Supreme Court of India
STATE OF KERALA & ORS.versusMOUSHMI ANN JACOB
- Citation
- 2025 INSC 255
- Decided
- 20 February 2025
- Disposal
- Appeal(s) allowed
- Bench
- SANJAY KAROL
Holding
The exemption of conversion fee under the 2021 Notification is available only to land holdings not exceeding 25 cents; for holdings exceeding 25 cents, the fee is payable on the entire land.
Summary
Moushmi Ann Jacob owned 14.57 acres of land classified as paddy land and applied to change its nature under the Kerala Conservation of Paddy Land and Wetland Act, 2008 to obtain an education loan. The State demanded a conversion fee of 10% of the fair value of the entire land, invoking a 2021 Government Notification that exempts lands up to 25 cents from any fee and levies 10% on lands exceeding 25 cents. The High Court and a Division Bench held that the fee should be calculated only on the portion of land exceeding 25 cents, a view the State appealed. The Supreme Court examined the Notification as delegated legislation, applied the literal and strict rules of interpretation, and emphasized that the Notification creates two distinct categories with a reasonable nexus to its purpose under Article 14. It concluded that the exemption applies only to holdings not exceeding 25 cents; if a holding exceeds that limit, the fee is payable on the whole land. Consequently, the appeal was allowed and the respondent was ordered to pay the conversion fee on the total extent of her land.
Issues considered
- Whether the exemption under the 25‑cent provision of the 25 February 2021 Notification applies only to land holdings up to 25 cents or can be limited to the portion exceeding 25 cents in larger holdings.
- Whether the Notification, as delegated legislation, must be interpreted strictly and whether the High Court erred in merging the two categories created by the Notification.
Legislation cited
- Constitution of Indias. Article 14
- Kerala Conservation of Paddy Land and Wetland Act, 2008s. 27, s. 27A
- Kerala Conservation of Paddy Land and Wetland Rules, 2008s. Rule 12(9)
Headnote
Issue for Consideration Whether under Notification dated 25.02.2021 issued under the Kerala Conservation of Paddy Land and Wetland Act, 2008, a land owner with more than 25 cents is liable to pay conversion fee for the entire land holding or would the conversion fee be calculable for the portion of 25 cents. Headnotes† Kerala Conservation of Paddy Land and Wetland Act, 2008 – Notification dated 25.02.2021 exempted landowners holding up to 25 cents from paying conversion fee – Respondent, owner of 14.57 acres, directed to pay conversion fee on total extent of land
Subjects
Land reclassificationConversion feeDelegated legislationSubordinate legislationExemption notificationStrict constructionLiteral ruleReasonable classificationArticle 14
Judgment
[2025] 2 S.C.R. 1273 : 2025 INSC 255
State of Kerala & Ors.
v.
Moushmi Ann Jacob
(Civil Appeal No(s). 3178-3179 of 2025)
20 February 2025
[Sanjay Karol* and Manmohan, JJ.]
Issue for Consideration
Whether under Notification dated 25.02.2021 issued under the
Kerala Conservation of Paddy Land and Wetland Act, 2008, a land
owner with more than 25 cents is liable to pay conversion fee for
the entire land holding or would the conversion fee be calculable
for the portion of land that is in excess of 25 cents.
Headnotes†
Kerala Conservation of Paddy Land and Wetland Act, 2008 –
Notification dated 25.02.2021 exempted landowners holding up
to 25 cents from paying conversion fee – Respondent, owner
of 14.57 acres, directed to pay conversion fee on total extent
of land – Writ Petition against interpretation of Notification in
High Court – Single Judge held fee should be calculated only
on extent of land exceeding 25 cents – Judgment upheld by
Division Bench and subsequent review dismissed – Dismissal
of review petition challenged – Appeal allowed – Exemption
provision to be strictly construed – Notification creates two
distinct categories – Exemption available only if holding does
not exceed 25 cents – Conversion fee to be calculated on
entire land if holding exceeds 25 cents – High Court erred in
merging the two categories – Classification held reasonable
and consistent with Article 14 of the Constitution – Respondent
liable to pay conversion fee on entire extent of land:
Held: Respondent, owner of 14.57 acres land, sought change of
nature of land to secure education loan – Competent authority
directed payment of Rs.1,74,840 as conversion fee, being 10% of
fair value of entire land – In Writ Petition, Respondent challenged
the fee amount contending that 25 cents was exempt under
Notification dated 25.02.2021 under the Kerala Conservation of
* Author
1274 [2025] 2 S.C.R.
Supreme Court Reports
Paddy Land and Wetland Act, 2008 – Fee ought to be calculated
only on land exceeding 25 cents — Single Judge held fee should
be calculated only on extent exceeding 25 cents and not entire
14.57 acres – Same upheld by Division Bench and subsequent
review dismissed by impugned order – Appeal allowed.
