COMMISSIONER OF AGRICULTURAL INCOME TAX Vs. BALAKRISHNAN K S

JUDGEMENT

(1.) THIS appeal arises from Balakrisknan v. Commissioner of Agricultural Income-tax, . The respondent applied for compensation of agricultural income-tax in June, 1966. The question was whether an extent of 29 acres and 27 cents which was in excess of the ceiling area, should be taken into account for purposes of composition. Notwithstanding the fact that the notification under Section 18(3) of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, was made on May 23. 1966, the assessing authority took the view that this extent should be taken into account for the purpose of composition in respect of the assessment year 1967-68 and in support of this view, he relied on the proviso to Section 10 of the Madras Agricultural Income-tax Act, 1955. THIS view prevailed with the Commissioner. But the composition order passed on that view was quashed by Ramaprasada Rao J., he being of opinion that because of Section 7 of the Land Reforms Act, the stated extent of land was not liable to be taken into account for the assessment year. The revenue appealed from his order.

(2.) WITH respect, we are unable to share with the learned judge's view. Section 5 of the Land Reforms Act fixed the ceiling area which a person could hold after commencement of the Act, which was on April 6, 1960. Section 7 says that on and from the date of the commencement of the Act, no person shall, except as otherwise provided under the Act, but subject to the provisions of Chapter VIII, be entitled to hold land in excess of the ceiling area. The expression "to hold", as defined, means "to own land as owner or to possess or enjoy land as possessory mortgagee or as tenant or as intermediary or in one or more of those capacities". But Section 7 read with this definition, in our opinion, merely makes a declaration that from the commencement of the Act, no person shall be entitled to hold land in excess of the ceiling area, to hold as defined in the Act that is to say, after that date, the person concerned shall not be entitled to own land as owner or to possess or enjoy land as possessory mortgagee or as a tenant or as an intermediary or in one or more of those capacities. But by its operation, Section 7 does not by itself divest the excess land and vest the same in the Government free of all encumbrances. Vesting only follows a notification under Section 18(1). The effect of the notification is stated by Sub-section (3) of that section, which is that from the date of the publication of the notification, the excess land shall be deemed to have been acquired for a public purpose and vested in the Government free from all encumbrances and all right, title and interest of all persons in such land with effect from that date be deemed to have been extinguished. It is clear from this provision that notwithstanding the declaration under Section 7 as to the excess land which the person concerned will not be entitled to hold from the date of the commencement of the Act, his title thereto is not extinguished by vesting it in the Government from the commencement of the Act. But the vesting, as we said, with reference to Section 18(3), takes place only on the date of the publication of the notification under Section 18(1), and it is only then the title of the person who held the excess, in point of fact, though he was not entitled thereto, would stand extinguished. In our opinion, Section 7 will not, therefore, have the operation of extinguishing the ownership of a holder thereof, though he might not be entitled to the ownership in the sense that he might not be entitled to hold from the date of the commencement of the Act.