1954 (4) TMI 29 - SC - Indian Laws

Provision relating to the payment of annual contribution contained in it is a tax and not a fee and so it was beyond the legislative competence of the Madras State Legislature to enact such a provision - That on the facts of the present case the imposition under a. 76(1) of the Act, although it is a tax, does not come within the latter part of art. 27 because the object of the contribution under the section is not the fostering or preservation of the Hindu religion or any denomination under it but the proper administration of religious trusts and institutions wherever they exist.

Issues Involved:
1. Validity of Madras Act II of 1927 and the Madras Hindu Religious and Charitable Endowments Act, 1951.
2. Fundamental rights under Articles 19(1)(f), 25, 26, and 27 of the Constitution.
3. Legislative competence of the State Legislature concerning section 76 of the Act.
4. Distinction between tax and fee.

Issue-wise Detailed Analysis:

1. Validity of Madras Act II of 1927 and the Madras Hindu Religious and Charitable Endowments Act, 1951:
The appeal challenged a judgment of the Madras High Court which allowed a petition under Article 226 of the Constitution, directing a writ of prohibition against the appellant from proceeding with the settlement of a scheme for the Shirur Math. The petition was initially filed when the Madras Hindu Religion Endowments Act (Act II of 1927) was in force. During the pendency of the petition, the Madras Hindu Religious and Charitable Endowments Act, 1951, came into force, replacing the Earlier Act. The petitioners were allowed to amend their petitions to challenge the validity of the New Act.

2. Fundamental Rights under Articles 19(1)(f), 25, 26, and 27 of the Constitution:
The High Court held several sections of the New Act to be ultra vires the Constitution, as they conflicted with the fundamental rights guaranteed under Articles 19(1)(f), 25, 26, and 27. The Supreme Court analyzed whether these articles were applicable to the respondent and whether they provided protection regarding the rights and privileges in question.

Article 19(1)(f):
The Supreme Court affirmed that the Mathadhipati has a right to property in the legal sense concerning the religious institution and its endowments, enabling him to claim protection under Article 19(1)(f). The Court emphasized that the Mahant's duties are not merely managerial but also spiritual, and any restrictions must be reasonable and not reduce the Mahant to a mere servant.

Article 25:
The Court held that Article 25 secures the freedom to practice and propagate religion, and this right extends to the Mathadhipati as an individual performing religious duties. The propagation of religious beliefs is protected, irrespective of whether it occurs within an institution.

Article 26:
The Court recognized that the Math in question constitutes a religious denomination within the meaning of Article 26. The right to manage its own affairs in matters of religion is a fundamental right that cannot be taken away by the legislature. The administration of property can be regulated by law, but the right to manage religious affairs must remain with the denomination.

Article 27:
The Court held that the provision for compulsory contribution under section 76 did not come within the mischief of Article 27, as the object of the contribution was to ensure proper administration of religious trusts and institutions, not to promote or maintain any particular religion.

3. Legislative Competence of the State Legislature concerning Section 76 of the Act:
The Supreme Court examined whether the contribution levied under section 76 was a tax or a fee. The Court concluded that the contribution was a tax and not a fee, as there was no correlation between the expenses incurred by the Government and the amount raised by the contribution. Consequently, the provision was beyond the legislative competence of the State Legislature.

4. Distinction between Tax and Fee:
The Court discussed the characteristics distinguishing a tax from a fee. A tax is a compulsory exaction of money for public purposes without reference to any special benefit to the payer, whereas a fee is a charge for a specific service rendered. The contribution under section 76 was deemed a tax because it was not earmarked for specific services and was not based on the quantum of benefit conferred on any particular institution.

Conclusion:
The Supreme Court declared sections 21, 30(2), 31, 55, 56, and 63 to 69 of the New Act invalid as they conflicted with the fundamental rights of the respondent. Section 76(1) was also declared void as it was beyond the legislative competence of the Madras State Legislature. The rest of the Act was upheld as valid. The appeal was dismissed with costs to the respondent.

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