2012 Supreme(Guj) 559

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Hon’ble Mr. Chief Justice Bhaskar Bhattacharya, Hon’ble Mr. Justice A.L. Dave & Hon’ble Mr. Justice V. M. Sahai
Costal Gujarat Power Limited
Versus
Chief Controlling Revenue Authority & Ors.
Stamp Reference No. 1 of 2011—Decided on 03/12/2012

Point in Issue :
Whether the instrument of mortgage in question is liable to stamp duty of Rs. 54,62,000/- under Section 5 instead of Rs. 4,21,000/- under Sections 2(1) & 3 of the Act.

Headnote:Head Note :

       (a) Gujarat Stamp Act, 1958 — Sections 2(1), 3, 13(a), 3(8), 5 Schedule Ist Articles 6 and 36(b) and Sections 53(1) & 54(1-A) — Stamp Duty — In denture of Mortgage for ‘Delayed after Assets Deed’ — Petitioner paid stamp duty of Rs. 4,21,000/- for registration — Claim of liability to pay stamp duty of Rs. 54,62,000/- by CCRA — Reference — Scope — Finding of — The controversy centres around an instrument wherein a single document of mortgage is executed by borrower the petitioner in favour of one security Trustee mortgaging it’s assets for securing the amount borrowed from special tender — Court held the instrument chargeable under Sections 2(1) and 3 of the Act — Upon plain reading the instrument in question does not fall within scope of Section 5 of the Act as convessed on behalf of State — It is the only one mortgage instrument and no rights in the mortgage property has been created in favour of any other person — Court, therefore, answered the reference accordingly holding that applicant is not required to pay deficit Stamp duty of Rs. 50,41,600/- to make up payment of Rs. 54,62,000/- for stamp duty as claimed made by CCRA.

       Held :

       Court find substance in the contention of the learned counsel for the petitioner and the intervening parties that Section 5 applies in a situation where several “distinct matters” or “distinct transactions” are clubbed in one single instrument. It is rightly contended by Mr. Thakore, the learned Senior Advocate appearing on behalf of the petitioner, that the said Section presupposes the existence of “distinct matters” or “distinct transactions”. Court cannot lose sight of the fact that the levy of stamp-duty under Section 3 read with Section 2[l] of the Act is on an instrument and not on the object behind the instrument, and therefore, the provision contained in Section 5 cannot be construed in a way so as to empower the State to levy duty on a transaction de hors the instrument. In the case before Court, there being only one instrument creating a mortgage by a borrower in favour of a security trustee, such relation between the borrower and security trustee is independent of the relationship between the borrower and the lending banks. [Para 15]

       As the duty on mortgage in question is a single transaction creating security in favour of the security trustee who acquired such status by virtue of another Trust deed stamped in accordance with law, the fact that the mortgage is for the benefit of various lending banks as the beneficiaries under a different trust deed, does not attract the provisions of Section 5 of the Act. The rights of the mortgagee created under the mortgage have accrued only in favour of the security trustee and no other person. [Para 16]

       The language of Section 3 and Section 2[1] are plain and unambiguous and are incapable of the interpretation canvassed by the State with the aid of Section 5 of the Act. The right to recover tax/duty flows from the clear and unambiguous provisions of law. The State is not entitled to recover any stamp-duty based upon its perception of the legislative intendment behind Section 5 of the Act. If upon plain reading of the provisions of the Act, the instrument in question does not fall within the scope and purview of Section 5 of the Act, on the basis of the State’s perception or understanding of the Legislative intendment, no stamp-duty can be recovered as it is settled legal position that the mere intendment cannot create liability to pay duty/tax and such liability would only flow out of clear and unambiguous provisions of the charging Section. [Para 18]

       Head Note :

       (b) Gujarat Stamp Act, 1958 — Section 54(1-A) — Reference — Order passed by CCRA — Contention that order can be challenged under Article 226 of Constitution, therefore, reference should not be entertained — Held, contention not acceptable — The remedy of reference being statutory remedy provided under the Act — It is, therefore, preposterous to suggest that Court should not give the benefit of statutory remedy to a litigant on ground of the existence of an alternative remedy under Article 226 of Constitution.

       Held :

       The remedy of Reference being a statutory remedy provided under the Act, it is preposterous to suggest that inspite of existence of such a statutory provision, this Court should not give the benefit of a statutory remedy to a litigant on the ground of the existence of an alternative remedy under Article 226 of the Constitution of India. In Court opinion, the position would have been different if instead of taking recourse to the provision of Reference prescribed by the Statute, the petitioner had approached this Court under Article 226 of the Constitution of India; in that circumstance, it could be successfully contended that in view of the existence of an alternative remedy of Reference provided under the Statute, this Court should not entertain the application under Article 226 of the Constitution of India. [Para 8]

       Therefore, Court is unable to accept the aforesaid preliminary objection raised by the State as regards the maintainability of the Reference in question. [Para 9]

       Law Laid Down :

       The remedy of Reference being a statutory remedy provided under the Act, it is preposterous to suggest the inspite of existence of such a statutory provision, the Court should not give the benefit of a statutory remedy to a litigant on the ground of the existence of an alternative remedy under Article 226 of the Constitution of India.

       Case Law Analysis :

       Members, Board of Revenue, West Bengal vs. Arthur Paw Benthall AIR 1956 SC 35;; Shree Sajjan Mills Ltd. vs. Commissioner of Income-Tax M.P. Bhopal and another AIR 1986 SC 484;; Real Optical Co. vs. Appellate commissioner of Customs and another 2001 (9) SCC 391;; The Commissioner of Income-tax, Patiala vs. M/s. Shahzada Nand and Sons and others AIR 1966 SC 1342.—Distinguished

       The Commissioner of Income-tax, Patiala vs. M/s. Shahzada Nand and Sons and others, AIR 1966 SC 1342;; Board of Revenue U.P vs. Rai Saheb Sidhnath Mehrotra AIR 1965 SC 1092;; The Commissioner of Inland Revenue vs. G. Anous and Co. and others (1891) Vol XXIII Queen’s Bench Division 579;; Hindustan Lever & Anr. vs. State of Maharashtra & Anr., AIR 2004 SC 326;; State of West Bengal vs. Kesoram Industries Ltd. and Ors., AIR 2005 SC 1646.—Relied upon