Telangana High Court
Amer Ali Khan vs The State Of Telangana, on 4 October, 2024
* THE HON'BLE SRI JUSTICE N.V.SHRAVAN KUMAR
+ Writ Petition No.21723 of 2023
% 04.10.2024
# Between:
Amer Ali Khan S/o. Zahed Ali Khan,
Aged about 46 years, Occ: New Editor,
R/o. H.No.4-11-55, M.M. Pahadi,
Rajendranagar, R.R.District,
Rep.by his Special Power of Attorney
Mr.Mohammed Ghouse Ifthaqri S/o Khaja Miaya,
Aged about 54 years, Occu: Business
R/o.H.No.17-1-30/D/B, R.C.Nagar,
Madannapet, Hyderabad.
... Petitioner
Vs.
The State of Telangana,
Rep.by its Principal Secretary,
Revenue (Registration & Stamps) Department,
Secretariat, Hyderabad and others.
... Respondents
! Counsel for Petitioner : Mr.Mohd.Abdul Hai
^ Counsel for Respondents : G.P. for Stamps & Registration
<GIST:
> HEAD NOTE:
? Cases referred
1. 2016 (1) ALD 106 (SC)
2. MANU/SC/0280/2024
NVSK, J
2 W.P. No.21723 of 2023
THE HONOURABLE SRI JUSTICE N.V. SHRAVAN KUMAR
W.P. No.21723 of 2023
ORDER:
This writ petition has been filed seeking to declare the action of the 3rd respondent, District Registrar, in issuing the impugned order bearing Proceedings No.Refunds/8087/2021 dated 26.10.2022 refusing to refund the Stamp Duty and Transfer Duty pertaining to the pending Doc.No.P-99/2021 on the file of the 4th respondent, Joint Sub-Registrar-II, as being illegal and arbitrary and consequently to set aside the same, insofar as the refusal for refund of the Stamp duty and transfer duty are concerned and also to direct the respondent authorities to refund the Stamp duty and transfer duty in accordance with law.
2. It is the case of the petitioner that he entered into a sale deed with one Khairunnisa Begum W/o. late Syed Yousuf Akhtar for purchase of open land admeasuring 3630 square yards in Sy.No.599, 600, 601 and 611 bearing H.No.8-1 corresponding to Old No.320/1, situated at Shaikpet, Hyderabad. For the purpose of registration of sale deed, he approached the 4th respondent and obtained the particulars as to the Stamp Duty, Registration etc., to the tune of Rs.65,37,500/- by way of Challan No.920MPR050921 dated 05.09.2021 for Rs.10,500/- and Challan No.637RLR130921, dated 13.05.2021 for Rs.65,27,400/-. Accordingly, he paid the Stamp Duty of Rs.65,37,500/- on 13.09.2021 and presented the sale deed before NVSK, J 3 W.P. No.21723 of 2023 the 4th respondent for registration on 15.09.2021 and the said document was received and admitted but kept pending bearing No.P-99/2021. Later, the 4th respondent refused to register the sale deed and passed the refusal order No.1 of 2021 on 14.10.2021 citing various reasons for refusal to register the document P.99/2021.
3. It is submitted that after examining the reasons cited in the said refusal order, the petitioner had chosen to withdraw the said proposal and accordingly made a representation on 25.11.2021 for returning of the total stamp duty, registration charges etc., of Rs.65,37,500/-. Since no action was taken on the said representation, the petitioner filed W.P. No.36625 of 2021 and this Court disposed of the same on 24.08.2022 with the following order:
"Without going into the merits or demerits of the case, having regard to the fact that the petitioner has already submitted representation dated
25.11.2021 to the respondent No.4 - District Registrar, Hyderabad (South), Hyderabad, for returning the stamp duty of Rs.65,37,900/- paid by the petitioner towards registration of document bearing No.P.99/2021, the respondent No.4 is directed to consider and dispose of the petitioner's representation dated 25.11.2021 strictly in accordance with law, as expeditiously as possible, preferably, within a period of eight (8) weeks from the date of receipt of a copy of this order."
