# COMMISSIONER OF WEALTH-TAX, ANDHRA PRADESH v. OFFICER-IN-CHARGE (COURT OF WARDS) PAIGAH

- **Citation:** [1977] 1 S.C.R. 146
- **Court:** Supreme Court of India
- **Decided:** 1976-08-06
- **Case number:** Civil Appeals Nos. 2552-2556 of 1969
- **Bench:** A. N. Ray. C.J, M. H. Beg, R. s. SARKARIA, P. N. Shingi-Ial, B Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissioner-of-wealth-tax-andhra-pradesh-v-officer-in-charge-court-of-wards-6898
- **Pages:** 11

## Headnote

c
D
Wealth Tax Act (27 of 1957)-Agricultural Lands, What are-Tests for
determining.
The assessee was the owner of more than I 00 acres of land within municipal
limits and enclosed by a compound wall. The land was adjacent to a
tank,
had two wells ih it, was capable of being used for agriculture, was assessed
to )and revenue as agricultural land, but had not been actually put to any
non.agricul!ural use.
·
The HiQ:h Court held that the land was 'agricultural land' under s. 2(e) (i)
of' the Wealth. Tax Act, 1957 and exempt from wealth tax on the basis that,
(1) the expression 'agricultural land', hot having been defined in the Act, must
be given the widest possible meaning; (2) so interpreted, all land which is
capable of being utili~d for agricultural purposes would be 'agricultural land'
unless il is actnally put to some non.agricultural use like construction of
buildings etc; and (3) 'the land has been assessed to land revemie as agricultural
land under the State Revenue Law.
Allowing the appeal,
. ,....
HELD : It is only land, which either is being actually used or ordinarily
used, or has been set apart or prepared for use for agricultural pmposes so as
to indicate the intention of the owner or occupier of the Jahd to put it to agri'
,.._
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cultural use, that would be 'agricultural !'and'. [156 A]
(I) It is not correct to give the expression a wide meaning mere! y because
the statute does not define it.
The1 correct rule is for the Court to endeavour
to find out logically the exact sense i'n which the words have been used in a
particular context, reading the statute as a whole, giving an interpretation in
consonance with the purposes of the statute, and avoiding absurd results. [153
A-Bl
(2) The object of the Wealth Tax Act is to tax surplus wealth.
It is not
all land but only 'agricultural land' that is excluded from the definition of assets.
Therefore, it is imperative to give reasonable limits to the scope of the ex-
• pression 'agricultural land'.
[153 CJ
·
.
(3) The determination of the character of land, according to the purpose
for which it i> meant or set apart and can be used, is a matter which. ought to
be determined on the facts of each particular case.
What is really required
to be shown is the connection with an agricultural purpose and user, and not
the mere possibility of user by some possible future owner or possessor, for
an agricultural purpose. It is not the potentiality, but its actual condition and
intended user which has to be seen for purposes of exemption from wealth tax.
The correct test to apply would be to.find out whether human labour had been
applied to the land itself, in order to extract from its natural powors, added to
or aided by other nautral or artificial sources of strength, a product which can
yield .income. If there is nothing in its condition, or in the evidence to indicate
the intention of its 9wner or possessor, so as to connect it with a'n agricultural
purpose, the land could not be 'agricultural land.
The person claiming that
any property is exempt must satisf'y the conditions of the exemption. [155 G-H]
The extent of the lahd, its situation, that it was capable of being used for
agricultural purposes and has not been actually put to any use which would
make it unfit for immediate
cultivation, are, therefore,
inconclusive
being
based on absence of user for non-agricultural purpose. Entries in revenue
records are. however, good vrima facie evidence since they are based on some
quasi-judicial enquiry but they raise only a rebuttable presumption.. Tf such
146
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COMMR. OF WEALTH TAX v. OFFICER-IN-CHARGE (Beg, J.)
147
prima facie evidence was. enough for the assessee to discharge his burden to
establish an exemption, evidence to rebut it should have been led on . behalf
of the Department. In the present case, however_, the High Court relted 'not
only on the entries, but also, on the inconclusive circumstances based on ?ot~n
tialities.
