Prabha Laxman Ghate vs Sub-Registrar And Collector Of ...
2004 Latest Caselaw 102 Bom

JUDGMENT

F.I. Rebello, J.

1. The petitioner is the owner of the property. Pursuant to the Amnesty Scheme introduced by respondent No. 1, by an application dated 13th March 1995, the petitioner produced an Agreement dated 10th April 1989 for regularisation of the document after payment of stamp duty and the penalty of Rs. 250/- as per the Amnesty Scheme. The petitioner, by a letter dated 24th January 1996, was informed that she had to pay a sum of Rs. 47,630/- as stamp duty on the development agreement. It is at this stage that the petitioner filed the petition before this Court in the year 1996. The case of the petitioner is that she took legal advice and insofar as the two flats which were retained for her are concerned, there was no question of payment of any stamp duty as the provisions of the Bombay Stamps Act, 1958, as amended by the Maharashtra Tax Laws (Levy, Second Amendment and Validation) Act, 1996 were not applicable. By the said amendment in Article 5, after Clause (g), Clause (g-a) was introduced which was deemed to have been inserted with effect from the 7th February 1990. The Act was published in the Government Gazette on 16th January 1997 and some of the other provisions came into force on 4th September 1996. Clause (g-a) reads as under :--

"(g-a) if relating to giving authority or power to a promoter or a developer, by whatever name called, for construction on, development of or, sale or transfer (in any manner whatsoever) of, any immovable property.

Five rupees for every five hundred or part thereof of the market value property :

Provided that, the provisions of 32A shall, mutatis mutandis, apply such agreement, records thereof or memorandum, as they apply to an instrument under that section :

Provided further that, if the proper stamp duty is paid under Clause (g) of Article 48 on a power of attorney executed between the same parties in respect of the same property then, the stamp duty under this Article shall be one hundred rupees."

2. On behalf of the petitioner, it is submitted, that the amendment having come into force with effect from 7th February 1990 and the agreement entered into by the petitioner and the developer is of 10th April 1989, the amendment would not apply and consequently the petitioner was not called upon to pay stamp duty as demanded by respondent No. 1's letter dated 13th March 1995.

On the other hand, on behalf of the respondents, a reply has been filed by one Dilip Uttamrao Salunkhe, working as Joint District Registrar and Collector of Stamps, Pune. It is the case of the respondents that the petitioner had applied in a prescribed format under Amnesty Scheme for regularisation of document i.e. Agreement dated 10th April, 1989. That agreement was to be adjudicated and stamp duty was to be recovered after notice and after perusing the contents of the said document. It is then set out that the petitioner granted development right to the developer for the purpose of construction of a multi-storeyed building on the said plot of land bearing sub-plot No. 10. According to the said plan, there were in all six flats which had to be constructed by the developer at his own cost. Out of six flats, two flats on the ground floor bearing flat Nos. 1 and 2 having built up area about 1293 and 540 sq.ft. respectively with open space and open terrace over flat No. 5 in the proposed building to be constructed had to be exclusively reserved for her own residence. Reference is then made to part of paragraph 2 of the Agreement, which reads as under :--

"It is mutually agreed that the consideration of the FSI to be exploited for sale of Four flats on ownership basis is fixed at Rs. 6,50,000/- (Rupees Six Lacs Fifty Thousand Only) out of which Rupees One Lac was to be paid to the Owner by the Developer in Cash as hereinafter stated and the remaining Rs. 5,50,000/- (Rupees Five Lacs Fifty Thousand only) are to be adjusted towards the constructional cost of Flat Nos, 1 and 2 and open terrace on the flat No. 5 to be constructed by the Developer for the owner. The cash consideration is to be paid as follows :--

a)      Rs. 50,000/- already paid on 26-9-1988
 

b)      Rs. 25,000/- on or before 15-6-1990
 

c)      Rs. 25,000/- on completion of the building".  
 

The Affiant then relying on Clause 8 of the Agreement has averred that the petitioner/owner is required to pay the stamp duty to the Government and thereafter flat Nos. 1 and 2 be given to the petitioner after construction by the developer and the same were going to be reconstructed. The reference is then made to the Scheme introduced by the Government. It is not necessary to go through the various other averments as on behalf of the respondents, the learned Counsel contends that the agreement has been considered to be a conveyance by the respondents and as such the petitioner was called upon to pay the stamp duty treating the said agreement as a conveyance.

3. Having heard the learned Counsel for both the parties, the real question is whether the petitioner is liable to pay tax on the agreement either under Article 5(g-a) as amended or by treating the document as a conveyance.

Dealing with Article 5(g-a), it is clear that the said Article applies only in respect of those agreements which have come into effect from 7th February 1990. The amending Act though published in the official gazette on 16th January 1997, insofar as Article 5(g-a) came into force with effect from 7th February 1990. There is no dispute between the parties that the agreement in question was before that date having been entered into on 10th April 1989. It is thus clear that insofar as the agreement in question is concerned, no stamp duty was payable. Stamp duty, if at all, would be payable only in respect of those agreements as set out under Article 5(g-a) which are entered into on or after 7th February 1990. This being not the case, in the present petition, the demand made by the respondents even at the petitioner's request on that count is liable to be set aside. Even assuming that the petitioner had wrongfully applied, that, by itself, is no ground for the respondents to insist on the petitioner paying stamp duty, if the same is not due and payable according to law. The respondents, therefore, could not call upon the petitioner to pay the stamp duty on agreement. The demand by the respondents is clearly without jurisdiction.

4. The second contention of the respondents is that the Agreement dated 10th April 1989 is a conveyance. Conveyance in law would contemplate a transfer of the property or interest from one person to another. In the instant case, on a perusal of the agreement between the petitioner and the developer, it is clear that there has been no transfer of property or interest in property by the petitioner in favour of the developer, On the contrary, all that is provided is that the developer shall develop the property and reserve for the petitioner herein two flats on the said property. The developer in turn was given the right to sell FSI in respect of other four flats. The petitioner, therefore, continued to be the owner of the property and if and at all in respect of the other four flats, at the highest, on the conveyance being entered into with parties purchasing the flats, stamp duty would be payable. Insofar as the two flats, which are reserved for the petitioner on her own land, the petitioner continued to be the owner of the land and the flats and, therefore, there was no question of the petitioner being called upon to pay stamp duty.

Even in respect of the remaining four flats, the petitioner has averred in paragraph 5 of the petition that the four flat purchasers had already paid their respective stamp duties for their flats as such there is no requirement of payment of stamp for the agreement. Insofar as these averments are concerned, there is no specific denial by the petitioner. Even otherwise, at the highest, if the flat purchasers had not paid the stamp duty, it is only those other flats which have been transferred to the flat purchasers which will be assessable to stamp duty. It is clear that insofar as the petitioner is concerned, the developer has only constructed a building for the petitioner on the petitioner's own land and there has been no transfer of interest in the property in favour of the developer nor would the agreement constitute an instrument under which any right, title or interest has been transferred from the petitioner to the developer. The very fact that Article 5(g-a) was introduced by the amendment would indicate that the legislature, in order to bring such transactions, which otherwise were not covered under the provisions of the Act, as it then stood, thought to amend the Stamp Act and bring such transactions also within the ambit of the Stamps Act and subject to duty. Considering that we find that the second contention of the respondents is also devoid of merit.

5. In the light of this, the petition will have to be allowed and the same is allowed. Rule is made absolute in terms of prayer Clause (a) of the petition. In the circumstances of the case, there will be no order as to costs.

6. Certified copy expedited.

7. Authenticated copy of this judgment be made available to the parties.