Madhya Pradesh High Court
The State Of Madhya Pradesh vs Deepmala Infrastructure Limited on 20 June, 2017
WP No.2873.2016
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HIGH COURT OF MADHYA PRADESH : JABALPUR
S.B. : HON'BLE MS. JUSTICE VANDANA KASREKAR
WRIT PETITION NO. 2873 OF 2016
State of Madhya Pradesh & another
vs.
Deepmala Infrastructure Pvt. Ltd. & another
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Smt. J. Pandit, learned Government Advocate for the
petitioner.
Shri Sanjay Kumar Agrawal, learned counsel for the
respondent No.1, on caveat.
Shri Saurabh Soni, learned counsel for respondent
No.2.
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O R D E R
( 20/06/2017) The petitioner has filed the present petition, under Article 227 of the Constitution of India, challenging the order dated 09/07/2015 passed by the Board of Revenue Gwalior in Revision Case No.947 PBR/14.
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2. Brief facts of the case are that an agreement was executed between the Government of M.P. and Madhya Pradesh Housing Board with an object to unlock the commercial value of the Project Site and implement the Re-densification Scheme of Housing & Environment Department. Government of M.P. decided to invite competitive proposals from eligible bidders to develop on concessional cum lease basis, the project site as a commercial complex/business centre. As per terms and conditions of the agreement, the developer undertook the responsibility of designing, engineering, financing, procurement, construction, management, operation and maintenance of the project and to fulfil other obligations pursuant to the letter of agreement. The developer was made entitled to sublease or license any or all above by the readily facilities for the purposes for which it has been constructed granting the same on limited powers contained therein, in accordance with the terms of the agreement. Accordingly, an agreement was executed between the WP No.2873.2016
--3- Government of M.P. and Madhya Pradesh Housing & Infrastructure Development Board, on one hand and respondent Deepmala Infrastructure Private Limited, on the other, for development under the Re-densification Scheme of Housing and Environment Department of the State Government under Public Private Partnership Structure.
3. Respondent developer was to take over the Project Site from Government of M.P., develop, design, engineer, finance, procure, construct to the extent possible infrastructure facilities in accordance with construction requirements as detailed in the Schedule to the agreement in terms of the agreement. The Housing Board was made as nodel agency responsible for the project. An agreement was executed on a non-judicial stamp of Rs.100/- only. Thereafter, a question has been raised in the State Assembly regarding deficit stamp duty paid on the above agreement by the Developer, an enquiry was made and a case of payment of deficit stamp duty was registered against the Developer. The Collector of Stamps found that the WP No.2873.2016
--4- respondent Developer had been given right for development, construction, management, maintenance and grant the land on sub-lease, under the agreement. Therefore, it was required to pay stamp duty on the agreement @ 2% on the market value of the property involved in the agreement in accordance with the prevalent provisions of Section 5(d) of the Indian Stamps Act, 1899. It was found that only stamp duty of Rs.100/- had been paid by the respondent developer. The Collector of Stamps found that the State Government had determined the premium of the land of Rs.335.296 crores. Accepting this to be market value of the land for the purposes of calculating stamp duty a sum of Rs.6,70,59,200/- @ 2% of the market value was payable and since only a sum of Rs.100/- has been paid, deficit stamp duty in the sum of Rs.6,70,59,100/- was payable by the respondent Developer. The authority has also imposed penalty under Section 48(b) of the Indian Stamps Act, 1899. Being aggrieved by that order, respondent developer had filed a revision before the Board of Revenue. The Board of WP No.2873.2016
--5- Revenue vide impugned order had allowed the said revision and set aside the order passed by the Collector of Stamps. The Board of Revenue has found that respondent developer had already paid a sum of Rs.38.18 crores earlier as stamp duty on the lease granted by the Government in its favour and, therefore, levy of additional duty and imposing penalty on the Development Agreement was illegal. Being aggrieved by that order, the petitioner has filed the present writ petition.