While doing so, the High Co

## Text

A
COMMISSIONER OF WEALTH-TAX, ANDHRA PRADESH
v.
OFFICER-IN-CHARGE (COURT OF WARDS) PAIGAH
August 6, 1976
[A. N. RAY. C.J., M. H. BEG, R. s. SARKARIA, P. N. SHINGI-IAL AND
B
JASWANT SINGH, JJ.]
c
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Wealth Tax Act (27 of 1957)-Agricultural Lands, What are-Tests for
determining.
The assessee was the owner of more than I 00 acres of land within municipal
limits and enclosed by a compound wall. The land was adjacent to a
tank,
had two wells ih it, was capable of being used for agriculture, was assessed
to )and revenue as agricultural land, but had not been actually put to any
non.agricul!ural use.
·
The HiQ:h Court held that the land was 'agricultural land' under s. 2(e) (i)
of' the Wealth. Tax Act, 1957 and exempt from wealth tax on the basis that,
(1) the expression 'agricultural land', hot having been defined in the Act, must
be given the widest possible meaning; (2) so interpreted, all land which is
capable of being utili~d for agricultural purposes would be 'agricultural land'
unless il is actnally put to some non.agricultural use like construction of
buildings etc; and (3) 'the land has been assessed to land revemie as agricultural
land under the State Revenue Law.
Allowing the appeal,
. ,....
HELD : It is only land, which either is being actually used or ordinarily
used, or has been set apart or prepared for use for agricultural pmposes so as
to indicate the intention of the owner or occupier of the Jahd to put it to agri'
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cultural use, that would be 'agricultural !'and'. [156 A]
(I) It is not correct to give the expression a wide meaning mere! y because
the statute does not define it.
The1 correct rule is for the Court to endeavour
to find out logically the exact sense i'n which the words have been used in a
particular context, reading the statute as a whole, giving an interpretation in
consonance with the purposes of the statute, and avoiding absurd results. [153
A-Bl
(2) The object of the Wealth Tax Act is to tax surplus wealth.
It is not
all land but only 'agricultural land' that is excluded from the definition of assets.
Therefore, it is imperative to give reasonable limits to the scope of the ex-
• pression 'agricultural land'.
[153 CJ
·
.
(3) The determination of the character of land, according to the purpose
for which it i> meant or set apart and can be used, is a matter which. ought to
be determined on the facts of each particular case.
What is really required
to be shown is the connection with an agricultural purpose and user, and not
the mere possibility of user by some possible future owner or possessor, for
an agricultural purpose. It is not the potentiality, but its actual condition and
intended user which has to be seen for purposes of exemption from wealth tax.
The correct test to apply would be to.find out whether human labour had been
applied to the land itself, in order to extract from its natural powors, added to
or aided by other nautral or artificial sources of strength, a product which can
yield .income. If there is nothing in its condition, or in the evidence to indicate
the intention of its 9wner or possessor, so as to connect it with a'n agricultural
purpose, the land could not be 'agricultural land.
The person claiming that
any property is exempt must satisf'y the conditions of the exemption. [155 G-H]
The extent of the lahd, its situation, that it was capable of being used for
agricultural purposes and has not been actually put to any use which would
make it unfit for immediate
cultivation, are, therefore,
inconclusive
being
based on absence of user for non-agricultural purpose. Entries in revenue
records are. however, good vrima facie evidence since they are based on some
quasi-judicial enquiry but they raise only a rebuttable presumption.. Tf such
146
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COMMR. OF WEALTH TAX v. OFFICER-IN-CHARGE (Beg, J.)
147
prima facie evidence was. enough for the assessee to discharge his burden to
establish an exemption, evidence to rebut it should have been led on . behalf
of the Department. In the present case, however_, the High Court relted 'not
only on the entries, but also, on the inconclusive circumstances based on ?ot~n
tialities.
