M/S Riya Finance & Investment vs State Of U.P. & Others
2017 Latest Caselaw 2483 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?AFR 
 
Court No. - 6
 
Case :- WRIT - C No. - 48671 of 2003
 
Petitioner :- M/S Riya Finance & Investment
 
Respondent :- State Of U.P. & Others
 
Counsel for Petitioner :- Anupam Kulsheshtha
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble B. Amit Sthalekar,J.

Heard Shri Anupam Kulsheshtha, learned counsel for the petitioner and Shri Shashikant Upadhyay, learned standing counsel for the respondents.

The petitioner in the writ petition is seeking quashing of the order dated 31.7.2003 passed in revision and the order dated 11.10.2002 passed by the Collector, Stamp in proceedings under section 33/47-A of the Indian Stamp Act, 1899.

Briefly stated the facts of the case are that the petitioner purchased property No 6/174-M, 6/173 and 6/175 situated at Phatak Surajbhan, Agra for a consideration of Rs. 37,61,000/- and Rs. 50,008/- was paid towards stamp duty. The instrument was the submitted before the Sub Registrar on 21.8.2000. However, proceedings under section 47-A of the Act were initiated against the petitioner and a  deficiency of stamp duty at Rs. 4,26,092/- was computed against the petitioner. The petitioner filed his objections and thereafter the deficiency of stamp duty was computed at Rs. 5,48,407/- and interest at 2% mensem which comes to about 10,969/- per month was also imposed. Aggrieved the petitioner filed revision before the Revisional Authority who has upheld the order of the Collector, Stamps.

The sole contention of the petitioner in the present writ petition and the submission of the learned counsel for the petitioner is that interest was charged illegally and was inadmissible inasmuch as there was no provision in Section 47-A of the Act, 1899 at the relevant point of time for charging interest. The submission is that payment of simple interest was introduced into the statute by introduction of sub-section (4A) to Section 47-A by the U.P. Act No. 38 of 2001 w.e.f. 20.5.2002 and prior to that the Act was silent with regard to charging of interest. Sub section (4A) of Section 47-A reads as under:

"(4A). The Collector shall also require along with the deficit stamp duty or penalty required to be paid under clause (ii) if sub section (4), the payment of a simple interest at the rate of one and half per cent per mensum on the amount of deficit stamp duty calculated from the date of the execution of the instrument till the date of actual payment.

Provided that the amount of interest under this sub-section shall be recalculated if the amount of deficit stamp duty is varied on appeal or revision or by any order of a competent court or authority."

The submission further is that the property was purchased and the sale deed was executed on 7.8.2000 and the registered instrument was executed on 18.7.2001 i.e. prior to the date of introduction of the amended sub-section (4A) to Section 47-A of the Act, 1899 and therefore interest could not have been imposed from the date of execution of the instrument.

The learned standing counsel, on the other hand, submitted that since the proceedings have been initiated after introduction of sub-section (4A) into Section 47-A of the Act, 1899, therefore, the charging of interest from the date of execution of the instrument was absolutely correct and in any case the order of the Collector, Stamps was itself passed on 11.10.2002 i.e. after the introduction of sub section (4A) to Section 47-A of the Act, 1899.

There is absolutely no dispute that the Indian Stamp Act is a fiscal statute to assist the collection of the revenue in the State and, therefore, the interpretation of the fiscal statute has to be strictly on the basis of intent and object of the particular statute.

