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Fahid Bin Tarik Soleja v. Commissioner, Kanpur & Others - WRIT - C No. 27962 of 2001  RD-AH 4534 (25 February 2006)
Civil Misc.Writ Petition No.27962 of 2001
Fahid Bin Tarik Soleja
The Commissioner, Kanpur & others
Hon.Shishir Kumar, J.
The petitioner has approached this Court for quashing the order passed by the respondent Nos. 1 and 2 by which the revision filed by the petitioner has been dismissed against the order dated 9.2.2000 by which the respondents have directed to pay the deficient stamp duty to the tune of Rs.80,900 and a penalty to the similar amount totaling Rs.1,61,800.
The facts arising out of the present writ petition are that the respondent No.3 who was a property dealer constructed a multi-storied flat and a flat No.501 was agreed to sale to Super Tannery India Ltd. respondent No.4. The flat was allotted, however, the conveyance was not executed in favour of Super Tannery India Ltd. The respondent No.4 has nominated the petitioner at the consideration of the same amount of Rs.7,75,000 to sale the property in favour of the petitioner. It was also agreed between the respondent Nos. 3 and 4 that the property will be conveyed either in the name of Super Tannery India Ltd. or any other person nominated by him. It is alleged that an agreement was also executed on 18.7.1995. A sale deed was executed and the stamp duty was paid, as the valuation of the property at the rate of Rs. 8,02,500/- as such, the stamp duty was payable on the said amount, amounting to Rs.80,900 and the said payment was made at the time of execution of the sale deed dated 20.11.1998. However, the matter was referred by the Registrar, Kanpur to the Additional District Magistrate (Finance) under Section 47-A of the Indian Stamp Act for scrutinizing the matter whether the stamp duty, which has been paid that is sufficient or not. In pursuance of the aforesaid reference the petitioner received a notice from the District Magistrate, Kanpur in Case No.2/1998-99 (State Vs. Bagaria Properties Ltd.). The petitioner filed an objection in the said case on 28.7.1999. It has been stated in the objection that the Sub-Registrar concerned has wrongly referred the matter without looking into the provisions of the Stamp Act. The petitioner is entitled to get the benefit of Section 28 Sub-Clause 3 of the Indian Stamp Act. The same is being reproduced below:-
28(3) "Where a person, having contracted for the purchase of any property but not having obtained a conveyance thereof contracts to sell the same in any other person and the property is in consequence conveyed immediately to the sub-purchaser, the conveyance shall be chargeable with advalorem duty in respect of the consideration for the sale by the original purchaser for the sub-purchaser."
The District Magistrate without considering the said provision has rejected the objection of the petitioner and has imposed the deficiency of Rs.80,900/- by judgment and order dated 9.2.2000. A copy of the same has been annexed as Annexure 2 to the writ petition. Aggrieved by the aforesaid order, the petitioner filed a revision, which was numbered as Revision No.164 of 2000 (Fahid Bin Tarik Vs. District Magistrate, Kanpur).
In paragraph 15 of the writ petition it has been stated that the Revisional Court had directed the petitioner to pay half of the deficient stamp duty demanded by order dated 9.2.2000 and the petitioner had deposited the said amount of Rs.40,500 before the authorities concerned but the Revisional Court without considering this aspect of the matter that there was a provision in the Act that the sale deed has been executed in favour of the petitioner. On the basis of valuation of the property no sale deed has been executed in favour of Respondent No.4 and petitioner is the first purchaser of the property. Respondent No.1 without considering the said aspect of the matter has dismissed the revision. Against the aforesaid order the petitioner has approached this Court.
The writ petition was entertained and vide its order dated 30.7.2001 the respondents were granted time to file a counter affidvit and a conditional order was passed by this Court directing the petitioner to deposit the balance amount in excluding the penalty. The petitioner submits that the had already deposited the said amount in compliance of the order dated 30.7.2001.
The submission of the petitioner is that the petitioner is entitled to get the benefit of Section 28 of Sub-Clause 3 of the Indian Stamp Act as there was a contract between the colonizer and the respondent No.4 for purchase of property to sale the same to any other person and as such, the petitioner was liable to pay the stamp duty chargeable with ad valorem in respect of the consideration for the sale by the original purchaser to the sub purchaser but the respondents without taking into consideration the aforesaid fact has dismissed the claim of the petitioner and had directed to pay the Court fees as well as the similar amount, has been imposed as penalty.
A counter affidavit has been filed and it has been stated in the counter affidavit that there is no such agreement between Messers Bageria and Messers Super Tannery India Ltd. or its nominee, as such; the petitioner is not entitled to get the benefit of Section 28 Sub-Clause 3 of the Indian Stamp Act. It has further been submitted in the counter affidavit that both the authorities have considered the submissions and have come to the conclusion that the petitioner is not entitled for the benefit as claimed, therefore, both the authorities have rightly rejected the claim of the petitioner.
I have heard learned counsel for the petitioner and learned Standing Counsel and have perused the record.
Now only the question involved in the present writ petition is that whether the penalty, which has been imposed as an amount of deficient stamp duty, is liable to be paid by the petitioner or not because admittedly, the petitioner has already paid the deficient stamp duty demanded by the respondents. 50% of the amount was paid on the basis of the order passed by the Revisional Court and rest of the amount has been paid by the petitioner in compliance of the order passed by this Court while entertaining the writ petition. Therefore, the petitioner submits that the only question for consideration before this Court is regarding imposition of the penalty to the tune of Rs.80,900. I have perused the record and from the record it is clear that there is no dispute that the petitioner was not entitled to get a benefit of Section 28 Sub-Clause 3 of the Indian Stamp Act as the requirement of taking the said benefit is that the agreement to that effect has to be executed between the parties prior to execution of the sale deed in favour of any other person. As it has not been done, therefore, the petitioner in view of the provisions of the aforesaid act was not entitled because no agreement was produced before the authority concerned while executing the sale deed in favour of the petitioner. Therefore, the authorities have taken into consideration that it is a second transaction and as such, the petitioner is liable to pay the stamp duty, which was being paid by the first purchaser. But as regards the penalty which has been imposed against the petitioner, though there is a power vested in the authority in view of Section 47 of the Stamp Act to impose the penalty but in the peculiar facts and circumstances of the present case, admittedly, there was no intention by the petitioner to avoid payment of stamp duty. It was the mistake on the part of the respondents Nos. 3 and 4 that they should have executed an agreement prior to the execution of the sale deed to this effect that the property is being purchased though by the respondent No.4 but the sale deed is to be executed in favour of the petitioner to get the benefit of Section 28 Sub-Clause 3. Not having been done so, he has not been given the benefit of the aforesaid provision. Admittedly, the petitioner has deposited the 50% of the amount before the Revisional Court when the revision was pending and the 50% of the amount was paid by the petitioner by virtue of this order of this Court, as such, the amount of deficient stamp duty has already been paid by the petitioner. Therefore, in my opinion, in the interest of justice it will not be appropriate to impose a penalty of the similar amount of the deficient stamp duty.
In view of the aforesaid fact, the writ petition is partly allowed to the extent that imposition of penalty by the respondents are hereby reduced to the tune of Rs.5,000/-. If the petitioner deposits the aforesaid amount within a period of one month, the respondent No.2 is directed to register the sale deed in favour of the petitioner after adjusting the amount, which has already been paid by the petitioner by virtue of the revisional order as well as the order of this Court.
There shall be no order as to costs.
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