Holding

The word "used" in Section 3 of the Andhra Pradesh Non‑Agricultural Lands Assessment Act, 1963 must be given its literal meaning of actual use, and a taxing statute must be strictly construed, so only land actually in industrial, commercial or other non‑agricultural use is assessable.

Summary

The Federation of Andhra Pradesh Chambers of Commerce and Industry and several industrialists appealed against a decision of the Andhra Pradesh High Court that interpreted the word "used" in Section 3 of the Andhra Pradesh Non‑Agricultural Lands Assessment Act, 1963 to include land merely intended or set apart for industrial or commercial purposes. The appellants argued that only land actually in use for such purposes should be liable to assessment. The Supreme Court examined the statutory language and held that a taxing statute must be strictly construed and no meaning can be read into it beyond what is expressed. It therefore concluded that "used" in the Act means land that is in fact being used for industrial, commercial or other non‑agricultural purposes. Consequently, the Court set aside the High Court’s wider interpretation and allowed the appeals, limiting assessment to land actually in use.

Issues considered

What is the proper interpretation of the word "used" in Section 3 of the Andhra Pradesh Non‑Agricultural Lands Assessment Act, 1963 – does it cover land merely intended for use or only land actually in use?
How must a taxing statute be construed under Indian law – strictly with no implication of legislative intent beyond the plain language?
Are lands that are only earmarked for industrial or commercial purposes liable to non‑agricultural land assessment under the Act?

Subjects

tax lawstatutory interpretationtaxing statutesnon‑agricultural land assessmentindustrial purposestrict constructionlevy of assessment

Judgment

THE FEDERATION OF ANDHRA PRADESH CHAMBERS OF A
COMMERCE AND INDUSTRY AND ORS. ETC. ETC.

-- v.
STATE OF ANDHRA PRADESH AND ORS. ETC. ETC.

AUGUST 4, 2000
B
[S.P. BHARUCHA, SYED SHAH MOHAMMED QUADRI AND
N. SANTOSH HEGDE, JJ.]

Andhra Pradesh Non-Agricultural Lands Assessment Act, 1963: Sections
2(d), (g) and 3-Interpretation of. C
Section 3-Non-Agricultural lands-Levy of assessment on-Land used
for any industrial, commercial or any other non-agricultural purpose-Levy
of tax on-Condition precedent.for-Held, there must be a.finding that the land
is in fact in presenti in use for industrial, commercial or any other non-
agricultural purpose-Land meant to be used or set apart for being used for D
such purpose held not liable to levy.

Interpretation of Statutes :

Taxing Statute-Interpretation of-Should be construed strictly-Nothing
can be read into it. E
These appeals have been preferred by some industries in Andhra
Pradesh and their Federation. The appellants contest the view taken by a
Bench of five Judges of the Andhra Pradesh High Court which interpreted
the word 'used' in the Andhra Pradesh Non-Agricultural Lands Assessment
Act, 1963 to mean "non-agricultural lands not only 'actually used' but are F
'meant to be used' or 'set apart for being used'.

Allowing the appeals and setting aside the impugned order, the Court

HELD : 1. It is only land which is actually in use for an industrial
purpose as defined in the Andhra Pradesh Non-Agricultural Lands G
Assessment Act, 1963 that can be assessed to non-agricultural assessment at
the rate specified for land used for industrial purposes. Section 3 of the Act
speaks of "land is used for any industrial purpose", land is used for any
commercial purpose and "land is used for any other non-agricultural
purpose". The emphasis is on the words 'is used'. For the purposes of levy H
151
152 SUPREME COURT REPORTS (2000] SUPP. 2 S.C.R.
A of assessment on non-agricultural lands at the rate specified in the Schedule
for land used for industrial purposes, therefore, there has to be a finding as
a fact that the land is in fact in presenti in use for an industrial purpose. The
same would apply to a commercial purpose or any other non-agricultural
purpose. [155-E; 154-F]
-
B 2. A taxing statute has to be strictly construed and nothing can be
read into it. Having regard to the fact that the Act in question is a taxing
statute, no court is justified in imputing to the legislature an intention that
it has not clearly expressed in the language it has employed. [155-F]

