http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12

PETITIONER:

SAROJINI TEA CO. (P) LTD

Vs.

RESPONDENT:

COLLECTOR OF DIBRUGARH, ASSAM AND ANR

DATE OF JUDGMENT24/01/1992

BENCH:

RAMASWAMY, K.

BENCH:

RAMASWAMY, K.

KULDIP SINGH (J)

CITATION:

1992 SCR Supl. (2) 25 1993 SCC Supl. (4) 632

1992 SCALE (3)70

ACT:

Assam Taxation of Ceiling on Land Holdings Act, 1956

(as amended by Assam Act VIII of 1971):

Section 12-Land Ceiling-Excess land-Compensation-

Computation of: `Annual Land Revenue'-Whether includes

`surcharge'on land revenue and `local rate' payable under

Assam Land Revenue and Land (Surcharge) Act, 1970 and Local

Rates Regulation, 1879: Belated appeal-Condonation of

delay-Whether provisions of Limitation Act, 1963 would apply.

HEADNOTE:

The appellant, a tea company, whose land was declared

excess under the Assam Fixation of Ceiling on Land Holdings

Act, 1956 as amended by Assam Act, VIII of 1971, was awarded

compensation, equal to 50 times of the annual land revenue

of the excess land as provided under section 12 of the Act.

However, the compensation was assessed excluding the

surcharge on land revenue and the local rate payable in

respect of the land.

On appeal by the Company, the District Judge enhanced

the amount of compensation by including the surcharge on

land revenue as well as the local rate as part of the annual

land revenue, against which respondent No. 1 filed a writ

petition before the High Court.

The High Court allowed the writ petition holding that

the expression `full rate of annual land revenue' meant only

the revenue assessed on the land as such and not the local

rates leviable under the Local Rates Regulation, 1879 nor

the surcharge on land revenue levied under the Assam Land

Revenue and Land (Surcharge) Act, 1970.

Aggrieved, the appellant preferred the appeal by

special leave to this Court.

On the question : whether the surcharge on land

revenue levied under the Assam Land Revenue and Land

(Surcharge) Act, 1970

372

and the local rate payable under the Local Rates

Regulations, 1879 can be held to be land revenue,

Allowing the appeal in part, this Court,

HELD: 1.1 The expression `surcharge' in the context of

taxation means an additional imposition which results in

enhancement of the tax and the nature of the additional

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12

imposition is the same as the tax on which it is imposed as

surcharge. [p.381 B-C]

Bisra Stone Lime Co. Ltd. & Anr. etc. v. Orissa State

Electricity Board & Anr., [1976] 2 SCR 307; Commissioner of

Income Tax, Kerala v. K. Srinivasan, [1972] 2 SCR 309;

Vishwesha Thirthaswamiar & Ors. v. State of Mysore & Anr.,

[1972] 1 SCR 137, relied on.

C.V. Rajagopalachariar v. State of Madras, AIR 1960

Mad. 543, referred to.

Shorter Oxford English Dictionary, referred to.

1.2 A surcharge on land revenue is an enhancement of

the land revenue to the extent of the imposition of

surcharge. The nature of such imposition is the same viz.

land revenue on which it is a surcharge. [pp. 381 C-D]

1.3 The surcharge payable under the Assam Land Revenue

and Land (Surcharge) Act, 1970 constitutes land revenue and

has to be taken into account for assessing compensation

under section 12 of the Assam Fixation of Ceiling on Land

Holdings Act, 1956. [p.385 C-D]

1.4 In view of the provisions of section 12 of the

Assam Ceiling Act, the measure for assessment of

compensation is `the full rate of annual land revenue'

payable for the land acquired. [pp.377H; 378A]

1.5 The use of the words "full rate of" before the

words "annual land revenue payable for the land" in s. 12

(a) (1) (i) of the Ceiling Act does not have a bearing upon

the nature of the levy, which is land revenue. The said

words have reference to the quantum of the levy which would

form the basis for assessment of compensation and do not

render inapplicable the principles that imposition of

surcharge on land revenue in only an enbancement of the land

revenue and nature of the said imposition is land revenue.

