Land and building tax cannot be reassessed merely on transfer when one-time tax has already been paid.

A State tax on land and buildings under entry 49 of List II is a tax on the property as a unit, not a personal levy on the owner. Once one-time tax has been paid and future liability exempted under section 3(1B), mere transfer of the same property does not justify fresh assessment, except in the limited case of rebuilding or enlargement contemplated by the statute. Provisions authorising levy or reassessment solely because ownership changes were treated as beyond legislative competence and inconsistent with article 265. Reassessment and demand proceedings based on transfer were therefore invalid and liable to be quashed.

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Issues: (i) Whether land or building once subjected to assessment and covered by the one-time tax option under section 3(1B) could be subjected to fresh assessment merely because of transfer; (ii) whether section 13(1)(b) and section 15(b) of the Rajasthan Lands and Buildings Tax Act, 1964, were valid insofar as they authorised levy or reassessment on change of ownership; (iii) whether the impugned reassessment and demand proceedings violated article 265 of the Constitution of India and entry 49 of List II.

Issue (i): Whether land or building once subjected to assessment and covered by the one-time tax option under section 3(1B) could be subjected to fresh assessment merely because of transfer.

Analysis: The tax under the Act was held to be a tax on land and building as units and not a tax on the owner or on the aggregate capital value of the assessee's assets. Once one-time tax had been paid in respect of the property and exemption from future liability had been granted, the property stood of further annual tax liability except in the limited situation contemplated by clause (c) of section 3(1B), namely rebuilding or enlargement of a building. Mere transfer of the same property did not revive tax liability where the property had already suffered tax.

Conclusion: Fresh assessment could not validly be made merely on transfer of property already covered by the one-time tax scheme; the conclusion was in favour of the assessee.

Issue (ii): Whether section 13(1)(b) and section 15(b) of the Rajasthan Lands and Buildings Tax Act, 1964, were valid insofar as they authorised levy or reassessment on change of ownership.

Analysis: Section 13 was treated as operating only where the property was not already liable to tax, while section 15 was held to be merely an amendment provision and not an independent charging provision. A levy on transferees by reason only of change in ownership was held to be beyond the State Legislature's competence under entry 49 of List II, because that entry authorises tax on lands and buildings as units and not a personal tax on owners. The impugned provisions were therefore held to travel beyond the constitutional field and to conflict with article 265.

Conclusion: Section 13(1)(b) and section 15(b), to the extent they fastened tax liability on change of ownership, were held ultra vires and unconstitutional, in favour of the assessee.

Issue (iii): Whether the impugned reassessment and demand proceedings violated article 265 of the Constitution of India and entry 49 of List II.

Analysis: The proceedings were founded on a fresh levy after the property had already been assessed and exempted from future liability under the one-time tax scheme. Such reassessment was treated as an attempt to impose a tax on ownership rather than on the land or building as a unit, which was inconsistent with entry 49 of List II and lacked valid authority of law within the meaning of article 265.

Conclusion: The reassessment, demand notices, and consequential proceedings were invalid and liable to be quashed, in favour of the assessee.

Final Conclusion: The writ petition and connected matters succeeded, the reassessment and demand were set aside, and it was declared that no fresh proceedings could be taken in respect of property already assessed and covered by the one-time tax scheme.

Ratio Decidendi: A State tax on lands and buildings under entry 49 of List II is a tax on the property as a unit and cannot be converted into a tax on ownership; where one-time tax has already been paid and future liability has been exempted, mere transfer does not authorise fresh assessment unless the statute expressly and constitutionally permits a limited new levy for rebuilding or enlargement.

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