TMI Blog1956 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... , is wholly useless. In form, it is merely the order passed by the Tribunal on the assessee's application for a reference refusing its request in respect of several questions and acceding to it in respect of only one. As regards the question referred, no facts are stated, nor is it stated how the question arises, nor are the grounds of the Appellate Tribunal's decision set out. We have had to collect the facts from the several orders over which they lay scattered and from the documents referred to in the appellate order of which copies were supplied to us by the parties. Briefly stated, the facts are as follows: The assessee, a Hindu undivided family, holds a square mile of land situated in the southern suburbs of Calcutta under a long lease granted by the Calcutta Corporation. It appears that the land was acquired in 1865 by the then Government of Bengal for the Corporation of Calcutta in order that it might be used by the Corporation for the conservancy purposes of the town. It is still used for those purposes, being chiefly utilised for the drainage outfall for the city's sewage and for dumping the city's refuse, but it has at the same time been leased out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with the question, it is necessary to state certain further facts and to refer to certain provisions of law. The Corporation of Calcutta was constituted by Bengal Act No. VI of 1863 and was then constituted, as would appear from section III of the Act of Justices of the Peace for the Town of Calcutta, which meant all Justices of the Peace for Bengal, Bihar and Orissa, resident in the Town and all Justices of the Peace for the Town itself. The object of the Act was to vest the property of the Town of Calcutta and the management of its municipal affairs in a Corporation and to make better provision for, inter alia, the conservancy and improvement of the Town. For the purpose of carrying out its duties, the Corporation was authorised to acquire lands by purchase, but the Act also provided by section CXIII that if the method of purchase was found ineffective in any particular case, the land required might be obtained through acquisition by the Government of Bengal. The actual language of the section was as follows: When there is any hindrance to the acquisition by purchase of any land or building required for the purposes of this Act, the Government of Bengal, upon the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a public purpose was published in the Calcutta Gazette of the 2nd of November, 1864. The amount of compensation payable to the persons interested in the land was determined at ₹ 55,071-2-9 and in August, 1865, the Corporation was called upon to pay the amount. The Corporation having paid it, the acquisition was completed in the same year and possession of the land was delivered to the Corporation on the 10th of November. Prior thereto, on the 27th of October, 1865, the Government appears to have passed an order that the Corporation should be required to pay a further sum of ₹ 7,728-13-8 as the 20 years purchase of the rental, viz., ₹ 386-7-1, on account of the land acquired for its use. It appears from the explanatory notes in the revenue roll of the Touzi that the owner of the estate was granted abatement of land revenue to the extent of the same sum, i.e., ₹ 386-7-1 on account of the acquisition of 2005 bighas, 8 cottahs and 4 chittacks of land for conservancy, i.e., for cleansing roads and streets. By a letter, dated the 5th of January, 1866, the Deputy Collector of 24 Parganas asked the Corporation to remit a sum of ₹ 7,728-13-8 and the mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said lands and hereditaments may be vested in the said Justices of the Peace, the said Secretary of State for India in Council doth by these presents grant and convey unto the said Justices of the Peace for the Town of Calcutta and their successors all those several pieces or parcels and strips of land as per aforesaid schedule and all ways, rights, easements members and appurtenances to the said pieces or parcels of lands or any of them or any part thereof belonging or appertaining or reputed so to be and which the said Secretary of State in Council can convey and all the estate right title and interest of the said Secretary of State for India in Council into or out of the land or any part thereof ..unto the said Justices of the Peace for the Town of Calcutta and their successors for ever free and clear and for ever discharged from all Government land revenue whatever or any payment or charge in the nature thereof to the end and intent that the said land may be used for a public purpose namely for the conservancy of the town upon the trusts and subject to the powers provisions terms and conditions contained in the said Act No. VI of 1863 of the Council of the Lieutenant-Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempt from land tax as Crown land, even if it could not claim exemption as the site of a hospital. The Court held that the land was not Crown land and then added, as the second ground for repelling the asylum's contention, that the land having been chargeable with land tax when belonging to the previous owner, would be chargeable even in the hands of the Crown if it was directly purchased by the Crown, although there might be some difficulty in enforcing payment of the tax. That view was taken, as the Court made it clear, because of the nature of the tax imposed by the Land Tax Act. By that Act, the King was provided with a grant of two millions thirty-seven thousand six hundred and twenty-seven pounds, nine shillings