Holding

Surcharge levied under the Assam Land Revenue and Land (Surcharge) Act, 1970 is part of land revenue and must be included in the assessment of compensation, while the local rate under the Local Rates Regulation, 1879 is a distinct levy and must be excluded.

Summary

Sarojini Tea Co. Ltd., a tea plantation, had 1,650 bighas of land declared excess under the Assam Fixation of Ceiling on Land Holdings Act, 1956 and was awarded compensation of Rs.71,811 calculated on the "full rate of annual land revenue" but excluding surcharge and local rates. The District Judge enhanced the compensation by including both surcharge (under the Assam Land Revenue and Land (Surcharge) Act, 1970) and local rates (under the Assam Local Rates Regulation, 1879). The High Court reversed this, holding that surcharge is not land revenue and that local rates are distinct from land revenue, thus should be excluded. On appeal, the Supreme Court held that surcharge is an enhancement of land revenue and must be included in the compensation, whereas local rates remain a separate levy and are excluded. Consequently, the appeal was partly allowed, setting aside the High Court’s view on surcharge and upholding its view on local rates, and remitting the matter for fresh compensation determination.

Issues considered

The meaning of "full rate of annual land revenue" under Section 12 of the Assam Ceiling Act – whether it includes surcharge under the Assam Land Revenue and Land (Surcharge) Act, 1970.
Whether the local rate payable under the Assam Local Rates Regulation, 1879 constitutes land revenue for the purpose of compensation under Section 12.
Whether the Limitation Act, 1963 applies to appeals under the Ceiling Act and whether the District Judge could condone delay.
The proper quantum of compensation for excess land under the Ceiling Act.

Legislation cited

Assam Act VIII of 1971 (amendment to the Ceiling Act)
Assam Fixation of Ceiling on Land Holdings Act, 1956s. 12
Assam Land and Revenue Regulation, 1886
Assam Land Revenue and Land (Surcharge) Act, 1970s. 3, s. 4, s. 5, s. 7
Assam Land Revenue Re-assessment Act, 1936
Assam Local Rates Regulation, 1879s. 1, s. 3, s. 4, s. 5
Limitation Act, 1963s. 10, s. 11, s. 12, s. 13, s. 14, s. 15, s. 16, s. 17, s. 18, s. 19, s. 20, s. 21, s. 22, s. 23, s. 24, s. 29, s. 4, s. 5, s. 6, s. 7, s. 8, s. 9

Subjects

land ceilingcompensationsurchargelocal rateAssamSection 12Limitation Actstatutory interpretationstate acquisitionspecial leave petition

Judgment

SAROJINI TEA CO. (P) LTD A
v.
COLLECTOR OF DIBRUGARH, ASSAM AND ANR.

JANUARY 24, 1992

(M.N. VENKATACHALIAH AND S.C. AGRAWAL, JJ.] B

Assam Taxation a/Ceiling on La'nd Holdings Act, 1956 (as amended
by Assam Act VIII of 1971):

Section 12-.-Land Ceiling-Excess land-Compensation- Compu,
tation of 'Annual Land Re1•, 1111e '-.Whether' incllldes 'surcharge' on land C
revenue and 'local rate' payable under Assam -f.,and. llevenue and Land
(Surcharge) Act.' 1970 and Local Rates Re,fulatiim, 1879: Belated
appeal-Condonation of delay--Whether provisions of Limitation Act, I 96J
would apply. ·

The appellant, a tea company; whose land was deciared excess
D
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 un4er section 12 ·of the Act. However, the compensatiori
was assessed excluding the surcharge DA land revenue and the local
rate payable in respect of the land.
E
On ap~eal by the Company, the. Di.strict Judge enhanced the
amount of compensation by including the surcharge on land rev-
enue as well as the local ~ate as patt ~(the _annual fand revenue,
against which respondent No. 1 filed a writ)retition before the High
Court. · ·
F
The High Court allowed the writ petition holding that the ex-
pression '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. G

Aggrieved, the appellant preferred the appeal by special' leave
to this Court.

