TaxTMI 
TaxTMI 
2008 (2) TMI 859
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....nd. The reason stated in the agreement for the joint purchase, was to avoid each of them having to individually negotiate and enter into separate agreements with several owners of the lands. They agreed that one of them would be authorized to hold negotiations and go through the procedural requirements for the purchase; and that after purchasing the land in their names, they would divide the lands equally as early as possible. They also agreed that there will be no collective or joint cultivation of the lands proposed to be purchased by them. 3. After the purchase of the lands, the ten purchasers entered into another agreement on 30.12.1971 recording that the total sale price of Rs. 46,300/- was paid equally by all of them. The said agreement also recorded the division of 172A, 36G of land purchased by them into ten portions among them. Under the said agreement, they also agreed to get their names registered in the Land Revenue Records as per the division. Subsequently, on their applications, Mutation Entry No.1371 dated 25.2.1976 (duly verified and approved on 19.4.1976) was made showing each co-owner as the separate owner of the lands respectively allotted to him/her, vide Hak....
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....eneral Clauses Act' for short) could be imported into the definition of a 'person' under the Ceiling Act. The appellants challenged the order of the learned Single Judge in appeal. A Division Bench of the Gujarat High Court allowed the appeal in part, by judgment dated 4.3.2003. It held that there was no need for remand, as the question whether the definition of 'person' included an association of persons, was a pure question of law which can be decided by the High Court itself. It held that definition of 'person' in the General Clauses Act has to be read into the definition of 'person' in the Ceiling Act and therefore, the decision of the Revenue Tribunal treating the ten co- owners as an association of persons, and consequently, a 'person' for the purpose of the Ceiling Act, entitling them to hold only one unit (36 acres), did not suffer from any infirmity. The order of the Tribunal was thus restored. The said order of the Division Bench of the High Court is challenged in this appeal by special leave. The Contentions : 7. The appellants contend that the definition of 'person' in General Clauses Act cannot be read into the ....
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....the ten purchasers was a purchase by a 'person' and the ten co-owners as a 'person' were entitled to hold only one unit (36 acres of 'C' class land). 8.1) The respondent's next contention is based on section 8 of Ceiling Act which provides that any transfer or partition effected between 24.1.1971 and the date on which the Gujarat Agricultural Land Ceiling (Amendment) Act, 1972 came into force shall be deemed to have been made in anticipation in order to defeat the object of the said Amending Act unless it is proved to the contrary. It is contended that the partition effected among the ten co-owners under the unregistered agreement dated 30.12.1971 should be deemed to have been effected with the intention of defeating the object of Gujarat Agricultural Lands Ceiling (Amendment) Act, 1972, (Amending Act for short) having regard to the provisions of section 8 of the Ceiling Act. It is pointed out that the only way to avoid such a presumption was to make an application to the Collector under sub-section (2) of section 8 in the prescribed form within the prescribed period seeking a declaration that such partition was not made in anticipation in order to de....
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....s' and therefore, constitutes a 'person'? (iii) Whether the ten purchasers, who became co-owners of the land, together constitute a 'body of individuals/association of persons' and therefore a 'person' within the meaning of that expression in the Ceiling Act? (iv) Whether the partition dated 30.12.1971 among the co-owners is 'deemed to have been made in anticipation to defeat the object of Gujarat Agricultural Lands Ceiling (Amendment) Act, 1972' under section 8(1) of the Ceiling Act; and if so what is the effect of failure to make an application under sub-section (2) of section 8 of the Ceiling Act. (v) What would be the position if some of the co-owners were non- agriculturists at the time of purchase of the lands? Whether the Mamlatdar can examine this issue when considering the question of surplus land under the Ceiling Act? Statutory Provisions : 11. The Ceiling Act was enacted to fix a ceiling on holding of agricultural lands and to provide for the acquisition and disposal of surplus agricultural land. Section 4 relates to delimitation of local areas and provides that there shall be different classes of local areas in the sta....
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....of five, so however that the total holding of the family does not exceed twice the ceiling area; and in such a case, in relation to the holding of such family, such area shall be deemed to be the ceiling area: x x x x x (3C) Where a family or a joint family irrespective of the number of members includes a major son, then such major son shall be deemed to be a separate person for the purposes of sub-section (1). x x x x x 11.2) Section 8 deals with transfers and partitions effected to defeat the objects of the Ceiling Act. Sub-section (1) provides that where after 24.1.1971 but before the stipulated date (the date on which the Gujarat Agricultural Lands Ceiling (Amendment) Act, 1972 - Gujarat Act 2 of 1974) came into force), any person has transferred or partitioned any land held by him, then notwithstanding anything contained in any law for the time being in force, such transfer or partition, shall, unless it is proved to the contrary, be deemed to have been made in anticipation in order to defeat the object of the Amending Act of 1972. Sub-sections (2) and (4) of section 8 read as under: "(2) Any person effected by the provisions of sub-section (1) may, within the p....
