Allahabad High Court
Kribhco Shyam Fertilisers Limited vs State Of U.P. & Others on 24 January, 2011
Equivalent citations: AIR 2012 (NOC) 106 (ALL.), 2011 (5) ALJ 417
Author: Rajes Kumar
Bench: Rajes Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD Reserved AFR Civil Misc. Writ Petition No. 35909 of 2009 Kribhco Shyam Fertilizers Limited, A-10, Sector 1, Kribhco Bhawan, Noida.....Petitioner. Vs. State of U.P. and others........................................................Respondents. Hon'ble Rajes Kumar, J.
By means of the present writ petition, the petitioner is seeking the following reliefs :
(a) "Issue an appropriate writ, order and/or direction in the nature of certiorari and/or otherwise passing an order to quash the impugned order dated 28.11.2008 by the respondent no. 3 in stamp appeal no. 152 of 2006-07 whereby the order under appeal dated 12.12.2006 passed by respondent no. 2 has been upheld and consequently also quash the demand of excess stamp duty, penal interest @1.5% per month and the penalty thereon;
(b) Issue appropriate directions declaring that the stamp duty is payable only on the immovable property mentioned in the sale/conveyance deed dated 31.10.2006;
(c) Issue an appropriate writ/order and/or direction in the nature of mandamus directing the Collector/ADM to reassess/recompute the correct stamp duty in accordance to law;
(d) Issue a consequent writ of mandamus or otherwise commanding the respondent to refund the excess stamp duty, penalty and interest (charged beyond Rs.131,77,12,000/-) along with interest till realization;
(e) Dispense with the filing of the originals of the annexures;
(f) With a further prayer to pass any other additional and/or alternative relief which this Hon'ble Court deems fit and proper in the facts and circumstances of the case;
(g) Allow the writ petition with costs in favour of the petitioner.
The Chief Controlling Revenue Authority (hereinafter referred to as the "Appellate Authority") vide order dated 28.11.2008 rejected the appeal against the order of the A.D.M. (Finance & Revenue), Shahjahanpur (hereinafter referred to as "A.D.M.") dated 12.12.2006 in Stamp Case No. 115 of 2006. The A.D.M. has raised the demand towards stamp duty amounting to Rs.26,08,59,300/-, penalty Rs.1,40,700/- and interest @1.5% per month.
The brief facts giving rise to the present writ petition are as follows :
(i)The petitioner is a Company incorporated under the Indian Companies Act, 1956 having its registered office at C-165, 1st Floor Naraina Industrial Area, Phase-1, New Delhi.
(ii)Krishak Bharati Co-operative Ltd. (in short KRIBHCO) is a Company in which Government of India holds more than 50% equity shares and in turn holds 85% shares in the petitioner's Company. Thus, it is a Government Company under Section 617 of the Indian Companies Act.
(iii) M/s Shyam Basic Infrastructure Projects Pvt. Ltd. (in short SHYAM) is a Company incorporated under the Indian Companies Act. It entered into an agreement on 3.11.2005 with Oswal Chemical Fertilizers Ltd. (in short OCFL) another Company to purchase the assets of OCFL, both movable and immovable properties, for a consideration of Rs.1900 crores.
(iv)The agreement to sale provides that SHYAM includes its successors in interest, any other existing or to be incorporated body corporate of SHYAM group and permitted assigns. It also provided that the Company in addition to the above mentioned lump sum purchase price shall pay to OCFL an additional consideration equivalent to the book value on 13.1. 2006 of the current assets. The agreement has been executed on the stamp paper of Rs.100/-.
(v) The said agreement to sale was impounded by the Collector (Stamp) under Section 33 of the Indian Stamp Act as the same was executed on a stamp paper of Rs.100/- and a case was registered being case no. 107 of 2005. The petitioner executed a supplementary agreement dated 23.12.2005 in furtherance of the agreement dated 3.11.2005. The same was included in the said proceeding, viz. Case no. 107 of 2007. The Collector (Stamp) determined the deficiency in payment of stamp duty in the agreement to sale and the demand of Rupees 76 crores was raised which was paid on 31.8.2006.