While doing so, the High Court did not hold that cate~oncal findmg
of the taxing authorities and Tribunal that the la!!d was never used, no.r was
intended to be used for an agricultural purpose did not. rest on. any evidence
at all; nor did it give any reasons fo~ rejecti'ng the. fi_ndmg. It is. therefore a
fit case for beine remanded to the Tribunal for decidmg the quest10n of fact,
after giving opportunity to both sides to adduce evidence. [155 B-E]
C.l.T. W. Bengal v. Raja Benoy Kumar (1957) I.T.R. 466, followed.
Sarojini Devi v. Raja Sri Krishna A.I.R. 1944 Mad. 4.Q1, overruled.
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2552-2556
of 1969.
(From the Judgment and Order dated 26.11.1968 of the Andhra
Pradesh High Court in Case Referred No. 40164 arising from R. A.
Nos. 1709-1713162~63).
B. Sen, S. P. Nayar for the Appellants.
K. Vasudeva Pillai, H. R. Puri and P. K. Pillai for the respondent.
The Judgment of the Court was delivered by
BEG, J.-Civil AppeaJs Nos. 2552-2556 of 1969,
are direeted
against a judgment of the Full Bench of the· High Court of Andhra
Pradesh.
The case was certified as fit under Articles 132 and 133 of
the Constitution for an appeal to this Court.
The question involved,
as framed in the Andhra Pradesh Case is, on the facts and circumstances of the present case are certain lands situated at Begumpet,
Lalguda, Jaiguda, Subzimandi, Yerraguda, Zamboorkhana and Vicarabad, "agricultural lands" within the meaning of section .2(e) fi) of
the Wealth Tax Act (hereinafter referred to as 'the Act') ?
If any of the lands mentioned above are agricultural lands, · as
defined by the Act, they would be excluded from the definition of
"assets" given in Section 2(e) of the Act, and, therefore, exempt from
wealth tax.
Section 2(e) says :
"2 ( e) 'assets' includes property of every
movable or imovable, but does not includexxx
xxx
xxx
xxx
description,
(i) agricultural land and growing crops, grass or standing
tress on such lafl:d;"
The word 'agricultural land' occurs in entries 86,
87
and
83
of List I to 7th Schedule of our Constitution relating to matters on
which Parliament may legislate.
Entry 86 here says :" Taxes on
the capital value of the assets, exclusive of agricultural land of individuals and companies; taxes on the eapital of companies:"
Entries
87 and 88 deal with Estate duty and duties of succession to property
and each of them excludes agricultural land from property on which
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SUPREME COURT REPORTS
[1977] 1 S.C.R.
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taxes may be levied by Parliament.
Entry 18 of List II giving sub8
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jects of exclusively state legislation says :
"Land, that is to say, rights in or over land, land tenures
including the relation of landlord and tenant, and the callee~
tion of rents, transfer and alienation of agricultural land;
land improvement and agricultural loans; colonization."
It is thus clear that "agricultural land" is only a species of land.
The main question before us is whether it should stand for all land
which is capable of being utilised for agricultural purposes or
for
some land which either is being actually used or .has been set apart
or prepared for use for agricultural purposes so as to indicate the
intention of the owner or occupier of the land to put it to agricultural
uses.
This raises the further question : What is an agricultural
purpose or agriculture ?
The term "agriculture" was discussed very thoroughly by
this
Court in Commissioner of Income Tax, West Bengal, Calcutta v. Raja
Benoy Kumar Sahas Roy.( 1)
This Court said there (at p. 472-473)
"The term 'agriculture' and 'agricultural
purpose' not
having been defined in the Indian Income-tax Act, we must
necessarily fall back upon the general sense in which they
have been understood in common parlance.
'Agriculture'
in its root sense means ager, a field, and culture,
cultivation, cultivation of a field which of course implies expenditure
of human skill and labour upon land.
The term has, however, acquired a wider significance and that is to be found
in the various dictionary meanings ascribed to it.
It may
be permisible to look to the dictionary meaning of the term
in the absence of any definition thereof in the relevant
statutes."
