Gujarat High Court
Hitesh D Desai vs Superintendent Of Stamps And Inspector ... on 24 February, 2015
Equivalent citations: AIR 2016 GUJARAT 62
Author: Abhilasha Kumari
Bench: Abhilasha Kumari
C/SCA/17485/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 17485 of 2013
With
SPECIAL CIVIL APPLICATION NO. 17486 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE SMT. JUSTICE ABHILASHA KUMARI
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1 Whether Reporters of Local Papers may be allowed to see Yes
the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any order
made thereunder ?
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HITESH D DESAI....Petitioner(s)
Versus
SUPERINTENDENT OF STAMPS AND INSPECTOR GENERAL OF
REGISTRATION & 3....Respondent(s)
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Appearance:
MR HRIDAY BUCH, ADVOCATE for the Petitioner(s) No. 1
Ms.Vacha Desai,learned ASST.GOVERNMENT PLEADER for the
Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 2 - 4
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CORAM: HONOURABLE SMT. JUSTICE ABHILASHA
KUMARI
Page 1 of 22
C/SCA/17485/2013 JUDGMENT
Date : 24/02/2015
COMMON ORAL JUDGMENT
1. These petitions under Articles 226 and 227 of the Constitution of India have been preferred, inter alia, laying challenge to the orders dated 15-4-2013, passed by respondent No.1, the Chief Controlling Revenue Authority, whereby the applications of the petitioners made under Section 44 of the Gujarat Stamp Act, 1958 ("the Act" for short) for the refund of the excess amount of stamp duty paid by them, have been rejected.
2. Both the petitions arise out of identical issues of fact and law and have been heard together; therefore, they are being decided by a common judgment.
3. For the sake of convenience, the facts as obtaining in Special Civil Application No.17485 of 2013, may be noticed. They are as follows:
3.1 The petitioner executed a Deed of Allotment on 31.03.2011, with Nandoli Co-operative Housing Society, for property bearing sub-plot No.AX-04, admeasuring Page 2 of 22 C/SCA/17485/2013 JUDGMENT 540 sq. yards in Suramya-VII Scheme at village Nandoli, Taluka Kalol, District Gandhinagar, for a total consideration of Rs.13,50,000/-. The said instrument was executed on a non-judicial stamp of Rs.66,500/-. By a Circular dated 02.04.2011, the State Government instructed every Sub-Registrar of the State of Gujarat to commence the implementation of the Annual Statement of Rates- 2011 (commonly known as "Jantri"), from 01.04.2011. Thus, the stamp duty would now be based upon the calculation of the market value of the immovable property based on the new Jantri-
2011, with effect from 01.04.2011. The petitioner was called upon to pay the difference of stamp duty of Rs.51,732/-and made the payment of this amount. Thereafter, the petitioner presented the said Deed of Allotment for registration before respondent No.4 Sub- Registrar on 13.07.2011 and obtained a Certificate under Section 32 of the Act. It is the case of the petitioner that in the meanwhile, a petition came to be preferred in this Court, being Special Civil Application No.9311 of 2011, challenging the Circular dated 02/04.04.2011 of the State Government, on the basis of which the stamp duty had been levied in the cases of the petitioners. During the pendency of this Page 3 of 22 C/SCA/17485/2013 JUDGMENT petition, the State Government issued a clarification dated 09.08.2011, to the effect that the date of the execution of the document would be relevant for the computation of the market value of the property and not the date of presentation. On the basis of the above clarification and the statement made by the learned Assistant Government Pleader appearing in that case, the petition came to be disposed of. 3.2 It is the case of the petitioners herein that after coming to know of the decision of the State Government dated 09.08.2011, they made applications for refund of the excess amount of stamp duty under Section 44(2) of the Act, on 12.09.2011. These applications came to be rejected by respondent No.1, by passing the impugned orders, on the ground that it is the date of the presentation of the document that is relevant and not the date of its execution. 3.3 Aggrieved thereby, the petitioners have approached this Court by way of the present petitions.
