Andhra HC (Pre-Telangana)
S.V. Cement Ltd., Rep. By Its Managing ... vs Revenue Divisional Officer And Ors. on 21 April, 1993
Equivalent citations: 1993(2)ALT32
Author: P. Venkatarama Reddi
Bench: P. Venkatarama Reddi
ORDER P.L.N. Sarma, J.
1. This writ petition was filed for a Mandamus or any other appropriate Writ or Order or direction restraining the respondents from determining the Non-Agricultural Land Assessment on the entire land of Ac.30-02 cents in S.No. 440/A3 situate at Kanakadripalli, H/o Itikala Village, Kolimigundla Mandal, Kurnool District. The petitioner further sought a direction to determine the Non-Agricultural Land Assessment only on the extent of 2431.99 square metres which is the actual area occupied by the Cement Factory.
2. Petitioner is a Company incorporated under the Companies Act. It was assigned an extent of Ac.30-02 cents for the purpose of starting Cement Factory. The assignment by way of alienation was made by the Proceedings of the Collector in Rc.B.469935/84 dt.8-6-1985. The Cement Factory was constructed and actually commissioned for production in May, 1986. According to the affidavit filed in support of the writ petition, the Factory consists of buildings wherein the machinery was installed, Godown, Electrical rooms, Workshop, Sub-station, Laboratory, Time Office, Security Post and other buildings. The total area actually occupied by the factory and the buildings above mentioned and utilised for the said purpose is of an extent of 2431.99 Square metres. However, third respondent determined the assessment at 12 paise per square metre on the entire land of Ac.30-02 cents which comes to Rs. 14,582-40 ps. and issued a notice of demand to the petitioner to pay the same. The demand also included an additional sum of Rs. 5,395-50 ps. towards cess calculated at 37 paise on the amount of assessment.
3. It is further stated in the affidavit that the petitioner-company approached Mandal Revenue Officer to direct the Mandal Revenue Inspector to visit the factory premises and fix the assessment in accordance with the provisions of the A.P. Non-Agricultural Lands Assessment Act, 1963 (hereinafter referred to as 'the Act') on the land occupied by the factory. As nothing came out of it, the petitioner filed an appeal before the Mandal Revenue Officer - 2nd respondent herein, which was dismissed as time-barred. Questioning the said order, the petitioner filed a revision before the Revenue Divisional Officer and the same was dismissed on merits, inter alia, holding that the entire area of Ac.30-02 cents has been obtained by the petitioner-company for the use of the Cement Factory and therefore, the non-agricultural land assessment can be levied on the entire area notwithstanding the fact that only an extent of 2,431-99 square metres alone was being actually occupied by constructions and structures and used for the Cement Factory. The present writ petition was filed questioning the said order.
4. The main point raised in the writ petition was that under the Act tax can be levied only in respect of the non-agricultural land which is actually used for the industrial purpose and not the other land which is not being used for any purpose.
5. A counter is filed resisting the writ petition on behalf of the respondents. According to the counter, non-agricultural land assessment is leviable on the entire extent of Ac.30-02 cents and not on the actual extent of the land used. It is further stated in the counter that the order passed by the first respondent is valid and is in accordance with the provisions of the Act.
6. When the writ petition came up for final disposal before a Division Bench consisting of M.N. Rao and D. Reddappa Reddy, JJ. a Judgment of a Division Bench of this Court in The Associated Cement Companies Limited v. Government of Andhra Pradesh, was pressed into service in support of the contention raised on behalf of the petitioner-company. The contention was that the extent that is being actually used for industrial purpose viz., the extent on which the factory and its buildings are constructed alone can be the subject matter of assessment under the provisions of the Act and not other extent which is not being used for any purpose. The learned Judges of the Division Bench consisting of M.N. Rao and D. Reddappa Reddy, JJ. felt that the view taken by the learned Judges of the Division Bench in the decision referred to supra (1) i.e., that only in respect of that portion of the land which is being used for mining operations, tax shall be levied, appears to be contrary to the provisions of the Act and, therefore, needs to be decided authoritatively by a Full Bench. Accordingly, the learned Judges directed the Registry to place the papers before the Hon'ble Chief Justice for obtaining necessary orders in that regard. That is how the writ petition came up before us.
7. The point that has been referred to the Full Bench is as under:
"Whether non-agricultural land assessment is leviable only on the non-agricultural land which is actually used for the purpose mentioned in the Act or not?"