Thereafter, in obedience to the said orders, the 3rd respondent has passed the impugned order dated 26.10.2022, which reads as under:
NVSK, J 4 W.P. No.21723 of 2023 "....
In this regard, the applicant is informed that the stamp duty and transfer duty which were paid through the subject challans are utilized with the said document under the provisions of the Indian Stamp Act - 1899 as such the intended purpose of duties paid is served. Hence, the Stamp duty, Transfer duty which were paid in respect of the subject document cannot be refunded as the purpose for which they were paid are served. ...."
Aggrieved by the said impugned order, the petitioner filed the present writ petition.
4. On behalf of the respondents, the 3rd respondent, District Registrar, filed counter affidavit, inter alia, stating that the 3rd respondent has obtained clarification from the 2nd respondent i.e., Commissioner & Inspector General Registration & Stamps, vide Memo No.S2/9935/2021, dated 21.10.2022 to the effect that the stamp duty should not be refunded in respect of refused documents which did not comply with the provisions of Registration Act, 1908. Following the said clarification of the 2nd respondent, the 3rd respondent has issued the impugned speaking order dated 26.10.2022 rejecting the request of the petitioner for refund of the stamp duty paid in respect of the refused sale deed.
NVSK, J 5 W.P. No.21723 of 2023
5. The learned counsel for the petitioner would submit that when the purpose for which the stamp duty and transfer duty are paid by way of Challan is not served, the said stamp duty and transfer duty has to be refunded to the party by way of deducting the necessary charges, if any. He would further submit that as per the limitation period prescribed, the refund of the stamp duty has to be claimed within a period of six months for claiming the stamp duty and the stamp duty has to be refunded after deducting 10% of the total amount of duty and in the instant case, the petitioner had submitted the representation on 25.11.2021 i.e., well within the limitation period. Hence, the impugned proceedings dated 26.10.2022 is not sustainable to the extent of rejecting to return the stamp duty and transfer duty which were paid through the subject challans. In support of his claim, he placed reliance on the judgments rendered in the case of Committee-GFL Vs. Libra Build Tech (P) Ltd., and others 1 and in the case of State of Maharashtra and Others Vs. National Organic Chemical Industries Limited 2.
6. On the other hand, the learned Assistant Government Pleader Sri Rakesh Kumar appearing for the respondents, Stamps and Registration, while reiterating the counter averments, would further submit that the sale deed in question was presented before the 4th respondent and the execution of the document was admitted before him and as such, it is obvious that the purpose for which it was 1 2016 (1) ALD 106 (SC) 2 MANU/SC/0280/2024 NVSK, J 6 W.P. No.21723 of 2023 executed was served but it was refused for non-compliance of the provisions of the Registration Act, 1908 and the reasons for refusal were mentioned in the refusal order passed by the 4th respondent. He would further submit that there is a provision in the Registration Act, 1908 for refund of the registration fee and user charges where documents were not registered by any reason by the Registering Officers. Therefore, bill for refund of registration fee and user charges was prepared and furnished to the Treasury and subsequently the amounts have been refunded to the petitioner. With regard to the mutation charges the matter was referred to the Government and the orders are awaited. The 4th respondent has levied the stamp duty in respect of the refused sale deed under Section (3) read with Article 47(A) of the Schedule-I (A) to the Indian Stamp Act, 1899. It is further submitted that the petitioner has paid the stamp duty, registration fee etc., in respect of the impugned sale deed for the purpose of registration of the schedule property and presented before the 4th respondent for registration and as such, the purpose for which the sale deed in question was executed was very much served. The 4th respondent in turn examined the document as a whole and noticed that the petitioner has failed to comply with the provisions of the Registration Act, 1908. Therefore, the sale deed was refused for registration and accordingly orders are issued by the 4th respondent.
