienate or encumber in any manner whatsoever any of his movable or immovable properties, barring stock intrade of the business, except with the permission of the Commissioner of Income tax and except for the purpose of the payment of the tax due under the settlement.
In June, 1954, after the decision by this Court of Suraj Mal Mohta vs A. V. Visvanatha Sastri and Another(1), the petitioner preferred this petition under the provisions of article 32 of the Constitution alleging that he had been advised that the entire proceedings under the Act which had resulted in the imposition upon him of a liability of Rs. 18,44,949 and in the payment already made of an aggregate amount of Rs. 13,99,175 were wholly illegal, ultra vires, void and unconstitutional and that the Income tax authorities were not legally entitled to recover the amount of Rs. 4,50,000 from him.
In the grounds of the petition it was stated that sections 5, 6, 7 and 8 of Act XXX of 1947 were invalid and ultra vires in so far as they contravene the provisions of articles 14, 19(1) (f) and 31 of the Constitution and that under the Act (1) ; 776 there was no reasonable or equitable basic for classifica tion, and that the Act gave to the execrative unrestrained and absolute right to pick and choose and to differentiate between the same class of taxpayers.
It was also alleged that the procedure prescribed by the Act for discovering concealed profits was substantially different and was more prejudicial to the assessees than the procedure prescribed under the Indian Income tax Act by section 34.
In the concluding paragraph of the petition it was prayed that an appropriate writ or direction be issued quashing the entire proceedings, and all orders passed under the Act by the Central Government and the respondent Commission, and restraining them from taking any proceedings whatsoever under the Act against the petitioner.
It was further prayed that a direction be issued for restoration to the petitioner of a sum of Rs. 13,99,715 10 6 with interest at 6 per cent and that the respondents be further restrained from taking any action against the petitioner for the recovery of the sum of Rs. 4,50,000 with interest.
In our judgment this petition is wholly misconceived.
Whatever tax the petitioner has already paid, or whatever is still recoverable from him, is being recovered on the basis of the settlement proposed by him and accepted by the Central Government.
Because of his request for a settlement no assessment was made against him by following the whole of the procedure of the Income tax Act.
In this situation unless and until the petitioner can establish that his consent was improperly procured and that he is not bound thereby he cannot complain that any of his fundamental rights has been contravened for which he can claim relief under article 32 of the Constitution.
Article 32 of the Constitution is not intended for relief against the I voluntary actions of a person.
His remedy, if any, lies in other appropriate proceedings.
The learned counsel for the petitioner contended that apparently the application for a settlement seems to have been made under the pressure of circumstances and in view of the coercive machinery of Act XXX of 1947 and the settlement arrived in such circumstances 777 was not binding and could not, be enforced.
Whatever be the merits of such a contention, it obviously cannot be raised in an application made under the provisions of article 32 of the Constitution.
The forum for investigating such allegations is elsewhere.
The result is that this petition fails and is dismissed with costs.
Petition dismissed.

dataset_name: IN-Abs

summary:
The petitioner, a business man, was alleged to have made huge profits during the years of War and the Central Government acting under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (XXX of 1947) referred his case to the Investigation Commission for investigation and report.
During the pendency of the investigation the petitioner 's application for settlement under the provisions of section 8 A of Act XXX of 1947 was accepted by the Central Government and in pursuance thereof the tax was made payable by installments and the claim for evaded income tax was thus finally settled be mutual agreement.
When the installments in the sum of Rs. 4 lacs odd still remained due the petitioner preferred the present petition under article 32 of the Constitution alleging that the entire proceedings under Act XXX of 1947, were illegal, ultra vires, void and unconstitutional, that the Income tax authorities were not competent to recover the amount.
due from him and that sections 5, 6, 7 and 8 of the Act were ultra vires as they infringed articles 14, 19(1) (f) and 31 of the Constitution.
Held, that the petition under article 32 was not competent as whatever had already been paid or whatever was still recoverable from the petitioner was being recovered.
on the basis of the 99 774 settlement between him and the Government.
Article 32 is not intended for relief against the voluntary actions of a person.
Suraj Mall Mohta Co. vs A. V. Visvanatha Sastri (A.I.R. referred to.


judgement:
iminal Appeal No. 49 of 1969.
Appeal by special leave from the judgment and order dated December 2, 1968 of the Allahabad High Court in Criminal Appeal No. 1277 of 1968.
R. L. Kohli, for the appellant.
O. P. Rana, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
The only question which arises in this appeal by special leave is whether the appellant, Sheo Nath, should be convicted under section 396, I.P.C., or section 411, I.P.C., or section 412, I.P.C. The facts as found by the High Court are these.
A dacoity was committed at the shop of Ram Murat in Dhaneja village by 15 to 20 persons on August 19, 1966, at about 11.30 p.m.