Notification issued in furtherance of an Act is delegated legislation –
Such subordinate legislation lacks the same level of immunity
as plenary law and must yield to it – Instant dispute concerns a
Notification granting exemption from payment of fees – Person
claiming exemption must establish entitlement – Such Notification
must be interpreted strictly and in accordance with the literal
rule of interpretation – Plain reading of Notification shows that
it creates two distinct categories: those with land up to 25 cents
and those with land in excess of 25 cents – Object of exempting
people belonging to the former class from payment of fee is to
enable them to have ease in constructing without being burdened
with conversion fee of the land – Nothing to show State did not
have necessary competence to create two classes – High Court
erred in fusing two distinct categories – Competent authority
specified different fee categories proportionate to land, signifying
intent to form distinct classes – State is permitted reasonable
classification, provided it bears a reasonable nexus to the object
sought to be achieved – Principles of Article 14 to guide all State
actions, including administrative, such as the issuance of Rules
or Notifications. [Paras 2-3, 13-20]
Reliance also placed on Rule 12 Clause 9 of Kerala Conservation
of Paddy Land and Wetland Rules, 2008, which states no fee
is payable up to 25 cents, and 10% of the fair value is payable
for land above 25 cents up to 1 acre – Respondent liable to pay
conversion fee on total extent of land in ownership. [Paras 23-25]
Case Law Cited
Registrar of Cooperative Societies, Trivandrum v. K. Kunjabmu,
1979 INSC 249 : [1980] 2 SCR 260 : (1980) 1 SCC 340; C.C.E. v.
Hari Chand Shri Gopal, 2010 INSC 785 : [2010] 13 SCR 820 :
(2011) 1 SCC 236; Commissioner of Customs (Import), Mumbai v.
Dilip Kumar & Co., 2018 INSC 646 : [2018] 7 SCR 1191 : (2018) 9
SCC 1; Balram Kumawat v. Union of Indian & Ors., 2003 INSC 426 :
[2003] Supp. 3 SCR 24 : (2003) 7 SCC 628; Natural Resources
Allocation, In Re: Special Reference No. 1 of 2012, 2012 INSC
428 : [2012] 9 SCR 311 : (2012) 10 SCC 1 – relied on.
[2025] 2 S.C.R. 1275
State of Kerala & Ors. v. Moushmi Ann Jacob
Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of
India, 1984 INSC 231 : [1985] 2 SCR 287 : (1985) 1 SCC
641; Swami Vivekanand College of Education & Ors. v. Union
of India & Ors., 2011 INSC 752 : [2011] 12 SCR 941 : (2012)
1 SCC 642; Charanjit Lal Chowdhury v. Union of India, 1950
INSC 36 : [1950] 1 SCR 869 : (1950) SCC 833; Kewal Singh v.
Lajwanti, 1979 INSC 197 : [1980] 1 SCR 854 : (1980) 1 SCC
290; Harbans Lal v. State of H.P, 1989 INSC 224 : [1989] 3 SCR
662 : [1989] 4 SCC 459; Chhattisgarh Rural Agriculture Extension
Officers Assn. v. State of M.P, 2004 INSC 229 : [2004] 3 SCR
821 : (2004) 4 SCC 646; Khalsa University v. State of Punjab,
2024 INSC 751 : [2024] 10 SCR 445 : 2024 SCC OnLine SC
2697 – referred to.
List of Acts
Constitution of India; Kerala Conservation of Paddy Land and
Wetland Act, 2008; Kerala Conservation of Paddy Land and
Wetland Rules, 2008.
List of Keywords
Land reclassification; Conversion fee; Delegated legislation;
Subordinate legislation; Exemption notification; Exemption
clause; Interpretation; Strict construction; Literal rule; Reasonable
classification; Article 14.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 3178-3179
of 2025
From the Judgment and Order dated 01.08.2023 and 04.10.2023
of the High court of Kerala at Ernakulam in WA No. 983 of 2023
and RP No. 894 of 2023 respectively
With
Civil Appeal No(s). 3180-3181 and 3220-3221 of 2025
Appearances for Parties
Advs. for the Appellants:
Shaji P. Chaly, Sr. Adv., Nishe Rajen Shonker, Mrs. Anu K Joy,
Alim Anvar.
1276 [2025] 2 S.C.R.
Supreme Court Reports
Advs. for the Respondent:
Raghenth Basant, V Chitambaresh, Sr. Advs., Manish Tiwari, Vishnu
Pazhanganat, Ms. Kaushik Akira Sharma, Ms. Hima Bhardwaj,
Jogy Scaria, Mrs. Beena Victor, C Govind Venugopal, Ms. M
Priya, Ashwani Kumar Soni, M Gireesh Kumar, Ankur S. Kulkarni,
A S Naushad, Ms. Puspita Basak, Tarun.
Judgment / Order of the Supreme Court
Judgment
Sanjay Karol, J.
Leave Granted.
2. The issue in these appeals is the construction of a Government
Notification exempting the payment of fee upon reclamation of
land originally reflected in the records of the State as ‘paddy land’
in accordance with the Kerala Conservation of Paddy Land and
Wetland Act, 20081. The Learned Single Judge vide judgment and
order dated 6th February 20232 passed in WP(C)No.23400/2022
held that the fee payable by a person would be calculable for
the portion of land that is in excess of 25 cents, since that much
stands exempted. Such a finding in law was confirmed by the
learned Division Bench vide judgment and order dated 1st August
2023 in WA No.983/2023, and a review filed thereagainst in R.P.
