P L D 1959 (W (PLP)

KAYANI, C. J.--‑In assessing agricultural income‑tax on the income of Malik Khizar Hayat Khan Tiwana on the basis of "total land revenue" payable by him during the years 1948‑49, 50‑51 and 51‑52, the Collector excluded the water‑advantage rate called "Khush haisiyyati" from the land revenue, wherefore, the Pun jab Province filed an appeal to the Commissioner and having failed before him, went on the revision side to the Board of Revenue which decided the matter against Malik Khazir Hayat Khan. He has, therefore, brought a petition in this Court praying for a writ of certiorari quashing the proceedings in the Board of Revenue for patent error of law, and for a writ of mandamus directing the Province to refrain from assessing or collecting any agricultural income‑tax on the basis approved by the Board of Revenue.

2. The Agricultural Income‑tax Acts are annual Acts and the Act of 1950 provided in section 2 (1) that "a tax (to be called the Agricultural Income‑tax) shall be levied, and collected in respect of income from agricultural land for the year 1950‑51 (comprising Rabi 1950 and Kharif 1950) at the rates specified in the Schedule * * * * ". In subsection (2) it is provided that the tax "shall be assessed on the basis of the total land revenue which was payable by an owner of agricultural, land in respect of the year 1949‑50 (comprising Rabi 1949 and Kharif 1949)". In section 11 clause (3), "land revenue" has been defined to mean "land revenue assessed on any land under the Punjab Land Revenue Act, 1887, and where any land is not so assessed, the land revenue assessed on similar land in the same estate or assessment circle".

3. The question, therefore, is whether the water‑advantage a rate called "khush haisiyyati" is land revenue assesseed under the Punjab Land Revenue Act. The record of rights pertaining to the last Settlement shows two separate amounts to be due from the petitioner, one as land revenue, the other as khush haisiyyati dues. The presumption, therefore, is that khush haisiyyati dues are not a part of land revenue. It should also be stated here that while land revenue for this estate is a fixed amount payable, whether any crop is or is not grown on the land, the water‑advantage rate is charged only when there is a crop growing and water is used on it. It is levied due to the additional advantage which a crop obtains by reason of canal irrigation.

4. The following passage from para. 445 of Douie's Settle ment Manual throws further light on the levy of the water- advantage rate :‑ " The State, as supreme landlord, has a right to a share of any increase of rent due to the introduction of canal irrigation by its own agency or by that of private individuals. * * * * * * * * * * * The enhanced assessment claimable on account of the introduction of canal irrigation maybe determined in two ways. The land may simply be rated as irrigated, no attempt being made to discriminate the portion of the assessment which is due to irrigation. This is the method by which the lands watered by perennial canals were assessed in our earliest Settlements, and the assessments of lands dependent on some of the inundation canals are still of this description. Mr. Prinsep initiated the plan of dividing the assessment into two parts, the first representing the revenue Claimable from the land in its unirrigated aspect, and the second that arising from the land‑owners' increased profits due to irrigation. The latter is described as 'water‑advantage reveuue or canal‑advantage revenue (vernacular khush haisiyyati). This revenue Mr. Prinsep took by means of a water‑advantage rate levied on the area irrigated at each harvest. The owner's rate defined in paragraphs 37‑39, Act Vill of 1873 (The Northern India Canal and Drainage Act) was the water‑advantage rate under another name."

5. It seems clear that properly speaking it is not "land" revenue, that is to say, revenue on the ownership of land. It is levied by reason of the advantage that the owner derives from the use of water. This accords with our common conception of land revenue and we have no doubt that when the legislature A wanted to make land revenue the basis of assessment, it had in mind the land revenue proper and not any additional advantage for the use of water.

6. The respective definitions of 'land revenue' in the land Revenue Act and the Tenancy Act, which were legislated in the same year one after the other, may also throw some light on the subject. Under section 3 clause (6) of the Land Revenue Act, ` "land revenue" includes assigned land‑revenue and any sum payable in respect of land, by way of quit‑rent or of commutation for service, to the Crown or to a person whom the Crown has assigned the right to receive the payment". Under section 4 clause (10) of the Tenancy Act, "land revenue" means land revenue assessed under any law for the time being in force or assessable under the Punjab Land Revenue Act, 1887, and includes‑ (a) any rate imposed in respect of the increased value of land due to irrigation, and (b)* * * * * * * * * * * *

7. Thus, while the definition in the Tenancy Act expressly includes the water‑advantage rate in the meaning of land revenue, the definition in the Land Revenue Act, while including other matters, makes no mention of the water‑advantage rate.

