The Indian Hotels Company Ltd vs State Of Rajasthan
2023 Latest Caselaw 4666 Raj

[2023/RJJD/015056]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 19375/2022

The Indian Hotels Company Ltd., Having Its Registered Office Mandlik House, Mandlik Road, Mumbai - 400001, Through Its Authorized Signatory, Shri Nagendra Singh Bhayal.

----Petitioner Versus

1. State Of Rajasthan, Through Its Principal Secretary, Department Of Finance, Government Secretariat, Jaipur Rajasthan - 302005.

2. Collector (Stamps), Registration And Stamps Department, Jodhpur Circle, Jodhpur.

3. Sub Registrar, Registration And Stamps Department, Jodhpur - (First), Jodhpur.

4. Rani Mahindra Kumari W/o Late Maharaj Hari Singh, R/o 5 Residency Road, Jodhpur.

5. Rajkumari Prem Kumari D/o Late Maharaj Hari Singh, R/o 5 Residency Road, Jodhpur.

----Respondents

For Petitioner(s) : Mr. Pallav Shishodia, Senior Advocate (through VC) assisted by Mr. Sunil Nath & Mr. Akash Shrivastava For Respondent(s) : Mr. Sandeep Shah, Senior Advocate & AAG assisted by Ms.Akshiti Singhvi

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Judgment

Reserved on 25/04/2023 Pronounced on 16/05/2023

1. This writ petition under Article 226 of the Constitution of

India has been preferred claiming the following reliefs:

"It is therefore prayed that this writ petition may kindly be allowed with costs and by an appropriate writ, order and direction that:

[2023/RJJD/015056] (2 of 15) [CW-19375/2022]

a) The impugned notice dated 13.2.2001 (Annex.4) and all proceeding initiated thereunder may kindly be quashed and set aside.

b) The impugned order dated 6.12.2022 (Annex.22) passed by the respondent No.2 and the demand issued in pursuance thereto, if any may kindly be quashed and set aside.

c) The questions of law raised by the petitioner in para 24 of the writ petition may be decided definitively;

d) The any demand raise in the interregnum period may kindly be quashed and set aside.

e) The entire record of the proceedings before the Respondent No.2 may be called before this Hon'ble Court.

f) Any other appropriate writ, order or direction which may be considered just and proper in the facts and circumstances of the case may also kindly be issued in favour of the petitioner."

2. As the pleaded facts would reveal, the petitioner is a

Company engaged in a hotel business in various States of India,

including the Taj Hari Mahal, Jodhpur, 5, Residency Road, Jodhpur.

By an agreement on 16.04.1994 with the owners (Rani Mahindra

Kumari and Rajkumari Prem Kumari) of land and the buildings and

the structures thereon, situated at Residency Road, Jodhpur, the

petitioner was granted permission to use the aforesaid land for the

purpose of carrying on the business of hoteliering, and thus,

sharing business profits on certain terms and conditions for 50

years. The said agreement was executed at Mumbai

(Maharashtra), and the stamp duty was paid by the petitioner, in

accordance with the Stamp and Registration Act of State of

Maharashtra,.

[2023/RJJD/015056] (3 of 15) [CW-19375/2022]

2.1. The Land and Building Tax Department, Jodhpur referred the

document (agreement) to Dy. Inspector General, Registration and

Stamps Department, Jodhpur vide communication on 19.07.2000,

while stating that the said document has not been registered, and

according to the audit team of Accountant General, stamp duty of

Rs. 2,64,44,880/- has been evaded.

2.2. Subsequently, a notice was issued on 13.02.2001 by the

respondent no.2 under Section 66(c) of the Registration Rules

read with Section 35 and Section 33(5) of the Indian Stamp Act

1899 (hereinafter referred as 'Act of 1899'). The notice

conclusively stated that the agreement in question was an

agreement for the lease of an immovable property.

2.3. Thereafter, the petitioner raised objections with regard to

jurisdiction of the respondent no.2 in initiating the proceedings

under the aforementioned provisions, because the document in

question was not executed in the State of Rajasthan, and

therefore, it does not lie within the jurisdiction of the respondent

no. 2 to levy the stamp duty; however such objections were

rejected vide order on 22.12.2001 on the ground that as the

property is situated in Jodhpur City, therefore, the respondent

no.2 had authority to initiate the proceedings in question.