No.894/2023 was dismissed by order dated 4th October 2023. The
appellant-State takes exception to such a reading of the Notification,
and hence, it is before us.
3. The background in which the writ petitions, their findings and
subsequent review petition impugned herein, arose, is: -
3.1 The Respondent is the owner of land measuring 14.57 acres
having Survey Number 97/2 of Karikode Village in Thodupuzha
Taluk. On 26th October 2019, with the intention of putting the
land to alternate use, i.e., using it to secure an education loan,
made an application to the competent authority under Form 6
of Section 27 of the Act. Thereafter an application was further
1 “The Act”
2 In W.P (C) 23400 of 2022
[2025] 2 S.C.R. 1277
State of Kerala & Ors. v. Moushmi Ann Jacob
made to remove the said land from the ‘data bank’, under
Form 5 of the Act.
3.2 The Revenue Officer, Idduki, by way of Notice dated 27th January
2021, informed the respondent that the property is de-notified
as per the Act, thereby, she was also directed to deposit a sum
of Rs. 1,74,840/-, which is 10% of the value of the property,
which totals to Rs.17,40,000/-. The relevant extract thereof, is
as below: -
“As per reference no.1 you had submitted application
for the change of nature of 14.57 Are property situated
at survey no. 97/2, Thodupuzha Taluk, Karikod Village,
Block 33. The property mentioned as field in the
revenue records. As per reference no.2 the Kerala
paddy and wetland (amendment act 2018) section
12(9) the nature of the unnotified land can be change
by the panchayat on payment of 10% of the property
value for properties having the measurement of 20.23
Are. As per reference no.5 report, it is understood that
the applicant’s property comes with the panchayat
limit. As per reference no.6 The Kerala Paddy and
wetland (amendment act 2018) Rule (4E) (4F) the
property has been removed from the data bank of the
Kerala paddy. Hence, the applicant’s property is not
in the data bank therefore as per the Kerala paddy
and wetland (amendment act 2018) the property is
unnotified.
It is understood from the application that the nature
of the property needs to be changed for the purpose
of taking education loan. As per the Kerala paddy
and wetland (amendment act 2018) rule 12(9) if the
nature of property which needs to be changed is
above 3000 square feet, for every square feet, a fees
of Rs.100/- need to be remitted. If there no plan of
constructing any building in the applicant’s property,
then there is no need of remitting any fees.
Under the Kerala paddy and wetland (amendment
act 2018) section 27A for change of nature of the
unnotified land, the value of the property will be
1278 [2025] 2 S.C.R.
Supreme Court Reports
considered as; the value of the property situated near
to the applicant’s property, and if there is no value
is fixed for the nearby properties, then the value
will be fix according to the nature of the property.
Hence as per reference no.3 circular the property
comprising survey no.95/1 is the nearby property to
the applicant’s property and as per the registered the
value of that property is mentioned as 60,000/- for
1 Are. Hence the fees for the present application can
be considered according to the value of the nearby
property. As per reference no.7 the Karikod village
officer has valued the property accordingly. Hence
the amount needs to be paid for the change of nature
of the property is mentioned hereunder.
1 Value for 1 are as per 2010 Rs.60,000/-
notification
2 100% increase as per 2020 Rs.60,000/-
notification
3 Current value of the property Rs.1,20,000/-
4 The area of the property 14.57 Are
5 Total value of the property Rs.17,48,400/-
120000 x 14.57
6 The total amount to be paid Rs.1,74,840/-
As per the recent Government notification, the
nearby property in survey no.95/1 has a value of
Rs.1,20,000/- per 1 Are. Therefore, the value of 14.57
area property will be 17,48,400/-. The property comes
under the panchayat limit, therefore for change of
nature of the property 10% of the total value i.e.,
Rs.1,74,840/- must paid as per the Kerala paddy
and wetland (amendment ac 2018) rule 12(9). The
payment receipt need be produced before this office.
It is informed that if there is any change in the fees
calculated or any miscalculation happens while
considering the value of the property, then the balance
amount if any has to be paid by the applicant.”
[2025] 2 S.C.R. 1279
State of Kerala & Ors. v. Moushmi Ann Jacob
3.3 The appellant-State issued a Notification on 25th February 2021
granting exemption from paying reclamation fee in respect of
lands up to 25 cents, stating that lands in excess of the prescribed
limit shall be charged such fee at 10% of the fair value. Since
it is this Notification, and its interpretation as undertaken by the
Courts below, which is the primary bone of contention, it shall
be useful to reproduce the same, in toto, as under:-
“ANNEXURE-P/2
//ENGLISH TRANSLATION//
EXHIBIT-P5
Emblem
GOVERNMENT OF KERALA
Abstract
Revenue Department – Issuance of revised rate of
Conversion Charges for change of nature of lands
which are not notified under Section 27(A) of the Kerala
Conservation of Paddy & Wet Land Act & Rules, 2008 –
orders issued – reg
_______________________________________
Revenue (P) Department
G.O. (Rt) No.1166/2021/Rev Thiruvananthapuram, Dated
25.02.2021
Ref : Interim order of the Hon’ble High Court of Kerala
Dated 08.01.2021 in WP©14312/2019 & Connected cases.
