WP(C) 4172/2000 BEFORE THE HON’BLE MR. JUSTICE AMITAVA ROY THE HON’BLE MR. JUSTICE P.K. MUSAHARY JUDGMENT & ORDER (CAV) Amitava Roy, J The petitioners, Government owned Public Sector entities, seek d efeasance of Sections 3-A and 25-B introduced by the Assam Land Revenue Reassess ment (Amendment) Act, 1997 (for short, hereinafter referred to as ’the Act 1997/ 1997 Act) as ultra vires the Constitution besides being infirm for lack of legis lative competence. Reclassification of lands at their disposal in furtherance of their institutional pursuits and consequential enhancement in land revenue ther efor has also been oppugned. The impugnments being common and the factual settin gs substantially identical with minor inconsequential divergences, this analogou s adjudication is permissible. However, the imperative facts to sketch the backd rop as are unavoidable have been gleaned from the pleadings of WP(C) 6853/2005 a nd WP(C) 4172/2002. 2. We have heard Mr GN Sahewalla, Senior Advocate for the petitione r Oil & Natural Gas Corporation Ltd. (for short, ONGC/ Corporation) and Mr AM Bu zar Baruah, Advocate for the petitioner Oil India Limited (for short, ’OIL/ Comp any’). The respondents have been represented by Dr. B.P. Todi, Senior Advocate a ssisted by Mr. N Rajkhowa, Advocate. 3. The Corporation in which in terms of Section 3 of the ONGC (Tran sfer of Undertaking & Repeal) Act, 1993 the assets of the erstwhile Oil and Natu ral Gas Commission did vest with effect from 1.2.1994, has introduced itself to be an organization engaged in exploration and production of hydrocarbons popular ly known as Crude Oil and Natural Gas, its exploits being spread over the countr y as a whole and also beyond its territorial shores. According to it, the Crude Oil produced/ extracted from Assam is sold to various refineries situated in the state for refining. However, the natural gas extracted is supplied to the Gas A uthority of India Limited and other Public Sector organizations including the As sam State Electricity Board. It has averred that in connection with the related operations for the purpose of exploring and exploiting hydrocarbons, the lands r equired are being acquired under the provisions of the Land Acquisition Act, 189 4 by paying due compensation thereunder and at times, land is also taken on long term lease. According to it, out of such stretches often only a small percenta ge thereof is actually used for the exploration and exploitation activities and the rest are utilized for providing roads, construction of office buildings, re sidential quarters and other civic amenities to its officers and staff. Some por tions are also used for setting up schools, hospitals, parks and sports complex for being availed by the members of the public. 4. The Corporation has referred to a series of miscellaneous recla ssification cases in connection with which notices had been issued by the Additi onal Deputy Commissioner, Sibsagar against which it had submitted written object ions. The appeals filed against the orders rejecting its representations before the learned Assam Board of Revenue, Guwahati were also dismissed. In essence, v ide orders passed in the reclassification cases the State authorities demanded p ayment of land revenue at the enhanced rate. That being aggrieved by such decisi ons which stood affirmed by the learned Assam Board of Revenue, Guwahati it had approached this Court, amongst others, with Civil Rule No. 2769/98, 3750/98 and WP(C) 165/2000 pertaining to various periods of demand has been mentioned. Traci ng these demands for enhanced land revenue to the Assam Land Revenue Assessment Act, 1936 (for short, ’Act 1936/ 1936 Act’) as well as Act 1997 (amending the 19 36 Act), it has repudiated the same to be illegal and unauthorized in law. 5. Vis-à-vis Section 2(xv) of the Act 1936 defining ’industrial lan d’, it has asserted that its activities do not tantamount to manufacture of any industrial product and, thus, the land at its disposal is not an industrial land . It has, thus, pleaded that payment of enhanced land revenue with reference to Sections 3-A and 25-B of the Act 1997 is wholly without jurisdiction. Reference has been made to the Oil Fields (Regulation & Development) Act, 1948 (for short, ’the 1948 Act/ Act 1948’) and the Petroleum & Natural Gas Rules, 1959 framed th ereunder (for short, hereinafter referred to as ’the 1959 Rules/Rules 1959’) whi ch cover the entire field of Crude Oil and Natural Gas providing inter alia for grant of mining lease etc. in connection therewith and statutory payments like royalty, licence fee, dead rent, surface rent et al. That under such a mining le ase as stipulated, no land revenue is payable has been emphasized. The petitione r has also alluded to the Oil Industry (Development) Act, 1974 (for short, 1974 Act) for development of oil industry. In this legislative setting, according to the petitioner, the State Government lacks in competence to enact any law in res pect of Crude Oil and Natural Gas for the purpose of realizing any land revenue with regard thereto. 