IMPORTANT POINT
In order to attract Section 3 of A.P. Non-Agricultural Lands Assessment Act, there has to be a finding as of fact that the land is in fact in praesenti in use for an industrial purpose/commercial purpose or any other non-agricultural purpose.

JUDGMENT

Bharucha, J.-Leave granted in SLP (C) No. 2877 of 1998.

2. A bench of five Judges of the Andhra Pradesh High Court interpreted the word "used" in The Andhra Pradesh Non-Agricultural Lands Assessment Act, 1963 ("the said Act") to mean "non-agricultural lands not only `actually used but are `meant to be used or `set apart for being used ." This view is contested in these appeals by some industries in Andhra Pradesh and, with permission, by their Federation.

2. The said Act was enacted to provide for the levy of assessment on lands used for non-agricultural purposes. Section 2(d) defines industrial purpose , so far as it is relevant to these appeals, to mean "any purpose connected with an industrial undertaking where the process of manufacturing any article is carried on with the aid of power...." Non-agricultural land is defined by Section 2(g) to mean "land other than the land used exclusively for the purpose of agriculture..." Section 3 of the said Act is the charging section and, so far as it is relevant, reads thus :

"3. Levy of assessment on non-agricultural lands :-In the case of non-agricultural land in a local area with the population specified in column (1) of the Schedule, there shall be levied and collected by the Government for each fasli year commencing on the first day of July, from the owner of such land, an assessment, at the rate specified in column (2) where the land is used for any industrial purpose, at the rate specified against it in column (3) where the land is used for any commercial purpose and at the rate specified against it in column (4) where the land is used for any other non-agricultural purpose including residential purpose."

The Schedule that is referred to in Section 3 sets out the rates of assessment per square metre of land used (a) for industrial purposes per fasli year, (b) for commercial purpose per fasli year and (c) for any other non-agricultural purpose, including residential purpose, per fasli year.

4. The question with which we are concerned came up first before the Andhra Pradesh High Court in the case of S.V. Cement Ltd. v. Revenue Divisional Officer, Nandyal & Ors.1 and a bench of three learned Judges held :

"In the context it is susceptible of wider meaning. The word "used" means not only "actually used", but it also means any land meant to be used or set apart for being used. The definitions of "industrial purpose" and "commercial purpose" and lend support to the wide meaning given to the word "used". "Industrial purpose" means any purpose connected with industrial undertaking. Likewise, "commercial purpose" means the purpose connected with the undertaking in trade, commerce or business. The definitions do not say that the non-agricultural land should be actually utilised for an industrial or commercial activity, but it is enough if the land is kept for use for a purpose connected with industrial or commercial undertaking."

5. A bench of two learned Judges of the Andhra Pradesh High Court took the view that the judgment in S.V. Cement Ltd. required reconsideration. Accordingly, the writ petitions in which the question was raised was placed before the bench of five learned Judges. They held that the word used had to be interpreted to connote a wider meaning. If that interpretation was adopted, non-agricultural lands not only actually used for industrial purposes but those meant to be so used or set apart for being so used were also liable to assessment as such under the said Act. It was contended before them, based on the celebrated judgment in the case of Cape Brandy Syndicate v. Inland Revenue Commissioners2, and a judgment of this Court, that fiscal legislation had to be strictly interpreted, and if two interpretations were possible, the one favourable to the assessee would prevail. The learned Judges found that "the contention that the word used has to be given the limited meaning actually used is not in tune with the intendment of the legislature ..... The legislat