ORDER
Directions are hereby issued in consonance with the
observations made by the Hon’ble High Court of Kerala.
In the matter referred above and based on the needs of
the public in general, the Conversion fees for change of
nature of land, those lands, which are not notified under
Section 27(A) of the Kerala Conservation of Paddy & Wet
Land Act & Rules, 2008, the following rate of Conversion
Charges are imposed and unifying the rate for change of
nature of land in Panchayath, Municipality and Corporation,
1280 [2025] 2 S.C.R.
Supreme Court Reports
1) Lands, which are having an extent up to 25 Cents
can be considered for category change without any
fee. Only to those lands not exceeding an extent of
25 cents as on 30th December 2017 can avail the
above benefit.
2) Properties which were lying as a single unit up to
30.12.2017 and was divided into several plots having
25 cents or below that will not get the above benefit.
In such cases, the entire land has to be considered
as a single unit and calculate the fee.
3) Those properties having more than 25 cents in extent,
shall impose the fee at the rate of 10% of the fair
value, irrespective of the fact, whether it is situated
in Municipality, Corporation or Panchayath.
4) Those properties having more than One Acre in
extent, the rate of fee to be imposed is 20% of the
fair value irrespective of the fact whether it is situated
in Municipality, Corporation or Panchayath.
5) Rate of fee with respect to the construction carried
out in the land wherein category change is carried
out, will remain as the current rate.
The above amendments shall come into force from
this day itself.
By order of the Governor
Dr. A. Jayathilak IAS
Principal Secretary”
(Emphasis supplied)
3.4 Subsequently, a clarification was also issued on 23rd July 2021,
inter alia, making the following points –
(a) The fee waiver shall be applicable to only those applications
received after the date of the Notification, submitted in
place thereof;
(b) A few exemptions shall be allowed in terms of the
Notification, for those properties which do not exceed
[2025] 2 S.C.R. 1281
State of Kerala & Ors. v. Moushmi Ann Jacob
the exempted amount of land, i.e., 25 cents as on 30th
December 2017;
(c) Applications in the name of one person as on 30 th
December 2017 which may either be under the same or
different survey numbers, in the same location as one
entity or in separate locations, can be considered under
single or separate applications. However, if the total
amount of land is in excess of 25 cents, then the benefit
of the exemption cannot be allowed. The applicant is also
required to submit an affidavit to the effect that the land
in respect of which the entry is to be altered, measures
less than 25 cents.
PROCEEDINGS IN THE WRIT PETITION
4. The respondent, aggrieved by the ask of the competent authority to
pay the amount of Rs.1,74,840/-, approached the High Court under
Article 226 of the Constitution of India.
5. The case of the respondent before the High Court, as can be
understood from record, was :
5.1 The respondent submitted an application for permission under
Section 27A of the Act on 26th October 2019, before the year
2020. The application was not rejected, nor was a fresh
application submitted, so the relevant date for consideration
should be the submission date, as per the Court’s ruling. The
appellants wrongly determined that the respondent could only
submit an application after the removal of the land’s entry from
the data bank in 2020. The High Court has apparently, clarified,
that the removal of an erroneous entry from the data bank is
merely a technicality and does not affect the right to submit
the application, which depends on meeting the requirements
of Section 27A, not on the data bank’s correction.
5.2 The respondent was also entitled to an exemption of up to
25 cents of land under the Circular reproduced supra, but
the appellants incorrectly calculated the fees for the entire
14.57 Acres, which is illegal. The Court further emphasized
that once an error in the data bank is corrected, the matter
is treated as if it was corrected on the original date the data
bank was prepared, i.e., 12th August 2008. Therefore, the date
1282 [2025] 2 S.C.R.
Supreme Court Reports
of application (26th October 2019) should be the relevant date
for determining the fees.
5.3 It was submitted that the appellants’ reliance on the fair value of
adjacent land to calculate the fees, ought to be rejected as the
property in question had a fixed fair value of Rs.57,000/- and
the fair value applicable should be that of the subject property,
as per the ruling in Ajithkumar Shenoy v. Revenue Divisional
Officer3 and the related case law. Since the application was
submitted before 20th February, 2021, the appellants’ must follow
the High Court’s decisions and treat the application date as 26th
October 2019, making their interpretation of the law incorrect.
6. In response, by way of a counter-affidavit, the 3rd appellant herein,
the Revenue Divisional Officer4, submitted as under :
6.1 The orders under challenge before the High Court suffered
with no illegality.
6.2 An application under Form-6 is maintainable only in respect of
‘unnotified land’. The land of the respondent herein is reflected
in the data bank as ‘paddy land’ which was only de-notified vide
order dated 13th January 2021. There is no illegality therefore
in taking the fair value as on the said date. The respondents’
application under Form-6 dated 26th January 2019 can only be
termed as a premature application, defective in nature.
6.3 The judgment relied on, i.e., Writ Petition (Civil) No.12721 of
2020 is not applicable to the given case. The contention of the
respondent is that the date of the application, i.e., 26th October
2019 is to be considered for the determination of fair value, is
misconceived and ought to be rejected.