Therefore, this Court, beginning with the decision of Lord Coleridge in R. v. Peters( 2 ), scanned and discussed various decisions of
English and Indian Courts, and the meanings given in various dictionaries of the English language, as well as
in
the law dictionaries.
It then reached the conclusion (at p. 510) :
"If the term 'agriculture' is thus understood as comprising within its scope tqe basic as well as subsequent operations in the process of agriculture and the raising on the ·land
of products which have some utility either for consumption
or for trade and commerce, it will be seen
that the term
'agriculture' receives a wider interpretation both in regard to
its operations as well as the results of
the same.
Nevertheless there is present all throughout the basic idea that
there must be at the bottom of it cultivation of land in the
sense of tilling of. the land, sowing of the seeds, planting, and
'ff
similar work done on the land itself. This basic conception is
the essential sine qua non of any operation performed on the
---·-·-------- --
(1) [1957]32I.T.R. p.466at472&510.
(2) [1886] 16 Q. B.D. 636, 641.
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COMMR. OF WEALTH TAX V. OFFICER-IN-CHARGE (Beg, J.)
land constituting agricultural operation. If the basic operations are there, the rest of the operations found themselves
upon the same.
But if these basic operations are wanting
the subsequent operations do not acquire the characteristic
of agricultural operations,"
149
In Raja Benoy Kumar Sahas Roy's case (supra), the question
before this Court was whether income from forest lands. derived from
sal a~d piyasa1 trees "not grown by human skill and labour" could .
constitute agricultural income.
The test applied there was whether
there was sonie integrated activity which could be described as agricultural operation yielding income.
It was pointed out that, although,
·a mer~ wild or spontaneous growth of trees, not involving the employment of any human labour or skill for raising them, could not be: agricultural income, yet, when there was a foresf more than 150 years
old, which had been carefully nursed and attended to by its owners,
the income would be agricultural. It is true that this case is not a
direct authority upon what is "agricultural land." Nevertheless,
it
goes a long way in helping us to decide what could be agricultural
land.
We think that this must be land which could be said to be
either actually used or ordinarily used or meant to be used for agricultural purposes.
In other words, "agricultural land" must have a
connection with an "agricultural user or purpose. It is on the
nature of the user that the very large number of definitions
and authorities discussed by this Court, in Raja Benoy Kumar Sahas
Roy's case (supra), 'have a direct bearing.
In that case, this Court
held that the wider meaning given to agricultural operations,
such
as breeding and rearing of livestock, poultry farming, or dairy farm-
. ing will not be applicable.
It held that the correct test to apply
would be to find out whether human labour had. been applied
to
the land itself, in order to extract· from its natural powers, added to
or aided by other natural or artificial sources of strength to the soil,
a product which can yield an income.
In the case before us, the question is a connected one.
Here also
the term "agricultural land" has not been defined.
That, however,
does not mean that the land to be considered can be divorced from
its ac~ual or natural '?r ordinary user. . If all land which is capable
of bemg used for agnculture, could be mtended to be excluded froni
"a~se.ts", practically ev~r)'. type of land, including that c~vered by
bmldmgs, would fall w1th111 that class.
Hence, it seems to us to be
impossible to adopt. so w!de a test as would obv~ously defeat the purpose of the exemption given.
Apparently, agricultural land is excluded from the definition of "assets" as it was thought that Parliament
was not competent to impose taxes which will fall on
agricultural
land.
Whatever may be the reason for the exemption,
we think
that the exemption is connected with the user of land for a purpose
which must be agricultural.
It is an enactment to tax "wealth" which
inc~u~es all that is. ordinarily understood as "assets".
The
person
clamung an ex.empt10n of 3;ny property of his from the scope of his
assets must satisfy the cond1ttons of the exemption.
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SUPREME COURT REPORTS
(1977] 1 S.C.R.
It is true that, in Raja Benoy Kumar Sahas Roy's case (supra),
this Court pointed out that meanings of words used in Acts of Parliament are not necessarily to be gathered from dictionaries which are
not authorities on what Parliament must have meant.