and one farthing to be raised, levied and paid .by such proportions and in such manner and form as the Act proceeded to specify and out of that sum, an amount of one million nine hundred eighty-nine thousand six hundred seventy-three pounds, seven shillings and ten-pence farthing was to be assessed and taxed in the several counties, cities, boroughs, towns and places of the country according to the proportions laid down in the Act. The Land Tax Act used to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue was matter of settlement in each individual case on principles laid down in the several regulations and even in the case of the permanently settled estates it was only the settlement made at the decennial settlement which was made permanent. It is thus not possible to apply the case cited to the land revenue in Bengal, because the foundation on which the decision rests is wanting here. Besides, what we have to consider in the present case is not the nature of the impost of land revenue as such, but the effect of an acquisition of land under section VIII of Act VI of 1857. Quite recently, that section fell to be construed by the Supreme Court in the case of Collector of Bombay v. Nusserwanji Rattanji Mistri and Others [1955] 1 SCR 1311 in connection with an acquisition of some Foras lands in Bombay which had been subsequently transferred by Government to a third party. The transferee was contending, that he was at least entitled to hold the lands at the assessment which they bore under the Foras Act (Bombay Act VI of 1851) up to and at the time of the acquisition, because section 2 of the Act conferred on the persons who were occupying Foras lands at its date right to continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l sum charged on the land as revenue. Thus, the charge of revenue does not exist de hors the engagement and does not run with the land as a liability inherent in its composition, but it is the product of an assessment made in connection with the engagement and payable in pursuance of one of its terms. When the land vests in the Government freed of all other interests, the interest of the proprietor and with such interest his engagement to pay the land revenue disappears. On such disappearance the assessment to land revenue cannot survive. That consequence is made clear by rules Nos. 1, 3 and 4 of the rules framed under section 55 of the present Land Acquisition Act (Act 1 of 1894) which has the force of law under sub-section (3) of the section. Those rules provide that when any revenue-paying land is acquired under the Land Acquisition Act, the proprietor shall be relieved of the liability to pay revenue to the extent of Government demand upon the said land. No corresponding rule framed under Act VI of 1857 could be traced. But there was section XXVI in the Act itself which provided that if the owner of the estate declined to receive the full amount of the compensation for loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appa and, on receiving the amount, conveyed the land as revenue-free. It may be argued with some plausibility that when they asked the Corporation to make an additional payment of ₹ 7,728-13-8 they treated the land as then subject to a land revenue of ₹ 386-7-1. In that view of the facts, even if the original assessment did not survive, as I think it did not, an assessment of an equal amount must be taken to have come into existence and the only hypothesis on which the revival of the land revenue can be explained is that Government made a fresh assessment. It was pointed out by the Supreme Court in the case to which I have referred that while an acquisition under Act VI of 1857 extinguished all existing tenures and assessments, it did not extinguish Government's right to levy assessment on the land. In the facts of the present case, if the amount of ₹ 7,728-13-8 is taken to be not an extraneous sum but the capitalised value of the revenue-charge to which the land was subject, we must proceed on the basis that even after the acquisition of the Land under the Land Acquisition Act and at the time it was about to be transferred to the Corporation, there was an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of assessment, as payable by the proprietor with whom the estate had been settled or his successors in interest, was made permanent; and section VI, article V of the Regulation means not that Government would be bound, if it transferred any land which had become its property, to transfer it at an assessment, but that the transferee would be entitled to hold that land for ever at the assessment at which it might be transferred, if it was transferred at an assessment. Indeed even if section VI, article V of Regulation II of 1793 implies that any transfer made would have to be made at an assessment, it does not say that such assessment would be the original assessment or at least would have to be its equivalent in value and therefore the section furnishes no ground for saying that the assessment, confirmed at the Permanent Settlement, was inextinguishable and unalterable. Neither article III of section IV, nor article V of section VI of Regulation I of 1793 and least of all section VIII of Regulation II of 1793 indicates that a permanent and ineradicable charge of land revenue was laid on the land itself which no circumstance could affect or extinguish and with which Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not mean that it had been impressed on the land for all time and could not be altered or extinguished, but meant only that so long as the land continued to be held under the settlement, the quantum of the revenue would remain fixed. The