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IN THE HIGH COURT OF ALLAHABAD
MANOJ MISRA, RAJIV JOSHI, JJ.
State of U.P. Through Principal Secretary - Appellant
Versus
M/S S.J.P. Infracon Limited And Another - Respondents
Special Appeal Defective No. 27 of 2021
Decided On : 25-06-2021
Indian Stamp Act, 1899 - Section 49(d) (1) (2) and (5) - Contract Act - Section 65 - Instrument of lease - Stamp duty – Possession of Land - Petitioner, being a company engaged in the business of developing and marketing of housing projects including plots etc., was allotted a parcel of land by second respondent (Development Authority -GNIDA), vide allotment letter - An instrument of lease was executed and registered where under plot of land was leased out to first respondent for a period of 90 years by GNIDA at a premium of Rs.228,94,57,090 with yearly rent @ 1% of premium, for first 10 years, enhanceable by 50% after every 10 year - Whether petitioner is entitled to relief against GNIDA for refund of stamp duty paid for surrendered area is a complex issue because principle of restitution embodied in Section 65 of Contract Act would not apply to it as GNIDA is not authority which received any benefit under a void contract – Whether on account of subsequent decision of High Court annulling acquisition of land constituting part of leased area, writ petitioner was entitled to allowances for spoiled stamps or refund of part of stamp duty in view of provisions of Section 49 (d) (1), (d) (2) or (d) (5) of Stamp Act - Whether writ petitioner is entitled to refund of any part of stamp duty on equitable principles such as principle of restitution or doctrine of unjust enrichment.
Finding of the court: When a statute levies a tax it does so by inserting a charging section by which liability is created or fixed and then proceeds to provide machinery to make liability effective. It, therefore, provides the machinery for assessment of the liability already fixed by the charging section, and then provides mode for recovery and collection of tax, including penal provisions meant to deal with defaulters - Instrument of lease is subject to stamp duty as provided in Article 35 of Schedule I-B of the Stamp Act - Nothing much turns on that because what is important is that a writ court must not ordinarily set aside an order consequence of which would be to revive an illegal order or perpetuate illegality. As we have already found that the claim for allowance was not sustainable under the provisions of Stamp Act (i.e. Section 49(d)), setting aside order of Principal Secretary, with direction to comply with the order of Joint Secretary, would be to perpetuate illegality - it would be sufficient to observe that since stamp duty was not collected by GNIDA, a claim for refund of stamp duty as against it would not be sustainable. But whether GNIDA is liable for damages / loss, is a question left open for first respondent to raise at appropriate stage in an appropriate proceeding before appropriate forum in accordance with law - A claim for refund of stamp duty from Development Authority cannot be taken as a precedent laying down any binding principle of law.
Result: Appeal allowed
JUDGMENT :
Manoj Misra, J.
1. This intra court appeal arises from a judgment and order of a Single Judge, dated 01.12.2020, in Writ-C No.17744 of 2020, allowing the writ petition of the first respondent.
FACTS GIVING RISE TO THE APPEAL
2. A brief narration of the facts giving rise to this appeal would be apposite to have a clear understanding of the issues involved in this appeal. These facts are as below:
2(i) The first respondent, namely, the writ petitioner, being a company engaged in the business of developing and marketing of housing projects including plots etc., was allotted a parcel of land, measuring 198135.62 square meter, by the second respondent (the Greater Noida Industrial Development Authority -GNIDA), vide allotment letter dated 30.08.2010. Pursuant thereto, an instrument of lease, dated 15.11.2010, was executed and registered on 16.11.2010 where under plot of land, bearing No.GH-05 in Sector 16-B, Greater Noida, measuring 198135.62 square meter, was leased out to the first respondent for a period of 90 years by GNIDA at a premium of Rs.228,94,57,090 (Two Hundred Twenty Eight Crore Ninety Four Lac Fifty Seven Thousand Ninety only), with yearly rent @ 1% of the premium, for first 10 years, enhanceable by 50% after every 10 years. On the instrument of lease, stamp duty amounting to Rs.12,70,64,900/-(Twelve Crores Seventy Lakh Sixty Four Thousand Nine Hundred Only) was paid by the first respondent. Later, on 26.07.2011, GNIDA issued letter, followed by another letter dated 29.07.2011, requiring the first respondent to surrender possession of an area of 71833.62 square meter of the leased land on the ground that the acquisition of that portion of land, made in favour of GNIDA, was quashed by the High Court vide order dated 12.05.2011 which was upheld by the Apex Court vide order dated 06.07.2011. As a result, the first respondent had to surrender possession of 71833.62 square meter of land and, in witness whereof, a deed of correction, dated 07.02.2013, was executed whereunder the demised area (viz. 198135.62 square meter) was reduced by 71833.62 square meter to 126302 square meter.
2(ii) On reduction of the demised area, the first respondent, who had borne the stamp duty, made a representation to the Principal Secretary, Stamp and Revenue, State of U.P., Lucknow (for short the Principal Secretary) for refund of that amount of the stamp duty which related to the area that the first respondent had to surrender. This representation was made by invoking the provisions of Section 49(d) (1) (2) and (5) of the Indian Stamp Act, 1899 (for short the Stamp Act).
2(iii) When a decision on the said representation was not taken, Writ-C No.3183 of 2018 was filed by the first respondent seeking a direction upon the State authorities to decide the representation. This petition was disposed off, vide order dated 24.01.2018, requiring the Principal Secretary to examine the matter and take a decision in accordance with law within a specified period. But, before the first respondent could serve the order of this Court dated 24.01.2018 (supra), vide letter dated 08.02.2018 the first respondent was intimated that by order dated 14.08.2017 its claim for refund has already been rejected.
2(iv) Aggrieved with the order dated 14.08.2017, as communicated by letter dated 08.02.2018, the first respondent, placing reliance on a judgment of the Apex Court in the case of The Committee GFIL Vs. Libra Buildtech Private Limited and others, (2015) 16 SCC 31, filed Writ-C No.16639 of 2018. On this petition, the writ court took the view that a fresh consideration was required in the light of the decision of the Apex Court in Libra Buildtech case (supra). Accordingly, vide order dated 28.05.2018, Writ-C No.16639 of 2018 was allowed and a direction was issued to the Joint Secretary, Government of U.P., Lucknow to decide the matter afresh.
2(v) Pursuant to th
Allowance for spoiled stamps – As per tenor of instrument, hence there was no unjust enrichment of State because stamp duty paid to it was as per provisions of Stamp Act. No doubt, Stamp Act provides....
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The provisions of Section 54(c) of the Indian Stamp Act, 1899, are unconstitutional as they impose an arbitrary limitation on refunds for unused stamp papers, violating Article 14 of the Constitution....
A claim for refund of excess stamp duty is unsustainable if filed beyond the prescribed limitation period and based on voluntary payment without evidence of overcharging.
The court may exercise extraordinary jurisdiction to grant refunds of stamp duty on unexecuted instruments, prioritizing equitable outcomes over procedural strictures.
The main legal point established in the judgment is that the provisions of the Indian Stamp Act, 1899, should be interpreted in a manner that upholds equity and fairness, and that the application of ....
The expiration of a limitation period may bar the remedy but not the right, ensuring that legitimate claims for refunds are not denied on technical grounds.
Refund of stamp duty is not permissible when the duty has been utilized for a document that was executed but refused registration due to non-compliance with legal provisions.
The court established the principle that compelling compliance with impossible conditions, and prejudicing a party due to judicial delay, would be unjust and unconscionable.
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