TMI Blog1993 (4) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 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 ₹ 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 ₹ 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 petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ienated 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations 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. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaking. 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 wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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