Vishwesha Thirthaswamiar & Ors. v. State of Mysore & Anr.,

[1972] 1 SCR 137, relied on.[P,382 D-E]

373

Benoy Mazumdar v. Deputy Commissioner, Cochin & Ors.,

(Civil Rule No. 28 of 1977 decided on 28.9.1981 by Gauhati

High Court), inapplicable.

1.6 The provisions for assessment of surcharge

contained in the Surcharge Act indicate that while land

revenue is assessed in one settlement and continues till the

succeeding settlement, surcharge having been imposed during

the currency of the settlement, is required to be assesed.

The need for assessment arises on account of the fact that

surcharge is not leviable on a person holding land measuring

less than 10 Bighas and, therefore, before making a demand

for surcharge it is necessary to determine whether a person

from whom demand is made is liable under the provisions of

the Surcharge Act and is not entitled to claim exemption

from such levy. [pp.382 GH; 383 A]

1.7 The fact that the person holding land less than 10

Bighas though liable to pay land revenue, is not liable to

pay surcharge under the Surcharge Act, does not alter the

character and nature of the levy. [p.383B]

1.8 The High Court was not right in holding that

surcharge on land revenue levied under the Surcharge Act is

different and distinct in character from land revenue and

does not fall within the ambit of annual land revenue under

section 12 of the Ceiling Act; and to this extent the

judgment of the High Court is liable to be set aside. [pp.

382 CD; 385 C]

2.1 Local rate leviable under the Local Rates

Regulation is, a levy which is distinct and different

in nature from land revenue.

[pp. 384 H; 385 A]

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12

2.2 The expression `rate' is generally used in the

same sense as the expression `cess'. Section 4 of the Local

Rates Regulation also indicates that the local rate is in

the nature of cess because in section 4 it has been provided

that when a rate is imposed on any land under this

Regulation any cess now leviable on such land for any of the

purposes mentioned in Section 12, shall cease to be levied

on such land or if such cess be maintained, a corresponding

diminuition shall be made for such rate. [p.384 F-G]

Guruswamy & Co. v. State of Mysore, [1967] 1 SCR 548;

India Cement Ltd. & Ors. v. State of Tamil Nadu & Ors.,

[1990] 1 SCC 12 followed.

374

2.3 The amount realised by way of local rate under the

Regulations is to be used for incurring expenditure for the

relief and prevention of famine and for local purposes.

Land revenue, on the other hand, forms part of general

revenue of the State and is not limited for a particular

purpose. [p.384 G-H]

2.4 The High Court has rightly held that local rate

payable under the Local Rate Regulations, 1879 is an

imposition which is distinct in character from land revenue

and cannot be regarded as land revenue or tax in lieu of

land revenue. It cannot, therefore, be taken into

consideration for assessing compensation under Section 12 of

the Ceiling Act. [p.385 B]

3. Since there is nothing in the Ceiling Act which

excludes the applicability of sections 4 to 24 of the

Limitation Act, 1963 to proceedings under the Ceiling Act,

the said provisions are applicable to such proceedings in

view of sub-section (2) of section 29 of the Limitation

Act, 1963 and the District Judge was competent to condone

the delay in the filing of the appeal. In the exercise of

jurisdiction under Article 136 of the Constitution, it

would not be appropriate to interfere with the said

exercise of discretion by the District Judge. [pp.376 G-H;

377 A]

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6650 of

1983.

From the Judgment and Order dated 1.6.1983 of the

Gauhati High Court in Civil Rule No. 876 of 1981.

A.K. Ganguli, Vijay Hansaria, Sunil Kumar Jain, A.K.

Lawania, Suresh Gupta and Rudra Kahlon for the Appellant.

A.K. Mazumdar, S.K. Nandy and P. Goswami for the

Respondents.

