Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12
PETITIONER:
SAROJINI TEA CO. (P) LTD
Vs.
RESPONDENT:
COLLECTOR OF DIBRUGARH, ASSAM AND ANR
DATE OF JUDGMENT24/01/1992
BENCH:
RAMASWAMY, K.
BENCH:
RAMASWAMY, K.
KULDIP SINGH (J)
CITATION:
1992 SCR Supl. (2) 25 1993 SCC Supl. (4) 632
1992 SCALE (3)70
ACT:
Assam Taxation of Ceiling on Land Holdings Act, 1956
(as amended by Assam Act VIII of 1971):
Section 12-Land Ceiling-Excess land-Compensation-
Computation of: ‘Annual Land Revenue’-Whether includes
‘surcharge’on land revenue and ‘local rate’ payable under
Assam Land Revenue and Land (Surcharge) Act, 1970 and Local
Rates Regulation, 1879: Belated appeal-Condonation of
delay-Whether provisions of Limitation Act, 1963 would apply.
HEADNOTE:
The appellant, a tea company, whose land was declared
excess under the Assam Fixation of Ceiling on Land Holdings
Act, 1956 as amended by Assam Act, VIII of 1971, was awarded
compensation, equal to 50 times of the annual land revenue
of the excess land as provided under section 12 of the Act.
However, the compensation was assessed excluding the
surcharge on land revenue and the local rate payable in
respect of the land.
On appeal by the Company, the District Judge enhanced
the amount of compensation by including the surcharge on
land revenue as well as the local rate as part of the annual
land revenue, against which respondent No. 1 filed a writ
petition before the High Court.
The High Court allowed the writ petition holding that
the expression ‘full rate of annual land revenue’ meant only
the revenue assessed on the land as such and not the local
rates leviable under the Local Rates Regulation, 1879 nor
the surcharge on land revenue levied under the Assam Land
Revenue and Land (Surcharge) Act, 1970.
Aggrieved, the appellant preferred the appeal by
special leave to this Court.
On the question : whether the surcharge on land
revenue levied under the Assam Land Revenue and Land
(Surcharge) Act, 1970
372
and the local rate payable under the Local Rates
Regulations, 1879 can be held to be land revenue,
Allowing the appeal in part, this Court,
HELD: 1.1 The expression ‘surcharge’ in the context of
taxation means an additional imposition which results in
enhancement of the tax and the nature of the additional
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12
imposition is the same as the tax on which it is imposed as
surcharge. [p.381 B-C]
Bisra Stone Lime Co. Ltd. & Anr. etc. v. Orissa State
Electricity Board & Anr., [1976] 2 SCR 307; Commissioner of
Income Tax, Kerala v. K. Srinivasan, [1972] 2 SCR 309;
Vishwesha Thirthaswamiar & Ors. v. State of Mysore & Anr.,
[1972] 1 SCR 137, relied on.
C.V. Rajagopalachariar v. State of Madras, AIR 1960
Mad. 543, referred to.
Shorter Oxford English Dictionary, referred to.
1.2 A surcharge on land revenue is an enhancement of
the land revenue to the extent of the imposition of
surcharge. The nature of such imposition is the same viz.
land revenue on which it is a surcharge. [pp. 381 C-D]
1.3 The surcharge payable under the Assam Land Revenue
and Land (Surcharge) Act, 1970 constitutes land revenue and
has to be taken into account for assessing compensation
under section 12 of the Assam Fixation of Ceiling on Land
Holdings Act, 1956. [p.385 C-D]
1.4 In view of the provisions of section 12 of the
Assam Ceiling Act, the measure for assessment of
compensation is ‘the full rate of annual land revenue’
payable for the land acquired. [pp.377H; 378A]
1.5 The use of the words "full rate of" before the
words "annual land revenue payable for the land" in s. 12
(a) (1) (i) of the Ceiling Act does not have a bearing upon
the nature of the levy, which is land revenue. The said
words have reference to the quantum of the levy which would
form the basis for assessment of compensation and do not
render inapplicable the principles that imposition of
surcharge on land revenue in only an enbancement of the land
revenue and nature of the said imposition is land revenue.