6.4 The further contention that the respondents’ liability to pay fee
is to the extent that remains of the 14.5 Acres after having
removed the 25 cents that are exempted from the payment of
fee, is also misconceived.
7. Two primary questions arose for consideration by the learned Single
Judge – one, concerning the maintainability of an application under
3 W.P.(C)No.12721/2020
4 For short ‘RDO’
[2025] 2 S.C.R. 1283
State of Kerala & Ors. v. Moushmi Ann Jacob
Form-6; and two, whether the fee payable shall be calculable after
having deducted the 25 cents as exempted by the Notification.
The learned Single Judge in judgment dated 6th February 2023
having referred to Section 27A, observed that an application under
Form-6 becomes maintainable after an order has been passed by the
RDO. That being the case, the respondents’ application could have
only been filed after 13th January 2021, when the application under
Form-5, for correction of a mistake in the data bank and deemed
removal of property therefrom was allowed. On the next issue, it was
held that the 10% of fair value should be calculable on the portion of
the total land, exceeding the 25 cents exempted by the Notification.
8. As the demand notice was set aside, the RDO was directed to make
a fresh calculation of the payment of fee, as it stood immediately
after January, 2021 to the extent of 4.45 Acres of land.
PROCEEDING IN WRIT APPEAL
9. The State of Kerala filed Writ Appeal No.983 of 2023 which was
dismissed vide judgment dated 1st August 2023 holding that there is
no reason to interfere with the judgment of the learned Single Judge
as the same has been passed in terms of the statutory provisions
and schedule of fee.
10. Review Petition No.894 of 2023 questioning the said findings of the
Division Bench was also dismissed vide order dated 4th October,
2023 observing that :
“5. A reading of the above notification leaves no room for
doubt that the fee for conversion of land is payable only for
lands in excess of 25 cents. Being so, the contention that,
if the land exceeds 25 cents, conversion fees will have to
be paid for the entire extent, including the 25 cents, can
only be rejected. The learned Single Judge having taken
the same view and the writ appeal having been dismissed
finding the view taken to be correct, we find no reason to
come to a different conclusion by exercising the power
to review.”
CASE BEFORE THIS COURT
11. By way of the special leave petition, the following grounds have been
urged in challenging the judgment of the learned Division Bench :
1284 [2025] 2 S.C.R.
Supreme Court Reports
(a) The intent of the Amendment exempting 25 cents of land
from paying conversion fees is to support persons intending
to construct residential houses or small buildings. The said
amendment is introduced in furtherance of public welfare and
so the Court ought to have interpreted the same as applying
only to those who have land up to 25 cents. Granting exemption
to the entire land and calculating the fee taking away the 25
cents as exempted would defeat the purpose thereof.
(b) Neither the Act nor the Rules provide for exemption in demand
of fees to the extent of property which exceeds 25 cents. In
fact, Rule 12(9) of the amended rules clearly states that the
fee is payable for the land that exceeds 25 cents as on 30th
December 2017, as per the Schedule of the Act.
12. We have heard the learned senior counsel and counsel appearing
for the parties and also perused the respective written submissions.
The appellant-State advanced the following submissions which we
presume was their pleaded case throughout :
(a) The unamended Rules required payment of fees in respect of
all properties irrespective its extent based on fair value. After the
Amendment, exemption of fees is permitted for land holdings
up to 25 cents. The second Note of the Schedule specifically
states that property up to 25 cents is exempted. It reads :
“NOTE -2 : The above offer shall not be applicable
to those land which remained as a single unit until
30th December, 2017 and changed afterwards into
plots having an extent of 25 cents or less. Fees has
to be calculated considering it as a whole.”
This Schedule and the Note-2 were entirely overlooked by the
High Court.
(b) By way of clarification, it was also stated that a person having
more than 25 cents of land as on 30th December, 2017 cannot
bifurcate the same for the purpose of tax exemption and is not
entitled to exemption from payment of fees on that count. Only
those persons having land equal to or less than 25 cents shall
be exempted from paying the fees. Any other interpretation
would defeat the purpose and intent of the legislation.
[2025] 2 S.C.R. 1285
State of Kerala & Ors. v. Moushmi Ann Jacob
(c) Government Order dated 25th February, 2021 stated that paddy
lands up to 25 cents are not to be levied fee upon, however,
the lands exceeding the said 25 cents and up to 1 Acre, are
liable to be levied 10% of fair value.
(d) Neither the Act nor the Rules provide for the exemption of fees
of property exceeding 25 cents, however, without considering
the same the error in law of the learned Single Judge was
upheld by the impugned judgment.
The respondent submitted as under :
(a) The purpose of changing the nature of the land was to secure
study loans for the children. The land totals 36.56 cents. It was
mistakenly described as ‘paddy land’ even though no paddy
cultivation has been carried out thereon.
(b) The Notification dated 25th February 2021 provides for a graded
scale of fees to be levied in reference to the extent of land. It
is submitted that the excess over the preceding entry has to
be worked out to calculate the levy. In this regard, reference
has been made to a judgment of the Bombay High Court in
Leelabai v. State of Maharashtra & Ors.5.