6. The petitioner has averred that in fact in order to facilitate t he exploration and extraction of mineral oil it has been granted a mining lease and licence thereunder in respect of lands therefor at its disposal. It has plea ded that though the entire area covered by the mining lease does not produce Cru de Oil and Natural Gas, under the 1959 Rules it is to pay dead rent therefor as well as royalty for the plots wherefrom such products are extracted. In addition thereto, surface rent is also payable. Further, surface compensation to the occ upiers of the land at the time of entering the same pursuant to the petroleum ex ploration licence/ mining lease under Rule 189/ 190 of the Rules framed under th e Assam Land Revenue Regulation (for short, hereinafter referred to as ’the Regu lation’) is also to be paid. Apart from citing these factors against the legalit y of the demand for land revenue for the same plot(s), reliance has also been pl aced on Section 28 of the Regulation in endorsement of its assertion of exemptio n from such impost. 7. The petitioner OIL has treaded substantially on his beaten track . While contending that it is engaged in the business of exploration, extraction and transportation of mineral oil/ crude oil at different cites in the country including the State of Assam and that such pursuits are regulated by the 1948 Ac t, the Petroleum Act, 1934 (for short, hereinafter referred to as ’the Act 1934/ 1934 Act’) as well as the Rules framed thereunder including the 1959 Rules, it similarly has denounced the demand of land revenue in connection with the land a t its disposal to cater to its aforementioned activities. According to it, it ha s been granted, under the 1959 Rules, petroleum mining lease in respect of lands in certain locations in connection with which it is to pay annual dead rent and surface rent in addition to royalty for every metric ton of petroleum extracted at a rate to be fixed by the Central Government from time to time. That under t he mining lease it is liable to pay taxes, assessments and impositions in the na ture of public demands except land revenue has been emphasized too. Besides impe aching Section 3-A and 25-B of the Act 1997 on various counts, it has highlighte d as well that it is not engaged in the manufacture of any industrial product an d, therefore, the lands at its disposal can by no means be construed to be indus trial lands as defined under Section 2(v) of the Act 1936 for imposition of enha nced land revenue under Section 25-B. Endeavours of the State authorities pursua nt to the impugned provisions of the Act 1997 to realize enhanced land revenue a nd the objections laid by it repudiating such law have also been referred to ind icate exhaustion of steps by them for redress before turning to this Court. 8. As alluded to hereinabove, the pleaded facts in the other writ p etitions more particularly relate to the aspect of reclassification of lands at the disposal of these two organizations as industrial sites and the consequentia l demand for land revenue at the enhanced rate under the Act 1997 and, thus dila tion thereof is inessential. Additional pleadings have been brought on record by the petitioners to emphasise in particular the quantum of payment being made by them as royalty and otherwise under the mining leases in their bid to negate th e justifiability for further realization by way of land revenue and, that too, a t the enhanced rate. 9. The respondents in their affidavit while endorsing the validity of the impugned provisions and the demand for enhanced land revenue based thereo n, have insisted that the Crude Oil and the Natural Gas explored and extracted f rom the field area are the raw materials for producing and manufacturing industr ial products and, therefore, the land at the disposal of the petitioners are vis ibly industrial land within the definition of Section 2(xv) of the Act 1936 (che ck). According to the respondents, collection and assessment of land revenue is within the purview and competence of the State Legislature, the Entry relatable thereto being included in List II of Schedule 7 to the Constitution of