One dacoit, Ram Shankar, was armed with a gun while others carried 797 spears, Gandasas and lathis.
During the course of the dacoity Ram Murat was injured.
One Pancham, who lived in a house not far from Ram Murat 's shop, and two others came running on heating the noise.
Pancham was shot down with the gun by dacoit Ram Shankar.
The dacoits then escaped with clothes, ornaments, cash, etc., looted from Ram Murat 's shop.
After the dacoits left Ram Murat dictated a report about the occurrence in which lie named Ram Shankar Singh, Jaintri Prasad Singh, Nanhe Singh and Sulai accused as having been among the culprits and this report was sent to the Jalalpur police station, five miles away, where it was received and recorded at 6 a.m. next morning.
On August 22, 1966, i.e., three days after the dacoity, the house of Sheo Nath, appellant, was searched and three lengths of cloth were recovered which were subsequently identified by Ram Murat and a tailor named Bismillah as having been stolen from Ram Murat 's shop in the dacoity.
The High Court, agreeing with the learned Sessions Judge, relied on the evidence of three eye witnesses regarding the manner in which the occurrence took place and regarding the participation of the four named accused persons.
Sheo Nath had not been named by the eye witnesses or in the dying declaration of Panchain and no witness claimed to have identified him taking part in the dacoity.
But, relying on the discovery of three lengths of cloth and their identification, the High Court convicted Sheo Nath under section 396, I.P.C. The High Court observed : "From the material on record we are fully con vinced that the Exhs. 2 and 3 were stolen from the shop of Ram Murat in the course of the dacoity committed in the night between 19 to 20 August 1966, and since they were recovered from the possession of Sheonath appellant only 2 or 3 days later, it is legitimate to infer that he was one of the dacoits vide illustration (a) to section 114 of the Evidence Act.
Sheo Nath, therefore, has been rightly convicted under section 396, I.P.C." The learned counsel for the appellant contends that in the circumstances of the case the High Court should not have convicted the appellant under section 396, I.P.C., but only under section 411 I.P.C. Section 114 of the Evidence Act and illustration (a) read as follows : " 114.
The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to facts of the particular case.
illustrations.
798 The Court may presume (a) that a man who is in possession of stolen goods after the theft, is either the thief or has received the goods knowing them to be stolen, unless he can account for his possession." This Section was considered by this Court in Sanwal Khan vs State of Rajasthan(1).
This Court, after considering some High Court cases, observed : "In our judgment no hard and fast rule can be laid down as to what inference should be drawn from a certain circumstance.
Where, however, the only evidence against an accused person is the recovery of stolen property and although the circumstances may indicate that the theft and the murder must have been committed at the same time, it is not safe to draw the inference that the person in possession of the stolen property was the murderer.
Suspicion cannot take the place of proof.
" In Wasim Khan vs State of Uttar Pradesh(2) this Court held that " recent and unexplained possession of the stolen property while it would be presumptive evidence against a prisoner on the charge of robbery would similarly be evidence against him on the charge of murder." On the facts of that case this Court held that the appellant was rightly convicted of the offence of murder and robbery.
But, apart from the possession of stolen property, there were other circumstances indicating that the appellant was guilty of murder and robbery.
The circumstances were that the appel lant in that case had travelled with the deceased on his bullock cart alone and the deceased never reached his home and was found murdered.
The appellant was found in possession of the goods ,of the deceased three days after and the appellant made no effort to trace the whereabouts of the deceased or lodge information of his disappearance from the bullock cart.
In the present case three presumptions are possible from the recovery of the stolen goods from the appellant three days after the occurrence of the dacoity (1) that the appellant took part in the dacoity; (2) that he received stolen goods knowing that the goods were stolen in the commission of a dacoity; and (3) that the appellant received these goods knowing them to have been stolen.
(1) A.I.R. 1956 S.C. 54.
(2)[1956] S.C.R. 191.
799 The choice to be made, however, must depend on the facts proved in this case.
It is quite clear that all the property which was, stolen by the dacoits was not recovered from the appellant.
We may repeat that clothes, ornaments, cash, etc. were stolen.
The only articles that were found with the appellant were a length of muslin (Exh. 2) and a length of charkhana doriya (Exh. 3).
The appellant is stated to be a cloth merchant and he may well have acquired these goods as a receiver.
It has not been shown that in the village in which the appellant lived it was known that a dacoity had taken place and goods had been stolen in the dacoity.
On the facts of this case it seems to us that the, only legitimate presumption to be drawn is that the appellant knew that the, goods were stolen but he did not know that they were stolen in a dacoity.
The appellant, therefore, can only be convicted under section 411, I.P.C.
