Rajasthan High Court - Jodhpur
Modern Insultors Ltd vs State And Ors on 2 May, 2025
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
[2025:RJ-JD:9296-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 1847/2007
Modern Insulators Limited, Post Box No. 23, Abu Road District
Sirohi, Through its Authorized Representative Shri V.K. Atri S/o
Late Shri Deep Chand Ji, Aged 60 years, R/o D-2, Officers
Colony, Modern Insulators Ltd., Abu Road, District Sirohi
----Petitioner
Versus
1. State of Rajasthan, through The Secretary to the Government
Finance Department (Tax Division) State Secretariat, Jaipur.
2. The Inspectors General Registration & Stamps Rajasthan,
Jaipur.
3. Sub-Registrar, Abu Road, District Sirohi.
----Respondent
For Petitioner(s) : Mr. Pranjul Mehta
For Respondent(s) : Mr. Harshvardhan Singh for
Mr. Mahaveer Bishnoi, AAG
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE CHANDRA PRAKASH SHRIMALI
Judgment
Reserved on 12/02/2025
Pronounced on 02/05/2025
Per Dr. Pushpendra Singh Bhati, J:
1. This Writ Petition under Article 226 of the Constitution of
India has been preferred claiming the following reliefs:
"It is, therefore, humbly prayed that the Writ Petition
may kindly be allowed and by an appropriate, order or
direction-
(i) declare Part VII of the Rajasthan Finance Act, 2006
imposing Land Tax and the Rules framed thereunder and
consequential notifications as ultra vires and the same
may be struck down.
[2025:RJ-JD:9296-DB] (2 of 13) [CW-1847/2007]
(ii) hold that the State legislature has no jurisdiction to
impose the impugned tax on agricultural land in the
State.
(iii) impugned Assessment Order dated 27/12/2006
(Annexure 3) & Demand Notice dated 2/3/2007
(Annexure 4) may kindly be quashed and set-aside.
(iv) hold that in any case no tax can be levied and
collected for the Financial Year 2006-2007.
(v) Any other order or direction which this Hon'ble Court
deems just and proper may kindly be passed."
1.1. At the outset, it has been brought to the notice of this Court
that the challenge to the validity of the Act of 2006 in the present
petition, has already been given up by the petitioner, which is
reflected in the order dated 10.07.2017 passed by this Hon'ble
Court; the said order reads as under:
"Learned counsel for the petitioner submits that the
petitioner is not pressing the prayer No.1 that is to
declare Part VII of the Rajasthan Finance Act, 2006 ultra
vires, hence, the matter is nor required to be
adjudicated by the learned Single Bench.
In view of the statement made by learned counsel
appearing on behalf of the petitioner, the writ petition
so far as the prayer No.1 is concerned is dismissed as
not pressed.
For the remaining causes, let this writ petition be listed
before learned Single Bench for adjudication."
2. Before unraveling the remaining controversy in the present
case, it is pertinent to underscore the provision of law application
whereof the controversy arose.
2.1. The State of Rajasthan enacted Rajasthan Finance Act, 2006
(hereinafter referred to as 'Act of 2006'), which was then
published in the Official Gazette on 31.03.2006. The State
[2025:RJ-JD:9296-DB] (3 of 13) [CW-1847/2007]
Government, in exercise of powers conferred by Section 61 under
Chapter VII of the Act of 2006, also framed the Rajasthan Land
Tax Rules, 2006 (hereinafter referred to as 'Rules'), and notified
the same in the Official Gazette on 25.09.2006.
2.2. The Act of 2006 under its Chapter VII provided for levy of
tax in the State of Rajasthan, on certain classes of land. The
provisions of the Act were applicable on the lands as defined
under Section 38(c), and the Scheme of levy and collection of tax
was as such that under Section 39 of the Act of 2006, the State
Government was to prescribe by a notification in the Official
Gazette, the levy of tax on the classes of lands at such rates as
were to be notified by the State Government from time to time in
the Official Gazette.
2.3. Furthermore, Section 40(1) of the Act of 2006 read with Rule
4 of the Rules, provided for preparation of a provisional
assessment list (in short "provisional list") by the assessing
authority (defined under Section 38 (b) of the Act of 2006), of all
lands liable to pay the prescribed tax. After preparation of the
provisional list, a public notice has to be given as per Section
40(3) of the Act of 2006 and Rule 5(1) of the Rules, which
contained the particulars as prescribed by the State Government,
and that the said list has to be open for inspection by every
person claiming to be the land holder of the land mentioned in the
list. Section 41 read with Rule 5(4) of the Rules, provided for
objections to the entries in the list by any person aggrieved by
any entry in the provisional list, and Section 42 read with Rule
5(7) of the Rules, provided for finalization of the assessment list,
[2025:RJ-JD:9296-DB] (4 of 13) [CW-1847/2007]
after the provisional list being duly authenticated by the assessing
authority, and the list so authenticated shall be kept open for
inspection by holders of the land or their agents. Then as per
Section 47 of the Act of 2006 read with Rule 10 of the Rules, a
notice of demand (in short "Demand Notice") has to be issued and
served on the land holder, and that Section 49, provided for a
penalty in default of payment of tax mentioned in the Demand
Notice.
