Allahabad High Court
Lekhraj And Another vs C.C.R.A. U.P. Alld./Board Of Revenue ... on 9 October, 2017
Equivalent citations: AIR 2018 ALLAHABAD 23, 2018 (1) ALJ 341, (2018) 186 ALLINDCAS 905 (ALL), (2017) 11 ADJ 20 (ALL), (2018) 138 REVDEC 224, (2018) 127 ALL LR 457
Author: Sunita Agarwal
Bench: Sunita Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD Reportable Reserved Case :- WRIT - C No. - 5481 of 2003 Petitioner :- Lekhraj And Another Respondent :- C.C.R.A. U.P. Alld./Board Of Revenue U.P Alld. & Others. Counsel for Petitioner :- V.K. Singh,B.K.Srivastava,Dhiraj Srivastava,M.N. Singh Counsel for Respondent :- C.S.C.,A.K.Mehrotra Hon'ble Mrs. Sunita Agarwal,J.
Heard Ms. Soumya Srivastava and Sri Dhiraj Srivastava, learned counsels for the petitioners and learned Standing Counsel for the respondents.
This writ petition is directed against the orders dated 6.12.2001 and 28.9.1998 passed by respondent no. 1 and respondent no. 2; respectively, in a matter arising out of the proceedings initiated under Section 33/47 of the Indian Stamp Act, 1899. Brief facts relevant to decide the controversy at hands are that a registered agreement for levy of Toll Tax over Toll bridge namely Ambala-Saharanpur-Mussoorie Road new Hindan Bridge near Gagalheri, District Saharanpur was executed in favour of the petitioners, partners of the firm known as M/s Lekhraj & others for a period of one year in view of settlement of auction for Rs. 1,00,03,100/-. The stamp duty of Rs. 5,50,192.50/- was paid by the petitioners thereon. The letter dated 7.11.1988 handing over charge for levy of Toll Tax was issued in favour of the petitioners by the Public Works Department. After execution of the contract, the petitioners started collection of Toll Tax from 10.11.1988 and made collections upto November, 1989.
Much after the expiry of the period of the said agreement, a notice was issued to the petitioners by the respondent no. 2 stating therein that the stamp duty paid by them on the said agreement was insufficient and as such they were liable to pay deficit stamp duty and penalty. Objection dated 25.3.1992 was filed by the petitioners with the assertions therein that the stamp duty leviable as per Article 35(a) of Schedule 1-B of the Indian Stamp Act, as applicable in the State of U.P., had been paid by them. No further duty and penalty, therefore, could be imposed.
Submission of learned counsel for the petitioners is that the agreement in question was a lease for a period of one year, the stamp duty leviable thereon was, as such, governed by the provisions of Article 35(a)(i) of the Indian Stamp Act, 1899, as applicable in the State of U.P. {Scheduled 1-B of U.P. Stamp (Amendment) Act, 1962} (herein after referred as to the 'Stamp Act').
Further submission of learned counsel for the petitioner is that as the lease was for a term not exceeding one year, the ratio of Full Bench of this Court in Gajey Pal Singh and another vs. Board of Revenue, U.P., Allahabad1 relied upon by the Stamp Authorities is not attracted. The Stamp Authorities had erred in imposition of deficit stamp duty and penalty by applying Article 35(b) of the Stamp Act.
Learned Standing Counsel, on the other hand, placing reliance upon the judgment of Full Bench in Gajey Pal Singh (supra) has submitted that the controversy raised in the present writ petition falls within the four corners of the said pronouncement. The decision of the Stamp Authorities, therefore, cannot be said to be erred.
Having heard learned counsel for the parties and perused the record, before adverting to the facts of the instant case, it would be relevant to refer to the relevant provisions of the Stamp Act and the ratio of the Full Bench in Gajey Pal Singh (supra).
Article 35 of Schedule 1-B of the Indian Stamp Act, as applicable in the State of U.P., {by U.P. Stamp (Amendment) Act, 1962} is reproduced as under:-
"35. Lease, including an under-lease or sub-lease and any agreement to let or sublet-
(a) where by sub-lease the rent is fixed and no premium is paid or delivered-
(i) Where lease purports to be for a term not exceeding one year;
The stamp duty as a Bond (No. 15) for the whole amount payable or de-liverable under sub-lease.
(ii) Where the lease purports to be for a term exceeding one year but not exceeding five years :
The stamp duty as a conveyance (No. 23) for a consideration equal to the amount or value of the average annual rent reserved.
(iii) ........................
(iv) ........................
(v) ........................
(b) Where the lease is granted for a fine or premium, for money advanced and where no rent is reserved;
The same duty as a conveyance (No. 23) for a consideration equal to the amount or value of such line or premium, or advance as set forth in the lease.
(c) Where the lease is granted for a fine or premium, or for money advanced in addition to rent reserved.
The same duty as a conveyance (No. 23) for a consideration equal to the amount or value of such fine or premium, or advance as set forth in the lease, in addition to the duty which would have been payable on such lease if no fine or premium or advance had been paid or delivered:
Provided that, in any case when an agreement to lease is stamped with the ad valorem stamp required for lease, and a lease in pursuance of such agreement is subsequently executed the duty on such lease shall not exceed two rupees and 25 paise."
Section 2(16) of the Indian Stamp Act which defines "lease" is as under:-
"2. (16) "Lease" means a lease of immovable property, and includes also-
(a) a patta;
(b) a kabuliyat or other undertaking in writing, not being a counterpart of a lease, to cultivate, occupy, or pay or deliver or pay or deliver rent for, immovable property;
(c) any instrument by which tolls of any description are let;
(d) any writing on an application for a lease intended to signify that the application is granted;"
The questions under reference placed before the Full Bench in the matter of stamp duty on the agreement to levy Toll Tax in Gajey Pal Singh (supra) were as follows:-
"1. Whether the document is a lease for a period of 3 years within the meaning of Section 2(16)(c) of the Stamp Act.