8. In the present case, the petitioner applied for and obtained assignment by way of alienation of an extent of Ac.30-02 cents of non-agricultural land covered by S.No. 440/A3 situate at Kanakadripalli, H/o Itikala Village, Kolimigundla Mandal, Kurnool District for the purpose of establishing a Cement Factory. The alienation was affected by the Collector, Kurnool in his proceedings Nc.Rc.B.469935/84 dated 8-6-1985. According to the petitioner, an extent of 2,431-99 square metres alone is being actually used for industrial purpose which is covered by structures and the rest of the land is not being used at all for any non-agricultural purpose, muchless industrial purpose. Therefore, the extent of the said area which is not being actually used at all for any purpose cannot be the subject-matter of levy of non-agricultural land assessment, even though the entire area of Ac.30-02 cents is in one block. In support of the said contention, Sri T. Bali Reddy, learned counsel for the petitioner-company relied upon the language of Section 3 of the Act read with the Schedule. Section 3 is the charging section and it is to the effect that in the case of non-agricultural land in a local area with the population specified in column (1) of the Schedule, the assessment shall be levied and collected by the Government from the owner of such land at the rate specified in column (2) where the land is used for any industrial purpose, at the rate specified against it in column (3) where the land is used for any commercial purpose and at the rate specified against it in column (4) where the land is used for any other non-agricultural purpose including residential purpose. The learned counsel strongly relied upon the word "used" for any industrial purpose, any commercial purpose, or any other non-agricultural purpose. The contention of the learned counsel is that this is a taxing statute and it should be construed strictly and if so construed, the meaning of the word "used" can only be that the land should be in actual use for the respective purposes to attract the different rates mentioned for different purposes in the schedule. The learned counsel also relied upon the word "used" as obtaining in the schedule as well as in the preamble to the Act. In other words, the contention is that if the non-agricultural land is not actually used for any one of three specified purposes but merely kept vacant, the same will not be subject to levy and collection of the non-agricultural land assessment.
9. On tine other hand, the learned Government Pleader for Revenue contended that all non-agricultural land is subject to levy of non-agricultural land assessment. The purpose for which the land is being used is only referred to for determining the rate of tax. If the above is kept in view, it will immediately be clear that the word "used" is not to be literally construed as "actually being used", but susceptible of wider interpretation such as, capable of being used, meant to be used etc. The learned Government Pleader commends to for our acceptance the above interpretation of the word "used" occurring in Section 3 as well as in the schedule and also in the preamble to the Act. According to the learned Government Pleader, the entire extent of Ac.30-02 cents was alienated by the Collector on the request of the petitioner-company for industrial purpose viz., to establish a cement factory and therefore, irrespective of the fact whether the entire area was actually used for industrial purpose or not, the entire extent is liable to be assessed and non-agricultural land assessment can be levied at the rates applicable for the land used for industrial purpose.
10. To appreciate the rival contentions, it is necessary to refer to the relevant provisions of the Act. According to the preamble of "the Act" it is "An Act to provide for the levy of assessment on lands used for non-agricultural purpose". Section 2 contains the definitions. "Non-agricultural land is defined in Section 2(g) which is as under:
""non-agricultural land" means land other than the land used exclusively for the purpose of agriculture, but does not include the land used exclusively for-
(i) cattle sheds;
(ii) hay-ricks:"
"Agriculture" is defined in Section 2(a) which is as under:
"agriculture means-
(i) the raising of any crop or garden produce;
(ii) the raising of orchards; or
(iii) the raising of pasture."
11. From the above two definitions, it is clear that all lands other than the lands used exclusively for the purpose of agriculture will be non-agricultural land, but does not include (i) cattle sheds; and (ii) hay-ricks.
12. Section 3 is the charging section which is as under:
"3. Levy of assessment on non-agricultural land:-
(1) In the case of non-agricultural land in a local area with the population specified in column (1) of the Schedule, there shall be levied and collected by the Government for each fasli year commencing on the first day of July, from the owner of such land, an assessment, at the rate specified in column (2) where the land is used for any industrial purpose, at the rate specified against it in column (3) where the land is used for any commercial purpose and at the rate specified against it in column (4) where the land is used for any other non-agricultural purpose including residential purpose:
Provided that where assessment is levied and collected in respect of such land under this Act, no land revenue shall be payable in respect of that land and nothing contained in any enactment, regulation, order, bye-law, rule, scheme, notification, or other instrument having the force of law, in operation immediately before the commencement of this Act relating to the assessment, levy and collection of land revenue on non-agricultural land shall apply in respect of that land, except as respect thing done or omitted to be done before the commencement of this Act;
Provided further that any amount payable on such land at the commencement of this Act, towards the arrears of land revenue may be recovered under the provisions of the Andhra Pradesh Revenue Recovery Act, 1864.
