Holding

A building that is a dwelling house is excluded from the exemption in Section 115(4)(c) and is therefore liable to the general tax irrespective of its agricultural use.

Summary

The respondent owned agricultural land in Delhi and built a farm house that was occupied only occasionally for agricultural purposes. The Delhi Municipal Corporation levied a general tax on the building under Section 115(4)(c) of the Delhi Municipal Corporation Act, 1957. The respondent claimed exemption, arguing that the building, being a dwelling house used for agriculture, fell within the exemption for "agricultural lands and buildings other than dwelling houses". The High Court accepted this argument, holding that exemption applied if the building was used substantially for agricultural purposes. The Supreme Court reversed, holding that once a structure is classified as a dwelling house, it is expressly excluded from the exemption and is liable to tax regardless of its use. The Court also clarified that occasional occupation does not affect liability and that appurtenant land necessary for enjoyment of the dwelling is part of the taxable unit.

Issues considered

Whether a building classified as a "dwelling house" under Section 115(4)(c) of the Delhi Municipal Corporation Act, 1957 is exempt from the general tax despite being used for agricultural purposes.
Whether the frequency or purpose of occupation (occasional vs. permanent) influences the tax liability of a dwelling house.
Extent of appurtenant land to be treated as part of a dwelling house for tax purposes.
Meaning of "agricultural land" under the Act (though not finally decided).

Legislation cited

Delhi Municipal Corporation Act, 1957s. 115(4)(c)

Subjects

general taxdwelling houseagricultural landtax exemptionDelhi Municipal Corporation Actproperty taxappurtenant landstatutory interpretation

Judgment

MUNICIPAL CORPORATION OF DELHI AND ANR. A
v.
SHRI NARESH KUMAR AND ORS.

MARCH 10, 1997.

[B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.] B

Delhi Municipal Corporation Act, 1957: Section 115 (4) (c).

Expression "Dwelling houses"-Scope of-General Tax-Levy
of-Held : Dwelling houses siruated on, o-.er or in the midst of agricultural C
lands, not exempt from general t~17iat such dwelling house was occupied
only occasionally .and only for purposes connected with agriculrural opera-
tions, immaterial.

'Dwelling houses ''-Treatment of land adjacent to-As integral part
thereof-For levy of general tax-Held : Such appurtenant land as was D
necessary for proper and convenient enjoyment of the dwelling house should
be so treated--The extent of such appurtenant land is a question of fact to be
decided in each case.

Agricultural land-Held : Whether a particular land was agiicullllral
land or not was a mixed question offact and law to be decided in the facts E
and circumstances of each case. ·

Words and Phrases :

"Dwelling house", "house" and "Fam1 house''-Meaning of-ln the con-
text of S. 115 (4)(c) of the Delhi Municipal Corporation Act, 1957. F

The respondent was the owner of a piece of land on which he carried
on agricultural operations. The respondent constructed a building on the
said land, which was occupied by him not on a permanent basis but only
occasionally for purposes connected with agricultural operations.
G
The appellant-Corporation levied general tax on the said building
under Section 115 (4)(c) of the Delhi Municipal Corporation Act, 1957.
The respondent filed a writ petition before the High Court contending that
the said building despite being a "dwelling house" was exempt from the
... general tax under Section 115 (4)(c) of the Act. The High Court allowed H
869
870 SUPREME COURT REPORTS f1997] 2 S.C.R.
A the petition holding that the exemption applied even to buildings or farm
houses used substantially, if not solely, for agricultural purposes. Hence
this appeal.

Allowing the appeal, this Court

B HELD: 1.1. Section 115 (4)(c) of the Delhi Municipal Corporation
Act, 1957 excludes "dwelling houses" from the purview of agricultural lands.
and buildings. Once it is a "dwelling house" it is outside the purview of
exempted category. The very context in which the expression "dwelling
houses" occurs shows that even the dwelling houses situated on, over or in
C the midst of agricultural lands were sought to be excluded from the
exempted category of "agricultural lands and buildings". A dwelling house
can also be occupied by persons carrying on agriculture i.e., to carry on
or supervise the agricultural operation. But according to Section 115
(4)(c), the "dwelling house" as such are excluded from the category of
agricultural. buildings. Even if it is possible to say that a dwelling house
D in an "Agricultural building'', yet it is excluded specifically by the statute
from the fold of agricultural buildings. The High Court erred in holding
that the exemption applied even to 'buildings' or farm houses used
'substantially', if not solely, for agricultural purpo§es. Application of the
test evolved by the High Court would remove the distinction between '
E "Agricultural buildings" and "dwelling houses" which are mentioned
together in Section 115 (4)(c). (872-G-H, 873-A-B]

1.2. The respondent's argument of occasional (as compared to
regular) occupation has no force, as it is not necessary that a house if
adapted for residential purposes should be actually dwelt in. (873-F]
F
Tata Engineering and Locomotive Co. Ltd. v. The Gram Panchayat,
Pimpri Waghere, [1976] 4 SSC 177, relied on.

