P L D 1957 W (PLP)

In making assessment of Agricultural Income Tax against Malik Khizar Hayat Khan Tiwana for the years (a) 1948‑49, (b) 1950‑51 and (c) 1951‑52, and against Malik Habib Ullah Khan and Malik Aziz Ullah Khan and their mother Mst. Fateh Bibi for the year 1949‑50, the Collector, Shahpur district, passed orders on 29th June 1953 to the effect that the Khush Hasiyyati dues paid by the assessee during the respective previous years should not be taken into account in ascertaining the total land revenue so paid by them, which land revenue would form the basis for calculating the amount of the Agricultural Income Tax due. The former Punjab Province appealed to the Commissioner against the four orders of the Collector and the Commissioner dismissed the appeals by a single order dated 21st April 1954. The Punjab Province then put in petitions of revision before the Financial Commissioner on 13th December 1954. These four petitions are Nos. 1‑4 of the year 1954‑

55. The present order will dispose of all the four petitions. The counsel for the respondents raised an objection in respect of limitation. But his objection was overruled because the Board of Revenue is interested in considering this important matter suo moto. The Khush Hasiyyati is described as water advantage rate or, in other words the extra payment of land revenue on account of the irrigation of the land in question. The lands of the respondents on which Khush Hasiyyati is charged are irrigated by inundation canals, some owned by Government the others owned by the respondents and their relatives. The assessment of land revenue on these lands is of the "fixed" variety, which means that the lands pay a fixed amount of land revenue every year, whether any crops are grown on them or not. This payment is, however, supplemented by the Khush Hasiyyati payment of Re. 1 per acre payable on all lands on which any irrigated crops mature. Thus, the total assessment includes a fixed assessment and also a fluctuating assessment. The Khush Hasiyyati was imposed by the Provincial Govern ment on the recommendation of the Settlement Officer of the district. Since the Settlement Officer is appointed by the Provincial Government under the Punjab Land Revenue Act, his proposals for levying the Khush Hasiyyati must be accepted as proposals made under that Act and consequently the orders passed on such proposals are orders passed under the Land Revenue Act. The fixed assessment on the lands of the respondents plus the Khush Hasiyyati charged in a fluctuating manner on those lands, forms the total land revenue payable by them in respect of those lands. The Khush Hasiyyati is analogous to an "owners rate" which is levied in some cases under section 37 of l the Northern India Canal and Drainage Act. That Act, however, is not applicable to the canals which irrigate the lands in dispute. It cannot, therefore, be argued even remotely that the Khush Hasiyyati in question is owner's rate under the said Act. If we took the case of the Lyallpur district, where irriga tion is received from canals governed by the Northern India Canal and Drainage Act, we find that a land revenue demand has been assessed on the recommendation of the Settlement Officer. There is, however, no owner's rate fixed under the said Northern India Canal and Drainage Act. The whole of the land revenue paid by the piece of land is taken into account for purposes of assessing Agricultural Income Tax. If, however, Government had split the land revenue payable per acre into two parts, viz. (a) the land revenue on the acre in its dry aspect and (b) the owner's rate levied in addition under section 37 of the Canal and Drainage Act, the assessee of Agricultural Income Tax would be the gainers, because only the first payment would be counted as land reve nue assessed under the Punjab Land Revenue Act and the second payment would be excluded from the purview of the definition of land revenue contained in the Agricultural Income Tax Acts. Thus, the liability of the assessee of the Lyallpur district depends on the question whether the extra payment arising from the irrigated aspect of the field is levied under the Land Revenue Act as Khush Hasiyyati or it is imposed as owner's rate under the Canal and Drainage Act. The unirrigated field pays a small land revenue, because the net assets of the landowner are comparatively low. An irrigated field, however, pays a larger amount of land revenue for the reason that the irrigation helps to grow better crops and gives rise to larger net assets. The Khush Hasiyyati merely represents a payment on account of the extra benefit received by the landowner in the form of net assets. The Khush Hasiyyati is, therefore, of the same character as the fixed land revenue levied on the field in its dry aspect. The definition of land revenue contained in the Agricultural Income Tax Act is as follows:‑ Land Revenue means land revenue assessed on any land under the Punjab Land Revenue Act, 1887. The criterion for deciding the matter in dispute, therefore, is whether the Khush Hasiyyati is levied under the Punjab Land Revenue Act. I have already made clear that this is the position and, therefore, the Collector and the Commissioner must be held to have given a wrong decision in favour of the respondents. For the above reasons, I would accept the four petitions for revision and direct that the Khush Hasiyyati dues paid by the respondents in the respective years should be taken into account as land revenue for purposes of assessment of the Agricultural Income Tax against them in all the four cases. K. M, A, Revision accepted,