Explanation:- Where the land is used for any industrial or commercial purpose and also for any other non-agricultural purpose, such land shall be assessed at the rates specified in column (2) or column (3) of the Schedule as if it were used solely for any industrial or commercial purpose, as the case may be.
(2) Notwithstanding anything contained in Sub-Section (1), where the assessment leviable on any non-agricultural land under this Act, is less than the land revenue payable on such land, the land revenue alone shall be payable on that land."
According to this section, in the case of non-agricultural 1 and in a local area with the population specified in column (1) of the Schedule, the Government shall levy and collect from the owner of such land each fasli year commencing from the first day of July, an assessment, at the rate specified in column (2) where the land is used for any industrial purpose and at the rate specified in column (3) where the land is used for any commercial purpose and finally at the rate specified in column (4) where the land is used for any non-agricultural purpose including residential purpose. Schedule gives the rates at which the assessment is to be levied on the non-agricultural land used for (1) industrial purpose (2) for commercial purpose and (3) for any other non-agricultural purpose in Columns (2), (3) and (4). Column (1) prescribes the local area with reference to population.
13. In the present case, it is admitted that the population of the local area of the main village including hamlet is only 3,000. If the non-agricultural land in question is used for industrial purpose, then alone the land in question will be liable for levy of assessment.
14. Two more definitions are relevant for deciding the question at issue, viz., "commercial purpose" and "industrial purpose". They are defined in Section 2(b) and (d) respectively which are as follows:
"2. (b) 'commercial purpose' means a purpose connected with the undertaking of any trade, commerce or business but it does not include an industrial purpose;
(d) 'industrial purpose' means any purpose connected with an industrial undertaking where the process of manufacturing any article is carried on with the aid of power and includes a purpose connected with an excavation, underground or otherwise where any operation for the purpose of searching for, or obtaining a mineral has been or is being carried on."
15. To appreciate the point debated before us, it is necessary to note that a land - agriculture as well as non-agriculture - is liable for payment of the land revenue to the Government. So far as the non-agricultural land is concerned, non-agricultural land assessment is leviable and if the said assessment is less than the land revenue payable on such land, the land revenue shall be payable on the said land as per Sub-Section (ii) of Section3 of the Act. Now, in the present case the petitioner-company obtained by way of alienation the entire land of Ac.30-02 cents from the Government for industrial purpose, viz., to establish a Cement Factory thereon. The entire land is in one block. The structures of the factory were raised only on an extent of 2,431-99 square metres and the rest, according to the petitioner, is not being used for any purpose, muchless, for industrial purpose.
16. In support of his contention, Sri T. Bali Reddy, learned counsel for the petitioner company relied upon the judgments of this Court in Associated Cement Companies Ltd., Government of A.P., (supra 1); Electronics Corporation of India Ltd. v. Secretary, Government of A.P., as well as an unreported judgment of a Division Bench of this Court consisting of Gopal Rao Ekbote and Y. Venkateswara Rao, JJ. in Writ Petition No. 290 of 1965 and batch dt.22-4-1970. The above mentioned judgments support the contention of the learned counsel for the petitioner, which are to the effect that the non-agricultural land to the extent to which it is actually used alone is liable for levy of non-agricultural land assessment and not otherwise.
17. We will consider the correctness or otherwise of the judgments to the extent they laid down that only the land actually used for non-agricultural purpose is subject to levy of non-agricultural land assessment later. In some of the decided cases, the word "used" has been held to be susceptible of wider interpretation.
18. In Income-tax Commissioner, Bombay v. V.B. Sathe, AIR 1937 Bom. 493, interpretation of the word "used" in Sub-Clause (iv) in Section 10(2) of the Income-tax Act, 1922 came up for consideration. In the said case, the assessee owner of ginning factory, by virtue of being a member of pool was under an obligation to keep his gin and machinery in good repair and condition and in working order to entitle him to a share of profits made by the pool. As per the agreement, the assessee kept the machinery ready for use at any moment. Question arose whether in such a case, the assessee is entitled to claim depreciation under Section 10(2)(vi) of Income-tax Act, 1922. On a combined reading of Section 10(2)(iv) and Section 10(2)(vi), the learned Judges came to the conclusion that "such" machinery, plant or furniture means the machinery, plant or furniture used for the purpose of business as indicated in Section 10(2)(iv). The question before the Division Bench was whether the machinery of the assessee was "used" for the purpose of the business for the year relevant to the assessment year, eventhough the machinery was never "actually used" and only kept ready for use. On those facts and in the circumstances, the Division Bench, while construing the word "used", observed as under:
"But that does not dispose of the question whether, when machinery is kept ready for use at any moment in a particular factory under an express contract from which taxable profits are earned, the machinery can be said to be used for the purposes of the business which earns the profits, although it is not actually worked. To my mind it is so used."