3. Brief facts of the case giving rise to the instant controversy are
that in exercise of the powers under Section 39 the State
Government notified the classes of land and the rate of tax, which
was payable for each year under Chapter VII of the Act of 2006.
Thereafter, a Public Notice dated 07.11.2006 (Annexure-1) was
issued by the assessing authority, which was admitted to be
received by the petitioner. The said notice informed the land
holders that a provisional assessment list of the tax on lands
situated in the village Amthala, Tehsil Abu road, District Sirohi has
been prepared, and was open for inspection at the office of the
Assessing Authority (Sub Registrar) Abu Road, Sirohi for a period
of 30 days from the date of publication of the said notice. The
Notice further sought filing of objections by the land holders,
against the provisional assessment list within a period of 30 days.
3.1. The petitioner perturbed by the levy of tax submitted its
preliminary objections dated 30.12.2006 (Annexure-2), in
pursuance to the said notice.
3.2. The Respondent no. 3, subsequently, issued the impugned
Public Notice (Annexure-3) on 27.12.2006 under Section 42 of the
[2025:RJ-JD:9296-DB] (5 of 13) [CW-1847/2007]
Act of 2006, whereby it was informed that the provisional
assessment as arrived by the respondents was duly authenticated
by the Assessing Authority and thus, the list was final as per
Section 42 of the Act of 2006; thereafter on 02.03.2007,
respondent no. 3 issued the impugned Demand Notice (Annexure-
4) under Section 47 or/and 49 of the Act of 2006 to the petitioner,
whereby a demand of Rs.4,07,868/- was raised. The Demand
Notice asked for the compliance of the same, failing which
coercive measures for recovery would be adopted by the
respondents.
3.3. Aggrieved by the Notice of finalization of the provisional
assessment list (Annexure-3) and Demand Notice(Annexure-4),
the petitioner-Company filed the instant writ petition, claiming the
afore-quoted reliefs.
4. Mr. Pranjul Mehta, learned counsel for the petitioner,
submitted that the ambit and purview of 'land' as defined under
Section 38(c) of the Act of 2006 is limited in the sense that it
excluded the land held or used exclusively for agricultural or
residential purposes or an urban land as defined The Rajasthan
Lands and Buildings Tax Act, 1964 (hereinafter referred to as the
Act of 1964) or an abadi land as defined under the Rajasthan Land
Revenue Act, 1956. It was further contended that the petitioner's
land is situated in Amthala, Abu Road, which is an urban area,
falling within the municipal limits and therefore would be governed
by the Act of 1964 and not by the Act of 2006.
4.1. Learned counsel for petitioner also submitted that the
Respondent No. 3 had neither provided any opportunity of hearing
[2025:RJ-JD:9296-DB] (6 of 13) [CW-1847/2007]
to the petitioner, nor has considered the objections dated
30.12.2006, raised by the petitioner to the notice dated
07.11.2006, while finalizing the assessment list, and thus has not
complied with the mandate of Section 42(2) of the Act of 2006,
which specifically mandates to provide an opportunity of hearing
before passing any order of assessment.
4.2. Learned counsel further submitted that after finalization of
the assessment list as per the provisions of the Act of 2006, the
list so finalized were to take effect and come into force w.e.f. 1 st
day of April following the date on which it had been finalized and
the same were to remain in force till a new list comes into
existence as per law. However, the proviso to the Section 42(4) of
the Act of 2006, lays down that the first list finalized after the
enforcement of the Chapter VII of the Act of 2006 shall only take
effect from such date as may be notified by the State
Government. The Chapter VII of the Act of 2006 was notified on
25.09.2006, thus the first list finalized could not take effect any
date prior to the said notification. Consequently, the respondents
have not made adherence to proviso to Section 42(4) of the Act of
2006, and that the said list could not take effect from 01.04.2006.
4.3. Learned counsel also submitted that the Chapter VII
incorporating land tax in the Act, was notified on 25.09.2006 and
thus, the same cannot have any retrospective application,
therefore, there could not have been any land tax for the financial
year 2006-07, which commenced on 01.04.2006. Hence, tax
levied for the financial year 2006-2007 is not just and proper
under the law.