continuance of the assessment itself, however, depended on the subsistence of the tenure, but if the holding by a subject ceased, the assessment also ceased to exist, because there could be no longer any question of a right to a share of the produce. Besides, the right to the revenue, being a right of the Crown, the Crown could always alienate or remit it. There is thus no ground for saying that the assessment of land revenue, confirmed and made permanent at the permanent settlement, could never be modified or removed from the land and that nothing and no power could affect it in any way. I have so far refrained from citing authorities in support of propositions which I consider to be well settled, but shall now cite one. In a case decided by Mukerji and Bartley, JJ., a portion of a permanently settled estate was first acquired under the Land Acquisition Act and then the estate was sold for arrears of revenue. Both the original proprietor and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The practice is certainly not in itself the law, nor have the executive instructions where the practice is to be found stated statutory force, but they indicate what the effect of an acquisition under the Land Acquisition Act is, section 16 of the present Act being more or less in the same terms as section VIII of the Act of 1857. It appears from rule 146 of the Executive Instructions that in the case of acquisition of lands appertaining to permanently settled estates, surplus land is to be offered in the first instance to the original holder on condition that it will be re-absorbed into the estate of which it originally formed part and if abatement of revenue was granted at the time of acquisition, the amount originally remitted should be added to the revenue. Rule 147 provides that in the case of lands relinquished by Railways, if the original owners or their representatives cannot be found, the lands are to be sold, either as temporary settled estates on assessment of revenue on them or, if it be inconvenient to assess revenue, as revenue-free lands. I am not saying that these executive rules, framed under the present Land Acquisition Act, can be drawn upon in judging the ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of 20 years' revenue at a time is also erroneous. The notifications are merely declarations that certain areas of land were required for public purposes and, of the two, only the notification of the 2nd November, related to the present land. Secondly, they say nothing about redemption of land revenue. It would seem that the Tribunal did not refer to the actual notifications at all, but merely reproduced paragraph 10 of the Appellate Assistant Commissioner's order and, in doing so, made the mistake of taking what appeared in that order after the reference to the notifications as a statement of the general law or practice, as a statement of the contents of the notifications. Be that as it may, neither the law in force at the time under which land revenue was redeemed on payment of a capital sum, nor the actual terms on which the further payment was made by or received from the Corporation, are known. The parties were unable to trace the law under which redemption was allowed at the relevant time or even the law under which they are allowed now. They informed us that they had applied to the Board of Revenue for information, but had received no assistance. If the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to redeem the land revenue should be given at the discretion of the Local Governments only in a limited number of cases such as in cases of lands required for dwelling houses, factories, gardens, plantations and other similar purposes. If redemption was granted in respect of lands comprised within zemindaries the revenue payable on which was not redeemed, a proportionate reduction of the revenue was to be granted to the proprietor. The basis on which the scheme of redemption rested appears to have been as follows: The land revenue of the country is the security for its public debt supporting the public credit and the Government pays the interest on that debt out of its receipts from land revenue. For the Government, the revenue is an annuity and for the person holding the land assessed to revenue, it is an annual charge. It was thought that if persons holding lands subject to an assessment to revenue were enabled to get rid of the annual liability by making a single payment of a consolidated sum and hold the lands thereafter completely freed of any demand on account of revenue and as though they were full owners in the real sense, they were likely to welcome such an arrangeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al stated that if the scheme was ultimately approved of, suitable provision for giving effect to it would be made by a legal enactment which would also provide that all sums paid in redemption of land revenue should be paid to certain commissioners who would invest them periodically in such manner as the law might direct. The despatch of Sir Charles Wood suggested that the moneys should be invested, not periodically but as soon as practicable and as a rule in the 4 per cent. loan. No law passed for the purpose could, however, be traced. That a practice of allowing redemption of the land revenue of a much wider character than authorised by Sir Charles Wood's despatch is now in existence admits of no doubt. Rule 203 of the Touzi Manual, for example, provides as follows: Proprietors of permanently-settled holdings in Calcutta, Panchonnogram, Paranagore and Sahiban Pagicha may redeem their yearly rent by one payment of thirty-five times the amount. It seems almost certain that