In this connection we may refer to a decision of the Rajas than High Court in Bhurgiri vs The State(1) (Wanchoo, C.J., and Dave, J.).
Wanchoo, C.J., after holding that the recovery of ornaments from Bhurgiri had been established, observed : "The next question is whether on this evidence Bhurgiri can be convicted for dacoity.
The, recovery took place five days after the dacoity.
It is not impossible that during that period the property might have passed from the dacoits to a receiver.
Under these circumstances, we are of opinion that it would not be safe to convict Bhurgiri of dacoity on the evidence of this recovery alone.
It would be more proper to convict him as a guilty receiver.
Then the question arises whether he should be convicted under section 411 or 412, I.P.C. So far as section 411 is concerned, he is clearly guilty under that section.
The presumption under section 114 applies, and we can safely presume that he is a guilty receiver of stolen property particularly when we find that the property was kept in the Bara, and not at his own house.
He must have, had reason to believe that it was stolen when he received the property, and that is why he left it in the Bara.
But we feel that it would not be proper to convict him under section 412 because that section requires that the receiver should know or have reason (1) I.L.R. [1954] Rai.
476, 482 83. 800 to believe that the property had been transferred by the commission of dacoity.
The prosecution, in our opinion has to show something more than the mere possession of stolen goods for a conviction under section 412.
If the prosecution is only able to show mere possession, the proper section to use is 411.
" In the result the appeal is allowed and the appellant convicted under s.411,I.P.C., instead of section 396, I.P.C.,and sentenced to undergo rigorous imprisonment for three years.
R.K.P.S Appeal allowed.

summary:
The house of the appellant, a cloth merchant, was searched and three lengths of cloth were recovered which were subsequently identified as having been stolen from a shop in a dacoity in which clothes, ornaments, cash etc.
were stolen.
The appellant was not named by the eye witnesses or in the dying declaration as having taken part in the dacoity.
Relying on the discovery of the cloth and their identification the High Court convicted him under section 396 Penal Code.
The Court observed that it was legitimate to infer that he was one of the dacoits in view of illustration (a) to Section 114 of the Evidence Act.
In the appeal to this Court it was contended that the High Court should have convicted the appellant only under section 411 Penal Code.
Allowing the appeal, HELD : On the facts the only legitimate presumption to be drawn is that the appellant knew that the goods were stolen but he did not know that they were stolen in a dacoity.
All the property which was stolen by the dacoits was not recovered from the appellant.
The appellant, a cloth merchant, may well have acquired these goods as a receiver.
It has not been shown that in the village in which the appellant lived it was known that a dacoity had taken place and goods had been stolen in the dacoity.
[799 B C] Wasim Khan vs State of Uttar Pradesh, [1956] S.C.R. 191 distinguished; Sanwal Khan vs State of Rajasthan A.I.R. 1956 S.C. 54, referred to.


judgement:
iminal Appeals Nos.
60 and 63 of 1965.
Appeals from the judgment and order dated November 20, 1963 of the Gujarat High Court in Criminal Appeals Nos. 957 and 796 of 1963 respectively.
Urmila Kapur and section P. Nayar, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Dua, J.
These two criminal appeals (Nos. 60 and 63 of 1965) with certificate raise a common question and are, therefore, being disposed of by a common judgment.
The Gujarat High Court also recorded the main judgment only in Criminal Appeal No. 60 of 1965.
The question which arises for determination is whether, several accused persons jointly tried have been acquitted by the trial Court, the state can ' prefer one appeal against the acquittal of all of them.
The High court held such a joint appeal not to be maintainable under Cr.
P.C. and so holding rejected the appeal by the State without going into the merits.
The Division Bench of the ,High Court speaking through Raju, J. recorded a very lengthily order though the reasoning in support of the non maintainability of the joint appeal is confined to a couple of pages only.
The High Court in its order referred to ss 258, 410, 417, 419 and 423 of the Code and came to the conclusion that the scheme of Chapter XXXI of the Code as disclosed by these sections and particularly by section 419 is against the maintainability of a joint appeal by the State against an order acquitting several accused persons tried jointly.
Section 419 was construed by the High Court to contain a bar against a joint appeal.
The major portion of the impugned order dealt with the question of binding character of the Full Bench decision of that High Court since reported as Lalu Jela vs State of Gujarat(1) on the Division Bench hearing the present appeals.
After a lengthy ,discussion the Division Bench came to the conclusion that the Full Bench decision holding a joint appeal to be maintainable in law was not binding on it.
On the view that we propose to take on the question of main tainability of a joint appeal against a common order acquitting (1) A.I.R. 1962 Guj.
877 several accused persons tried jointly, we do not consider it necessary to embark on a lengthy discussion on the question of binding charter of decisions of Full Benches and of Division Benches on future Benches of co ordinate jurisdiction of the same High Court.
