# RATNA SUGAR MILLS CO. LTD v. STATE OF U.P. AND OTHERS

- **Citation:** [1976] 3 S.C.R. 1062
- **Court:** Supreme Court of India
- **Decided:** 1976-04-07
- **Case number:** Civil Appeals Nos. 10761079 of 1971
- **Bench:** H. R. Khanna, P. K. Goswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ratna-sugar-mills-co-ltd-v-state-of-u-p-and-others-6727
- **Pages:** 5

## Headnote

U.P. LargP Land Holdings Act, 1957, S. 2(15) "land", scope of.
The appellant acquired some 1and 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
t<tx
fCl'lr
the
assessment years 1365 to 1368 Fasli. The appellant's application u/s. 143 of
the U.P. Zamindari Abolition and Land Re;forms 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 :filec!
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 application·s.
The Board of Revenue decided all
the revision petitions in favour of the State, holding that the appe11ant's land·
":as "sirdari" and not bhumidari, and it could not be meant for industrial
purposes. The appellant's petitions under Article 226 of the Constitution -wererejected 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 theorder.
It ¥ias contended before this Court that the land is held for industrial
purposes, and is not "land" under sec. 2(15) of the Act.
Disn1issing the appeals, the Court,
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HELD :
The appellant holds the land as a sirdar.
Permission to use the
land in ouestion for industrial purposes was not granted. The word "landsn
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 uncultivated. [1065-G, 1066CD]
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Raia Jagannath Baksh ·singli v. State of Utlar Pradesh and Another, [1963]
I S.C.R. 220, referred to.

## Text

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1062
RATNA SUGAR MILLS CO. LTD.
v.
STATE OF U.P. AND OTHERS
April 7, 1976
(H. R. KHANNA AND P. K. GOSWAMI, JJ.]
U.P. LargP Land Holdings Act, 1957, S. 2(15) "land", scope of.
The appellant acquired some 1and 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
t<tx
fCl'lr
the
assessment years 1365 to 1368 Fasli. The appellant's application u/s. 143 of
the U.P. Zamindari Abolition and Land Re;forms 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 :filec!
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 application·s.
The Board of Revenue decided all
the revision petitions in favour of the State, holding that the appe11ant's land·
":as "sirdari" and not bhumidari, and it could not be meant for industrial
purposes. The appellant's petitions under Article 226 of the Constitution -wererejected 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 theorder.
It ¥ias contended before this Court that the land is held for industrial
purposes, and is not "land" under sec. 2(15) of the Act.
Disn1issing the appeals, the Court,
E
HELD :
The appellant holds the land as a sirdar.
Permission to use the
land in ouestion for industrial purposes was not granted. The word "landsn
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 uncultivated. [1065-G, 1066CD]
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Raia Jagannath Baksh ·singli v. State of Utlar Pradesh and Another, [1963]
I S.C.R. 220, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos.
10761079 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. A11arwala
and
Miss Manik Tarkunde,
for the appellant.
G. N. Dikshit, Shivapujan Singh, advocate for O. P. Rana, for
the respondents.
The Judgment of the Court was delivered by
KHANNA, J.-This judgment would dispose of four civil appeals
Nos. I 076 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
'
RATNA SUGARMILLS v. U.P. STATE (Khanna, J.)
I 063
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 oi 1957)
(tereinafter 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.
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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
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village Agrupur Kalan as industrial land.
In the course of those pro-
, ceedings, 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
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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."
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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 Act.
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 Collector.
F
While the proceedings under section 143 of the U.P. 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 t1'e Board, while those filed by the appellant were rejected. The
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I 064
SUPREME COURT REPORTS
[1976] 3 s.c.R.
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 same. 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 !, 1957 but according to
sub-seetion ( 3) of section I, 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 beeome neeessary 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 postwar zamindari
era.
The
principle
of
social
justice
enshrined in our Constitution ajso 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 objeets 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 sma'11 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 subseetion ( 1) of that section, there shall, save as hereinafter prnvided,
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 e'ceed
thirty acres.
Section 2(,15) of the Act defines land as under:
"(15) 'land' means land, whether
assessed
to
land
revenue or not, which is held or occupied for a purpose
RATNA SUGAR MILLS v. U.P. STATE (Khanna, J.)
1065
connected with agriculture, horticulture, animal
dry, pisciculture or poultry farming and includes
vated land held by a landholder as such" :
husbanuncultiA
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,
1%1.
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
t• 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
cootentions are not well-founded.
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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 np a factory, somehow the factory could not be
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set up_ and the land remained uncultivated.
The appellant holds the
land as a sirdar.
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
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is 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
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1066
SUPREME COURT REPORTS
[1976] 3 S.C.R.
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
poultry farming.
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 landholder in his capacity as a landholder.
We see no snfficient ground
to take a different view.
In any case even if the words "as such"
be construed to mean 1hat the land should be held for the purpose
of agriculture, horticulture, animal husbandry, pisciculture or poultry
farming, the land in question should be taken tcJ 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.(I), 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 ~erit in these appeals and the same are dismissed
with costs.
One hearing fee.
M.R.
Appeals dismissed.
(1) [1963] l S.C.R. 220.
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