In Brief
The State of Kerala challenged the High Court's interpretation of a government notification exempting conversion fees for paddy land up to 25 cents. The respondent, seeking to change the nature of her 14.57-acre property to secure education loans, was directed to pay 10% of fair value as conversion fee. The High Court held that the fee applied only to the land exceeding 25 cents. The Supreme Court overruled this, holding that the notification creates two distinct classes: lands up to 25 cents (exempt) and lands exceeding 25 cents (fully subject to fee). The exemption cannot be deducted from larger holdings. The Court emphasized strict interpretation of exemptions and the State's power to classify reasonably under Article 14.
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