Kamal Arora vs State Of Uttarakhand And Another on 12 October, 2017

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Uttarakhand High Court

Kamal Arora vs State Of Uttarakhand And Another on 12 October, 2017

The brief facts leading to the filing of the writ petition are that in pursuance to the auction proceedings, which was conducted by the Official Liquidator, the petitioner was auction purchaser of the property, by virtue of the sale deed executed in his favour on 3rd October, 2008. The sale consideration which has exchanged hands, as a consequence of the sale deed dated 3rd October, 2008, was 5,26,00,000/-. Whereas, as per the market value settled by Collector, sale consideration would have been Rs.3,14,94,000/-, meaning thereby, Rs.2,11,46,000/- excess sale consideration paid by petitioner more than the market rate. Thus, the petitioner was entitled for rebate of 5% on the excess amount of Rs.2,11,46,000/-, which as per the petitioner, was settled to be Rs.9,91,570/- In accordance with the stamp duty which was paid, it is the case of the petitioner that he has remitted a sum of Rs. 47,34,000/- as a stamp duty. Out of which, he contends that he has remitted an amount of Rs. 41,34,000/- as cash and the remaining 2 amount of Rs.6,00,000/- by virtue of stamp papers. However, the Collector, Stamp by invoking Section 33 read with Section 38 of the Indian Stamps Act, by virtue of its order dated 15th October, 2008, has impounded the sale deed and referred the matter.

On conclusion of the reference, it was held out that the document executed on 3rd October, 2008, will amount to be a sale deed and will fall to be within Article 23 and it would not be treated as to be a sale certificate so as to bring it within Article 18 of the Stamp Act. Merely because of the fact that the Official Liquidator has auctioned the property in favour of the petitioner, it will not be treated as to be sale certificate.

Accordingly, it was held that the petitioner would be liable to pay the stamp duty as payable against the sale deed @ 9% and not @ 13.5 % which was being levied on the sale certificate at the relevant time.

The Collector, Stamps on conclusion of the proceedings, confirmed the report about the deficiency of the stamp against which a revision was preferred by the petitioner before the ACRC. And accordingly, the revision was decided by the order dated 22nd February, 2009 in favour of the petitioner. While, passing the order, the ACRC has made an observation that the petitioner would be entitled for a rebate in pursuance Government Order No. 74/XXVII(9)/Stamp/2008 dated 25th April, 2008, and hence a rebate was required to be refunded to the petitioner on the sale consideration which was in excess to the market rate as settled by the Collector under the Stamp Act.

When the rebate of 5% was not paid to the petitioner, he approached the Collector, Stamp who vide his impugned order dated 28th February, 2009, declined to grant the benefit of rebate to the petitioner on the ground that the stamp duty which was paid by the petitioner in excess to the market value, i.e. for the sum of consideration of Rs.2,11,46,000/-, was paid by him voluntarily. The denial has been only on the ground that the petitioner has voluntarily remitted the stamp duty on the entire sale consideration based on the face value of the sale deed and since it was a voluntary payment, it could not be refunded under the Government Order dated 25th April, 2008, which provided the benefit of rebate in stamp duty against consideration in excess to the market value.

Learned counsel for the State submits that the petitioner would not be entitled for any benefit of refund/ rebate under the Government Order dated 25th April, 2008 because the amount which has been remitted by him against the sale deed 3rd October, 2001, was a voluntary act, and thus, the State is not responsible in any manner whatsoever, thus, he opposed the cause agitated by the petitioner.

In response to it, the learned counsel for the petitioner submits that the petitioner would be entitled for the refund because in view of the provisions contained under Section 72 of the Contract Act to be read with Section 3 of Contract Act which defines the Contract itself. Section 72 provides that if a person owes a liability to pay a certain amount and if he remits the amount in excess by mistake, he must be repaid or returned the excess amount paid by him. Although sale deed is a settlement of right of an immovable property between seller and purchaser, but for the purposes 4 of payment of stamp duty, as it based on the face value of the document, it will be treated as contract between collected purchaser for purposes of determining the stamp duty as payable on the deed, thus, Section 3 read with Section 72 of Contract Act would apply. Section 72 of the Indian Contract Act is quoted hereunder :

"72. Liability of person to whom money is paid, or thing delivered, by mistake or under coercion. - A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it."

Here in the present case, petitioner owed to pay the stamp duty on market value as provided in the Government Order and once the Government Order provides rebate on sale deed in payment of sale consideration and if excess amount is paid, the same would be refunded because the excess amount was as a matter of fact not payable, and there was an entitlement of refund under law for excess amount paid. Because stamp duty @ 9% on entire sale consideration as paid by the petitioner, he was not liable to pay under law and State cannot be held to be entitled to receive excess amount paid.

If Section 72 is read with Section 3 of the Contract Act, which deals with the contracts, it is a proposal and its acceptance which determines the terms of the contract, the proposal herein was an offer of the stamp duty which the petitioner has given to the Collector oblivions of the fact that rebate was provided on the amount of consideration in excess of the sale consideration as settled by the Collector and rebate as provided in the G.O. dated 25th April, 2008. If the petitioner has voluntarily and under all bona fide has paid an excess amount, he was entitled for the benefit and 5 exemption to the rebate as provided by the G.O. dated 25th April, 2008.

The another limb of argument which has been extended by the learned counsel for the petitioner is that in view of Section 45 of the Indian Stamp Act, he is also entitled for the refund of an excess penalty or "excess duty". For the said purpose, he places reliance on sub-section (2) of Section 45 of the Act which deals with that if the Chief Controlling Revenue Authority, determine that stamp duty and same is paid in excess by the petitioner which is otherwise legally chargeable by the State, he would be entitled for a refund under Section 45 provided it falls to be under Section 40 of the Stamp Act.

On reading of Section 40 of the Stamp Act, it deals with the power of the Collector to impose stamp or to impound the instruments. The power of the Collector to impound an instrument, herein, would be in a situation where there is deficiency in the remittance of a proper stamp duty. Simultaneously, if Section 40 is read with Section 45 which deals with refund if excess is paid, then the petitioner in view of sub-section (2) of Section 45 would be entitled for the refund of the excess amount paid on the excess sale consideration than as settled by the market value.

In that view of the matter, the writ petition succeeds and is allowed. The impugned orders dated 28.02.2009 passed by the Collector, Stamp in Case No. 39 of 2008-09 and judgment dated 22.05.2009, passed by Additional Chief Revenue Commissioner in Stamp Revision No. 10 of 2008-09 are quashed. The petitioner is entitled for the benefit of rebate as provided in the Government Order dated 25th 6 April, 2008. The respondents are directed to remit back the amount of stamp duty paid by the petitioner in excess to the circle rate as determined to be Rs. 9,01,570/-.

No order as to costs.

(Sharad Kumar Sharma, J.) 12.10.2017 Shiv

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Uttarakhand High Court