TaxTMI 
TaxTMI 
2017 (1) TMI 139
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....Vishen, Assistant Government Pleader, on behalf of the respondent State Government, at length, by making elaborate and detailed submissions. 3. Mr.Mihir Joshi, learned Senior Advocate for the petitioner has first drawn the attention of the Court to the order dated 18.10.2006, allotting the land to the petitioner for the purpose of developing a SEZ. He has submitted that a perusal of the said order would make it clear that the land of the State Government has been allotted for setting up a SEZ, specifically for an industrial purpose, subject to certain conditions. The allotment of land has not been made to the petitioner for agricultural purposes but specifically for industrial purposes. This is clear from Condition No.5 of the allotment order which specifies that the land is granted for industrial purposes and cannot be used for any other purpose unless permission is granted by the State Government. The petitioner is using the land for industrial purposes and has not converted the use of land to any other purpose. Laying emphasis on the aspect that the land has been granted for industrial purposes, which constitutes nonagricultural use and that it is assessed for nonagricultural u....
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.... that constitute the taxable event, are fulfilled. In the present case, as the petitioner was never granted land for agricultural purposes and has never sought to convert it into nonagricultural land, the provisions of Section 67A are not at all attracted. It is emphasised by learned Senior Counsel for the petitioner that it is clear from the allotment order that the land has been granted to the petitioner for industrial purposes in order to setup a SEZ and there is no conversion of the land for any other purpose. The basic requirements of Section 67A are not met with in the case of the petitioner and Section 67A is, therefore not applicable. The demand of conversion tax by the State Government is, therefore, exfacie illegal. 6. It is further contended that nowhere in the order of allotment is there any condition or stipulation that the petitioner is liable to pay conversion tax. Neither is there any such stipulation in the Sanad. The order of allotment of the Sanad cannot be sought to be varied on the basis of an audit objection raised by the Accountant General, Ahmedabad. The levy and demand of conversion tax from the petitioner under Section 67A is unjustified as the said provi....
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....eral, by submitting that the liability to pay conversion tax is on the conversion of the purpose of the land. Where and when the conversion takes place is a secondary issue. The liability arises as soon as the conversion takes place. The land can be said to have been held and assessed for agricultural purposes even at the ends of the State Government. What is to be seen is what land is given and not for what purpose it is given. It is submitted that the liability to pay conversion tax does not depend upon any express conditions incorporated in the allotment order. Elaborating further on this aspect, learned Advocate General submits that the lands in question are Government lands which have been described as "Sarkari Padtar" in the revenue record. This does not mean that the land ceases to be agricultural land. The lands allotted to the petitioner were "lands assessed" or "lands held for agricultural purposes" at the material time. 10. Referring to Section 37 of the Code, learned Advocate General submitted that all lands belong to the State Government. However, it is lawful for the Collector to dispose of certain lands with permission from the State Government, which gives the powe....
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.... formality while issuing the allotment orders and Sanad to the petitioner which cannot wash away the charge or levy of conversion tax. The tax is on the conversion of the land and not a procedural formality. It only remains to be seen whether the conversion has taken place as per the taxing procedure, or not. In support of this submission, reliance has been placed upon a judgment of the Supreme Court in the case of Madhu Silica Private Limited and Ors. v. State of Gujarat and Ors. ( 1992)85 STC 258 (Guj.). 14. In support of his submission regarding the underlying objective of Sections 48 and 67A of the Code, learned Advocate General has relied upon Hindustan Brown Boveri Ltd. v. Ashok Chavla, Collector of Baroda & Ors. 1998( 1) GLR 336. 15. Learned Advocate General has referred to the Government Resolution dated 06.06.2003, which consolidates all previous Resolutions and Circulars laying down the provisions for the grant of Government lands for nonagricultural purposes wherein Condition No.37 clearly provides that when the lands are granted for nonagricultural purposes, all the Collectors should invariably incorporate the conditions in the grant order to the effect that applican....
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....submitted that the manner in which conversion takes place has been clearly defined in Section 67A which states that where any land assessed or held for the purpose of agriculture is permitted or deemed to have been permitted under Section 65 to be used for any other purpose, then conversion tax would be leviable. In the present case, neither has the land been assessed for agricultural purpose or held for the agricultural purpose by the petitioner and nor has the petitioner applied for the use of the land under Section 65 of the Code. 21. It is emphatically submitted by the learned Senior Counsel that the concept being developed by the learned Advocate General that all lands of the State Government are agricultural lands is not supported by either facts or law. Land revenue does not apply to the State Government. Even if it is assumed, for the sake of argument that deemed conversion takes place in the hands of the State Government, the petitioner cannot be made to suffer. 22. Referring to Rule 117B of the Rules, it is submitted that this Rule pertains to conversion tax payable under Section 67A and mandates that the tax should be paid in advance by a Challan in the Government Trea....
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....ers (supra) by submitting that this judgment pertains to a mining lease. 28. In the background of the above submissions, this Court has heard learned counsel for the respective parties at length, and considered the rival submissions and the provisions of the Code, the Rules and judicial pronouncements cited at the Bar. Having done so, this Court finds that certain salient issues emerge from the legal and factual position on record, which can be enumerated as below: (1) The orders of allotment of the lands to the petitioner clearly specify that the lands are being allotted for industrial purposes, in order to develop a SEZ. The conditions attached to the said orders clearly state that the lands are assessed as nonagricultural lands. There does not appear to be any mention in the orders that the lands have been held for agricultural use. (2) Section 67A pertains to payment of conversion tax by the occupant for the change of the use of the land which is assessed or held for the purpose of agriculture when it is permitted or deemed to be permitted under Section 65, to be used for any other purpose. In the present case, there is no conversion of the user of the land by the petitioner.....