Madhya Pradesh High Court
M/S Axis Securities Ltd. vs State Of M.P. on 9 July, 2020
Author: Prakash Shrivastava
Bench: Prakash Shrivastava
WA No.590/2020
1
HIGH COURT OF MADHYA PRADESH
WA No.590/2020
M/s.Axis Securities Ltd. Vs. The State of M.P.
Indore, Dated:09.07.2020
Shri.Manoj Munshi, learned counsel for appellant.
Shri Pushyamitra Bhargava, learned Addl. Advocate
General for respondent/State.
Heard through Video Conferencing.
As per Prakash Shrivastava,J:-
The appellant being aggrieved with the order of the learned Single Judge dated 3/3/2020 dismissing the WP No.5229/2019, has approached this court by way of the present appeal u/S.2(1) of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyaypeeth Ko Appeal) Adhiniyam, 2005.
[2] The appellant had filed the writ petition before the learned Single Judge aggrieved with the levy of penalty by the Collector of Stamp in the order dated 31/1/2012 as also the demand notice in this regard.
[3] The short facts as reflected in the petition are that the appellant is a stock broker company and is a member of Bombay Stock Exchange and National Stock Exchange. It provides brokering service to its client from its office in Indore in respect of sale and purchase of share listed in the Bombay Stock Exchange and National Stock Exchange. During the period from 1/4/2009 to 31/5/2011, the appellant had transacted the business for its client both on delivery base and non delivery base transaction but he had not paid the stamp duty in terms of Sec.41(b) of Schedule I-A of the Indian Stamp Act as applicable in the State of Madhya WA No.590/2020 2 Pradesh. The appellant on 23/6/2011 had deposited the demand draft of Rs.19,58,294/- which includes the stamp duty amounting to Rs.18,13,193/- and interest thereon @ 13% per annum amounting to Rs.1,45,101/- calculated by the appellant himself. The Collector of Stamp had registered the case against the appellant under the provisions of the Stamp Act and by order dated 31/1/2012 had determined the deficit stamp duty of Rs.18,13,193/- and had also levied the penalty equal to the deficit stamp duty amounting to Rs.18,13,193/- u/S.40(1)(b) of the Act. Against the levy of penalty, appellant had approached the writ court and petition has been dismissed.
[4] Learned counsel for appellant submits that the appellant had suo motu approached the Collector by submitting the demand draft for the deficit stamp duty, therefore, penalty has wrongly been imposed. He further submits that provisions of Sec.33 of the Stamp Act cannot be attracted and at the most the Collector could have proceeded u/S.41 of the Act or levied the penalty of Rs.500/- u/S.362 of the Act.
[5] Learned counsel for State opposing the appeal has submitted that the learned Single Judge has already considered all the relevant aspects of the matter and that the penalty has rightly been levied because the appellant had failed to deposit the stamp duty within time. He further submits that the ground which was not raised in reply before the Collector of Stamp cannot be permitted to be raised before this Court.
[6] We have heard the learned counsel for parties and perused the record.WA No.590/2020 3
[7] It is not in dispute though the appellant had become liable to pay the stamp duty in the State of Madhya Pradesh at the time of sale or purchase of the instrument, but he had failed to do so and in respect of the transaction done between 1/4/2009 to 31/5/2011 he had approached the Collector for payment of deficit stamp duty on 23/6/2011. The Collector of stamp by a detailed and exhaustive order has duly taken note of the provisions of law and the default committed by the appellant while imposing the penalty u/S.40(1)(b) of the Act which permits levy of penalty upto ten times of the amount of proper duty or of the deficit portion thereof.
[8] So far as the appellant's submission about invoking Sec.33 of the Act is concerned, the record reflects that no such ground was raised by the appellant in his reply before the Collector. Even otherwise the appellant has not questioned the liability to pay the stamp duty and has confined to the issue relating to levy of penalty only, therefore, the argument relating to registration of case under wrong provision is without any merit.
[9] So far as the submission of counsel for appellant that the Collector should have proceeded u/S.41 of the Act is concerned, a bare perusal of Sec.41, which is quoted below, reveals that the said Section is attracted if the instrument in question is produced before the Collector within one year from the date of its execution or first execution. Above Section further require the appellant to satisfy that the omission to duly stamp the instrument occasioned by accident, mistake or urgent necessity. Sec. 41 reads as under:-WA No.590/2020 4
"41. Instruments unduly stamped by accident.- If any instrument chargeable with duty and not duly stamped, not being an instrument chargeable [with a duty not exceeding ten naye paise] only or a bill of exchange or promissory note, is produced by any person of his own motion before the Collector within one year from the date of its execution or first execution, and such person brings to the notice of the Collector the fact that such instrument is not duly stamped and offers to pay the Collector the amount of the proper duty, or the amount required to make up the same, and the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity, he may, instead of proceeding under sections 33 and 40, receive such amount and proceed as next hereinafter prescribed."
[10] In the present case, the pre-conditions for invoking Sec.41 are not satisfied. Even otherwise no such ground was raised by the appellant in his reply before the Collector of Stamp and no such factual foundation was laid before the Collector, hence the plea of the appellant based upon Sec.41 cannot be accepted.
[11] So far as submission relating to levy of penalty u/S.62 is concerned, the record reflects that before the Collector or before the learned Single Judge no argument for attracting the penalty u/S.62 was made. Even otherwise proviso to Sec.62(1) reveals that levy of fine u/S.62 does not exclude levy of penalty but mere adjustment of the amount is to be done.
[12] A perusal of the order of the learned Single Judge reveals that the learned Single Judge has duly considered the issue relating to liability of the appellant and has also noted that the Collector has taken a lenient view in imposing WA No.590/2020 5 only one time penalty whereas Sec.40(1)(b) provides for levy of penalty upto ten times.
[13] Having regard to the aforesaid, we do not find any merit in this appeal which is accordingly dismissed.
(Prakash Shrivastava) (Vivek Rusia)
Judge Judge
vm
Varghese Mathew
2020.07.13 18:06:39
+05'30'