2005 Supreme(Guj) 773

Gujarat High Court
Judgename :K.M.MEHTA, R.S.GARG
OIL and NATURAL GAS CORP.LTD - Appellant
Versus
TALUKA PANCHAYAT,khambhat - Respondent
First Appeal 5225 of 2001
Decided On : 12/01/2005

Headnote:Point in Issue :

       Land given on lease - Deed for executed between parties - Land revenue education cess and other taxes - Notice of demand for - Sustainability - Finding as to.

       Head Note :

       Companies Act, 1956 (Central Act 1 of 1956) - Oil and Natural Gas Commission Act, 1959 (Central Act 43 of 1959) - Oil Field (Regulation and Development) Act, 1948 (Central Act 53 of 1948) - Petroleum and Natural Gas Rules, 1959 - Rule 13(2)(b) - Bombay Land Revenue Code, 1879 (Bom. Act 5 of 1879) - Sections 148 & 152 - Gujarat Education Cess Act, 1962 (Guj. Act 35 of 1962)- Sections 3, 4, 5, and 7 - Civil Procedure Code, 1908 (Central Act 5 of 1908) - Section 96 - Land given on lease - Deed for executed between parties - Land revenue, education cess and other tax - Notice of demand for - Sustainability - Finding as to - When contract entered into by plaintiff and the Government which specifically states that the Government would not levy Land Revenue then the village Panchayat will have no power or jurisdiction to levy land revenue - Any reliance placed on the provisions of Land Revenue Code for the purpose of making such a demand is wholly misplaced and unjustified specially when Section 45 of the Code itself provides power of exemption particularly when special contract entered into between plaintiff and State Government stipulating not to levy land revenue - In view of Section 45 of the Land Revenue Code read with the contract, Court held, State Government has no power to levy tax under the Code - Also on the facts and circumstances of the case, use of land in mining purpose did not fall within any of the categories mentioned in Section 48(1) and hence there was no question of making plaintiff liable to pay tax otherwise assessable to land revenue - Since land was liable for payment of flat/lease rent and was not liable to revenue assessment there was no question of education cess being payable by plaintiff - Trial Court has, therefore, committed error in not considering these facts - The judgment and decree of trial Court as such quashed and set aside.

       Held :

       Once the contract which has been entered into between the plaintiff and the Government which specifically states the Government not to levy "land revenue" then the village panchayat will have no power or jurisdiction to levy "land revenue" relying on Section 45 of the Act. The reliance placed by the learned AGP on Section 45 and Section 48 of the Land Revenue Code is unjustified and unwarranted because Section 45 itself provides power of exemption particularly special contract entered into between the plaintiff and the State Government. Here the State Government has specifically entered into contract with the plaintiff not to levy "land revenue" under the provisions of the Land Revenue Code. In view of Section 45 of the Land Revenue Code read with the contract, the State Government will have no power to levy tax under the Bombay Land Revenue Code. [Para 4]

       In view of Section 45 of the Code read with agreement it has been explicitly agreed that the plaintiff was not liable to pay land revenue. Once the plaintiff was not liable to pay land revenue, it was not liable to pay education cess assessable on the land revenue at the relevant time. In Courts view on the facts and circumstances of the case, use of the land in mining purpose did not fall within any of the categories mentioned in Sub-section (1) of Section 48 and hence there was no question of the plaintiff liable to pay tax otherwise being assessable to land revenue. In Courts view since the land in question were held on payment of flat rent/lease rent and were not liable to revenue assessment, there was no question of education cess being payable by the plaintiff. In Courts opinion, the trial Court has committed an error in not considering that no assessment can be levied and collected on the land used for mining operations unless provided in the lease deed itself. In Courts view, the trial Court has erred in coming to the conclusion that the plaintiff would be liable to pay tax merely because for earlier period of time, tax has been paid. In Courts view, the trial Court ought to have considered that the building in Kansari was not being used for mining purposes and as a matter of fact was being used as administrative office and hence the trial Court erred in concluding that the plaintiff would be liable to pay taxes merely because the appellant was paying tax for the property at Kansari. In Courts view the trial Court erred in holding that because tax was paid for Kansari property, the plaintiff would be liable for payment of tax even qua other properties. [Para 4.1]

       Law Laid Down :

       In view of Section 45 of the Code read with agreement entered into between the parties, plaintiff was not liable to pay land revenue and other taxes.

       Case Law Analysis :

       Digvijaysinhji Salt Works vs. State, reported in 1970 (11) GLR 249 [Para 4.5].-Relied on

       Conclusion :

       The judgment and decree of trial Court dismissing suit of plaintiff is quashed and set aside - The original suit of plaintiff decreed party and notices issued by Taluka Development Officer to pay tax being illegal, set aside.

       Decided in Favour of :

       Appellant

       Appeal Allowed