Writ Petition No.773 of 2001

25th July, 2001

Petitioner Counsel: Mr.VIRAG TULZAPURKAR,DESAI DOIJODE , PATHERPHEKAR
Respondent Counsel: Mr.S.ANEY , Mr.PRADEEP JADHAV

Cases Cited:
The Tata Engineering & Locomotive Co. Ltd. Vs. The Gram Panchayat, Pimpri Waghere, AIR 1976 SC 2463 [Para 16]
Pali Devi Vs. Chairman, Managing Committee, AIR 1996 SC 1589 [Para 16]
Kanai Lal Sur vs. Paramnidhi Sadhukhan, AIR 1957 SC 907 [Para 17]
A.V.Fernandez vs. The State of Kerala, AIR 1957 SC 657 [Para 17]
Inland Revenue Commrs. vs. Duke of West-minister, 1936 A C 1 at p.24(A) [Para 17]
Partington v. The Attorney General, (1869) 4 H L 100 at p.122(B) [Para 17]

JUDGMENT

S.A.BOBDE, J. :- Rule. Rule made returnable forthwith.

Heard with consent of both the parties.

2. By this petition, the petitioners challenge the demand notice dated 7th April, 2000 issued by the respondent No.1 Collector, demanding due and unpaid land revenue for the period 19.5.1999 to 18.5.2000 in the sum of Rs.2,69,04,961/- in respect of Plot No.148 of BBR III Division, threatening the petitioners on noncompliance, with attachment and sale of the said property.

3. The petitioner also challenge the Demand Notice dated 12th January 2001, demanding increased land revenue in the sum of Rs.15,76,10,252/-. This sum demanded by this notice is the land revenue increased by 100% under section 3 of the Maharashtra Increased Land Revenue and Special Assessment Act, 1974.

4. The respondent No.2 State of Maharashtra recommended to the petitioners that it set up a 220 KV Sub-station near the existing Sub-station of BES&T to ensure uninterrupted and reliable power supply to South Mumbai, where the Mantralaya, Vidhan Bhavan, Mumbai Port Trust, Defence establishments etc. are situated. In pursuance of this recommendation, the respondent No.1 granted a lease of plot of land, that is Plot No.14B in BBR, Block No.3, admeasuring 3502.45 mtrs. hereinafter referred to as the plot. The rent was fixed at Rs.5,25,36,750/- for a period of 30 years. The petitioners however received possession of only 3423.79 sq. mtrs. In April 1997, the respondent No.1 Collector after the joint survey, acknowledged that a portion of plot was encroached on by the huts. It was further acknowledged, after a second joint survey in April, 1999 that the actual area of the plot handed over to the petitioners is 3423.79 sq. mtrs. On 7.4.2000 the petitioners received a notice of demand from the respondent No.1 for a sum of Rs.3,35,517/- on the basis that the plot held by the petitioners was 3052.45 sq. mtrs., i.e., 78.66 sq. mtrs. in excess of the area of the plot actually handed over. This was objected to by the petitioners by its letter dated 12.2.2000 to which there was no response, from the respondent No.1. Thereafter, the petitioners received a notice dated 27.4.2000 from the respondent No.1, inter alia, stating that the petitioners have been allotted the plot in question admeasuring 3502 sq.mtrs. and further, that since the petitioners are presumed to be holding morethan 12 hectors of land in the State of Maharashtra, it is liable to pay a 100% increased land revenue under the Maharashtra Increased Land Revenue & Special Assessment Act, 1974. This notice stated that the petitioners are liable to pay increased land revenue for the year 1995-2000, amounting to Rs.26,26,83,750/-. This letter is accompanied by a notice of demand for the said sum.

5. The petitioners have raised the two issues before us. Firstly, in the submission of the petitioners, the respondents are not entitled to charge land revenue on the basis that the plot admeausures 3052.45 sq.mtrs. since they have received possession only of 3423.79 sq.mtrs., the rest of the land being encroached upon.