ANALYSIS
13. In issue, as is clear from the preceding paragraphs, is the interpretation
of a Government Notification dated 25th February 2021, under the
Act. We restrict our observations only to the interpretation thereof.
A Notification issued in furtherance of an Act is a form of delegated
legislation. This concept is aptly captured in the words of O. Chinappa
Reddy, J. in The Registrar of Cooperative Societies, Trivandrum
& Anr. v. K. Kunjabmu & Ors.6
“3… The desire to attain these objectives has necessarily
resulted in intense legislative activity touching every
aspect of the life of the citizen and the nation. Executive
activity in the field of delegated or subordinate legislation
has increased in direct, geometric progression. It has
to be and it is as it should be. Parliament and the State
5 AIR 1979 Bom 206
6 (1980) 1 SCC 340
1286 [2025] 2 S.C.R.
Supreme Court Reports
Legislatures are not bodies of experts or specialists. They
are skilled in the art of discovering the aspirations, the
expectations and the needs, the limits to the patience
and the acquiescence and the articulation of the views
of the people whom they represent. They function best
when they concern themselves with general principles,
broad objectives and fundamental issues instead of
technical and situational intricacies which are better
left to better equipped full time expert executive bodies
and specialist public servants. Parliament and the State
Legislatures have neither the time nor the expertise to be
involved in detail and circumstance. Nor can Parliament
and the State Legislatures visualise and provide for new,
strange, unforeseen and unpredictable situations arising
from the complexity of modern life and the ingenuity
of modern man. That is the raison d’etre for delegated
legislation. That is what makes delegated legislation
inevitable and indispensable. The Indian Parliament and
the State Legislatures are endowed with plenary power
to legislate upon any of the subjects entrusted to them by
the Constitution, subject to the limitations imposed by the
Constitution itself. The power to legislate carries with it the
power to delegate. But excessive delegation may amount
to abdication. Delegation unlimited may invite despotism
uninhibited. So the theory has been evolved that the
legislature cannot delegate its essential legislative function.
Legislate it must by laying down policy and principle and
delegate it may to fill in detail and carry out policy…”
14. Questioned herein is not the power of the competent authority to
issue the Notification but the construction of the same. Yet, it may be
useful to note that a piece of subordinate legislation does not carry
the same level of immunity as a plenary legislation enacted by the
State legislature since the former is to yield to the plenary legislation.
(See: Indian Express Newspapers (Bombay) (P) Ltd. v. Union of
India7; and Swami Vivekanand College of Education & Ors. v.
Union of India & Ors.8)
7 (1985) 1 SCC 641
8 (2012) 1 SCC 642
[2025] 2 S.C.R. 1287
State of Kerala & Ors. v. Moushmi Ann Jacob
15. The instant dispute pertains to a Notification granting exemption from
payment of fees. The law is that a person, who claims the exemption
or concession, must establish that he is so entitled. Such a Notification,
it is also settled, is to be interpreted strictly. The Constitution Bench
in C.C.E. v. Hari Chand Shri Gopal9 observed as under :
“29. The law is well settled that a person who claims
exemption or concession has to establish that he is entitled
to that exemption or concession. A provision providing for
an exemption, concession or exception, as the case may
be, has to be construed strictly with certain exceptions
depending upon the settings on which the provision has
been placed in the statute and the object and purpose to
be achieved. If exemption is available on complying with
certain conditions, the conditions have to be complied
with. The mandatory requirements of those conditions
must be obeyed or fulfilled exactly, though at times, some
latitude can be shown, if there is a failure to comply with
some requirements which are directory in nature, the
non-compliance of which would not affect the essence or
substance of the notification granting exemption.”
(Emphasis supplied)
16. In Commissioner of Customs (Import), Mumbai v. Dilip Kumar
& Co. & Ors.10, a Constitution Bench, albeit while dealing with a
question concerning tax law, spoke of the literal Rule of Interpretation
in the following terms :
“23. In applying rule of plain meaning any hardship and
inconvenience cannot be the basis to alter the meaning to
the language employed by the legislation. This is especially
so in fiscal statutes and penal statutes. Nevertheless, if
the plain language results in absurdity, the court is entitled
to determine the meaning of the word in the context in
which it is used keeping in view the legislative purpose.
[Commr. v. Mathapathi Basavannewwa, (1995) 6 SCC 355]
9 (2011) 1 SCC 236
10 (2018) 9 SCC 1
1288 [2025] 2 S.C.R.
Supreme Court Reports
Not only that, if the plain construction leads to anomaly
and absurdity, the court having regard to the hardship and
consequences that flow from such a provision can even
explain the true intention of the legislation. Having observed
general principles applicable to statutory interpretation, it
is now time to consider rules of interpretation with respect
to taxation.
…
27. As contended by Ms Pinky Anand, learned Additional
Solicitor General, the principle of literal interpretation and
the principle of strict interpretation are sometimes used
interchangeably. This principle, however, may not be
sustainable in all contexts and situations. There is certainly
scope to sustain an argument that all cases of literal
interpretation would involve strict rule of interpretation, but
strict rule may not necessarily involve the former, especially
in the area of taxation.