Vishwesha Thirthaswamiar & Ors. v. State of Mysore & Anr.,
[1972] 1 SCR 137, relied on.[P,382 D-E]
373
Benoy Mazumdar v. Deputy Commissioner, Cochin & Ors.,
(Civil Rule No. 28 of 1977 decided on 28.9.1981 by Gauhati
High Court), inapplicable.
1.6 The provisions for assessment of surcharge
contained in the Surcharge Act indicate that while land
revenue is assessed in one settlement and continues till the
succeeding settlement, surcharge having been imposed during
the currency of the settlement, is required to be assesed.
The need for assessment arises on account of the fact that
surcharge is not leviable on a person holding land measuring
less than 10 Bighas and, therefore, before making a demand
for surcharge it is necessary to determine whether a person
from whom demand is made is liable under the provisions of
the Surcharge Act and is not entitled to claim exemption
from such levy. [pp.382 GH; 383 A]
1.7 The fact that the person holding land less than 10
Bighas though liable to pay land revenue, is not liable to
pay surcharge under the Surcharge Act, does not alter the
character and nature of the levy. [p.383B]
1.8 The High Court was not right in holding that
surcharge on land revenue levied under the Surcharge Act is
different and distinct in character from land revenue and
does not fall within the ambit of annual land revenue under
section 12 of the Ceiling Act; and to this extent the
judgment of the High Court is liable to be set aside. [pp.
382 CD; 385 C]
2.1 Local rate leviable under the Local Rates
Regulation is, a levy which is distinct and different
in nature from land revenue.
[pp. 384 H; 385 A]
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12
2.2 The expression ‘rate’ is generally used in the
same sense as the expression ‘cess’. Section 4 of the Local
Rates Regulation also indicates that the local rate is in
the nature of cess because in section 4 it has been provided
that when a rate is imposed on any land under this
Regulation any cess now leviable on such land for any of the
purposes mentioned in Section 12, shall cease to be levied
on such land or if such cess be maintained, a corresponding
diminuition shall be made for such rate. [p.384 F-G]
Guruswamy & Co. v. State of Mysore, [1967] 1 SCR 548;
India Cement Ltd. & Ors. v. State of Tamil Nadu & Ors.,
[1990] 1 SCC 12 followed.
374
2.3 The amount realised by way of local rate under the
Regulations is to be used for incurring expenditure for the
relief and prevention of famine and for local purposes.
Land revenue, on the other hand, forms part of general
revenue of the State and is not limited for a particular
purpose. [p.384 G-H]
2.4 The High Court has rightly held that local rate
payable under the Local Rate Regulations, 1879 is an
imposition which is distinct in character from land revenue
and cannot be regarded as land revenue or tax in lieu of
land revenue. It cannot, therefore, be taken into
consideration for assessing compensation under Section 12 of
the Ceiling Act. [p.385 B]
3. Since there is nothing in the Ceiling Act which
excludes the applicability of sections 4 to 24 of the
Limitation Act, 1963 to proceedings under the Ceiling Act,
the said provisions are applicable to such proceedings in
view of sub-section (2) of section 29 of the Limitation
Act, 1963 and the District Judge was competent to condone
the delay in the filing of the appeal. In the exercise of
jurisdiction under Article 136 of the Constitution, it
would not be appropriate to interfere with the said
exercise of discretion by the District Judge. [pp.376 G-H;
377 A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6650 of
1983.
From the Judgment and Order dated 1.6.1983 of the
Gauhati High Court in Civil Rule No. 876 of 1981.
A.K. Ganguli, Vijay Hansaria, Sunil Kumar Jain, A.K.
Lawania, Suresh Gupta and Rudra Kahlon for the Appellant.
A.K. Mazumdar, S.K. Nandy and P. Goswami for the
Respondents.