2.4. Aggrieved by the aforesaid order, the petitioner filed a

revision petition, and the same was allowed vide order dated

14.03.2018 passed by the Rajasthan Tax Board, Ajmer and the

matter was remanded back to the respondent no.2 for deciding

afresh every issue with regard to the jurisdiction as raised by the

petitioner. Thereafter, the respondent no. 2 initiated fresh

[2023/RJJD/015056] (4 of 15) [CW-19375/2022]

proceedings and the petitioner submitted written submissions in

detail. On 30.09.2019, the arguments were heard and concluded

by the Respondent no. 2 and the order was reserved.

2.5. Subsequently, however, a demand notice dated 03.02.2020

was received by the Mumbai Corporate Office (State of

Maharashtra) of the petitioner on 11.02.2020 raising a demanding

a sum of Rs. 15,65,05,360/- on the basis of order dated

29.01.2020 along with interest and penalty and the same was

directed to be deposited within a period of 7 days of receipt of

such notice.

2.6. Aggrieved by the said order dated 29.01.2020, the petitioner

preferred a writ petition bearing S.B. Civil Writ Petition No.

2693/2020 before this Hon'ble Court. The Hon'ble Court, after

hearing the parties, rendered the judgment dated 19.01.2021,

whereby the order dated 29.01.2020 and the demand notice dated

03.02.2020 were quashed and set aside, and the matter was

remanded back to the respondent no. 2 with direction to decide

the same afresh.

2.6.1. The matter thereafter, was heard by the Respondent no. 2;

however on 12.12.2022, the petitioner was supplied with a copy of

the impugned order dated 06.12.2022, which was passed against

the petitioner. Vide the said impugned order dated 06.12.2022, an

amount of Rs.15,24,18,672/- was directed to be deposited

alongwith interest @ 12% per annum till the date of such

deposition. Thus, aggrieved by the impugned order dated

06.12.2022, the present writ petition has been preferred, claiming

the afore-quoted reliefs.

[2023/RJJD/015056] (5 of 15) [CW-19375/2022]

3. Mr. Pallav Shishodia, learned Senior Counsel assisted by

Mr.Sunil Nath & Mr. Akash Shrivastava, appearing on behalf of the

petitioner submitted that at the time of execution of the

agreement in question, the Act of 1899, as adopted, was in

currency in the State of Rajasthan, and accordingly, the

applicability of Section 3 of the Act of 1899 was limited to the

instruments executed in the State of Rajasthan. Thus, as per

learned Senior Counsel, the Rajasthan Stamp Authorities had no

jurisdiction to initiate proceedings to recover the alleged stamp

duty on the agreement, as the same was executed in Mumbai

(Maharashtra), and was thus, governed by the provisions of the

Stamps and Registration Act, which was in currency in the State of

Maharashtra, and in accordance with which, the stamp duty was

duly paid.

3.1. It was further submitted that after coming into force of the

new Stamps Act, known as Rajasthan Stamps Act, 1998

(hereinafter referred as 'Act of 1998') w.e.f. 27.05.2004, the

Rajasthan Stamp Authorities were conferred with the jurisdiction

to charge stamp duty on those instruments, irrespective of the

same being executed out of the State of Rajasthan, in relation to

the property situated in the State of Rajasthan, as per Section 3 of

the Act of 1998. However, such provision did not exist in the year

1994, when the agreement in question was executed. Hence, as

per learned Senior Counsel, the respondent no.2 could not have

initiated the proceedings in the year 2001, to levy stamp duty in

respect of the agreement in question.

[2023/RJJD/015056] (6 of 15) [CW-19375/2022]

3.2. It was further submitted that the impugned order dated

06.12.2022 suffers from patent illegality, as the Respondent no.2,

while passing the said order, has relied upon Section 3B(1)(b) of

Act of 1899, without considering the fact that at the time of

execution of the instrument in question, the said Section 3B(1)(b)

was not even applicable in the State of Maharashtra.

3.3. In furtherance, it was submitted that the aforesaid section is

only applicable in relation to the instruments executed between

the period from 10.12.1962 to 09.03.1976, and that, the

instrument(s) executed during the said period were only

chargeable with the additional stamp duty at the rate, as provided

under the said provisions, as an amendment was brought under

Rajasthan Stamps Law (Adaptation) Act, 1952, in order to

compensate the public exchequer for the loss suffered, as a

consequence of reduction in the rates of fees for registration of

documents, during the period from 10.12.1962 to 09.03.1976.