The Judgment of the Court was delivered by

S.C.AGRAWAL, J. This appeal by special leave is

directed against the judgment and order dated June 1, 1983

of the Gauhati High Court in Civil Rule No. 876 of 1981. It

raises for consideration the question whether the expression

`annual land revenue' in Section 12 of the Assam Fixation of

Ceiling on Land Holdings Act, 1956 (hereinafter referred to

as `the Ceiling Act') would include `surcharge' payable

under the Assam Land Revenue and Land (Surcharge) Act, 1970

(hereinafter referred to as `the

375

Surcharge Act') and the 'local rate' payable under the Assam

Local Rates Regulation, 1979 (hereinafter referred to as

'the Local Rates Regulation').

The Ceiling Act was enacted by the Assam State

Legislature to make provision for imposition of limits on

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12

the areas of land that may be held by a person. Section 4

of the Act prescribes the ceiling on the existing land.

Under s.5 a person holding land in excess of the ceiling is

required to submit a return and under s. 7 (I), the

Collector prepares a draft statement which shows the lands

in excess of the limits fixed under s. 4. The said draft

statement is published under sub-section (2) of S. 7 for the

purpose of submitting objections. After considering the

said oobjections, the draft statement is made final under

sub-section (4) of S.7; and with effect from the date on

which the final statement is signed by the Collector, all

rights, title and interest of the person or persons whose

lands are shown in excess in such statement, stand

transferred to and vested in the State Government, free from

all encumbrances created by such person. S. 12 makes

provision for payment of compensation for the land which

stands transferred to and vested in the State Government.

Under clause (a) of S. 12 where the person from whom excess

land has been acquired, held it as the owner thereof, the

compensation, that is payable is, in the case of fallow

land, an amount equal to 25 times the full rate of the

annual land revenue for such land and, in case of any other

land, an amount equal to 50 times such annual land revenue.

The Ceiling Act, as originally enacted, did not apply

to tea estates. It was amended by Assam Act VIII of 1971

which came into force on March 27, 1971 whereby sub-section

(2) of S. 4 was amended and the Ceiling Act was made

applicable to tea plantations and land in excess of such

land as has been used for special cultivation of tea and the

purposes ancillary thereto, was brought within the ceiling.

The apellant is a tea company. Land measuring 1650

bighas, 4 Katthas and 5 lathhas belonging to it was declared

as excess land under the Ceiling Act on September 9, 1975

by the Collecter, Dibrugarh, respondent No. I herein, and he

also took over possession of the same. A sum of Rs. 71,811

was assessed as the compensation payable to the appellant

for the said land under S. 12 of the Ceiling Act. The said

figure was arrived at by excluding the surcharge and the

local rate payable in respect of the land. The appellant

filed an appeal against the said order before the District

Judge, Dibrugarh, who by his order dated July 1, 1981,

enhanced the amount of compensation by including the

surcharge as well as the local rate as part of the annual

land revenue. Respondent No. 1 challenged the said order of

the District Judge by moving a writ petition under

376

Articles 226 and 227 of the Constitution before the High

Court, which was allowed by the High Court by its judgment

dated June 1, 1983 on the view that the expression 'full

rate of annual land revenue' meant only the revenue assessed

on the land as such and the Legislature by enacting S. 12 of

the Ceiling Act did not have in their mind the local rates

which were already leviable under the Local Rates Regultion,

at the time of enacting s. 12 of the Act and the surcharge

on the land revenue which was subsequently levied under the

Surcharge Act. The said decision of the High Court was

based on its earlier judgment dated December 21, 1982 in

Civil Rule No. 194 of 1982 wherein the High Court had fully

considered this question and had arrived at the aforesaid

conclusion. Feeling aggrieved by the aforesaid judgment of

the High Court, the appellant has filed this appeal.