The Judgment of the Court was delivered by
S.C.AGRAWAL, J. This appeal by special leave is
directed against the judgment and order dated June 1, 1983
of the Gauhati High Court in Civil Rule No. 876 of 1981. It
raises for consideration the question whether the expression
‘annual land revenue’ in Section 12 of the Assam Fixation of
Ceiling on Land Holdings Act, 1956 (hereinafter referred to
as ‘the Ceiling Act’) would include ‘surcharge’ payable
under the Assam Land Revenue and Land (Surcharge) Act, 1970
(hereinafter referred to as ‘the
375
Surcharge Act’) and the ’local rate’ payable under the Assam
Local Rates Regulation, 1979 (hereinafter referred to as
’the Local Rates Regulation’).
The Ceiling Act was enacted by the Assam State
Legislature to make provision for imposition of limits on
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12
the areas of land that may be held by a person. Section 4
of the Act prescribes the ceiling on the existing land.
Under s.5 a person holding land in excess of the ceiling is
required to submit a return and under s. 7 (I), the
Collector prepares a draft statement which shows the lands
in excess of the limits fixed under s. 4. The said draft
statement is published under sub-section (2) of S. 7 for the
purpose of submitting objections. After considering the
said oobjections, the draft statement is made final under
sub-section (4) of S.7; and with effect from the date on
which the final statement is signed by the Collector, all
rights, title and interest of the person or persons whose
lands are shown in excess in such statement, stand
transferred to and vested in the State Government, free from
all encumbrances created by such person. S. 12 makes
provision for payment of compensation for the land which
stands transferred to and vested in the State Government.
Under clause (a) of S. 12 where the person from whom excess
land has been acquired, held it as the owner thereof, the
compensation, that is payable is, in the case of fallow
land, an amount equal to 25 times the full rate of the
annual land revenue for such land and, in case of any other
land, an amount equal to 50 times such annual land revenue.
The Ceiling Act, as originally enacted, did not apply
to tea estates. It was amended by Assam Act VIII of 1971
which came into force on March 27, 1971 whereby sub-section
(2) of S. 4 was amended and the Ceiling Act was made
applicable to tea plantations and land in excess of such
land as has been used for special cultivation of tea and the
purposes ancillary thereto, was brought within the ceiling.
The apellant is a tea company. Land measuring 1650
bighas, 4 Katthas and 5 lathhas belonging to it was declared
as excess land under the Ceiling Act on September 9, 1975
by the Collecter, Dibrugarh, respondent No. I herein, and he
also took over possession of the same. A sum of Rs. 71,811
was assessed as the compensation payable to the appellant
for the said land under S. 12 of the Ceiling Act. The said
figure was arrived at by excluding the surcharge and the
local rate payable in respect of the land. The appellant
filed an appeal against the said order before the District
Judge, Dibrugarh, who by his order dated July 1, 1981,
enhanced the amount of compensation by including the
surcharge as well as the local rate as part of the annual
land revenue. Respondent No. 1 challenged the said order of
the District Judge by moving a writ petition under
376
Articles 226 and 227 of the Constitution before the High
Court, which was allowed by the High Court by its judgment
dated June 1, 1983 on the view that the expression ’full
rate of annual land revenue’ meant only the revenue assessed
on the land as such and the Legislature by enacting S. 12 of
the Ceiling Act did not have in their mind the local rates
which were already leviable under the Local Rates Regultion,
at the time of enacting s. 12 of the Act and the surcharge
on the land revenue which was subsequently levied under the
Surcharge Act. The said decision of the High Court was
based on its earlier judgment dated December 21, 1982 in
Civil Rule No. 194 of 1982 wherein the High Court had fully
considered this question and had arrived at the aforesaid
conclusion. Feeling aggrieved by the aforesaid judgment of
the High Court, the appellant has filed this appeal.
