Case: Ratna Sugar Mills Co. Ltd Vs. State Of U.P. And Others

securing successful implementation of the Second Five Year Plan, it has become necessary to augment the revenues of the State. The Agricultural Income Tax Act, which was enacted at a time when zamindari system was in force, has become out of date in the context of post war zamindari era. The principle of social justice enshrined in our Constitution also demands that disparities between agricultural incomes be reduced. More efficient exploitation of agricultural lands is essential for increasing the food production in the State. Those big holders who do not fulfill their duty towards society will have to sell up, as they should, if they fail in making increased contribution to the exchequer in the form of holding tax under this legislation. With these objects in view, the Agricultural Income Tax Act, 1948, is being replaced and this Bill is being introduced.The Bill seeks to levy a holding tax on all land holdings the annual value of which exceeds Rs. 3, 600. A cultivator who does not cultivate more than 30 acres of land would be exempt from this tax. The Bill is so designed as not to affect the small cultivator. It is proposed to levy the tax on a graduated scale so that the larger the holding, the greater the incidence of the tax."5. Section 3 of the Act is the charging section. According to sub-section (1) of that section, the re shall, save as hereinafter provided, be charged, levied and paid, for each agricultural year, on the annual value of each land holding, a tax called the holding tax at the rates specified in the Schedule provided that no such tax shall be charged on any land holding the area whereof does not exceed thirty acres. Section 2(15) of the Act defines land as under:"(15) `land means land, whether assessed to land revenue or not, which is held or occupied for a purpose connected with agriculture, horticulture, animal husbandry, pisciculture or poultry farming and includes uncultivated land held by a landholder as such":The definition of land-holder is given in section 2(16) and the same reads as under:"(16) land-holder means-(i) an intermediary, where the land is in his personal cultivation or is held as sir, khudkasht or grove, and(ii) any other person who holds or occupies land otherwise than as-(a) an asami.(b) a sub-tenant.(c) a tenant of sir, or(d) a sirtan.and includes a manager or a principal officer, as the case may be:Explanation-In this clause asami does not include an asami of Gaon Samaj:"The Act took the place of the U.P. Agricultural Income Tax Act, 1948 which stood repealed in pursuance of section 28 of the Act from the date the Act came into force. It may also be pointed out that this Act has been itself subsequently repealed by section 45 of the U.P. Imposition of Ceilings on Land-holdings Act, 1961 as from June 30, 1961.6. In appeal before us Mr. Tarkunde on behalf of the appellant has argued that the land in question does not constitute land as defined in section 2(15) of the Act and as such the appellant is not liable to pay holding tax on the said land. The land in question, according to the learned counsel, is held for industrial purposes and not for purposes of agriculture, horticulture, animal husbandry, pisciculture or poultry farming. The above contentions have been controverted by Mr. Dikshit on behalf of the State and, in our opinion, the contentions are not well-founded.7. The land in dispute is shown to be Banjar land in the revenue records. Although the appellant acquired the land in 1951 for the purpose of setting up a factory, somehow the factory could not be set up and the land remained uncultivated. The appellant holds the land as a sirdr. An application was filed by the appellant for permission to use the land in question for industrial purposes, but that permission was not granted, the order of the Sub-Divisional Officer in this respect was affirmed on appeal by the Collector. A sirdar under section 146 of the U.P. Zamindari Abolition and Land Reforms Act, has the right to the exclusive possession of the land and entitled to use it for any purpose connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming. It is, therefore, apparent that after the order which was made on the appellants application under section 143 of the U.P. Zamindari Abolition and Reforms A ct, the appellant cannot be said to hold the land in dispute for industrial purpose. The purpose for which the appellant could after that date use the land was agriculture, horticulture or animal husbandry including pisciculture and poultry f arming. The fact that the appellant did not cultivate the land in question would not warrant exemption from the liability to pay the holding tax. The definition of the "land" includes uncultivated land held by a land-holder as such. The High Court held that the words "as such" did not pertain to the purpose for which the land is held but have reference to the land being held by the land holder in his capacity as a landholder. We see no sufficient ground to take a different view. In any ca se even if the words "as such" be construed to mean that the land should be held for the purpose of agriculture, horticulture, animal husbandry, pisciculture or poultry farming, the land in question should be taken to satisfy that requirement, because those are the only purposes for which the said land can now be used. The word "lands" used in the Act, as mentioned in the case of Raja Jagannath Baksh Singh v. State of Uttar Pradesh &Anr., is wide enough to include all lands whet her agricultural or not. The object of the Act, as mentioned in the objects and reasons, is more efficiency exploitation of agricultural land for increased food production. The appellant, in our opinion, cannot escape liability for payment of holding tax by keeping the land in question uncultivated.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]The land in dispute is shown to be Banjar land in the revenue records. Although the appellant acquired the land in 1951 for the purpose of setting up a factory, somehow the factory could not be set up and the land remained uncultivated. The appellant holds the land as a sirdr. An application was filed by the appellant for permission to use the land in question for industrial purposes, but that permission was not granted, the order of the Sub-Divisional Officer in this respect was affirmed on appeal by the Collector. A sirdar under section 146 of the U.P. Zamindari Abolition and Land Reforms Act, has the right to the exclusive possession of the land and entitled to use it for any purpose connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming. It is, therefore, apparent that after the order which was made on the appellants application under section 143 of the U.P. Zamindari Abolition and Reforms A ct, the appellant cannot be said to hold the land in dispute for industrial purpose. The purpose for which the appellant could after that date use the land was agriculture, horticulture or animal husbandry including pisciculture and poultry f arming. The fact that the appellant did not cultivate the land in question would not warrant exemption from the liability to pay the holding tax. The definition of the "land" includes uncultivated land held by a land-holder as such. The High Court held that the words "as such" did not pertain to the purpose for which the land is held but have reference to the land being held by the land holder in his capacity as a landholder. We see no sufficient ground to take a different view. In any ca se even if the words "as such" be construed to mean that the land should be held for the purpose of agriculture, horticulture, animal husbandry, pisciculture or poultry farming, the land in question should be taken to satisfy that requirement, because those are the only purposes for which the said land can now be used. The word "lands" used in the Act, as mentioned in the case of Raja Jagannath Baksh Singh v. State of Uttar Pradesh &Anr., is wide enough to include all lands whet her agricultural or not. The object of the Act, as mentioned in the objects and reasons, is more efficiency exploitation of agricultural land for increased food production. The appellant, in our opinion, cannot escape liability for payment of holding tax by keeping the land in question uncultivated.