1999 Supreme(MP) 1030

IN THE HIGH COURT OF MADHYA PRADESH
S.C. Pandey, J.
Vimla Devi (Smt.) – Applicant
Vs.
Dhanraj Singh – Respondent
Civil Revn. No. 2473 of 1999(J)
Decided On : 02-12-1999

Headnote:(1) Stamp Act, 1899 – – S. 3 – – taxable event – – is creation of instrument within The meaning of the Act – – it is the instrument which is chargeable to stamp duty.

       (2) Stamp Act, 1899 – – Schedule 1 Arts. 5 and 23 – – agreement to sell – possession mentioned to have been handed over to vendee – – chargeable as conveyance under Art. 23 and not as agreement under Art. 5.

       (3) Transfer of Property Act, 1882 – S. 53A – agreement to sell – – possession handed over to vendee – chargeable as conveyance for stamp duty

        Short Note

       1. This is a revision filed by the plaintiff Smt. Vimla Devi, against the order dated 1.10.99, passed by 1st Addl. District Judge, Hoshangabad in C.S. No. 18A/98.

       2. I have heard the learned counsel for the parties. The objection of the applicant to the admissibility of the agreement to sell dated 1.4.96 was to the effect that in the agreement there is a clause whereby it is stated that at the time of agreement, possession of the land subject to the agreement is being delivered to the non – applicant No.1. Therefore, it is liable to be taxed for the purpose of stamp duty as of conveyance and not as an agreement to sell within the meaning of Article 5 of Schedule IA of Indian Stamp Act. The attention of the learned trial Judge was drawn to the Article 23 of Schedule IA of Indian Stamp Act. The learned trial Judge also agreed that the explanation to Article 23 aforesaid expanded the definition of' ''conveyance" mentioned in Article 23 to include the immoveable property possession of which was delivered at the time when the agreement to sell was executed without executing any conveyance. The trial Court, however, rejected the contention of the applicant on the ground that the document in question could not be taxed as per Article 23 aforesaid because the applicant did not accept the allegations made in the plaint that the possession was delivered.

       3. It is contended by the learned counsel for the applicant that under the Indian Stamp Act the taxable event arises when the document is executed and, thereafter, when the document is sought to be impounded either under the notice of the Collector or when it is tendered during the evidence in Court. The Court, while determining the stamp duty should consider the purport of the document and should not act by any collateral effects which are part of the document for judging if the instrument is taxable under a particular Article of Schedule IA of Indian Stamp Act.

       4. The learned counsel for the applicant appears to be right. It is well established that a taxing statute is to be construed strictly and not according to the supposed intentment of the maker. It is well established from fair reading of section 3 of Indian Stamp Act, 1899 that the taxable event is the creation of instrument within the meaning of the Act and it is the instrument that is chargeable to stamp duty. Therefore, the question whether possession was delivered pursuant to the agreement to sell dated 1.4.96, is neither here nor there. Accordingly, it is held that the non – applicant No. 1 is liable to pay stamp duty in accordance with Article 23 of Schedule I of the Indian Stamp Act. The case is remitted back to the trial Court for determination of stamp duty and penalty accordingly. It is also pointed out that in case, the non – applicant pays the stamp duty according to the Article 23 aforesaid before the Court then at the time of execution of the sale – deed, if any, the proviso No.2 to explanation will become operative and adjustment will be made at the time of execution of the sale – deed of the amount paid on the conveyance by the non – applicant No. 1 – plaintiff.

       5. This revision accordingly succeeds without notice to the non – applicant No. 1 suo motu in exercise of revisional powers u/S. 115 of the Code of Civil Procedure, in the interest of justice and in order to obviate delay in trial.