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High Court Of Calcutta
SANKAR PRASAD MITRA, SABYASACHI MUKHERJI, S. K. DATTA
THE BENGAL PAPER MILLS CO.LTD. - Appellant
Versus
THE COLLECTOR OF CALCUTTA - Respondent
Matter 477 Of 1973
Decided On : 08/11/1976
{'KEYWORD': 'STAMP DUTY', 'SUBJECT': 'ASSESSMENT OF STAMP DUTY ON LOAN AGREEMENT', 'ACT SECTION LIST': ['INDIAN STAMP ACT, 1899, SECTION 2 (5)', 'INDIAN STAMP ACT, 1899, SCHEDULE 1-A, ARTICLE 15']}
Fact of the Case:
THE CASE INVOLVED A DISPUTE OVER THE STAMP DUTY PAYABLE ON A LOAN AGREEMENT BETWEEN THE BENGAL PAPER MILLS CO., LTD. AND THE WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD. THE AGREEMENT RELATED TO A LOAN OF RS. 15,00,000/- GRANTED BY THE CORPORATION TO THE COMPANY. THE DOCUMENT WAS STAMPED WITH RS. 1.50 P, PLUS A DUTY OF 10 P. AS ADDITIONAL DUTY, IT BEING AGREED BETWEEN THE CORPORATION AND THE COMPANY THAT IF ON ADJUDICATION ANY FURTHER DUTY WAS PAYABLE THE SAME WOULD BE PAID BY THE COMPANY.
Finding of the Court:
THE COURT HELD THAT THE DOCUMENT WAS A BOND WITHIN THE MEANING OF SECTION 2 (5) (A) OF THE INDIAN STAMP ACT, 1899, AND THAT THE COLLECTOR WAS JUSTIFIED IN ASSESSING THE DUTY OF RS. 18,000.10 P. ON THE DOCUMENT UNDER ARTICLE 15 OF SCHEDULE 1-A TO THE ACT.
Issues: ['WHETHER THE DOCUMENT WAS A BOND WITHIN THE MEANING OF SECTION 2 (5) (A) OF THE INDIAN STAMP ACT, 1899.', 'WHETHER THE COLLECTOR WAS JUSTIFIED IN ASSESSING DUTY OF RS. 18,000-10 P. ON THE SAID DOCUMENT UNDER ARTICLE 15 OF SCHEDULE 1-A OF THE INDIAN STAMP ACT, 1899.', 'WHETHER THE BOARD OF REVENUE WAS JUSTIFIED IN REJECTING THE PETITION DATED 23-6-1973 OF THE BENGAL PAPER MILLS CO., LTD., AND IN HOLDING THAT THIS WAS NOT A DOUBTFUL CASE']
Ratio Decidendi: THE COURT OBSERVED THAT THE DEFINITION OF 'BOND' IN SECTION 2 (5) OF THE INDIAN STAMP ACT, 1899, IS NOT AN EXHAUSTIVE DEFINITION AND INCLUDES NOT ONLY THE THREE TYPES OF INSTRUMENTS MENTIONED IN THE SECTION BUT ALSO OTHER INSTRUMENTS AS WELL. THE COURT FURTHER HELD THAT THE DOCUMENT IN QUESTION CREATED AN OBLIGATION IN ITSELF WITH AN EXPRESS PROMISE FOR PAYMENT OF AN AMOUNT, AND THEREFORE, IT WAS A BOND WITHIN THE MEANING OF SECTION 2 (5) (A) OF THE ACT.
Final Decision: THE COURT ANSWERED THE SECOND QUESTION IN THE AFFIRMATIVE, HOLDING THAT THE COLLECTOR WAS JUSTIFIED IN ASSESSING THE DUTY OF RS. 18,000.10 P. ON THE DOCUMENT UNDER ARTICLE 15 OF SCHEDULE 1-A TO THE INDIAN STAMP ACT, 1899. THE COURT DID NOT ANSWER THE OTHER TWO QUESTIONS AS THEY DID NOT ARISE.
( 1 ) THIS matter has come up before us in view of the provisions of Sub-section (2) of Section 57 in Chapter VI of the Indian Stamp Act. 1899, which provides that when the Chief Controlling Revenue Authority refers a case to the High Court, it shall be heard by not less than three Judges.
( 2 ) ON June 6, 1973, there was an agreement between the Bengal Paper Mills Co. , Ltd. , and the West Bengal Industrial Development Corporation Ltd. The agreement related to a loan of Rs. 15,00,000/- which the Corporation granted to the Bengal Paper Mills Co. , Ltd. , The document was stamped with Rs. 1. 50 P, plus a duty of 10 P. as additional duty, it being' agreed between the Corporation and the Company that if on adjudication any further duty was payable the same would be paid by the Company. The Corporation applied to the Collector of Calcutta, for adjudication of the stamp duty payable on the document. The Collector examined the matter. The Collector found that the Company had applied to the Corporation for a loan The Corporation had sanctioned the amount of Rs. 97,28,444. 58p. to the borrower (i. e. the Company) as an interest free loan under the terms and conditions laid down in the deed. The Corporation decided that the loan would be paid by instalments. The Corporation, as the first instalment of the loan had paid Rs. 15,00,000/- on the execution of the document. The borrower, i. e. , the Company acknowledged the receipt of the loan and executed a separate receipt therefor. By the document the borrower, i. e. , the Company undertook to repay to the Corporation the loan of Rs. 15,00,000/- by three equal instalments of Rs. 5,00,000/ -. The first of such instalments would be paid on May 31, 1991; the second instalment on May 31, 1992 and the third instalment on May 31, 1993 without any interest. The borrower also agreed to certain conditions, if any default in repayment of the instalments had occurred.
( 3 ) THE Collector was of the view that the document was a loan bond within the meaning of Section 2, Sub-section (5) (a) of the Indian Stamp Act. 1899. He imposed a duty of Rs. 18,000. 10 P. assessed under Article 15 of Schedule 1-A to the Act. He directed that the said sum of Stamp Duty was to be deposited with the Collector by June 29, 1973.
( 4 ) AGAINST the Collector's order the Company submitted a petition before the Board of Revenue, West Bengal for setting aside the Collector's order.
( 5 ) THE Member, Board of Revenue, heard the Company's petition on June 23, 1973. He agreed with the Collector and rejected the petition.
( 6 ) ON June 25, 1973, the Company moved an application to this Court under Article 226 of the Constitution for quashing the Collector's order dated June 16. 1973 and the order of the Member, Board of Revenue dated June 23, 1973. This was Matter No. 477 of 1973.
( 7 ) THIS Court issued a Rule on June 26, 1973 and granted an interim injunction restraining inter alia the Collector and the Member, Board of Revenue from giving effect to their respective orders.
( 8 ) ON February 3, 1975, this Court made the Rule absolute and directed the Collector of Calcutta, and the Member, Board of Revenue to submit a statement of case within three weeks from the service of the order, The time was subsequently extended.
( 9 ) IN compliance with this Court's order made on February 3, 1975, a Reference has been made for a decision on the following points:-- (i) Whether on the facts and in the circumstances of the case the Collector of Calcutta, was justified in holding that the agreement dated 6-6-1973 between the Bengal Paper Mills Co. Ltd. , and the West Bengal Industrial Development Corporation Ltd. , was a bond within the meaning of Section 2 (5) (a) of the Indian Stamp Act, 1899. (ii) Whether the Collector was justified in assessing duty of Rs. 18,000-10 P. on the said document under Article 15 of Schedule 1-A of the Indian Stamp Act, 1899 and (iii) Whether the Board of Revenue was justif
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