Allahabad High Court
Dr. R.M. Sinha vs Chief Controlling Revenue ... on 10 April, 2023
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD Reserved Case :- WRIT - C No. - 33738 of 2021 Petitioner :- Dr. R.M. Sinha Respondent :- Chief Controlling Revenue Authorit/Board Of Revenue Alld Counsel for Petitioner :- Vipin Sinha,Devansh Rathore,Kalpana Sinha,Navin Sinha Counsel for Respondent :- C.S.C. Hon'ble Pankaj Bhatia,J.
1. The present petition has been filed challenging the order dated 09.12.2003 passed by the respondent no.1, Chief Controlling Revenue Authority/ Board of Revenue, Allahabad as well as the order dated 30.12.2003 passed by the respondent no.2, Deputy Commissioner (Stamps), Jhansi, whereby the deficiency of stamp duty has been assessed against the petitioner.
2. The facts in brief are that the petitioner purchased a property vide sale deed dated 30.01.2001 situate at Civil Lines, Jhansi along with constructions existed thereupon from the owner of the said property, namely, M/s Sriniwas Steels Limited (in short ''the Company'). The sale deed was executed by the constituted attorney holder Sri Pankaj Goel. It transpires from the record that in respect of the same property, an unregistered agreement to sale dated 28.08.1992 was executed by the Company in favour of Sri K.K. Goel, HUF. The said agreement to sale was neither registered nor stamped. This fact came to the knowledge of the petitioner, thus, to avoid any further complications in the sale deed executed in favour of the petitioner on 30.01.2001, the said Sri K.K. Goel, HUF was made a confirming party to the said sale deed.
3. After the execution of the sale deed dated 30.01.2001, a notice dated 25.10.2002 was served on the petitioner calling upon to show cause as to why, the deficiency of stamp of Rs.3,61,145/- may not be assessed and collected from him. The petitioner was further called upon to show cause as to why the penalty equivalent to 10 times should not be imposed upon the petitioner in respect of the sale deed executed on 30.01.2001.
4. The petitioner filed a reply to the said show cause notice and took a ground that no material was disclosed as to how an opinion was formed with regard to the deficiency of stamp duty, thereafter, the petitioner was served with a report of Deputy Registrar, Jhansi, which was the basis on which the show cause notice was issued.
5. The petitioner once again filed a detailed objections on 20.01.2003 and 21.03.2003. Simultaneous notice was also issued by the respondents to the confirming party, namely, Sri K.K. Goel, HUF, who also filed his objections.
6. After considering the objections, an order came to be passed, whereby in respect of the property purchased vide sale deed dated 30.01.2001, a deficiency of stamp duty was assessed at Rs.400/- against the petitioner, however, in the same order, the Deputy Commissioner formed a view that there was a deficiency in stamp duty to a tune of Rs.12,12,400/- on the agreement of sale dated 28.08.1992 and on the said instrument, he further imposed a penalty of an equal amount, total amount of Rs.24,25,600/- was assessed and directed to be paid by the petitioner. On the perusal of the order, it transpires that the demand was quantified after taking into consideration the unregistered agreement to sale dated 28.08.1992 as a part of the same transaction by invoking Section 5 of the Indian Stamp Act, 1899.
7. The petitioner filed a revision against the said order before the respondent no.1 being Revision No.91 of 2003-04. In the said revision, 08.12.2003 was the date fixed for consideration of the ad-interim application, however, before the said date, an order was passed for recovery of the amount against the petitioner, as such, the petitioner preferred Writ Petition No.50996 of 2003, in which, an interim order came to be passed staying the recovery till the disposal of the stay application. On 09.12.2003, the revision was dismissed as not maintainable as it was not accompanied by a deposit of one third of the stamp deficiency imposed along with interest and penalty. Both the said orders are under challenge in the present writ petition.
