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Allahbad High Court
S.C.MANCHANDA
Ratna Sugar Mills Co. Ltd. - Appellant
Versus
State of U. P. - Respondent
Decided On : 11/09/1964
LARGE LAND HOLDINGS TAX ACT, 1957 - S. 2(15) - U.P. ZAMINDARI ABOLITION AND LAND REFORMS ACT, 1951 - SS. 143, 144, 146, 206 - SIRDAR'S RIGHT TO USE LAND FOR INDUSTRIAL PURPOSES - ASSESSMENT OF LARGE LAND HOLDINGS TAX - INTERPRETATION OF STATUTORY PROVISIONS.
Fact of the Case:
The petitioner, a sugar mill company, acquired land for industrial purposes, including setting up a paper and pulp factory. The Assessing Authority issued notices under S. 7(2) of the Large Land Holdings Tax Act, 1957 (L. L. H. T. Act) for assessment of tax on the land. The petitioner objected, claiming that the land was not chargeable to L. L. H. Tax as it was acquired for industrial purposes and did not fall within the definition of "land" under S. 2(15) of the L. L. H. T. Act. The Assessing Authority and the Commissioner held that the land in question was not chargeable to L. L. H. Tax, but the Board of Revenue reversed this decision, holding that the petitioner was liable to pay the tax as the land was sirdari and not bhumidhari, and a declaration for use of industrial purposes had not been obtained under S. 143 of the U.P. Zamindari Abolition and Land Reforms Act, 1951 (U.P. Act No. I of 1951).
Finding of the Court:
The Court held that the definition of "land" under S. 2(15) of the L. L. H. T. Act includes uncultivated land held by a land-holder as such, and that the only exception to this definition is land used for industrial purposes under S. 143 of the U.P. Act No. I of 1951. The Court further held that a sirdar, who is a type of landholder under the U.P. Act No. I of 1951, is entitled to exclusive possession of the land in his holding and to use it for any purpose connected with agriculture, but cannot use it for industrial or residential building purposes. The Court also held that the petitioner's application for a declaration under S. 143 of the U.P. Act No. I of 1951, which would have allowed the petitioner to use the land for industrial purposes, had been rejected by the Department and that order had become final.
Issues: 1. Whether the land acquired by the petitioner for industrial purposes was chargeable to L. L. H. Tax under the L. L. H. T. Act. 2. Whether a sirdar can escape the clutches of the L. L. H. T. Act by merely saying that the land was never used or intended to be used for agriculture or purposes connected with agriculture.
Ratio Decidendi: 1. The Court interpreted the definition of "land" under S. 2(15) of the L. L. H. T. Act and held that it includes uncultivated land held by a land-holder as such, and that the only exception to this definition is land used for industrial purposes under S. 143 of the U.P. Act No. I of 1951. 2. The Court interpreted Ss. 143, 144, and 206 of the U.P. Act No. I of 1951 and held that a sirdar is entitled to exclusive possession of the land in his holding and to use it for any purpose connected with agriculture, but cannot use it for industrial or residential building purposes. The Court also held that the petitioner's application for a declaration under S. 143 of the U.P. Act No. I of 1951, which would have allowed the petitioner to use the land for industrial purposes, had been rejected by the Department and that order had become final.
Final Decision: The Court dismissed the petitions filed by the petitioner, holding that the petitioner was liable to pay L. L. H. Tax on the land in question as it was sirdari and not bhumidhari, and a declaration for use of industrial purposes had not been obtained under S. 143 of the U.P. Act No. I of 1951.
2. The facts leading up to these petitions are these. M/s. Ratna Sugar Mills Company, the petitioner, acquired 44.94 acres of land in village Takha West, Tahsil Shahganj, district Jaunpur. Out of the aforesaid area 31.34 acres were purchased in 1933, 8.52 acres in 1936 and 5.8 acres in 1953 under the Land Acquisition Act and on this land the petitioner's Sugar Factory stands. In the year 1951 the petitioner acquired the land measuring 277.08 acres situate in village Argupur Kalan also in Tahsil Shahganj, district Jaunpur. According to the petitioner, the laud acquired which is the subject-matter of the dispute in tin's petition was for setting up a factory for the production of paper, pulp, etc. and for the said purpose the licence was granted by the Government of India. The letter from the Under Secretary to Government of India, dated the 31st July, 1961 was filed at the time of hearing in supersession of Annexure-'1' which was said to be the incorrect copy of that letter. According to the annexure now filed, the Under Secretary after referring the letter of the petitioner, dated the 10th July, 1961 stated that it had been decided to give the petitioner some more time for placing the order on indigenous paper plant machinery manufacturer in support of Industrial Licence No. L/24/1/46 CR(1)/61, dated 7-4-1946. The Department in its counter affidavit denies that the licence issued on the 19th January, 1961 was not for paper and pulp machinery but for power alcohol, etc. The licence, however, has not been filed.
3. For the assessment years 1365, 1366, 1367 and 1368 Fasli the Assessing Authority issued notices under S. 7(2) of the Large Land Holdings Tax Act, 1957, hereinafter referred to as the L. L. H. T, Act in respect of both the areas of land in village Takha West and village Argupur. The petitioner filed objections that both the lands were acquired for industrial purposes and they did not fall within the definition of "land" in S. 2(15) of the L. L. H. T. Act. The assessing Authority called for a report from the Tahsildar who reported on 27th February, 1961 that out of the total area of 42 acres of bhumidhari and 38.47 acres of sirdari, no portion was used for agriculture, horticulture or animal husbandry. According to the Department this report only related to the land in village Takha West. For the village Argupur Kalan the relevant report is that of the Tehsildar, dated 24th May, 1959. This report was based on spot enquiry. This stated that the village was under a consolidation scheme and, therefore, no regular partal had been done after 1362 Fasli. The area of 298 acres of land in village Argupur Kalan was said to have been taken on lease for growing sugarcane crop for the said purpose and the petitioner is recorded as sirdar-tenure-holder. Only a few acres of land have been brought under cultivation by trespassers.
4. By the assessment orders, dated 14th March, 1959 and 27th June, 1959, the Assessing Authority for the assessment years 1365 and 1366 Fasli, respectively, held that the land in village Takha West was not chargeable to L. L. H. Tax but only the land in village Argupur Kalan was assessable. Aggrieved by the said orders, the petitioner filed appeals before the Commissioner. On the 24th August, J959 the Tehsildar submitted a report in Case No. 1 of 1959 under S. 143 of the U.P. Zamindari Abolition and Laud Reforms Act, 1951 stating that "as regards Argupur Kalan the whole area is recorded as sirdari of Ratna Sugar Mills and they pay Rs. 1,495 as annual land revenue. It is recorded, in the Mills from before Zamindari Abolition and Mill Authorities continue to pay the
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