Nevertheless,
it was also indicated there that, where there is nothing better to rely
upon, dictionaries may be used as an aid to resolve an ambiguity. The
ordinary dictionary meaning cannot be discarded simply because it is
given in a dictionary. To do that would be to destroy the literal rule
of interpretation.
This is a basic rule relying upon the
ordinary
dictionary meaning which, in the absence of some overriding or special reasons to justify a departure, must prevail.
Moreover, it was
held there that the dictionary meanings: of the word "agricultural" were
wider than what was meant.by "agricultural income" as that term was
used in the Income tax Act.
Even if we could give a wider connotation to the term "agricultural" than the one it carries with it in the
Income tax Act, we cannot dispense with credible evidence of atleast
appropriation or setting apart of the land for a purpose which could
be regarded as agricultural and for which the land under consideration
could be reasonably used without an alteration of its character. This
we think, is the minimal test of "agricultural land" which should b~
applied in such cases.
In stating the facts of the case with regard to the Begumpet property, which, according to a rather surprising agreement between parties, was to be used for reaching an inference applicable to all other
lands in the case, the High Court said :
"The property at Begumpet was known as 'Begumpet
Palace, Hyderabad.' The buildings in this property were
valued at Rs. 8,81,336/- while the vacant land comprising
an area of about 108 acres was valued at Rs. 15,69,052.
The entire plot of land was enclosed in a compound wall and
the various buildings inside it had their own compound
walls.
The property is situated within the limits of the
Hyderabad Municipal Corporation.
The land had never
been actually, used for agriculture, in the sense, that it had
never been ploughed or tilled.
The property is situated
adjacent to the tank known as "Hussain Sagar'
on the
southern side, and there are two wells in the said land. The
land was capable of being used for agriculture and land revenu~ was being assessed and paid in respect of the said
lands.
A portion of the land was acquired by the Government of Hyderabad on 15th September, 1955 and utilised by
them for construction of buildings thereon."
The High Court then stated the views of the taxing authorities as
follows :
"On these facts, the Wealth Tax Officer, came to
the
conclusion that the lands could not be treated as 'agricultural lands' as no agricultural operations were carried on,
in the sense of
ploughing and tilling the land and raising
any crop thereon.
The Appellate Assistant Commissioner,
COMMR. OF WEALTH TAX V. OFFICER-IN-CHARGE (Beg, J.)
151
confirms the order of the Wealth Tax Officer on this point.
The assessee preferred an appeal to the Income Tax Appellate Tribunal
The Tribunal also took the view that the
said land was never intended to be used for agriculture and
that the lands were never ploughed or tilled and that the
lands were situated within the limits of the Hyderabad Municipal Corporation and that the presumption would be that
they were not agricultural lands and that the said presumption was not rebutted, as no agricultural operations were ever
carried on in the said land.
On this view, the Tribunal
confirmed the order of the Appellate Assistant Commissioner
on this point."
The High' Court had discussed the various meanings of the term
"agriculture" and pointed out how it had acquired a wide sweep. It
also discussed a number of cases, including Sarojini Devi v. Srikrishna,( I) which had not been followed by a Division Bench of the
Andhra Pradesh High Court in Manyam Meenakshamma v. Commissioner of Wealth Tax A.P.,(2 ) on the ground that the Madras view,
that it was enough that the land was capable of being used for agricultural purposes, was no longer good law in view of the pronouncement of this Court in Raja Benoy Kumar Sahas Roys case (supra).
The Andhra Pradesh Division Bench had said in Smt. Manyam Meenakshamma's case (supra) (at p. 544) :-
"We are inclined to agree with the observation of Hegde
and Ahmed Ali Khan, JJ. in Sri Krishna Rao L. Balekai v.
Third Wealth Tax Officer [1963] 48 I.T.R. 472 that the
present characteristics and not the potentialities of a land
are the proper criterion.
If a land is ordinarily used for
purposes of agriculture or for purposes subservient to or
allied to agriculture, it would be agricultural land. If
it is not so used, it would not be agricultural land.
The
question how a land is ordinarily used would be one of
fact depending on the evidence in each case.