8. The argument of Sri Navin Sinha, learned Senior Counsel is that the property was purchased from a Company and the petitioner was not a party to the unregistered agreement to sale executed, as such, no liability can be fastened on the petitioner. He further argues that in any case, the sole basis being the Section 5 of the Indian Stamp Act is not invocable as the duty and the instrument are distinct. In support of the said argument, he places reliance on the judgment of this Court in the case of The Member, Board of Revenue vs Arthur Paul Benthall; (1995) 2 SCR 842.
9. Sri Sinha further argues that even otherwise, a show cause notice in respect of the instrument dated 28.08.1992 was beyond the prescribed period of limitation as provided under Section 47-A of the Indian Stamp Act. He argues that even for the sake of argument, the agreement in question is treated to be a part of a transaction, the liability of payment of the stamp duty would arise only against Sri K.K. Goel, HUF, who entered into an agreement for sale with the Company. He further argues that the question of payment of stamp duty arises only when any instrument is presented for registration whereas the agreement dated 28.08.1992 was never presented for registration nor did it create any right in favour of Sri K.K. Goel, HUF as it was unregistered and unstamped.
10. Sri Sinha lastly argues that the petitioner was bona fide purchaser and to avoid any future complications or litigation made Sri K.K. Goel as confirming party and, thus, there was no mens rea and consequently, the imposition of penalty was not at all justified.
11. Learned Standing Counsel, on the other hand, argues that the submissions of Sri Sinha as raised at the bar are liable to be rejected in view of the fact that the facts regarding the execution of the agreement to sale dated 28.08.1992 was itself mentioned in the sale deed executed on 30.01.2001 and, thus both the instruments were relating to several distinct matters and were thus chargeable to the aggregate amount of duties, for which separate instruments, each comprising or relating to one of such matters, was liable to be charged in terms of the mandate of Section 5 of the Indian Stamp Act.
12. Learned Standing Counsel further argues that the other submissions of Sri Sinha with regard to the liability to pay duty, the time limit, within which, the show cause notice can be issued under Section 47-A of the Indian Stamp Act as well as the other submissions of Sri Sinha loose its relevance in view of the mandate of Section 5.
13. As the pleadings are exchanged and no issue of fact is involved, the present petition is being decided finally instead of relegating the parties to the remedy of revision.
14. Considering the submissions made at the bar, this Court is to consider, as to whether the invoking of Section 5 for assessing and levying the stamp duty on both the said instruments on the petitioner was justified in law or not?
15. A perusal of the impugned order on record itself makes it clear that the order assessing the stamp duty on the agreement to sale has been passed on the foundation of the mandate of Section 5 of the Indian Stamp Act. For considering the issue raised, it is essential to look into the provisions of Section 5 of the Indian Stamp Act, 1899 which is quoted hereinbelow:
"Instruments relating to several distinct matters: - Any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters, would be chargeable under this Act."
16. Section 5 on its plain language provides that an instrument, relating to several distinct matters, is chargeable to duty within the aggregate amount of duty chargeable on each distinct matters, is chargeable as the duty, thus, it is to be seen whether the unregistered agreement to sale and the sale deed in question relate to "several distinct matters" or not.
17. The Hon'ble Supreme Court in the case of Arthur Paul Benthall (Supra) had the occasion to consider the meaning of the word "distinct matters" as used in Section 5, interpreted the scope of Section 5 in conjunction with Section 4 and Section 6 and recorded as under:
"3. The point for decision in this appeal is as to the meaning to be given to the words "distinct matters" in section 5. The contention of the respondent which found favour with the majority of the learned Judges in the court below is that the word "matters" in section 5 is synonymous with the word "description" occurring in section 6, and that they both refer to the several categories of instruments which are set out in the Schedule. The argument in support of this contention is this: Section 5 lays down that the duty payable when the instrument comprises or relates to distinct matters is the aggregate of what would be payable on separate instruments relating to each of these matters. An instrument would be chargeable under section 3 only if it fell within one of the categories mentioned in the Schedule. Therefore, what is contemplated by section 5 is a combination in one document of different categories of instruments such as sale and mortgage, sale and lease or mortgage and lease and the like. But when the category is one and the same, then section 5 has no application, and as, in the present case, the instrument in question is a power of attorney, it would fall under Article 48(a) in whatever capacity it was executed, and there being only one category, there are no distinct matters within section 5.
