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IN THE HIGH COURT OF JUDICATURE AT BOMBAY AT NAGPUR BENCH
Avinash G Gharote, J.
M/s. Ambuja Cements Limited, Maharashtra - Appellant
Versus
State Of Maharashtra - Respondent
Writ Petition No. 976 of 2015
Decided On : 04-06-2020
The Bombay Stamp Act (BSA) charges stamp duty on an instrument, not on a transaction. The Collector can estimate stamp duty payable under a mining lease agreement at the time of its execution, considering factors like royalty paid for previous years. However, if the initial calculation is incorrect due to suppression of facts by the lessee, the revenue can redetermine the stamp duty. The 2nd proviso to Section 27 BSA empowers the government to claim excess royalty for excess excavation, protecting the government's right to collect stamp duty based on the actual value of minerals extracted.
Fact of the Case:
The petitioner, a mining company, obtained a renewal of its mining lease from the state government. The Collector of Stamps determined the stamp duty payable on the lease agreement under Section 31 of the BSA. However, an audit objection raised concerns about the quantum of stamp duty calculated. The petitioner deposited the additional stamp duty demanded but challenged the calculation and imposition of the stamp duty. The Chief Controlling Revenue Authority (respondent no. 4) passed an impugned judgment redetermining the stamp duty payable by the petitioner.
Finding of the Court:
1. Stamp duty is chargeable on an instrument, not on a transaction. 2. The Collector can estimate stamp duty payable under a mining lease agreement at the time of its execution, considering factors like royalty paid for previous years. 3. If the initial calculation is incorrect due to suppression of facts by the lessee, the revenue can redetermine the stamp duty. 4. The 2nd proviso to Section 27 BSA empowers the government to claim excess royalty for excess excavation, protecting the government's right to collect stamp duty based on the actual value of minerals extracted.
Issues: 1. Whether stamp duty is chargeable on an instrument or a transaction. 2. Whether the Collector can redetermine stamp duty payable under a mining lease agreement after its initial determination. 3. Whether the 2nd proviso to Section 27 BSA empowers the government to claim excess royalty for excess excavation.
Ratio Decidendi: 1. The court held that stamp duty is chargeable on an instrument, not on a transaction, relying on the language of Section 3 of the BSA and the Full Bench decision in C.C.R.A. Pune v. R.I. Ltd. 2. The court held that the Collector can redetermine stamp duty payable under a mining lease agreement after its initial determination if there was suppression of facts by the lessee, relying on the language of the 2nd proviso to Section 27 BSA and the decision in Meghmala v. G. Narasimha Reddy. 3. The court held that the 2nd proviso to Section 27 BSA empowers the government to claim excess royalty for excess excavation, relying on the language of the proviso and the decision in Steel Authority of India v. Collector of Stamps.
Final Decision: The court quashed and set aside the impugned judgment of the Chief Controlling Revenue Authority and remanded the matter back to the authority to calculate the correct market value and the correct stamp duty in light of the court's findings.
JUDGMENT
Avinash G Gharote, J. - I, had heard learned Senior Counsels for the respective parties at length and had closed the matter for judgment, whereupon the Counsel for parties having expressed their intention to file written notes of arguments in support of the oral submissions advanced the matter was kept for that purpose. Accordingly the respondents 1 to 3, have filed their written notes of arguments on 18/3/2020 and the petitioner has filed the same on 30/3/2020.
2. Certain events being material and admitted they are stated as under :
(a) On 19/01/2004 an application for renewal of a mining lease of land admeasuring 579.90 hectares, situate in Rajura Tehsil, granted for the purpose of extraction of major mineral (lime stone) was made by the petitioner to the State.
(b) On 14/9/2009 the Government of Maharashtra granted renewal of the lease w.e.f. 31/12/2004 for 20 years to the petitioner.
(c) On 24/12/2009 an application was made by the petitioner to R2/Collector u/s 31 of Bombay Stamp Act for adjudication of the proper stamp duty payable upon the lease.
(d) On 30/1/2010 an order of adjudication was passed by the respondent no.2/Collector, whereby the proper stamp duty payable upon the lease was adjudicated to Rs.25,75,000/- which amount came to be deposited by the petitioner on 11/2/10 and the lease came to be executed on 16/2/2010.
(e) On 24/2/2010 the lease came to be registered in favour of the petitioner, which contained various clauses including one as to how royalty was to be paid.
(f) In an audit, objection was raised as to the quantum of stamp duty calculated and a higher amount was said to be chargeable.
(g) On 2/3/2012 a Show-cause-notice demanding Rs.43,83,915/- as deficit stamp duty was issued to the petitioner as the stamp duty payable was claimed to be Rs.69,58,918/-.
(h) On 26/4/2012 a reply was given by the petitioner opposing the calculation and imposition of the stamp duty as demanded.
(i) On 7/5/2012 another notice was received by the petitioner containing a revised claim demanding deficit Rs.34,79,160/-.
(j) On 27/6/2012 a reply was given by the petitioner inter-alia contending amongst other statements that the Jt. Registrar had no authority to revise the amount.
(k) On 22/6/2012 the petitioner deposited Rs.34,79,160/- which was claimed to be the deficit, under protest to avoid any action.
(l) On 7/8/2012 the petitioner asked for a refund of the amount of so called deficit stamp duty paid on the mining lease.
(m) As the request for refund was not entertained, the petitioner filed Writ Petition No.807/2013, in which vide judgment dt.17/7/2013, the petitioner was permitted to move the Chief Controlling Revenue Authority u/s 53 A of the Bombay Stamp Act, within a period of six weeks from the date of the judgment and the Chief Controlling Authority was directed to take necessary decision about adequacy of stamp duty as per law, within a further period of 3 months. The alleged deficit stamp duty paid by the petitioner was permitted to be retained by the respondent, with a direction to refund any such excess, if so found after determination by the Chief Controlling Authority.
(n) Before the Chief Controlling Authority, the petitioner filed its submissions which are annexed as Annex-J to the present petition.
(o) On 2/1/2015 the Chief Controlling Authority, Revenue/R-4, by the impugned judgment rendered a finding that the mining lease in favour of the petitioner, was chargeable with a stamp duty of Rs.1,54,19,100/- and taking into consideration the earlier amounts paid by the petitioner on this count of Rs.25,75,000/- at the time of registration of the lease and Rs.34,79,160, totaling Rs.60,54,160/-, thus directed the petitioner to pay the deficit of Rs.93,64,940/-, being aggrieved by which the present petition has been filed.
3. The basic crux of the arguments as advanced by Shri C. S. Kaptan, learned Senior Counsel for the petitioner, to challenge the impugned judgment, are as under :
(a) Stamp Duty is c
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