Before we proceed to deal with the submissions of the

learned counsel for the appellant, we may deal with the

preliminary objection that has been raised by Mr. Mazumdar,

the learned counsel for the respondents. Mr Mazumdar has

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12

urged that the appeal filed by the appellant before the

District Judge, Dibrugarh, against the order for assessment

of compensation u/s. 12 of the Ceiling Act, was barred by

limitation and that the District Judge was in error

condoning the delay in filing the said apppeal. In this

regard, Mr. Mazumdar has submitted that under the law a

period of 30 days is prescribed for filing an appeal against

an order under s. 12 and that in the instant case the final

order granting compensation was passed by the State

Government on February 8, 1979 and the apeal was filed on

September 19, 1979, long after the stipulated period of

limitation. On behalf of the appellant, it was submitted

before the District Judge that no order was communicated to

the appellant and that the Collector by his order dated

February 17, 1979 directed the appellant to collect the

amount of Rs. 71, 811 and on request the company got a copy

of the sanctioning letter on September 6, 1979 only and thus

the appellant became aware of the sanction order only on

September 6, 1979 and it preferred an appeal on September

19, 1979 which was within limitation. The District Judge

has observed that the Government sanction of compensation

was communicated by the Collector vide his letter dated

February 17, 1979 which was duly acknowledged by the

appellant vide its letter dated March 16, 1979 and that the

appellant could have preferred the appeal by that time and

that the appeal was filed beyond the period of limitation.

But taking into consideration the peculiar circumstances of

the proceeding of the principles of natural justice and fair

play, the District Judge condoned the delay in the filing of

the appeal. Since there is nothing in the Celling Act which

excludes the applicability of ss. 4 to 24 of the Limitation

Act, 1963, to proceeding under the Ceiling

377

Act, the said provisions are applicable to such proceedings

in view of sub-section (2) of s.29 of the Limitation Act,

1963 and the District Judge was competent to condone the

delay in the filing of the appeal. On a consideration of

the facts and circumstances of the case, the District Judge

considered it proper in the interest of justice to condone

the delay. In the exercise of our jurisdiction under

Article 136 of the Constitution, we do not consider it

appropriate to interfere with the said exercise of

discretion by the District Judge. The preliminary objection

raised by the learned counsel for the respondents, is

therefore, rejected.

The main question that arises for consideration in this

appeal relates to assessment of compensation u/s. 12 of the

Ceiling Act. The relevant provisions of the said section

are as under:-

"12. where any land is transferred to and vested in

the State Government under Sub-s.(4) of s.7 of the

Act, there shall be paid compensation which shall

be determined by the Collector or any other officer

authorised by the State Government in the manner

and in accordance with the principles laid down

below, namely:

(a) (1) where the person from whom the excess land

has been acquired held it as the owner thereof, the

compensation (inclusive of the value of any tenancy

right) shall be-

(i) in case of fallow land, an amount equal to 25

times the full rate of annual land revenue payable

for such land; and

(ii) in case of other land, inclusive of the value

of trees, an amount equal to 50 times such annual

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12

land revenue;

xx xx xx xx xx xx xx xx xx

"Provided that where the land is revenue free, or

assessed to land revenue at a concessional rate, or

where it is not assessed to land revenue under the

provisions of the Assam Land and Revenue

Regulations, 1886 or of the Assam Land Revenue Re-

assessment Act, 1936, the compensation shall be

determined on the basis of annual land revenue

assessable under the provisions of the afore-

mentioned Acts on similar, full revenue-paying land

situated nearest to it."

From a perusal of the aforesaid provisions, it would

appear that the measure for assessment of compensation is

`the full rate of annual land

378

revenue' payable for the land acquired. The expression

`land revenue' is not defined in the Ceiling Act.

Assessment and payment of land revenue in Assam is governed

by the Assam Land and Revenue Regulation, 1886 (hereinafter

referred to as `the Revenue Regulation'). Clause (3) of s.3

of the Revenue Regulation defined the expression `land

revenue' in the following terms:-

"3 (e) "land revenue" means any revenue assessed by

the State Government on an estate, and includes any

tax assessed in lieu of land revenue;"

By the Assam Land Revenue Re-assessment Act, 1936,

enacted for the purpose of regulating reassessment of land

revenue in Assam, the land revenue was re-assessed.