We may only make a passing reference to the decisions of this Court cited at the bar in support of such binding character.
In Mahadeolal Ranodia vs The Administrator General of West Bengal(1), this Court observed as follows : "We have noticed with some regret that when the earlier decision of two judges of the same High Court in Beorajan 's an 's case was cited before the learned judges who heard the present appeal they took on themselves to say that the previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring the question to a lar ger Bench.
Judicial decorum no less than legal propriety forms the basis of judicial procedure.
If one thing is more necessary in law than any other thing, it is the quality of certainty.
That quality would totally disappear if judges of co ordinate jurisdiction in a High Court start overruling one another 's decision.
If one Division Bench of a High Court is unable to distinguish a previous decision of another Division bench and holding the view that the earlier decision is wrong itself gives effect to that view, the result would be utter confusion.
" Other decisions cited containing similar observations are : jai Kaur and others vs Sher Singh etc.
(2 ) and Atma Ram vs State of Punjab and others(3).
We are aware of a still more recent decision of this Court in Jaisri Sahu vs Rai Dewan (4) in which re Ference is made to a Privy Council decision in Budha Singh vs Laltu Singh(5).
The question of competency of a joint appeal by several per sons convicted by one order at a joint trial was referred for authoritative decision to a Full Bench of the Gujarat High Court in Lalu Jela 's case(6).
The argument before the Full Bench was that r. 6 in Chapter XXVI of the Bombay High Court Appellate Side Rules (which are applicable to the proceedings in Gujarat High Court) was inconsistent with Chapter XXXI of the Code of Criminal Procedure, with the result that a joint appeal to the High Court by several persons convicted at a joint trial was not maintainable.
The Full Bench on an exhaustive discussion held such (1) [1960]3.S.C.R. 78 (2) (3) (4) (5) I.L.R , 37 All, 604 (P.C.).
(6) A.I.R. 1962 Guj.
125. 878 an appeal to be competent and did not consider r. 6 to be inconsistent with Chapter XXXI of the Code.
The decision of this Court in Rabari Ghela Jadav.
State of Bombay(1) was explained and distinguished.
If we agree with the principle accepted in the Full Bench decision then the present appeals would on the reasoning of that decision seem prima facie to possess merit and in the absence of some other cogent reason to the contrary the appeals would have to succeed.
Chapter XXVI of the Bombay High Court Appellate Side Rules, 1960 deals with "criminal business" and r. 6 is in the following words "Joint appeal or application by persons affected by the same judgment.
All persons aggrieved,by a judgment or an order passed in a criminal case, may join in one appeal or application for revision, and one copy of the judgment or order complained of shall be sufficient." This rule, of course, does not in terms cover the case of an appeal by the State against several accused persons jointly tried and acquitted by the trial Court by a common order, but if an appeal by persons jointly tried and convicted is competent, then on principle it is difficult to negative the maintainability of one appeal by the State against a common order acquitting several persons tried jointly.
This rule deals with a matter of procedure and not of Substantive rights and seems to be based on sound commonsense.
Procedure has been described to be a hand maid and not a mistress of law, intended to subserve and facilitate the cause of justice and not to govern or obstruct it.
Like all rules of procedure, this rule demands a construction which would promote this cause.
So construed a joint appeal, in compliance of this rule must be sustained.
The power to frame this rule is specifically conferred on the High Court by section 554(2)(c) Cr.
P.C. and r. 6 does not seem to us to be inconsistent with any provisions of the said Code.
Holding this rule to be valid, in agreement with the decision of the Full Bench, the competency of a joint appeal by several accused persons convicted at one trial must be upheld.
On the same reasoning a joint appeal by the State against several accuses.
persons acquitted at a joint trial has also to be held not to be contrary to any provision of the Code and therefore not legally prohibited.
Section 419 of the Code on which the High Court seems to have relied in support of the non maintainability of a joint appeal by the State, lays down inter alia that every appeal shall be made in the form of a petition in writing presented by the appellant (1) A.I.R, 1960 S.C. 748.
879 or his pleader and every such petition shall, unless the court otherwise directs, be accompanied by a copy of the judgment or order appealed against.
This section does not seem to us to prohibit a joint appeal by the State against more than one accused persons.
The contrary view taken by the, High Court on the construction of this section is clearly unacceptable.
Section 417 which provides for an appeal in a case of acquittal empowers the State Government to direct the public prosecutor in any case to present an appeal from an order of acquittal.
This section also does not suggest any bar or prohibition against presentation of a joint appeal against several accused persons acquitted in a case.
On the other hand, it provides for an appeal in a case, and not against an accused person, who has, been acquitted.
The plain reading of this sections therefore.
, seems to be wide enough to permit a joint appeal.
