Allahabad High Court
Ashok Kumar Jalan vs State Of U.P. And 2 Others on 6 January, 2017
Author: Pramod Kumar Srivastava
Bench: Pramod Kumar Srivastava
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court no.- 28 Case :- WRIT - C no.- 59174 of 2016 Petitioner :- Ashok Kumar Jalan Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Akhilanand Mishra, Sri Shashi Nandan Counsel for Respondent :- C.S.C., Nripendra Mishra Hon'ble Pramod Kumar Srivastava, J.
1. The Gorakhpur Industrial Development Authority (respondent no.-3) had executed a registered lease-deed of property in question in favour petitioner (M/s. Ankur Udyog Ltd. Nakaha no.-2, Gorakhpur) on 24.12.2010 for the land mentioned in said deed which was plot no.-AL-2 of Sector 23 of Industrial Area for establishment of integrated steal plant and textile industry according to design and building plan approved by respondent no.-3 GIDA or by competent authority for 90 years. In consideration of said lease the lessee the petitioner had paid the provisional premium of Rs. 7,92,31000/- (Rs. Seven core Ninty two thousand, thirty one thousand only) for the land. It was also agreed in lease-deed that lessee will pay yearly rent of leased property, and also that in case lessor required to bear at any stage any additional cost of electrification or development or facilities etc., which benefit the said industrial area as a whole, then lessee shall pay the additional premium to lessor as may be determined for this behalf by the lessor. It was also agreed that lessee will bear and pay all the taxes, charges and assessment of every description, which may during the said term be assessed, charged or imposed upon either landlord or tenant or occupier. It was also agreed that lessee shall also pay to the lessor such recurring fee in nature of service of maintenance charges of whatever description (including charges for supply of water, expenses of maintenance of roads, drains, lights etc.) and for other common facilities and services as may be determined from time to time.
2. After execution of said lease-deed dated 24.12.2010, the Sub-Registrar, Sahjanwa, Gorakhpur had sent his report to Additional Commissioner (Stamp), Gorakhpur to the effect that insufficient stamp-fees was paid at the time of registration of said instrument. Then Assistant Commissioner (Stamp), Gorakhpur had sent his report dated 23.3.2012 alongwith report of Sub-Registrar, to respondent no.-2 Collector, Gorakhpur. Thereafter, respondent no.-2 Collector had issued notice dated 23.7.2014 under Section 47-A/33 of Stamp Act for initiating the proceedings of realization of deficient stamp fees. Said notice was replied on 14.5.2015 by the petitioner in concerned case no.-D2014053100882 (State Vs. Ashok Kumar Jalan) with averment, inter alia, that on lease-deed in question dated 24.12.2010, entire stamp duty has already been paid by the petitioner and on other things relating to rent or maintenance charges, no such stamp fees can be imposed; therefore the notice is erroneous and liable to be discharged.
3. For property relating to same lease-deed two cases no.-D2014053100882 and no.-D-20130531001194 were started by respondent no.-2, in which similar notices were given and same reply was submitted on behalf of petitioner. After affording opportunity of hearing, respondent no.-2, Collector, Gorakhpur had passed impugned order dated 5.11.2016, in which it was held that in case no.-D-20130531001194, no stamp duty is payable, but stamp-duty should be paid by petitioner on amount of future lease rent (on of Rs. 1,69,24,590/-) and on amount of future maintenance charges (on amount of Rs. 11,94,67,440/-), and also penalty is leviable on deficient stamp-duty. With this finding the respondent no.-2 had directed the petitioner to pay the stamp fees is payable on amount of future lease rent and future maintenance charges of the leased property amunted to Rs. 68,19,550/- alongwith penalty of Rs. 6,81,955/-, total Rs. 74,29,505/-. It was also directed that this deficiency stamp fees and penalty will be realized from petitioner alongwith interest @ 1.5 per cent per month.
4. Against this impugned judgment dated 5.11.2016 passed by respondent no.-2, Collector, Gorakhpur, present writ petition has been preferred on behalf of the petitioner. At the time of hearing preliminary objection on behalf of respondent no.-3 was raised that there is provision of revision and appeal under the Indian Stamp Act, against such impugned order; therefore present writ petition is not maintainable.