Thereafter, the Assam State Legislature enacted the

Surcharge Act in 1970 to provide for the levy of surcharge

on land revenue and rent assessed in the State of Assam. In

sub-section (1) of s.2 of the said Act the expression `land

revenue' is defined in the same terms as in s.3 (e) of the

Revenue Regulation. In s. 3 the following provision is made

for the levy of surcharge:-

"3. Levy of Surcharge. Every person holding land

measuring 10 (ten) bighas or more directly under

the State Government shall be liable to pay a

surcharge on land revenue or rent, as the case may

be, at the rate of 30 per cent of the land revenue

or rent of all classes of holdings in addition to

the land revenue or the rent payable by him."

Section 4 provides for provisional assessment of

surcharge and issue of notice to the person or persons

concerned. Section 5 provides for filing of objections and

making of assessment after giving an opportunity of hearing.

Sec. 7 makes the following provision for recovery of

surcharge:-

"7. Surcharge recoverable as arrear of land

revenue. The surcharge assessed under this Act

shall be payable along with the land revenue or the

rent, as the case may be, in the manner prescribed

and any arrear of any surcharge shall be realisable

as an arrear of land revenue."

Since the question for consideration is whether the

surcharge levied under the Surcharge Act can be held to be

land revenue, it is necessary to examine the nature of the

said levy. According to the Shorter Oxford English

Dictionary the word `surcharge' stands for an additional or

extra

379

charge or payment. In Bisra Stone Lime Co. Ltd & Anr. etc.

v. Orissa State Electricity Board & Anr. [1976] 2 SCR 307

after referring to the said definition, this Court had

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12

observed:

"Surcharge is thus a superadded charge, a charge

over and above the usual or current dues." (p.310-

11)

In that case the Orissa State Electricity Board had

imposed a uniform surcharge of 10% on the power tariff. It

was argued that surcharge was unkown to the provisions of

the Electricity (Supply) Act, 1948 and the Electricity Board

had no power under the said Act to levy a surcharge. This

Court negatived the said contention and in that context,

after expalining the meaning of the expression `surcharge',

it was observed:

"Although, therefore, in the present case it is in

the form of surcharge, it is in substance an

addition to the stipulated rates of tariff. The

nomenclature, therefore, does not alter the

position. Enhancement of the rates by way of

surcharge is well within the power of the Board to

fix or revise the rates of tariff under the

provisions of the Act" (P. 311)

Similarly, in Commissioner of Income Tax, Kerala v.

K.Srinivasan, [1972] 2 SCR 309, a question arose whether the

term `income-tax' as employed in s. 2 of the Finance Act,

1964, would include surcharge and addtional surcharge

whenever provided. This Court while tracing the concept of

surcharge in taxation laws of our country, has observed:

"The power to increase federal tax by surcharge by

the federal legislature was recommended for the

first time in the report of the committee on Indian

Constitutional Reforms, Vol. 1 Part I. From para

141 of the proposals it appears that the word

"surcharge" was used compendiously for the special

addition to taxes on income imposed in September,

1931. The Government of India Act 1935, Part VII,

contained provisions relating to finance, property,

contracts and suits. Sections 137 and 138 in

Chapter 1 headed "finance" provided for levy and

collection of certain succession duties, stamp

duties, terminal tax, taxes on fares and freights,

and taxes on income respectively. In the proviso

to s. 137 the federal legislature was empowered to

increase at any time any of the duites of taxes

leviable under that section by a surcharge for

federal purposes and the whole proceeds of any such

surcharge were to form part of the revenue of the

federation. Sub-section (3) of s.138 which dealt

with taxes on income related to imposition of a

surcharge." (P.312)

380

It was further observed at page 315 of the report:

"The meaning of the word "surcharge" as given in

the Webster's New International Dictionary includes

among others "to charge (one) too much or in

addition..." also "additional tax". Thus the

meaning of surcharge is to charge in addition or to

subject to an additional or extra charge".

In C.V. Rajagopalachariar v. State of Madras, AIR 1960

Mad. 543, in the context of the Madras Land Revenue

Surcharge Act, 1954 and the Madras Land Revenue (Additional

Surcharge) Act, 1955, it has been laid down:-

"The word "surcharge" implies an excess or

additional burden or amount of money charged.

