Case: Controller Of Estate Duty, Kerala Vs. V. Venugopala Varma Rajah

cultivation, so that the State must prove that it is non-agricultural in order to establish that it could be the subject matter of legislation which was within Parliaments legislative competence, and, therefore, covered by the Act, is to mix up the question of legislative competence and that of taxability of what is, on the face of it, taxable as part of the estate or property of the assessee within the meaning of Section 5 of the Act set out above. Indeed, the question of legislative competence of Parliament was neither in issue nor part of the question referred even if such a question could have been referred at all by a Tribunal functioning under the Act. We think that the burden of establishing the exemption lay upon the assessee respondent as was rightly held by the High Court. We think that the High Court was not correct in placing the burden upon the Department, after it was admitted that it was "forest land", on the ground that the further question of an immunity of the subject matter from taxation by Par- liament arose here and that, therefore, the onus lay on the Department. Even if there could be such an onus here, it was, we think, sufficiently discharged by the admission that this was "forest land" covered with natural or wild growths. After that, at any rate, the assessee had to prove change of its character.10. In Commissioner of Wealth Tax, Andhra Pradesh v. Officer-incharge (Court of Wards) Paigah, (supra), in which we heard arguments together with arguments in the case now before us, we found that there was some evidence of the agricultural character of land in the shape of entries in revenue record. We do not find what could similarly constitute evidence of agricultural character of the land involved in this case. On the other hand, the assessees admission that the land under consideration was "forest land", covered by wild and natural growth of forests, constituted evidence to the contrary. We think that, unless there was evidence that such lands had been, in some way, set apart or earmarked for or linked up with an agricultural purpose, by their owners or occupiers, it could not be held that they are agricultural lands.We think that the view of the Kerala High Court, that "all forest lands in this State are agricultural lands in the sense that they can be prudently and profitably exploited for agricultural purposes", is too wide. It is erroneous for the reasons we have already set out in our judgment in the case from the Andhra Pradesh High Court. The question has to be decided on evidence of actual or intended user for which land may have been prepared or set apart.11. In the case before us now, the Tribunal said in its referring order:"The Tribunal permitted the accountable person to raise the contention that the value of the forest lands has to be excluded as they were agricultural lands. So far as this contention was concerned, the following facts were not in dispute: viz., that the forest consisted of trees of spontaneous growth; that no operations in the nature of forest development were being carried on; and, that only operations in the nature of exploitation of the forest were being conducted. The accountable person, however, contended that these lands were capable of being brought under cultivation at a future date and that therefore they must be deemed to be agricultural lands. Reliance was sought to be placed upon the decision of the Madras High Court in Sarojini Devi v. Shri Krishna (AIR 1944 Madras p. 401) in which it was held that the expression agricultural lands must be taken to include lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry. The Tribunal was, however, of the view that in the said decision their Lordships did not intend to lay down a definition of the expression agricultural lands for all purposes, and that, on the other hand, they clearly indicated that the expression admits of different interpretations and that it was only from the context of the particular enactment in which this expression is used that its meaning has to be inferred. The Tribunal observed that the very wide definition of the expression agricultural lands laid down in the above cited decision was not applicable to cases under the Estate Duty Act. The Tribunal, therefore, negatived the contention of the accountable person that the forest lands had to be excluded fro m the value of the assessable estate of the deceased".Thus, it is clear that the assessee, after having been given due opportunity to lead evidence to show that what was prima facie nonagricultural land, in the sense that it was covered by the spontaneous or natural growth of forests, was really agricultural land, had led no such evidence. It was not shown that the assessee or his predecessor in interest did anything to develop the forest in the sense that any particular trees were planted deliberately. It appears that the nature of exploitation of the forest lands was simply to give contracts for cutting of the trees. The assessee not having led any evidence of any intention to prepare or appropriate or ear-mark the land for any agricultural use or purpose, but, on the other hand, having contended that mere possibility of using such land for agricultural purposes in future was enough, could not be said to have discharged his onus of proof. After the assessees admission that it was "forest land" which presumably prevented cultivation, no evidence was led as we have already observed to indicate any change of character of this land or its conversion into agricultural land. We therefore think that the Appellate Tribunal was correct in expressing the view it had taken and the conclusions it had recorded. And, no case is made out for sending the case back to the Tribunal for any fresh decision.12.