NVSK, J 7 W.P. No.21723 of 2023
7. It is further submitted that the Chapter-V (runs from Section 49 to 55) of the Indian Stamp Act, 1899 pertains to allowances for Stamps in certain cases. Provision was made in the said chapter under Section 49 which comes into play in respect of claim for spoiled stamps. Refund can be given under Section 49 within the period of limitation as contemplated under Section 50. Under Sub Section (d) of Section 49, refund for executed documents can be granted as elaborated therein. In sub Section (d) of Section 49, no provision was made for refund of the stamp duty paid in respect of the refused document. Transfer duty forms part of the stamp duty which is collected as surcharge on the stamp duty. Therefore, stamp duty and transfer duty are inseparable and go in tandem with each other. In view of the above provisions of the Indian Stamp Act, it is crystal clear that the prayer of the petitioner is palpably wrong, manifestly erroneous and demonstrably unsustainable in law and in fact no provision was made in the Indian Stamp Act, 1899 to refund the stamp duty paid in respect of the documents that were refused registration by the Registering authority acting under the provisions of the Registration Act, 1908.
8. Heard the learned counsel on either side and perused the material made available on the record.
9. Admittedly, the petitioner had paid stamp duty of Rs.65,37,500/- on 13.09.2021 and presented the sale deed before the 4th respondent for registration on 15.09.2021 and the said document NVSK, J 8 W.P. No.21723 of 2023 was received and admitted but kept pending bearing No.P.99/2021 and thereafter refusal order No.1 of 2021 was passed on 14.10.2021 for various reasons.
10. The main grievance of the petitioner is that vide impugned proceedings dated 26.10.2022, the respondents authority have refused to refund the stamp duty on the ground that the subject challans are utilised with the said document under the provisions of the Indian Stamp Act, 1899 as such, the intended purpose of duties paid is served.
11. In the instant case, it is to be noted that the petitioner has not challenged the refusal order however, after examining the reasons for refusal had chosen to withdraw the proposal and accordingly, submitted a representation for refund of the stamp duty etc. The petitioner on his own volition has decided to withdraw the proposal of the registration.
12. For better appreciation, Section 49 of the Indian Stamp Act, 1899, which deals with certain allowances for spoiled stamps, is extracted hereunder:
"49. Allowance for spoiled stamps. -- Subject to such rules as may be made by the State Government as to the evidence to be required, or the enquiry to be made, the Collector may, on application made within the period prescribed in section 50, and if he is satisfied as to the facts, NVSK, J 9 W.P. No.21723 of 2023 make allowance for impressed stamps spoiled in the cases hereinafter mentioned, namely: --
(a) the stamp on any paper inadvertently and undesignedly spoiled, obliterated or by error in writing or any other means rendered unfit for the purpose intended before any instrument written thereon is executed by any person;
(b) the stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto;
(c) in the case of bills of exchange payable otherwise than on demand or promissory notes;
(1) the stamp on any such bill of exchange signed by or on behalf of the drawer which has not been accepted or made use of in any manner whatever or delivered out of his hands for any purpose other than by way of tender for acceptance:
Provided that the paper on which any such stamp is impressed, does not bear any signature intended as or for the acceptance of any bill of exchange to be afterwards written thereon;
(2) the stamp on any promissory note signed by or on behalf of the maker which has not been made use of in any manner whatever or delivered out of his hands;
(3) the stamp used or intended to be used for any such bill of exchange or promissory note signed by, or on behalf of, the drawer thereof, but which from any omission or error has been spoiled or rendered useless, although the same, being a bill of exchange may have been presented for NVSK, J 10 W.P. No.21723 of 2023 acceptance or accepted or endorsed, or, being a promissory note, may have been delivered to the payee;
Provided that another completed and duly stamped bill of exchange or promissory note is produced identical in every particular except in the correction of such omission or error as aforesaid with the spoiled bill, or note.
