Conversion tax dispute over SEZ industrial land justified interim protection pending fuller scrutiny of statutory levy conditions.

A strong prima facie case existed against recovery of conversion tax under Section 67A because the land was allotted for industrial use for SEZ development and was already assessed as non-agricultural land. The levy was disputed on the basis that there had been no conversion of user by the petitioner and no application under Section 65, while the allotment terms contained no stipulation for conversion tax. The court held that the applicability of the statutory provisions, together with the effect of the allotment conditions and executive instructions, required deeper examination at final hearing. Interim protection against recovery was therefore granted.

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Issues: Whether the petitioner made out a prima facie case for interim relief against recovery of conversion tax under Section 67A of the Gujarat Land Revenue Code, 1879, in respect of land allotted for industrial use for development of an SEZ.

Analysis: The land allotment orders stated that the lands were granted for industrial purposes for development of an SEZ and that they were assessed as non-agricultural lands. The demand for conversion tax rested on the premise that the land fell within Section 67A, but the order records a substantial dispute on whether the statutory ingredients for that levy were attracted at all, since the petitioner asserted that there was no conversion of user by it and no application under Section 65. The Court found that these questions, including the effect of the allotment terms, the absence of any stipulation regarding conversion tax, and the relevance of the cited provisions and executive instructions, required deeper examination at final hearing.

Conclusion: The petitioner established a strong prima facie case and was entitled to interim protection against recovery of conversion tax.

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