S. V. Cement Ltd. v. Revenue Divisional Officer, Nandyal & Ors., (1993) 2
c ALT 32; overruled.

The State of Bombay v. Automobile and Agricultural Industries
Corporation, Bombay, (1961) 1~ STC 122 and The Controller of Estate Duty,
Gujarat v. Shri Kantilal Trikamlal, [1976] 4 SCC 643, referred to.
D Cape Brandy Syndicate v. Inland Revenue Commissioners, 9 (1921) 8
KB 64, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1039 of 2000.

From the Judgment and Order dated 13.8.96 of the Andhra Pradesh High
E Court in W.P. No. 13764 of 1987.

WITH

Civil Appeal Nos. 8828/97, 8836-37/97, 8838/97, 8839/97, 8840-44/97,
8849/97, 1064/98, 2236/98, 3271198 and C.A. No. 4390/2000.
F
C.S. Vaidyanathan, V.G. Pragasam, M.A. Chinnasamy, V. Shekhar, Ms.
D. Bharathi Reddy, A.T.M. Sampath, A.D.N. Rao and G. Prabhakar for the
appearing parties.

The Judgment of the Court was delivered by
G
BHARUCHA, J. Leave granted in S.L.P.(C)No. 2877 of 1998.

A Bench of five Judges of the Andhra Pradesh High Court interpreted
the word "used" in The Andhra Pradesh Non-Agricultural Lands Assessment
Act, 1963 ("the said Act") to mean "non-agricultural lands not only 'actually
H used" but are 'meant to be.used or. 'set apart for being used'." This view is
FEDERATION OF A.P. CHAMBERS OF COMMERCE AND INDUSTRY•·. STATE-LBHARUCHA, I.] 153
contested in these appeals by some industries in Andhra Pradesh and, with A
permission, by their Federation.

The said Act was enacted to provide for the levy of assessment on lands
used for non-agricultural purposes. Section 2(d) defines 'industrial purpose',
so far as it is relevant to these appeals, to mean "any purpose connected with
an industrial undertaking where the process of manufacturing any article .is B
carried on with the aid of power...... " 'Non-agricultural land' is defined by
Section 2(g) to mean "land other than the land used exclusively for the purpose
of agriculture .... " Section 3 of the said Act is the charging section and, so far
as it is relevant, reads thus:

"3. Levy of assessment on non-agricultural lands:- In the case of non- c
agricultural land in a local area with the population specified in column
(1) of the Schedule, there shall be levied and collected by the Govern-
ment for each fasli year commencing on the first day of July, from the
owner of such land, an assessment, at the rate specified in column
(2) where the land is used for any industrial purpose, at the rate D
specified against it in column (3) where the land is used for any
commercial purpose, and at the rate specified against it in column (4)
where the land is used for any other non-agricultural purpose including
residential purpose."

The Schedule that is referred to in Section 3 sets out the rates of assessment E
per square metre of land used (a) for industrial purposes per fasli year, (b) for
commercial purpose per fasli year and (c) for any other non-agricultural
purpose, including residential purpose, per fasli year.

The question with which we are concerned came up first before the
Andhra Pradesh High Court in the case .of S. V. Cement Ltd. v. Revenue F
Divisional Officer, Nandyal and Ors., (1993) 2 ALT 32) and a Bench of three
learned Judges held:

"In the context it is susceptible of wider meaning. The word "used"
means not only "actually used" but it also means any land meant to
be used or set apart for beil)g used. The definitions of "industrial G
purpose" and "commercial pcrrpose" also lend support to the wide
meaning given to the word "used". "Industrial purpose" means any
purpose connected with industrial undertaking. Likewise, "commercial
purpose" means the purpose connected with the undertaking in trade,
commerce or business. The definitions do not say that the non- H
154 SUPREME COURT REPORTS [2000] SUPP. 2 S.C.R.
A agricultural land should be actually utilised for an industrial or
commercial activity, but it is enough if the land is kept for use for a
purpose connected with industrial or commercial undertaking."