Sections 258, 410 and 423 of the Code also do not seem to indicate any bar as is suggested by the order of the High Court.
This Court in Rabari Ghela Jadav 's case(1), on the basis of which the judgment of the High Court mainly proceeds, merely lays down that the Appellate Court hearing an appeal cannot admit it only on a question of sentence and that such a restricted order of admission being invalid, the appellant would be entitled to insist that his appeal should be heard on the merits.
This decision, in Our opinion, does not militate against the maintainability of a joint appeal.
The Full Bench decision of the Gujarat High Court rightly distinguished and explained this decision.
As observed earlier, once we accept the Full, Bench to lay down the correct rule of law, then there cannot be much difficult in upholding the maintainability of a joint appeal by the State against several accused persons acquitted at a joint trial.
There being no legal bar (at least we are aware of none either in the Cr.
P.C. or elsewhere), such an appeal cannot be held to suffer from any serious legal infirmity.
And then the matter being one of mere form it calls for a liberal approach requiring the appeal to be heard on the merits.
To hold it to be unmaintainable on this ground would defeat the larger cause of justice.
Unfortunately, we did not have the advantage of arguments on behalf of the respondents because they were unrepresented, but on considering the scheme of the relevant provisions of the Code of Criminal Procedure, we are of the view that the High Court was wrong in holding the joint appeal not to be maintainable and in summarily rejecting the same.
We accordingly allow the appeal, set aside the order of the High court and remit the case back to it for decision of the appeal on the merits.
G.C. Appeal allowed.
(1) A.I.R. 1960 S.C. 748.

summary:
The respondents were tried jointly and acquitted by a common judgment.
State of Gujarat filed a Joint appeal against their acquittal in.
the High Court.
Rule 6 of the Bombay High Court Appellate Side Rules, 1960 (which were applicable to the proceedings in the Gujarat High Court) provided for joint appeals by persons aggrieved by a common judgment or order.
There was however no, rule specifically providing for similar joint appeals by the State.
A Division Bench of the High Court dismissed the joint appeal by the State against the respondents on the ground that such an appeal was not maintainable.
The Division Bench held that the decision by a Full Beach of the High Court in Lalu lela 's case in which a contrary view had been taken was not binding on the Division Bench.
In appeal to this Court against the judgment of the Division Bench.
HELD : (i) The Division Bench was in error in not treating as binding the earlier decision of a Full Bench of the same court on the same question.
1877 A F] Mahadeolal Kanodia vs The Administrator General of West Bengal, ; , Jai Kaur & Ors.
vs Sher Singh etc. , Atma Ram vs State of Punjab & Ors. , Jaisri Sahu vs Rai Dewan, [19621 2 S.C.R. 559 and Budha Singh vs Laltu Singh, I.L.R. 37 All. 604 (P.C.), applied.
(ii) Rule 6 of the Bombay High Court Appellate Side Rules does not in terms cover the case of an appeal by the State against several accused persons jointly tried and acquitted by the trial court by a common order, but if an appeal by persons jointly tried and convicted is competent, then on principle it is difficult to negative the maintainability of one appeal by the State against a common order acquitting several persons tried jointly.
Like all rules of procedure this rule demands a construction which would ' promote the cause of justice and not obstruct it.
(878 D F] A joint appeal by the State against several accused persons acquitted at a joint trial is not contrary to any provision of the Code of Criminal Procedure and is therefore not legally prohibited.
Sections 258, 410, 417, 419 or 423 of the Code do not indicate any bar as was suggested by the order of the High Court.
Indeed the plain reading of section 417 which pro%ides for an appeal in a case and not against an accused person, seems to be wide enough to permit ,A joint appeal.
The matter being one of mere form it calls for a liberal approach requiting the appeal to be beard on its merits.
The order of the High Court must accordingly be set aside.
[878 G H; 879 C F] 876 Rabari Ghela jadav V. State of Bombay, A.I.R. 1960 S.C. 748, ,explained.
Lalu Jela.
vs State of Gujarat, A.I.R. 1962 Guj. 125, approved.


judgement:
Appeal No. 2312 of 1966.
Appeal from the judgment and order dated November 7, 1962 of the Mysore High Court in Writ Petition No. 781 of 1960.
M. C. Chagla, section section Javali and section P. Nayar, for the appellants.
M. K. Nambyar, G. L. Sanghi and J. B. Dadachanji for respondents Nos.
1 to 5.
The Judgment of the Court was delivered by Shah, J.
The Madras Religious and Charitable Endowments Act 19 of 1951 was enacted to provide for the better administra tion and governance of Hindu Religious and Charitable Institutions and Endowments in the State of Madras.