The learned Judges further observed as under:
"But I think that the word "used" in this section may be given a wider meaning and embrace passive as well as active user".
Whatever may be the agreement entered into between the members of the pool, the question was whether the machinery which was kept ready for being used can be said to have been actually used. The learned Judges held that the word "used" in the said section may be given a wider meaning and embraces passive as well as active user and if the machinery is kept ready for use at any moment, it can be said that the machinery is so "used".
19. The above mentioned provisions of the Income-tax Act, 1922 were the subject matter of consideration in a number of cases. In Niranjan Lal Ram Chandra v. Commissioner of Income-tax, (1963) 49 I.T.R. 177, again the meaning of the word "used" in the above mentioned provisions was considered by a Division Bench of Allahabad High Court. The assessee in the said case sold away his trucks on 1-l-1946 i.e., first day of the accounting year (accounting year being calendar year) for a value which exceeded the written down value of the trucks and it was contended that as the trucks were not "used" for the purpose of the business during the year in which they were sold, the excess price realised could not be deemed to be profits under the proviso to Section 10(2)(vi). While dealing with the said contention, the learned Judges had to consider the meaning to be given to the word "used" for the purpose of the business. Assessee's business in the said case consists of plying motor trucks and lorries on hire. After referring to several cases, the learned Judges observed as follows:
"Though the business consists of putting trucks into motion it cannot be said that a truck is used in the business only when it is in motion and not when it is kept stationary, capable of being put into motion and is available for being, or waiting to be put into motion. A truck which is put into motion for transporting goods on hire from time to time or periodically is as much used for the purposes of the business when stationary as a truck continuously in motion. In the words of Lord Sumner in Birendra Kumar Ghosh v. Emperor (AIR 1925 P.C. 1), "They also serve who only stand and wait". Though a telephone is meant for receiving sound from a distance, it is said to be used by a person even though the person is not actually receiving any sound with its help. A burglar alarm can be said to be in use at a given moment even though there is no burglar in the premises and the alarm is not ringing at the moment. An article which is meant for yielding acertain result and which yields the result not continuously but periodically as and when required, cannot be said to be not in use at a particular time simply because it is not yielding the result at that time. If it is capable of yielding the result and is available for producing the result, it is in use. It is only that article which is meant to go on yielding the result continously that can be said to be not in use at a time when it is not yielding the result. A truck to be used for the purpose of the business of plying trucks and lorries on hire is not an article of this kind, not being meant to be used continuously without a break. Hiring is always for a certain time or for a certain distance and as soon as the time is over or the distance is covered the article hired must remain idle till it is to be hired again.
A person walking with a gun with intent to kill game uses it for that purpose without firing within the meaning of a statute that makes using a gun with that intent penal; see Stroud's Judicial Dictionary, 3rd edition, Vol.4 page 3168. A house is used for purposes of betting within the meaning of a criminal provision, even though betting is done occasionally in it; Troman's v. Hodkinson ((1903) 1 K.B. 30). Under Section 36 of the Salmon Fishery Act any person using any net for catching salmon is liable to penalty. R went with X in a river where salmon was usually caught, got out of his boat and walked along the bank of the river looking for salmon. The net was in the boat for the purpose of being put into the water when a salmon was seen near the surface; though it had not been put into the water, R was held to be guilty of using it for catching salmon: Moses v. Raywood ((1911) 2 K.B. 271). As the net was ready with him in the boat, it was used for the purpose of catching salmon. In Counsel of the City of Newcastle v. Royal Newcastle Hospital, ((1958-59) 100 Commonwealth Law Reports 1), land though not put in active use was held by the Privy Council to be used; a tuberculosis hospital had acquired and kept it vacant in order to keep the hospital free from buildings in the immediate vicinity and to keep the surrounding air pure and clean, and this passive use of the land was held to be use of the land for the hospital. All these cases show that the statement that an article was in use at a particular time does not require that it was actively employed during the time in producing the result for which it was meant."
The learned Judges held that the word "used" is susceptible of wide interpretation and that if the trucks are capable of being put into motion or waiting to be put into motion, though not actually in motion, it can be said that the trucks are being used for the purpose of business. The illustrations given by the learned Judges are apposite.
