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Andhra Pradesh High Court
Judges : B.P.JEEVAN REDDY, V.MADHAVA RAO
Associated Cement Companies Ltd. - Appellant
Versus
Government Of A.P. - Respondent
Decided On : 06-10-82
TAXATION - NON-AGRICULTURAL LAND ASSESSMENT - AMENDMENT TO DEFINITION OF INDUSTRY - COMPETENCY OF STATE LEGISLATURE - MINERALS AND MINERAL DEVELOPMENT - CONTROL BY UNION GOVERNMENT - LEVY OF TAX ON LAND USED FOR MINING OPERATIONS - VALIDITY - ASSESSMENT ON LAND USED AS NON-AGRICULTURAL LAND - DISPUTE REGARDING EXTENT OF LAND USED - RE-ASSESSMENT - LEASE OF GODOWNS AND ADJACENT LAND - LIABILITY FOR PAYMENT OF ASSESSMENT - NOTICE OF ASSESSMENT - APPEAL - DEMAND NOTICE FOR SEVERAL YEARS - SEPARATE ASSESSMENT FOR EACH YEAR - APPEAL AGAINST DEMAND NOTICE - STAY OF RECOVERY.
Fact of the Case:
The petitioners challenged the validity of the Andhra Pradesh Non-Agricultural Lands Assessment Act (Act XIV of 1963) and the amendment to the definition of industry under Section 2(d) of the Act, which included mining operations within the definition. The petitioners argued that the state legislature lacked the competence to make such an amendment and that the levy of tax on land used for mining operations was ultra vires of the state legislature.
Finding of the Court:
The court held that the state legislature was competent to make the amendment to Section 2(d) of the Act and that the levy of tax on land used for mining operations was intra vires of the state legislature. The court also held that the assessment on land used as non-agricultural land should be based on the actual extent of land used for such purpose and that the assessment on the entire extent of land, including land not used for mining operations, was vitiated.
Issues: 1. Whether the state legislature was competent to make the amendment to Section 2(d) of the Andhra Pradesh Non-Agricultural Lands Assessment Act (Act XIV of 1963) to include mining operations within the definition of industry? 2. Whether the levy of tax on land used for mining operations was ultra vires of the state legislature? 3. Whether the assessment on land used as non-agricultural land should be based on the actual extent of land used for such purpose?
Ratio Decidendi: 1. The court held that the state legislature was competent to make the amendment to Section 2(d) of the Act because the subject matter of the amendment fell within Entry 45 of the State List of the Seventh Schedule to the Constitution, which deals with land revenue, including the assessment and collection of revenue, and not within Entry 54 of the Union List, which deals with the regulation of mines and mineral development. 2. The court held that the levy of tax on land used for mining operations was intra vires of the state legislature because the state legislature had the power to levy tax on land under Entry 49 of the State List of the Seventh Schedule to the Constitution, which deals with taxes on lands and buildings. 3. The court held that the assessment on land used as non-agricultural land should be based on the actual extent of land used for such purpose because the Andhra Pradesh Non-Agricultural Lands Assessment Act only authorized the imposition of assessment on the use of land as non-agricultural and no other cess could be imposed and collected on the land thereunder.
Final Decision: The court allowed the writ petitions in part and quashed the demand notice to the extent that it imposed assessment on land not used for mining operations. The court also directed the assessing authority to re-assess the land in the light of the observations made in the judgment and issue a fresh notice to the petitioner.
( 1 ) THESE writ petitions are taken up together for hearing as the question involved in all these writ petitions is in respect of issue of a writ of Mandamus restraining the respondents from levying and collecting the tax under the Andhra pradesh, Nonagricultural Land Assessment Act (Act XIV of 1963)
( 2 ) IN these writ petitions the legislative competence to make amendment to S. 2 (d) of the said Act and also the definition of the term industry (Industrial purpose ?) under this section are challenged. To have a clear idea of the several points raised, we will narrate the facts of writ petition 3494 of 1978.
( 3 ) THE petitioners-Associated cement companies Limited Mancherial, are the owners of 338 acres 22 guntas of and on which the cement plant for the manufacture of cement is erected. It is stated that only on 32 acres 18 guntas the machinery is set up where the manufacturing process takes place and in the said are the company has constructed certain buildings where the staff of the company work in connection with the manufacture. The company has also constructed certain houses to accommodate its staff and workers and the area covering these residential quarters is about 173 acres 5 guntas leaving a vacant site of 121 acres 14 guntas as waste land with shrubs thereon. It is further stated that the company has taken on lease 1900 acres of land for the purpose of carrying on mining operations i. e. for extraction of lime stone as lime stone is the raw material for the manufacture of cement. Under the Andhra Pradesh Non-Agricultural lands assessment Act, 1963 (Act XIV of 1963), tax was levied on the lands used for non-agricultural purposes. The same was challenged by filing a writ petition in this Court and several other writ petitions followed. The main attack was on the validity of the Act and the state Government has no power to collect tax on the land actually used as commercial, industrial or for residential purposes and no tax can be levied on the land which is not used at all in the sense it has been kept waste. It was sought to be contended that a distinction should be made between the land used for industrial commercial and residential purposes in order to levy tax and on that levy cannot be made for the land used for extraction of minerals like mining operations etc. This batch of writ petitions viz. , Writ petition 290 of 1965 etc. Were disposed of by a Division Bench of this Court by its judgment dated 22/04/1970 holding:". . . . . . . . . . IT is therefore clearly wrong to class lands containing mines and from which ore is extracted with the aid of power as lands used for industrial purpose when the activity in that land does not involve any process of manufacture with the aid of power". Thus it was made clear that it was not open to the Government to levy tax on the area used for mining operations.
( 4 ) IN view of the aforesaid judgment, the state legislature has amended the said Act which is known as the Andhra pradesh Non-Agricultural ). Lands Assessment (Amendment) Act 1974. The Act received the assent of the Government on 2 2/08/1974 and was published in the Gazette on 23/08/1974. To the definition clause of industrial purpose under S. 2 (d) of the Act. The following para was added:". . . . . . . . . . . . . . and includes a purpose connected with an excavation underground or otherwise, where any operation for the purpose of searching for or obtaining a mineral has been or is being carried on". The petitioner states that this amendment evidently is made to bring mining operation within the definition of the term industry and according to him the state legislature has no power to do so.
( 5 ) THE learned counsel for the petitioner Mr. K. Srinivasa Murthy submitted that it is open to the parliament to take over the control of the mines and mineral development he referred to item 54, List I of the seventh sch. To the Constitution. He submitted that in pursuance of the said power the Mines and Mi
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