Ratna Sugar Mills Co. Ltd. Vs. State of
U.P. & Ors  INSC 106 (7 April 1976)
KHANNA, HANS RAJ KHANNA, HANS RAJ GOSWAMI,
CITATION: 1976 AIR 1742 1976 SCR (3)1062 1976
SCC (3) 797
U.P. Large Land Holdings Act, 1957, S. 2(15)
"land", scope of.
The appellant acquired some land in district
Jaunpur, for setting up a factory, but did not use the land for such purpose.
Under the U.P. Large Land Holdings Act, 1957, he was required to pay holdings
tax for the assessment years 1365 to 1368 Fasli. The appellant's application
u/s. 143 of the U.P. Zamindari Abolition and Land Reforms Act, for treating his
land as industrial land was rejected by the Sub-Divisional Officer. On appeal,
the Collector affirmed the order. In further appeal to the Commissioner, the
appellant succeeded as regards the years 1365 and 1366 Fasli. The State filed
revision petitions. Subsequently the Commissioner held that the appellant was
liable to pay holdings tax for the years 1367 and 1368 Fasli. The appellant
also preferred revision applications. The Board of Revenue decided all the
revision petitions in favour of the State, holding that the appellant's land
was "sirdari" and not bhumidari, and it could not be meant for
industrial purposes. The appellant's petitions under Article 226 of the
Constitution were rejected by a Single Judge of the High Court on the ground
that the disputed land constituted "land as defined in the Act, and that
he was liable to pay the tax. On appeal, the Division Bench of the High Court
affirmed the order.
It was contended before this Court that the
land is held for industrial purposes, and is not "land" under sec. 2(15)
of the Act.
Dismissing the appeals, the Court, ^ HELD:
The appellant holds the land as a sirdar.
Permission to use the land in question for
industrial purposes was not granted. The word "lands" used in the Act
is wide enough to include all lands whether agricultural or not. The appellant
cannot escape liability for payment of holding tax by keeping the land in question
[1065-G, 1066C-D] Raja Jagannath Baksh Singh
v. State of Uttar Pradesh and Another,  1 S.C.R. 220, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 1076- 1079 of 1971.
Appeals by special leave from the judgment
and order dated the 8th January, 1970 of the Allahabad High Court in special
appeals Nos. 965 to 968 of 1964.
V. M. Tarkunde, E.C. Agarwala and Miss Manik
Tarkunde, for the appellant.
G. N. Dikshit, Shivapujan Singh, advocate for
Rana, for the respondents.
The Judgment of the Court was delivered by
KHANNA, J.-This judgment would dispose of four civil appeals Nos. 1076 to 1079
of 1971 which have been filed by special leave by Ratna Sugar Mills Ltd.
against the judgment of Allahabad High Court affirming on appeal the decision
of the learned single Judge 1063 whereby the appellant's four petitions under
article 226 of the Constitution of India to challenge the order dated December
18, 1963 of the Board of Revenue directing the levy of holding tax under the
U.P. Large Land Holdings Act, 1957 (U.P. Act No. 31 of 1957) (hereinafter
referred to as the Act) on the land of the appellant for the assessment years
1365, 1366, 1367 and 1368 Fasli had been dismissed.
In 1951 the appellant acquired land measuring
277.08 acres situated in village Argupur Kalan, tehsil Shahganj, district
Jaunpur. According to the appellant, the said land was acquired for the purpose
of setting up a factory for the production of paper and pulp. A licence was
granted to the appellant in that connection. The appellant filed an application
under section 143 of the U.P. Zamindari Abolition and Land Reforms Act for
treating its land situated in village Agrupur Kalan as industrial land. In the
course of those proceedings, the Tahsildar submitted a report on August 24,
1959 as under:
"As regards Argupur Kalan the whole area
is recorded as sirdari of Ratna Sugar Mills and they pay Rs. 1495/- as annual
land revenue. It is recorded in the Mills from before Zamindari Abolition and
Mills Authorities continue to pay the recorded land revenue to Government. The
whole area is lying Banjir and lies on both the sides of the railway line and
Belwai Station. It has not at all been brought under cultivation nor the Mill
has derived any benefit from it. It is really meant for industrial purposes but
due to financial difficulties, they could not use it as such." The
Sub-Divisional Officer, however, rejected the application filed on behalf of
the appellant under section 143 of the U.P. Zamindari Abolition and Land Reforms
The result was that the land in dispute could
not be declared to be land for industrial purpose. Appeal filed by the
appellant against the order of the Sub-Divisional Officer was dismissed by the
While the proceedings under section 143 of
Zamindari Abolition and Land Reforms Act were
pending, the Commissioner held for assessment years 1365 and 1366 Fasli in an
appeal filed by the appellant that the land in dispute was meant for industrial
purposes and had on that account remained uncultivated. The appellant was held
not liable to pay holdings tax for the land in dispute for the assessment years
1365 and 1366 Fasli. Two revisions were filed by the State against the above
order of the Commissioner.
Subsequently for the years 1367 and 1368
Fasli the Commissioner held that the appellant was liable to pay holdings tax
for the land in dispute under the Act. The appellant filed two revisions to the
Board of Revenue against that order of the Commissioner. The four revisions,
two filed by the State and two filed by the appellant, were decided by the
Board of Revenue by a common order dated December 18, 1963. The revisions filed
by the State were accepted by the Board, while those filed by the appellant
were rejected. The 1064 Board held that as the land held by the appellant was
sirdari and not Bhumidari land, it could not be declared to be meant for
industrial purposes. The appellant was held liable to pay holdings tax for the
land in question. Four petitions under article 226 of the Constitution were
thereupon filed by the appellant to challenge the order of the Board of
Revenue. The learned single Judge held that the land in dispute constituted
land as defined in the Act and the appellant was liable to pay holdings tax for
The order of the learned single Judge, as
already mentioned, was affirmed on appeal by the Division Bench.
Before dealing with the question involved in
these appeals, it would be appropriate to refer to the relevant provisions as
well as the objects and reasons.
The Act was published on November 1, 1957 but
according to sub-section (3) of section 1, it was to be deemed to have come in
force on the first day of July 1957. The objects and reasons which were
mentioned in the Bill were as under:
"For 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
fulfil 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." Section 3 of the Act is the charging section.
According to sub-section (1) of that section, there 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
"(15) `land' means land, whether
assessed to land revenue or not, which is held or occupied for a purpose 1065
connected with agriculture, horticulture, animal husbandry, pisciculture or
poultry farming and includes uncultivated land held by a landholder as
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.
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.
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 1066 made on the appellant's
application under section 143 of the U.P. Zamindari Abolition and Reforms Act,
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
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 case
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 whether 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.
There is no merit in these appeals and the
same are dismissed with costs. One hearing fee.
M.R. Appeals dismissed.