Karnataka High Court

State Of Karnataka vs Sri. R Praveenchandra on 25 November, 2021

Bench: Alok Aradhe, Anant Ramanath Hegde

                             1



     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

      DATED THIS THE 25TH DAY OF NOVEMBER 2021

                         PRESENT

         THE HON'BLE MR. JUSTICE ALOK ARADHE

                           AND

     THE HON'BLE MR.JUSTICE ANANT RAMANATH HEGDE

             W.A. No.595 OF 2020 (GM-ST/RN)
                            IN
                W.P. No.10794 OF 2011 C/W
             W.P.No.12822 OF 2011 (GM-ST/RN)

BETWEEN:

1.      STATE OF KARNATAKA
        REPRESENTED BY ITS SECRETARY
        DEPARTMENT OF REVENUE
        M S BUILDING
        DR. AMBEDKAR VEEDHI
        BANGLAURU-560 001.

2.      THE DIRECTOR OF MINES AND GEOLOGY
        DEPARTMENT OF MINES AND GEOLOGY
        KHANIJA BHAVAN, 5TH FLOOR
        RACE COURSE ROAD
        BANGALURU-560 001.

3.      THE DEPUTY DIRECTOR OF MINES AND GEOLOGY
        DEPARTMENT OF MINES AND GEOLOGY
        B L GOWDA EXTENSION
        NEXT TO BASAPPA HOSPITAL
        CHITRADURGA.

4.      THE DEPUTY INSPECTOR GENERAL
        OF REGISTRATION, (VIGILANCE)
        OFFICE OF THE INSPECTOR
        GENERAL OF REGISTRATION
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       AND COMMISSISONER OF STAMPS
       SHIMSA BHAVAN, WATER BOARD
       BUILDING, 8TH BLOCK
       JAYANAGAR, BENGLAURU.

5.     STATE OF KARNATAKA
       REPRESENTED BY ITS SECREATARY
       DEPARTMENT OF REVENUE
       M S BUILDING
       DR AMBEDKAR VEEDHI
       BANGLAURU-560 001.

6.     THE DIRECTOR OF MINES GEOLOGY
       DEPARTMENT OF MINES AND GEOLOGY
       KHANIJA BHAVAN, 5TH FLOOR
       RACE COURSE ROAD
       BANGALURU-560 001.

7.     THE DEPUTY DIRECTOR OF MINES AND GEOLOGY
       DEPARTMENT OF MINES AND GEOLOGY
       B L GOWDA EXTENSION
       NEXT TO BASAPPA HOSPITAL
       CHITRADURGA.

8.     THE DEPUTY INSPECTOR GENERAL
       OF REGISTRATION (VIGILANCE)
       OFFICE OF THE INSPECTOR
       GENERAL OF REGISTRATION
       AND COMMISSIONER OF STAMPS
       SHIMSA BHAVAN, WATER BOARD
       BUILDING, 8TH BLOCK
       JAYANAGAR, BENGALURU.

                                           ... APPELLANTS
(BY MR. G.V. SHASHIKUMAR, AGA)

AND:

1.   SRI. R. PRAVEENCHANDRA
     S/O LATE SRI. E. RAMAMURTHY
     AGED ABOUT 46 YEARS
     R/O NO.59, 12TH MAIN
     (OLD 24TH MAIN)
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     SRINAGAR, BANASHANKARI 1ST STAGE
     I ST BLOCK, BANGALURU-560 050.

2.   M/S. SESA GOA LIMITED
     REGD. OFFICE AT P.O. BOX 125
     SESAGHOR, 20, EDC COMPLEX
     PATTO, PANJIM, GOA-403 001
     REP. BY ITS ASSOCIATE
     VICE PRESIDENT - KARNATAKA
     SRI. VIVEK MISHRA.

                                           ... RESPONDENTS
(BY MR. K.N. PHANEENDRA, SR. COUNSEL FOR
   MRS. VAISHALI HEGDE, ADV., FOR R2)
                           ---

     THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, PRAYING TO ALLOW THE WRIT APPEAL BY
SETTING ASIDE THE ORDER DATED 1/01/2018 PASSED IN WP
NO.10794/2011 C/W WP NO.12822/2011 AND SUCH OTHERS
ORDERS.