5. These submissions were refuted by learned counsel for the petitioner who submitted that admittedly instrument in question dated 24.12.2010 was a lease-deed for the period mentioned in it, in which it was written that yearly rent would be paid by the lessee/petitioner, who will also bear the maintenance charges. His submission was that admittedly, proper and full stamp duty was paid on the amount of premium of Rs. 7,92,31000/-. His main submission was that proceedings by respondent no.-2 in aforesaid case no.-D2014053100882 were initiated for realization of additional stamp duty treating the maintenance charges as leviable as premium of lease. His main contention was that since maintenance charges are exempted from payment of stamp duty and not leviable, therefore the proceedings under Section 47-A of Indian Stamp Act initiated by respondent no.-2 for such amount is entirely illegal and without jurisdiction. His submission was that since proceedings initiated by respondent was illegal and ultra-vires, therefore the impugned order passed without jurisdiction can be properly challenged through present writ petition.
6. I have considered the rival contentions and perused the records. Section 47-A of the Indian Stamp Act deals with under valuation of the instrument and the recovery of unpaid stamp duty.
7. Section 47-A of Indian Stamp Act, 1899 reads as under:
"47-A. Under-valuation of the instrument.-
(1)(a) If the market value of any property which is the subject of any instrument, on which duty is chargeable on the market value of the property asset forth in such instrument, is less than even the minimum value in accordance with the rules made under this Act, the registering officer appointed under the Registration Act, 1908, (Act no.-16 of 1908), notwithstanding anything contained in the said Act, immediately after presentation of such instrument and before accepting it for registration and taking any action under Section 52 of the said Act, require the person liable to pay stamp duty under Section 29, to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument for presenting again in accordance with Section 23 of the Registration Act, 1908."
8. From perusal of the impugned judgment of respondent no.-2 and other records, it is found that at the time of passing impugned order, respondent no.-2 had considered two points of determination. First was that as to what is the nature of instrument in question and second was as to what is the valuation of the instrument for the purpose of determination of stamp fees and how much stamp fees is leviable on this instrument.
9. The first point of determination was decided by respondent no.-2 with finding that instrument in question is a lease-deed. This finding is supported by contents of instrument in question, in which it is specifically mentioned that it is a lease-deed. Counsel for the respondents as well as the counsel for the petitioner had also supported this finding and submitted that instrument in question dated 24.12.2010 is a lease-deed.
10. Thereafter remained second point of determination that as to what should be the amount of stamp duty payable of instrument in question. Admittedly, instrument in question is a lease-deed for more than 30 years and its entire premium was Rs. 7,92,31,000/- on which whole of the admissible stamp fees has already been paid by the petitioner at the time of registration of instrument in question.
11. From perusal of the impugned judgment dated 5.11.2016, it is found that respondent no.-2 had held that yearly rental amount for 90 years according to instrument in question is Rs. 1,69,24,590/-. He also found that on the lease property, the maintenance amount @ Rs. 4/- per square meter from year for the aforesaid period of 90 years comes to Rs. 11,94,67,440/-. It was held that although the premium of Rs 7,92,31,000/- for the lease-deed is correct over which proper stamp fees has been paid, but aforesaid amount for a rent of Rs.1,69,24,590/- and maintenance amount for the said period of Rs. 11,94,67,440, total Rs. 13, 63,92,030/- is also inseparable part of consideration of leased property, therefore apart from amount of premium, the stamp duty is chargeable also on this amount of rent and maintenance charges which comes to Rs. 68,19,550/-. With this finding respondent no.-2 District Magistrate had passed the impugned judgment, by which it was directed that deficient stamp fees of Rs. 68,19,550/- alongwith penalty of Rs. 6,81,955/- total Rs. 74,29,505/- be realized from the petitioner with interest @ 1.5 per cent per month from the date of execution of instrument in question.
12. The only point of determination before this Court is as to whether in such special facts and circumstances of the execution of registered lease-deed dated 24.12.2010, the stamp duty (alongwith penalty and interest) imposed by respondent no.-2 on amount of future lease rent and prospective maintenance charges is legally correct or not.
13. Schedule I-B of U.P. Stamp Act Provides about stamp duty payable on instrument under the Indian Stamp Act,1899. Under Article-35 of this Schedule I-B deals with instrument of lease. In present matter, the lease-deed in question is available a term existing 30 years. For such instruments, the provision of Article 35(c)(ii) is there which reads as under:
"(c) Where the lease is granted for a fine or premium or for money advanced in addition to rent reserved-
(ii) where the lease purports to be for term exceeding thirty years.