Before we proceed to deal with the submissions of the
learned counsel for the appellant, we may deal with the
preliminary objection that has been raised by Mr. Mazumdar,
the learned counsel for the respondents. Mr Mazumdar has
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12
urged that the appeal filed by the appellant before the
District Judge, Dibrugarh, against the order for assessment
of compensation u/s. 12 of the Ceiling Act, was barred by
limitation and that the District Judge was in error
condoning the delay in filing the said apppeal. In this
regard, Mr. Mazumdar has submitted that under the law a
period of 30 days is prescribed for filing an appeal against
an order under s. 12 and that in the instant case the final
order granting compensation was passed by the State
Government on February 8, 1979 and the apeal was filed on
September 19, 1979, long after the stipulated period of
limitation. On behalf of the appellant, it was submitted
before the District Judge that no order was communicated to
the appellant and that the Collector by his order dated
February 17, 1979 directed the appellant to collect the
amount of Rs. 71, 811 and on request the company got a copy
of the sanctioning letter on September 6, 1979 only and thus
the appellant became aware of the sanction order only on
September 6, 1979 and it preferred an appeal on September
19, 1979 which was within limitation. The District Judge
has observed that the Government sanction of compensation
was communicated by the Collector vide his letter dated
February 17, 1979 which was duly acknowledged by the
appellant vide its letter dated March 16, 1979 and that the
appellant could have preferred the appeal by that time and
that the appeal was filed beyond the period of limitation.
But taking into consideration the peculiar circumstances of
the proceeding of the principles of natural justice and fair
play, the District Judge condoned the delay in the filing of
the appeal. Since there is nothing in the Celling Act which
excludes the applicability of ss. 4 to 24 of the Limitation
Act, 1963, to proceeding under the Ceiling
377
Act, the said provisions are applicable to such proceedings
in view of sub-section (2) of s.29 of the Limitation Act,
1963 and the District Judge was competent to condone the
delay in the filing of the appeal. On a consideration of
the facts and circumstances of the case, the District Judge
considered it proper in the interest of justice to condone
the delay. In the exercise of our jurisdiction under
Article 136 of the Constitution, we do not consider it
appropriate to interfere with the said exercise of
discretion by the District Judge. The preliminary objection
raised by the learned counsel for the respondents, is
therefore, rejected.
The main question that arises for consideration in this
appeal relates to assessment of compensation u/s. 12 of the
Ceiling Act. The relevant provisions of the said section
are as under:-
"12. where any land is transferred to and vested in
the State Government under Sub-s.(4) of s.7 of the
Act, there shall be paid compensation which shall
be determined by the Collector or any other officer
authorised by the State Government in the manner
and in accordance with the principles laid down
below, namely:
(a) (1) where the person from whom the excess land
has been acquired held it as the owner thereof, the
compensation (inclusive of the value of any tenancy
right) shall be-
(i) in case of fallow land, an amount equal to 25
times the full rate of annual land revenue payable
for such land; and
(ii) in case of other land, inclusive of the value
of trees, an amount equal to 50 times such annual
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12
land revenue;
xx xx xx xx xx xx xx xx xx
"Provided that where the land is revenue free, or
assessed to land revenue at a concessional rate, or
where it is not assessed to land revenue under the
provisions of the Assam Land and Revenue
Regulations, 1886 or of the Assam Land Revenue Re-
assessment Act, 1936, the compensation shall be
determined on the basis of annual land revenue
assessable under the provisions of the afore-
mentioned Acts on similar, full revenue-paying land
situated nearest to it."
From a perusal of the aforesaid provisions, it would
appear that the measure for assessment of compensation is
‘the full rate of annual land
378
revenue’ payable for the land acquired. The expression
‘land revenue’ is not defined in the Ceiling Act.
Assessment and payment of land revenue in Assam is governed
by the Assam Land and Revenue Regulation, 1886 (hereinafter
referred to as ‘the Revenue Regulation’). Clause (3) of s.3
of the Revenue Regulation defined the expression ‘land
revenue’ in the following terms:-
"3 (e) "land revenue" means any revenue assessed by
the State Government on an estate, and includes any
tax assessed in lieu of land revenue;"
By the Assam Land Revenue Re-assessment Act, 1936,
enacted for the purpose of regulating reassessment of land
revenue in Assam, the land revenue was re-assessed.
