JUDGMENT - Dr. B.P. SARAF, J.:---On 7 September, 1986, petitioners, Crest Hotels Ltd. entered into an agreement of sale of a flat being that No. 121 on 1st floor of the building named 'Madhuli' which was still to be constructed and open car parking space therein. It was lodged for registration with the Sub-Registrar of Assurances at Bombay on 29 September, 1986. The said agreement was later on cancelled by the parties by a deed of cancellation dated 6 October, 1988. The deed of cancellation was also lodged for registration with the Sub-Registrar of Assurances at Bombay. The document of cancellation was executed on a stamp paper of Rs. 10/-. The Sub-Registrar of Assurances, being of the opinion that the stamp duty prescribed under Article 25-B of Schedule 1 to the Bombay Stamp Act, 1958 ("the Act") was applicable, forwarded the same to the Assistant Stamp Superintendent, Bombay. The Assistant Stamp Superintendent, Bombay held that stamp duty under Article 25-B of Schedule I to the Act was chargeable on the deed of cancellation in question. As it was executed on a stamp paper of Rs. 10/-, the Assistant Stamp Superintendent determined the deficient stamp duty at Rs. 2,17,890/-. Penalty of Rs. 21,000/- was also levied. By a letter dated 4 January, 1990 the petitioners were directed to pay the said amount of deficient stamp duty and penalty within one month. The petitioners have challenged the above order of the Assistant Stamp Superintendent.

2. The contention of the petitioners is that the deed of cancellation is chargeable to duty at the rates specified in Article 15 of Schedule I to the Act which, at the material time, read as under:

"15. Cancellation.---Instrument of, if attested and not otherwise provided for : Twenty rupees."

According to the petitioners, the proper stamp duty on the deed of cancellation in question was Rs. 20 under Article 15 and not the amount determined by the Assistant Stamp Superintendent treating it as a document chargeable to stamp duty under Article 25 of Schedule I to the Act. Article 25 of Schedule I contains the rates of stamp duty under on conveyance. This article has been amended by the Maharashtra Act, 27 of 1985 and the Explanation was inserted. By Maharashtra Act, 27 of 1988, the Explanation thereto was renumbered as Explanation I and between the words "the possession of any immovable property is transferred" and the words "to the purchaser before the execution", the words "or agreed to be transferred" were inserted. Thus, the scope of Article 25 was extended first in 1985 by inclusion of the Explanation and latter by inclusion of the words "or agreed to be transferred" in the said Explanation. By the first amendment of 1985 even agreement of sale was brought within the purview of Article 25 if the possession was transferred to the purchaser before the execution or at the time of execution or after execution of such agreement without executing the conveyance in respect thereof. By the 1988 amendment even agreement to sell where the possession of any property was agreed to be transferred to the purchaser without executing the conveyance in respect thereof was also included within the expression "conveyance" for the purpose of chargeability of stamp duty.

3. The contention of the respondents is that the cancellation of agreement of sale in this case amounts to reconveyance of the property by the purchaser to the owner with whom the agreement to sell had been originally entered into. Reliance is placed in this connection on Explanation to Article 25 of Schedule I to the Act.

4. In reply to the above submission, Counsel for the petitioners submits that the original agreement of sale itself in this case does not fall within Article 25 of Schedule I to the Act even after insertion of the Explanation. The original agreement of sale was dated 7 September, 1986 and was lodged for registration on 29 September, 1986. In 1986, the Explanation to Article 25 had already been inserted which provided th

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