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2012(3) JLJ 170
(SUPREME COURT)
R.M. Lodha and H.L. Gokhale, JJ.
State of M.P. v. Rakesh Kohli
Civil Appeal No.684 of 2004; Decided on 11.5.2012.
(2) Constitution of India -- Art.14 -- Stamp Act, 1899 (M.P. Amendment Act, 2002) -- Sch.1, Art.45 cl.(d) -- validity of -- provision not found discriminatory -- without assigning any reason -- cannot be declared unconstitutional on ground of arbitrariness, unreasonable or irrationality.
Held : It is very difficult to approve the reasoning of the High Court that the provision may pass the test of classification but it would not pass the requirement of the second limb of Article 14 of the Constitution which ostracises arbitrariness, unreasonable and irrationality. The High Court failed to keep in mind the well defined limitations in consideration of the constitutional validity of a statute enacted by Parliament or a State Legislature. The statute enacted by Parliament or a State Legislature cannot be declared unconstitutional lightly. The Court must be able to hold beyond any iota of doubt that the violation of the constitutional provisions was so glaring that the legislative provision under challenge cannot stand. Sans flagrant violation of the constitutional provisions, the law made by Parliament or a State Legislature is not declared bad.
[Para 13
The High Court has not given any reason as to why the provision contained in clause (d) was arbitrary, unreasonable or irrational. The basis of such conclusion is not discernible from the judgment. The High Court has not held that the provision was discriminatory. When the provision enacted by the State Legislature has not been found to be discriminatory, we are afraid that such enactment could not have been struck down on the ground that it was arbitrary or irrational. (1996)3 SCC 709 and (1995)1 SCC 519 relied on.
(3) Stamp Act, 1899 (M.P. Amendment Act, 2002) -- Sch.1, Art.45 cl.(d) -- stamp duty -- is a tax -- interpretation of fiscal statutes -- hardship is not relevant.
Stamp duty is a tax and hardship is not relevant in interpreting fiscal statutes. AIR 1955 SC 661, AIR 1965 SC 1216, AIR 1968 SC 623, (2008)4 SCC 720, (1979)1 SCC 23, AIR 1958 SC 731, AIR 1959 SC 942, AIR 1960 SC 554, AIR 1951 SC 41, AIR 1951 SC 318, 1962 Supp. (2) SCR 589, AIR 1964 SC 370, (1980)1 SCC 223, (1981)4 SCC 675 and (2003)5 SCC 239 discussed.
[Paras 17 and 18 to 30
¼1½ LVkai vf/kfu;e] 1899 ¼e-iz- la‘kks/ku vf/kfu;e] 2002½ && vuqlwph 1] vuq-45 [kaM ¼?k½ && dh fof/kekU;rk && mica/k foHksndkjh ugha ik;k x;k && dksbZ dkj.k fu;r fd, fcuk && euekusiu] vuqfpr ;k foosdh gksus ds vk/kkj ij ljyrk ls vlaoS/kkfud gksuk ?kksf"kr ugha fd;k tk ldrkA ¼iSjk 13 ¼2½ Hkkjr dk lafo/kku && vuq-14 && LVkai vf/kfu;e] 1899 ¼e-iz- la‘kks/ku vf/kfu;e] 2002½ && vuqlwph 1] vuq-45 [kaM ¼?k½ && dh fof/kekU;rk && mica/k foHksndkjh ugha ik;k x;k && dksbZ dkj.k fu;r fd, fcuk && euekusiu] vuqfpr ;k vfoosdh gksus ds vk/kkj ij ljyrk ls vlaoS/kkfud gksuk ?kksf"kr ugha fd;k tk ldrkA vfHkfu/kkZfjr % mPp U;k;ky; ds bl fu"d"kZ dk vuqeksnu djuk vR;ar dfBu gS fd mica/k oxhZdj.k dh ij[k dh mis{kk dj ldrk gS fdarq lafo/kku ds vuqPNsn 14 dk f}rh; vo;o tks euekusiu] vuqfpr rFk vfoosdh dks cfg"d`r djrk gS mldh mis{kk ugha dj ldsxkA mPp U;k;ky;] laln ;k jkT; fo/kku&eaMy }kjk vf/kfu;fer dkuwu dh lkafo/kkfud ij fopkj djrs le; lqifjHkkf"kr e;kZnkvksa dk /;ku j[kus esa vlQy jgk gSA laln ;k jkT; fo/kku&eaMy }kjk vf/kfu;fer dkuwu ljyrk ls vlaoS/kkfud ?kksf"kr ugha fd;k tk ldrkA U;k;ky; dks fdlh jÙkhHkj lansg ls ijs ;g Bgjkus ds ;ksX; gksuk pkfg, fd lkafo/kkfud mica/k dk mYya?ku bruh lqLi"V Hkwy Fkh fd pqukSrh ds v/khu fo/kku dk mica/k fLFkj ugha j[kk tk ldrkA lkafo/kkfud mica/kksa dks lqLi"V mYya?ku ds fcuk] laln ;k jkT; fo/kku&eaMy }kjk cukbZ xbZ fof/k vkeU; ?kksf"kr ugha dh tkrh gSA mPp U;k;ky; us dksbZ ,sls dkj.k ugha fn, gSa fd [kaM ¼?k½ esa of.kZr mica/k D;ksa euekuk] vuqfpr ;k vfoosdh FkkA ,sls fu"d"kZ dk vk/kkj fu.kZ; ls ugha fn[krk gSA mPp U;k;ky; us ;g ugha Bgjk;k gS fd mica/k foHksndkjh gS tc jkT; fo/kku&eaMy }kjk vf/kfu;fer mica/k foHksndkjh ugha ik;k x;k gS] ge vfuf‘pr ugha gSa fd ,slh vf/kfu;fefr bl vk/kkj ij [kkfjt ugha dh tk ldrh Fkh fd ;g euekuh ;k vfoosdh FkhA ¼1996½3 ,l lh lh 709 rFkk ¼1995½1 ,l lh lh 519 voayfcrA ¼3½ LVkai vf/kfu;e] 1899 ¼e-iz- la‘kks/ku vf/kfu;e] 2002½ && vuqlwph 1] vuq-45 [kaM ¼?k½ && LVkai ‘kqYd && ,d dj gS && jktfoÙkh; dkuwuksa dk fuoZpu && dfBukbZ lqlaxr ugha gSA LVkai ‘kqYd ,d dj gS rFkk jktfoÙkh; dkuwuksa dk fuoZpu djus esa dfBukbZ lqlaxr ugha gSA , vkb vkj 1955 ,l lh 611] , vkb vkj 1965 ,l lh 1216] , vkb vkj 1968 ,l lh 623] ¼2008½4 ,l lh lh 720] ¼1979½1 ,l lh lh 23] , vkb vkj 1958 ,l lh 731] , vkb vkj 1959 ,l lh 942] , vkb vkj 1960 ,l lh 554] , vkb vkj 1951 ,l lh 41] , vkb vkj 1951 ,l lh 318] 1962 lIyh-¼2½ ,l lh vkj 589] , vkb vkj 1964 ,l lh 370] ¼1980½1 ,l lh lh 223] ¼1981½4 ,l lh lh 675 rFkk ¼2003½5 ,l lh lh 239 foosfprA
