LexCONTROLLER OF ESTATE DUTY, KERALA versus V. VENUGOPALA VARMA RAJAH
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
346
A
CONTROLLER OF ESTATE DUTY, KERALA
v.
V. VENUGOPALA VARMA RAJAH
A~gust 24, 1976
B
[A. N. RAY, C.J., M. H. BEG, R. s. SARKARIA, P. N. SlllNGHAl AND
JASWANT SINGH, JJ.)
c
D
E
F
G
H
Estate Duly Act \34 of 1953 ), s. 5-Land corered with ll'i/d and 1wt11ral
forest xrowths-lf agricultural land.
\
Under s.5 of the Estate Duty Act, 1953, all property, including agricultural
land situate in the States specified in the First Schedule to the Act. which passes
on th6 death: of the owner is subject to estate duty. The State of Madras was
added in the First Schedule with effect from 6th June, 1955.
The assessee claimed that large tracts of land, covered with wild and natural
f'orest growth9 situate in the Malabar District of the Madras Sta•e, were agri"
cultural lands and that they were not liable to estate duty because the former
owners died before 6th: June, 1955.
The High Court heLd that the property
wa1i agricultural ]and ahd not liable to estate duty, because, ( l) th.e words
'agricultural land' should. be interpreted in their widest significJn-:e, so that. in
the absence of exceptional circumstances4 such a9 the land b-eing entirely rocky
or barren for other reasons, all forest lands in the State of Kerala in which
the District of Malabar was since included, are agricultural lands in the sense
tliat they can be prude11tly and profitably exploited for agricultural purposes;
and (2) although the burden rested upon an assessee to establish an exemption
from liability to estate duty in respect of any part of his estate, yet, if he
claimed immunity on the ground that the subject matter does not fall within
the ambit of the taxing power of the legislature imposing the duty, the Revenue
had to establish that the subject matter involved is taxable.
Allowing the appeal to this Court,
HELD : (I) The expression 'agricultural land' has to be given a restricted
meaning and not the wide meaning given by the High· Court.
The question
whether land is agricultural land has to be decided on evidence of actual or
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intehded user for an agricultural purpose for which the land may have been
prepared or set apart. [352 FJ
Commissioner of Wealth-tax, Andhra Pradesh v. Officer-in-Charge (Court of
Wards) Paigah, [1977] 1 S.C.R. 146 followed.
(a) The land in the present case was covered by spontaneous or natural
growth of forests. It was not shown that the assessee or his predecessor in
interest did anything to develop the forest in the sense that any particular .trees
were planted deliberately.
The exploitation of the forest lands was simply to!
give contracts for cutting trees. It must, therefore, be trnated prima facie as
non-agricultural land. [353 EJ
(b) The decision in State of Kera/a v. Gwalior Rayon Silk Manufacturiong
(Wvg.) Co. Ltd. [1974] 1 SCR 671 depended upon the special facts of that
case and the provisions of\the Kerala Private Forests (Vesting and Assessmmt)
Act, 1971, interpreted. thereiri. This Court, in that case. explained, ":'hY for
certain special reasons and m an unusual context, certam land descnbed as
'forest land' was to be treated as 'agricultural'.
Forest land ordinarilv means
non arable, that is, non agricultural land. [351 C & El
Rajalz Anand Brahma Shah v.
State of U. P. & Ors. [1967] 1 SCR
373.
followed.
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CONTROLL.ER OF ESTATE DUPTY V. V. V. VARMA RAJAH (Beg, J.)347
( c) A'suming that the forest land subsequent to th·" levy of estate duly
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had been acquired by the State to1 be converted and used for agricuitural pur-
poses, there heing no evidence or find<ng of such a character before the events
which attracted the estate duty, it is an irrelevant circumstance of which the
Court cannot take notice.
[351 G]
(2) (a; The burden of establishing the exemption lay upon the assessel. The
High Court was not correct in placing the burden upon the Revenue when it
was admitted that the land was forest land.
The reason given by the High
Court, that a, question of immunity of the subject matter from taxation by
Parliament arose here, and that, therefore, the onus lay on the
Departrrr~nt:
mixes up the questions of legislative competence and OJ° taxability.
Even if
there could be such an onus, it was, snfficiently discharged in the present case
by the adm:.ssion of the assessee that the land was forest land covered with
natural_ or wild growths. [352 A-Cl
(b) The assessce, was given due opportunity to lead evidence to show,
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