4. Mr.Hriday Buch, learned advocate for the petitioners, has submitted that there is no dispute Page 4 of 22 C/SCA/17485/2013 JUDGMENT regarding the fact that the Deed of Allotment was executed on 31.03.2011. It was presented for registration on 13.07.2011 and was registered on 19.07.2011. However, as per the definition of "market value" contained in Section 2(na) of the Act, the market value is to be calculated taking into consideration the price which the property which is the subject matter of the instrument would have fetched, if sold in the open market on the date of the execution of the instrument. It is submitted that taking into consideration the definition of "market value" as per Section 2(na) of the Act, and as the Deed of Allotment was executed on 31.03.2011, the market value as obtaining on 31.03.2011 ought to have been taken into consideration for the calculation of the stamp duty and not the market value prevailing on the date of the presentation of the document. 4.1 It is further submitted that the State Government has itself issued a clarification dated 09.08.2011 in this regard, wherein it is clearly stated that the market value prevailing on the date of the execution of the document would be relevant for the computation of the market value of the property upon which the Page 5 of 22 C/SCA/17485/2013 JUDGMENT stamp duty is leviable. It is submitted that this decision was placed on record by the learned Assistant Government Pleader during the hearing of Special Civil Application No.9311 of 2011 and is reflected in the order dated 17.08.2011 passed in that petition. 4.2 It is further contended that the petitioners have apprised respondent No.1 of the decision dated 09.08.2011 of the State Government and the order passed in Special Civil Application No.9311 of 2011 and it is clear from the impugned orders that respondent No.1 is well conversant with the decision of the State Government and the order of this Court. Though respondent No.1 has stated in the impugned orders that the definition at Section 2(na) of the Act is applicable, he has misapplied the said definition by taking into consideration the date of the presentation of the instrument instead of the date of its execution.
4.3 Taking this Court through the affidavit-in-reply filed on behalf of respondent No.1, it is submitted by the learned advocate for the petitioners that the only ground raised in the said affidavit is that the Page 6 of 22 C/SCA/17485/2013 JUDGMENT petitioners have voluntarily paid the stamp duty at the relevant point of time, therefore, according to respondent No.1, they cannot claim a refund of the excess amount under Section 44 of the Act. 4.4 It is contended that respondent No.1 cannot retain any amount of excess stamp duty paid by a person and can only retain what is permissible in law. The aspect of voluntary payment by the petitioners does not entitle respondent No.1 to retain an excess amount that is not legally due.
4.5 The learned advocate for the petitioner has placed reliance upon a judgment of this Court in Shamjibhai Ranchhodbhai Dabhi v/s The Chief Controlling Revenue Authority, reported in 2009 (2) GLH 191, in order to buttress the above submission. 4.6 The learned advocate for the petitioners has further relied upon a judgment of the Supreme Court in HMM Limited and another v. Administrator, Bangalore City Corporation and another, reported in (1989) 4 SCC 640, in support of his submission that the State Government has no right to retain an amount that is Page 7 of 22 C/SCA/17485/2013 JUDGMENT refundable as that would amount to undue enrichment.
On the strength of the above submissions, it is prayed that the impugned orders be quashed and set aside and the petitions allowed.
5. Ms.Vacha Desai, learned Assistant Government Pleader for the respondents has opposed the submissions advanced by the learned advocate for the petitioners and has supported the orders passed by respondent No.1. She has submitted that the said orders have been passed after taking into consideration the provisions of Section 2(na) of the Act and other material on record. Besides this, the petitioners have voluntarily paid the stamp duty, therefore, they cannot ask for a refund under the provisions of sub-section (2) of Section 44 of the Act. Had the petitioners been aggrieved by the levy of stamp duty, they could have challenged it by preferring an appeal under Section 53(1) of the Act. By not doing so, the petitioners have impliedly accepted the stamp duty determined by the impugned orders and the stamp duty has been paid without any objection.
Page 8 of 22
C/SCA/17485/2013 JUDGMENT On the strength of the above submissions, it is prayed that the petitions be rejected.
6. In rejoinder, Mr.Hriday Buch, learned advocate for the petitioners submits that Section 44 of the Act is a specific provision providing for the refund of excess stamp duty. If the submissions made by the learned Assistant Government Pleader, regarding filing an appeal instead against the levy of stamp duty are to be accepted, it would amount to rendering Section 44, nugatory. It is further submitted that once it is found that stamp duty has been wrongly levied, the principles of law enunciated by the Supreme Court in the judgment of HMM Limited and another v. Administrator, Bangalore City Corporation and another (Supra) would come into play.