A Bench of two learned judges of the Andhra Pradesh High Court took
the view that the judgment in S. V. Cement Ltd. required reconsideration.
B Accordingly, the writ petitions in which the question was raised was placed
before the Bench of five learned Judges. They held that the word 'used' had
to be interpreted to connote a wider meaning. If that interpretation was
adopted, non-agricultural lands not only actually used for industrial purposes
but those meant to be so used or set apart for being so used were also liable
c to assessment as such under the said Act. It was contended before them based
on the celebrated judgment in the case of Cape Brandy Syndicate v. Inland
Revenue Commissioners, (9) 1921- 8 KB 64 (71 ), and a judgment of this Court,
that fiscal legislation had to be strictly interpreted, and if two interpretations
were possible, the one favourable to the assessee would prevail. The learned
Judges found that "the contention that the word 'used' has to be given the
D
limited meaning 'actually used' is not in tune with the intendment of the
legislature, ...... The legislature had intended the word 'used' to mean to be used
or set apart for being used." Accordingly, the view taken in the case of S. V.
Cement Ltd. was affirmed.

E Section 3 of the said Act speaks of "land is used for any industrial
purpose", "land is used for any commercial purpose" and "land is used for any
other non- agricultural purpose" The emphasis is on the words 'is used'. For
the purposes of levy of assessment on non-agricultural lands at the rate
specified in the Schedule for land used for industrial purposes, therefore, there
has to be a finding as a fact that the land is in fact in presenti in use for an
F
industrial purpose. The same would apply to a commercial purpose or any
other non- agricultural purpose.

It is trite law that a taxing statute has to be strictly construed and nothing
can be read into it. In the classic passage from Cape Brandy Syndicate, which
G was noticed in the judgment under appeal, it was said:

"In a taxing Act one has to look merely at what is clearly said. There
is no room for any intendment. There is no equity about a tax. There
is no "presumption as to a tax. Nothing is to be read in, nothing is
to be implied. One can look fairly at the language used." .
H
FEDERATION OF A.P. CHAMBERS OF COMMERCE AND INDUSTRY'' STATE (BHARUCHA, J.] 155
This view has been reiterated by this Court time and again. Thus, in The A
State of Bombay v. Automobile and Agricultural Industries Corporation,
Bombay, (1961) 12 S.T.C. 122, this Court said:

"But the courts in interpreting a taxing statute will not be justified in
adding words thereto so as to make out some presumed object of the
Legislature ...... If the Legislature has failed to clarify its meaning by B
the use of appropriate language, the benefit thereof must go to the
taxpayer, it is settled law that in case of doubt, that interpretation of
a taxing statute which is beneficial to the taxpayer must be adopted."

On behalf of the respondent - State, learned counsel drew our attention
to the judgment of this Court in the The Controller of Estate Duty, Gujarat
c
V. Shri Kantilal Trikamlal, (1976] 4 sec 643. That judgment also is to the same

effect and does not avail the respondents. It said:

"The sweep of the sections which will be presently set out must,
therefore be informed by the language actually used by the legislature. D
Of course, if the words cannot apply to any recondite species of
property, courts cannot supply new logos or invent unnatural sense
to words to fulfil the unexpressed and unsatiated wishes of the
legislature"

We are in no doubt whatever, therefore, that it is only land which is E
actually in use for an industrial purpose as defined in the said Act that can be
assessed to non-agricultural assessment at the rate specified for land used for
industrial purposes. The wider meaning given to the won! 'used' in the
judgment under challenge is untenable. Having regard to the fact that the said
Act is a taxing statute, no court is justified in imputing to the legislature an
F
intention that it has not clearly expressed in the language it has employed.

In the result, the appeals are allowed and the judgment and order under
challenge is set aside in so far as it deals with the interpretation of the word
'used' in Section 3 of the said Act.
G
T.N.A. Appeals allowed.