2. If so, whether it is a lease in consideration of a premium of Rs. 93,000/- and is chargeable with a duty of Rupees 4,185/- under Article 5(b), Schedule 1-B of the U. P. Stamp Amendment Act, 1962.
3. If not, whether the document is a lease for 3 years in consideration of an yearly rent of Rs. 31,000/- chargeable with a duty of Rs. 1395/- under Article 35(a)(ii), Schedule 1-B of the U. P. Stamp Amendment Act, 1962.
4. In case the answer to the first point is in the negative, what is the nature of the document and what amount of duty is chargeable in respect thereof."
The answer to the said questions given therein are as under:-
(1) The instrument in question namely the agreement for levy of Toll Tax was a document of lease within the meaning of Section 2(16)(c) of the Indian Stamp Act.
(2) As the lease in the said case was for a term exceeding one year but not exceeding five years, it was held that as the lease was granted for a premium and no rent was reserved, the case would be governed by Article 35(b) of the Stamp Act. On the other hand, in a case where the lease was granted for no premium and rent was reserved, Article 35(a)(ii) would be attracted.
(3) The crucial question, as held therein, was, therefore, whether the lease in question was for a rent or for a premium. The difference between a premium and rent made out by the Apex Court in the case of Commissioner of Income-tax vs. Panbari Tea Company Ltd. (AIR 1965 SC 1871) with reference to Section 105 of the Transfer of Property Act, had been considered.
(4) A distinction had clearly been drawn therein between rent and premium inasmuch as rent is a price paid for a transfer of a right to lessee to enjoy the property and the periodic payment in lieu thereof to the lessor. Whereas, where, the interest of the lessor in immovable property is parted with for a price, the price paid is premium. The former is a capital income and the latter a Revenue receipt.
(5) It was held that there may be a case where the so called premium is in fact advance rent and in another rent is deferred price, however, it is the substance of the transaction and not the form that matters. The nomenclature is not decisive or conclusive but the Court having regard to all other circumstances shall ascertain the real intention of the parties.
(6) In other words, the premium is one paid in consideration of the conveyance implied in the lease and is quantified in lump, whether it is paid outright or by installments over a period or promised to be paid at a certain time. But a rent, while it is also paid in consideration of a lease, is in lieu of the enjoyment which the lessee has and particularly as consideration therefor. Another distinguishable feature of rent is that it is payable as and when it accrues unlike a premium, the liability for which, arises at the time when the contract is entered into.
In the light of the legal position laid down by the Full Bench as noted above, the nature of instrument in the instant case is to be examined.
The relevant clause of the agreement in question is reproduced as under:-
**tks iV~Vk xxxxxxxxxxxxxxxxxxxxxxx mRRkj izns'k ds xoZuj egksn; lkoZtfud fuekZ.k foHkkx ds ek/;e lsA tks bles vkxs pydj iV~Vk nsus okys dgyk;saxsA** **nwljs i{k ds nkos es fy[kk x;k gSA bl ckr dk lk{kh gS fd mls HkkMs+ ds cnys es tks iV~Vs es vkxs lqjf{kr fd;k x;k gSA ** ** iV~Vk nsus okyks bl iV~Vs }kjk iV~Vsnkj dks fdjk, ;k HkkM+s ij iqy ikj djus okys vkSj mu lc okguks lsA tks ifjf'k"B es of.kZr gS vkSj mUgs i{kdj ls eqDr u fd;k x;k gksA iqy iFk }kjk Toll TaxA olwy djus dk ,dkafrd (exclusive) vf/kdkj iV~Vs nsrk gSA** Considering the nature of the instrument, it is evident that the said agreement had been executed for a fixed premium which was decided in the auction held for the purpose. The contract to collect Toll fee from the public at large, on behalf of the State, had been granted in favour of the petitioners. However, no rights were created in favour of the petitioners to enjoy the immovable property or to receive profits out of the land over which the bridge was situated. The price paid for the lease for levy of toll tax, therefore, can only be termed as premium and in no case, it can be termed as rent periodically paid for enjoyment of immovable property. In other words, the right to levy toll tax as vested in the State, had been parted with for a price which can be termed as premium.
In view thereof, Article 35(b) and not Article 35(a)(i) of the Stamp Act would be applicable for levy of the stamp duty on the instrument in question.
The contention of learned counsel for the petitioners that the ratio of the Full Bench is not attracted in view of the fact that the agreement was for a term upto one year, is devoid of force. No distinction can be drawn regarding applicability of the ratio of decision of the Full Bench, in the facts and circumstances of the present case. Issue raised herein is squarely covered by the said pronouncement.
Lastly, the reliance has been placed upon the decision of another Full Bench by the learned counsel for the petitioners namely Vinayendra Nath Upadhyay and others vs. State of U.P. and others2.
The said pronouncements is on a reference raising issue involving power of the State to impose and realize additional stamp duty on an instrument of lease executed for a contract to realize toll in respect of two bridges in the district of Allahabad, under the provisions of Section 39(1) of the U.P. Urban Planning & Development Act, 1973 readwith the Indian Stamp Act, 1899.
In the said case, there was no dispute regarding imposition of Stamp duty under Article 35(b) of Schedule 1-B of the Indian Stamp Act, as applicable in the State of U.P. The reliance placed thereon, thus, is misplaced.
For all the above noted reason, the present writ petition is found devoid of merits and hence dismissed.
The Stamp Authorities are required to take follow up action.
Order Date :- 9.10.2017 (Sunita Agarwal, J.) B.K./-