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2011 DIGILAW 496 (RAJ)

Prem Chand Jain v. State

2011-03-04

MOHAMMAD RAFIQ

body2011
Hon'ble RAFIQ, J.—Learned counsels for the petitioners at the outset cited the judgment passed by this Court at Principal Seat, Jodhpur in M/s. Golcha Minerals Pvt. Ltd. vs. State & Ors., S.B. Civil Writ Petition No.10921/2009 and other identical matters wherein vide judgment dated 28.1.2010, the similar demand notices for levy of land tax have been quashed. It is therefore prayed that the writ petitions be allowed in view of the aforesaid judgment. 2. Learned counsels for the petitioners have argued that in all these cases, assessment orders have been framed mechanically and without application of mind to the facts of given case. In certain cases, the mining area leased out was larger, but substantial part of that was still being retained by the khatedars and used for agriculture purposes and accordingly mining operations were being carried out in very smaller part of the land. It is argued that Section 38(c) of the Rajasthan Finance Act, 2006 (for short-`the Act')has defined the land and as per that definition, the land which is being cultivated for agriculture purposes is liable to be excluded for the purpose of land tax. Section 38(c), which defines `land' specifically excludes the land held or used exclusively for agricultural or residential purposes. There could be therefore no question of levying land tax on such land. In spite of the fact that petitioners submitted objections against the provisional assessment list, the assessing authority without considering such objections and without affording any opportunity of hearing to the petitioners as required by section 42(2) of the Act, unilaterally finalised the assessment order and issued attachment warrants. Learned counsels further argued that Section 42(2) categorically provides that where objection in respect of land mentioned in the provisional assessment list is filed in accordance with the provisions of Section 41, the Assessing Authority shall, after affording an opportunity of hearing and producing evidence to the objector, decide the objections and then confirm, revise or modify the entries in the provisional assessment list. It is further argued that the government issued notification dated 9.3.2006 by exercising its powers under section 39 of the Finance Act, 2006 notifying the class of lands and rate of tax whereas Chapter VII of the Finance Act, which contains Sections 37 to 63, was itself brought in force vide Government notification issued by virtue of Section 37(2) with effect from 25th of September, 2006. There was thus no legal competence for issuing notification dated 31st of March, 2006 before that date. 3. Learned counsels further argued that Rule 5 of the Rajasthan Land Tax Rules has also not been complied with in its latter and spirit. The said rule provides that upon preparation of provisional assessment list, the assessing authority shall give public notice in form no.2 in one daily newspaper circulated in the locality in which the land is situated. Moreover, the State Government in exercise of the powers conferred upon it under Section 42(4) of the Act has issued notification dated 23.2.2007, which was published in the Government Gazette on 28.2.2007 whereby it has appointed 25.9.2006 as the date from which finalised assessment list has by a deeming fiction been given effect to. Retrospective effect cannot be given to the assessment order, which is required to be prepared after notice and upon providing opportunity to the affected parties. No such opportunity was provided to any of the petitioners. 4. In some cases, learned counsels for the petitioners argued that the Ministry of Environment and Forest has granted environment clearance and the State Pollution Board has given consent to operate for air and water pollution for a smaller land area; even then the land tax has been levied for a larger chunk of land area. It is also argued that if the land area is less than 10 hectares, then no tax is leviable as per the notification dated 28.2.2007. Learned counsels argued that in some of the cases, though the land area for which mining lease was originally granted was larger, but the lease holders surrendered either the entire leased out area or part thereof, even then the tax has been levied on the entire land without considering this aspect of the matter. So far as the land which is used for agriculture purposes cannot be subjected to levy of land tax so long as the land is not acquired or the compensation is not determined and paid to the concerned khatedar, the lease holder cannot enter the land for the purpose of mining. It is also argued that in some cases, the lands which have become part of the forest land, have also been included for the purpose of assessment of tax. It is also argued that in some cases, the lands which have become part of the forest land, have also been included for the purpose of assessment of tax. In certain other cases, the lands which have been subsequently used for construction of government building shall also be taken to be the land in the hands of the petitioners for the purpose of levy of land tax. It is argued that in some cases even the land, which have been declared as chara gah have also been included. It is therefore prayed that the writ petitions be allowed, the impugned assessment orders be set aside, the matters be remanded for framing fresh assessment orders and the amount which has been realised/deposited pursuant to interim orders passed in those matters should be ordered to be refunded. 5. Shri S.N. Kumawat, learned Additional Advocate General appearing for the respondents opposed the writ petition and submitted that only such land which is being exclusively used for agricultural purpose, can be excluded for the purpose of tax. However, if it is part of leased out area and is being used for horticulture purposes in addition to mining purposes and not purely for agriculture purposes, such land cannot be excluded. So far as residential and government buildings are concerned, it is argued by him that if the buildings are used for proposed ancillary to mining, then such land cannot be excluded. It is submitted that under Section 48, petitioners are free to file appeals before the appellate authority, therefore, the writ petitions be dismissed as not maintainable. 