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....o person shall be entitled to hold land in excess of the ceiling area". If the ten co-owners are considered as an 'association of persons' or 'body of individuals', and consequently as a 'person', then the ten co-owners together as a person, will be entitled to only one unit of land which is the ceiling area per person. But if 'association of persons' or body of individuals is not a 'person', or if a co-ownership is not an association of person/body of individuals, then each co-owner or the family of each co- owner, as the case may be will be a separate 'person' having regard to the definition of person in section 2(21) of Ceiling Act, in which event, each family will be entitled to hold one unit of land. 15. The word 'person' is defined in the Act, but it is an inclusive definition, that is "a person includes a joint family." Where the definition is an inclusive definition, the use of the word 'includes' indicates an intention to enlarge the meaning of the word used in the Statute. Consequently, the word must be construed as comprehending not only such things which they signify according to ....
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....e inclusive definition of 'person' in General Clauses Act applies to all Gujarat Act unless there is anything repugnant in the subject or the context. The inclusive definition of 'person' in section 2(21) of the Ceiling Act, does not indicate anything repugnant to the definition of 'person' in General Clauses Act, but merely adds 'joint family' to the existing definition. Therefore the definition of person in the Ceiling Act, would include the definition of person in section 3(35) of General Clauses Act. The resultant position can be stated thus : The definition of person in General Clauses Act, being an inclusive definition, would include the ordinary, popular and general meaning and those specifically included in the definition. The inclusive definition of 'person' in the Ceiling Act, in the absence of any exclusion, would have the same meaning assigned to the word in the General Clauses Act, and in addition, a 'joint family' as defined. Thus, the word 'person' in the Ceiling Act will, unless the context otherwise requires, refer to : (i) a natural human being, (ii) any legal entity which is capable of possessing right....
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....be grouped together as though they were held by one person only for the purpose of determining the ceiling limit for each member of a family. It may indirectly have the effect of disabling a member of a family from holding land upto the prescribed ceiling limit for a person holding as an individual. In other words, the result is that such a member of a family will have to be content with a holding less than that of an unmarried individual. It has the effect of making it clear that what have to be grouped together are the separate properties of individuals belonging to families other than what are "joint families", in law. It takes in and applies to members of families other than undivided Hindu families. It means that married persons and their minor children will have to be viewed as though they hold one lot together even though they retain their separate legal personalities and remain competent owners of their separate holdings. It does not affect either their legal status or competence. It does reduce their individual holdings." Question (ii) - Whether co-owners are together a 'person'? 19. When several persons acquire undivided shares (as contrasted from defined po....
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....ons/body of individuals' in the legal sense. A mere combination of persons or coming together of persons without anything more, without any intention to have a joint venture or carry on some common activity with a common understanding and purpose will not convert two or more persons into a body of individuals/association of persons. An 'association of persons/body of individuals' is one in which two or more persons join in a common purpose and common action to achieve some common benefit. Where there is a combination of individuals by volition of the parties, engaged together in some joint enterprise or venture, it is known as 'association of persons/body of individuals'. The common object will have some relevance to determine whether a group or set of persons is an association of persons or body of individuals with reference to a particular statute. For example, when the said terms 'association or persons' or 'body of individuals' occur in a section which imposes a tax on income, the association must be one the object of which is to produce income, profit or gain. [vide : Commissioner of Income Tax vs. Indira Balkrishna (AIR 1960 SC 1172), Moham....
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....(iii) - Whether the ten purchasers constitute a 'person'? 22. We will now examine whether a group of individuals purchasing agricultural land jointly as co-owners, not with the intention of retaining the property in co-ownership and carrying on agricultural activities jointly, nor with the intention of managing it as a joint venture nor with the intention of holding it together to generate income, profit or gain, but solely with the intention of dividing the land so purchased and hold their respective shares separately and individually, can be considered as a 'person' for the purposes of the Ceiling Act. The Tribunal and the High court have proceeded on the basis that the ten purchasers constituted an 'association of persons' and therefore a separate juristic person. Let us examine whether the said conclusion is correct. 23. Instead of buying the land (172 acres, 36 guntas) jointly under the four sale deeds it was open to the ten persons to have bought the lands individually, that is each of them purchasing such extent of land as he or she wanted. If they had registered the sale deeds individually (subject to each of them being entitled to buy agricult....
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....other land held by them, will give the basis for determining the surplus land. For example, if a husband's share as co-owner is 20 acres and wife's share as co-owner is 20 acres, and their other individual holding is another 10 acres (all of the same category in C class), the total holding of the family will be 50 acres (20+20+10 acres) and the surplus will be 14 acres. Question (iv) - What is the effect of section 8 of Ceiling Act? 25. The fact that the partition among the co-owners on 30.12.1971 was between 24.1.1971 and the date on which the Gujarat Agricultural Land Ceiling Amendment Act, 1972 came into effect, is not in dispute. Sub- section (1) of section 8 makes it clear that where any person has transferred or partitioned any land held by him between those dates then notwithstanding anything contained in any law, such partition shall be deemed to have been made in anticipation in order to defeat the object of the said Amendment Act unless it is proved to the contrary. Sub-section (2) provides how the affected person may prove the contrary by filing an application to the collector seeking a declaration to that effect. When such an application is made, sub-secti....