Thereafter, the Assam State Legislature enacted the
Surcharge Act in 1970 to provide for the levy of surcharge
on land revenue and rent assessed in the State of Assam. In
sub-section (1) of s.2 of the said Act the expression ‘land
revenue’ is defined in the same terms as in s.3 (e) of the
Revenue Regulation. In s. 3 the following provision is made
for the levy of surcharge:-
"3. Levy of Surcharge. Every person holding land
measuring 10 (ten) bighas or more directly under
the State Government shall be liable to pay a
surcharge on land revenue or rent, as the case may
be, at the rate of 30 per cent of the land revenue
or rent of all classes of holdings in addition to
the land revenue or the rent payable by him."
Section 4 provides for provisional assessment of
surcharge and issue of notice to the person or persons
concerned. Section 5 provides for filing of objections and
making of assessment after giving an opportunity of hearing.
Sec. 7 makes the following provision for recovery of
surcharge:-
"7. Surcharge recoverable as arrear of land
revenue. The surcharge assessed under this Act
shall be payable along with the land revenue or the
rent, as the case may be, in the manner prescribed
and any arrear of any surcharge shall be realisable
as an arrear of land revenue."
Since the question for consideration is whether the
surcharge levied under the Surcharge Act can be held to be
land revenue, it is necessary to examine the nature of the
said levy. According to the Shorter Oxford English
Dictionary the word ‘surcharge’ stands for an additional or
extra
379
charge or payment. In Bisra Stone Lime Co. Ltd & Anr. etc.
v. Orissa State Electricity Board & Anr. [1976] 2 SCR 307
after referring to the said definition, this Court had
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12
observed:
"Surcharge is thus a superadded charge, a charge
over and above the usual or current dues." (p.310-
11)
In that case the Orissa State Electricity Board had
imposed a uniform surcharge of 10% on the power tariff. It
was argued that surcharge was unkown to the provisions of
the Electricity (Supply) Act, 1948 and the Electricity Board
had no power under the said Act to levy a surcharge. This
Court negatived the said contention and in that context,
after expalining the meaning of the expression ‘surcharge’,
it was observed:
"Although, therefore, in the present case it is in
the form of surcharge, it is in substance an
addition to the stipulated rates of tariff. The
nomenclature, therefore, does not alter the
position. Enhancement of the rates by way of
surcharge is well within the power of the Board to
fix or revise the rates of tariff under the
provisions of the Act" (P. 311)
Similarly, in Commissioner of Income Tax, Kerala v.
K.Srinivasan, [1972] 2 SCR 309, a question arose whether the
term ‘income-tax’ as employed in s. 2 of the Finance Act,
1964, would include surcharge and addtional surcharge
whenever provided. This Court while tracing the concept of
surcharge in taxation laws of our country, has observed:
"The power to increase federal tax by surcharge by
the federal legislature was recommended for the
first time in the report of the committee on Indian
Constitutional Reforms, Vol. 1 Part I. From para
141 of the proposals it appears that the word
"surcharge" was used compendiously for the special
addition to taxes on income imposed in September,
1931. The Government of India Act 1935, Part VII,
contained provisions relating to finance, property,
contracts and suits. Sections 137 and 138 in
Chapter 1 headed "finance" provided for levy and
collection of certain succession duties, stamp
duties, terminal tax, taxes on fares and freights,
and taxes on income respectively. In the proviso
to s. 137 the federal legislature was empowered to
increase at any time any of the duites of taxes
leviable under that section by a surcharge for
federal purposes and the whole proceeds of any such
surcharge were to form part of the revenue of the
federation. Sub-section (3) of s.138 which dealt
with taxes on income related to imposition of a
surcharge." (P.312)
380
It was further observed at page 315 of the report:
"The meaning of the word "surcharge" as given in
the Webster’s New International Dictionary includes
among others "to charge (one) too much or in
addition..." also "additional tax". Thus the
meaning of surcharge is to charge in addition or to
subject to an additional or extra charge".
In C.V. Rajagopalachariar v. State of Madras, AIR 1960
Mad. 543, in the context of the Madras Land Revenue
Surcharge Act, 1954 and the Madras Land Revenue (Additional
Surcharge) Act, 1955, it has been laid down:-
"The word "surcharge" implies an excess or
additional burden or amount of money charged.