3.4. In support of his submissions, learned Senior Counsel relied

upon the following judgments:

(a) State of Rajasthan v. Bhilwara Spinners, AIR 2001 Rajasthan

184;

(b) Himachal Futuristic Communications Ltd. v. State of

Rajasthan, AIR 2019 (Raj.) 130; and

(c) M/s. Godrej Sara Lee Ltd. v. The Excise and Taxation Officer-

cum-Assessing Authority & Ors., (Civil Appeal No. 5393 of 2010,

decided by the Hon'ble Apex Court on 01.02.2023).

3.5. It was further submitted that the contents of the agreement

clearly show that the relationship between the parties was not of

[2023/RJJD/015056] (7 of 15) [CW-19375/2022]

lessor and lessee, as the said agreement was not a lease

agreement. It was argued that it is a settled principle of law that

where a document gives only a right to use the property in a

particular way or under certain terms, while it remains in the

possession and control of the owners, it will be a license and not a

lease.

3.6. In furtherance, it was argued that Clause 23 of the

agreement clearly negates the relationship between the parties as

that of lessor and lessee. Thus, as per learned Senior Counsel, the

respondent no.2 had no authority to determine the nature of the

agreement without initiating proceedings under Section 47(c) of

the Act of 1899.

3.7. It was asserted that Section 19A was not applicable as the

said section would only be applicable on the documents which

subsequently became chargeable with higher rate of duty in the

State of Rajasthan.

4. On the other hand, Mr. Sandeep Shah, learned Senior

Advocate & Additional Advocate General assisted by Ms.Akshiti

Singhvi, appearing on behalf of the respondents opposed the

aforementioned submissions made on behalf of the petitioner.

4.1. It was submitted that the present writ petition deserves to

be dismissed on the ground of availability of equally efficacious

alternative remedy, as Section 65 of the Act of 1998 provides for

filing of revision against the order(s), as impugned herein.

Relevant portion of the said section is reproduced as hereunder"

"Section 65: Revision by the Chief Controlling Revenue Authority-

[2023/RJJD/015056] (8 of 15) [CW-19375/2022]

(1) Any person aggrieved by an order made by the Inspector General of Stamp or Collector under Chapter IV and V and under clause (a) of the first provision to section 29 and under section 35 of the Act, may within 90 days from the date of order, apply to the Chief Controlling Revenue Authority for revision of such order:

"Provided that the Inspector General of Stamp or any other officer authorised specially or generally by the Inspector General of Stamp may, if aggrieved by any order referred to in this subsection, may file revision before Chief Controlling Revenue Authority within 180 days from the date of the communication of the order."

Provided further that no revision application shall be entertained unless it is accompanied by a satisfactory proof of the payment of twenty five percent of the recoverable amount."

4.2. Reliance has also been placed on the judgment rendered by

a Division Bench of this Hon'ble Court on 01.08.2022 in Param

Prasad Charitable Trust v. State of Rajasthan & Ors. (DB

SAW No. 619/2022); relevant portion whereof reads as under:

"We have heard the learned counsel for the parties and also perused the order passed by the learned Single Judge.

Learned Single Judge has declined to entertain the writ petition keeping in view that the appellant has an efficacious alternative remedy provided under the law. That being not in dispute, we find that no case of exceptional nature is made out, not avail statutory remedy.

The efficacy of the alternative remedy is sought to be a questioned by the learned counsel for the appellant on the ground that requirement of the pre-deposit amount to the extent of 25% is required to be fulfilled by the appellant before he could avail the alternative remedy. On principles, it does not appeal to us that as there is a provision for pre- deposit, alternative remedy is not efficacious.

[2023/RJJD/015056] (9 of 15) [CW-19375/2022]

The Supreme Court in the case of Tecnimont Pvt. Limited Vs. State of Punjab & Ors. AIR 2019 SC 4489 (supra) was dealing with a case of exceptional nature where the requirement of pre-deposit was considered to be severe hardship. Taking into consideration the total amount said to be recoverable under the order impugned and that the appellant society is a charitable trust dealing with big projects including running of an educational institution, it cannot be held that it is a case of such hardship on which ground the writ petition should be entertained on merits, despite existence of alternative efficacious remedy.

The submission of learned counsel for the appellant that the recoverable amount may also include huge interest.

Learned State counsel would submit that it is open for the appellant to claim that recoverable amount is only 25% of the amount of additional stamp duty charged upon him by the impugned order. This would be a matter of consideration by the revisional authority.

Having considered the submissions made at bar by the counsel for the parties and taking into consideration the law which has been laid down in the case of Ansal Housing and Construction Limited Vs. State of U.P. & Ors., Genpact India Pvt. Limited Vs. Deputy Commissioner (Supra), as present is not a case of exceptional nature and further that we do not find that it would be a case where it would be almost impossible for the appellant to arrange the payment of pre-deposit to comply with the statutory requirement, we are not inclined to interfere with the order passed by the learned Single Judge.

