Andhra Pradesh H.C : The petitioner, a Government of India undertaking, is questioning the jurisdiction of the respondents to levy and collect the non-agricultural land assessment tax under the Andhra Pradesh Non-Agricultural Lands Assessment Tax Act, 1963 (Act 14 of 1963) (for short “the Act”).

K. RAMASWAMY, J. :

The petitioner, a Government of India undertaking, is questioning the jurisdiction of the respondents to levy and collect the non-agricultural land assessment tax under the Andhra Pradesh Non-Agricultural Lands Assessment Tax Act, 1963 (Act 14 of 1963) (for short “the Act”).

The facts not in dispute are that the State Government, acting through its Secretary, Industries Department, at its meeting held on 26th June, 1969, authorised the establishment of the petitioner industry and allotted 500 acres of land for project purpose which included 330 acres of land. The petitioner was put in possession. The Government agreed to make available the land free of cost originally. But, thereafter, they asked the petitioner to make good Rs. 10 lakhs incurred towards additional cost. Accordingly, the petitioner has been in possession of 330 acres of land. This land is still registered in the Revenue records as Government “poramboke” and the title to the land still vests in the Government. The interest therein was not transferred to the company. The company is continuing with permissive possession on behalf of the State Government. It is either by lease or otherwise. Then, the third respondent in exercise of the power under s. 3 of the Act levied a sum of Rs. 8,67,765.96 towards non-agricultural land tax for Faslis 1389 to 1393 and also imposed an additional sum of Rs. 1,35,380.70 for Fasli 1394, i.e., up to 9th Feb., 1985. Assailing the jurisdiction thereof, the present writ petition has been filed.

The contention of Sri P. L. N. Sarma, learned counsel for the petitioner, is that the impost of the tax is under s. 10 of the Act. The liability is fastened on the owner or the lessee. The recovery is initially to be made from the owner. In case the owner is not available, then it can be recovered from the person in occupation under s. 10. But s. 12 gives exemption to certain lands, namely, lands owned by the State Government or the Central Government. Therefore, since the land is owned by the State Government and the petitioner is put in permissive possession for a public purpose, namely, establishment of zinc smelting industry, there is no liability fastened under the Act on the petitioner and thereby the assessment is without authority of law.

The respondents have resisted the contention. The learned Government Pleader has argued that since the company has been in possession of the land, the liability is incurred by operation of s. 10. Therefore, the assessment is perfectly valid and it is within jurisdiction. As regards the quantum, it is stated that a revision has been filed for Faslis 1389 to 1393 which is pending. The appeal for Fasli 1394 was filed but was withdrawn. Therefore, it is premature to go into the merits.

The only question that arises for consideration is whether the authorities have power to levy non-agricultural land assessment tax under the Act. s. 2(1) defines “occupier ” which reads thus: “`occupier’ includes(1) any person for the time being paying or liable to pay to the owner rent or any portion of the rent, for the non-agricultural land or for the structure constructed on such land, or part of such land or structure, in respect of which the word is used, or damages on account of the occupation of such land, structure or part ; and (2) a rent-free occupant.”

6. Sec. 2(j) defines “owner” and reads thus: “‘owner’ includes any person for the time being receiving or entitled to receive, whether on his own account or as agent, trustee, guardian, manager or receiver, for another person, or for any religious, educational or charitable purpose, rent or profits for the non-agricultural land or for the structure constructed on such land, in respect of which the word is used and also includes in respect of the land owned by the State Government or the Central Government, (i) a lessee, if the land has been leased out by that Government for any commercial, industrial or other non-agricultural purpose, and (ii) not necessary, hence omitted.”Therefore, owner includes a lessee. The person answering the description of ownership is entitled to receive, or for the time being is receiving as agent, trustee, guardian, receiver in a fiduciary capacity or for religious/ educational or charitable purpose rents or profits or damages for use and occupation of non-agricultural land. The petitioner is neither an owner nor a lessee. Therefore, he does not become an owner within the meaning of s. 2(j) of the Act. Sec. 3 is the charging section which authorises levy and assessment on non-agricultural lands in any local area with the population specified in column 1 of the Schedule and to be collected by the Government for each Fasli year from the owner of such land on making an assessment in the manner indicated for the purpose for which the land is used in the relevant columns 2, 3 or 4, as the case may be. Sec. 10 gives power for recovery of the land tax from the occupier of the non-agricultural land and reads thus : “10. Recovery from occupier of non-agricultural land in certain cases. (1) Where the owner of any non-agricultural land is himself not the occupier thereof and is in default of payment of the assessment, such assessment may be recovered from the occupier of such land. (2) not necessary, hence omitted.”

9. Therefore, by the operation of s. 3 of the Act, the liability is primarily on the owner to pay the assessed non- agricultural land tax. Where the owner himself is not the occupier but third parties are in occupation, then the statute authorises recovery of such non-agricultural land tax from the occupier and reimbursement by the owner has been adumbrated under sub-s. (2) thereof. Sec. 12 states certain lands to which the Act is not to apply. “12. Act not to apply to certain lands.—Nothing in this Act shall apply to . ……. (b) land owned by the State Government or the Central Government other than (i) land leased out for any commercial, industrial or other non- agricultural purpose ; or (ii) land vested in a local authority and used for any commercial, industrial or other non- agricultural purpose deriving income therefrom.”

Therefore, the lands owned by the State or the Central Government are totally exempted. But the liability to pay non-agricultural land tax even in respect thereof is fastened only in case the land is leased out for any commercial, industrial or other non-agricultural purpose or the land is vested in the local authority and is used for the aforesaid purpose and the local authority is deriving income therefrom. We are not concerned with cls. 1 and 2 for the reason that it is not the case that the State Government has leased out the land to the petitioner for any commercial or industrial or any other non-agricultural purpose and that it is deriving any income therefrom. Therefore, the land belonging to the State Government was made over to the petitioner for the establishment of the zinc smelting industry in their lands but the ownership continues to be vested in the State Government and in the absence of any transfer of interest therein to the petitioner, the petitioner cannot be held to be the owner of the land though he is in occupation of 330 acres of land. Therefore, the charging s. 3 does not apply to the case of the petitioner. Hence, the levy and assessment of the exempted land by operation of s. 12(b) is without authority and, therefore, the impost of levy of tax is clearly without authority of law.

The writ petition is, accordingly, allowed. No costs. Advocate’s fee Rs. 350.

[Citation :182 ITR 456]