A.K. Kuppuswamy vs The Urban Land Tax Tribunal and Others

Sathiadev, J.—This writ petition is filed to quash the proceedings of Urban Land Tax Tribunal, Madurai, passed in Urban Land Tax Tribunal

No. 65 of 1977 on 10th April 1978. Petitioner owns the lands mentioned in the said order and the Assistant Commissioner of Urban Land Tax

has valued the property in T.S. No. 23 at Rs. 2,000 per ground and the property in T.S. No. 662 at Rs. 45,000 per ground and while levying the

tax, exempted two grounds in the lowest priced property, i.e., T.S. No. 23 by his order, dated 28th February 1977. Aggrieved as against his

order, the matter was taken up to the Tribunal which also confirmed it resulting in the filing of this Writ Petition.

Mr. D.C. Krishnamurthi, Counsel for the Petitioner contends that in enforcing the taxing statute, it is obligatory to construe the benefits in favour

of the assesses and that when exemption is provided for, it must ensure to the maximum benefits of assesses. He further states that, if the discretion

is left to the department to choose the lands in respect of which exemption may be applied in some cases for lowest valued properties and in some

cases for highest valued properties, and in other cases, any other property in between, to be exempted, it would only result in arbitrariness being

exercised by taxing authorities, and such as enforcement of the enactment, would only lead to unjust orders being passed on extraneous factors.

On this aspect he refers to Section 29-A of Tamil Nadu Urban Land Tax Act, as it stood prior to the amendment under Act XLIX of 1975 and

also to the Schedule to the Act. Section 29-A deals with exemption and Section 29-A (2) of the Act, was to the following effect:

Where the aggregate extent of urban land held by any owner in any urban area exceeds, two grounds, nothing in this Act shall apply to an

aggregate extent of two grounds having the lowest market value and the amount of urban land tax shall be determined under this Act in respect of

the extent which is in excess of the said two grounds.

As per this clause, the lowest market value, of the lands was not to be taken into account.

Section 5 is the charging section for levy of urban land tax. It prescribe that the tax shall be imposed at the rates specified in the Schedule. The

words at the rates specified in the Schedule were substituted under Tamil Nadu Act XXX of 1971. The Schedule was again subjected to a change

under Act XIX of 1973, in and by which, the rate of tax was to be circulated according to extent and there was no indication of any lowest value

in the Schedule.

Sub-Section 2 of Section 29-A having been deleted under Act XLIX of 1978, Mr. Krishnamurthi contends that when the legislative intent was

to take away the expression the lowest market value, it naturally results in construing that, this concept has been given up by the Legislature, and

therefore, the imposition of tax should be so made as to favour the assesses and not the Revenue.

This contention cannot be entertained because it is Section 5 which is the charging section. Prior to the amendment under Act XLIX of 1975,

the Schedule did not contain the words lowest market value because the computation on that basis was treated as part of exemptions. Whereas

subsequent to the amendment, the schedule itself provides for a method of computation if tax. Section 5, being the charging section, and the

Schedule being part of the Act and the said section is to be read along side the Schedule and when the imposition of tax is evolved on a particular

method, it cannot any longer be contended that in spite of such a charging provision having been incorporated, the computation of tax should be

made otherwise. It is interesting to note that the aspect of lowest market value is made applicable only in respect of assesses whose total extent

may not exceed five grounds. For such of these persons who come under categories of more than five grounds, such a concept, is not applicable.

This itself is indicative that having removed this concept from the exemption provision, and making it as a part of the charging section; in finding out

the extent which would be involved and also the method to be adopted for calculating the tax, the lowest market value would be applicable only if

an assesses possess less than five grounds. In respect of assesses who own more than five grounds, undoubtedly the contention of Mr.

Krishnamurthi that in const(SIC)uing the taxing statute, an interpretation which favours the assesses would alone be applicable and not that of the

Revenue.

The next contention of Mr. Krishnamurthi is that by virtue of G.O. Ms. No. 3526, Revenue dated 15th June 1973, the Petitioner is a person

who would be entitled to the exemption contemplated therein. In the impugned order, this respect has been dealt with and taking into accounts

exhibit A.l to A.3 being the adangal extracts for faslis 1380, 1381 and 1382 it has been found that no crops had been raised at all in any portion of

the land, and that it is only in subsequent faslis 1383 and 1384 some cultivation has been noted in the adangal extracts.

This G.O. contemplates exemption being extended in respect of lands which are registered as dry and which were under cultivation, wet or dry,

for five years prior to the coming into force of the said Act in the City of Madurai. The notification extending the provisions of the Act for Madurai

was published in the gazette on 22nd December 1971. Unless Petitioner is able to establish that for five years proceeding 1971, the lands were

under cultivation with wet or dry crops, he would not be entitled to claim benefits under the said G.O.

Lastly, Mr. Krishnamurthi would contend that on the facts of this matter, when the aggregate extent of land held by this Petitioner is 6.0798

grounds, he would come under category (iii) in Part I of Schedule, and therefore, the concept of lowest market value would not be applicable at

all. Though he has raised this point, and that contention has raised only to show that in respect of categories (iii) to (v) in Schedule I, the intention of

the Legislature was to enable the owners of urban land to have the benefit of exemption from tax to the extent of two grounds of the highest value.

When the legislative intention is thus reflected in providing for this concept only in respect of category (ii), the interpretation which he has invited, to

apply in respect of the other categories, necessarily requires to be conceded. In taxing statutes, as contended by him more than once, an

interpretation which would be beneficial to the assesses has to be adopted in preference to one which may be attempted by the Revenue. In this

view, the rule nisi in made absolute and the second Respondent is directed to revise the inspection of tax on the lines above indicated. There will be

no order as to costs.