India. Th ey have contended that as oil and natural gas have acquired global importance in the industrialization of modern economies, the land utilized for oil exploratio n has been rightly construed to be an industrial site for which no separate noti fication under Section 3A is called for. They have asserted that the petitioners ’ perception of exemption from land revenue on the plea of payment of other levi es for the same land under the mining leases is fallacious and untenable. That t heir challenge to the demand for land revenue is also frivolous in the face of t heir voluntary payment thereof till enhancement has been underlined. While admit ting that the demand for the enhanced land revenue is as per Section 25-B of the 1997 Act classifying the land at the disposal of the petitioner to be industria l sites, the respondents have asserted the validity thereof. 10. Vis-a-vis OIL, the respondents have asserted in particular that it under the mining lease pays either the dead rent or royalty and not both at t he same time. That this organization is involved in marketing of its finished pr oducts like LPG from its locations in addition to exploration, extraction and tr ansportation of crude oil has also been pleaded. That royalty, licence fee, leas e fee etc. do not come under the ambit of land revenue under the Regulation and that the State Government had never exempted the petitioners therefrom has been stated as well. The respondents have averred that all lands are eventually under the State Government and the occupant is liable to pay land revenue to it under the Regulation. 11. The reply affidavits of the petitioners are essentially those of affirmation and reiteration of their averments in the writ petitions as well as denials of the factual assertions of the State respondents incompatible with th eir orientations. 12. In the above contentious backdrop, Mr Sahewalla has emphatically contended that Section 25-B of the 1997 Act is beyond legislative competence an d is, thus, unconstitutional, null and void. As the levy contemplated therein is on net profit, it is essentially a tax imposed on the mineral oil, a field excl usively within the legislative domain of the Parliament outlined by Entry-53 of List-I of Schedule 7 to the Constitution of India. As the impost in the alternat ive is also construable to be a tax on income as contemplated in Entry -82 of th e said List-I, the State Legislature obviously does not posses the competence of enacting any law thereon, thus, rendering Section 25-B non-est, he contended. W ithout prejudice to these impeachments, the learned senior counsel has argued th at Sections 3-A and 25-B of the 1997 Act are highly arbitrary, discriminatory an d unreasonable as thereby the entire land at the disposal of the petitioners is sought to be proclaimed as industrial land though a substantial portion thereof is utilized as road, office building, quarters etc. Further, in absence of any d eclaration under Section 3A that the land of the petitioners is an industrial si te, no levy contemplated under Section 25-B is permissible and, thus, the demand is wholly illegal and unauthorized, he urged. As the levy under Section 25-B is sans any unit of land measure but on profit without any reference to the area a ctually utilized by the petitioners for their operations, it is wholly arbitrary , illogical and irrational as well, he added. Mr Sahewalla pleaded that as the a ctivities of the petitioners, namely, extraction, exploration and transportation of the mineral oil/ crude oil do not amount to manufacture of any industrial pr oduct, the land used by them therefor are by no means industrial land as defined under Section 2(xv) of the Act 1936, as amended, and thus the levy of land reve nue is wholly incompetent. 13. Mr Sahewalla urged that as the petitioners’ activities are under a mining lease in terms of the 1948 Act and the 1959 Rules and they in complian ce of the stipulations thereof are paying royalty, surface rent and dead rent in respect of the extraction, Section 25-B is inapplicable in their case and, thus , the resultant demands are without jurisdiction. The learned senior counsel arg ued that the Government of Assam being a party to the mining lease which is a s tatutory agreement under the 1959 Rules, it is bound by the covenants thereof wh ich inter alia mandate against any demand for payment of land revenue and, thus, on that count as well the impugned demand is palpably illegal, null and void. R eferring in particular to Rule 13(2)(b) of the 1959 Rules, the learned senior co unsel insisted that as the surface rent