(vi)The entire assets, including movable and immovable properties, have been valued as on 31st January, 2006. It was valued at Rupees 1902.50 crores. The detail of the valuation is at page 70 of the writ petition and is being referred as follows :
SL. No. Particulars Current Value Value adjustment for operating periods Asset Value as on 18.01.2006 1.0 Land & Site Development
- Land 5100 o 5100
-Site Development 5291 862 4429 2.0 Plant & Non-Plant Buildings 4694 869 3825 3.0 Process
-Plant (others) 182243 61086 121157
-Machinery 60099 20367 39732 4.0 Non-Process
-Plant (others) 707 237 470
-Machinery 1300 438 862 5.0 Office & other items, furniture & Fittings, etc. 25 0 25 6.0 Spares 2150 0 2150 7.0 Intangible Assets 12500 0 12500 Total Assets 274109 83859 190250 It appears that SHYAM has been incorporated with Kribhco Shyam Fertilizers Ltd. vide order no. 1183 SIDC-ROB-1A-Shahjahanpur Bulk Land dated 11.8.2006, U.P. State Industrial Development Corporation Ltd. (UPSIDC) had granted approval for transfer of the lease relating to 780.75 acres of leasehold land and in pursuance thereof a lease deed relating to the land was executed on 14.8.2006 in favour of the petitioner. On the said lease deed, a sum of Rs.53,87,000/- has been paid towards stamp duty.
A sale deed between the petitioner and OCFL had been executed on 31.10.2006. The stamp duty of Rs.164,71,40,700/- was paid on a consideration of Rs.16,47,14,00,000/-. Some of the relevant clauses of the sale deed are as follows:
D. "On 3rd November, 2005, the VENDOR entered into a Memorandum of Understanding, titled as an "Agreement to Sell" (hereinafter referred to as "the Agreement") with Shyam Basic Infrastructure Projects Private Limited, a company incorporated and existing under the provisions of the Companies Act, 1956 and having its registered office at B-2D, Shiv Marg, Bani Park, Jaipur, Rajasthan (hereinafter referred to as the "SHYAM") for sale of the Undertaking 'as a going concern' on 'as is where is basis' on a lump sum consideration for Rs.1,900.00 crores.
F. As per the terms and conditions of the Agreement it was agreed and understood between OCFL and SHYAM that the Sale Deed would be executed in favour of SHYAM or KRIBHCO or any of their nominee or a Joint Venture or a Special Purpose Vehicle (SPV) formed for this purpose.
G. Pursuant to the Agreement, SHYAM in joint venture with KRIBHCO have incorporated a SPV in the name and style of KSFL.
L. The PDIL has submitted a valuation report dated 6th April, 2006. KSFL has accepted the said report to the extent of its valuation of movable and immovable assets including land, plant and non-plant buildings (Township), plant and machinery etc. As per the valuation report the value of the 'immovable assets' (excluding leasehold land) comprising part of the Undertaking (hereinafter referred to as "the property" mentioned in detail in Schedule 'A' annexed hereto) is Rs.1647,14,00,000/- (Rupees one thousand six hundred forty-seven crore fourteen lakhs) only.
M. By an order No. 1183 SIDC-ROB-1A-Shahjahanpur Bulk Land dated 11.08.2006, U.P. State Industrial Development Corporation Ltd. (UPSIDC) had granted approval for the transfer of the lease relating to the 780.75 acres of leasehold land of the undertaking in favour of the VENDEE.
N. Pursuant to the approval dated 11.08.2006 UPSIDC has executed a lease deed relating to the land of the undertaking on 14th August, 2006 in favour of the VENDEE.
O. VENDEE has paid a stamp duty of Rs.53,87,000/- (Rupees fifty three lac eighty seven thousand only) on the said lease deed and the same is registered with the office of Sub-Registrar of Assurances at Shahjahanpur at Sl. No. 7696 Zild no. 4287 and page no. 191 to 226, Book No. 1 dated 14th August, 2006 and, therefore, land and site development valued at Rupees 5100 and 4429 lakhs respectively i.e. total of Rupees 9529 lakhs is not part of this sale deed.
P. The estimated asset value of office, other equipments, vehicles, furnitures & fittings and machinery spares, estimated value at Rupees 2175 lakhs are in the nature of movable property, and, therefore, does not form part of this sale deed. The possession of these items has been taken by delivery.