Therefore, a surcharge of land revenue would also

partake the character of land revenue and should be

deemed to be an additional land revenue. Although

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12

S.4 of the two anactments referred to above only

deems it to be recoverable as a land revenue it is

manifest that the surcharge would be a part of the

land revenue. The effect of the two Acts would be,

therefore, to increase the land revenue payable by

a land holder to the extent of the surcharge

levied. If therefore, a surcharge levy has been

made, the Government would be enabled to collect a

higher amount by way of land revenue from a

ryotwari pattadar than what was warranted by the

terms of the previous ryotwari settlement."

The said decision was approved by this Court in

Vishwesha Thirthaswamiar & Ors. v. State of Mysore & Anr,

[1972] 1 SCR 137. In that case this Court was considering

the question whether the Mysore State Legislature was

competent to enact the Mysore Land Revenue (Surcharge) Act,

1961. After examining the nature of the levy the Mysore

High Court had held that the so-called land revenue

surcharge was but an additional imposition of land revenue

or a land tax and fell either within Entry 45 or Entry 49 of

the State List. This Court agreeing with the view of the

High Court held that the surcharge fell squarely within

Entry 45 of the State List, namely, land revenue. It was

observed:-

"The legislation is but an enhancement of the land

revenue by imposition of surcharge and it cannot be

called a tax on land revenue, as contended by the

learned counsel for the appellant. It is a common

practice among the Indian Legislatures to impose

surcharge on existing tax. Even art 271 of the

Constitution speaks of a surcharge for the purpose

of the Union being

381

levied by way of increase in the duties or taxes

mentioned in art, 269 and art. 270" (p.140)

"It seems to us that the Act clearly levies land

revenue although it is by way of surcharge on the

existing land revenue. If this is so, the fact

that the surcharge was raised to 100% of the land

revenue on the wet and garden land and 75% of the

land revenue in respect of dry lands, subject to

some minor exceptions, does not change the nature

of the imposition." (p. 141)

From the aforesaid decisions, it is amply clear that

the expression `surcharge' in the context of taxation means

an additional imposition which results in enhancement of the

tax and the nature of the additional imposition is the same

as the tax on whcih it is imposed as surcharge. A surcharge

on land revenue is an enhancement of the land revenue to

the extent of the imposition of surcharge. The nature of

such imposition is the same viz., land revenue on which it

is a surhcarge.

The learned Judges of the High Court have taken note of

the decisions of this Court referred to above and were of

the view that if they were to interpret only the expression

`land revenue', there would not be any difficulty. They have

observed that in the instant case they were interpreting the

expression "full rate of annual land revenue payable for the

land" in S. 12 (a) (1) of the Ceiling Act. According to the

learned Judges, the expression "full rate of land revenues"

has to be understood in conformity with the Assam Land

Revenue Regulation where different classes of estates are

often referred to in terms of revenue, for example, khiraj

or full revenue paying estates and Nisf-khiraj or half

revenue paying estates. The learned Judges have referred to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12

the provisions of the Assam Land Revenue Reassessment Act,

1936 which prescribes the procedure for reassessment and how

the rates of revenue are to be fixed, as well as the Assam

Assessment of Revenue Free Waste land Grant Act, 1948 and

have observed that the rate of revenue has been understood

in the sense of revenue assessed on land. The learned

Judges have also taken note of the provisions of the

Surcharge Act and have pointed out that the Surcharge Act

makes provision for assessment of surcharge in the

prescribed procedure whereas in the case of land revenue, it

is assessed in one settlement and continues till the

succeeding settlement; and under S.3 of the Surcharge Act a

person holding land measuring less than 10 Bighas, though

liable to pay land revenue, is not liable to pay surcharge

on his land revenue. The learned Judges have also laid

emphasis on the expression `in addition to the land revenue'

used in S.3 of the Surcharge Act and the expression `along

with land revenue' in S.7 of the Surcharge Act.

