Case: Sarojini Tea Co.Pvt.Ltd., Vs. Collector Of Dibrugarh

settlement, 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 case (Civil Rule No. 28 of 1977, decided on Sept. 28, 1981) 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 20. 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 Thirtha Swamiar case ( 1972 (3) SCC 246 : 1972 (1) SCR 137 : 1971 AIR(SC) 2377) 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 Section 12 of the Ceiling Act 21. 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 Section 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 naye paise for every rupee of the annual value of the land in addition to the land revenue and local cesses (if any) assessed thereon." * 22. Section 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 Section 12 shall cease to be levied on such land; or if such cess be maintained, a corresponding diminution shall be made in such rate." * 23. 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 landholder and shall be recoverable as if they were arrears of land revenue due on such land When such land is held by two or more landholders such landholders shall be jointly and severally liable for such sums." * 24. In Guruswamy and Co. v. State of Mysore ( 1967 (1) SCR 548 : 1967 AIR(SC) 1512) Hidayatullah, J., as the learned Chief Justice then was, has observed as under : (SCR p. 571 D-E) 25. In India Cement Ltd. v. State of T. N. ( 1990 (1) SCC 12 ) these observations have been quoted and it has been mentioned that though they were made in the dissenting judgment, there was no dissent on this aspect of the matter 26. From the aforesaid observations, it would appear that 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 which is imposed by the Local Rates Regulation 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 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 is, therefore, a levy which is distinct and different in nature from land revenue. Section 3 only provides a convenient mode of prescribing the rate for levy of local rate by fixing it as a proportion, namely, 25 per cent of the annual value of the land and Section 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 27. The High Court has rightly held that local rate payable under the Local Regulation 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

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

Explanation:
1[ds]But taking into consideration the peculiar circumstances of the proceedings and upon consideration 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 Ceiling Act which excluded the applicability of Section 4 to 24 of the Limitation Act, 1963, to proceedings under the Ceiling Act, the said provisions are applicable to such proceeding sin 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. 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, rejected16. 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 which it is imposed a surcharge. A surcharge on land revenue is an enhancement of the 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 surcharge17. 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 if annual land revenue payable for the land in Section 12(a)(1) of the Ceiling Act. According to the learned Judges, the expression full rate of land revenue has to be understood in conformity with the Assam Land Revenue Regulation where different classes of estate are often referred to in terms of revenue, for example, khiraj or full revenue paying estate and nisf-khiraj or half revenue paying estates. The learned Judges have referred to the provisions of the Assam Land Revenue Re-assessment Act, 1936 which prescribes the procedure for re-assessment 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 continues till the succeeding settlement; and under Section 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 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 Section 3 of the Surcharge Act and the expression along with land revenue in Section 7 of the Surcharge Act. 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 (Civil Rule No. 28 of 1977, decided on Sept. 28, 1981) wherein the court was dealing with the constitutional validity of Section 7(1-A) 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 concept18. 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 compensation19. We do not consider that the words "in addition to the land revenue" in Section 3 and the words "along with land revenue" in Section 7 of the Surcharge Act imply that surcharge levied under the said Act is a levy which is distinct in nature from land revenue. These expressions only mean that surcharge @ 30 per cent of the land revenue leviable under Section 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 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 settlement, 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 case (Civil Rule No. 28 of 1977, decided on Sept. 28, 1981) 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 considered20. 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 revenue26. From the aforesaid observations, it would appear that 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 which is imposed by the Local Rates Regulation 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 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 is, therefore, a levy which is distinct and different in nature from land revenue. Section 3 only provides a convenient mode of prescribing the rate for levy of local rate by fixing it as a proportion, namely, 25 per cent of the annual value of the land and Section 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 revenue27. The High Court has rightly held that local rate payable under the Local Regulation 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