Q. The non-process plant and machinery of estimated value of Rupees 1332 lakhs is also in the nature of movable property and, therefore, does not form part of this sale deed. The possession of these items has been taken by delivery.
R. The intangible benefits from an acquisition of an undertaking includes skilled and trained men power, synergic value, availability of natural gas at subsidised rates (APM price level) etc. VENDEE has valued the intangible benefits at Rupees 12500 lakhs. The consideration paid towards the said intangible benefits is also not part of this sale deed.
S. This sale deed therefore covers only plant and non-plant buildings, process plant and machinery which are in the nature of immovable property and has been estimated at value of Rupees 3825 lakhs, Rupees 121157 lakhs and Rupees 39732 lakhs respectively i.e. total of Rupees 164714 lakhs.
T. That through this sale deed the immovable property mentioned in para "S" above is being transferred and this deed does not cover the transfer of any other movable/immovable or any other tangible or intangible assets being part of the offered assets/undertaking for which separate consideration has been paid. No other movable or immovable properties including the leasehold land are covered or transferred under this sale deed.
V. That the VENDEE has already paid the stamp duty of Rupees 100 on the Agreement dated 3rd November, 2005, Rupees 400 lakhs worth of stamps were purchased on 30th March, 2006 and Rupees 7600 lakhs stamp duty was paid on dated 31st August, 2006 pursuant to an order in stamp case no. 107/105/97/05. These stamps are liable to be adjusted towards the total stamp duty payable on this sale deed.
W. That the stamp duty @ 8% on the value of "the property", which is being transferred through this sale deed, is at Rupees 13177.12 lakhs. Additional stamp duty payable @ 2% is at Rupees 3294.28 lakhs. Thus, the total stamp duty payable on the present/conveyance deed is at Rupees 16471.40 lakhs. As such on the present sale deed after adjustment of the stamp duty of Rupees 7600.001 lakhs (already paid) the stamp duty of Rs.8871.399 lakhs (including the stamps of Rupees 400 lakhs) i.e. the balance amount of the total stamp duty is being paid."
After the execution of the aforesaid sale deed, on the report of the Sub-Registrar, Sadar, proceeding under Section 33/47-A (1) of the Act was initiated. A notice was issued to the petitioner stating therein that in the agreement to sale dated 3.11.2005, the amount of consideration has been shown at Rupees 1900 crores and at its page no. 6 it has been clearly stated that the total amount of the current assets mentioned in Schedule D would be as per the book value dated 13.1.2006; the assessment of free hold land and covered area would be as per the circle rate dated 22.6.2006; whereas as per the directions mentioned on page 24 of the aforesaid list, the valuation of the machinery and immovable property would be done by the assessment committee of experts constituted by the Collector; whereas on the said deed dated 31.10.2006 stamp duty has not been paid on the fullest consideration.
The petitioner filed its reply, denied the allegations and submitted that the stamp duty has been correctly paid on the valuation of the immovable properties which were the subject matter of the sale deed and there was no deficiency.
The A.D.M., vide order dated 12.12.2006, held that the entire assets of the company, including movable and immovable properties, have been transferred on Rupees 1908 crores which consists of the value of Rupees 1900 crores as per agreement to sale and further the book value of the current assets as on 31.1.2006 determined at Rupees 8 crores, on which stamp duty at Rs.190,80,00000/- has been held payable. The adjustment of a sum of Rupees 76 crores which has been paid in pursuance of the agreement to sale has been allowed and a demand of Rupees 26,10,00,000/- (twenty six crores ten lakhs) has been raised towards stamp duty. A sum of Rs.1,40,700/- has been levied towards penalty and interest @ 1.5% per month has been charged.
The order of the A.D.M. has been confirmed in appeal, against which the present writ petition is being filed.
Heard Sri Shashi Nandan, Senior Advocate, assisted by S/Sri Ashish Mishra and Arun Monga, learned counsel for the petitioner and Sri Sanjay Goswami, Additional Chief Standing Counsel, assisted by Sri Nimai Das, Standing Counsel appearing on behalf of the respondents.