On the question : whether the surcharge on land revenue iev~
ied under the Assam Land Revenue and Land (Surcharge) Act, 1970 H

371
372 SUPREME COURT REPOR.1 S 11992) I S.C.R.
;..
A and the local rate payable under the Local Rates Regulations, 1879
can be held to he land revenue,

Allowing the appeal in part, this Court,

HELD:l.1 The expression 'surcharge' in the context of taxa-
tion means an additional imposition which results in enhancement
B of the tax and the nature of the additional imposition is the same as
the tax on which it is imposed as surcharge. [p. 381 B-C]

Bisru Stone Lime Co. ltd. & Anr. etc. v. Orissa State Electricity
Board & Anr., [1976) 2 SCR 307; Commissionerof/ncome Tax. Kera/a
v. K. Srinivasan, [1972] 2 SCR 309;Vishwesha Thirthaswamiar & Ors.
c v. State of Mysore & Anr., [1972] 1SCR137, relied on.

C. V. Rajagopalach.ariar v. State of Madras, AIR 1960 Mad. 543,
referred to.

Shorter Oxford English Dictionary, referred to'

D 1.2 A surcharge on land revenue is an enhancement of the
land revenue to the extent of the imposition of surcharge. The na-
ture of such imposition is the same viz. land revenue on which it is a
surcharge. [pp. 381 C; 383 C-DJ

1.3 The surcharge payable under the Assam Land Revenue
E 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
F annual land revenue' payable for the land acquired. [pp. 377H;
378 A)
1.5 The use of the words "full rate of" before the words "an-
nual land revenue payable for the land" in s. 12 (a) (1) (i) of the
Ceiling Act docs not have a hearing upon the nature of the levy,
G which is land revenue. The said words have reference to the quan-
tum of the levy which would form the basis for assessment of com-
pensation and do not render inapplicable the principles that imposi-
tion of surcharge on land revenue is only an enhancement of the
land revenue and nature of the said imposition is land revenue.
Vishwesha Thirthaswamiar & Ors. v. State of Mysore & Anr.. (1972) 1
H SCR 137, relied on. [P. 382 D-E]
TEA CO. v. COLLECTOR 373

Benoy Mazumdar v. Deputy Commissioner. Cochin & Oi·s., (Civil A
Ruic 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 B
having been imposed during the currency of the settlement, is re-
quired to be assessed. The need for assessment arises on account of
the fact that surcharge is not leviablc on a person holding land
measuring less than 10 Bighas and, ther.efore, before making a de-
mand for surcharge it is necessary to determine whether a person
from whom demand is made is liable under the provisions of the C
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, docs not alter the character and nature of D
. the levy. [p. 383 BJ

1.8 The High Court was not right in holding that surcharge on
iand revenue levied under the Surcharge Act is different and dis-
tinct 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 E
aside. [pp. 382 CD; 385 CJ

2.1 Local rate leviable under the Local Rates Regulatilln is, a
levy which is distinct and different in nature from land revenue.
[pp. 384 H; 385 A] .
F
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 ccss because in sec-
tion 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 purpllses mentioned in Section 12, shall cease .to be levied on G
such land or if such cess he maintained, a corresponding diminuition
shall be m.ade 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. H
374 SUPREME COURT REPORTS • (1992] I S.C.R.,

A 2.3 The amount realised by way of local rate under the Regu-
. lations 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. ~84 G-H]

B 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]
c
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 applica-
ble to such proceedings in view of sub-section (2) of secti<ln 29 of the
Limitation Act, 1963 and the District Judge was competent to con-
D done the delay in the filing of the appeal. In the exercise of jurisdic-
tion under Article 136 of the Constitution, it would not be appropri-
ate to interfere with the said exercise of discretion by the District.
Judge. (pp. 376 G-H; 377 A] _.r--

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6650 of
E 1983.

From the Judgment and Order dated 1.6.1983 of the Gaubati High
Court in Civil Rule No, 876 of 1981.

A. K. Ganguli, Vijay Hansaria, Sunil Kumar Jain, A.K. Lawania,
F Suresh Gupta and Rudra Kahlon for the Appellant.

A.K. Mazunidar. S.K. Nandy and P. Goswami for the Respondents.