8. Again, in section 29 of the Land Revenue Act there is a mention of the water‑advantage rate in the following context. Under subsection (1) the Government could impose a village officers' cess at a rate not exceeding half anna for every rupee of the annual value for remunerating the headman. Under sub section (2) annual value has been defined to mean double the land revenue for the time being assessed on any land, "provided that, in any tract in which, under the settlement for the time being in force, the improvement of the land due to canal -irrigation has been excluded from account in assessing the land revenue and a rate has been imposed in respect of such improve ment, that rate shall be added to the land revenue for the purpose of computing the annual value". This visualizes a separate assessment of water‑advantage rate, and it was argued that where the intention was to include water‑advantage rate for the purpose of determining annual value, an express provision was made. In the absence of this proviso to section 29, annual value would have been calculated on the basis of land revenue as it stood, without the water‑advantage rate.

9. Assessment of land revenue takes place in accordance with the provisions of Chapter V of the Land Revenue Act which begins with section

48. Under subsection (4), "land revenue may be assessed‑ (a) as a fixed annual charge (b) in the form of prescribed rates per acre or other unit of area applicable to the area recorded as sown, matured or cultivated during any harvest or during any year."

10. There are thus two separate modes of assessment, one called fixed and the other fluctuating. It is not possible to say, as has been argued on behalf of the Province, that in respect of the same land there can be two assessments, one fixed, the other fluctuating. Now, since the land revenue in respect of the petitioner's land is fixed, it cannot be said to include as land revenue another due like the khush haisiyyati tax which, by reason of its very incidence, is fluctuating. Under section 61 (1), in the case of every estate, the entire estate and the landowners jointly and severally are liable for the land revenue for the time being assessed on the estate. If land revenue included the water -advantage rate, then even those who were not liable for such rate because they had not used water would be liable for its payment jointly with those who had used water. This, however, has never happened, for water‑advantage rate cannot be charged on the whole estate. It is charged on the land which receives water in a particular year.

11. It has been noticed that land revenue has been defined in section 11, clause (3) of the Punjab Agricultural Income‑tax Act, 1950, as "land revenue assessed on any land under the Punjab Land Revenue Act, 1887, and where any land is not so assessed, the land revenue assessed on similar land in the same estate or assessment circle". Now, if land revenue included the water‑advantage rate and "similar land in the same estate" were liable not only to land revenue proper but also to water‑advantage rate, then while determining the assessment in respect of any land which has not been assessed, we would be including water advantage‑rate, although no such rate was payable by the land owner by rea3on of the fact that he had not used water.

12. These considerations make us think that neither the Land Revenue Act nor the Agricultural Income‑tax contemplated the water‑advantage rate as a part of land revenue except where the assessment was calculated on the basis of net assets in the irrigated aspect.

13. The learned counsel for the Province referred to para. 35 of Wilson's Settlement Report, where it is stated that the actual collections of land revenue embrace other items besides those that appear on the fixed revenue roll, including, among other things, the water‑advantage revenue, and argued that the latter was thus treated as part of land revenue. What Wilson has said, however, lends strong colour to the argument that although the water‑advantage revenue is not, strictly speaking, land revenue, when land revenue is actually collected and a revenue roll or Fard Bachh is prepared, it is made to include certain other dues like the water‑advantage rate "and sums realised for grazing and sale of sajji on State lands". If the argument of the learned counsel for the Province had any force, then the sums realised for the sake of sajji will also be land revenue.

14. The Board of Revenue based its decision on the circum stance that the water‑advantage rate was levied under the Punjab Land Revenue Act. The following passage from the judgment of the Board lucidly presents the argument which appealed to it .‑ "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 haisiyyati is levied under the Punjab Land Revenue Act. I have already made clear that this is the position," The earlier passage to which reference has been made is as follows : "The khush haisiyyati was imposed by the Provincial Government 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 haisiyyati must be accepted as proposals made under the Act and consequently the orders passed on such proposals are orders passed under the Land Revenue Act." What seems to have escaped the notice of the Board is that according to the definition in the Agricultural Income‑tax Act, land revenue means "land revenue" assessed on any land under the Punjab Land Revenue Act, and not any revenue or cess or rate assessed on any land under the Punjab Land Revenue Act. In other words, not only should the assessment be made under the Land Revenue Act, what is assessed should also be assessed as land revenue. The Act enables assessment of other things also, apart from land revenue and the water‑advantage rate. These have been described in section 98 (a) as "fees, fines, costs and other charges, including the village‑officers' cess" and are all recoverable as arrears of land revenue. This does not however, mean that they can all be included in land' revenue.

15. Even if two interpretations were possible in an income tax statute, the one favourable to the subject should be adopted. This has been pointed out by the Commissioner also in his judgment. In the present case, we think that we would be straining the meaning of the term "land revenue" if we were to include in it a charge which has in the revenue records been shown quite distinct from land revenue and which, in the two principal Land Acts, was expressly mentioned where it was intended to be included.

16. We accept the petition with costs and issue the direction for which the petitioner has prayed. K. B. A. Petition accepted.