20. The above two mentioned cases as well as several other cases were considered by a Division Bench of the Delhi High Court in Capital Bus Service (P) Ltd. v. Commissioner of Income-tax, New Delhi, . In the said case, the facts are - that the assessee for its business maintained a fleet of 20 buses. Fifteen buses were maintained against twelve permits for running on regular routes, and the other five buses were maintained for being run on contract basis on temporary permits such as for marriages, private tours and the like. Out of these five buses, one bus was never used and it had been taken off from the road. The other four buses were also not actually employed by the assessee for more than 30 days on account of lack of demand therefor. The contention of the assessee was that these buses were earmarked for contract purposes and were always ready and in a fit condition to ply on the road, and the same was not in dispute. Question arose whether in respect of those buses, the assessee is entitled for depreciation. Depreciation is allowed as per the provisions of the enactment if they are "used" for the purpose of the business. Therefore, the learned Judges had to consider the import of the word "used". The Division Bench considered several cases wherein the said provision was dealt with and ultimately held as under:
"The above survey of the decisions on the subject clearly shows that the consensus of judicial opinion is in favour of adopting the liberal interpretation. We are also of opinion that in the context in which the expression occurs and also having regard to the various types of cases that could arise, the wider interpretation has to be placed on this expression. The decided cases, which have been earlier referred to, have arisen in different contexts which clearly indicate that the wider and more liberal interpretation of the provisions would in the context of Section 1(2)(vi) and (vii) may be appropriate."
21. In State of Punjab v. British India Corporation, , interpretation of the word "used" for the purpose of a factory occurring in Clause (g) of Sub-Section (1) of Section 4 of the Punjab Urban Immovable Property Tax Act came up for consideration before the Supreme Court. Clause (g) mentions "such buildings and lands used for the purpose of a factory as may be prescribed" for claiming exemption from tax imposed by the Punjab Urban Immovable Property Tax Act, 1940. The buildings in the said case were liable to be taxed under the provisions of the Act unless they fall under the exemption clause viz., Clause (g) of Sub-Section (1) of Section 4. The contention of the assesse was that the buildings are used for the purpose of the factory and therefore, entitled to exemption from tax. The Assessing Authority rejected the claim of the assessee for exemption. Appeals to the Deputy Excise and Taxation Commissioner were unsuccessful. Thereupon the assessee moved the High Court by way of a writ petition under Article 226 of the Constitution of India challenging the orders of the Appellate Authority. High Court held that the assessee is entitled to exemption as prayed for and quashed the order of assessment. Consequently, the department went in appeal before the Supreme Court. The Supreme Court had to consider whether the buildings belonging to the Proprietors of the factory will get the benefit of exemption from taxation under Section 4 of the Act. In that connection, the learned Judges had to consider the words "all buildings and lands used for the purpose of factory" occurring in Rule 18 of the Punjab Urban Immovable Property Tax Rules, 1941. The learned Judges while considering the said question held as under:
"It is neither necessary nor desirable to attempt to define what amounts to "use for the purpose of a factory". That the Legislature left this undefined is a good indication that the intention of the Legislature was to have the question decided, in any case where controversy arises over it, on a consideration of the facts of the case. It appears to us to be reasonable to think, however, that two principles will be easy of application in the solution of the problem in the majority of cases. One is that where the building is used for a purpose which the factory law requires must be fulfilled in order that the factory may function, that will be user for the purpose of a factory. The other is that where the user of the building is such as is necessary for the efficiency of the machines or of the workmen engaged in the factory the building should be held to be used for the purpose of a factory."
The above passage clearly lays down that the buildings belonging to the proprietors of the factory or other staff can be said to be used for the purpose of factory even though they were not actually used for the purpose of running the factory. The learned Judges stated that if the buildings are used for a purpose, which the factory law requires must be fulfilled in order that the factory may function, that can be said to be used for the purpose of factory and if the building is such as is necessary for the efficiency of the machines or of the workmen engaged in the factory, the building should be held to be used for the purpose of a factory.
22. The next case relied upon by the learned Government Pleader is Newcastle City Council v. Royal Newcastle Hospital, (1959) 1 All.E.R. 734. The facts of the said case are - Royal Newcastle Hospital was situated in the city of Newcastle, New South Wales in certain area laid out with lawns and gardens. The hospital as well as lawns and gardens laid out are enclosed with a ring fence and they cover an extent of 171/2 acres. Outside the ring fence, the hospital owns 181/2 acres of rough ground marked off by five white posts. Beyond this rough ground, hospital owns 291 acres of land which was still in its virgin state and these acres are traversed by ridges and gullies, which are heavily timbered, with a good deal of underwood. There was no physical use of the extent of 291 acres by the hospital. It was just vacant land.