This Court in The Commissioner of Hindu Religious and Charitable Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(1) held that sections 21, 30(2), 31, 55, 56 and 63 to 69 of Act 19 of 1951 were ultra vires, in that they infringed the guarantee of the fundamental rights in articles 19(1)(f), 25 and 26 of the Constitution of India.
This Court also held that section 76(1) providing for imposing liability for payment of contribution which was of the nature of a tax and not a fee, was beyond the legislative competence of the State Legislature.
The Legislature then amended the Act by Madras Act 27 of, 1954.
On August 11, 1955, the Government of Madras framed Rules under the Act prescribing a graduated scale of rates of contribution under section 76(1).
(1) ; 919 The respondents who are trustees of the Venkataramana Temple at Mulki, District South Kanara, moved a petition in the High Court of Madras for an order restraining the Commissioner of Hindu Religious and Charitable Endowments from enforcing the provisions of the Amending Act 27 of 1954.
Under the scheme of reorganization of State of Madras, the petition was transferred for trial to the High court of Mysore.
The High Court of Mysore by order dated March 16, 1959, held that sections 21, 30(2), 31, 63 to 69 and 89 as amended by Act 27 of 1954 were invalid : Devraja Shenoy vs The State of Madras(1).
The Assistant Commissioner of Religious Endowments Mysore, issued on September 30, 1959 directing the respondent to pay the arrears of contributions and audit fee under the Commissioner 's demand notice dated June 25, 1957.
The respondents moved another petition in the High Court of Mysore challenging the validity of the demand.
The High Court upheld the plea on the ground that no rules had been framed under section 100 of the Act, and therefore, the demand for levy of contribution was Premature, and that audit fee demanded by the Commissioner was without determination under section 76(2) of the Act and was "on that account without competence or authority of law".
With certificate granted by the High Court, the Commissioner of Hindu Religious & Charitable Endowments has preferred this appeal.
The provisions of the Act which are relevant may first be read: section 71 "(1) The trustee of every religious institution shall keep regular accounts of all receipts and disbursements.
(2) The accounts of every religious institution, the annual.
income of which as calculated for the purposes of section 76 for the fasli year immediately preceding is not less than sixty thousand rupees, shall be subject to concurrent audit, that is to say, the audit shall take place as and when expenditure is incurred.
(3) (4) The audit shall be made (a) in the case of a religious institution the annual income of which calculated as aforesaid for the fasli year immediately preceding is not less than one thousand rupees, by auditors appointed in the prescribed manner, (b) (1) 920 section 76 "(1) In respect of the services rendered by the Government and their officers and for defraying the expenses incurred on account of such services every religious institution shall from the income derived by it, pay to the Commissioner annually such contribution not exceeding five per centum of its income as may be prescribed.
(2) Every religious institution, the annual income of which, for the fasli year immediately preceding as calculated for the purposes of the levy of contribution under sub section (1), is not less than one thousand rupees, shall pay to the Commissioner annually, for meeting the cost of auditing its accounts, such further sum not exceeding one and a half per centum of its income as the Commissioner may determine.
(3) (4) The Government shall pay the salaries, allowances, pensions and other beneficial remuneration of the Commissioners, Deputy Commissioners, Assistant Commissioners and other officers and servants (other than exe cutive officers of religious institutions) employed for the purposes of this Act and the other expenses incurred.
for such purposes, including the expenses of Area Committees and the cost of auditing the accounts of religious institutions.
(5) section 100 "(1) The Government may make rules to carry out all or any of the purposes of this Act and not inconsistent therewith.
(2) In particular, and without prejudice to the generality of the foregoing power, they shall have power to make rules with reference to the following matters (c) the method of calculating the income of a religious institution for the purpose of levying contribution and the rate at which it shall be levied; Rules were framed by the State of Madras on August 11, 1955 authorising the imposition of a graded levy of contribution.
The Rules framed by the Government of the State of Madras remained in force in the State of Mysore after reorganization of the State.
of Madras, and applied to the temples in the South Kanara District which was incorporated in the Mysore State.
It is true that the High Court of Mysore declared invalid certain provisions of 921 the Act imposing control upon the administration of temples governed by the Act.
But on that account the power to make rules was not restricted, nor were the rules framed by the Government rendered invalid.
The decision of the High Court that no rules for the levy of contribution were framed was largely influenced by the observations made in the judgment in devraja Shenoy 's case(1).
It was observed in that case that since the respondents had applied for restraining the State from enforcing any of the provisions of the Act, an investigation into the sustainability of that claim would have involved determination of the validity of section 76(1) and of any demand for contribution under its provisions and since the Advocate General appearing for the State, in that case had informed the Court that the question did not fall to be determined because rules prescribing the contribution payable by the respondent temple "had yet to be made, which meant that until such rule was made no contribution could be demanded", the conclusion reached by the Court was in truth "a decision on one of the material questions arising in that case, and binding on all the parties to that case.