referred to therein is synonymous with l and revenue, the levy under Section 25-B is incompetent. Referring to Section 28 of the Regulation, Mr Sahewalla has pleaded that in terms thereof as well, no l and revenue is realizable from the petitioners who are administrating their oper ations on the land at their disposal under the respective mining leases which su bsist as on date. That by means of royalty the petitioners are paying huge amoun ts annually to the State Government has been sought to be underlined by drawing the attention of this Court to the relevant averments in the pleadings. Mr Sahew alla in support of his contentions has placed reliance on the following decision s: i) Oil India Ltd.& Ors. -vs- State of Assam & Ors., 2006 (1) GLR 593 ii) Deepak Kumar Poddar -vs- State of Assam & Ors., 2010 (6) GLR 835 and the decision of the Gujarat High Court in First Appeal Nos. 5224 of 2001, 52 25 of 2001 with Civil Application Nos. 12963 of 2001 and 12964 of 2001 (D/D 1.12 .2005) (Oil & Natural Gas Corporation Ltd. -vs- Taluka Panchayat, Khambat & Anr. ) 14. While adopting generally the above contentions, Mr Buzar Baruah has argued that a plain reading of Section 25-B would disclose that the levy con templated thereunder is in fact not a tax on land as no unit thereof has been sp ecified to measure the same. According to the learned counsel, the impost envisa ged therein is in essence a taxation on the profit from petroleum and petroleum products which is obviously beyond the competence of the State Legislature, a fi eld being constitutionally reserved for the Parliament in Entry-53 of List-I of Schedule 7 to the Constitution of India. While reiterating that the purported la nd revenue sought to be realized under Section 25-B is in disguise a tax on inco me as envisioned in Entry-82 of List-I of Schedule 7 to the Constitution of Indi a, a domain reserved for the Parliament, he contended that the only refuge of th e State respondents to save the provision is Entry-49 of List-II of Schedule 7 t o the Constitution of India. Mr Buzarbaruah, however, pleaded that such an endev our to be valid and legally cognizable, the levy under Section 25-B has to be es sentially based on unit of land measure. As the phraseology applied in Section 2 5B does not permit such an interpretation, it is apparently ultra vires the Cons titution, he maintained. According to Mr Buzarbaruah, as Section 25-B contemplat es tax on the income derived from the activities related to petroleum and petrol eum productions and not one on land, it is stillborn in law and is liable to be adjudged as such. The learned counsel echoed the plea of Mr Sahewalla to the eff ect that the activities of the petitioners do not amount to manufacture and, thu s, Section 2(xv) of the Act 1936, as amended, is wholly inapplicable to them and that consequently the demand for land revenue is non-est in law. He reiterated as well that in the teeth of the stipulations contained in the mining lease whic h is statutory in nature, Section 25-B cannot equip the State respondents to rea lize land revenue as endeavoured. According to the learned counsel, the second p roviso to Section 28 of the Regulation is also of no avail as the same does not efface the sanction of exemption from land revenue qua the petitioners in view o f the subsisting mining leases under the 1959 Rules involving the land at their disposal. In any case as the land of the petitioners stretch over several parts of the State, demand of land revenue raised district wise irrespective of the a ctual utilization thereof is illogical, arbitrary, unreasonable and unfair on th at count as well, and thus, the same is liable to be adjudged illegal and discri minatory. The following decisions were relied upon by Mr Buzarbaruah in support of his contentions: i) Ajoy Kumar Mukherjee -vs- Local Board of Barpeta, AIR 1965 SC 1561 ii) Union of India & Ors. -vs- J.G. Glass Industries Ltd. & Ors. (1998) 2 SC C 32 iii) State of W.B. -vs- Kesoram Industrial Ltd. & Ors. (2004) 10 SCC 201 15. Dr. Todi in reply has insisted that the impost predicated by Sec tion 25-B is directly relatable to Entry-45 of List-II of Schedule 7 to the Cons titution of India and, thus, the plea of want of legislative competence of the S tate Legislature is wholly misconceived. According to the learned senior counsel , the activities in which the petitioners are engaged amount to manufacture and, thus, the land at their disposal is industrial land as contemplated in Section 20-A of the Act 1936, as amended by the Act 1990. The learned senior counsel ref erred to downloads from the websites