Learned counsel for the petitioner submitted that;
(i)under the instrument of sale deed only plant and non-plant buildings, process plant and machinery which were in the nature of immovable property valued at Rupees 3825 lakhs, Rupees 121157 lakhs and Rupees 39732 lakhs respectively i.e. total for Rupees 164714 lakhs have only been sold and the stamp duty has been paid on the said amount.
(ii) No stamp duty is payable on the value of the movables which are not part of the sale deed and have been specifically excluded, namely; value of the office, other equipments vehicles, furnitures & fittings and machinery spares valued at Rupees 2175 lakhs, non-process plant and machinery valued at Rupees 1332 lakhs, the intangible benefits valued at Rupees 12,500 lakhs.
(iii) Under the registration Act the requirement is to get the sale deed registered in respect of the immovable properties. The registration of the movable property is not compulsory. Under Section 18 it is optional. Under clause (1) of Article 3 of Schedule 1-B of the Indian Stamp Act, the rate of stamp duty is provided for immovable properties @ 8% of market value. Clause (b) of Article 23 of Schedule 1-B provides 2% stamp duty in case of registration of movable property.
(iv) The A.D.M. in its order has not disputed that the alleged movable properties mentioned in the sale deed are not movable properties and are immovable properties. The stamp duty is payable on the value of the immovable property, which is subject matter of the sale deed. The properties and its value mentioned in the agreement to sale is wholly irrelevant and the stamp duty cannot be demanded on the value of the assets mentioned in the agreement to sale, which are not subject matter of transfer under the impugned sale deed. Reliance is placed on the Full Bench decision of this Court in the case of M/s. Somaiya Organics India Ltd. and another Vs. Chief Controlling Revenue Authority, reported in AIR 1972 Allahabad-252 (para-3).
(v) Under the lease deed, the vendee could transfer the leasehold right on the permission being granted by the vendor UPSIDC. In the present case the UPSIDC has not granted permission to the seller lessee to transfer the leasehold right and has executed a separate lease deed in favour of the petitioner on consideration of the leasehold right. The transfer of leasehold right has been made prior to the execution of the impugned sale deed in respect of other immovable properties. When the UPSIDC has not granted permission, the leasehold right has been surrendered and a fresh lease deed has been executed. This fact has been stated in paragraph 10.23 of the writ petition, which has not been denied in paragraph-27 of the counter affidavit. Prior to the sale deed, the UPSIDC has already transferred the leasehold right to the petitioner and seller ceased with the right to transfer any title over the land on the date of the sale deed.
(vi) The development charges were the labour charges for levelling the land, etc. A sum of Rupees 8 crores is the value of current movable assets and not of immovable and, therefore, its value cannot subject to stamp duty.
(vii) The stamp duty cannot be demanded without the authority of law. The petitioner was forced to pay the stamp duty on the movables under the agreement to sale and, therefore, it is entitled for the adjustment or refund.
Sri Sanjay Goswami, Additional Chief Standing Counsel has not disputed that under the Registration Act, the registration of sale deed in respect of immovable property is only necessary. Under the Indian Stamp Act, the stamp duty is payable on the instrument of the immovable property under clause (a) of Article 23 of Schedule 1-B on the market value of immovable properties. The registration of the movable property is optional. In case of registration of movable property, the stamp duty is payable under Clause (b) of Article 23 of Schedule 1-B, which is 2%.
The agreement to sale for the entire assets both movable and immovable were for Rupees 1900 crores. Under the agreement, there was also stipulation for payment of additional amount equivalent to the book value as on 13.1.2006. The book value has been determined at Rupees 8 crores. It is not in dispute that the entire Rupees 1908 crores was paid by the petitioner to the seller. The sale consideration of the movable and immovable properties at Rupees 1908 crores has been accepted as it was higher than the valuation report.
It is true that the stamp duty is not chargeable on the value of movable goods. Therefore, no stamp duty can be charged on the value of office, other equipments, vehicles, furnitures, fittings and plant and machinery spares valued at Rupees 2175 lakhs; non-process plant and machinery valued at Rupees.1332 lakhs; intangible benefits valued at Rupees 12500 lakhs as no sale deed has been executed in respect thereof. The total comes to Rupees 16007 lakhs.
