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TMI Blog2017 (1) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... version tax under the provisions of Section 67A of the Code. It falls for the determination of the Court whether the requirements of the said provision, in order to constitute the taxable event, has occurred at all, in the case of the petitioner - petitioner has succeeded in establishing a good primafacie case for the admission of the petition and the grant of interim relief. By way of interim relief, the respondents are restrained from recovering conversion tax from the petitioner till the final decision of the petition - petition allowed - decided in favor of petitioner. - SPECIAL CIVIL APPLICATION NO. 12733 of 2016 - - - Dated:- 29-12-2016 - SMT. ABHILASHA KUMARI, J. FOR THE PETITIONER : MR MIHIR JOSHI, SENIOR ADVOCATE WITH MR SANDEEP SINGHI, ADVOCATE AND MR PRANJAL BUCH FOR SINGHI CO, ADVOCATE FOR THE RESPONDENT : MR KAMAL B. TRIVEDI, ADVOCATE GENERAL WITH MS SANGITA VISHEN , ASSISTANT GOVERNMENT PLEADER ORAL ORDER 1. The issue arising for determination in the petition is, whether the demand for the payment of Conversion Tax under Section 67A of the Gujarat Land Revenue Code, 1879 ( the Code ), made by the respondent State Government upon the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 67A is that the land has to be `assessed or `held for the purpose of agriculture by the occupant of the land. This requirement is not fulfilled as the petitioner has never held the land for the purpose of agriculture. Insofar as assessment is concerned, Condition No.12 of the allotment order clearly stipulates that the land is to be assessed as nonagricultural land. The first requirement for the levy of tax, therefore, is not fulfilled in the case of the petitioner. It is further submitted that the second requirement for the taxable event to take place flows from clause (a) of subsection (1) of Section 67, which specifies that the land should have been permitted or deemed to have been permitted, under Section 65, to be used for any other purpose. It is submitted that Section 65 of the Code provides for the use to which an occupant of the land held for agricultural purposes may put his land to and the procedure to be followed by the Collector, when such permission for change of user is asked for. The proviso to this Section contains a deeming provision to the effect that if the Collector fails to inform the applicant of his decision on the application within three months, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is held as below: 5. In the instant case, it is not disputed that the land in question was allotted to the petitioner in the year 1996 by the Collector, by executing the lease deed under the provisions contained in the Gujarat Mines and Mineral Rules, 1966. It is also not disputed that there was no condition in the original lease deed executed in the year 1996 as well as in the lease deed renewed in the year 2001 to the effect that the petitioner was liable to pay the conversion tax as contemplated under Section 67A of the Code. On the contrary, as transpiring from the conditions mentioned in the lease deed (AnnexureA), granting of the said land was not to be construed as bar of any of the Rules i.e. 67, 68, 69 and 70 of the Gujarat Land Revenue Rules. The learned AGP has failed to point out as to under which provision of Section 67A, the Collector had called upon the petitioner to pay the conversion tax. When the land was allotted to the petitioner by the competent Authority under the Gujarat Mines and Mineral Rules, 1966 for specific purpose of removing black trap stones, there was no question of the petitioner applying to the Collector for using the land for nonagricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom itself. On the logic of this explanation, learned Advocate General submitted that the requirement of Section 67A(1) that the land is required to be assessed and held for the purpose of agriculture is fulfilled. It is contended that Section 67A(1) does not say in whose hands it is to be assessed or held for agricultural purposes. As the land has been allotted to the petitioner for nonagricultural purpose, the demand of conversion tax is legal and justified and Section 67A is applicable to the case of the petitioner. 11. Learned Advocate General has also taken the Court through the provisions of Sections 62, 65, and 65A of the Code. It is further submitted that the Sanad has mistakenly been granted to the petitioner under Section 133 of the Code, in Schedule H, whereas it ought to have been issued under Rule 87 of the Gujarat Land Revenue Rules, 1972, under Form M, which provides for the payment of conversion tax. It is submitted that the levy of conversion tax flows from a cumulative reading of Sections 37, 65, 67A of the Code read with Rule 87. There is no requirement for any specific condition to be inserted for the demand of conversion tax in the allotment order. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medy as it has challenged the order of the Collector, therefore, the Court may relegate it to avail of such remedy. It is submitted that even against the mutation of entry of charge in the revenue record, the petitioner has an alternative remedy. 17. On the basis of the above submissions, learned Advocate General has contended that the petition may be rejected at this stage, or, if the Court is inclined to admit the petition, interim relief may not be granted. In the alternative, the petitioner may be directed to deposit the amount of the conversion tax in the Registry of the Court, which can be refunded to it if successful in the final result of the petition. 18. In support of this submission, reliance has been placed upon a judgment of the Supreme Court in the case of Siliguri Municipality And Others v. Amalendu Das And Others (1984)2 SCC 436 . 19. In rejoinder to the submissions advanced by the learned Advocate General, Mr.Mihir Joshi, learned Senior Advocate has submitted that it is clear from the communications dated 30.06.2015 and 30.04.2016, that in levying the demand of conversion charge, the Collector has acted upon the instructions of the State Government, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeming assessment in the hands of the State. There must be an actual assessment. 24. It is further submitted that the contention of the learned Advocate General that the Sanad ought to have been issued under Rule 87 read with Form M further supports the case of the petitioner. Form M contemplates an application to be made to the Collector under Section 65 or Section 65A of the Code, which has not been done in the present case. 25. Learned Senior Advocate further submits that the judgment in the case of Hindustan Brown Boveri Ltd. v. Ashok Chavla, Collector of Baroda Ors. (supra) , relied upon by the learned Advocate General would actually support the case of the petitioner as it held in the said judgment that subsection (2) of Section 67A of the Code would be applicable where the land assessed or held for any nonagricultural purpose is used for any other nonagricultural purpose that is other than that for which it has been converted. Only then would the question of levying tax arise, otherwise not. In the present case, the land has neither been converted from agricultural to nonagricultural or from one purpose to another purpose by the petitioner, therefore, the taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the allotment order or the Sanad, can it be said that the demand and levy of conversion tax is not required to be specifically provided for and would flow from a general reading of the statute? (5) Whether the demand and levy of conversion tax would arise from an audit objection, without reference to any specific provision of the Code? Can such a demand be general in nature, without it being specified as to how and under which subsection of Section 67A the demand arises from? (6) Whether the taxable event under Section 67A of the Code be overridden by executive instructions, such as the Government Resolution dated 06.06.2003? (7) Even assuming that there is a mistake in the issuance of the Sanad under Section 133 of the Code read with Form H, would that mistake justify the levy of commercial tax under Section 67A of the Code if the ingredients necessary for conversion tax to be applicable are primafacie not attracted? 29. The above aspects are, in the view of the Court, highly relevant and vital for a proper determination of the issues arising in the petition. Serious questions of law have been raised by the parties that require deeper and detailed consideratio ..... 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