6. It is further argued that the amount which has been deposited pursuant to the interim orders passed in these matters, may be ordered to be adjusted subject to fresh order that may be passed in the event of this court remanding the matters to the Assessing Authority, within time bound frame. 7. Counsels for the petitioners rejoined and submitted that the objection of alternative remedy should be rejected because impugned orders are passed in utter violation of principles of natural justice and identical writ petitions have already been allowed by coordinate bench of this Court at Principal Seat in M/s. Golcha, supra. 8. I have given my anxious consideration to the rival arguments and perused the material on record. 9. 8. I have given my anxious consideration to the rival arguments and perused the material on record. 9. So far as the objection of alternative remedy is concerned, this objection cannot be sustained, as rightly argued by learned counsels for the petitioners because this Court is inclined to accept the argument that principles of natural justice have been utterly violated in the present case and opportunity of hearing which is statutorily provided to be afforded to the assessee or the petitioners in this case, has not at all been granted. Moreover, this Court has already set aside similar demand notices/assessment orders in identical writ petitions at the Principal Seat, Jodhpur. 10. The arguments of petitioners, which have been noticed in detail, have not been effectively refuted by the respondents, go to show the casual and mechanical manner in which the assessment orders have been framed in these matters. The provisions of main enactment as also the rules framed thereunder have been completely violated while framing assessment orders. Definition of `land' as given in Section 38(c) of the Rajasthan Finance Act, 2006 has also not been taken into consideration. The provisional assessment lists were finalised without considering the objections submitted by the petitioners and without providing them opportunity of hearing as envisaged in Section 42(2) of the Act. The purpose of providing two stages of assessment i.e. one provisional and other final is precisely to enable the assessee to file his objections on provisional assessment list and the assessing authority to examine them after giving opportunity of hearing to the assessee so that if on consideration he decides to uphold any of these objections, or otherwise, he may revise or modify the entries in the provisional assessment list or confirm the same. 11. There is then another illegality peculiar to this case which is that provisions contained in Chapter VII from Section 37 to 63 were brought into force by notification of the government in exercise of its powers u/s.37(2) with effect from 25.9.2006 because this notification was issued by the government on 25.9.2006 which was published in the gazette extraordinary on 27.9.2006. There is then another illegality peculiar to this case which is that provisions contained in Chapter VII from Section 37 to 63 were brought into force by notification of the government in exercise of its powers u/s.37(2) with effect from 25.9.2006 because this notification was issued by the government on 25.9.2006 which was published in the gazette extraordinary on 27.9.2006. When the notification u/s.37(2) itself has been issued on 25.9.2006 at a later point of time, how could the government by issue of notification dated 9.3.06, a date falling much before 25.9.2006 notification, fix the class of lands and rate of tax because of the provisions of the Chapter VII starting from Section 37 to Section 63 which were brought into force only with effect from 25.9.2006 by virtue of the aforesaid notification issued u/s.37(2). 12. In all these matters, public notice of provisional assessment list has not been published in form no.2 in any public daily as per requirement of Rule 5, supra. Moreover, the Government could not retrospectively by notice u/s.42(4) dated 23.2.2007 make the assessment orders effective from 25.9.2006, the date on which the Act was enforced because an assessment order can be passed only after providing opportunity of hearing and deciding the objections of the concerned assessees as already noticed above. 13. The manner in which the assessment orders have been framed in these matters leaves much to be desired. Although this is a matter for consideration of the State Government but in the facts of these caes, this Court is constrained to observe that the State Government would be well advised to train its officials in the matter of framing assessment orders. The task of framing assessment orders in these matters appear to have been entrusted to Registrars/Sub-Registrars of the Stamp and Registration Department and the records reveal, they may not be that trained in such matters like some of the other taxation departments of the government, which are more conversant with the method and manner of framing assessment orders. As is evident from the assessment orders framed in these matters, they have been found completely lacking in that expertism. 14. In view of above discussion, all these petitions deserves to be allowed and are accordingly allowed. As is evident from the assessment orders framed in these matters, they have been found completely lacking in that expertism. 14. In view of above discussion, all these petitions deserves to be allowed and are accordingly allowed. The impugned orders of assessment/demand notices in each of these cases are quashed and set aside and the matters are remanded back to the assessing authority in each of these matters, who is directed to frame fresh assessment order after providing opportunity of hearing to concerned assessees keeping in view the aforesaid discussion and according to provisions contained in the Act and the Rules. 15. So far as the amount of 50%, which has been ordered to be deposited with the assessing authority pursuant to the impugned demand notices is concerned, it is directed that deposit of such amount shall abide by final outcome of the fresh assessment orders that may be passed by the assessing authority in each of these cases and in the case of amount of demand being reduced, the excess amount shall either be adjusted against the subsequent year, if by that time, fresh assessment order is framed and tax has become due for the subsequent year and if no such fresh assessment becomes due, the excess amount shall be refunded with interest @ 6% per annum.