The Madhya Pradesh Land Revenue Code, 1959, establishes a fundamental principle of land tenure in the state: State ownership in all lands. This means that ultimately, all land within the state belongs to the government. While individuals or entities may hold various rights over land, such as 'Bhumiswami' rights (which are akin to proprietary rights), these rights are derived from the State and are not absolute in the sense of paramount title. The State retains the ultimate ownership and the power to regulate land use, acquire land for public purposes, and impose taxes or revenue on it.

Flowing from this principle of State ownership is the liability of land to payment of land revenue. Every person holding land from the State, regardless of the nature of their tenure (e.g., Bhumiswami), is generally liable to pay land revenue to the State Government. This payment is a fundamental obligation for the privilege of holding and using the land. Land revenue is a charge on the land itself, and its non-payment can lead to various coercive measures, including attachment and sale of the land.

Exceptions to Land Revenue Liability: While the general rule is that all land is liable for revenue, there are certain exceptions:

1. Specific Exemptions by Law/Notification: The State Government may, by notification, exempt certain classes of land or specific lands from the payment of land revenue, either wholly or partially, and for a specified period or indefinitely. This could include lands used for public, charitable, or religious purposes, or very small holdings below a certain threshold.
2. Revenue-Free Grants: Historically, some lands were granted revenue-free by rulers or governments for specific services or as rewards. While many such grants have been abolished or converted, some might still exist under specific legal provisions.
3. Urban Lands: In certain urban areas, land may be subject to municipal taxes or other local rates instead of, or in addition to, traditional land revenue, as per specific municipal laws.

How Land Revenue is Assessed: Land revenue is assessed based on a systematic process, primarily during settlement operations or revisions conducted by the revenue authorities. The assessment takes into account various factors to determine the revenue payable, including:

1. Soil Classification: The quality and fertility of the soil.
2. Irrigation Facilities: Availability and type of irrigation (e.g., canal, well, rain-fed).
3. Crop Pattern and Productivity: The types of crops grown and the average yield.
4. Market Value: The prevailing market value of the land in the area.
5. Location: Proximity to markets, roads, and urban centers.
6. Access to Amenities: Availability of infrastructure and services.

Revenue officers, such as the Collector, Sub-Divisional Officer, and Tehsildar, are responsible for conducting these assessments. The land is often divided into 'revenue groups' or 'assessment circles' based on similar characteristics. The assessment is typically fixed for a period (e.g., 30 years) and is subject to revision at the end of that period, taking into account changes in economic conditions and land value. The Code provides detailed rules and procedures for the assessment, collection, and remission of land revenue.