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

Explanation:
1[ds]It seems clear to us that this Court, by explaining why, for certain special reasons and in an unusual context, certain land described as "forest land" was to be treated as though it had become "agricultural", implied that ordinarily this is not so. In Rajah Anand Brahma Shah v. State of U.P. &Ors., ([1967] 1 S.C.R. 373 at p. 379.) this Court held forest land to be nonarable which meant "non-agricultural". We think that, without evidence to show that such land had been cleared and prepared or earmarked for agricultural purposes, it must be treated as prima facie nonagriculturalbeing no evidence or finding of such a character before the events which attracted the estate duty, we cannot take notice of such a statement by Counsel. It is irrelevant for the purpose of the cases before us.So far as the question of burden of proof is concerned, we think that to proceed on the assumption that all land is prima facie capable of cultivation, so that the State must prove that it is non-agricultural in order to establish that it could be the subject matter of legislation which was within Parliaments legislative competence, and, therefore, covered by the Act, is to mix up the question of legislative competence and that of taxability of what is, on the face of it, taxable as part of the estate or property of the assessee within the meaning of Section 5 of the Act set out above. Indeed, the question of legislative competence of Parliament was neither in issue nor part of the question referred even if such a question could have been referred at all by a Tribunal functioning under the Act. We think that the burden of establishing the exemption lay upon the assessee respondent as was rightly held by the High Court. We think that the High Court was not correct in placing the burden upon the Department, after it was admitted that it was "forest land", on the ground that the further question of an immunity of the subject matter from taxation by Par- liament arose here and that, therefore, the onus lay on the Department. Even if there could be such an onus here, it was, we think, sufficiently discharged by the admission that this was "forest land" covered with natural or wild growths. After that, at any rate, the assessee had to prove change of itsdo not find what could similarly constitute evidence of agricultural character of the land involved in this case. On the other hand, the assessees admission that the land under consideration was "forest land", covered by wild and natural growth of forests, constituted evidence to the contrary. We think that, unless there was evidence that such lands had been, in some way, set apart or earmarked for or linked up with an agricultural purpose, by their owners or occupiers, it could not be held that they are agricultural lands.We think that the view of the Kerala High Court, that "all forest lands in this State are agricultural lands in the sense that they can be prudently and profitably exploited for agricultural purposes", is too wide. It is erroneous for the reasons we have already set out in our judgment in the case from the Andhra Pradesh High Court. The question has to be decided on evidence of actual or intended user for which land may have been prepared or setTribunal observed that the very wide definition of the expression agricultural lands laid down in the above cited decision was not applicable to cases under the Estate Duty Act. The Tribunal, therefore, negatived the contention of the accountable person that the forest lands had to be excluded fro m the value of the assessable estate of theit is clear that the assessee, after having been given due opportunity to lead evidence to show that what was prima facie nonagricultural land, in the sense that it was covered by the spontaneous or natural growth of forests, was really agricultural land, had led no such evidence. It was not shown that the assessee or his predecessor in interest did anything to develop the forest in the sense that any particular trees were planted deliberately. It appears that the nature of exploitation of the forest lands was simply to give contracts for cutting of the trees. The assessee not having led any evidence of any intention to prepare or appropriate or ear-mark the land for any agricultural use or purpose, but, on the other hand, having contended that mere possibility of using such land for agricultural purposes in future was enough, could not be said to have discharged his onus of proof. After the assessees admission that it was "forest land" which presumably prevented cultivation, no evidence was led as we have already observed to indicate any change of character of this land or its conversion into agricultural land. We therefore think that the Appellate Tribunal was correct in expressing the view it had taken and the conclusions it had recorded. And, no case is made out for sending the case back to the Tribunal for any fresh decision.