Daniel v. Coulsting, 135 ER 53, cited.

G 2. Such appurtenant land as is necessary for a proper and con-
venient enjoyment of the dwelling house should be treated as an integral
part of the dwelling house for levy of general tax. The extent of such
appurtenant land is a question of fact to be decided in each case. (874-A]

3. Whether a particular land is an agricultural land or not is a mixed
H question of fact and law to be decided in the facts and circumstances of
._,,,-·

M.C.D. v. NARESH KR [B.P. JEEVAN REDDY, J.] 871

each case. [87 4-C] A
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1834 of
1997.

From the Judgment and Order dated 2.12.94 of the Delhi High Court
in C.W.P. No. 937 of 1994. B
Ms. Madhu Tewatia and Ranbir Yadav for the Appellants.

Mukul Mudgal for the Respondents.

The Judgment of the Court was delivered by c
B.P. JEEVAN REDDY, J. Leave granted.

This appeal involves the interpretation of clause (c) of sub- section
(4) of Section 115 of the Delhi Municipal Corporation Act, 1957. Sub-sec-
tion (4) levies, what is called, a "General Tax" on "all lands and buildings" D
in Delhi except "(c) agricultural lands and buildings (other than dwelling
houses)". The question is whether the farm houses within the Delhi
Municipal Corporation area are exigible to general tax as "dwelling houses".

The respondent owns an extent of about 13 bighas in the Revenue
estate of village Bijwasan, Tehsil Mehrauli, New Delhi. According to him, E
he carries on agricultural operations thereon. He constructed a building on
the said land, which, according to him, is occupied for purposes connected
with agricultural operations on the said land and wherein the respondent
and his family members stay whenever they visit the farm. According to the
respondent, further the building is not occupied on a permanent basis but F .
only occasionally as and when they visit the farm. The contention of the
respondent before High Court was that since the said building is connected
with the agriculture being carried on over the said extent of 13 bighas, it
is exempt from tax under Section 115 (4)(c) nothwithstanding the fact that
it is a "dwelling house". On the other hand, the case of the Corporation
was that since the said building is a "dwelling house" within the meaning of G
Section 115 (4)(c), it is subject to general tax. According to the corpora-
tion, it is immaterial whether the dwelling house is occupied on ·a per-
manent basis or only occasionally. It is equally immaterial, says the
corporation, whether the dwelling house is occupied for the purpose of
agriculture being carried on over the adjacent lands or otherwise. It is H
872 SUPREME COURT REPORTS [1997] 2 S.C.R.

A enough that it is a dwelling unit, says the corporation. It is taxable. The
High Court has not accepted the contention urged by the corporation. The
High Court has opined that a dwelling unit is exempted from general tax
if it is mainly or pre-dominantly occupied or used for agricultural purposes.
This what the High Court said:

B "We are therefore of the view that so far as the exemption
provision in Section 115 (4)(c) is concerned, the test is not whether
buildings or Farm houses are used 'solely' in connection with
agricultural operations. In our view, the said exemption applies to
'buildings' or farm houses used "substantially'', if not solely, for
c agricultural purposes. If this test is satisfied, the building or farm
house falls outside the tax-net. So far as the exclusionary words
'other than dwelling houses' are concerned, we are again of the
view that the buildings or farm houses must be solely or substan-
tially used for 'dwelling purposes, that is to say, with a degree of
continuity and pc:rmanency, and not solely or substantially for
D
agricultural purposes, then such buildings will fall inside the tax
net. We do not visualise any third category of 'buildings' or farm
houses which do not fall into one or other categories above stated.
Assuming however that any such intermediate category arises, we
are of the view that the person claiming the exemption will not be
E entitled to exemption from property tax unless he proves that the
building is solely or substantially used for 'agricultural purposes'.
Whether a given building is used substantially for agricultural
purposes, is a question depending upon the facts and circumstan-
ces of each case and on what, according to general principles of
law could be said to be the meaning of the words 'agricultural
F
purposes'."