Lodha, J. -- 1. The only point for consideration here is, whether or not the Division Bench of the Madhya Pradesh High Court was justified in declaring clause (d), Article 45 of Schedule 1-A of the Indian StampAct, 1899 (for short, ‘1899 Act’) which was brought in by the Indian Stamp (Madhya Pradesh Amendment) Act, 2002 (for short, M.P. 2002 Act’) as unconstitutional being violative of Article 14 of the Constitution of India.
2. The above point arises in this way. Two writ petitions came to be filed before the Madhya Pradesh High Court. In both writ petitions initially it was prayed that clauses (f) and (f-1), Article 48, Schedule 1-A brought in the 1899 Act by section 3 of the Indian Stamp (Madhya Pradesh Amendment) Act, 1997 (for short, ‘M.P. 1997 Act’) be declared ultra vires. During the pendency of these petitions, the 1899 Act as applicable to Madhya Pradesh was further amended by the M.P. 2002 Act. The respondents, referred to as writ petitioners, amended their writ petitions and prayed that clause (d), Article 45 of Schedule 1-A of the 1899 Act as substituted by M.P. 2002 Act be declared ultra vires. The writ petitioners set up the case that original Article 48 of the 1899 Act, Schedule 1-A prescribed stamp duty payable at Rs.10/- if attorney was appointed for a single transaction. By M.P. 1997 Act, Article 48 clause (f) was substituted by clauses (f) and (f-1). Clause (f-1) provided that where power of attorney was executed without consideration in favour of person who is not his or her spouse or childlren or mother or father and authorizes him to sell or transfer any immovable property, the stamp duty would be leviable as if the transaction is conveyance under Article 23. Explanation II inserted by M.P. 1997 Act provided that where under clauses (f) and (f-1), duty had been paid on the power of attorney and a conveyance relating to that property was executed in pursuance of power of attorney between the executant of the power of attorney and the person in whose favour it was executed, the duty on conveyance should be the duty calculated on the market value of the property reduced by duty paid on the power of attorney. By M.P. 2002 Act, stamp duty relating to power of attorney has been prescribed in Article 45 of Schedule 1-A. Clause (d) thereof prescribes stamp duty at two per cent on the market value of the property which is subject-matter of power of attorney when power of attorney is given without consideration to a person other than father, mother, wife or husband, son or daughter, brother or sister in relation to the executant and authorizing such person to sell immovable property situated in Madhya Pradesh. The writ petitioners pleaded, inter alia, that the distinction between an agent who was a blood relation and who was an outsider carved out in Article 45, clause (d) was legally impermissible. The provision violates Article 14 of the Constitution as it has sought to create unreasonable classification.
3. The State of Madhya Pradesh stoutly defended the challenge to the above provisions and stated before the High Court that the matter of rate of stamp duty was solely in the domain of State Legislature and none of the provisions of the Constitution was offended by the above provisions.
4. The Division Bench of the High Court has accepted the constitutional challenge to clause (d), Article 45 of Schedule 1-A brought in the 1899 Act by M.P. 2002 Act and held that the said provision was violative of Article 14 of the Constitution of India. The Division Bench gave the following reasoning :
“11. As far as clause (d) is concerned, it lays a postulate that postulate (sic) that when the power of authority is given without consideration to a person other than the father, mother, wife or husband, son or daughter, brother or sister in relation to the executant and authorizing such person to sell immovable property, 2% on the market value of the property is to be collected. Submission of Mr. Agrawal is that this clause
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