Back
1976 Supreme(Cal) 277
High Court Of Calcutta
SANKAR PRASAD MITRA, SABYASACHI MUKHERJI, S. K. DUTTA
BENGAL PAPER MILLS CO LTD - Appellant
Versus
COLLECTOR OF CALCUTTA - Respondent
Matter 477 Of 1973
Decided On : 08/10/1976
Important Points
Subject
Taxation Law - STAMP DUTY
Act Referred
Headnote
{'KEYWORD': 'STAMP DUTY', 'SUBJECT': 'BOND', 'ACT SECTION LIST': ['INDIAN STAMP ACT, 1899, SECTION 2 (5)', 'INDIAN STAMP ACT, 1899, SECTION 8', 'INDIAN STAMP ACT, 1899, SCHEDULE 1A, ITEM 15'], 'SUMMARY': "The court held that the document in question was a 'bond' within the meaning of Section 2 (5) of the Indian Stamp Act, 1899, and that the Collector was justified in assessing duty of Rs. 18,000.10p. on the document under Article 15 of Schedule 1a to the Act."}
Fact of the Case:
The case involved a dispute over the stamp duty payable on a document between the Bengal Paper Mills Co. Ltd. and the West Bengal Industrial Development Corporation Ltd. The document was an agreement for a loan of Rs. 15,00,000/- granted by the Corporation to the Company. The Collector of Calcutta imposed a duty of Rs. 18,000.10p. on the document, which was challenged by the Company before the Board of Revenue and subsequently before the High Court.
Finding of the Court:
The court held that the document was a 'bond' within the meaning of Section 2 (5) of the Indian Stamp Act, 1899, and that the Collector was justified in assessing duty of Rs. 18,000.10p. on the document under Article 15 of Schedule 1a to the Act.
Issues: 1. Whether the document in question was a 'bond' within the meaning of Section 2 (5) of the Indian Stamp Act, 1899. 2. Whether the Collector was justified in assessing duty of Rs. 18,000.10p. on the document under Article 15 of Schedule 1a to the Act. 3. Whether the Board of Revenue was justified in rejecting the Company's petition and holding that this was not a doubtful case.
Ratio Decidendi: The court held that the document was a 'bond' within the meaning of Section 2 (5) of the Indian Stamp Act, 1899, because it was an instrument by which the Bengal Paper Mills Co. Ltd. had obliged itself to pay the sum of Rs. 15,00,000/- in three equal annual installments, it was not payable to order or bearer, and it was not an agreement because the enforcement of this document did not involve quantification of damages by Court.
Final Decision: The court answered the second question in the affirmative and held that the Collector was justified in assessing duty of Rs. 18,000.10p. on the document under Article 15 of Schedule 1a to the Act. The court did not answer the other two questions.
Dipankar Gupta, PRABIR MAJUMDAR, S.B.MOOKERJEE, S.PAL CHAUDHARY, SUCHIT KUMAR BANERJI
( 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 10p. 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 has sanctioned the amount of Rs. 97,28,444. 85p. 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 installments. The Corporation as the first installment 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 a repay to the Corporation the loan of Rs. 15,00,000/- by three equal installments of Rs. 5,00,000/ -. The first of such installments would be paid n May 31, 1991; the second installment on May 31, 1992 and the third installment on May 31, 1993 without any interest. The borrower also agreed to certain conditions, if any default in repayment of the installments 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. 10p. assessed under Article 15 of Schedule 1a 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. 73 between the Bengal paper Mills Company 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. 10p. on the said document under Article 15 of Schedule 1a of the Indian Stamp Act, 1899, and (III)whether the Board of Revenue