If,
for
instance, an agricultural land, as we have interpreted above,
is left fallow in a particular year owing to adverse seasonal
conditions or to some other special reason, it would not cease
to be agricultural hind."
Apparently, the conflict between the views contained in Sarojini
Devi's case (supra) ·and in Smt. Manyam Meenakshamma's
case
(supra), had led to a reference of the case to a larger bench.
The
Full Bench of the Andhra .Pradesh High Court, after discussing a
number .of cas~ ~f various High Courts, preferred the Madras High
Court view, pnnc1pally on two grounds : firstly, becausue as wide
a connotation as was possible·to give to the words1 "agricultural land"
was preferable in a taxing statute; and, secondly, because the entry
to the large tract of vacant land in the Begumpet Palace in revenue
records as assessable to land revenue raised a presumption of its
agricultural character.
A.I.R. 1944 Mad. 401,
(2) [1967] 63 I.T.R. 534 at 544.
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SUPREME COURT REPORTS
(1977] 1 S.C.R,
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The Full Bench stated its conclusions on questions of law
as
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follows :
" ( 1 ) The words 'agricultural land' occurring in Section
2(e) (i) of the Wealth Tax Act should be given the same
meaning as the said expression bears in Entry 86 of List I
and given the widest meaning :
(2) The said expression not having been defined in the
constitution, it must be given the meaning which iv ordinarily
bears in the Einglish language and as understood in ordinary
parlance :
( 3) The actual user of the land for agriculture is one
of the indicia for determining the character of the land as
agricultural land :
·
( 4) Land which is left barren but which is capable of
being cultivated can also be 'agricultural land' unless
the
said land is actually put to some other non-agricultural purpose, like construction of buildings or an aerodrome, runway, etc. thereon, which alters the physical character of
the land rendering it unfit for immediate cultivation :
( 5) If land is assessed to land revenue as agricultural
land under the State revenue law, it is a strong piece of
evidence of its character as agricultural land :
( 6) Mere enclosure of the land does not by itself render it a non-agricultural land :
(7) The character of land is not determined by the
nature of the 'products raised, so long as the land is used
or can be used for raising valuable plants or crops or trees
or for any other purpose of husbandary :
(8) The situation of the land in, a village or in an urban
area is not by itself determinative of its character."
The Full Bench rejecting the effect o( such features as construction of a Palace and the location of the land within its
compound
said :
"The land is of a large extent of 108 acres and abuts
Hussain Sagar tank and has two wells in the land itself.
These indicate that the land possesses all the characteristics
of agricultural land and that it is capable of being put to
agriculture.
It is also not disputed that the land is vacant
and has not been actually put to any purpose other
than
agriculture and that the physical character of the land is not
such as to render it unfit for immediate cultivation.
The
other relevant fact is that the land has been admittedly assessed to land revenue as agricultural land under section 50
of the Hyderabad Land Revenue Act. ·
These factors in
our opinion, strongly indicate that the land in question
is
agricultural land."
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COMMR. OF WEALTH TAX V. OFFICER-IN-CHARGE (Beg, J.)
153
We think that it is not correct to give as: wide a meaning as possible to terms used in a statute simply because the statute does
not
define an expression.
The correct rule is that we have to endeavour
to find out the exact sense in which the words have been used in a
particular context.
We are entitled to look at the statute as a whole
and give an interpretation in consonance with the purposes of the
statute and what logically follows from the terms used.
We are to
avoid absurd results.
If we were to give the widest possible connotation to the words "agricultural land", as the Full Bench of
the
Andhra Pradesh High Court seemed inclined to give· to the term
"agricultural land", we would reach the conclusion that practically
all land, even that covered by buildings, is "agricultural land" inasmuch as its potential or possible use could be agricultural. The object
of the Wealth Tax Act is to tax surplus wealth. It is clear that all
land is not excluded from the definition of assets. It is only "agricultural land" which could be exempted.
Therefore, it is imperativ~ to
give reasonable limits to the scope of the "agricultural land'', or, in
other words, this exemption had to be necessarily given a more restricted meaning than the very wide ambit given to it by the Andhra
Pradesh Full Bench.