The Judgment of the Court was delivered by

G 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
H Revenue and Land (Surcharge) Act. 1970 (hereinafter referred to as 'the
TEA CO. v. COLLECTOR (AGRAWAL, J.) 375

--<, Surcharge Act') andthe 'local rate' payable under the Assam Local Rates A
Regulation, 1879 (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 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 i~ B
· required to submit a return and under. s. 7 (I), the Collector prepares. a
draft statement which shows the lands jn 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 objec-
· tions, the draft statement is made final' under sub-section (4) of$. 7; and
with effect from the date on which the final statement is signed by, the c
Collector, all rights, title and interest of the person or.persons whose land.s
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 D
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 fand
,.:. 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 1been used for special cultivation of tea and the purposes
ancillary thereto, was brought within the ceiling.

The appellant. is .!! tea company. Land measuring 1650 bighas, 4
Katthas and 5 lathhas belonging to it was declared as excess land under
F

-· the Ceiling Act on September 9, 1975 by the Collector, Dibrugarh, re-
spondent Na. 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 appel-
!ant for the said land under S. 12 of the Ceiling Act. The said figure was G
arriyed 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 l, 1981, enhanced
the amount of compensation by including the surcharge as well as the
j. 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 -H
376 SUPREME COURT REPORTS [19921 I S.C.R.
.
A Articles 226 and 227 of the Constitution before the High Court, which was \...
allowed by the High Court by its judgment dated June I, 1983 on the view
that the expression 'full rate of annual land revenue' mea.1t 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 Regulation, at the time of enacting
B' s. 12 of the Act and the surcharge on the land revenue which was subse-
quently 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
c appeal.

Before we proceed to deal with ·the submissions of the learned coun-
set for the appellant, we may deal with the preliminary objection that ·has
been raised by Mr. Mazumdar, the teamed counsel for the respondents.
Mr. Mazumdar has urged that the appeal filed by the appellant before the
D District Judge, Dibrugarh, against the order for assessment of compensa-
lion u/s. 12 of the Ceiling Act, was barred by limitation and that the
District Judge was in error in condoning the delay in filing the said ap-
peal. In this regard, Mr.. Mazumdar has submitted that under the law a ;., .
perioJ 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
E was passed by the State Government on February 8, 1979 and the appeal
was filed on September 19, 1979, long after the stipulated period of limi-
talion. On behalf of the appellant, it was submitted before the District
Judge that no order was communicated to the appellant and that the Col-
lector 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

•..
F 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 compen-
sation was communicated by the Collector vide his letter dated February
17, 1979 which was duly acknowledged by the appellant vide its letter
G 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 and upon consideration 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 Ceiling Act which excludes the applicability
H of ss. 4 to 24 of the Li111itation Act, 1963, to proceeding under the Ceiling ·-'-
TEA CO. "· f'OLLECfOJ( [AGRAWAL, J.) . 377

Act, the said provisions are applicable 'to such proceedings in view of sub- A
section (2) ofs. 29 of the /.,imitation Act, 1963 and the District Judge was
competent to condone the delay in the filing of the appeal. On a consid-
eration 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 B
by the District Judge. The preliminary objection raised by the learned
counsel for the respondents, is the:efore, 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 :- C
"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 be- D
low, namely :

(a) (I) where the person from whom the excess land has been
--~
acquired held it as the owner thereof, the compensation (inclu-
sive of the value of any tenancy right) shall be--
E
(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
runount equal to 50 tin1es such annual land revenue;
F
x x x x x x x x x

"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 G
'

' Re-assessment Act, 1936, the compensation shall be deter-
l'lined on the basis of annual land revenue assessable under the
.·provisions of the afore-mentioned Acts on similar, full
r ' ·revenue--paying land sittiated nearest to it."

' a perusal of the aforesaid provisions, it would appear that the
frpm H
measttre for. assessment of co1npensation is 'the full' rate of annual land
SUPREME COURT REPORTS [1992] 1 S.C.R.

A 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 defines the expression 'land revenue.' in the fol-
lowing tenns :-
B
"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 L'311d Revenue Re-assessment Act, 1936, enacted for
C -the purposi;. 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 le~y of surcharge on land
revenue and rent assessed _in the State of Assam. In sub-section (I) of s. 2
of the said Act the expression 'land revenue' is defined in the same tenns
as ins. 3 (e) of the Revenue Regulation. Ins. 3 the following provision is
D made for the l~vy of surcharge:-

"3. Levy of Surcharge. Every person holding land measuring ~:_.