It is not disputed that the total sale consideration of Rs.1908 crores was paid by the petitioner for the property including movable and intangible assets, in respect of which no sale deed was executed. The agreement to sale provides for the transfer of the entire plant through a sale deed. The petitioner at best can reduce the value of 16007 lacs of movable assets from 1908 crores for the purposes of payment of stamp duty, without seeking any adjustment of the duty already paid in respect of movable and intangible assets on the agreement to sale. Thus, the petitioner is liable to pay the stamp duty on 1908 crores minus 160.07 crores.
So far the question of double stamp duty on lease land, as raised by the petitioner, is concerned, it is submitted that the entire plant is established on the land in question and was operational at the time of execution of the sale deed. It is an admitted case of the petitioner that the vendor has a right on the lease land which belonged to UPSIDC. The petitioner in paragraphs 10.23, 10.24 and 10.25 admitted these rights of the vendor, which were surrendered to the UPSIDC in favour of the petitioner in pursuance of the agreement to sale. These rights were relating to immovable property and the land beneath the plant cannot legally be separated as the same goes with the plants, machineries and buildings permanently fasten to the earth/land. In other words, it was a whole sum sale of fertilizer plant and other buildings.
The stamp duty on the lease deed dated 11.8.2006 cannot be adjusted under the proviso of Aticle 23 of Schedule 1-B as the lease deed has been executed between the UPSIDC and the petitioner and not between the same parties of agreement to sale.
The stamp duty paid on agreement to sale can be allowed only proportionately, namely, to the extent of the amount of the stamp duty paid under the agreement to sale, which are subject matter of sale deed and not of the amount of the stamp duty paid on other assets, which are not the subject matter of the sale deed.
So far the movable assets and its valuation is concerned, it is submitted that the petitioner at best could seek the modification of the orders to the extent they determined the deficiency of stamp duty on the movable properties. In the event the submission is accepted by this Hon'ble Court, the petitioner would not be entitled to adjustment of stamp duty paid in respect of movable assets on the agreement to sale, as no sale deed for movable assets, as per own case of the petitioner, was executed in pursuance of the aforesaid agreement to sale.
He placed reliance on the decision of the apex Court in the case of Duncans Industries Ltd. Vs. State of U.P. and others, reported in (2000) 1 SCC-633.
Having heard learned counsel for the parties, I have considered the rival submissions and the documents available on record.
Some of the relevant provisions of the Act, which are necessary for adjudication of the issue, are as follows:
Section 2 (10) "Conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I. Section 2 (14) "Instrument" includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or record.
Section 3 (aa) every instrument mentioned in Schedule 1-A or 1-B which not having been previously executed by any person was executed in Uttar Pradesh-
(i)in the case of instruments mentioned in Schedule 1-A on or after the date on which the U.P. Stamp (Amendment) Act, 1948, came into force, and
(ii)in the case of instruments mentioned in Schedule 1-B on or after the date on which the U.P. Stamp (Amendment) Act, 1952, comes into force;
Section 17. Instruments executed in India.-All instrument chargeable with duty and executed by any person in [India] shall be stamped before or at the time of execution.
Article 23 of Schedule 1-B Conveyance [as defined by section 2 (10) not being a Transfer charged or exempted under No. 62-
(a) if relating to immovable property where the amount or Sixty rupees
value of the consideration of such conveyance as set
forth therein or the market value of the immovable
property which is the subject of such conveyance,
whichever is greater does not exceed Rs.500.
Where it exceeds Rs. 500 One hundred and twenty-five rupees
but does not exceed Rs. 1,000.
and for every Rs.1,000 or part One hundred and twenty-five rupees
thereof in excess of Rs.1,000.
Provided that the duty payable shall
be rounded off to the next multiple of
ten rupees.
(b) if relating to movable property where Twenty rupees.
the amount or value of the consideration
of such conveyance as set forth therein
does not exceed Rs.1,000.
and for every Rs.1,000 or part thereof Twenty rupees.
in excess of Rs.1,000.
Exemption
Assignment of copyright in musical
works by resident of, or first
published in India.