4. Learned Government Advocate appearing on behalf of the petitioner/State submits that the order passed by the Board of Revenue is illegal and contrary to statutory provisions of Indian Stamp Act. She submits that Board of Revenue has committed a serious error in holding that respondent No.1 has been saddled with the stamp duty on two occasion for the same instrument. She submits that on earlier occasion it was consideration amount of the land and the stamp duty as determined by the Collector of Stamp is assessed for the first time and it was rightly levied. She further submits that Board of Revenue has failed to see that WP No.2873.2016
--6- subject agreement was executed on a stamp of Rs.100/- and the respondent is neither the owner nor the lessee of the said land and, therefore, the Stamp Duty accrued under Entry 5 (d) of the Schedule 1-A annexed to the Indian Stamp Act, in the present case. She further submits that respondent No.1 was permitted to develop and construct flats on the land and thereafter to sublet or sublease those flats under the terms and conditions of the contract agreement. Under the facts and circumstances of the case, the provisions of Entry 5 (d) of Schedule 1-A were rightly applied for by the Collector of Stamps. The said entry specifically provides for levy of the stamp duty @ 2% of the cost of the land. She prays that petition be allowed and the order passed by the Board of Revenue be set aside.
5. On the other hand, learned counsel for the respondents supports the order passed by the Board of Revenue. He submits that Board of Revenue has rightly held that the respondent has already paid the stamp duty on earlier occasion and, therefore, he cannot be saddled with WP No.2873.2016
--7- the same duty. He submits that the a tripartite Development Agreement dated 17/04/2008 was executed between the Government of M.P. and Madhya Pradesh Housing Board and present respondent for Development of Central Business District in South T. T. Nagar Bhopal. The Development Agreement itself envisaged the implementation of the whole project with the answering respondent as a lessee of the government for a period of 30 years. As per the stipulations of the said agreement, a lease deed dated 21/09/2011 was executed between the petitioner and answering respondent. The answering respondent paid a total of Rs.17.60,30,400/- of Stamp Duty and Rs.12,57,36,030/- of Registration Fees respectively as a lessee to the State Government. The stamp duty was calculated on the basis of the said 'lease deed' in terms of Entry 33 of Schedule 1-A of the Indian Stamp Act, 1899. Thus for all purposes the answering respondent was treated as ''lessee'' of the subject land owned by the State Government.
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6. It has further been submitted by the respondents that Collector of Stamp was himself under a doubt as to the charge-ability of stamp duty on the Development Agreement and, therefore, he referred the matter to the Chief Controlling Revenue Authority for opinion under Section 56(2) of the Act. However, without waiting for the opinion of the Chief Controlling Revenue Authority, the Collector of Stamp has passed the order dated 19/02/2014. Thus, in light of the aforesaid, learned counsel for the respondents submits that petition be dismissed.
7. I have heard learned counsel for the parties and perused the record as well as the order passed by the Board of Revenue.
8. From perusal of the record it reveals that a tripartite Development Agreement was executed between the Government of M.P., Madhya Pradesh Housing Board and the present respondent for development of Central Business District in South T. T. Nagar, Bhopal. Certain WP No.2873.2016
--9- questions were raised in the Madhya Pradesh Legislative Assembly alleging the evasion of stamp duty by the answering respondent. As a consequence of the same, show cause notice was issued by the petitioner to the answering respondent and proceedings were registered against the respondents for stamp evasion under Section 48-B of the Indian Stamp Act, 1899. The respondents filed their reply to the said show cause notice and objected to the very maintainability of the proceedings against the same on the ground that the development agreement as being the lessee of the subject land, no stamp duty is payable under Entry 5(d) of Schedule 1-A of the Act. The Collector of Stamps thereafter referred the matter to the Chief Controlling Authority for opinion under Section 56(2) of the Act. However, without waiting for the opinion, the Collector of Stamps had passed an order dated 19/02/2014, thereby imposing the stamp duty of Rs.6,70,59,100/- and a penalty of the same amount on the answering respondent. Being aggrieved by that order, respondent had preferred a revision WP No.2873.2016
--10- before the Board of Revenue. The Board of Revenue by the impugned order has set aside the order passed by the Collector of Stamps. Being aggrieved by that order the petitioner has filed the present petition.
