IMPORTANT POINT
Transfer of Share in Co-operative Housing Society would amount to conveyance attracting stamp duty under Article 25(b)(i) of the Bombay Stamps Act, 1958.

JUDGMENT

S.N. Variava, J.-This Civil Appeal is against the judgment dated 16/17th February, 1989. The questions raised in this Appeal are :-(a) whether transfer of shares in a Co-operative Society is subject to levy of stamp duty under the Bombay Stamp Act, 1958 and (b) whether the State Legislature has legislative competence to levy stamp duty on transfer of shares.

2. Briefly stated the facts are as follows :

The 1st Appellant was a member of Dalamal Tower Promises Co-operative Society Ltd. As such member the 1st Appellant was the holder of 5 shares each bearing distinctive Nos. 711 to 715. As such member the 1st Appellant was in occupation of office premises No. 904 on the 9th floor of the building known as Dalamal Tower situated at 211, Nariman Point, Bombay 400 021. By an Instrument dated 31st March, 1986 the 1st Appellant transferred in favour of Appellants Nos. 2, 3, 4, 5 and 6 the said 5 shares for a consideration of Rs. 9,46,900. The said Instrument of Transfer, inter alia, set out that the Dalamal Tower Premises Co-operative Society Ltd. was the owner of the building Dalamal Tower; that the 1st Appellant was a member of the said society holding the said 5 shares; that one of the incidents of membership was that the member had a right to occupy specific Office premises in the building Dalamal Tower and as such the 1st Appellant had a right to occupy premises No. 904 on the 9th floor of the Dalamal Tower, which Office premises admeasured 557 Sq. ft. of built up area. The Instrument went on to state that for a consideration of Rs. 9,46,900/- paid by the transferees to the transferor, the transferor transferred the said 5 shares to the transferees and that the transferees accepted the said shares.

3. By a letter dated 23rd April, 1986 the Advocates of the 1st Appellant forwarded the instrument of transfer to the Superintendent of Stamps for adjudication under the provisions of Bombay Stamp Act, 1958. In the said letter the Advocates stated that, in their opinion, the instrument of transfer was wholly exempted from duty, but that it was sent for adjudication by way of abundant caution. By a reply dated 22nd May, 1986 the Superintendent of Stamps Informed the Advocates for the 1st Appellant that the document for adjudication was a conveyance of property chargeable with stamp duty under Article 25(b)(i) of the Bombay Stamp Act on the present market value of the said property. By the said Letter the Superintendent of Stamps requested for details regarding premises No. 904 in Dalamal Tower and also called for a valuation report and other relevant documents.

4. The Appellants, therefore, filed Writ Petition 1820 of 1986 in the High Court of Judicature at Bombay to have the said letter quashed. They also sought directions against the Superintendent of Stamps and the State of Maharashtra to desist and forbear from charging, demanding or recovering stamp duty on the said form of Transfer of shares, or from proceeding on the basis that the form of Transfer of shares was not duly stamped and, thus, liable to be impounded. The Appellants contended that the instrument of transfer was a document transferring the shares held in a body corporate and was thus not within the purview of the Bombay Stamp Act, 1958. They also contended that the levy of stamp duty on transfer of shares in a Co-operative Society fell exclusively within Enty 91 of List I of the Seven Schedule to the Constitution of India. The Appellants contended that it was beyond the legislative competence of the State as it did not fall within Entry No. 63 of List II of the Seventh Schedule to the Constitution of India.

5. By the impugned Judgment dated 16/17th February, 1989, the Petition was dismissed on the ground that the instrument of transfer amounted to a conveyance of property and was chargeable with stamp duty under Article 25(b)(i) of the Bombay Stamp Act, 1958. By the said judgment the argument regarding lack of legislative competence was also rejected.

6. The question w