Explanation
For the purpose of this Article, in the case
of an agreement to sell an immovable
property, where possession is delivered
before the execution or at the time of
execution, or is agreed to be delivered
without executing the conveyance, the
agreement shall be deemed to be a
conveyance and stamp duty thereon
shall be payable accordingly :
Provided that the provisions of Section 47-A
shall mutatis mutandis apply to such
agreement :
Provided further that when conveyance in
pursuance of such agreement is executed,
the stamp duty paid on the agreement shall
be adjusted towards the total duty payable
on the conveyance].
The agreement to sale is Annexure-2 to the writ petition. This agreement was for the moveable and immovable assets of Ammonia Urea complex. Under the heading recitals, all assets situated at Ammonia Urea complex (movable and immovable) including manufacturing facilities including off-sites, ammonia storage tanks and material handling facilities etc. and all other utilities and moveable assets and stores and spares etc. have been described as assets. The land and building of the complex have been described as Plant Land assets. Township built has been described as Township Land Assets and the parties had agreed to enter into an agreement for assets Plant Land Assets and Township Land Assets, which are collectively called as Offered Assets. A sum of Rs.1900 crores has been determined as a consideration for the Offered Assets. Apart from the aforesaid amount, in addition to the above lump sum purchase consideration SHYAM was pay to OCFL an additional consideration equivalent to the book value as on 13.1.2006 of the current assets. Therefore, it is clear that the agreement to sale was both movable and for immovables. In pursuance of the said agreement, the sale deed has been executed, and there is a clear recital in this regard, in the impugned sale deed itself. At the time of the execution of the sale deed, the value of the movable and immovables have been determined. The valuation of various assets, namely, movables and immovables, referred herein-above, have not been disputed by any of the authority. The determination of said value is referred herein-above. In the impugned sale deed, it is clear that non-process plant and machinery, office, other equipments, vehicles, furnitures, fittings and machinery parts and intangible benefits would not be part of the sale deed. It has also been clearly recited that the sale deed covers only plant and non-plant building, process plant and machinery, which are in the nature of immovable property. The total value of which has been taken at Rs.16474 lacs. The Collector in its order demanded the duty on the entire value of the assets including movables and immovables, which have been determined under the agreement to sale, namely, Rs.1900 crores stipulated in lump sum for the assets, plus Rs.8 crores, which was the additional value determined as on 13.1.2006.
In my view, the order of the Collector is not legally correct and sustainable for the reasons stated below :
(i)Section 17 of the Registration Act provides registration of immovable property only. Registration of movable property is not compulsory. Under Section 18 it is optional. The separate stamp duty is also provided for the registration of movable property under Clause (b) of Article 23 of Schedule 1-B.
(ii)The authorities below have not disputed in their orders the value of non-process plant and machinery at Rs.1332 lacs; value of the office, other equipments, vehicles, furnitures & fittings and machinery spares at Rs.2175 lacs and the value of intangible benefits at Rs.12500 Lacs. These assets are not part of the sale deed They have been specifically excluded in the sale deed being movable. It is not the case of the respondents that the aforesaid assets are immovable. Therefore, no duty can be demanded on the aforesaid value and their value is liable to be excluded.
(iii) Subject of instrument is immovable properties mentioned in the instrument. Properties, those were not immovable properties have been excluded from the instrument, their value cannot be chargeable to duty.
In the case of M/s. Somaiya Organics India Ltd. and another Vs. Chief Controlling Revenue Authority (Supra), the Full Bench of this Court held (i)- Before Section 24 of the Act can apply, it must be shown that the property which was transferred, was subject, either certainly or contingently to the payment of any money, whether constituting a charge or encumbrance upon the property or not. (ii) Although, there is a recital in the sale-deed that the vendor i.e. Messrs. Godavari Sugar Mills have resolved to sell all the properties mentioned in Schedule "A" with all the buildings, situated on the aforesaid land and all the machinery either fixed in the earth or lying on the surface on favour of the vendees for a consideration of Rs.36,64,678/- yet no effort was made by the vendor to effect the transfer of what was branded as moveable items by the deed in question. The wordings of the deed are clear and only one conclusion is possible, that the deed intended to transfer only the property mentioned in Schedule "A" and the buildings situated therein. It did not purport to transfer the other properties which were described as moveable properties. The authorities constituted under the Act have to adjudge the duty chargeable on a deed as presented by the executants. It is not permissible for them to embark upon an enquiry as to what the intention of the parties was when executing the deed, and then to fix a duty on such items of property which in their opinion the parties contemplated to transfer. The fact that the sale deed contains recitals in respect of other transactions between the parties would not affect the duty, in case the deed which is sought to be registered does not affect the transfer of these properties.
