Vesting under land ceiling law occurs only on notification, while a prospective amendment does not affect earlier notifications.

A statutory prohibition on holding land in excess of the ceiling area under the Land Reforms Act was treated as only declaratory of incapacity to retain such land; it did not by itself divest title or vest the land in the Government. Vesting occurred only on publication of the statutory notification, when title and interest stood extinguished, and excess land remained relevant for inclusion in the agricultural income-tax composition application until that vesting took place. The 1974 amendment altering the vesting consequence was construed as prospective and, by its commencement scheme, did not apply to notifications issued before 1 March 1972.

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Issues: (i) Whether land in excess of the ceiling area stood vested in the Government merely by reason of the prohibition on holding under the Land Reforms Act, or only upon publication of the notification under the vesting provision, and whether such excess land was to be included in the composition application for agricultural income-tax. (ii) Whether the 1974 amendment altering the vesting consequence applied to notifications issued before 1 March 1972.

Issue (i): Whether land in excess of the ceiling area stood vested in the Government merely by reason of the prohibition on holding under the Land Reforms Act, or only upon publication of the notification under the vesting provision, and whether such excess land was to be included in the composition application for agricultural income-tax.

Analysis: The prohibition on holding excess land under the ceiling law was held to be only declaratory of the incapacity to retain such land from the commencement of the Act. It did not by itself divest title or vest the land in the Government. Vesting occurred only on publication of the notification under the relevant provision, and it was then that title and interest stood extinguished. The proviso to the agricultural income-tax provision was also treated as decisive, because a person who held land in excess during any part of the financial year lost the exemption for that year.

Conclusion: The excess land remained relevant until vesting by notification, and it was rightly includible in the composition application. This issue was decided in favour of Revenue.

Issue (ii): Whether the 1974 amendment altering the vesting consequence applied to notifications issued before 1 March 1972.

Analysis: The amendment was construed as operating only from 1 March 1972. Although it substituted the words governing the effect of publication of the notification, the opening provision of the amending Act showed that the amended regime was prospective for transactions and notifications prior to that date. Accordingly, a notification made before 1 March 1972 did not attract the amended vesting consequence.

Conclusion: The amendment did not assist the assessee in respect of a pre-1 March 1972 notification. This issue was decided in favour of Revenue.

Final Conclusion: The appeal succeeded, and the composition order quashed by the Single Judge was restored in substance, with costs awarded to the Revenue.

Ratio Decidendi: A statutory prohibition on holding excess land does not itself vest title in the State; vesting occurs only when the statute so provides through publication of the vesting notification, and an amendment altering that consequence will operate only prospectively where its commencement clause so limits it.

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