Before parting, this Court observe that all the observations which have been made by us are only for the purpose of determination as to whether the writ petition should be entertained or the appellant should be relegated to the alternative remedy.

The appeal, therefore, fails and is dismissed however, subject to the liberty as reserved to the appellant."

[2023/RJJD/015056] (10 of 15) [CW-19375/2022]

4.3 Learned counsel also placed reliance on the judgment

rendered by this Hon'ble Court in M/s Fine Mineral Industry v.

State of Rajasthan & Ors. (SB CWP No. 7943/2007, decided

on 18.01.2022; relevant portion of which reads as under:

"28. Heard learned counsel for the parties as well as perused the record of the case, alongwith the precedent laws cited above.

29. With regard to the preliminary objection regarding the maintainability of the present petition, as raised by the learned counsel for the respondents, this Court observes the following:

(a) The present petition is brought before this Court under its extraordinary writ jurisdiction under Article 226 of the Constitution of India, and while in Genpact (supra) the Hon'ble Apex Court, referring to UP Rajya Khanij (supra) has observed that a petition brought before a High Court under Article 226 of the Constitution of India may be dismissed in light of availability of an effective and alternative remedy, and non-dismissal of such petition merely on the ground that such a petition has already been admitted, would be an incorrect understanding of the law.

(b) In Ansal Housing (supra), the Hon'ble Apex Court in the said case found that the High Court was not justified in entertaining the writ petition, and thus, relegated the matter back to the concerned authority.

30. Keeping in mind the facts and circumstances of the case, and in light of the fact that a statutory alternate remedy is available to the petitioner, and deriving strength from the decisions rendered by the Hon'ble Apex Court in Genpact (Supra) and Ansal Housing (supra), this Court does not find it a fit case for making any interference.

31. Consequently, the present petition is dismissed.

However, the petitioner shall be at liberty to avail the alternate remedy available to him under the law, and

[2023/RJJD/015056] (11 of 15) [CW-19375/2022]

approach the concerned authority for redressal of his grievance. All pending applications stand disposed of."

4.4. It was submitted that the proceedings against the petitioner

were initiated and notice was issued under Section 66 (C) of the

Registration Rules along with Sections 33 (5) and 35 of the Act of

1899, which provides for power to levy stamp duty.

4.5. It was further submitted that the respondent authorities did

not have jurisdiction to levy stamp duty in relation to the

document in question. As per Section 3 and Section 19A of the Act

of 1952, in the present case, the stamp duty is required to be paid

upon the instrument in question, since property involved is

situated within the State of Rajasthan. The document (agreement)

in question should have been registered in Jodhpur only, since the

property is situated in Jodhpur.

4.6. It was also submitted that Section 3B(1)(b) of Act of 1952

provides that additional stamp duty should be imposed on

documents relating to property situated in the State of Rajasthan,

but executed out of Rajasthan.

4.7. It was further submitted that with effect from 18.09.1989, by

way of Rajasthan Registration (Amendment) Act, 1989, Section 67

and Section 30(2) of the Registration Act, 1908, were deleted, so

far they are made applicable to the State of Rajasthan. The said

provisions had provided for registration of documents in Delhi and

other Metropolitan Cities including Mumbai (Maharashtra).

However, as per learned Senior Counsel & Additional Advocate

General, the said Sections were repealed by various State

amendments including the State of Rajasthan, to ensure that in

[2023/RJJD/015056] (12 of 15) [CW-19375/2022]

cases where the property is situated in a particular State, the

document shall be required to be registered in that State only, and

not in other metropolitan cities. Hence, the petitioner was duty

bound to get the document registered in Jodhpur (Rajasthan) and

to deposit stamp duty upon it, with the Office of the Sub Registrar

concerned.

4.8. It was also submitted that the document in question is a lease

document, and not a license, because various clause thereof clearly

reveal that the agreement in question is a lease agreement, as

defined under the law.

5. Heard the learned counsel for the parties as well as perused

the record of the case along with judgments cited at the Bar.

6. At the outset, this Court deems it appropriate to clarify that in

the present judgment, this Court does not delve into the merits of

the case, rather the present adjudication is being made on the issue

of jurisdiction alone.

