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The petitioner company is incorporated in India and the majority of its shareholders are Indians. It owns a tea estate in Kuttikanam area in the Peermade hills in Kerala State. The estate consists of 1006 hectares equal to 2486 acres of which 491 hectares equal to 1214 acres are tea plantations. According to the petitioners Peermade hills are in the Western Ghats and are divided into two main parts. Kuttikanam area roughly 33 sq. miles is situated at an altitude of 3400 to 3700 ft. and receives 150 to 200 inches of rainfall annually. The Periyar valley area roughly 60 sq. miles is situated at an altitude of 2800 to 3200 ft. and receives 100 to 150 inches rainfall annually. The Periyar valley area is more fertile than the Kuttikanam area. According to the petitioners' statement M/s. Parkins Private Ltd., are the Managing Agents of Twyford Tea Company and also the Haileyburia Tea Estate. The former is in Kuttikanam and the latter in Periyar area. The extent of produce from these two areas is very different. Between the years 1963 to 1967 Twyford Tea Company produced 959 to 1211 kgs. per hectare while Haileyburia produced 1461 to 1845 kgs. per hectare. The other tea-estates disclosed the same differences in production. Examples are given of Penshurat, Karimtharuvi estates under the same management and of Stagbrook and Cheenthalaar and other estates. The Twyford Tea Company's net profits have declined from Rs. 2,28,222 (1963) to Rs. 59,938 (1967). The net profits of Twyford Tea Company after taxation per hectare ranged from Rs. 122.00 (1967) to Rs. 465.00 (1963) with loss in 1966, while the profits of Heileyburia ranged from Rs. 909.00 (1963) to Rs. 770.00 (1967) with Rs. 245.00 in 1966. This difference is attributed to the differences in fertility between the Kuttikanam and Pariyar areas. The petitioners state that similar differences exist in the Vandiperiyar and Nelliampathy areas. The petitioners point cut that for purposes of excise duty these areas have been formed into different zones and different rates of excise duty are leviable in these zones.

The petitioners paid tax under the old Act without objections -They state that they did so without realising their rights. They were issued three demands for the assessments years 1960-61 to 1968. They had already paid between April 10, 1961 and October 18, 1968 a sum of Rs. 1,02,106.02. It is because of this additional demand arising from the increase in the rate of tax from Rs. 8/- per acre or Rs. 20/- per hectare to Rs. 501- per hectare that they have challenged the constitutionality of the two Acts. The contention of the petitioners is that there is no rational :classification of plantations; that unequals have been treated as equal and that a flat rate imposed upon all the plantations irrespective of their yield is arbitrary. According to them some of the plantations cannot make enough profit to be able to pay tax and in their case the tax became confiscatory. They also complain of discrimination and question the legislative competency of the Kerala Legislature to impose plantation tax in the absence of a specific entry in the 7th Schedule to the Constitution either in List II or III enabling the State Legislature to impose it. They also say that the land tax imposed under the Land Tax Act was successfully challenged before this Court in Kunnathat Thathunni Moopil Nair v. The State of Kerala and another(') and the change making it additional land revenue imposed an obligation upon the-- State Legislature to make assessment on the basis of the produce from the land in much the same way as land revenue is calculated after taking into account the fertility of the soil, its yield and such other factors.

lature taxed the land on the standard of potential productivity instead of the ad hoc levy originally provided in the Act of 1955 and also removed the objection as to the absence of any remedy against assessment by providing appeal and revision. The position, therefore, is that whereas under the Kerala Land Tax Act, XIII of 1961, as amended in 1968 and 1969, the basic or land tax is levied on the basis of potential productivity and yield, the tax as imposed by the impugned Act as a tax in-addition to the basic tax is a uniform tax at a flat rate without any regard to the productivity of the land, potential or actual. According to the petitioners, Peermade Hills, where their estate is situate, falls roughly into two areas, the Kuttikanam area .and the Periyar valley area. Though both these areas are situate in high ranges, they differ in the extent of their productivity and quality, the reason being that the Periyar valley area is the basin of Periyar river. The difference in the fertility and the quality of soil in these two areas is sought to be illustrated by showing that Twyford estate situate in Kuttikanam area and Haileyburia estate situate in Periyar valley area, though under common management, give different average yields. The average yield in 1967 per hectare in Twyford estate was 959 Kgs. while that of Haileyburia estate was 1542 Kgs. To show such differences also in other areas in the State and elsewhere the petitioners have furnished various statistics. These statistics first,show that the average annual yield per hectare in the tea-growing areas in Madras, Mysore and Kerala for the year 1967 was 1394, 1178 and 1076 Kgs. respectively. The all India average yield according to these figures was I 1 00 Kgs. per hectare per year. The average of tea production per hectare in Kerala State thus compares favourably with that of the other tea growing regions as also with the all India average. Therefore, the tea planters in Kerala cannot be said to be backward or less forward-looking or less venturesome than those in the other regions. Secondly, these figures also show that the average yield in thee different districts in Kerala itself varies from district to district ranging from about 350 Kgs. for the district of Ernakulam to as much as 1850 Kgs. for Trichur district. The production figure for the whole of the Kerala State appears to have remained steady throughout 1965 to 1967 as it varies from about 43000 Kgs. to 44000 Kgs. These figures indicate that different areas in the State where tea is grown differ in a very large way in productivity and fertility. These figures are taken from the Reports of the Tea Board, and therefore, can be safely regarded as reliable.