With respect we are unable to agree with the High Court. Clause (c)
exempts "agricultural lands and buildings" from the levy imposed by Section
115 (4). Clause (c), however, contains an exception within itself. The
G "dwelling houses" are excluded from the purview of agricultural lands and
buildings. In other words, once it is a "dwelling house" it is outside the
purview of exempted category. The very context in which the expression
"dwelling houses" occurs shows that even the dwelling houses situated on,
over or in the midst of agriculturat lands were sought to be excluded from
H the exempted category of "agricultural lands and buildings". An agricultural
M.C.D. v. NARESH KR. [B.P. JEEVAN REDDY, J.] 873

building may be a godown where the agricultural produce is stored, it may A
be warehouse or it may be a building housing the machinery used for
purposes the agriculture. A dwelling house can also be occupied by persons
carrying on agriculture i.e., to carry on or supervise the agricultural opera-
tion. But according to Section 115 (4)(c), the "dwelling houses" as such are
excluded from the category of agricultural buildings. In other words, even B
if it is possible to say that a dwelling-house is an "agricultural buildip.g", yet
it is excluded specifically by the statute from the fold of agricultural
buildings. Application of the test involved by the High Court would remove
the distinction between "agricultural buildings" and "dwelling houses" which
are mentioned together in Clause (c). An agricultural building is a building
used mainly or pre-dominantly for the purpose of agriculture. If the same C
test is applied to dwelling houses then the very purpose and object behind
excluding dwelling houses from the purview of agricultural buildings would
disappear. We, therefore, agree with the Corporation that once a building
is a dwelling house, no further enquiry need be made whether it is used
mainly or predominantly for agricultural purposes or not. It is enough that D
it is a dwelling house. It becomes exigible to general tax. This would be so
even if the dwelling house is situated in the midst of a farm or is a part of
the farm or it may be, what is called, a "farm house".

So far as the argument of occasional (as contrasted with regular)
occupation is concerned, we may refer to the decision of this Court in The E
Tata Engineering And Locomotive Company Limited v. The Gram
Panchayat, Pimpri Waghere, (1976] 4 S.C.C. 177. In Para 18, the following
statement occurs: "It may be stated generally that the word "house" is a
structure of a permanent character. It is structurally served from other
tenements . .It is not necessary that a house if adapted for residential F
purposes should be actually dwelt in see Daniel v. Coulsting, (1845) 14 LJ
r CP 70 : 135 ER 53. A building in Covent Garden had formerly been a
dwelling house but was converted into a frnitstore warehouse and offices in
which no one slept and was held to be a 'house' as regards 'assessment to the
rector's rate within the provisions of the relevant statute."
G
The next question is-if a "dwelling house" is exigible to levy of general
tax, how much of the adjacent land should be treated as an integral part
of the dwelling house. In other words, the question is whether the entire
land surrounding or abutting a farm house is subject to general tax
alongwith the dwelling house. '!he answer to this question is: a dwelling H
874 SUPREME COURT REPORTS (1997] 2 S.C.R.

A house includes within its ambit such appurtenant land as is necessary for
a proper and convenient enjoyment of the dwelling house. The extent of
such appurtenant land is naturally a question of fact to be decided in each
case. We have only stated the test. It is for the appropriate assessing
authority to determine the extent of land which can be called appurtenant
B land to a given dwelling house.

The third question urged before us is as to be meaning of the
expression "agricultural land". This question has not been really gone into
by the High Court. When can a land be called ari agricultural land has been
the subjected matter of good amount of debate under various enactments
C including the Income Tax Act and the Wealth Taxt Act. Whether a land
is an agricultural land or not is a mixed question of fact and law, which has
to be decided in the facts and· circumstances of each case. We are not
prepared to go into details, to determine whether the land involved in this
appeal is "agricultural land", since that question has not been gone into by
the High Court. The three issues set out by the High Court do not take in
D this issue. It is enoL1gh to say for the purposes of this appeal that a dwelling
house situated on an agricultural land is not exempt from general tax and
that a dwelling house includes within its ambit such appurtenant land as is
necessary for a proper and convenient enjoyment of the dwelling house.
No more can be said, nor need he said, in this appeal.
E The appeal is allowed in the manner indicated above. The matter
should go back to the Assessing Authority for appropriate orders in the
light of the law laid down herein. No order as to costs.

v.s.s. Appeal allowed.