Therefore, a surcharge of land revenue would also
partake the character of land revenue and should be
deemed to be an additional land revenue. Although
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12
S.4 of the two anactments referred to above only
deems it to be recoverable as a land revenue it is
manifest that the surcharge would be a part of the
land revenue. The effect of the two Acts would be,
therefore, to increase the land revenue payable by
a land holder to the extent of the surcharge
levied. If therefore, a surcharge levy has been
made, the Government would be enabled to collect a
higher amount by way of land revenue from a
ryotwari pattadar than what was warranted by the
terms of the previous ryotwari settlement."
The said decision was approved by this Court in
Vishwesha Thirthaswamiar & Ors. v. State of Mysore & Anr,
[1972] 1 SCR 137. In that case this Court was considering
the question whether the Mysore State Legislature was
competent to enact the Mysore Land Revenue (Surcharge) Act,
1961. After examining the nature of the levy the Mysore
High Court had held that the so-called land revenue
surcharge was but an additional imposition of land revenue
or a land tax and fell either within Entry 45 or Entry 49 of
the State List. This Court agreeing with the view of the
High Court held that the surcharge fell squarely within
Entry 45 of the State List, namely, land revenue. It was
observed:-
"The legislation is but an enhancement of the land
revenue by imposition of surcharge and it cannot be
called a tax on land revenue, as contended by the
learned counsel for the appellant. It is a common
practice among the Indian Legislatures to impose
surcharge on existing tax. Even art 271 of the
Constitution speaks of a surcharge for the purpose
of the Union being
381
levied by way of increase in the duties or taxes
mentioned in art, 269 and art. 270" (p.140)
"It seems to us that the Act clearly levies land
revenue although it is by way of surcharge on the
existing land revenue. If this is so, the fact
that the surcharge was raised to 100% of the land
revenue on the wet and garden land and 75% of the
land revenue in respect of dry lands, subject to
some minor exceptions, does not change the nature
of the imposition." (p. 141)
From the aforesaid decisions, it is amply clear that
the expression ‘surcharge’ in the context of taxation means
an additional imposition which results in enhancement of the
tax and the nature of the additional imposition is the same
as the tax on whcih it is imposed as surcharge. A surcharge
on land revenue is an enhancement of the land revenue to
the extent of the imposition of surcharge. The nature of
such imposition is the same viz., land revenue on which it
is a surhcarge.
The learned Judges of the High Court have taken note of
the decisions of this Court referred to above and were of
the view that if they were to interpret only the expression
‘land revenue’, there would not be any difficulty. They have
observed that in the instant case they were interpreting the
expression "full rate of annual land revenue payable for the
land" in S. 12 (a) (1) of the Ceiling Act. According to the
learned Judges, the expression "full rate of land revenues"
has to be understood in conformity with the Assam Land
Revenue Regulation where different classes of estates are
often referred to in terms of revenue, for example, khiraj
or full revenue paying estates and Nisf-khiraj or half
revenue paying estates. The learned Judges have referred to
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12
the provisions of the Assam Land Revenue Reassessment Act,
1936 which prescribes the procedure for reassessment and how
the rates of revenue are to be fixed, as well as the Assam
Assessment of Revenue Free Waste land Grant Act, 1948 and
have observed that the rate of revenue has been understood
in the sense of revenue assessed on land. The learned
Judges have also taken note of the provisions of the
Surcharge Act and have pointed out that the Surcharge Act
makes provision for assessment of surcharge in the
prescribed procedure whereas in the case of land revenue, it
is assessed in one settlement and continues till the
succeeding settlement; and under S.3 of the Surcharge Act a
person holding land measuring less than 10 Bighas, though
liable to pay land revenue, is not liable to pay surcharge
on his land revenue. The learned Judges have also laid
emphasis on the expression ‘in addition to the land revenue’
used in S.3 of the Surcharge Act and the expression ‘along
with land revenue’ in S.7 of the Surcharge Act.