[2025:RJ-JD:9296-DB] (7 of 13) [CW-1847/2007]
5. Per Contra, Mr. Harshvardhan Singh appearing for Mr.
Mahaveer Bishnoi, AAG, while opposing the aforesaid submissions
made on behalf of the petitioner, submitted that due process of
law has been followed while passing the impugned notice and
issuance of the impugned demand notice.
5.1. Learned Counsel further submitted that the spirit of the Act
of 1964 and the Act of 2006 is different in essence and therefore,
both of them cannot be equated for the purpose of adjudicating
the prayers in question.
5.2. Learned Counsel also submitted that though the definition of
land under Section 38(c) of the Act of 2006 excludes the land held
or used exclusively for agricultural or residential purposes from
the ambit of levy of the said tax; however, the word "exclusively"
clearly signifies the exclusion of land for said purposes only when
they are actually being used for agricultural or residential
purposes. Merely stating that the nature of land is
agricultural/residential, and using the same for other purposes, or
vice-versa, does not bring the same under the ambit of the said
exclusion. Therefore, as per the learned Counsel, any kind of
importation of definition of the term 'land' from other Statutes,
would be detrimental to the cause of justice.
5.2.1. Learned Counsel also submitted that the State by
defining the 'land' for the purpose of levying land tax has already
excluded the land used for agricultural and residential purposes
and also for the urban land as defined in the Act of 1964 as well
as Abadi land. It was further submitted that the petitioner's land
[2025:RJ-JD:9296-DB] (8 of 13) [CW-1847/2007]
neither fell in the category of urban land nor Abadi land nor is
used for agricultural or residential purposes.
5.3. Learned counsel further submitted that a fair and equal
opportunity of hearing was given to the petitioner. It was
highlighted that before passing the order dated 27.12.2006, a
notice was served on the petitioner on 07.11.2006 which clarified
that provisional list of tax was open for inspection and objections
against the same maybe filled, if any, within 30 days from the
date of publication of notice.
5.4. Learned Counsel further contended that Section 42 of the
Act of 2006 pertains to the finalization of the assessment list,
which serves as the basis for the crystallization of lands. It was
further submitted that while sub-section (4) of Section 42
stipulates that the finalized assessment list shall take effect from
the 1st day of April following the date of its finalization and shall
remain in force until a new list is prepared and enforced; the
legislature has incorporated a specific proviso to address
exigencies arising in the first year of the enactment. The said
proviso expressly provides that the initial finalized assessment list,
post-enforcement of the Chapter, shall take effect from the date
specified by the State Government through notification in the
Gazette. This demonstrates that the legislature has expressly
created an exception for the first assessment list, enabling its
enforcement from a date notified by the State Government, rather
than the default date of 1st April following its finalization.
Accordingly, the petitioner's contention that the provisional
[2025:RJ-JD:9296-DB] (9 of 13) [CW-1847/2007]
assessment list can only be applied from 1st April 2007 is
erroneous and without merit.
5.5. Learned counsel also submitted that if the petitioner has any
grievance with respect to the procedure followed by the relevant
authorities including issuance of the impugned notice and the
demand notice, an efficacious and speedy remedy lies in raising
the same before the appellate authority as has been provided
under Section 48 or Section 50 of the Act of 2006, depending
upon the nature of grievance, after fulfilling the required
conditions stated therein.
6. Heard learned counsel for the parties at length as well as
perused the record of the case.
7. Since the matter pertains to taxation, therefore, as per the
Notification issued by this Hon'ble Court, the same continues to be
listed before the Division Bench.
8. At this juncture, this Court finds that in light of the
aforementioned order dated 10.07.2017, the present adjudication
shall be made on the issues raised herein, except the issue
pertaining to challenge to the validity of Act of 2006, as the same
has already been given up by the petitioner.