JO (ten) bighas or more directly under the State Government ~-_X:..

. shall be liable to pay a surcharge_ on land revenue or rent, 3S'
the case may be, at the rate of 30 per cent of the land revenue
E or rent of all classes of holdings in addition to the I.and rev-
enue 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
F 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 sur-
charge assessed under this Act shall be payable along with the
land revenue or the rent, as the case may be; in the manner
G 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
H English Dictionary the word 'surcharge' stands for an additional or extra
TEA CO. v. COLLECTOR [AGRAWAL, J.] 379

charge or payment. In Bisra Stone Lime Co. Ltd. & Anr. etc. v. Orissa A
State Electricity Board & Anr., [1976] 2 SCR 307 after referring to the
said definition, this Court had observed : •

"Surcharge is thus a superadded charge, a charge over and
above the usual or current dues." (Ji. 310-11)
B
In that case the Orissa State Electricity Board had imposed a uni-
form surcharge of 10% on the power tariff. It was argued that surcharge
was unknown 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 explain-
ing the meaning ofthe expression 'surcharge', it was observed:
c
"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 posi~
tion. Enhancement of the rates by way of surcharge is well
within the power of the Board to fix or revise the rates of tariff D
under the provisions of the Act." (P. 311)
Similarly, in Commissioner of Income Tax, Kera/a v. K.Stinivasan, .
[1972] 2 SCl!c 309, a question arose whether the term 'income-tax' as
emp/oyed in s.2 of the Finance Act, 1964, would include surcharge and
additional surcharge whenever provided. This Court while tracing the con-
cept of surcharge in taxation laws of our country, has observed: E

"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. I Part I.
From para 141 of the proposals it appears that the word "sur~
charge" was used compendiously for the special addition. to F
taxes on income imposed in September, 1931. The Govern-
ment of India Act 1935, Part VII, contained provisions relating
to fmance, property contracts and suits. Sections 137 and 138
in Chapter I 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 G
proviso to s. 137 the federal legislature was empowered to
increase at any time any of the duties 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 rev-
enue of the federation. Sub-section (3) of s. 138 which dealt
with taxes on income related to imposition of a surcharge." H
(P.312)
I
380 SUPREME COURT REPORTS [1992] I S.C.R.
I
A 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
B to an additional or extra charge."
,.
In C V.Rajagopalaclwriar 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:- · ·
c
"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
S.4 of tire two enactments referred to above only deems it to
D be recoverable as a land revenue it is manifest that the sur-
charge 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 ma!le, the Government
would be enabled to collect a higher amount by way of land
E 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
F State Legislature was competent to enact the Mysore Land Revenue (Sur-
charge) Aci, 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
G 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 06 land
revenue, as contended by the learned counsel for the appellant.
It is a common practice among the Indian Legislatures to im-
H pose surcharge on existing tax. Even art. 271 of the Constitu-
tion speaks of a surcharge for the purpose of the Union being
TEACO. v. COLLECTOR[AGRAWAL,J.] 381

levied by way of increase in the duties or taxes mentioned in A
art. 269 and art. 210:• (p. 140)

"It seems to us that the Act clearly levies land revenue al-
though it is by way of surcharge on the existing land revenue.
If this is so, the fact that the surcharge was raised to .I 0.0% of
the land revenue on the wet and garden land and 75% of the B
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 c
imposition is the same as the tax on which 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 surcharge. ·

The learned Judges of the High Court have taken note of the deci- D
sions of this Court referred to above and were of the view that if they
were to interpret only the expression 'land revenue', ttere 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) {I) of the Ceiling Act. According to the learned
Judges, the expression "full rate of land revenue" has to be understood in E
conformity with the Assam Land Revenue Regulation where different
classes of estates kre ofteri referred to in terms of revenue, for exan1ple,
khiraj or full revenue paying estates and Nisf-khiraj or half revenue pay-
iJ1g estates. The learned Judges have referred to the provisions of the
Assam Land Revenue Reassessment Act, 1936 which prescribes the pro-
cedure for reassessment and how the rates of revenue are to be fixed, as F
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 pre-
scribed procedure whereas in the case of land revenue, it is assessed in
G
one settlement and continues till the succeeding settlement; and under S.3
of the Surcharge Act a person holding land measuring less than I 0 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 expres-
sion 'in addition to the land revenue' used in S. 3 of the Surcharge Act
H
and the expression 'along with land revenue' in S. 7 of the Surcharge Act.
382 SUPREME COURT REPORTS [1992] 1 S.C.R.