382
Taking into account the features referred to above, the
learned Judges of the High Court have held that the
Legislature clearly distinguished land revenue and
surcharge. The learned Judges also referred to the decision
of a Full Bench of five Judges of the High Court in Benoy
Mazumdar v. Deputy Commissioner, Cochin & Ors (Civil Rule
No.28 of 1977 decided on September 28, 1981) wherein the
court was dealing with the constitutional validity of
S.7(1A) of the Assam Land (Requisition and Acquisition) Act,
1948, and had to deal with the question of compensation in
terms of multiple of annual land revenue. After mentioning
the various decisions that were referred to in the said
decision, the learned Judges have observed that in those
cases the annual land revenue was taken to mean the land
revenue as assessed on land and nowhere the idea of
surcharge entered into that concept.
With great respect to the learned Judges of the High
Court, we are unable to subscribe to this view. We do not
find any sound basis for holding that surcharge on land
revenue levied under the Surcharge Act is different and
distinct in character from land revenue and does not fall
within the ambit of annual land revenue under section 12 of
the Ceiling Act. The use of the words "full rate of" before
the words "annual land revenue payable for the land" in
Section 12(a) (1) (i) of the Ceiling Act do not, in our
opinion, have a bearing upon the nature of the levy, which
is land revenue. The said words have reference to the
quantum of the levy which would form the basis for
assessment of compensation. We find it difficult to
appreciate how these words render inapplicable the
principles laid down by this Court in Vishwesha
Thirthaswamiar’s case (supra), that imposition of surcharge
on land revenue is only an enhancement of the land revenue
and nature of the said imposition is land revenue.
We do not consider that the words "in addition to the
land revenue" in S.3 and the words"along with land revenue"
in S.7 of the Surcharge Act imply that surcharge levied
under the said Act is levy which is distinct in nature from
land revenue. These expressions only mean that surcharge @
30% of the land revenue leviable under S.3 of the Surcharge
Act is over and above the amount that is payable as land
revenue and in that sense it is an additional charge or
imposition which is payable by way of surcharge on land
revenue. The fact that the said sum is to be paid and can
be recovered along with the land revenue also does not alter
the nature of the levy if it is otherwise found to be of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12
same character as land revenue. As regards the provisions
for assessment of surcharge contained in the Surcharge Act
for assessment, we find that while land revenue is assessed
in one settlement and continues till the succeeding
settlement, surcharge having been imposed during the
currency of the settle-
383
ment, is required to be assessed. The need for assessment
arises on account of the fact that surcharge is not leviable
on a person holding land measuring less than 10 Bighas and
therefore, before making a demand for surcharge it is
necessary to determine whether a person from whom demand is
made is liable under the provisions of the Surcharge Act and
is not entitled to claim exemption from such levy. The fact
that the persons holding land less than 10 Bighas though
liable to pay land revenue, are not liable to pay surcharge
under the Surcharge Act, does not, in our view, alter the
character and nature of the levy. Benoy Mazumdar’s case
(supra) and the cases referred to therein, have no bearing
because in those cases the question whether surcharge is to
be included in land revenue, was not in issue and has not
been considered.
For the reasons aforesaid, we are unable to endorse the
view of the High Court that surcharge on land revenue
payable under the Surcharge Act is not land revenue but a
levy which is distinct from land revenue. In consonance
with the law laid down by this Court in Vishwesha
Thirthaswamiar’s case (supra), it must be held that the
surcharge on land revenue levied under the Surcharge Act,
being an enhancement of the land revenue, is part of the
land revenue and has to be treated as such for the purpose
of assessing compensation under s. 12 of the Ceiling Act.
We may now examine whether the local rate payable under
the Local Rates Regulation can be regarded as land revenue.
In the Preamble to the Local Rates Regulation, the said
Regulation has been made to provide "for the levy on land
of rates to be applied to defray the expenditure incurred
and to be incurred for the relief and prevention of famine
and for local purposes". In S.1 of the Regulation it is
prescribed that the said Regulation shall come into force in
such districts, in such parts thereof and on such dates, as
the State Government may by notification in the Official
Gazette, from time to time, direct. Section 3 of the
Regulation prescribes the rates assessable and reads as
under:-
"3. Rates Assessable. All land shall be liable to
a levy at the rate of twenty-five paise for every
rupee of the anuual value of the land in addition
to the land-revenue and local cesses (if any)
assessed thereon".