6. In response to the first submission, Mr.Aney, learned counsel appearing on behalf of the respondents very fairly states that this grievance of the petitioners will be redressed immediately and the respondents will not charge land revenue for the area of which the petitioners have not received possession. The learned counsel submitted that the land revenue will be charged on the basis of the joint measurement which has been carried out.

7. The second contention raised on behalf of the petitioners is that the respondent State is not entitled to charge land revenue increased by 100% of the land revenue payable in respect of the holding under the Maharashtra Increased Land Revenue & Special Assessment Act,1974 (hereinafter referred to as the Act). According to Mr.Virag Tulzapurkar, learned counsel appearing on behalf of the petitioners, increased land revenue is chargeable under section 3 of the Act only from a holder in respect of the holding since section 2(d) of the Act defines "holder" for the purposes of section 3 as person lawfully in possession of the land as owner or as a tenant who is primarily liable to pay land revenue to the State Government under the Code. The petitioner being neither an owner nor a tenant, primarily liable to pay land revenue to the State, the petitioners cannot be charged the increased land revenue. Reliance is placed by the learned counsel on sub-section(2) of section 2 which provides that the words or expressions used in this Act, but not defined therein shall have the meanings respectively assigned to them in the Code, that is, the Maharashtra Land Revenue Code. (Hereinafter referred to as "the Code"). Referring to the relevant definitions in the Code, the learned counsel further submitted that the petitioner is not an owner since it holds the land on lease from the Government and can be only described as "Government lessee" as defined by section 2(11) of the Code. It is further submitted that the petitioner is neither a tenant in view of the definition in section 2(40) which defines a tenant to mean a lessee but not a lessee holding directly under the State Government.

8. There is no dispute before us that the petitioners hold the plot on lease directly under the State Government.

9. Mr.Aney, learned counsel appearing on behalf of the respondents submits that the petitioner is liable to pay the increased land revenue if the Act is construed liberally, having regard to the purpose for which increased land revenue is levied under the Act, that is, for raising additional resources needed for implementing the Employment Guarantee Scheme under the Maharashtra Employment Guarantee Act, 1977.

10. It is therefore necessary to set out the relevant sections of the Act. Section 3 reads as follows :

"Subject to the provisions of this Act, on and from the 1st day of August 1975, for the purpose of raising additional resources needed for implementing the Employment Guarantee Scheme [under the Maharashtra Employment Guarantee Act, 1977,] the amount of the revenue payable by a holder in respect of his holding shall be increased at the following rate, that is to say :-

Where a holding consists of the land equal to :	Rate of increase
(1) 8 hectares or more but less than 12 hectares.	50 per centum of the land revenue
(2) 12 hectares or more	100 per centum of the land revenue payable in respect of such holding.”

11. On reading the provision, it is clear that the increased land revenue is payable by a "holder". This term is defined in section 2(d) of the Act as follows

"2(d) "holder" in relation to any land for the purposes of

(i) Section 3 of this Act, means a person lawfully in possession of the land as owner or as tenant (whether such possession is actual or not) who is primarily liable to pay land revenue to the State Government under the Code; and

(ii) Section 4 of this Act, means a person in actual possession of land on which special assessment is levied under [clause (b) of section 4 of the Maharashtra Education and Employment Guarantee (Cess) Act, 1962] and the expression "holding" shall be construed accordingly."

The word "owner" is not defined in the Act and must be given the commonly understood meaning. The petitioner, who holds land under a lease is clearly not an owner. Therefore, what needs to be seen is whether the petitioner is a tenant, and therefore, a holder.

Section 2(2) reads as follows:

"Words or expressions used in this Act, but not defined, shall have the meanings respectively assigned to them in the Code, or as the case may be, the [Maharashtra Education and Employment Guarantee] (Cess) Act,1962."

Accordingly, it is necessary to refer to the definition of the tenant in the Maharashtra Land Revenue Code, 1966. Section 2(40) of the Land Revenue Code defines "tenant" as :

"tenant" means a lessee, whether holding under an instrument, or under an oral agreement, and includes a mortgagee of a tenant's rights with possession; but does not include a lessee holding directly under the State Government."