" The Court proceeded to observe : "In that view of the matter it is incontrovertible that what was stated in the previous case on behalf; of the State was that the amount of contribution payable by the petitioners (respondent) temple should be prescribed by a rule which remained to be made which means that what was decided by this Court was that no such contribution could be recovered from that temple until such a rule was made.
The impugned demand made on June 25, 1957 before this Court rendered its decision in Devraja Shenoy 's case(1) on March 10, 1959 having no efficacy or effect, since it was a plainly premature demand made even before the liability to Day the contribution came into existence, has to be and is accordingly quashed.
" This view, in our judgment, proceeds upon an incorrect view of the true nature of the contribution leviable under section 76(1) of the Act.
The assumption made by the Court that under the Act the Government had to make under section 100 rules applicable to each temple separately and prescribing the method for determining contribution finds no support in the provisions of the Act or its scheme.
The true nature of the contribution eligible under section 76(1) under Madras Act 19 of 1951 was explained by this Court in H. H. Sudhindra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore (2) It was pointed out that (p. 323) (1) (2) [1963] Supp. 2 S.C.R. 302.
922 "A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the ac tual services rendered by the authority to individual who obtains the benefit of the service.
If with a view to provide a specific service, levy is imposed by law and expenses for maintaining the service are met out of the amounts collected there being a reasonable relation between the levy and the expenses incurred for rendering the service, the levy would be in the nature of a fee and not in the nature of a tax.
It is true that ordinarily a fee is uniform and no account is taken of the varying abilities of different recipients.
But absence of uniformity is not a criterion on which alone it can be said that it is of the nature of a tax.
A fee being a levy in consideration of rendering service of a Particular type, co relation between the expenditure by the Government and the levy must undoubtedly exist, but a levy will not be regarded as a tax merely because of the absence of uniformity in its incidence, or because of compulsion in the collection thereof, nor because some of the contri butories do not obtain the same degree of service as others may.
" Under the Act a fee though levied for rendering services of a particular type is not to be, co related to the services performed for each individual who is intended to obtain the benefit of the services.
The co relation must be between the expenses incurred by the authority levying the fee for generally providing the service and the aggregate of the levy from persons who are to be made subject thereto.
It is a necessary corollary that under the Act general rules prescribing the levy of fee from religious endowments have to be made, and not rules governing individual endowments.
The Act does not contemplate separate rules to be made in respect of each religious institution likely to obtain the benefit of services rendered by the State for which the contribution is to be levied.
The concession by the Advocate General at the hearing in Devraja Shenoy 's case(1) does not oblige the State to frame separate rules in respect of each individual religious institution.
The rules under the Act have to be general.
And such rules were in fact framed and were in operation.
We are unable therefore, to agree with the High Court that appropriate rules were not in existence at the time when the demand was made, and on that account the demand was premature.
If services are provided, assuming that the Venkataramana temple either does not need the services, or does not obtain the.
(1) (196)) Mys.
L. J. 245.
923 benefit of the services, the contribution would still be recoverable.
We are also unable to accept the argument raised that because the rules were framed at a time when several different kinds of services were intended to be rendered and the Court later struck down certain provisions of the Act under which services were to be rendered, the rules framed in 1955 were rendered inapplicable.
The order passed by the High Court upholding the claim of the respondent temple on this part of the. case must therefore, be set aside.
The High Court has not investigated the question whether there is a reasonable relation between the expenditure incurred by the Government for providing services and the amounts intended to be collected from the religious institutions for whose, benefit the services are to be rendered.
Since this is a matter to be decided on evidence, we do not propose to enter upon that question in this appeal.
The second question relates to the levy of audit fee.
Under section 76(2) of the Act audit fee is not to be prescribed by rules : the Commissioner has to determine the fee for auditing the accounts of each religious endowment.
The power of the Commissioner is subject to a three fold restriction : (1) that the annual income of the religious institution for the relevant year preceding the year is Rs. 1,000/ or more; (2) that the fee does not exceed 11/5% of the income; and (3) that the fee is levied for meeting the cost of auditing the accounts of the religious institution.
In the present case, conditions (1) & (2) are satisfied.
But the High Court was of the view that the Commissioner had not determined the cost of auditing the accounts of the respondent temple, and proceeded to observe "It is sufficient to say that the demand made of the petitioners ' temple for the payment of a sum of Rs. 1, 1 62 8 3 nP towards the audit of its accounts in respect of the year 1963 fasli does not rest upon any determination made under Section 76(2) and is therefore one made without competence or the authority of law.
" In so observing, in our judgment, the High Court erred.
It was not the case of the respondents in their petition that the Commissioner had not determined the audit fee under section 76(2).