(d) the stamp used for an instrument executed by any party thereto which--
(1) has been afterwards found to be absolutely void in law from the beginning:
(2) has been afterwards found unfit, by reason of any error or mistake therein, for the purpose originally intended:
(3) by reason of the death of any person by whom it is necessary that it should be executed, without having executed the same, or of the refusal of any such person to execute the same, cannot be completed so as to effect the intended transaction in the form proposed:
(4) for want of the execution thereof by some material party, and his inability or refusal to sign the same, is in fact incomplete and insufficient for the purpose for which it was intended:
(5) by reason of the refusal of any person to act under the same, or to advance any money intended to be thereby secured, or by the refusal or non-acceptance of any office thereby granted, totally fails of the intended purpose:
NVSK, J 11 W.P. No.21723 of 2023 (6) becomes useless in consequence of the transaction intended to be thereby effected being effected by some other instrument between the same parties and bearing a stamp of not less value:
(7) is deficient in value and the transaction intended to be thereby effected has been effected by some other instrument between the same parties and bearing a stamp of not less value:
(8) is inadvertently and undesignedly spoiled, and in lieu whereof another instrument made between the same parties and for the same purpose is executed and duly stamped:
Provided that, in the case of an executed instrument, no legal proceeding has been commenced in which the instrument could or would have been given or offered in evidence and that the instrument is given up to be cancelled.
[Explanation I] : The certificate of the Collector under section 32 that the full duty with which an instrument is chargeable, has been paid is an impressed stamp within the meaning of this section.
[Explanation-II] : The endorsement made under Section 10-A is an impressed stamp within the meaning of this section to the extent of the amount as specified therein.]"
13. The said provision of Section 49 deals with the allowance for spoiled stamps and only in certain cases allowances for stamps would be considered. In the case on hand, the petitioner has already NVSK, J 12 W.P. No.21723 of 2023 executed the document and utilised the stamp duty and the registration of subject document was refused for registration for the reasons that the petitioner had failed to comply with the provisions of the Registration Act, 1908 and thereafter, the petitioner made an application to refund the stamp duty which has been rejected since the purpose for which the stamp duty had paid was very much served. Hence, the petitioner cannot take the shelter under the provision of Section 49 of the Indian Stamp Act. It is to be noted that the parties to any document having signed/executed and presented before the registration authorities signifies that the stamp duty has been utilised on the subject document and that the parties have complied with the provisions of the Stamp Act, 1899 and thereafter, the issue of registration of the subject document would be considered as per the provisions of the Registration Act, 1908. As such, the provisions of the Stamp Act, 1899 and the Registration Act, 1908 is distinct and different. In that view of the matter, mere refusal of registration of a document cannot entitle the petitioner for refund of stamp duty which have already been utilised by the petitioner.
14. Insofar as the reliance placed by the learned counsel for the petitioner in the case of the one supra, (Committee-GFL) is a case where contract in question became void as a result of its cancellation which entitled the applicants to seek restitution of the money paid to the State for purchase of stamp duty. Admittedly the transaction originally intended between the parties i.e., sale of properties in NVSK, J 13 W.P. No.21723 of 2023 question by GFIL-Committee to the applicants was not accomplished and failed due to reasons beyond the control of the parties and it was not possible for the parties to conclude the transactions originally intended and the Hon'ble Supreme Court passed order cancelling the transactions in question and directed the seller (GFIL-Committee) to refund the entire sale consideration to the applicants and simultaneously permitted the applicants to claim refund of stamp duty amount from the State Government by order dated 26.09.2012. Thereby a right to claim refund of amount paid towards the stamp duty accrued to the applicants and the applicants were entitled to claim restoration of all such benefits/advantages from the State once the transaction was cancelled by the Court on 26.09.2012 in the light of the principle contained in Section 65 of the Contract Act which enable the party to a contract to seek restoration of all such advantage from other party which they took from such contract when the contract is discovered to be void or becomes void.