As held by the Supreme Court in AIR 1961 SC 1047 (Commissioner of Sales Tax U.P. Vs. Modi Sugar Mills Ltd) in paragraph 10 that in interpreting a taxing statute equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed: it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency. The relevant paragraph 12 of the said judgement reads as under:

"It is not provided that in giving effect to the alteration of the rate during the course of the year of assessment an artificial division of the turnover of the previous year should, in applying the altered rate be made. The Legislature having failed to provide machinery for working out the liability, the attempted projection becomes unworkable. A legal fiction must be limited to the purposes for which it has been created and cannot be extended beyond its legitimate field. The turnover of the previous year is fictionally made the turnover of the year of assessment: it is not the actual or the real turnover of the year of assessment. By the imposition of a different tariff in the course of the year, the incidence of tax liability may competently be altered by the Legislature, but for effectuating that alteration, the Legislature must devise machinery for enforcing it against the tax payer and if the Legislature has failed to do so, the court cannot resort to a fiction which is not prescribed by the Legislature and seek to effectuate that alteration by devising machinery not found in the statute"

With regard to charging of interest whether it should be retrospective or prospective, the Supreme Court in paragraph 13 of Indian Carbon Ltd. And others Vs. State of Assam reported in (1997) 6 SCC 479 in paragraph 13 and 14 has held as under:

"13.Now, the words "charging or payment or interest" in Section 9(2) occur in what may be called the letter part thereof. Section 9(2) authorises the sales tax authorities of a State to assess, reassess, collect and enforce payment of the Central sales tax payable by a dealer as if it was payable under the State Act; this is the first part of Section 9(2). By the second part thereof, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including provisions relating to charging and payment of interest, apply accordingly. Having regard to what has been said in the case of Khemka & Co., it must be held that the substantive law that the States' sales tax authorities must apply is the Central Act. In such application, for procedural purposes alone, the provisions of the State Act are available. The provision relating to interest in the latter part of Section 9(2) can be employed by the States' sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax the States' sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon.

14.The requirement of the 1st respondent's sales tax authorities that the appellants should pay interest at the rate of 24% p.a. on delayed payments of Central sales tax under the provisions of Section 35(A) of the State Act must, therefore, be held to be bad in law."

In (1999) 4 SCC 192 (V.V.S. Sugars Vs. Government of A.P. And others), the Supreme Court in paragraphs 4,5 and 6 has held as under:

"4.The said Act is a taxing statute and a taxing statute must be interpreted as it reads, with no additions and no subtractions, on the ground of legislative intendment or otherwise.

5.On the plain wording of clause (a) of sub-section (3D) of Section 21 of the Act as amended, we find it difficult to agree with the High Court. The provisions thereof say that sub-section (5) shall not apply in relation to tax levied under sub-section (1) of Section 21 on purchase of sugarcane. The provisions came into force on the date of the commencement of the Amending Act. The provisions are open ended and are intended to apply upon the commencement of the Amending Act with no limitation in time.

6.This Court in India Carbon Limited & Ors. vs. State of Assam (1997 (6) SCC 479) has held, after analysing the Constitution Bench judgment in J.K. Synthetic vs. CTO (1994 (4) SCC 276), that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf. There being no substantive provision in the Act for the levy of interest on arrears of tax that applied to purchases of sugarcane made subsequent to the date of commencement of the Amending Act, no interest thereon could be so levied, based on the application of the said Rule 45 or otherwise."

The judgement in the case of Indian Carbon Ltd. has been referred to by the Supreme Court in (2001) 3 SCC 76 (Vikrant Tyres Ltd. Vs. First Income Tax Officer, Mysore).

As already noted above in the present case the amendment introducing the liability to pay interest was introduced in Section 47-A of the Act, 1899 through the amending Act No. 38 of 2002 which introduced sub-section (4A) w.e.f. 20.5.2002. Therefore on the date of execution of the instrument there was no such provision for payment of interest on deficiency of stamp duty even if for the sake of assumption it may be said that there was deficiency of stamp duty.

In this view of the matter coming to the facts of the present case there being no statutory provision for charging interest w.e.f. the date of instrument or date of registration of the sale deed a demand of interest could not have been placed upon the petitioner from a date anterior to the date of amendment in the statute. 

Therefore on a conspectus of facts and the law laid down by the Supreme Court, the impugned orders dated 31.7.2003 and 11.10.2002 cannot survive and are accordingly quashed.

The writ petition stands allowed.

Order Date :- 18.7.2017/o.k.