7. This Court has heard learned counsel for the respective parties, perused the averments made in the petitions, contents of the impugned orders and other documents on record.
8. The short, but fundamental, question that arises for determination by this Court is, whether the market value of the property which is the subject matter of Page 9 of 22 C/SCA/17485/2013 JUDGMENT an instrument is to be determined by taking into consideration the date of the execution of the said instrument, or the date of its presentation before the Sub-Registrar?
9. The term "market value" was defined in Section 2(na) of the Act in the following terms:
"2.(na) "Market value", in relation to any property which is the subject matter of an instrument means the price which such property would have fetched if sold in open market on the date of execution of such instrument."
10. A plain reading of the said definition leaves no manner of doubt that the market value of a property which is the subject matter of an instrument means the price which such property would have fetched if sold in the open market on the date of the execution of such instrument. There is no denial of the fact that the instruments in the present cases, which are Deeds of Allotment, have been executed on 31.03.2011, a day prior to the coming into force of the Jantri-2011. Therefore, as per the definition of market value in Section 2(na), the market value of the property would mean the market value fetched if the property would Page 10 of 22 C/SCA/17485/2013 JUDGMENT have been sold in the open market on 31-3-2011, which is the date of the execution of the Deeds of Allotment. That the date of the execution of the instrument is 31-3-2011, has not been controverted by respondent No.1 in the impugned orders or the affidavits-in-reply filed in the present petitions. In fact, in the impugned orders, respondent No.1 has referred several times to the provisions of Section 2(na). However, after having done so, respondent No.1 appears to have misdirected himself by taking the market value as it prevailed on the date of the presentation of the instrument, that is, 13.07.2011, instead of on 31-3-2011,when the instruments were executed.
11. It is significant to note that the Jantri-2011, came into effect from 01.04.2011. Obviously, after 1- 4-2011, higher Jantri rates would prevail and the market value would be calculated as per those higher rates. There would, therefore, be a corresponding increase in the levy of stamp duty after 1-4-2011, insofar as the market value of the property which is the subject matter of an instrument is concerned. Page 11 of 22
C/SCA/17485/2013 JUDGMENT 12. The petitioner in Special Civil Application No.17485 of 2013 paid stamp duty at the rate of
Rs.66,500/- as per the market value prevailing as on 31-3-2011. Thereafter, he was called upon to pay the difference of stamp duty of Rs.51,732/-, which was paid by him on 13-7-2011. The petitioner in Special Civil Application No.17486 of 2013 initially paid stamp duty at the rate of Rs.77,500/-. He later paid the difference in stamp duty of Rs.60,391/- when called upon to do so by the respondents. It is only thereafter that the petitioners obtained Certificates of Registration under Section 32 of the Act. Thereafter, on 12-9-2011, the petitioners preferred applications under Section 44 of the Act, for the refund of the excess amount of stamp duty, on the basis of the decision of the State Government dated 9- 8-2011, clarifying that stamp duty was to be levied as per the market value prevailing on the date of the execution of the instrument and not on the date of its presentation. The petitioners also brought to the notice of respondent No.1, the proceedings of Special Civil Application No.9311 of 2011 and the order dated 17-8-2011, whereby the petition was disposed of, on the basis of the decision dated 9-8-2011 of the State Page 12 of 22 C/SCA/17485/2013 JUDGMENT Government.
13. A perusal of the impugned orders reveals that respondent No.1 was very well aware of the said decision of the State Government and has also referred to in his orders. However, contrary to the provisions of Section 2(na) and the decision of the State Government dated 9-8-2011, respondent No.1 has refused to refund the excess stamp duty levied upon the petitioners, by taking into consideration the market value as on the date of the presentation of the instruments for registration, instead of considering the date of their execution, as required by Section 2(na) of the Act and the decision of the State Government dated 9-8-2011.