(iv)The submissions of the learned Standing Counsel that the adjustment of the entire duty paid under the agreement to sale cannot be adjusted and only proportionate stamp duty paid on the immovable property is adjustable, cannot be accepted. The Collector has given adjustment of the entire duty paid at Rs.76 crores under the agreement to sale with the amount of stamp duty payable. I do not find any error in this adjustment. The second proviso to Explanation of Clause (b) of Article 23 of Schedule 1-B provides that when a conveyance in pursuance of such agreement is executed, the stamp duty paid on the agreement shall be adjusted towards the total duty payable on the conveyance. It does not contemplate any proportionate adjustment of the stamp duty paid under the agreement to sale. There is no dispute that the impugned sale deed has been executed in pursuance of the agreement to sale dated 3.11.2005 and there is a clear recital in this regard in the sale deed itself.
Now two questions remain for consideration.
(i)Whether the value of immovable assets, namely, plant and non-plant building, process plant and machinery valued at Rs.3825 lacs, Rs.121157 lacs and Rs.39732 lacs respectively total Rs.164714 lacs is the correct market value of the said assets?
(ii)Whether the stamp duty paid on the lease agreement executed by the UPSIDC in favour of the petitioner transferring lease hold right be adjusted with the amount of stamp duty payable?
So far as the issue relating to the valuation of the immovable property is concerned, learned counsel for the petitioner submitted that the valuation of the property has not been disputed by any of the authority, therefore, there is no reason to dispute the same.
Learned Standing Counsel submitted that since the entire consideration fixed under the agreement to sale has been taken as the market value, which was higher than the market value determined, therefore, there was no occasion to determine the market value of the immovable assets separately. According to him, after the exclusion of the value of the movable properties from Rs.1908 crores, which has been paid by the petitioner as a consideration of movables and immovables, the balance amount should be taken as the market value of the immovable property. At the most, the value for the lease hold right transferred by UPSIDC to petitioner under the separate lease hold agreement, on which the separate stamp duty has been paid, can also be considered.
In my view, this aspect of the matter requires consideration by the authorities below. None of the authorities has gone into this question. Therefore, it would be appropriate to remand the matter to the Collector to adjudicate the issue relating to the valuation of the immovable properties afresh in accordance with the law after considering the submissions of the petitioner.
So far as the second issue relating to the claim of adjustment of stamp duty paid on agreement to sale executed between the UPSIDC and the petitioner for transferring of lease hold right is concerned, in my view, the claim cannot be allowed. The lease agreement has not been executed between the parties of impugned sale deed and in pursuance of said lease agreement. Under the said lease agreement fresh lease hold right has been transferred to the petitioner. Therefore, claim cannot be allowed under said proviso to Explanation of Clause (b) of Article 23 of Schedule 1-B. The decision of the Apex Court in the case of Duncans Industries Ltd. Vs. State of U.P. and others (Supra) does not apply to the present case. The Apex Court in the said case has treated the plant and machinery embedded in the earth as an immovable property, which has been claimed as a movable property and was not made part of the agreement. On the facts and circumstances, the Apex Court has held that the stamp duty is payable on the value of such plant and machineries, which were embedded to the earth and falls within the purview of immovable assets. There is no such situation in the present case. The assets, which have been claimed as a movable, has been accepted by the authorities below. It is not the case of the respondent that the assets, which have been claimed as a movable are immovable.
In the result, the writ petition is allowed in part. The order of the A.D.M. (Finance & Revenue), Shahjahanpur dated 12.12.2006 in Stamp Case No. 115 of 2006 and the order of the Chief Controlling Revenue Authority dated 28.11.2008 are set aside. The matter is remanded back to the A.D.M. (Finance & Revenue), Shahjahanpur to decide the Stamp Case No. 115 of 2006 afresh in the light of the observations made above in accordance to law after giving opportunity of hearing.
Dated: 24th January, 2011 OP