M. A. Majeed vs State of Kerala, Rep. by the Secretary to Government

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2005 Supreme(Ker) 663

Judges : K.A.ABDUL GAFOOR,K.THANKAPPAN,K.HEMA
M.A.Majeed - Appellant
Versus
State of Kerala, Rep.by the Secretary to Government - Respondent
Case No : WP(C).No.28313 of 2004 (U)
Decided On : 11/15/2005
Advocates Appeared :
For the Petitioner: S. Venkatasubramonia Iyer (SR), T.H. Abdul Azeez, Advocates. For the Respondents: Susheela Bhat, Government Pleader.

Headnote:
Kerala Grants and Leases (Modification of Rights) Act 1980 - Section. 2(c), 3 and 4 - A Branch of this Court in Vairavan v. Joint Regional Transport Officer, held that strict adherence to the provisions is warranted for claiming exemption from tax. When this appeal came up for hearing before another Bench, the Bench felt that the matter requires reconsideration by a larger Bench expressing doubt whether - Whether previous intimation claiming exemption from tax under S.5 of the Kerala Motor Vehicles Taxation Act, 1976 read with R.10 of the Kerala Motor Vehicles Rules is a mandatory requirement for claiming exemption from payment of tax is the question which has been referred for our consideration - it is the content or the form which is more material for seeking exemption from payment of motor vehicles tax - Held, The liability to pay seigniorage under S.4 is, thus, cast on 'every grantee and every lessee' and this liability is in respect of 'the timber cut and removed from any land held' by such grantee or lessee under the grant or lease, as the case may be, of course, subject to S.3. Admittedly, the company is the grantee. The petitioner obtained the rights from the company in terms of Ext.P1 (R2(i)) agreement. He cannot be better placed than the grantee. If at all any one can dispute payment of seigniorage, it can only be the company. When faced with that situation, he contends that as per S.2(c) of the Act, the grantee includes the heirs, successors and assigns of the person in whose favour the grant has been made. If it is transfer of any right in immovable property there arises no question of payment of sales tax. If so, it also ought to have been registered going by S.17(1)(c) of the Registration Act, read with Clause (v) of sub-s. (2) thereof. Moreover, on any reading, Ext.R2(i) cannot be in respect of, at the best, anything other than the standing timber in the property covered by Ext.R2(a). Therefore, the petitioner cannot contend that whatever right he has obtained in terms of Ext.P1 (Ext.R2(i)) is a right in respect of an immovable property so that he can also come within the definition of grantee, being an assignee in respect of any right or interest in the land in question - S.4 is liable to be paid by the grantee or lessee, as the case may be. The contractor under the grantee or lessee or a purchaser of timber from a grantee or lessee based on an unregistered agreement like Ext.R2(i) (Ext.P1) will not be a successor in interest of the grantee as respects the rights in the land. Whether the grant contains any conditions as stipulated in S.3 of the Act to make applicable the Act itself to the land in question is a matter to be considered in a lis between the grantee on the one part and the grantor or Government on the other; and not at the instance of a purchaser of some timber logs from the grantee, when seigniorage is demanded by the Forest Department in respect of the timber sought to be removed from the land held under the grant or lease. So the question posed is not one to be decided at the instance of the petitioner. The seigniorage payable under S.4 is one to be paid by the grantee, if the timber cut is to be 'from any land held by him under the grant'- Except the liability to pay seigniorage, nothing remains to be resolved in this Writ Petition. Necessarily, the aforesaid finding shall result in dismissal of the Writ Petition.

Judgment :-

Abdul Gafoor, J.

This case has come up before us on reference by a Division Bench. The Division Bench opined that a question identical to the one arising in this case concerning demand of seigniorage for the shade trees cut and removed had been directed by another Division Bench to be place before a larger bench doubting the correctness of the decision in State of Kerala v. Kannan Devan Hills Produce Co. Ltd. {1998 (1) KLJ 78}={1998 (1) KLT 28}. But the issue was not decided therein. Therefore, the Division Bench felt that,

“an authoritative pronouncement requires to be made in view of the above legal position that has been highlighted by the learned Special Government Pleader.”

Accordingly the matter comes up before us.

2. The earlier reference referred to by the Division Bench was in Ext.R2(c). Therefore, in order to understand the question of law to be decided by us, we have to refer to Ext.R2(c). The question arose for consideration there, was “the interpretation of section 4 of the Kerala Grants & Leases (Modification of Rights) Act, 1980”. That Division Bench, referring to the decision in State of Kerala v. Kannan Devan Hills Produce Co. Ltd. {[1991] 2 SCC 272} found that the Apex Court has held that “the State Government could refuse to permit transportation of timber from the Concession Area” and the “Government being the owner had a right to impose kuttikanam on the removal of the trees out of the Concession Area. “That Division Bench also opined that the contention that Kuttikanam could not be charged in respect of “such timber which was planted by the grantee in the Concession Area” was negatived by the Apex Court and that the said decision has been distinguished by yet another Bench of those court in State of Kerala v. Kannan Devan Hills Produce Co. Ltd. {1998 (1) KLT 28} holding that “if the Government and intended to claim ownership on the trees which are to be cultivated by the grantee, specific reference would have been made to such trees also in the documents” and the Bench, therefore, concluded that if the trees are planted by the grantee, “the grantee is not liable to pay any seigniorage or kuttikanam in respect of timber of those shade trees”. That Division Bench noticed that such a finding was arrived at without noticing the Kerala Grants & Leases (Modification of Rights) Act, 1980, Section 4 of which contains a non-obstante clause to the effect that notwithstanding anything contained in any law for the time being in force, or in any grant, lease deed, contract etc., the lessee is bound to pay seigniorage to Government. As “the impact of Section 4 was not considered by the earlier Division Bench in State of Kerala v. Kannan Devan Hills Produce Co. Ltd. {1998 (1) KLT 28}, in order to avoid conflict of views” that Division Bench opined that the matter had to be considered by a larger bench. But when that case came up for consideration before a Full Bench, it was not pressed, and the issue was not decided. That was why the present reference order has been passed as mentioned above by another Division Bench.

3. Thus, the question to be decided is whether, in the light of Section 4 of the said Act, seigniorage is liable to be paid for removal of the timber of the trees stated to be planted by the grantee from a property assigned by way of grant by Government.

4. Admittedly by the petitioner, he has ‘purchased 1000 (1000 only) number of Gravelle trees about 24 inches girth at 3 ft. height at an average price of Rs.2,500/- per tree” from Travancore Rubber and Tea Company Limited – hereinafter referred to as the company-as per Ext.P1 agreement dated 19.01.2004, Full text thereof is produced as Ext.R2(i). Admittedly by the petitioner, before felling the trees purchased by him, the company had obtained certificate from the Tahsildar, as per Exts.P3 and P4. Respondents 2 and 3 have also issued passed for transporting the said felled trees. He transported 700 trees until 30.9.2004. While the timber of 300 trees

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