28. The decision of this Court in Punjab Land Development
and Reclamation Corpn. Ltd. v. Labour Court [Punjab
Land Development and Reclamation Corpn. Ltd. v. Labour
Court, (1990) 3 SCC 682 : 1991 SCC (L&S) 71] , made
the said distinction, and explained the literal rule: (SCC
p. 715, para 67)
“67. The literal rules of construction require the
wording of the Act to be construed according to
its literal and grammatical meaning, whatever
the result may be. Unless otherwise provided,
the same word must normally be construed
throughout the Act in the same sense, and in
the case of old statutes regard must be had to
its contemporary meaning if there has been no
change with the passage of time.”
That strict interpretation does not encompass strict
literalism into its fold. It may be relevant to note that simply
juxtaposing “strict interpretation” with “literal rule” would
result in ignoring an important aspect that is “apparent
legislative intent”. We are alive to the fact that there may
[2025] 2 S.C.R. 1289
State of Kerala & Ors. v. Moushmi Ann Jacob
be overlapping in some cases between the aforesaid
two rules. With certainty, we can observe that, “strict
interpretation” does not encompass such literalism, which
lead to absurdity and go against the legislative intent. As
noted above, if literalism is at the far end of the spectrum,
wherein it accepts no implications or inferences, then
“strict interpretation” can be implied to accept some form
of essential inferences which literal rule may not accept.
…
29. We are not suggesting that literal rule dehors the
strict interpretation nor one should ignore to ascertain
the interplay between “strict interpretation” and “literal
interpretation”. We may reiterate at the cost of repetition
that strict interpretation of a statute certainly involves literal
or plain meaning test. The other tools of interpretation,
namely, contextual or purposive interpretation cannot be
applied nor any resort be made to look to other supporting
material, especially in taxation statutes. Indeed, it is well
settled that in a taxation statute, there is no room for any
intendment; that regard must be had to the clear meaning
of the words and that the matter should be governed wholly
by the language of the notification. Equity has no place in
interpretation of a tax statute. Strictly one has to look to the
language used; there is no room for searching intendment
nor drawing any presumption. Furthermore, nothing has
to be read into nor should anything be implied other than
essential inferences while considering a taxation statute...”
(Emphasis supplied)
16.1 In Balram Kumawat v. Union of Indian & Ors.11, a Three Judge
Bench, while dealing with a question of a ban on ivory trade,
referred to the literal rule of construction in the following terms :
“20. Contextual reading is a well-known proposition
of interpretation of statute. The clauses of a statute
should be construed with reference to the context vis-
11 (2003) 7 SCC 628
1290 [2025] 2 S.C.R.
Supreme Court Reports
à-vis the other provisions so as to make a consistent
enactment of the whole statute relating to the subject
matter. The rule of “ex visceribus actus” should be
resorted to in a situation of this nature.
21. In State of W.B. v. Union of India [AIR 1963 SC
1241] (AIR at p.1265, para 68), the learned Chief
Justice stated that the law thus:
“The Court must ascertain the intention of the
Legislature by directing its attention not merely to
the clauses to be construed but to the entire statute;
it must compare the clause with the other parts of
the law, and the setting in which the clause to be
interpreted occurs.”
17. Keeping in view the aforesaid, i.e., strict interpretation of exemption
clauses, and the principles of literal rule of interpretation, let us now
move to the interpretation of the Notification. In order to understand
whether the Courts below were correct in granting exemption up to
25 cents to the respondent herein, we are primarily concerned with
Clauses 1 and 3 of the Notification. Although, the Notification stands
extracted in toto (supra), the two clauses are once again reproduced
for ready reference :
“1) Lands, which are having an extent upto 25 Cents can
be considered for category change without any fee. Only
to those lands not exceeding an extent of 25 cents as on
30th December 2017 can avail the above benefit.
… …
3) Those properties having more than 25 cents in extent
shall impose the fee at the rate of 10% of fair value,
irrespective of the fact, whether it is situated in Municipality,
Corporation or Panchayath.”
18. What follows from a plain reading of the above two clauses is
that, (a) lands up to 25 cents as on 30th December 2017 can seek
a change of category without having to pay any fee; (b) when a
category change is sought in respect of land(s) that exceeds the
limit of 25 cents, such a change shall be permissible upon having
paid 10% of the fair value of such land. Clause 4 also specifies
[2025] 2 S.C.R. 1291
State of Kerala & Ors. v. Moushmi Ann Jacob
the situation when the person seeking a change of category has
lands exceeding 1 Acre. In such a situation, 20% of the fair value
is to be paid.
The interpretation of the High Court is that such calculation of 10%
fair value of total land, which exceeds 25 cents, shall be computable
after having reduced the 25 cents, as exempted from the total. We
are unable to accept such a view.
19. To us it appears plain that by way of the Notification, the appellant
has sought to create two separate classes, one of people having
land 25 cents or less; and the second, where people have land
in excess of 25 cents. It has been submitted that the object of the
exemption of fee for the people belonging to the former class is to
enable them to have ease in constructing either housing of small
buildings, etc., without being burdened with having to pay a fee for
conversion of the land. The respondent has not brought anything on
record nor has advanced any submissions to put forward a position
holding that the State did not have the necessary competence to
do so. When that is the case, we are unable to understand as to
how the two distinct categories were fused into one by the High
Court. Further, due care has been taken by the competent authority
to specify the different categories of fees to be paid proportionate
to the land. This signifies the intent to form different classes and
categories. One does not flow into the next.