15. As regards to the reliance placed by the learned counsel for the petitioner in the case of the two supra, (State of Maharashtra), respondent-Company had increased its share capital and accordingly paid a stamp duty as per Article 10 of Schedule-I of the Bombay Stamp Act, 1958. The State amended Article 10 and introduced a maximum cap of Rupees Twenty Five Lakhs on stamp duty which would be payable by a company. Subsequently, the respondent passed a resolution for a further increase in its share capital and paid NVSK, J 14 W.P. No.21723 of 2023 rupees Twenty Five Lakhs as stamp duty. However, according to the respondent this was done inadvertently as it was soon realised that stamp duty was not liable to be paid by them since the maximum stamp duty was of rupees Twenty Five Lakhs payable on Articles of Association as per the provisions of the Stamp Act, had already been paid by them. Consequently, the respondent wrote a letter to appellant No.2 seeking a refund of the payment of Stamp Duty. This request was turned down by appellant No.2, wherein it was stated that whenever the authorised share capital of a company is increased, stamp duty was payable on each such occasion at the time of filing of Form No.5 and it was not a one time measure. Aggrieved by the same, the respondent filed a writ petition before the Bombay High Court challenging the aforesaid order seeking refund of Stamp Duty with interest, paid by them inadvertently. The High Court allowed the writ petition and directed the appellants to refund Stamp Duty along with interest. Under those circumstances, the Hon'ble Apex Court held at paras No.16 and 18 as under:
"16. The fact that the maximum cap of Rs.25 lakhs would be applicable as a one-time measure and not on each subsequent increase in the share capital of a company is fortified directly by the Maharashtra Stamp (Amendment) Act, 2015 which amended the charging Section for Articles of Association i.e., Article 10 of the Stamp Act.
....
NVSK, J 15 W.P. No.21723 of 2023 The effect of the 2015 amendment is that "increased share capital" has also been added in Column 2 and proper stamp duty shall be calculated, for either of the three situations, as per the share capital or increased share capital. This means that the cap will now be applicable on each individual increase.
18. We also do not agree with the Appellant that stamp duty paid before the amendment cannot be taken into account. It is true that the amendment does not have retrospective effect, however since the instrument 'Articles of Association' remains the same and the increase was initiated by the Respondent after the cap was introduced, the duty already paid on the same very instrument will have to be considered. It is not a fresh instrument which has been brought to be stamped, but only the increase in share capital in the original document, which has been specifically made chargeable by the Legislation."
16. Insofar as the cases referred to supra one and two by the learned counsel for the petitioner could not make any submissions to the extent of the applicability of the law laid down in both the cases.
17. Having gone through the facts and circumstances of the cases referred to one and two supra are different to that of the facts and circumstances of the present writ petition and therefore, they are not applicable to the present case.
18. In the case on hand, the petitioner did not challenge the refusal order in which it was reasoned that the petitioner has not complied NVSK, J 16 W.P. No.21723 of 2023 with the provisions of the Registration Act, 1908 and thereafter, the petitioner did not choose to prefer any appeal thereon. That apart, the petitioner himself has chosen to withdraw the proposal of registration and has submitted a representation for returning of the stamp duty etc. Admittedly there is no dispute on the execution of the document and utilisation of the stamp duty.
19. Having regard to the facts and circumstances of the case and the submissions made by the learned counsel on either side, this Court is of the considered opinion that the impugned order bearing Proceedings No.Refunds/8087/2021, dated 26.10.2022 passed by the 3rd respondent, District Registrar, do not suffer from any legal infirmity and as such, there is no reason to interfere with the impugned order dated 26.10.2022. This writ petition is devoid of merits and fails and is liable to be dismissed.
20. In the result, this writ petition is dismissed. There shall be no order as to costs.
As a sequel, miscellaneous applications, if any pending, shall stand closed.
________________________________ JUSTICE N.V. SHRAVAN KUMAR Date: 04.10.2024 Note: L.R. copy be marked.
B/o.
LSK