23. City Council claimed that the hospital is liable to pay rates on these 291 acres also for the years 1946 to 1952 on the ground that the said extent is used or occupied by the hospital for the purpose of the hospital. The question that arose for determination by the Privy Council was whether the extent of 291 acres can be said to be "used" for the purpose of the hospital. The learned Judges answered in the affirmative that the extent can be said to be "used" or occupied for the purpose of hospital. While dealing with the said contention, the learned Judges held as under:
"The land was undoubtedly acquired and owned for those purposes. But was it used or occupied for those purposes? That is the question.
Their Lordships are of opinion that it was used for those purposes. Counsel for the City council submitted that an owner of land could not be said to use the land by leaving it unused; and that was all that had been done here. Their Lordships cannot accept this view. An owner can use land by keeping it in its virgin state for his own special purposes. An owner of a powder magazine or a rifle range uses the land he has acquired nearly for the purpose of ensuring safety even though he never sets foot on it. The owner of an island uses it for the purpose of a bird sanctuary even though he does nothing on it, except prevent people building there or disturbing the birds. In the same way this hospital gets, and purposely gets, fresh air, peace and quiet, which are no mean advantages to it and its patients."
24. Let us also consider the position if a restrictive meaning is given to the word "used" for industrial purpose. It is stated in the affidavit that the area on which the buildings are raised, consist of buildings in which the machineries are installed, godown, electrical rooms, workshop, sub-station, Laboratory, time office, security post and other buildings. Some land may be covered by roads and drainage pipes. If a strict and literal interpretation is placed on the word "used for industrial purpose" meaning thereby "actually used for industry", it cannot be said that manufacturing of any article is carried on with the aid of power in each of the buildings or in the area left for common use. Supposing for want of business, the factory itself is not being run, can it be said that the land is not being used for industrial purpose? If we put the strict and literal interpretation for the words "used for industrial purpose", then we have to necessarily say that it is not being used for industrial purpose. In such a case, even the area which is occupied by the buildings and machinery can also be said to be not used for industrial purpose if the machinery is not actually working. The illustrations given both in Niranjan Lal Ram Chandra v. Commissioner of Income-tax (supra 4); Capital Bus Service (P) Ltd., v. Commissioner of Income-tax, New Delhi (supra 5) as well as in the case of Newcastle City Council v. Royal Newcastle Hospital (supra 7) amply establish that it will lead to absurd results if the word "used" is given a restrictive meaning and construed strictly and literally even in respect of non-agricultural land on which the factory buildings are raised. It will also frustrate the object of "the Act".
25. Considered from common sense point of view also, the interpretation which we have indicated above is more acceptable. Any passer-by will refer to the entire premises as the premises of Cement Factory. The area may be required to be kept vacant by virtue of the building regulations or the provisions of industrial law. On certain area, lawns may be raised and on some other area trees and gardens may be raised to maintain ecological balance and certain area may be required for expansion of the industry and it is kept ready for the same. In the ordinary parlance, in a case like the present one, it is not possible to say that a particular area is for industrial purpose and the other area is a waste land or land which is not being used for any other purpose. Taking into consideration the propositions laid down by the decisions referred to above and also the object and intendment of the Act, we are of the opinion that the word "used" in the Act with reference to the purposes should be given a wider meaning. In the context it is susceptible of wider meaning. The word "used" means not only "actually used", but it also means any land meant to be used or set apart for being used. The definitions of "industrial purpose" and "commercial purpose" also lend support to the wide meaning given to the word "used". "Industrial purpose" means any purpose connected with industrial undertaking. Likewise, "commercial purpose" means the purpose connected with the undertaking in trade,commerceorbusiness. The definitions do not say that the non-agricultural land should be actually utilised for an industrial or commercial activitiy, but it is enough if the land is kept for use for a purpose connected with industrial or commercial undertaking.
26. Learned Government Pleader relied upon the decision of the Supreme Court in Income-tax Commissioner, Gujarat v. Cellulose Products of India Ltd., , for the proposition that recourse can be had to liberal construction so as to effectuate the object of statute in interpreting the taxing statutes. The learned Judges stated that when there is genuine doubt about the interpretation of a fiscal statute or where two opinions are capable of being formed, recourse can be had to a liberal interpretation to effectuate the object of the statute. The aforesaid decision justifies our opinion to give a wider or more liberal interpretation to the word "used" in "the Act". The other decisions referred to by the learned Government Pleader with regard to the construction of statutes need not be specifically dealt with as they referred to well-known principles of interpretation of statutes.