A 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 constitu-
B tional validity of S. 7(1A) of the Assam Land (Requisition and Acquisi-
tion) Act, 1948, and had to deal with the question of compensation in
tern1s 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 sur-
C charge 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
D 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 I 2(a) (I) (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
E 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"
F 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 a 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
G 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 same character as
land revenue. As regards the provisions for assessment of surcharge con-
tained in the Surcharge Act for assessment, we find that while land rev-
enue is assessed in one settlement and continues till the succeeding settle- ..l." .
H ment, surcharge having been imposed during the currency of the settle-
TEA CO. v. COLLECTOR [A<iRAWAL, J.] 383

ment, is required to be assessed. The need for assessment arises on A
account of the fact that surcharge is not leviable on a person holding land
measuring less than I 0 Bighas and therefore, before making a demand for
surcharge it is necessary to determine whether a person from whom de-
mand is made is liable under the provi~ions of the Surcharge Act and is
not entitled to claim exemption from such levy. The fact that the persons
holding land less than l 0 Bighas though liable to pay land revenue, are B
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 iherein, have no bearing because in those cases
· ihe 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
c
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. Jn
consonance with the law laid down by this Court in Vishwesha
Thirrhaswamiar's case (supra), it must be held that the surcharge on land
revenue levied under the Surcharge Act, being an enhancement of the land D
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 . E
provide "for .the levy on land of rates to be applied to defray the expendi-
ture incurred and to be incurred for the relief and prevention .pf fa1nine
and for local purposes". In S. I 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 :- F

"3. Rates Assessable. All land shall be liable to a levy at the
rate of twenty-five paise for every rupee of the annual value of
the land in addition to the land-revenue and local cesses (if
any) assessed thereon."
G
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 lai1d under this Regulation, any
--i cess now leviable on such land for any of the purposes men-
tioned in S. 12 shall cease to be levied on such land; or if such
H
384 SUPREME COURT REPORTS [1992] 1 S.C.R.

A 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 im-
B posed on any land under this Regulation shall be payable by
the lanct-holder and shall be 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,"
c In Guruswamy & Co. v. State of Mysore, [1967] l SCR 548;
Hidayatullah J., as the learned Chief Justice then was, has observed as
under:

"The word 'cess' is usild in Ireland and is still in use in India
although the word rate has replaced it in England. ltcneans a
D
tax and is generally used when the levy is for some special
administrative expenS'e which the name (health cess, education
cess, road cess etc. ) indicates. When levied as an increment to
an existing tax, the name matters not 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."
E
In India Cement Ltd. & Ors. v. State of Tamil Nadu & Ors. [1990] l
sec 12; these observations have been quoted and it has been mentioned
that though they were made in the dissenting judgment, there was no
dissent on this aspect of the matter.

F From the aforesaid observatioris, it would appear that the expression
'rate' is generally used iti the same sense 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 is 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 pur-
G poses 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
H . particular purpose. Local rate leviable under •he Local Rates Regulation
TEA CO. v. COLLECTOR [AGRAWAL, J.] 385

is, therefore, a levy which is distinct and different in nature from land A

- rev<jjlue. 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 lie.u of land
revenue. B

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 regarded 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. C

The appeal is, therefore, partly allowed and the judgment of the
High Court to the extent it holds that '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 consti-
tutes land revenue and has to be taken into account for assessing compen- D
sation 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· th,e pµrpose of
assessing such compensation, is upheld. The order of the High .Court
setting aside the judgment and order of the District Judge, dated July 1,
1981 in Misc. Appeal No.5 of 1979 is maintained. The 'matter will go E
back to the District Judge, Dibrugarh, for re-determination of the compen-
sation payable to the appellant in Misc. Appeal No. 5 of 1979 in accord-
ance with law. The parties are left to bear their own costs.

R.P. Appeal partly allowed.