Sec.4 which deals with the effect of imposition of land
rates on cess now leviable provides as follows:-
"4. Effect of imposition of land rate on cess now
leviable. When a rate is imposed on any land under
this Regulation, any cess now leviable on such land
for any of the purposes mentioned in S.12 shall
cease to be levied on such land; or if such
384
cess be maintained, a corresponding diminution
shall be made in such rate."
Section 5 contains the following provision with regard
to recovery of rates:
"5. Recovery of rate. All sums due on account of a
rate imposed on any land under this Regulation
shall be payable by the land-holder and shall be
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12
recoverable as if they were arrears of land revenue
due on such land.
When such land is held by two or more land-holders
such land-holders shall be jointly and severally
liable for such sums".
In Guruswamy & Co. v. State of Mysore, [1967] 1 SCR
548; Hidayatullah J., as the learned Chief Justice then was,
has observed as under:
"The word ‘cess’ is used in Ireland and is still in
use in India although the word rate has replaced it
in England. It means a tax and is generally used
when the levy is for some special administrative
expense which the name (health cess, education
cess, road cess etc.) indicates. When levied as an
increment to an existing tax, the name matters for
the validity of the cess must be judged of in the
same way as the validity of the tax to which it is
an increment".
In India Cement Ltd. & Ors. v. State of Tamil Nadu &
Ors. [1990] 1 SCC 12; these observations have been quoted
and it has been mentioned that though they were made in the
dissenting judgement, there was no dissent on this aspect of
the matter.
From the aforesaid observations, it would appear that
the expression ‘rate’ is generally used in the same as the
expression ‘cess’. S.4 of the Local Rates Regulation also
indicates that the local rate which is imposed by the Local
Rates Regulation in the nature of cess because in S.4 it has
been provided that when a rate is imposed on any land under
this Regulations any cess now leviable on such land for any
of the purposes mentioned in S.12, shall cease to be levied
on such land or if such cess be maintained, a corresponding
diminution shall be made for such rate. Moreover, as
indicated in the Preamble, the amount realised by way of
local rate is to be used for incurring expenditure for the
relief and prevention of famine and for local purposes.
Land revenue, on the other hand, forms part of general
revenue of the State and is not limited for a particular
purpose. Local rate leviable under the Local Rates
Regulation
385
is, therefore, a levy which is distinct and different in
nature from land revenue. S.3 only provides a convenient
mode of prescribing the rate for levy of local rate by
fixing it as a proportion, namely, 25% of the annual value
of the land and S.5 only provides the mode of recovery of
the rate as arrear of land revenue. The said provisions do
not have the effect of equating the local rate with land
revenue or making it a tax in lieu of land revenue.
The High Court has rightly held that local rate payable
under the Local Rate Regulation is an imposition which is
distinct in character from land revenue and cannot be regard
as land revenue or tax in lieu of land revenue. It cannot,
therefore, be taken into consideration for assessing
compensation under S.12 of the Ceiling Act.
The appeal is, therefore, partly allowed and the
judgement of the High Court to the extent it hold the
‘Surcharge’ is a levy different and distinct from land
revenue is set aside and it is held that surcharge payable
under the Assam Land Revenue and Land (Surcharge) Act, 1970
constitutes land revenue and had to be taken into account
for assessing compensation under S.12 of the Assam Fixation
of Ceiling on Land Holdings Act, 1956. The view of the High
Court that the local rate payable under the Local Rates
Regulation 1879, is to be excluded for the purpose of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12
assessing such compensation, is upheld. The order of the
High Court setting aside the judgement and order of the
District Judge, dated July 1, 1981 in Misc. Appeal No.5 of
1979 is maintained. The matter will go back to the District
Judge, Dibrugarh, for re-determination of the compensation
payable to the appellant in Misc. Appeal No.5 of 1979 in
accordance with law. The parties are left to bear their own
costs.
R.P Appeal partly allowed.
386