4. We are unable to accept the contention that the word "matter" in section 5 was intended to convey the same meaning as the word "description" in section 6. In its popular sense, the expression "distinct matters" would connote something different from distinct "categories". Two transactions might be of the same description, but all the same, they might be distinct. If A sells Black-acre to X and mortgages White-acre to Y, the transactions fall under different categories, and they are also distinct matters. But if A mortgages Black-acre to X and mortgages White-acre to Y, the two transactions fall under the same category, but they would certainly be distinct matters. If the intention of the legislature was that the expression 'distinct matters' in section 5 should be understood not in its popular sense but narrowly as meaning different categories in the Schedule, nothing would have been easier than to say so. When two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expression "distinct matters" in section 5 and "descriptions" in section 6 have different connotations.
5. It is urged against this conclusion that if the word "matters" in section 5 is construed as meaning anything other than "categories" or in the phraseology of section 6, "descriptions" mentioned in the Schedule, then there could be no conflict between the two sections, and the clause in section 6 that it is "subject to the provision of the last preceding section" would be meaningless and useless. We see no force in this contention. Though the topics covered by sections 5 and 6 are different, it is not difficult to conceive of instruments which might raise questions falling to be determined under both the sections. Thus, if a partnership carried on by members of a family is wound up and the deed of dissolution effects also a partition of the family properties as in Secretary, Board of Revenue v. Alagappa Chettiar [ILR 1937 Mad 553], the instrument can be viewed both as a deed of dissolution and a deed of partition, and under section 6, the duty payable will be the higher duty as on an instrument of partition. But supposing by that very deed one of the members creates a charge or mortgage over the properties allotted to his share in favour of another member for moneys borrowed by him for his own purposes, that would be a distinct matter which would attract section 5. Now, but for the saving clause, a contention might be advanced that sections 5 and 6 are mutually exclusive, and as the instrument falls within section 6, the only duty payable thereon is as on an instrument of partition and no more. The purpose of the clause in section 6 is to repel any such contention.
6. Considerable stress was laid by Mr. Chaudhury on the scheme of the Act as embodied in sections 3 to 6 as strongly supporting the view that 'matters' in section 5 meant the same thing as 'description' in section 6. He argued that under section 3 the duty was laid not on all instruments but on those which were of the descriptions mentioned in the Schedule, that section 4 enacted a special provision with reference to three of the categories mentioned in the Schedule, sale (conveyance), mortgage and settlement, that if they were completed in more than one instrument, not all of them were liable for the duty specified in the Schedule, but only one of them called the principal document, and that section 6 provided that when the instrument fell under two or more of the categories in the Schedule, the duty payable was the highest payable on any one of them, that thus the categories in the schedule were the pivot on which the entire scheme revolved, and that in construing the section in the light of that scheme, the expression "distinct matter" must in the setting be construed as distinct categories. To construe "distinct matters" as something different from "distinct categories" would be, it was argued, to introduce a concept foreign to the scheme of the enactment.
7. The error in this argument lies in thinking that the object and scope of section 4 to 6 are the same, which in fact they are not. Section 4 deals with a single transaction completed in several instruments, and section 6 with a single transaction which might be viewed as falling under more than one category, whereas section 5 applies only when the instrument comprises more than one transaction, and it is immaterial for this purpose whether those transactions are of the same category or of different categories. The topics dealt with in the three sections being thus different, no useful purpose will be served by referring to section 4 or section 6 for determining the scope of section 5 or for construing its terms. It is not without significance that the legislature has used three different words in relation to the three sections, 'transaction' in section 4, ''matter' in section 5, and 'description' in section 6."