14. In fact,it appears that respondent No.1 has merely referred to the definition of "market value"
contained in Section 2(na) of the Act, for the mere sake of reference. Far from applying the definition of "market value" in the present cases, respondent No.1 has passed orders in contradiction of the said definition. Instead of taking the date of the execution of the instruments as the date for the Page 13 of 22 C/SCA/17485/2013 JUDGMENT calculation of the market value of the property, respondent No.1 has insisted upon treating the date of the presentation of the document as the date on which the market value is to be calculated. No discernible reason, whatsoever, has been given by respondent No.1 in the impugned orders for such a misapplication of Section 2(na). By passing the impugned orders in a manner contrary to Section 2(na), respondent No.1 has virtually attempted to rewrite the definition of "market value" in Section 2(na) of the Act, which cannot be countenanced. In the view of this Court, taking into consideration the provisions of Section 2(na) of the Act and the decision of the State Government dated 9-8-2011, which is in consonance with the said definition, it is clear that in passing the impugned orders respondent No.1 has committed a glaring and patent error of law which cannot be permitted to stand. The rejection of the applications of the petitioners, without assigning any cogent reasons, except for reiterating that it is the date of presentation that is relevant date for computing the market value, would ultimately amount to undue enrichment on the part of the respondents. In this regard, the observations of the Supreme Court in HMM Page 14 of 22 C/SCA/17485/2013 JUDGMENT Limited and another v. Administrator, Bangalore City Corporation and another (Supra) are relevant and are reproduced hereinbelow:
"12. These observations, in our opinion, in view of the contentions raised on behalf of the Municipality here are apposite in this case. The aforesaid Rule 24 does not apply. In that view, Rules 25 and 26 have no scope of application. Indubitably, amounts have been realised as octroi on the entry of the goods on which octroi was not leviable because these were not for use or consumption within the municipal limits. Mere physical entry into the city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale. In this case, putting the powder from the drums to the bottles for the purpose of exporting or taking these out of the city is neither use nor consumption of the Horlicks powder attracting the levy of octroi. Such amounts, therefore, cannot be retained by the respondent- Corporation. There is no dispute as to the quantum in view of the fact that the amount has now been found to be certified to be credited pursuant to the direction of the learned Single Judge of the High Court. We see no ground as to why amount should not be refunded. Realisation of tax or money without the authority of law is bad under Article 265 of the Constitution. Octroi cannot be levied or collected in respect of goods which Page 15 of 22 C/SCA/17485/2013 JUDGMENT are not used or consumed or sold within the municipal limits. So these amounts become collection without the authority of law. The respondent is a statutory authority in the present case. It has no right to retain the amount, so far and so much. These are refundable within the period of limitation. There is no question of limitation. There is no dispute as to the amount. There is no scope of any possible dispute on the plea of undue enrichment of the petitioners. We are, therefore, of the opinion that the Division Bench was in error in the view it took. Where there is no question of undue enrichment, in respect of money collected or retained, refund, to which a citizen is entitled, must be made in a situation like this."
(emphasis supplied)
15. Insofar as the provisions of Section 44 of the Act are concerned, this court in Shamjibhai Ranchhodbhai Dabhi v/s The Chief Controlling Revenue Authority (Supra), has held as below:
"15. Having heard the learned Advocates appearing for the parties and having considered the rival submissions, the Court is of the view that there is no dispute about the fact that a mistake was committed in mentioning the exact area of the land, which was 15,884 sq. meters as against it was Page 16 of 22 C/SCA/17485/2013 JUDGMENT mentioned as 63,536 sq. meters and accordingly on this area of land, the petitioner has paid the stamp duty of Rs.25,19,886/= + Rs.2,02,000/=. Thus in all Rs.27,21,886/= were paid by the petitioner. In fact the petitioner is required to pay stamp duty of Rs.8,00,554/=. Thus the petitioner is entitled to the refund of excess stamp duty paid. The petitioner's claim is objected only on the ground that the application was not made in time and that the said deficit stamp duty was paid under Section 32A of the Act. However, the respondent being a State Authority cannot retain any amount paid in excess under some genuine or bonafide mistake. Equity demands that if the petitioner is not liable to pay the stamp duty and still it is paid, the same is required to be refunded. There is no justification on part of the respondent authority in denying the claim of refund of excess stamp duty. However the Court looking to the issue involved and equity in the matter, tilts the balance in favour of the petitioner and holds that the petitioner is entitled to refund of the excess stamp duty paid under genuine or bonafide mistake."
