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2024 Supreme(Online)(CHH) 10574
HIGH COURT OF CHHATTISGARH
Amitendra Kishore Prasad, J
State of Chhattisgarh – Appellant
Versus
Board of Revenue – Respondent
WPC No. 1848 of 2012 | WPC No. 1849 of 2012 | WPC No. 1850 of 2012 | WPC No. 1851 of 2012 | WPC No. 1852 of 2012 | WPC No. 1853 of 2012 | WPC No. 1854 of 2012
For the Appellants/Petitioners: Arvind Dubey, Sunita Manikpuri
For the Respondents: A.D. Diwan, Manoj Paranjape
A deed of surrender or relinquishment of property rights in favor of a cooperative society is classified as a conveyance, thereby making it mandatorily liable for stamp duty and registration fees under the Indian Stamp Act, 1899, regardless of prior exemptions granted for initial land acquisition.
Headnote:(A) Indian Stamp Act, 1899 - S. 3, S. 29, S. 47(A)(3) - Surrender/Relinquishment deed - Stamp duty and Registration fee - Whether a deed of surrender by members in favour of a Co-operative Society constitutes a conveyance requiring payment of stamp duty despite prior exemption granted to the society during initial land acquisition.
Facts of the case:
Members of a Cooperative Housing Society had surrendered plots back to the society due to failure to construct houses in accordance with society bylaws. The State argued that these surrender deeds were essentially deeds of conveyance, thus attracting stamp duty. The Board of Revenue initially set aside the Collector of Stamps' recovery order, leading the State to file these writ petitions.
Findings of Court:
The Court held that a deed of surrender/relinquishment is a form of conveyance and is mandatorily subject to stamp duty and registration fees. The initial exemption granted to the society for land acquisition does not extend to subsequent transfers or surrenders by members back to the society.
Issues: 1. Whether a deed of surrender is a conveyance requiring stamp duty. 2. Whether the society is liable to pay stamp duty on such surrenders.
Ratio Decidendi: Following the provisions of the Indian Stamp Act, 1899, the Court clarified that deeds of surrender functionally operate as conveyances. Consequently, legal responsibility for stamp duty cannot be avoided, and the Board of Revenue erred in setting aside the Collector’s order for recovery.
Result: Petitions allowed; impugned order of the Board of Revenue set aside; society directed to pay the requisite stamp duty.
| Table of Content |
|---|
| 1. factual background regarding property surrender deeds and tax liability. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9) |
| 2. arguments summarizing state's claim for duty and respondent's willingness to comply. (Para 10 , 11) |
| 3. court determination that surrender deeds constitute taxable conveyances. (Para 12 , 13 , 14 , 15 , 16) |
| 4. final order allowing petitions and enforcing stamp duty payment. (Para 17 , 18 , 19) |
C A V Order
1. By this common orders all these writ petitions are being decided as common question of law are involved in these matters.
2. The State of Chhattisgarh has filed these writ petitions inter alia challenging the order dated 31st March, 2008 passed by the Board of Revenue, Chhattisgarh, Bilaspur (Circuit Court Raipur), in Appeal Case No. A/09/S.A./B-105 (3)/233/2007, arising out of the order passed by the Collector of Stamps, Bastar (Jagdalpur), in Case Nos. 33/B-105(3)/2005-06, 31/B-105(3)/2005-06, 45/B-105(3)/2005-06, 35/B-105(3)/2005-06, 34/B-105(3)/2005-06, 41/B-105(3)/2005-06 & 40/B-105(3)/2005-06 respectively.
3. The State of Chhattisgarh has challenged the impugned order dated 31.03.2008 passed by the Board of Revenue, Chhattisgarh, Bilaspur (Circuit Court, Raipur) whereby it has set aside the order of Collector of Stamps, Bastar (Jagdalpur) dated 30.08.2006 by which the Collector of Stamps has directed to the President of Udainagar Grih Nirman Sahkari Samiti, Kanker to pay stamp duty for transfer of land in its favour by its members.
4. It was the case that the respondent No. 2 is the President of the Udainagar Grih Nirman Sahkari Samiti, Kanker, Chhattisgarh. The said society is registered under the Co-operative Societies Act, 1960. The society has been acquiring and purchasing land for allotment of land to the beneficiaries, i.e. the members of the society. The society is also governed by its own by laws.
5. In the present case, the society allotted plots to its members via registered sale-deed at discounted and affordable rates. Since, the society is governed by its own by laws; the members of the society had to construct their respective houses complying with the bylaws of the society. But, as some of the members of the society could not construct the houses as per the terms of the bylaws of the society hence those members had surrendered the land allotted to them and had executed a deed of surrender in favour of the society between the year 2003-04.
6. It is pertinent to mention here that, the said society was exempted to pay the stamp-duty by the State Government vide notification No. “733-1155-6 R.” dated 24.10.1980. So, while executing the Surrender Deed, no stamp duty was paid to the State Government.
7. An inspection was conducted regarding the records of Sub Registrar, Kanker by the team of Accountant General, Chhattisgarh and it was pointed out by the said team that the deed of relinquishment executed by members of the said society are in fact deed of conveyance and hence stamp duty and registration fees has to be recovered from the person who is found liable to pay the stamp duty and the registration fees.
8. In pursuance of that inspection report, the Sub-Registrar, Kanker made a reference under Section 47(A)(3) of the Indian Stamps Act, 1899, to the Collector of Stamps for determination of the amount of stamp duty and the registration fee payable on the deeds of surrender by the members in favour of the society. This reference was registered as revenue case numbers as 33/B-105(3)/2005-06, 31/B-105(3)/2005-06, 45/B-105(3)/2005-06, 35/B-105(3)/2005-06, 34/B-105(3)/2005-06, 41/B-105(3)/2005-06 & 40/B-105(3)/2005-06 respectively.
9. The Collector of Stamps, Jagdalpur after hearing the parties passed orders against the respondent No. 2 on 30.08.2006 in the above mentioned revenue cases. It was held by the Collector of Stamps that the document in question was infact deeds of conveyance and Registration fees and stamp duty is required to be paid. Since Stamp duty was not paid it is