382

Taking into account the features referred to above, the

learned Judges of the High Court have held that the

Legislature clearly distinguished land revenue and

surcharge. The learned Judges also referred to the decision

of a Full Bench of five Judges of the High Court in Benoy

Mazumdar v. Deputy Commissioner, Cochin & Ors (Civil Rule

No.28 of 1977 decided on September 28, 1981) wherein the

court was dealing with the constitutional validity of

S.7(1A) of the Assam Land (Requisition and Acquisition) Act,

1948, and had to deal with the question of compensation in

terms of multiple of annual land revenue. After mentioning

the various decisions that were referred to in the said

decision, the learned Judges have observed that in those

cases the annual land revenue was taken to mean the land

revenue as assessed on land and nowhere the idea of

surcharge entered into that concept.

With great respect to the learned Judges of the High

Court, we are unable to subscribe to this view. We do not

find any sound basis for holding that surcharge on land

revenue levied under the Surcharge Act is different and

distinct in character from land revenue and does not fall

within the ambit of annual land revenue under section 12 of

the Ceiling Act. The use of the words "full rate of" before

the words "annual land revenue payable for the land" in

Section 12(a) (1) (i) of the Ceiling Act do not, in our

opinion, have a bearing upon the nature of the levy, which

is land revenue. The said words have reference to the

quantum of the levy which would form the basis for

assessment of compensation. We find it difficult to

appreciate how these words render inapplicable the

principles laid down by this Court in Vishwesha

Thirthaswamiar's case (supra), that imposition of surcharge

on land revenue is only an enhancement of the land revenue

and nature of the said imposition is land revenue.

We do not consider that the words "in addition to the

land revenue" in S.3 and the words"along with land revenue"

in S.7 of the Surcharge Act imply that surcharge levied

under the said Act is levy which is distinct in nature from

land revenue. These expressions only mean that surcharge @

30% of the land revenue leviable under S.3 of the Surcharge

Act is over and above the amount that is payable as land

revenue and in that sense it is an additional charge or

imposition which is payable by way of surcharge on land

revenue. The fact that the said sum is to be paid and can

be recovered along with the land revenue also does not alter

the nature of the levy if it is otherwise found to be of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12

same character as land revenue. As regards the provisions

for assessment of surcharge contained in the Surcharge Act

for assessment, we find that while land revenue is assessed

in one settlement and continues till the succeeding

settlement, surcharge having been imposed during the

currency of the settle-

383

ment, is required to be assessed. The need for assessment

arises on account of the fact that surcharge is not leviable

on a person holding land measuring less than 10 Bighas and

therefore, before making a demand for surcharge it is

necessary to determine whether a person from whom demand is

made is liable under the provisions of the Surcharge Act and

is not entitled to claim exemption from such levy. The fact

that the persons holding land less than 10 Bighas though

liable to pay land revenue, are not liable to pay surcharge

under the Surcharge Act, does not, in our view, alter the

character and nature of the levy. Benoy Mazumdar's case

(supra) and the cases referred to therein, have no bearing

because in those cases the question whether surcharge is to

be included in land revenue, was not in issue and has not

been considered.

For the reasons aforesaid, we are unable to endorse the

view of the High Court that surcharge on land revenue

payable under the Surcharge Act is not land revenue but a

levy which is distinct from land revenue. In consonance

with the law laid down by this Court in Vishwesha

Thirthaswamiar's case (supra), it must be held that the

surcharge on land revenue levied under the Surcharge Act,

being an enhancement of the land revenue, is part of the

land revenue and has to be treated as such for the purpose

of assessing compensation under s. 12 of the Ceiling Act.

We may now examine whether the local rate payable under

the Local Rates Regulation can be regarded as land revenue.

In the Preamble to the Local Rates Regulation, the said

Regulation has been made to provide "for the levy on land

of rates to be applied to defray the expenditure incurred

and to be incurred for the relief and prevention of famine

and for local purposes". In S.1 of the Regulation it is

prescribed that the said Regulation shall come into force in

such districts, in such parts thereof and on such dates, as

the State Government may by notification in the Official

Gazette, from time to time, direct. Section 3 of the

Regulation prescribes the rates assessable and reads as

under:-

"3. Rates Assessable. All land shall be liable to

a levy at the rate of twenty-five paise for every

rupee of the anuual value of the land in addition

to the land-revenue and local cesses (if any)

assessed thereon".