(emphasis supplied)
16. It is clear from the principles of law enunciated by the Supreme Court and this Court in the judgments quoted hereinabove, that respondent No.1, being a statutory authority, has no right, whatsoever, to Page 17 of 22 C/SCA/17485/2013 JUDGMENT retain any amount paid by the petitioners in excess of the stamp duty that is legally and validly leviable upon the instruments executed by them. Respondent No.1 cannot retain the excess amount that has been paid by the petitioners in a bonafide manner, even though it may have been paid voluntarily and without protest. When it is found that, as per the relevant provisions of law, the amount paid by the petitioners is in excess of what was actually payable by them, it becomes the duty of State authorities to refund such excess amount and not retain it merely on the ground that it has been paid voluntarily.
17. Thus, the action of respondent No.1 in rejecting the applications for refund preferred by the petitioners is not only unsustainable in law, being in violation of Section 2(na) of the Act, it is also highly inappropriate, as it results in retaining the excess amount of stamp duty paid by the petitioners. There is no justification on the part of the State authorities to retain any amount over and above what is legally leviable upon the petitioners under the Statute. The reason for the refusal to refund the excess amount, as expressed in the affidavit-in-reply, Page 18 of 22 C/SCA/17485/2013 JUDGMENT is the voluntary nature of the payment made by the petitioners. This Court is unable to agree with this reason put forth by respondent No.1, that an amount paid voluntarily by a citizen can be appropriated by a statutory authority just because it bas been paid without objection. The State is bound by law to impose stamp duty as per the provisions of the Statute but is certainly neither authorised, nor justified, to retain even a single rupee over and above the amount actually due and payable as per law.
18. The other objection raised in the affidavit-in- reply, to the effect that the petitioner ought to have preferred an appeal under Section 53(1) of the Act against the levy of excess stamp duty instead of filing an application under Section 44 of the Act is without any substance as the legislature, in its wisdom, has thought it fit to enact Section 44 of the Act for just such a contingency that arises in the present cases, namely, the refund of the excess amount of stamp duty. At this stage, the provisions of Section 44 of the Act may be noticed;
"44. Power to Revenue Authority to refund Page 19 of 22 C/SCA/17485/2013 JUDGMENT penalty or excess duty in certain cases:
(1) Where any penalty is paid under Section 34 or Section 39, the Chief Controlling Revenue Authority may, upon application in writing made within one year from the date of the payment, refund such penalty wholly or in part.
(2) Where, in the opinion of the Chief Controlling Revenue Authority stamp duty in excess of that which is legally chargeable has been charged and paid under Section 32, Section 34 or Section 39, such authority may, upon application in writing made by the party concerned within three months from the date of receipt of the order charging the same, refund the excess."
19. The legislature, while enacting Section 44, appears to have been conscious of the fact that situations can occur when an excess amount of stamp duty has been levied and paid by a citizen. With a view to obviating the difficulties that may arise and ensuring that a remedy is available in such cases, Section 44(2) of the Act has been enacted. In cases where excess stamp duty has been paid, an application can be made under Section 44(2) of the Act for the refund of the excess amount. In the present cases, the applications have been made within the prescribed time Page 20 of 22 C/SCA/17485/2013 JUDGMENT period. There is, therefore, no requirement of filing an appeal under Section 53(1) of the Act as contended by respondent No.1 in the affidavit-in-reply.
20. The cumulative effect of the above discussion is that this Court considers it just and proper to quash and set aside the impugned orders dated 15-4-2013, passed by respondent No.1, in both the petitions in the interest of justice.
Accordingly, the orders dated 15-4-2013, impugned in both the petitions, are hereby quashed and set aside. Respondent No.1 is directed to refund the excess amount of stamp duty paid by the petitioners, taking into consideration the market value of the property as it stood on 31-3-2011,that is, the date of the execution of the instruments. Such refund shall be made with interest at the rate of 6% per annum from the date of the payment of the excess amount of stamp duty, within a period of four weeks from the date of the receipt of a copy of this judgment.
21. The petitions are allowed, in the above terms. Rule is made absolute, accordingly, in both the petitions. There shall be no orders as to costs. Page 21 of 22
C/SCA/17485/2013 JUDGMENT
(SMT. ABHILASHA KUMARI, J.)
ARG
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