The same duty as a Conveyance (no. 23 clause (a)) for a consideration equal to the market value of the property which is subject of the lease."
14. This provision exclusively applicable for the lease-deed like present lease-deed in question dated 24.12.2010. It provides that stamp duty is leviable whether the lease is granted for a fine or premium or money advanced in addition to rent. This provision has not mentioned any charge relating to maintenance of the property in question. Therefore, the contention of learned counsel for the petitioner in this regard is acceptable that proceeding initiated for the realization of maintenance charges are erroneous and illegal.
15. From perusal of the above mentioned provisions, it is found that proceeding for recovery of maintenance charges cannot be initiated under Section 47-A of Indian Stamp Act as has been initiated in this matter. Therefore, proceedings initiated in this regard for recovery of maintenance charges are beyond purview of said Section 47-A and are without jurisdiction. Since these proceedings were initiated without any legal provision, therefore, by simply mentioning the aforesaid Section 47-A the said order cannot be held intra-vires and order passed in that regard in assessing the amount of Rs. 11,94,67,440/- and for levy of stamp duty on it is erroneous and illegal and without jurisdiction which is liable to be quashed.
16. Since impugned order relating to stamp duty on maintenance charges is wholly without jurisdiction, therefore it cannot be considered formal proceedings under Section 47-A of Indian Stamp Act, against judgment of which, appeal or revision is prescribed. Therefore, in absence of other equally efficacious remedy for an order wholly within legal jurisdiction, the relief sought through writ petition, on this point, under Article 226 of the Constitution of India is acceptable.
17. So far the point of levy of stamp-duty by impugned order on lease rent is concerned, no argument was placed on behalf of petitioner. From above mentioned provision it is explicitly clear that any amount paid as consideration for lease is leliable for stamp-duty. In present case not only the premium (on which proper stamp-duty was paid) but the future lease rent, amounting to Rs. 1,69,24,590/- is also the consideration for the lease, as mentioned in lease deed. So on amount of lease rent, the stamp-duty is chargeable. So in this regard, impugned order suffers from no error or irregularity.
18. By impugned order the penalty was also imposed on unpaid amount of stamp-duty, without assigning its specific reason. Penalty is a punishment. At the time of awarding its reason must be disclosed. It should be awarded for deliberate overt act. It pre-supposes the intention to conceal relevant facts or intention to commit fraud. A penalty should be imposed if it is found that attempt had been deliberately made for tax duty evasion. Before imposing penalty the concerned authority must record its finding in that regard by reasoned order. This power cannot be exercised mechanically in every case.
19. In present matter petitioner had not concealed any relevant or material fact relating to instrument in question. He disclosed premium and accordingly paid proper stamp-duty on it. He also disclosed future lease rent to be paid in future and laso other liabilities, including the maintenance charges and his future liabilities regarding leased property. Had there been any deliberate intention to conceal any relevant fact regarding stamp-duty, then future lease rent would not have been mentioned in instrument of lease-deed. There had been no finding of respondent no.-2 Collector that any deliberate attempt was made by petitioner for evading stamp-duty. Every error is not punishable unless it is deliberate. Even in this case the respondent no.-2 Collector had committed error when it had wrongly imposed stamp-duty on future maintenance charges, as discussed above, that led the petitioner to rush for relief to this Court. Therefore the penalty imposed in this matter is liable to be set aside because intention to evade stamp-duty was not proved.
20. In view of above, this writ petition is partly allowed. That portion of impugned order dated 05.11.2016 of respondent no.-2 Collector, Gorakhpur is confirmed by which petitioner was directed to pay stamp-duty on amount of future lease rent (of Rs. 1,69,24,590/-). But remaining that portion of this impugned order is set aside by which stamp-duty was imposed on amount of future maintenance charges (amount of Rs. 11,94,67,440/-) and also penalty (of Rs. 6,81,955/-) was imposed. It is further observed that if stamp-duty on amount of future lease rent is not paid by petitioner within a period of two months from today, then it may be recoverable from him with interest as directed by respondent no.-2 by specific order.
Order Date :- 06.01.2017 Sanjeev