The Full Bench itself saw the need for some kind 0( limitation to
the application of "widest purpose" principle, if one may call it that.
Therefore, evidently in an attempt to avoid the unreasonable conclusion
to which. too wide a definition of "agricultural land" would naturally
lead to, the Full Bench, in the fourth conclusion recorded by it, held
that, if some vacant land is actually built upon, it changes its physical
characteristics and becomes unfit for immediate cultivation. It thus
qualified its view that the widest possible meaning must be given to
"land". Its final view was that only such land could cease to be agricultural land as had actually become unfit for immediate use for an
agricultural purpose. This view seems to imply that one has to start
with the presumption that all "land", as such is "agricultural land".
If one were to start with such a presumption, (although, we must, in
fairness to the views actually expressed by the Full Bench, observe that
it did not expressly say ~o), even desert land will have to be first
presumed to be agricultural land. We feel certain that the Full Bench
did not mean to carry the application of assumptions or principles,
which seem to follow from its reasoning, so far as that.
Conclusions 6, 7 and 8
are only negative in character.
They
merely indicated what could not be conclusive in deciding whether
the land was agricultural. Conclusions 6 to 8, as stated above, would
seem to be correct. But, in our opinion, they do not carry us far in
formulating a test of what is agricultural land.
Conclusion No. 5
seems to have been the real or positive test, based on entries in revenue
records, actually adopted by the Full Bench for determining the nature
of the land.
The attempted application of the principles laid down by the Full
Bench shows that what were treated as tests were really presumptions
arising from the following facts : firstly, that the area was 108 acres
abutting Hussain Sagar tank; secondly, that this land had two wells in
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SUPREME COURT REPORTS
[1977] 1 S.C.R.
it; thirdly, that it was capable of being used for agricultural purposes;
fourthly, that it had not been actually put to any use which could
change the character of land by making it unfit for immediate cultivation; and, fifthly, that it was classified and assessed to land revenue
as "agricultural land" under the provisions of the Andhra Pradesh
Land Revenue Act 8 of 1317 Fasli perhaps on the assumption that
it could be used for agriculture.
We may observe that the first four indicia set out aborn are based
on absence of any user for non-agricultural purposes.
Hence, they
are inconclusive. The last feature does seem to provide some evidence
of the character of the land from the point of view of its
purpose.
Section 50 of the Hyderabad Land Revenue Act (No. VIII of 131 7F)
(now called the Andhra Pradesh Land Revenue Act) lays down :
"50. Land revenue shall be assessed
according to the
various modes of use.
(a) Agricultural use.
(b) In addition to agricultural
use any other use from
which profit or advantage is derived.
When rate is assessed on any land for any one of the
aforesaid purposes and the land is appropriated for any other
purpose th~ rate thereof shall be altered and fixed again,
although the term of
subsisting
settlement may not have
expired.
If any land granted by the Government with remission of
land revenue for any special purpose is appropriated to some
other purose against the intention of the
grant, the land
revenue thereof shall be recovered.
It shall be lawful for the Taluqdar, and in case a taluqa
is under settlement, for the Commissioner of Survey Settlement or Commissioner of land Records after giving a heating
to the land holder to prohibit its appropriation for any particular purpose and record reasons therefor and to summarily
evict the holder who may have appropriated the said land to
prohibited purpose".
Provisions of· the Andhra Pradesh Land Revenue Act seem
to
involve quasi-judicial proceedings, or atleast, an enquiry into the purposes for which land to be assessed has been appropriated. The Full
Bench of the Andhra Pradesh High Court has held these entries to be
"strong prima facie evidence", and, it practically decided the case on
the basis of these entries.
But, the difficulty seems to us to be that
the taxing authorities had given a categorical finding that the land
under consideration had neither been used for an agricultural purpose
nor was it ever tended to be so used. It may be that this finding was
based on no evidence or was based on the circumstance that the land
appeared to have been kept, as the environs of a huge palace, unused
for any agricultural purpose. It may be that the past history of such
lands could give rise to some guess-work that no agricultural user was
i!ltended by the owners of the Begumpet Palace. But, is it possible to
},
COMMR. OF WEALTH TAX V. OFFICER-IN-CHARGE (Beg, J.)