      THIS W.A. COMING ON FOR PRELIMINARY HEARING, THIS
DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

                        JUDGMENT

This appeal has been filed against the order dated

12.01.2018 passed by the learned Single Judge by

which the writ petition preferred by the respondent has

been allowed and the notice dated 03.01.2011 as well as

the communication dated 31.01.2011 issued by the

appellants herein have been quashed.

2. Facts leading to filing of this appeal briefly

stated are that initially father of the petitioner was

granted a lease for mining on 15.01.2001 for a period of

20 years. While registering the lease deed the

anticipated amount of Royalty per year as estimated and

the stamp duty was accordingly paid. The stamp duty on

the aforesaid lease was paid as required under the

provisions of Karnataka Stamp Act, 1957.

3. Thereafter, during the course of an audit

enquiry, the appellants learnt about the increase in the

payment of royalty. Thereupon, a notice dated

03.01.2011 was issued to the respondent by which he

was called upon to pay stamp duty and registration fee

on the registered documents and the mining lease,

which was executed in favour of the father of the

respondent on 15.01.2001. Thereafter, a communication

was issued on 31.01.2011 by which respondents were

directed to execute a supplementary lease deed based

on the increased royalty and to get the document

registered in the office of sub-registrar by paying deficit

stamp duty as required under Article 30(1) of the

Karnataka Stamp Act, 1957. Being aggrieved, the

respondents filed a writ petition before this court. The

learned Single Judge by an order dated 12.01.2018,

inter alia held that there is no specific provision in the

Karnataka Stamp Act, 1957 permitting the appellants

herein to demand additional stamp duty on a document

upon which stamp duty has already been paid.

Accordingly, the demand notice dated 03.01.2011 and

the communication dated 31.01.2011 were quashed and

the petitions were disposed of. In the aforesaid factual

background, this appeal has been filed.

4. Learned Additional Government Advocate has

invited the attention of this court to clause 3 of Part V of

Mining Lease 15th January 2001 and has submitted that

in the aforesaid clause, the appellants have the

authority to demand additional stamp duty. On the other

hand, learned Senior counsel for the respondent has

supported the order passed by the learned Single Judge

and has submitted that in the absence of any provision,

the action of the appellants in demanding the additional

stamp duty is per se without jurisdiction.

5. We have considered the submissions made by

learned counsel for the parties and have perused the

record. It is trite law that levy of any tax or fee has to

be sanctioned under Article 265 of the Constitution of

India. Section 27 of the Karnataka Stamp Act, 1957 Act

reads as under:

27. Stamp where value of subject matter is indeterminate.- Where the amount or value of the subject matter of any instrument chargeable with ad valorem duty cannot be or could not have been, ascertained at the date of its execution, or first execution, nothing shall be claimable under such instrument more than the highest amount or value for which, if stated in an instrument of the same description, the stamp actually used would, at the date

of such execution, have been sufficient:

Provided that, in the case of the lease of mine in which royalty or a share of the produce is received as the rent, or the part of the rent, it shall be 1957: KAR. ACT 34] Stamp 525 sufficient to have estimated such royalty or the value of such share, for the purpose of stamp duty,--

(a) when the lease has been granted by or on behalf of the Government, at such amount or value as the 1[Deputy Commissioner]1 may, having regard to all the circumstances of the case, have estimated as likely to be payable by way of royalty or share to the Government under the lease; or 1. Substituted by Act 29 of 1962 w.e.f. 1.10.1962.

(b) when the lease has been granted by any other person, at twenty thousand rupees a year, and the whole amount of such royalty or share, whatever it may be, shall be claimable under such lease: Provided also that, where proceedings have been taken in respect of any instrument under section 31 or 39 the amount certified

by the Deputy Commissioner shall be deemed to be the stamp actually used at the date of execution.

Thus, from perusal of the aforesaid section, it is

evident that levy of stamp duty in a case where the

subject matter of the instrument is indeterminable is in

relation to the highest value of the subject matter

estimated at the time of the registration of the

document. The subject matter of a mining lease is

indeterminable. Therefore, in accordance with the

provisions of Section 27 of the Act at the time of

registration of the mining lease, the appellants had

levied the stamp duty. There is no provision in the

Karnataka Stamp Act, 1957 which empowers the