TaxTMI 
TaxTMI 
2011 (7) TMI 1339
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.... on lease from Maharashtra Industrial Development Corporation (for short 'MIDC') for construction of its factory. The Appellant commenced construction of its plant in or about the year 1997 and on completion, commenced actual use for industrial purpose, in the year 1999. 2. The Appellant was served with a demand notice dated 26.2.2002 by the Gar Kamgar Talathi, Chikhali, demanding payment of Rs. 45,25,538/- as non-agricultural cess and additional non-agriculture cess, for the period 1995-96 to 2001-02. As the said payment was not made, default notices dated 1.3.2002 and 5.3.2002 were issued under Section 174 of the Maharasthra Land Revenue Code, 1966 ('Code' for short) informing that if the amount demanded was not paid within seven days, the amount due will be recovered with 25% of the amount due as penalty. At that stage the Appellant filed a writ petition before the Bombay High Court for quashing the demand notice 26.2.2002, 1.3.2002 and 5.3.2002. The Appellant contended that it was a "government lessee". Alternatively, it was contended that it was the tenant of the Development Authority. It was submitted that neither a government lessee nor a tenant of the Dev....
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....Section 2(19) and Section 2(23) and the said definitions are extracted below: (19) - "land revenue" means all sums and payments, in money received or legally claimable by or on behalf of the State Government from any person on account of any land or interest in or right exercisable over land held by or vested in him, under whatever designation such sum may be payable and any cess or rate authorised by the State Government under the provisions of any law for the time being in force; and includes premium, rent, lease money, quit rent, judi payable by a inamdar or any other payment provided under any Act, rule, contract or deed on account of any land; (23) - "occupant" means a holder in actual possession of unalienated land, other than a tenant or Government lessee; provided that, where a holder in actual possession is a tenant, the land holder or the superior landlord, as the case may be, shall be deemed to be the occupant; The expressions "to hold land" or "to be a land holder or holder of land" is defined in Section 2(12) and mean to be lawfully in possession of land, whether such possession is actual or not. The term "tenant" and "government lessee" referre....
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....t primarily liable for the same, such person shall be allowed credit for any payments which he may have duly made to the person who is primarily liable, and shall be entitled to credit, for the amount recovered from him, in account with the person who is primarily liable. 5. It is not in dispute that the land in question is unalienated land and that in regard to such land, only the 'occupant' as defined in the Code is primarily liable to pay the non-agricultural assessment to the state government. Section 2(23) makes it clear that where the land is in the actual possession of a tenant, the superior landlord or the land holder is deemed to be the occupant. It is also not in dispute that the Development Authority is the 'occupant' and the Appellant is not the occupant, but only a tenant under the occupant. Re: Question (i) 6. There is no dispute that a government lessee is not liable to pay any land revenue. Section 2(11) read with Section 38 defines a 'government lessee' as a lessee under a lease granted by a Collector in regard to unalienated unoccupied land belonging to the government. In this case the lands in question for which the non-agricultur....
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.... to pay non-agricultural assessment in regard to the land taken on lease from the Development Authority will have to be decided with reference to the relevant statutory provisions and the terms of lease and not with reference to position prevailing with reference to some other lease taken by the Appellant from MIDC. The status, objects, functions and area of operation of MIDC and the Development Authority are different. Any decision or clarification issued in regard to lands held by MIDC or lands leased by MIDC will not apply to lands held or leased by the Development Authority. As noticed above, the circular dated 29.3.1975 relied upon by the Appellant is not relevant as it applies only to lessees of MIDC, which as agent of the state government granted certain leases and consequently such lessees as government lessees were exempted from paying the non-agricultural assessment. The said notification did not refer to Pimpri-Chinchwad New Town Development Authority as the agent of the state government in regard to grant of leases to Appellant and others. In fact there is no document which shows the state government to be the owner of the lands leased by the Development Authority, nor ....
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.... XXX (4) Every Development Authority shall be a body corporate with perpetual succession and a common seal with power to acquire, hold and dispose of property, both moveable and immoveable, and contract and sue or be sued by such name as may be specified in the notification under Sub-section (2). Section 114 lays down the object of Development Authority and Sub-section (1) thereof is extracted below: 114(1) The objects of a Development Authority shall be to secure the laying out and development of the new town in accordance with proposals approved in that behalf under the provisions of this Act, and for that purpose every such Authority shall subject to the provisions of Section 113A have power to acquire, hold, manage and dispose of land and other property to carry out buildings and other operations, to provide water, electricity, gas, sewerage....
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....d dispose of its lands as its agent. Sub-section (3A) of Section 113 of MRTP Act provides: (3A). Having regard to the complexity and magnitude of the work involved in developing any area as a site for the new town, the time required for setting up new machinery for undertaking and completing such work of development, and the comparative speed with which such work can be undertaken and completed in the public interest, if the work is done through the agency of a corporation including a company owned or controlled by the State or a subsidiary company thereof, set up with the object of developing an area as a new town, the state government may, notwithstanding anything contained in Sub-section (2), require the work of developing and disposing of land in the area of a new town to be done by any such corporation, company or subsidiary company aforesaid, as an agent of the state government; and thereupon, such corporation or company shall, in relation to such area, be declared by the state government, by notification in the official gazette, to be the New Town Development Authority for that area. MIDC is a corporation which would fall under Sub-section 113(3A) whereas the Dev....
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.... as lessor and lessee, that will be settled in accordance with law. 12. It is no doubt true that the primary liability to pay the land revenue which includes non-agricultural assessment is on the occupant, under Section 39 of the Code. The definition of 'occupant' excludes not only 'government lessee' but also every tenant. Whenever the person in actual possession of the land is the tenant, the land holder or the superior landlord who granted the lease to such tenant is deemed to be an occupant. In this case the Appellant has taken the lease from the Development Authority and therefore the Development Authority as the landlord and occupant, will be primarily liable to pay the land revenue. But the matter does not rest there. 13. In exercise of the powers conferred by Section 159 of the MRTP Act, the Development Authority, with the previous approval of the state government, has made regulations for regulating the disposal of land acquired by it or vesting in it in the Pimpri-Chinchwad New Town, known as the "Pimpri-Chinchwad New Town Development Authority (Disposal of Land) Regulations, 1973" ('Regulations' for short). Regulation 1(ii) provides that the....
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...., when the land revenue code makes the occupant primarily liable. But for the statutory obligation created under regulation 10(iv) and (v) of the Regulations, in the normal course, a demand should have been made upon the occupant (landlord) who is primarily liable and only if the landlord fails to pay, recourse could be had to Sub-section (2) of Section 168 which enabled a claim being made against the tenant in terms of the said Sub-section. But where the liability to pay land revenue is fastened on the lessee under the statutory regulations, it is not be necessary for the state government to make a claim upon the occupant, leading to a demand by the Development Authority, in turn, upon its lessee, for payment of land revenue. The state government can directly make the demand as the lessee, by taking note of the liability statutorily fastened on the lessee under the Regulations. When the liability of the lessee to pay the land revenue is not open to challenge, having regard to the provisions of the Regulations and terms of the lease, no purpose would be served by requiring the state government to recover the amount from the Development Authority (occupant) and then require the Deve....