Land and Land Revenue — Assessment, Fixation, Liability and Exemption — Land Law Notes

Land and Land Revenue — Assessment, Fixation, Liability and Exemption

Land revenue is the oldest tax in India — kings took a share of the harvest long before income tax was dreamt of. The KLR Act carries that ancient idea forward with one blunt rule that the exam loves to quote: all land is liable to pay land revenue unless it is specially exempted. Notice the direction of the presumption. The State does not have to prove your land is taxable; you must show it is exempt. Grasp that single default, and the topic — what land revenue is, who is liable, how it is assessed and when it is exempt — unfolds naturally from it.

What “land” and “land revenue” mean

Take the two words in turn. Land revenue is the annual tax (or rent) payable to the State Government on land, in recognition of the State’s paramount ownership over all land. Section 80 states the governing rule: all land, whether agricultural or non-agricultural, is liable to pay land revenue to the State Government unless specially exempted — by a special contract, by a provision of the Act, or by a government notification (which must record its reasons). This ties back to section 67, under which all land not owned by an individual — roads, riverbeds, tanks, waste — belongs to the State: the State’s title is the foundation of its right to tax.

A. The core rule — all land is liable unless exempted (s. 80)

State the rule and then its exceptions, because a rule without its exceptions is incomplete:

The presumption (s. 80). Every parcel is presumed liable to land revenue; the burden is on the holder to prove an exemption.
The exemptions. Land may be free from revenue where there is (i) a special contract with the Government, (ii) an express provision of the Act, or (iii) a notification/order of the Government exempting a class of lands, prospectively or retrospectively, with reasons recorded. The Government may also suspend or remit revenue in a bad season (s. 194).
Partly-exempt land. Where land is only partially exempt or exempt on conditions, assessment is fixed with regard to the subsisting rights (s. 83 / s. 123).

B. Who is liable to pay (s. 157)

Liability follows the interest in the land:

for unalienated land (ordinary Government-assessed land), the occupant is primarily liable;
for alienated land (where revenue rights were granted away), the superior holder is primarily liable;
the liability includes all arrears; and where the primarily-liable person defaults, the person in actual possession can be made to pay.

And the State’s claim ranks first: under section 158 the Government’s claim for land revenue has precedence over every other debt, demand or claim — mortgage, decree or attachment — against the land or holder (developed further in Topic 6).

C. How land revenue is assessed and fixed (ss. 83, 116, 122B, 79-A)

This is the “how” the essay demands:

Assessed by reference to use (s. 83). Land revenue is assessed with reference to the purpose for which the land is used — agriculture, dwelling, industrial/commercial, or other non-agricultural use. Land put to agriculture is assessed as agricultural land; a change of use can change the assessment.
Commutation (s. 83). Annual non-agricultural assessment may be commuted (bought out once for all) by paying the Government a lump sum equal to five times the annual assessment, after which the land is exempt from that annual charge.
Who fixes it. The Deputy Commissioner fixes the assessment on all non-exempt land for a prescribed period, and may revise it after that period expires (ss. 116, 122B). For a full revenue survey and settlement of a whole area, Survey/Settlement Officers determine assessment (Chapter X, ss. 114–126); a settlement is introduced for a term and then revised.
With whom the assessment is settled (s. 79-A / s. 157). The assessment is settled with the person primarily responsible to the Government for the land — the occupant or superior holder.
Prohibition of misuse. The Tahsildar or Survey Officer may prohibit the use of assessed land for certain purposes and summarily evict a person who uses it for a prohibited purpose (s. 83).

Quick orientation on the 6W:

Who — the occupant (unalienated land) or superior holder (alienated land) is liable (s. 157); the Deputy Commissioner / Settlement Officer fixes assessment.
What — land revenue is the annual tax on land; all land is liable unless specially exempted (s. 80).
When — revenue becomes due at the start of the revenue year (Topic 6); assessment is fixed for a settlement term and revised on expiry.
Where — throughout the State, on every parcel not owned by an individual and not exempt (ss. 67, 80).
Why — it is the fiscal return for the State’s paramount ownership of land, and the State’s claim ranks first (s. 158).
How — assessed by reference to use (s. 83), fixed for a term by the DC/settlement machinery (ss. 116, 122B), commutable at five times the annual charge.

Section 80, KLR Act, 1964: “All land, whether applied to agricultural or other purposes, and wherever situate, is liable to the payment of land revenue to the State Government … except such as may be wholly or partially exempted … under the provisions of any special contract with the State Government or of any law for the time being in force or of any rule or order made under this Act.”

In Simple Terms: The default is that everything pays land revenue, everywhere, whatever it is used for. Freedom from the tax is the exception, and it exists only where a contract, a law, or a proper Government order specifically grants it. So when a client says “my land is exempt”, the right question is always: exempt under what?

🧩 WORKED EXAMPLE — is the plot liable, and how much?

Facts. E owns a plot recorded as agricultural, on which he pays a small annual assessment. He begins running a godown (warehouse) on part of it and claims that, since it is “just storage”, no revenue is due.

Rule. All land is liable to land revenue unless specially exempted (s. 80); assessment is by reference to the use of the land, and non-agricultural use attracts non-agricultural assessment (s. 83); such annual assessment may be commuted at five times its amount.

Apply. E’s claim fails at s. 80 — there is no exemption. Worse, by putting the land to a non-agricultural (commercial) use he has changed the basis of assessment: the godown portion is now assessable at the higher non-agricultural rate under s. 83 (and he needed s. 95 conversion permission — see Topic 9). He could, if he wished, commute that annual charge by paying five times its yearly amount.

Conclusion. The plot is fully liable; the change of use raises, not removes, the revenue. “All land liable unless exempted” plus “assessed by use” answers the whole problem.

flowchart TD
    ROOT["Land & Land Revenue<br/>(KLR Act, Chapter VII)"]:::root
    ROOT --> RULE["s.80 CORE RULE<br/>all land liable unless specially exempted"]:::leaf
    RULE --> EX["Exemptions: special contract /<br/>provision of law / Govt notification<br/>(reasons recorded); s.194 suspend/remit"]:::leaf
    ROOT --> LIAB["s.157 WHO IS LIABLE<br/>unalienated -> occupant;<br/>alienated -> superior holder<br/>(incl. arrears)"]:::leaf
    ROOT --> ASST["ASSESSMENT & FIXATION"]:::root
    ASST --> AS1["s.83 assessed by USE;<br/>non-agri assessment commutable at 5x"]:::leaf
    ASST --> AS2["ss.116/122B fixed by Deputy Commissioner<br/>for a term, then revised"]:::leaf
    ASST --> AS3["ss.114-126 survey & settlement<br/>by Settlement Officers"]:::leaf
    ROOT --> PREC["s.158 State's claim has<br/>precedence over all other claims"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,stroke-width:1px,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Case Laws

State of Karnataka vs Shankara Textiles Mills Ltd. (1995) — to put agricultural land to non-agricultural use, permission under s. 95 is mandatory; mere payment (or non-payment) of revenue does not itself change the character of the land.
M/s. Mysore Feeds Ltd. vs State of Karnataka (1988) — levy of land revenue on a plot does not by itself prove it is agricultural; sections 83 and 95(2) show that assessment depends on actual use, and a plot not used for agriculture cannot be assumed agricultural merely because conversion permission was sought.
M.K. Devaraj vs State of Mysore (1974) — on liability for revenue (s. 157), the authorities are not confined to recovering only from the tenant or the person in possession; the provision is read in the scheme of the Act, and the primarily-liable holder remains answerable.

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