In paragraph 12 of the petition it was merely asserted that the fee determined by the Commissioner at the rate of 1 1/2% of the income was excessive.
It is true that the Commissioner may not under section 76(2) of the Act impose a flat rate of audit fee on the religious institutions governed by the provisions of the Act : he has to determine audit fee for meeting the costs of auditing the accounts as a per 924 centage of the income of each religious institution.
The Commissioner has to determine, having regard to the facts and circumstances of each case, the fee (being not more than the maximum prescribed) for meeting the cost of audit of the institution.
That im.plies that the Commissioner has to form an estimate of the reasonable cost which may be incurred in making an effective audit of the accounts of the religious institution, and to state it in terms of a percentage of the income.
The percentage of income levied as audit fee must of necessity be based on an estimate, and the demand will not be struck down merely because it turns out that the amount demanded is not precisely equivalent to the cost actually incurred for auditing the accounts.
Since the High Court has proceeded upon the ground of ab sence of determination by the Commissioner, which was never pleaded, and the High Court has not determined whether the audit fee ;demanded was in truth for meeting the cost of auditing, the accounts of the Venkataramana temple, the order passed by the High Court in respect of this part of the case must also be set aside.
The order of the High Court is set aside and it is directed that the case do stand remanded to the High Court and that the High Court do dispose of the case according to law and in the light of the observations made in this judgment.
Costs of this appeal will be costs in the High Court.
Y.P. Case remanded.

summary:
In 1955 the Government of Madras framed Rules under the Madras Hindu Religious and Charitable Endowments Act, 1951, as amended by Act 27 of 1954, prescribing a graduated scale of rates of contribution under section 76(1) of the Act.
The rules remained in force in the State of Mysore after reorganisation of the State of Madras and applied to the temples in the South Kanara district which was incorporated in the Mysore State.
On a petition by the respondents, trustees of a temple in the South Kanara district, the High Court of Mysore in Devraja Shenoy vs The State of Mysore declared invalid certain provisions of the amended Act imposing control upon the administration of temples governed by the Act.
Thereafter the Assistant Commissioner of Religious Endowments directed the respondents to pay the arrears of contribution and audit fee.
The respondents again moved the High Court challenging the validity of the demand.
The High Court upheld their plea on the ground that no rules had been framed under section 100 of the Act, and, therefore, the demand for recovery of contribution was premature.
The decision of the High Court was largely influenced by some observations made in the judgment in Devraja Shenoy 's case.
The court observed that since what was stated in that case on behalf of the State wag that the amount of contribution payable by the petitioner (respondent) temple had to be prescribed by a rule which 'remained to be made it meant that what was decided was that no contribution could be recovered from the temple until such a rule was made.
Regarding the demand for arrears of audit fee the court held that the Commissioner had not "determined" the cost of auditing the account of the respondent temple under section 76 (2) of the Act and the demand was "on that account without competence or authority of law.
" In appeal to this Court, HELD : (i) It is true that the High Court declared invalid certain provisions of the Act imposing control over the administration of temples governed by the Act.
But on that account the power to make rules was not restricted nor were the rules framed by the government rendered invalid.
The assumption made by the High Court that the Government had to make under section 100 rules applicable to each temple separately and prescribing the levy for determining contribution, finds no support in the provisions of the Act or its scheme.
Under the Act a fee though levied for rendering services of a particular type need not be co related to the services performed for each individual who is intended to obtain the benefit of the services.
The co relation must be between the expenses incurred by the authority levying the fee for generally providing the service and the aggregate of the levy from persons who are to be made subject thereto.
It is a necessary corollary that general rules prescribing the levy of fee from religious endowments have to be made and not rules governing individual endowments.
Such general rules were in fact framed and were in operation when the 918 demand was made.
The concession made by the Advocate General at the hearing in Devraja Shenoy 's case did not oblige the State to frame separate rules in respect of each individual religious institution.
Even if the respondent! temple did not need the services or did not obtain benefit of the services provided the contribution would still be recoverable.
Because the rules were framed at a time when several different kinds of services were intended to be rendered and the court later struck down certain provisions of the Act under which services were to be rendered, the rules framed in 1955 cannot be held to be inapplicable.
[921 A B, G; 922 E, G 923 B] H. H. Sudhindra Thirtha Swatniar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore, [1963] Supp.
2 S.C.R. 302, referred to.
(ii) It was not the case of the respondents in their petition in the High Court that the Commissioner had a not "determined" the audit fee under section 76(2).
It was merely asserted that the fee demanded was excessive.
Since the High Court proceeded upon the ground of absence of determination by the Commissioner which was never pleaded and the High Court had not determined whether the audit fee demanded was for meeting the cost of auditing the accounts of the respondent temple, the order passed by the High Court must be set aside and the case remanded.
[924 C]