7. This Court observes that the agreement in question was

executed on 16.04.1994 in Mumbai (Maharashtra) between the

petitioner and the owners of the property, which is situated in

Jodhpur (Rajasthan). Thereafter, the Land & Building Tax

Department, vide notice dated 13.02.2001 issued under Section 66

(C) of the Registration Rules read with Sections 33 (5) and 35 of

the Act of 1899 for recovery of the stamp duty in question. In view

of the subsequent developments, the matter came before this

Hon'ble High Court and vide order dated 19.01.2021, the matter

was remanded back to the respondent no. 2 with the direction that

[2023/RJJD/015056] (13 of 15) [CW-19375/2022]

the matter be decided afresh, after affording an opportunity of

hearing to all the parties concerned.

7.1 The respondent no. 2 after hearing the parties passed the

impugned order dated 06.12.2022 whereby the petitioner was

directed to pay the stamp duty in question with interest @ 12% per

annum.

8. This Court further observes that at the time time of execution

of agreement in question, the Act of 1899, was in currency in the

State of Rajasthan. Subsequently, the legislature, in the State of

Rajasthan, enacted a new Stamps Act known as the Rajasthan

Stamps Act, 1998 and the same came into force w.e.f. 27.05.2004.

This Court also observes that at the time of the execution of the

agreement in question, the Act of 1952 was prevalent in the State

of Rajasthan.

9. This Court also observes that the property in question is

situated in the jurisdiction of the State of Rajasthan and as per

Section 19-A of the Act of 1952 (as amended), the State has a

right to demand additional stamp duty on the agreement in

question.

For the sake of clarity the appropriate Section has been

reproduced as under:

"19-A. Payment of duty on certain instruments liable to increased duty in the State of Rajasthan - When any instrument has become chargeable in any part of India other than the State of Rajasthan with duty under the Indian Act or under any other law for time being in force in such part and thereafter becomes chargeable with higher rate of duty in the State of Rajasthan under the Indian Act as adapted to the State.

[2023/RJJD/015056] (14 of 15) [CW-19375/2022]

(i) The amount of duty chargeable on such instrument shall be the amount chargeable on it under the Indian Act as so adopted less the amount of duty, if any, already paid on it in India; and

(ii) in addition to the stamps, if any, already affixed thereto, such instrument shall be stamped with the stamps necessary for the payment of the amount of duty chargeable on it under clause (i) in the same manner and at the same time and by the same person as though such instrument were an instrument received in India for the first time, when it became chargeable with the higher duty."

10. This Court is of the opinion that as per Section 65 of Act of

1998, alternative remedy can be resorted against the impugned

order dated 06.12.2022 passed by the Collector (Stamp) Jodhpur.

Section 65 provides that, "Any person aggrieved by an order

made by the Inspector General of Stamp or Collector under

Chapter IV and V and under clause (a) of the first provision to

section 29 and under section 35 of the Act, may within 90 days

from the date of order, apply to the Chief Controlling Revenue

Authority for revision of such order.....". Thus, this Court relegates

the petitioner to the alternative remedy, as per the above

mentioned provision of law.

11. Thus, as regards the preliminary objection of the petitioner

that the State of Rajasthan has no jurisdiction to levy additional

stamp duty with regard to the agreement in question, rather, in

the given factual matrix, the jurisdiction, with regard to imposition

of the stamp duty in relation to the agreement in question, falls

within the domain of the State of Maharashtra, this Court is not

persuaded to agree with such proposition.

[2023/RJJD/015056] (15 of 15) [CW-19375/2022]

11.1. Hence, this Court is inclined to agree with the proposition

put forth on behalf of the respondents that the State of Rajasthan

clearly has jurisdiction to levy additional stamp duty in question,

more particularly, in light of the afore-quoted provision of law i.e.

Section 19-A of the Act of 1952, which in no uncertain terms, has

already settled the issue of jurisdiction in question, while

extending such jurisdiction to the State of Rajasthan.

Furthermore, the petitioner has an alternative remedy to

challenge the impugned order before the appropriate authority of

the State of Rajasthan, as provided under Section 65 of Act of

1998.

12. Thus, without going into the merits of the case and after

examining the issue of jurisdiction involved herein, the present

petition is disposed of, with liberty to the petitioner to avail the

alternative remedy by approaching the appropriate authority,

under the law. However, to enable the petitioner to avail the

aforementioned alternative remedy under the law, it is directed

that for the purpose of availing such alternative remedy, the

limitation period shall be computed, while excluding the period,

during which the present petition remained pending before this

Court. All pending applications stand disposed of.

(DR.PUSHPENDRA SINGH BHATI), J.

SKant/-

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