20. The law is well-settled. The State is permitted reasonable classification.
A long line of precedents right from Charanjit Lal Chowdhury v.
Union of India12; Kewal Singh v. Lajwanti13; Harbans Lal v. State
of H.P.14; and Chhattisgarh Rural Agriculture Extension Officers
Assn. v. State of M.P.15, all the way up to Khalsa University v.
State of Punjab16 speak to this point. The solitary, but all-important
principle in this regard is that such classification should have a
reasonable nexus to the object sought to be achieved. Since the
Notification has been issued by a State, reference to Natural
12 (1950) SCC 833
13 (1980) 1 SCC 290
14 (1989) 4 SCC 459
15 (2004) 4 SCC 646
16 2024 SCC OnLine SC 2697
1292 [2025] 2 S.C.R.
Supreme Court Reports
Resources Allocation, In re, Special Reference No. 1 of 2012
[Natural Resources Allocation, In re, Special Reference No. 1
of 201217], would be on point. The discussion therein pertains to
the State following the principles of Article 14 when it engages in
contracts, however, such principles are to guide all actions of the
State, including administrative, such as the issuance of Rules or
Notifications.18 The relevant extract thereof is as under :
“183. The parameters laid down by this Court on the
scope of applicability of Article 14 of the Constitution of
India, in matters where the State, its instrumentalities,
and their functionaries, are engaged in contractual
obligations (as they emerge from the judgments
extracted in paras 159 to 182, above) are being briefly
paraphrased. For an action to be able to withstand the
test of Article 14 of the Constitution of India, it has already
been expressed in the main opinion that it has to be
fair, reasonable, non-discriminatory, transparent, non-
capricious, unbiased, without favouritism or nepotism, in
pursuit of promotion of healthy competition and equitable
treatment. The judgments referred to, endorse all those
requirements where the State, its instrumentalities,
and their functionaries, are engaged in contractual
transactions… Article 14 of the Constitution of India
permits a reasonable classification having a rational nexus
to the object sought to be achieved, it does not permit
the power of pick and choose arbitrarily out of several
persons falling in the same category. Therefore, criteria or
procedure have to be adopted so that the choice among
those falling in the same category is based on reason,
fair play and non-arbitrariness…”
21. No fault, therefore, can be found on that count, on the action of the
appellant-State.
22. The subsequent clarification dated 23rd July 2021 also reiterated this
position. The relevant extract of the clarification reads as under : -
17 (2012) 10 SCC 1
18 See: Maneka Gandhi v. UOI (1978) 1 SCC 248
[2025] 2 S.C.R. 1293
State of Kerala & Ors. v. Moushmi Ann Jacob
“Applications received as in the name of the same person
as on 30.12.2017 for the properties which are either in
the same survey number without he same survey number
lying as a single unit covered by different documents
can be considered as single application or separate
applications. But, if the total extent exceeds 25 cents,
the exempted benefit cannot be allowed. An affidavit has
to be submitted along with the application submitted by
the applicant swearing that the property which is sought
to be changed by its category is less than 25 cents in
its extent.
As per the conditions currently stipulated in rules, the
applications received for category change the extent of
property which comes up to 50 cents applications can
be received in Form 6 and property which exceeds 50
cents can be received in Form 7 which is appended to
the rules.”
As can be seen from the above extract, the competent authority
has found it fit to provide that as on the cut-off date properties,
with or without the same survey number, lying as a single unit but
covered by different documents can be considered. However, it is
again clarified that if the total exceeds 25 cents then the benefit
of the exemption cannot be allowed. It is clear from this that the
exemption is only intended for lands up to 25 cents because, had it
not been so, the second part of the clarification, as aforesaid, would
be rendered otiose.
23. In assailing the High Court judgment, the appellant-State has also
placed reliance on Rule 12 Clause 9 of the Kerala Conservation of
Paddy Land and Wetland Rules, 2008, which reads as, “Fees to be
remitted for sanction of change of nature of unnotified land”,
therein it is clarified that when the extent is up to 25 cents no fee is
to be remitted. The second column thereof categorically states that
when the land is above 25 cents up to 1 Acre or less 10% of the
fair value, is to be paid as a fee.
24. This, in our view, further clarifies that the learned Single Judge as
also the Division Bench fell in error in holding that land up to 25
cents is exempted from payment of fees in all cases.
1294 [2025] 2 S.C.R.
Supreme Court Reports
25. Consequent to the above discussion the appeals are allowed. The
judgment of the learned Single Judge as confirmed by the Division
Bench is overruled on this count as not having laid down the correct
interpretation of the law. The respondent must, therefore, pay a
conversion fee as calculable on the total extent of land in their
ownership.
Pending application(s) if any shall stand disposed of.
Result of the case: Appeals allowed.
†
Headnotes prepared by: Aandrita Deb, Hony. Associate Editor
(Verified by: Shibhani Ghosh, Adv.)
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