18. The Hon'ble Supreme Court also considered the word "transaction" used in Section 4, the word "matter" used in Section 5 and the word "description" used in Section 6 and after analysing the arguments recorded as under:
"10. We are unable to agree with the respondent that when a person executes a power of attorney in respect of all the matters in which he could act, it should be held, as a matter of law and without regard to the contents of the instrument, to comprise a single matter. Whether it relates to a single matter or to distinct matters will, in our opinion, depend on a number of factors such as who are parties thereto, which is the subject-matter on which it operates and so forth. Thus, if Aexecutes one power authorising X to manage one estate and Y to manage another estate, there would really be two distinct matters, though there is only one instrument executed by one person. But if both X and Y are constituted attorneys to act jointly and severally in respect of both the estates, then there is only one delegation and one matter, and that is specifically provided for in Article 48(d). Conversely, if a number of persons join in executing one instrument, and there is community of interest between them in the subject-matter comprised therein, it will be chargeable with a single duty. This was held in Davis v. Williams [104 E.R. 358], Bowen v. Ashley [127 E.R. 467, 469], Goodson v. Forbes [128 E.R. 999 at 1000-1001] and other cases. But if the interests of the executants are separate, the instrument must be construed as comprising distinct matters. Vide Freemanv. Commissioners of Inland Revenue [(1870-71) LR 6 Exch 101] . Applying the same principle to powers of attorney, it was held in Alien v. Morrison [108 ER 1152, 1153] that when members of a mutual insurance club executed a single power, it related to one matter, Lord Tenterdon, C.J. observing that "there was certainly a community of purpose actuating all the members of this club". In Reference under Stamp Act, s. 46 [ILR 9 Mad. 358] , a power of attorney executed by thirty-six persons in relation to a fund in which they were jointly interested was held to comprise a single matter. A similar decision was given in Reference under Stamp Act, s. 46 [ILR 15 Mad 386] where a power of attorney was executed by ten mirasdars empowering the collection of communal income appurtenant to their mirasi rights. On the other hand, where several donors having separate interests execute a single power of attorney with reference to their respective properties as, for example, when A constitutes X as attorney for management of his estate Black-acre and B constitutes the same person as attorney for the management of his estate White-acre, then the instrument must be held to comprise distinct matters. It was so decided in Reference under Stamp Act, s. 46 [2 MLJ 178] . Thus, the question whether a power of attorney relates to distinct matters is one that will have to be decided on a consideration of the terms of the instrument and the nature and the extent of the authority conferred thereby."
19. In view of the law laid down as conceded and expounded by the Hon'ble Supreme Court in the case of Arthur Paul Benthall (Supra), the inescapable conclusion is that if the instrument comprises of distinct matters, aggregate amount of duty is chargeable. In the present case, the matter, which is transferred by virtue of a sale deed dated 30.01.2001, is same as was proposed in the unregistered agreement to sale dated 28.08.1992. In fact, in the agreement to sale dated 28.08.1992, no rights could be said to have been transferred in favour of Sri K.K. Goel, HUF as the agreement was neither registered nor stamped. The said Sri K.K. Goel, HUF was added as a confirming party only to avoid any chance of future litigation, thus as the "matters" were not distinct, the stand of the respondents that the aggregated amount of duty is payable on both the instruments cannot be sustained. The assessment of duty by means of the impugned order dated 30.10.2003 in respect of the instruction dated 28.08.1992 amounting to Rs.12,12,400/- along with penalty imposed thereupon is liable to be quashed. Accordingly, the same is quashed.
20. However, the deficiency of stamp duty in respect of the sale deed dated 30.01.2001 to the extent of Rs.400/- is affirmed. The consequences of the order as directed above shall follow.
21. For the reasons recorded above, the writ petition is allowed.
Order Date:10.04.2023 (Pankaj Bhatia,J)
akverma