TMI Blog1960 (11) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... udge(s) : S. K. DAS., M. HIDAYATULLAH., J. C. SHAH JUDGMENT The judgment of the court was, delivered by HIDAYATULLAH, J.--The point involved in this appeal is a very short one ; but it requires a long narration of facts to reach it. The appeal is against the judgment and order of the High Court of Calcutta dated May 15, 1956, arising out of an income-tax reference. By the Calcutta Municipal Act (VI of 1863) there was established a Corporation under the name of " The justices of the Peace for the Town of Calcutta." By a notification issued on November 2, 1864, one square mile of land forming part of the Panchannagram Estate was acquired by the Government of Bengal at the instance of the Justices. Section CXII of the Municipal Act provided that the Justices might " agree with the owners of any land for the absolute purchase thereof... for any other purpose whatever connected with the conservancy of the Town. " Under section CXIII, it was provided that if there was any hindrance to acquisition by private treaty, the Government of Bengal upon the representation of the justices would compulsorily acquire the land and vest such land in the justices on their paying compe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE WITNESSETH . . . to hold the said pieces of land, hereditaments and premises intended to be conveyed with the appurtenances except as aforesaid 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 condititions contained in the said Act No. VI of 1863 of the Council of the Lieutenant Governor of Bengal and to the rules heretofore passed or hereafter to be passed by the Government of Bengal under the said last mentioned Act." On January 23, 1880, a temporary lease of the land known as the " Square Mile " was granted by the Justices of the Peace to the predecessors-in-title of the appellant (assessee), Srish Chandra Sen, who has, since the filing of the appeal, died, leaving behind 40 legal representatives who have been shown in the cause title of the appeal. The lease was renewed for further periods, and the rent was also progressively in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Assistant Commissioner, and hence remanded the cases. The Appellate Assistant Commissioner in the rehearing held that the land in question continued subject to land revenue, and that the lump sum payment was merely payment of revenue in advance. He accordingly allowed the appeals, and ordered exclusion of the income from the assessments for the four years in question. On appeal by the Department, the Tribunal changed its opinion, and came to the conclusion that the payment of a lump sum was not a payment in advance of the land revenue due from year to year but was land revenue capitalised. It referred to the deed by which the proprietorship in the land was vested in the Corporation by the Secretary of State, and stated that by the document and the capitalisation of land revenue, the demand for land revenue was extinguished for ever. It accordingly allowed the appeals, and restored the orders of assessment made by the Income-tax Officer. The assessee next moved the Tribunal for a reference setting out a number of questions which, he contended, arose out of the Tribunal's order. The Tribunal referred the following question of law for the opinion of the High Court : " Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land by Government upon the continued assessability of the land to land revenue. The learned Chief Justice held that by the acquisition the assessment ceased to subsist. The second was the effect of the redemption of land revenue by the justices by a lump sum payment. The learned Chief Justice was of opinion that it had the effect of cancelling the assessment. The last was the effect of the grant free from land revenue, about which the learned Chief Justice was of opinion that it freed the land from assessment to land revenue. Sarkar, J., agreed as to the first, but expressed doubts about the second and third propositions. According to the learned judge, the acceptance of a lump sum payment in lieu of recurring annual payments was more a matter of agreement than a cancellation of assessment to land revenue. The matter has been argued before us from the same points of view ; but Mr. Mitra has added an argument about the interpretation to be placed on the conveyance by the Secretary of State which, according to him, only freed the justices from " payment " of the assessed land revenue but did not cancel the assessment. No Act of Legislature bearing upon the power of Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net rent shall be allowed as a remission of revenue, in which case a deduction shall be made from the said value proportionate to the value of such remission." This provision only saved the estate assessed to land revenue from liability to pay land revenue proportionately falling upon the land acquired compulsorily, subject to a like proportionate reduction in the amount of compensation payable to the proprietor of the estate, but the provision cannot be stretched to mean that the liability of the land actually acquired, to land revenue in the bands of grantees from the Government also ceased. Be that as it may, it is hardly necessary to view the present case from this angle at all, because, whether the land acquired continued to be subject to an assessment or must be deemed to be reassessed as a separate estate, the result would be the same if Government demand still subsisted on it, as, in fact, it did. There could have been no redemption of the liability by a down-payment if no land revenue could have been demanded. The fact that the recurring liability was redeemed by a lump sum payment itself shows that in the view of Government as well as of the Justices, the " Square Mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited Wharton's Law Lexicon to show the meaning of the word " redemption ", which is " commutation or the substitution of one lump payment for a succession of annual ones, e.g., see the Land Tax and the Tithe Redemption Acts and many other statutes ". Redemption is the act of redeeming which in its ordinary meaning is equal to bringing off a charge or obligation by payment. To what extent this redemption freed the land or its holder from the obligation depends not so much upon what the obligation was before redemption as what remained of that obligation after it. Here, the payment itself was meant to be " an immediate payment of one sum equal in value to the revenue redeemed " (vide the Resolution of Government dated October 17, 1861). By the down-payment, the entire land revenue to be recovered from that land was redeemed. The payment was equal to the capitalised value of the land revenue. When such a payment took place, it cannot be said that the assessment for land revenue remained. The land was freed from that assessment as completely as if there was no assessment. Thenceforward, the land would be classed as revenue-free, in fact and in law. In the Land Law of Bengal (Tagore Law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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