9. This Court further observes that the term 'land' has been
defined under Section 38(c) of the Act of 2006 and Section 2(5) of
the Act of 1964, which are reproduced as hereunder:
Section 38 (c) of the Act of 2006:
""land" shall not include the land held or used exclusively
for agricultural or residential purposes or an urban land
as defined in the Rajasthan Land and Building Tax Act,
1964 (Act No. 18 of 1964) or an abadi land as defined in
[2025:RJ-JD:9296-DB] (10 of 13) [CW-1847/2007]
clause (b) of section 103 of the Rajasthan Land Revenue
Act, 1956 (Act No. 15 of 1956)"
Section 2(5) of the Act of 1964:
""land" means land which is, or is capable of being, used
as a building site, and includes garden or ground
appurtenant to a building, but does not include a holding
as defined in the Rajasthan Tenancy Act, 1955 (Rajasthan
Act 3 of 1955), provided the improvement referred to in
sub-clause (a) of clause (19) of section 5 of the said Act
over such holding does not exceed such area as has been
prescribed for purposes of the second proviso to sub-
section (1) of section 66 or the second proviso to section
67 of the said Act"
9.1. This Court further observes that while both enactments
pertain to the taxation of land, where the Act of 2006 adopts a
more comprehensive approach by encompassing a wider range of
land classifications within its ambit of taxation. In contrast, the
Act of 1964 was specifically designed to regulate the taxation of
urban and developed lands, primarily for municipal revenue
purposes.
9.2. This Court also notes that despite the identical terminology
employed in both statutes, the legislative intent underlying each
enactment differs significantly. The Act of 2006, while classifying
different categories of land and corresponding taxation liability,
encompasses all taxable lands, irrespective of whether they are
situated in rural or urban areas, in accordance with the state's
taxation policies. Moreover, it expressly excludes from the purview
of taxation any land that is exclusively utilized for agricultural or
residential purposes.
[2025:RJ-JD:9296-DB] (11 of 13) [CW-1847/2007]
9.3. This Court in light of the aforesaid discussion, finds that the
exclusion sought by the petitioner from leviability of tax on the
land in question under the Act of 2006, does not fall within the
ambit of law. The exclusion is for fixed purposes for actual use,
which included agricultural, urban, Abadi & residential, whereas
the petitioner's land does not fall in either of the excluded
categories for actual purposes fixed by the State.
10. This Court reiterates and emphasizes that the term
"exclusively" used in the said provision to exempt certain lands
from its applicability necessitates a thorough examination of the
"purpose" for which such land is utilized. The mere assertion of an
exemption cannot override the actual usage of the land. For
instance, an agricultural land that is utilized for commercial
activities cannot seek exemption solely on the grounds of its
classification as agricultural land, nor can a non-agricultural land
be deemed otherwise merely by its designation, without regard to
its functional use.
10.1. It is thus, crucial to consider the intended use of the land in
question at all times. This Court finds that the exclusion under the
said provision of the Act of 2006, is expressly limited to specific
categories, namely agricultural, urban, abadi, and residential
purposes. As the petitioner's land does not fall within any of these
defined categories, the claim for such exclusion is also untenable
and devoid of merit.
11. This Court also finds that the respondent no.3 passed an
order dated 27.12.2006 raising the demand in question against
the petitioner, after serving notices upon the petitioner
[2025:RJ-JD:9296-DB] (12 of 13) [CW-1847/2007]
07.11.2006, further giving them 30 days from the said notice to
file objections, if any; therefore, the requirements of Section
42(2) of the Act of 2006 have been complied with by the
respondent in issuing the notice in question. It is further observed
that the provisional assessment is also in accordance with law.
12. As regards the contention raised on behalf of the petitioner
that in the present case, the respondents have not made due
adherence to the provision of Section 42 of the Act of 2006, this
Court observes that in view of the exception as carved out by the
legislation in the form of the proviso to Section 42(4) of the Act of
2006, the list finalized for the first time after the enforcement of
this Chapter, i.e., Chapter VII, shall take effect and be deemed to
have come into force with effect from such date as notified by the
State Government in the Official Gazette. Thus, this Court is not
convinced with the argument raised on behalf of the petitioner
that land tax in question could not have been imposed with effect
from any date prior to the ensuing financial year which in the
present case commenced from 01.04.2007, i.e., financial year
2007-08.
13. This Court further finds that an efficacious and proper
remedy lies before the appellate authority provided under Section
48 or/and 50 of the Act of 2006 with respect to grievances raised
by the petitioner in this writ petition.
14. This Court further finds that the Statute, challenge to which
has been given up, is exhaustive in nature, and once the Statute
survives and the challenge to the same has been given up by the
petitioner, the petitioner has to adhere to the assessment in
[2025:RJ-JD:9296-DB] (13 of 13) [CW-1847/2007]
question as well as the notice given. The notice for the land
located at village Amthala is amenable to the tax because the
purpose of that land is important and not the location of the land,
and that the purpose is not in dispute.
15. In view of the above, this Court does not find it a fit case so
as to grant any relief to the petitioner in the instant petition.
16. Consequently, the present petition is dismissed. All pending
applications stand disposed of.
(CHANDRA PRAKASH SHRIMALI),J (DR.PUSHPENDRA SINGH BHATI),J
SKant/-
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