27. Learned Government Pleader also contended that the petitioner-company, having applied for and got the alienation for industrial purpose viz., for Cement Factory, cannot be heard to say that the entire extent of the land was not being used for the purpose for which it was obtained by way of alienation. This can be taken one of the circumstances for interpreting the word "used" in the Act.
28. Sri T. Bali Reddy, learned counsel for the petitioner relied upon a decision in State of Uttar Pradesh v. Ramagya Shama, for interpretation of the word "used" in a strict sense. The said decision does not relate to interpretation of the word "used" occurring in any taxing statute. The facts in the said case are - that the accused - respondent before the Supreme Court obtained certain quantity of iron including rods on applications filed by him under the provisions of Clause (7) of the Iron and Steel (Control) Order (1956). According to the said clause, a person acquiring iron or steel under the provisions of the Order shall not use the iron or steel otherwise than in accordance with the conditions contained or incorporated in the document which was the authority for the acquisition. Iron was obtained by the accused for the purpose of constructing a public temple and Dharmasala.
29. Accused was prosecuted on the ground that he, after obtaining the material sanctioned by the authority, did not construct any temple or Dharmasala and the iron obtained under the permits was not utilised for the purpose for which it was taken. In that connection, a question arose as to what is the meaning to be given to the word "used' occurring in Clause (7) of Control Order, 1956. The learned Judges held that the word "used" must take its colour from the context in which it is used and the said expression in the context suggests something done positively, e.g., utilisation or disposal. Mere "non-use" is not included in the word "used".
30. We are of the opinion that this decision is not helpful in construing the word "used" occurring in taxing statute i.e., "the Act". We must remember that the learned Judges of the Supreme Court were considering in the said judgment the word "used" in the context of prosecution launched against the accused. In such a case a literal and strict meaning will have to be given to the word "used" since the accused is liable to be convicted and sentenced under the provisions of the Order for criminal liability. Moreover, the context in which that expression occurs is also quite different. Therefore, the said decision, in our view, is not helpful in construing the word "used' in the present case.
31. Learned counsel for the petitioner in support of his contention relied upon a judgment of a Division Bench of this Court in Associated Cement Companies Limited v. Government of Andhra Pradesh (supra 1). This decision is no doubt directly in point and construed the word "used" occurring in the Act. Under the provisions of the Act, tax was levied on the lands utilised for non-agricultural purpose. The petitioner-company therein owned Ac.338-22 guntas of land on which the Cement Factory for manufacture of cement was erected. Out of the entire extent, only Ac.32-18 guntas were utilised for setting up the machinery wherein the manufacturing process takes place and certain buildings were constructed. The company also constructed certain houses to accommodate its staff and workers and the area is covering about 173 acres 5 guntas leaving a vacant site of 121 acres 14 guntas as waste land with shrubs thereon. Apart from this, the company also has taken on lease Ac.1900-00 of land for the purpose of carrying on mining operations i.e., for extraction of lime stone which is the raw material for the manufacture of cement. Tax was levied under the Act on the land used for non-agricultural purposes i.e., the land used for the purpose of carrying on mining operations. Writ Petition No. 290 of 1965 and batch were filed in this Court. A Division Bench of this Court consisting of Gopal Rao Ekbote and Y. Venkateswara Rao, JJ. while upholding the constitutional validity of the Act, held that the assessment cannot be levied in respect of the land used for extraction of minerals like mining operations etc. As a consequence of the judgment of the Division Bench, the Act was amended by A.P. Non-Agricultural Lands Assessment Act, 1974 by adding the following words:
".... and includes a purpose connected with an excavation, underground or otherwise, where any operation for the purpose of searching for, or obtaining a mineral has been or is being carried on." to the definition Clause of 'industrial purpose' under Section 2(d) of the Act.