It is clear to us that the petitioner, not being an owner would be liable to pay an increased land revenue only, if it fell into the category of the term "tenant". A plain reading of the definition of the tenant shows that it does not include a lessee holding directly under the State Government which the petitioner clearly is. In the very first letter dated 11.12.1995 which is on record, the respondent No.1 stated that the Government has allotted the plot to the petitioner on 30 years lease basis on the terms and conditions stated therein. It is an admitted position that the petitioner has only been paying the rent fixed for the lease of the plot and is not chargeable to land revenue. Having regard to the statutory scheme, it is therefore clear that the petitioner is not a tenant for the purposes of the Act because, when read with the definition of that word in the Maharashtra Land Revenue Code, a lessee holding directly in the State Government is excluded under the definition of the tenant.

12. The learned counsel for the respondents however contended that section 2(19) which defines "land revenue", includes premium, rent, lease money, etc. He, therefore, contended that the lease rent payable by the petitioners is land revenue. Since section 3 of the Act increases land revenue, the petitioner is liable to pay the increased land revenue.

13. This submission does not seem to us to be of any avail to the respondents. Even if we hold that section 3 increases the land revenue payable,it does not do so generally. The crucial question is: who is made liable for the payment of increased land revenue? In terms, section 3 makes the increased land revenue payable by a holder. As observed earlier, the term "holder" is defined under the Act and includes only two categories of persons, i.e. an owner or a tenant, primarily liable to pay land revenue and the petitioner is neither.

14. The learned counsel for the respondents next relied upon section 10 of the Act, which reads as follows :

"The provisions of the Code shall, save in so far as they are not inconsistent with anything herein contained, apply for the purpose of the recovery of the increase in land revenue or special assessment levied and collected under this Act, from the persons specified in the assessment list, as though such increase were land revenue payable under the Code."

He submitted that the provisions of the Code apply only in so far as they are not inconsistent with anything contained in the Act. That the provisions of the Act render persons like the petitioner liable to pay increased land revenue since the petitioner is liable to be a person specified in the assessment list. In other words, the submission is that since the petitioner's name is liable to be included in the assessment list prepared under section 7 of the Act, it is liable to pay increased land revenue and it is not necessary to refer to the Code. Accordingly, the petitioner is liable, notwithstanding that the definition of tenant excludes a lessee holding directly under the State Government. This argument can only be accepted if any inconsistency exists between the Act and the Code.

15. We, however, find that the assessment lists are prepared by Tahsildar under section 7 of the Act and, such a list is essentially, a list containing the names of all persons in every village within his jurisdiction, who are liable to the payment of the increase in the land revenue, levied under section 3 of the Act. We, therefore, find that this again requires the ascertainment of whether a person is liable to pay increased land revenue in accordance with section 3 of the Act. As observed earlier, we find that increased land revenue is chargeable only to an owner or tenant and, as far as the present petitioner is concerned, he is neither of them. We fail to see anything inconsistent in this regard between the provisions of the Code and the provisions of the Act. A reference to the Code is required to be made in view of section 2(2) which requires reference to the dictionary of the Code for the words or expressions used in the Act but not defined in it.

16. Mr.Aney, further submitted that a look at Form I, which is a form of return, prescribed under rule 3 of the rules framed under the Act, provides a column in which the following is required to be filled up :

“Status of person mentioned in column 1, that is whether an occupant, lessee of Government, superior holder, tenant or mortgagee in possession, etc.” 2 3 4 5 6 7 8 9 10

