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Andhra Pradesh High Court
Judges : JAGMOHAN REDDY, PARTHASARATHI, RAMACHANDRA RAO
Officer in charge (Court of wards) Paigah - Appellant
Versus
Commissioner of Wealth-tax A.P. - Respondent
Decided On : 11-26-68
WEALTH TAX - Agricultural land - Meaning of - Whether vacant land capable of being used for agriculture is agricultural land - Held, yes.
Fact of the Case:
The assessee, the erstwhile Paigah of Hyderabad, owned various assets, including vacant lands situated at Begumpet, Lallaguda, Jiaguda, Subzimandi, Yerragadda, Zamboorkhana and Vicarabad. The Wealth Tax Officer treated the value of these lands as part of the assessee's net wealth, holding that they were not agricultural lands as they had never been ploughed or tilled. The Appellate Assistant Commissioner and the Income Tax Appellate Tribunal confirmed this order. On a reference to the High Court, the question was whether the lands were agricultural lands within the meaning of Section 2(e)(i) of the Wealth Tax Act, 1957.
Finding of the Court:
The High Court held that the lands were agricultural lands. It held that the expression "agricultural land" in Section 2(e)(i) of the Act should be given the same meaning as it bears in Entry 86 of List I of the Seventh Schedule to the Constitution, and that it should be given the widest meaning. The Court held that the actual user of the land for agriculture is one of the indicia for determining the character of the land as agricultural land, but that land which is left barren but which is capable of being cultivated can also be agricultural land, unless the said land is actually put to some other non-agricultural purpose. The Court also held that the situation of the land in a village or in an urban area is not by itself determinative of its character.
Issues: Whether vacant land capable of being used for agriculture is agricultural land.
Ratio Decidendi: The expression "agricultural land" in Section 2(e)(i) of the Wealth Tax Act, 1957 should be given the same meaning as it bears in Entry 86 of List I of the Seventh Schedule to the Constitution, and that it should be given the widest meaning. The actual user of the land for agriculture is one of the indicia for determining the character of the land as agricultural land, but that land which is left barren but which is capable of being cultivated can also be agricultural land, unless the said land is actually put to some other non-agricultural purpose. The situation of the land in a village or in an urban area is not by itself determinative of its character.
Final Decision: The question referred was answered in the affirmative and in favour of the assessee.
( 1 ) AN important question as to what is the meaning of the words agricultual land for the purpose of wealth tax falls for determination in this referred case. A division Bench of the Madaras High Court in Sarojini Devi v. Sri krishna, A. I. R. 1944 Mad. 401 while interpreting the words agricultural lands occurring in Lists II and III of Schedule 7 to the Government of India Act, 1935, held that the expression must be taken to include lands which are used or are capable of being used for raising any valuable plains or trees or for any other purpose of husbandary the question there was whether a mango grove is an agricultural land in respect of which the Hindu Women s Rights to property Act, 1937 doe not operate to regulate succession. The words "agricultural lands" occur in Lists 1 and II of the Seventh schedule to the Constitution of India, i. e. in items 86, 87 and 88 of the Union list in the Constitution of India corresponding to Entries 55, 55 A and 56 of list I of the Government of India Act, 1935, and Itcmi 18, 47 and 48 of List ii of the Constitution of India corresponding to Entries 21, 43 and 43 A of the government of India Act, 1935. It is contended that the decisions of the madras High Court defining the words "agricultural lands" to mean also lands which are capable of being used for agriculture, are binding upon this Court in interpreting similar words used in the Constitution, the framers of. which mult be taken to have adopted the judicial interpretation of the words used in some of the provisions of the Government of India Act, 1935 whicb are in part materia with corresponding provisions in the constitution.
( 2 ) IN a recent case, Smt. Manyam Meenakskmma v, Cemmissioner ef Wealth Tax n. D. Krishna Rao J. (as he then was) and Sharfuddin Ahmed J held that an agricultural land is one which is used for agricultural purposes and not other wise, the question how a land is ordinarily used being one of fact depending on the evidence in in each case. The Bench observed that the learned Judges who decided the Madras case had in mind meanings given to the word based on the nature of the products raised on the land. This we think does not prima facie appear to us a correct reading of that decision. In order to determine the question referred to us, it is Accessary first to ascertain the meaning of the words "agricultural land" used in the Welth tax Act vis a vis Lists I and II of the Seventh Schedule to the constitution and in view of the apparent conflict between the definition given by the madras High Court, which is binding oh this court, and our own Bench, we refer the case to a Full Bench.
( 3 ) THIS case is referred under Section 27 (1) of the Wealth Tax Act 0/1957, for a decision of this Court of the question. "whether on the facts and in the circumstances of the case, the lands situated at Begumpet, Lallaguda, Jiaguda, Subzimandi, Yerragadda, zamboorkhana and Vicarabad, were agricultuial lands within the meaning of Section 1 (e) (i) of the Wealth Tax Act, (hereinafter referred to as the Act ). " when this case came up before a Bench of this Court consisting of one of us (The Hon ble the Chief Justice) and Sambasiva Rao J. they referred the same to a Full Bench as an important question as to the meaning of the words "agricultural lands" falls for determination, and as there is an apparent conflict between the decision rendered by a Bench of the Madras High court in Sarojini Dtvi v Sri Krishnas A. I. R. 1944 Mad, 401 and a decision of another Bench of this court in Smt. Manyam Meenakshamma v. Commr of Wealth Tax (1967)63i. T. R 534 the brief facts as found in the statement of the case are as follows:-By a notification dated 4th August, 1960, the Court of wards of the erstwhile hyderabad State Government took over the administration of the estate of late Sir Vicar-ul-Umra, and an officer in charge was appointed to administer the said Paigah,. The Paigah owned various assets, such as build
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