32. Questioning the legislative competency of the amendment to Section 2(d) of the Act, writ petitions were filed. The said writ petitions were disposed of by a Division Bench of this Court consisting of Madhava Rao and Jeevan Reddy, JJ. (supra 1). The learned Judges upheld the constitutional validity of the Amending Act, 1974. Then it was contended before the learned Judges that the authorities have no power to levy assessment on the land which was kept vacant or waste or wherein mining operations are not being carried on and assessment can be levied only on the land over which mining operations are carried on. While dealing with the said contention, the learned judges had to consider the import of the word "used" occurring in the charging Section 3. Learned Judges held that "when the land is not put to a non-agricultural purpose and it is a waste land, then the question of imposing tax on it treating it as non-agricultural land does not arise." This interpretation of the word "used" is relied upon by the learned counsel for the petitioner, Sri T. Bali Reddy in support of his contention. In the said case, there is no detailed discussion with regard to the interpretation of the word "used". The Division Bench has not considered the object and intendment of the Act and the context in which the word "used" is occurring. In fact, this particular question was not debated in detail. We do not find any reasoning on this aspect. Everybody seems to have proceeded on the basis that the word "used" occurring in the charging section as well as in the schedule etc., means only the land actually used for industrial purpose.
33. Having regard to what is stated above and for the reasons mentioned in the judgment, we are of the opinion that the judgment of the Division Bench insofar as it construed the word "used" as meaning "actually used" is not correct. Therefore, we are of the opinion that the judgment to that extent does not represent correct position of law and it is accordingly overruled.
34. The same Division Bench also took the same view in Electronics Corporation of India Ltd., v. Secretary, Government of Andhra Pradesh (supra 2). The learned Judges held that the charging Section 3 levies the assessment on such non-agricultural land as is used for three purposes mentioned therein and not otherwise. The learned Judges held that the word "used" is more significant than the "purpose" viz., whether industrial purpose, commercial purpose or any other non-agricultural purpose.
35. For the reasons mentioned in the aforementioned paragraphs and in view of what is stated by us with reference to the decision (supra 1), we are unabel to agree with the interpretation put upon the word "used" by the Division Bench in this decision also. Having regard to what is stated above, the decision of the Division Bench to this extent is not correct and is accordingly overruled.
36. For appreciating the point whether the emphasis is on the word "used" or on the word "purpose", it is necessary to extract the charging section insofar as it is relevant for the present purpose which is as under:
"Section 3. Levy of assessment of non-agricultural land:-(1) In the case of non-agricultural land.... there shall be levied and collected.....from the owner of such land, as assessment, at the rate specified in column (2) where the land is used for any industrial purpose, at the rate specified against it as column (3) where the land is used for any commercial purpose and at the rate specified against it in column (4) where the land is used for any other non-agricultural purpose including residential purpose."
It becomes immediately clear mat the levy is on the non-agricultural land and the collection is from the owner of such land. For determining the rate of assessment, "purpose" is relevant. For the purpose of levy, the emphasis is not on the word "used", but on the word "non-agricultural land". It is only for the purpose of ascertaining the rate of assessment to be levied on the non-agricultural land, we look to "purpose". If this is kept in view, the intention and ambit of the impost will be very clear. The context in which it was used as stated in the afore-mentioned paras also indicate, having regard to the above relevant extract of the charging section, actual use of the land is not decisive.
37. In view of what is stated above, the judgment of the Division Bench of this Court in Writ Petition No. 290 of 1965 and batch dt.22-4-1970 to the extent it held that the charging section contemplated levy of assessment only on lands which are actually used for one or the other purposes specified therein and not on vacant and waste lands or their potential for industrial, commercial and other purposes, is not correct. To that extent, the said judgment of the Division Bench is also overruled.
38. Further, in the said judgment of the Division Bench, the question as to the meaning to be given to the word "used" was not specifically debated. The main point which was debated before the Division Bench was regarding the constitutional validity of the Amending Act, 1974.
39. Learned Government Pleader also relied upon certain provisions in the Acts relating to Maharashtra, Karnataka and Rajasthan. We do not find any assistance in construing the word "used" in those Acts.
40. Learned Government Pleader also relied upon a Judgment of the Supreme Court in Income-tax Commissioner, Andhra Pradesh v. Tajmahal Hotel, for the contention that in construing the word in a statute, distionary meaning which leads to literal interpretation, need not be considered. He also relied upon another decision in Municipal Corporation of Greater Bombay v. New Standard Engineering Co., Limited, for the proposition that when the language of the statute is not plain, such interpretation which secures the object of the Act should be adopted.
41. We have taken into consideration the principles laid down by the decision referred to in the preceding paragraph for construing the provisions of "the Act" in coming to the conclusion as we did in the foregoing paragraphs.
42. For all the reasons stated above, we are of the opinion that the word "used" occurring in charging Section 3 and the Schedule does not necessarily mean "actually used", but it also means land meant to be used or set apart for being used or even readily available for use.
43. The reference is answered accordingly.