1999 (5) TMI 599 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of Article 285 of the Constitution of India.
2. Liability of the appellant company to pay non-agricultural assessment under the Andhra Pradesh Non Agricultural Lands Assessment Act, 1963.
3. Principle of promissory estoppel against the State Government.
4. Retrospective application of amendments made by Act 28 of 1974.

Summary:

1. Applicability of Article 285 of the Constitution of India:
The appellant company contended that as a government company wholly owned by the Union of India, its property should be exempt from state taxation u/s Article 285(1) of the Constitution. The Supreme Court rejected this argument, stating that a company registered under the Companies Act is a distinct legal entity separate from its shareholders, even if wholly owned by the Union of India. Therefore, Article 285 does not apply to the appellant company.

2. Liability of the appellant company to pay non-agricultural assessment:
The Andhra Pradesh Non Agricultural Lands Assessment Act, 1963, as amended by Act 28 of 1974, includes lessees of land owned by the Central or State Government for commercial, industrial, or other non-agricultural purposes within the definition of "owner." The appellant company, being a lessee of the Department of Atomic Energy, falls within this definition and is liable to pay non-agricultural assessment u/s 3 of the Act. The High Court's decision to levy the assessment was upheld, with the clarification that the assessment could only be levied on land actually used for specified non-agricultural purposes.

3. Principle of promissory estoppel against the State Government:
The appellant company argued that the State Government was estopped from levying the assessment based on a 1967 letter promising tax exemption. The Supreme Court dismissed this argument, stating that there can be no estoppel against a statute. Additionally, the letter only promised exemption for units run by the Government of India in the public sector, not for separate legal entities like the appellant company.

4. Retrospective application of amendments made by Act 28 of 1974:
The amendments made by Act 28 of 1974 have no retrospective effect. Therefore, no demand for non-agricultural assessment could be made for any period prior to 12th July 1974. The demands for periods before this date were quashed. For demands subsequent to 12th July 1974, the appellant companies were allowed to file appeals to establish the actual extent of land used for non-agricultural purposes and the applicable rate.

Conclusion:
The appeals were partially allowed. The demands for non-agricultural assessment prior to 12th July 1974 were quashed. For subsequent periods, the appellant companies were permitted to file appeals to determine the extent of land used for non-agricultural purposes and the applicable rate. No order as to costs.