155
reach a categorical finding or conclusion on the basis of general notions,
A
based on past history of the way in which such lands were treated by
their aristocratic owners?
At any rate, there presumably was some,
possibly quasi-judicial, enquiry at the time of classification of land as
"agricultural" under the provisions of Section 50 of the Andhra Pradesh
L;md Revenue Act.
There must have been some evidence given for
such a classification.
Learned Counsel for the assessee respondents submitted that no
evidence had been led on the question of intended user before the
Taxing authorities as the "prima facie evidence", provided by the
entries in the revenue records, was considered enough. It has, however,
to be remembered that such entries could raise only a rebuttable presumption.
It could,
therefore, be contended that some
evidence
~hould have been led before the Taxing authorities of the purpose or
intended user of the land under consideration before the presumption
could be rebutted. If the "prima facie" evidence of the entries was
enough for the assessee to discharge his burden to establish an exemption, as it seemed to be, evidence to rebut it should have been led on
behalf of th"' Department.
We think that this aspect of the question was not examined by the
Full Bench from a correct angle. Although it seems to lmve based its
conclusion primarily on the "prima facie" evidence provided by the
entries under Section 50 of the Andhra Pradesh Land Revenue Act,
it had also used other indicia which were really not very helpful. They
had a bearing on potentialities for agricultural user.
The Full Bench
had, however, not recorded a finding that conclusion reached hy the
Taxing authorities, that the land was never even intended to be used
for an agricultural purpose, rested on no evidence at all. It had not
given its reasons for rejecting this finding of the Tribunal.
We also think that the Full Bench was not correct in adopting the
view expressed in Sarojini Devi's case (supra) by the Madras High
Court where it was held that it was enough to show that the land under
consideration was capable of being used for agricultural purposes.
This erroneous view also seems to us to have affected the conclusion
of the Full Bench on what was essentially a question of fact.
It had
led the Full Bench into giving excessive weight to considerations which
had a bearing only on potentialities of the land for use for agricultural
purposes.
For the reasons already given, we do not think that the term "agricultural land" had such a wide scope as the Full Bench appears to
have given it for the purposes of the Act we have before us.
We
agree that the determination of the character of land, according to the
purpose for which it is meant or set apart and can be used, is a matter
which ought to be determined on the facts of each particular case.
What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land,
by some possible future owner or possessor, for an agricultural purpose. It is not the mere potentiality, which will only affect its valm11ion as part of "assets", but its actual condition and intended user
which has to be seen for purposes of exemption from wealth tax. One
B
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156
SUPREME COURT REPORTS
[1977) 1 S.C.R.
of the objects of the exemption seemed to be to encourage cultivation
or actual utilisation of land for agricultural purposes. If there is neither
anything in its condition, nor anything in evidence to indicate the intention of its owners or possessors, so as to connect it with an agricultural purpose, the land could not be "agricultural land" for the purposes of earning an exemption under the Act.
Entries in revenue
records are, however, gocid prima facie evidence.
We do not think
that all these considerations were kept in view by the taxing authorities
in qeciding the question of fact which was really for the assessing
authorities to determine having regard to all the relevant evidence and
the law laid down by this Court. The High Court should have sent
back the case to the assessing authorities for deciding the question of
fact after stating the law correctly.
We think that this is a fit case in which we should set aside the
judgment of the Full Bench of the High Court and hold that the tribu•
nal should determine afresh, from a correct angle, the question of fact
whether any of the lands under considerati'on were "agricultural" or
not for the purposes of the Act before it. Accordingly, we allow these
appeals, set aside the judgment and order of the Full Bench and send
back the cases to the Tribunal for appropriate orders for giving opportunities _to both sides to lead further evidence, if they so desire, and
for the decision of the cases in accordance with the law as declared
now by this Court. The parties will bear their own costs throughout.
V.P.S.
Appeals allowed.