Sec.4 which deals with the effect of imposition of land

rates on cess now leviable provides as follows:-

"4. Effect of imposition of land rate on cess now

leviable. When a rate is imposed on any land under

this Regulation, any cess now leviable on such land

for any of the purposes mentioned in S.12 shall

cease to be levied on such land; or if such

384

cess be maintained, a corresponding diminution

shall be made in such rate."

Section 5 contains the following provision with regard

to recovery of rates:

"5. Recovery of rate. All sums due on account of a

rate imposed on any land under this Regulation

shall be payable by the land-holder and shall be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12

recoverable as if they were arrears of land revenue

due on such land.

When such land is held by two or more land-holders

such land-holders shall be jointly and severally

liable for such sums".

In Guruswamy & Co. v. State of Mysore, [1967] 1 SCR

548; Hidayatullah J., as the learned Chief Justice then was,

has observed as under:

"The word `cess' is used in Ireland and is still in

use in India although the word rate has replaced it

in England. It means a tax and is generally used

when the levy is for some special administrative

expense which the name (health cess, education

cess, road cess etc.) indicates. When levied as an

increment to an existing tax, the name matters for

the validity of the cess must be judged of in the

same way as the validity of the tax to which it is

an increment".

In India Cement Ltd. & Ors. v. State of Tamil Nadu &

Ors. [1990] 1 SCC 12; these observations have been quoted

and it has been mentioned that though they were made in the

dissenting judgement, there was no dissent on this aspect of

the matter.

From the aforesaid observations, it would appear that

the expression `rate' is generally used in the same as the

expression `cess'. S.4 of the Local Rates Regulation also

indicates that the local rate which is imposed by the Local

Rates Regulation in the nature of cess because in S.4 it has

been provided that when a rate is imposed on any land under

this Regulations any cess now leviable on such land for any

of the purposes mentioned in S.12, shall cease to be levied

on such land or if such cess be maintained, a corresponding

diminution shall be made for such rate. Moreover, as

indicated in the Preamble, the amount realised by way of

local rate is to be used for incurring expenditure for the

relief and prevention of famine and for local purposes.

Land revenue, on the other hand, forms part of general

revenue of the State and is not limited for a particular

purpose. Local rate leviable under the Local Rates

Regulation

385

is, therefore, a levy which is distinct and different in

nature from land revenue. S.3 only provides a convenient

mode of prescribing the rate for levy of local rate by

fixing it as a proportion, namely, 25% of the annual value

of the land and S.5 only provides the mode of recovery of

the rate as arrear of land revenue. The said provisions do

not have the effect of equating the local rate with land

revenue or making it a tax in lieu of land revenue.

The High Court has rightly held that local rate payable

under the Local Rate Regulation is an imposition which is

distinct in character from land revenue and cannot be regard

as land revenue or tax in lieu of land revenue. It cannot,

therefore, be taken into consideration for assessing

compensation under S.12 of the Ceiling Act.

The appeal is, therefore, partly allowed and the

judgement of the High Court to the extent it hold the

`Surcharge' is a levy different and distinct from land

revenue is set aside and it is held that surcharge payable

under the Assam Land Revenue and Land (Surcharge) Act, 1970

constitutes land revenue and had to be taken into account

for assessing compensation under S.12 of the Assam Fixation

of Ceiling on Land Holdings Act, 1956. The view of the High

Court that the local rate payable under the Local Rates

Regulation 1879, is to be excluded for the purpose of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12

assessing such compensation, is upheld. The order of the

High Court setting aside the judgement and order of the

District Judge, dated July 1, 1981 in Misc. Appeal No.5 of

1979 is maintained. The matter will go back to the District

Judge, Dibrugarh, for re-determination of the compensation

payable to the appellant in Misc. Appeal No.5 of 1979 in

accordance with law. The parties are left to bear their own

costs.

R.P Appeal partly allowed.

386