of the petitioners to authenticate the subm ission vis-à-vis the nature of the activities engaged in by the petitioners. Dr. Todi argued that for quantifying the levy under section 25-B, the land of the p etitioners as a composite whole is construed to be proportionate to the profit e arned by them and, thus, no separate unit of land measure is essential for compu tation of the land revenue. The learned senior counsel pleaded that the profit c onceptualized to be the unit of the levy is only a measure of revenue to be real ized and that the same per se does not nix Section 25-B to be a provision within the ambit of Entry-45 of List-II of Schedule 7 to the Constitution of India. As the validity of Section 20A inserted by the 1990 Amendment of the Act 1936 has not been challenged and the petitioners have been paying land revenue before enh ancement, they are estopped from impugning the validity of Section 25-B or quest ioning their liability to pay the same at the enhanced rate in terms thereof, he urged. Dr. Todi maintained that in the face of Section 25-A and the manufacturi ng process pursued by the petitioners, the necessity of a fresh declaration unde r Section 3-A of the Act 1997 is uncalled for. Referring to the provisions of th e Act 1948, the 1959 Rules as well as the stipulations in the mining leas of the petitioners, the learned senior counsel has urged that royalty, surface rent an d dead rent are independent of the land revenue realizable for the land at their disposal. He relied on the second proviso to Section 28 of the Regulation to as sert the validity of the impugned demands. Dr. Todi fairly submitted that the im position of land revenue at the enhanced rate with retrospective effect may not, however, be tenable but is realizable from 25.5.97, the date from which the Act 1997 had been enforced. To buttress his arguments, Dr. Todi placed reliance on the following decisions of the Apex Court: i) State of Mysore & Ors. -vs- M.L. Nagade and Gadag & Ors., AIR 1983 SC 7 62 ii) Union of India & Ors. -vs- J.G. Glass Industries Ltd. & Ors. (1998) 2 SC C 32 16. Mr Buzarbaruah in reply dismissed the reliability of the website downloads as unimpeachable testimony of the nature of the activities undertake n by the petitioners to arrive at a conclusion that those amount to manufacture of industrial products. He sought to plead that whereas the notion of manufactur e encompasses the concept of production, the reverse is not true. As in any view of the matter, the website downloads indicate that the petitioners are engaged in a process of production, the same by no means amount to manufacture. Accordin g to Mr. Buzarbaruah, the interpretation sought to be provided to the second pro viso to Section 28 is impermissible in view of the fundamental precept of statut ory interpretation that a proviso only carves out an exception to the parent pro vision but does not supplant the same. The following decisions in addition were relied upon by him: i) Hindusta Ideal Insurance Co. Ltd. -vs- Life Insurance Corporation of In dia, AIR 1963 SC 1083 ii) Sree Raghuthilakathirtha Sreepadangalavaru Swamiji -vs- The State of Mys ore & Ors., AIR 1966 SC 1172 iii) Empire Industries Ltd.-vs- Union of India & Ors., (1985) 3 SCC 314 iv) Goodricke Group Ltd. & Ors. -vs- State of W.B. & Ors., 1995 Supp (1) SCC 707. 17. The competing narration in the rival pleadings and the contentio us arguments have received our due consideration. The principal assailment beari ng on want of legislative competence of the State Legislature to enact the 1997 Act, if sustained, would be decisive vis-à-vis the adjudicative pursuit and the same, therefore, demands priority in the order of scrutiny. In essence, the bele agured legislation though has been impeached to be one ordaining taxation of pet roleum and petroleum products as well as on income other than agricultural incom e as comprehended in Entry-53 and 82 of List-I of the 7th Schedule to the Consti tution of India, the respondents in refutation have contended it to be an enact ment within the purview of Entry 45 of List-II or in the alternative of Entry 49 thereof being either a levy in the form of land revenue or tax on land. The leg islative entries sought to be taken refuge of by the parties form the bedrock of the analysis to follow and, therefore, are extracted hereinbelow: List-I-Union List 53. Regulation and development of oil fields and mineral oil resources; petroleu m and petroleum products; other liquids and substances declared by Parliament by law to be dangerous inflammable. & & & & & & & & & & & & & & & & & & & & & & &..