and although that basic-tax under s. 6 of that Act depends upon the gross income yielded by the particular land. It is true that under the second proviso to that section, if the land is used for growing any of the crops therein mentioned, the Government can impose, having regard to -its potential productivity; the basic tax at Rs. 2/- per acre, even though the land has not yet begun to yield or bear the crop and no income has yet begun to be made therefrom. By subsequent amendment the rate was changed to Rs. 4.94 per hectare, but the principle of potential productivity was maintained. The additional tax imposed by Act XVII of 1960, on the other hand, is on the same land provided it is used for growing any one or more of the specified trees or plants, originally at the uniform rate of Rs. 8/- per acre but now enhanced by Act XIX of 1967 to Rs. 501/- per hectare, i.e., Rs. 20 per acre. As already stated, the Amendment Act deleted the word 'additional' but the deletion makes no difference as the tax is still in addition to the basic or land tax and must, therefore, partake its character, both taxes being taxes in respect of the same land, where the land is plantation within s. 2(6). Thus, so far as such 'lands are concerned, the basic tax on them is assessed according to their productivity or income. But the tax under Act XVII of 1960, as amended by Act XIX of 1967, is imposed in respect of them as an ad hoc uniform tax, irrespective of the kind of their soil or their capacity etc. and only for the reason of their particular user. Prima facie, the incidence of such a tax by reason of its uniformity is bound to be unequal on persons similarly situated and would, therefore,, be hit by the equality clause in Art. 14. Even assuming that the basic tax is a revenue assessment and the additional tax is not, it would still make no difference in its unequal incidence on these whose lands by their particular user are plantations. In other words, the burden of the tax on persons situated in similar circumstances, i.e., those whose lands are plantations, would be unequal. depending upon the kind of soil, the geographical situation, water supply, elevation and other relevant factors touching the lands they hold. The additional tax is by no means low as it is, after the passing of the amendment Act XIX of 1967, Rs. 50 per hectare, equivalent to Rs. 20 per acre. A person holding 1,000 acres of land of inferior soil would, by reason of such, an ad hoc tax, be bound to be hit harder than the one holding 1,000 acres of superior land with higher fertility or productivity. Such a result would not occur if the land is classified and the incidence of the tax is graded according, to its productivity and other relevant factors, In support of the Act it was argued that the impugned Act not only makes a classification between those who hold lands which are plantations and those who hold lands which are not plantations, but also makes a further classification within that classification by the method provided for calculating the extent of plantations in Sch. 11. That argument does not appear to be correct. The Schedule only provides the methods for calculating the extent of the plantations : (1) by means of quotients and (2) where tea and cardamom plants are cultivated by the actual extent of the land used for those purposes. But the Schedule does not solve the difficulty. A piece of land in one area may have a certain number of trees or plants of one or more of the specified categories to make it a plantation. But the incidence of the tax in respect of it would be unequal as compared to an-other land situate elsewhere by reason of the latter's better situation or fertility even if the number of plants or trees of the specified kind are the same, depending upon the situation and the capacity of the two lands. In such a case the very uniformity of the tax is bound to result in discrimination on account of the relative potentiality of the two lands not being taken into account, and the lands not being classified accordingly. It is, therefore, difficult to say that the Schedule, intended only for calculating the extent of the plantations, seeks to achieve equality of treatment between one kind of plantation and another or between plantations of the same kind, if the principle of their yield or income, actual or potential, is not taken into account. How is it possible to say that the uniform burden of Rs. 50/- per hectare in the case, say of cocoanut, tea, coffee or cardamom plantations, is reasonably equal, when the potential yield of each such plantation is not taken into consideration ? The' same result must also follow amongst holders of the same kind of plantations if the principle of yield or income is discarded. Thus, Sch. 11 only provides the two methods, of calculating the extent of the plantation and does, not make a Classification within a classification as urged. The only classification made is between those whose lands fall under the definition of 'plantation' and those whose lands do not. All those who held lands which are plantations are made liable to pay the tax at the uniform rate of Rs. 501/- per hectare, no matter what kind of crop, out of the seven kinds mentioned in the Act, is cultivated by them. without regard to the fact that one kind may be more valuable than the other and irrespective of their situation, their income-yielding capacity and other factors.