Relying on two decisions of the Supreme Court, reported in A.I.R.1976 Supreme Court, 2463 in the case of The Tata Engineering & Locomotive Co.Ltd. vs. The Gram Panchayat, Pimpri Waghere and A.I.R.1996 Supreme Court, 1589 in the case of Pali Devi & Ors. Vs. Chairman, Managing Committee & Anr., he submitted that reliance on the statutory rules and, therefore, the Form, prescribed thereunder is a legitimate aid to the construction of a statute as Contemporanea Expositio. We have therefore considered Form I, which has a column for the purpose stated above. It is, however, important to note that the form is referable to rule 3, which provides that the return to be submitted to the Tahsildar under section 6, shall be in Form I. Section 6 provides for the submission of returns and rules as follows :

"Submission of returns :- As soon as possible after the commencement of this Act and thereafter on the commencement of each subsequent year, [every person whose holding consists of land equal to 8 hectares or more,] and every person who is liable to pay a special assessment of an amount exceeding two hundred rupees, [shall, subject to the provisions of Section 7, furnish ...."

We do not find anything in the section which makes a person in the position of the petitioner, liable to pay land revenue. This section merely requires every person whose holding, consists of land, equal to 8 hectares or more and every person who is liable to pay special assessment of the amount exceeding 200 rupees to furnish a return, subject to the provisions of section 7. Section 7 of the Act however requires the Tahsildar to prepare an assessment list containing the names of all persons in every village who are liable to the payment of increase in the land revenue levied under section 3.

17. We therefore reject the submission that because Form I provides for the entry of the name of a Government lessee for the purposes of submission of a return under section 6 on the basis of which an assessment list is prepared under section 7, a Government lessee who is otherwise not liable, becomes liable to increased land revenue. It is important to have regard to the well settled rule of construction, enunciated by the Supreme Court as early as in A.I.R. 1957 Supreme Court, 907 in the case of Kanai Lal Sur vs. Paramnidhi Sadhukhan, relied on by the petitioner, where, Their Lordships observed in paragraph 6 as follows :

"However, in applying these observations to the provisions of any statute, it must always be borne in mind that the first and primary rule of construction is that the intention of the Legislature must be found in the words used by the Legislature itself. If the words used are capable of one construction only then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act."

Mr.Tulzapurkar, the learned counsel for the petitioners also relied on a paragraph from A.V.Fernandez vs. The State of Kerala, A.I.R.1957 Supreme Court, 657 in which the Supreme Court observed in paragraph 27 as follows :

"The answer given by the learned counsel for the appellant to the above reasoning was that in fiscal statutes what you have got to look to is not the spirit of the statute but the letter of the law; and if you could not bring a particular tax within the letter of the law, the subject could not be made liable for the same. Our attention was drawn in this connection to the observations of Lord Russell of Killowen in Inland Revenue Commrs. vs. Duke of West-minister, 1936 A C 1 at p.24(A): "I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if in accordance with a Court's view of what it considers the substance of the transaction, the Court thinks that the case falls within the contemplation or spirit of the statute. The subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case."

As Lord Cairns said many years ago in Partington v. The Attorney General, (1869) 4 H L 100 at p.122 (B) :

"As I understand the principle of all fiscal legislation it is this : if the person sought to be taxed, comes within the letter of the law he must be taxed however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be."

18. Bearing the above observations in mind we cannot accept the submission on behalf of the respondents that having regard to the broad social purpose of the increased land revenue i.e. for raising additional resourses for the Employees Guarantee Scheme we must construe the charging sections i.e. section 3 and the statutory scheme any differently. Indeed, every tax has an ultimate social purpose, but its levy and incidence must fall on the persons on whom it is intended to fall according to the plain meaning of the words used by the statute.

19. We, therefore, find on a plain reading of the statutory scheme of the Act and the Maharashtra Land Revenue Code, and in particularly, the ongoing effect to the plain meaning of the words of section 3 of the Act that a Government lessee, like the petitioner is not liable to pay the increased land revenue under the Act.

20. In the result, we make the rule absolute in terms of prayer clause (a),(b) and (d) to (e) and quash and set aside the impugned demand notice dated 7th April, 2000 at Exhibit "C" issued by the respondent No.1 and the demand notice dated 12th January, 2001 at Exhibit "O".

There shall however be no order as to costs.

Petition allowed.