Judgement Key Points

JUDGMENT - M.P. KANIA, J.:---This petition raises a question as to the levy of stamp duty under the Bombay Stamp Act, 1958, on a document purporting to be an instrument of transfer of shares in a Co-operative Society and also raises the question of legislative competence in the State Legislature on the question of levy of stamp duty as indicated in detail herein below.

2. The 1st petitioners, Hanuman Vitamins Foods Pvt. Ltd. as members of the Dalamal Tower Premises Co-operative Society Ltd. and as holder of five shares therein was in occupation of office premises No. 904 on the 9th floor of the building known as "Dalamal Tower" situate at 211, Nariman Point, Bombay 400 021. By an instrument dated the 31st of March, 1986, the 1st petitioner Nos. 2, 3, 4, 5 and 6 the said five shares of the face value of Rs. 50/- each bearing distinctive numbers 711 to 715 in the capital of the said society for a consideration of Rs. 9,46,900/-. The said instrument of transfer sets out in its body that dalamal Tower Premises Co-operative Society Ltd. is the owner of the building known as Dalamal Tower situate at 211, Nariman Point, Bombay, that the 1st petitioner who is described as the transferor, is a member of the said Society holding five shares of the face value of Rs. 50/- each; that as one of the incidents of membership of the said Society, the 1st petitioner has a right to occupy sepecific officer premises in the said building Dalamal Tower and the 1st petitioner as such transferor has a right to occupy office premises No. 904 on the 9th floor of the said building Dalamal tower which office premises and measures 557 sq. ft. of built up area and for a consideration of Rs. 9,46,900/- paid by the transferees (petitioners 2 to 6 herein) to the transferor (petitioner No. 1 herein), transfers the said five shares in the capital of the said Dalamal Tower Premises Co-operative Society Ltd. "to hold the said shares upon the same terms and conditions on which the transferor now holds". The said document goes on to state "the transferees now holds". The said document goes on to state "the transferees hereby accept the shares subject to the said terms and conditions".

3. By a letter dated April 23, 1986, copy whereof is to be found at Ex. 'C' to the petition, the Advocates for the 1st petitioner on behalf of the trustees of the Adarsh Trust, forwarded the aforesaid instrument of transfer of shares to the Superintendent of Stamps, Bombay for adjudication under the provisions of the Bombay Stamp Act, 1958. In the said letter, the said Advocates recorded their contention that the said instrument of transfer of shares was wholly exempt from duty and went on to state that the said instrument was however sent for adjudication by way of abundant caution. By a reply dated May 22, 1986, (copy whereof may be found at Ex. 'D' to the petition), the Superintendent of Stamps, Bombay, informed the said Advocates for the 1st petitioner that the document sent for adjudication was a conveyance of Trust property chargeable with stamp duty under Article 25(b)(i) of the Bombay Stamp (Amendment) Act, 1985, on the present market value of the said property. By the said letter, the superintendent of Stamps requested that details regarding the premises No. 904 on the 9th floor of the said building Dalamal Tower be furnished as also the valuation report of the Architects and other relevant document pertaining to the said property be forwarded to him, to enable the Collector of the District to determine the value of the said property and on receipt of the valuation report, stamp duty will be assessed and communicated. It is in order to quash and set aside the aforesaid letter/order dated 22nd May, 1986, that the petitioners have filed the present petition seeking inter alia a Writ of Mandamus directing the respondents who are the State of Maharashtra and the Superintendent of Stamps, Bombay, to desist and forbear from charging, demanding or recovering Stamp duty on the said "

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