such redemption is allowed under the authority of some law passed subsequently to the time when the Government of India was corresponding with the Secretary of State, but what that law is, the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue payable on the square mile of land, the land stood assessed to land revenue. The argument advanced by Dr. Pal is undoubtedly a very attractive one, but on the facts of the present case, I do not find it possible to hold in his favour. We have to decide the point more or less in vacuo, because the facts are obscure and the relevant law unknown. If the principles of the English Redemption Acts are to be applied, it would seem that what happens at a redemption of land revenue is not that a new method of payment is substituted, but that the land is wholly freed and exonerated from the tax charged thereon. That is the actual language of section 38 of the Act of 1802. In Halsbury's Laws of England, Hailsham Edition, Vol. 19, at page 615, the effect of redemption is stated to be to relieve the lands and their natural production and profits from further tax ; and as regards Crown lands, it is stated in Vol. 6, page 798, that on redemption of land tax charged on lands of the Crown and upon registration, such lands are freed and exonerated from land tax. Again, when an owner of land redeems the land tax charged upon it by payment of a capital sum, he may have a certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the property of the Government, the true position appears to be that it is not an amount of capital invested by the owner of the land for the purpose of providing for payment of the land revenue by the interest flowing from it, but it is consideration paid to Government for releasing the land from the revenue charge. If so, the land in the present case is not assessed to land revenue. It appears to me that, for the purposes of the present case, it is not necessary to decide the general question as to whether even when a proprietor of an estate, assessed to land revenue, redeems it or a part of it and continues to hold the land himself, the land remains assessed to land revenue. The facts here are difficult to reconcile with a continuance of the assessment. The land was acquired under Act VI of 1857 and upon such acquisition the tenure of the original owner ceased to exist. All interests other than the right of the Government to levy an assessment were extinguished. The Corporation was a stranger to the land, but it had been acquired for its use and it was to be vested in the Justices under section CXIII of the Act. That section provides that the Government may vest such land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional payment was asked for, the fact remains that it was realised. But it is to be noticed that in 1866, when the payment was made the Corporation had merely been put in possession of the land, but had no other interest in it. There is nothing to show that the land was settled with the Corporation at an assessment of revenue and that it was for the redemption of that revenue that the payment was called for. The position of the Corporation in regard to the land was therefore very different from that of a person who already holds land, assessed to revenue, as a proprietor and obtains redemption of the whole or a part of the revenue chargeable on the land which he continues to hold in his old capacity. The Corporation was a newcomer and it was a party in whom the land was going to be vested and who, at the relevant time, had acquired no interest in it, not to speak of an interest of a tenant or proprietor. In those circumstances, it appears to me that the demand for the capitalised value of the revenue did not mean that a fresh assessment had been made on the land and that the Corporation was being asked to redeem it. It only meant that the Government was compensating itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n acquiring a piece of revenue-paying land from the proprietor under the provisions of the Land Acquisition Act and granting him an abatement of revenue for the land so taken out of his estate, got the land with the existing assessment wiped out and then, in conveying the land to a third party for whose benefit it had been acquired and who had yet no interest in the land, took from him a sum of money, not as the redemption value of any revenue, because there was no revenue payable by him to be redeemed, but as compensation for the loss it was going to suffer by being no longer able to realise the revenue, either from the original proprietor or from the third party to whom the land was going to be conveyed as revenue-free, the compensation being the price of the right to buy an assessment on the land and its measure being the value of the revenue which was formerly recovered from the proprietor and which might be assessed again. The case against the assessee is carried further by the terms of the deed of conveyance which I have already set out. It is not at all clear why the deed recites only the payment of the compensation but does not recite the payment of the additional sum. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ads thus: Now therefore the said Secretary of State for India in Council, in consideration of the said sum so paid as aforesaid, doth hereby release and for ever quit the claim of and discharge as well the said Khaja Abdul Gani and his heirs and assigns for ever, as also the said land and premises, so by the said Khaja Abdul Gani held .as aforesaid of and from the said rent or sum of rupees ten, annas thirteen and pies two (Rs. 10-13-2) per annum payable to the said Secretary of State for India in Council for the same, and doth hereby grant and assign to the said Khaja Abdul Gani and his heirs and assigns for ever the said land and premises free, and for ever discharged from all and every claim and demand of him, the said Secretary of State for India in Council. It would therefore seem that even when there is no conveyance after an acquisition under the Land Acquisition Act, but only a redemption of revenue granted to a person holding the land under an assessment, the land itself is discharged from the liability to revenue, besides that the holder and his heirs and assigns are personally released and the Government's claim is quitted. A redemption of the land reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or any payment or charge in the nature thereof and, therefore, whatever the previous condition of the land, it is, since the conveyance, no longer charged to land revenue but, on the other hand, stands discharged from it. For the reasons given above, the answer to the question referred should, in my opinion, be in the affirmative. In view of the difficulty of the point, I would make no order for costs. Sarkar, J.-I agree with the opinion expressed by my Lord the Chief Justice but I confess that I do so not without a certain amount of hesitation. As I am not differing from the views of the Learned Chief Justice I do not think it necessary to deal with the matter at large. I shall only record here the doubts that have assailed me. The question before us is whether certain land was assessed to land revenue in the accounting years, i.e., 1943-44 to 1946-47. Prior to 1865 the land formed part of a permanently-settled towzie and was therefore then assessed to land revenue. Sometime about the middle of 1865 the land was acquired by the Government of Bengal for the purposes of the conservancy of the town of Calcutta, in order that it might be vested in the municipal authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was acquired was reduced because of the acquisition. Next there is another letter dated January 12, 1866, from the Collector of Calcutta to the Collector of 24-Pargannahs forwarding Bank of Bengal Receipt from the Calcutta Justices for ₹ 7,728-13-8 in your favour being the amount of remission of Government Revenue for the square mile at Dhappa payable by the Justices under the Order of Government No. 5986 dated 27th October, 1865. This letter shows that under the orders of the Government of Bengal the Justices paid into the Bank of Bengal to the credit of the Collector of 24-Pargannahs the sum of ₹ 7,728-13-8 on account of remission of Government revenue, i.e., land revenue for the land, and that there was a receipt from the Bank of Bengal stating this fact. The order of the Government is not available. The payment was accepted by the Government of Bengal and it does not appear to have thereafter ever realised any land revenue for the land from the Justices. The last thing that happened was the execution of a conveyance of the land on December 5, 1870, by the Secretary of State for India in favour of the Justices. By this conveyance, the Secretary of State granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her evidence on the matter. The two letters really say the same thing. The first letter demands the sum for the purchase of the rental, i.e., the land revenue. The second letter shows that the amount was paid by the Justices under an order of the Government to obtain remission of Government revenue . These are the terms of the receipt, as appears in the letter, granted by the Bank of Bengal for the payment by the Justices to it to the credit of the Collector of 24-Pargannahs and therefore to the credit of the Government of Bengal. The Government of Bengal, as I have said, accepted the payment. It may therefore be said that there was an agreement made between the Justices and that Government by which in consideration of ₹ 7,728-13-8 paid to it by the Justices, the Government remitted the land revenue payable by the Justices in respect of the land or allowed them to purchase the liability to pay it. If such was the agreement both parties must be held to it. But then what did the agreement amount to ? Now, remission according to the Shorter Oxford English Dictionary means release from a payment , the act of giving up a tax . It may therefore well be that the agreement wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consequences mentioned in the preceding paragraph would follow. The Department however contended that there could in fact be no assessment of the land to land revenue at the date of the payment of ₹ 7,728-13-8 for then it had not been vested in the Justices. It was said that the vesting in the Justices did not take place till the conveyance was executed on 5th December, 1870. The Department's point was that at the date of the aforesaid payment, the Government being the owner of the land, it was not legally possible to assess it to land revenue. But then the answer to this may be twofold. First, as it was contended on behalf of the assessee, prior to the date of the payment of ₹ 7,728-13-8 the land may have actually been transferred to the Justices and vested in them. It was pointed out that the Justices had paid to the Government the compensation payable in respect of the acquisition and became thereupon entitled to have the land vested in them. Thereafter the Government delivered possession of the land to the Justices on 10th November, 1865. Learned counsel argued that on that date immovable property could be transferred by delivery of possession only and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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