9. The contention of learned counsel for the petitioner is that respondent is neither the owner nor the lessee of the said land and, therefore, the Collector of Stamps has rightly held that on the said agreement, the stamp duty would be payable as given under the Entry 5(d) of Schedule 1-A of the Act.
10. On the other hand, learned counsel for the respondents have relied number of Clauses given in the Development Agreement dated 17/04/2008. The Clause-D of the Agreement says that proposals were invited from eligible bidders to develop on concessional cum lease basis. Further Clause 8.1 of the said Agreement says that in accordance with the terms and conditions set forth in the Agreement and through the Lease Deed to be entered in to between WP No.2873.2016
--11- Government of M.P. and the Developer in the form annexed as Schedule 9, Government of M.P. hereby grants to the Developer and the Developer hereby accepts the lease, with respect to the Project Site for a period of 30 years taking effect or commencing from the date of expiry of the Concession Period. The Clause 8.2 provides that the lease has been granted to the Developer. Sub-Clause (1) of Clause 10 provides that Developer shall be entitled to sub- lease or license any or all part of the Realty Facilities for the purposes for which it has been constructed granting the same or limited powers herein contained and in accordance with the terms of this Agreement. All these Clauses shows that the land in question was granted on lease for the period of 30 years to the respondents.
11. Learned counsel for the respondents further submits that respondents had also filed a copy of the lease deed dated 21/09/2011 as Annexed R/1 on record. The respondent had also deposited the lease rent of Rs.17,60,30,400/- as stamp duty and Rs.12,57,36,030/- as WP No.2873.2016
--12- registration fees as a lessee to the State Government. The said stamp duty was calculated on the basis of said lease in terms of Entry 33 of Schedule (1) of the Indian Stamp Act, 1899. Entry 5(d) of Schedule 1-A of the Act provides for payment of stamp duty on Agreement or Memorandum of an agreement. The said Entry reads as under :-
"5(d): If relating to the construction of a building on a land by a person other than the owner or lessee of such land and having stipulation that after construction, such building shall be held jointly or severally by that other person and the owner or the lessee, as the case may be, of such land, or that it shall be sold jointly or severally by them or that a part of it shall be held jointly or severally by them and the remaining part thereof shall be sold jointly or severally by them."
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12. As per the said Entry, in case of a construction of a building on a land by a person other than the owner or lessee of such land then the stamp duty would be payable @ 2% of the market value of the land. On the basis of said Entry, the Collector of Stamps has held that respondent is neither owner or lessee of such land and, therefore, he has assessed stamp duty @ 2% of market value of land. However, while passing the order the Collector of Stamp has overlooked the fact that the lease agreement was executed between the petitioner and respondent and as per the Agreement the respondent had already paid the stamp duty on the lease agreement as well as registration fee also. Therefore, the Board of Revenue has rightly held that the respondent cannot saddle with the stamp duty twice.
13. The High Court of Bombay in the case of The Chief Controlling Revenue Authority vs. Trustees of the Port of Bombay & another, 1951 ILR page 881, has held as under :-
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"We must also bear in mind that this being a fiscal statute we should give it a construction which prevents hardship to the subject and which does not compel the subject to pay a duty twice over. The Stamp Authorities are only concerned with the collection of fiscal duty; and if two documents are executed, and between the two all the duty that the subject is liable to pay has been paid to the fiscal authorities, then the fiscal authorities are not concerned as to whether a particular duty should have been paid on the first document and a particular duty should have been paid on the second document. The proviso is intended to give effect to this very position. All that the Legislature was concerned with is that, when you have cases of agreements for lease and leases, between the two documents no more stamp duty WP No.2873.2016
--15- should be paid than the ad valorem duty under art.35 and the additional duty of annas 12, and the proviso was intended to give effect to this intention."
14. As per the said judgment, the fiscal statute should be given the construction which prevents hardship to the subject and which does not compel the subject to pay a duty twice over. Thus, in light of the said judgment, I do not find any reason to interfere into the said writ petition. The petition is, therefore, dismissed.
(MS. VANDANA KASREKAR) JUDGE manju WP No.2873.2016
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