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2024 Supreme(Online)(GUJ) 24417
HIGH COURT OF GUJARAT
MRS. JUSTICE SUNITA AGARWAL, CJ, MR. JUSTICE PRANAV TRIVEDI, J
STATE OF GUJARAT – Appellant
Versus
SHALIN MUKESHBHAI PATEL – Respondent
R/LETTERS PATENT APPEAL NO. 689 of 2023 In R/SPECIAL CIVIL APPLICATION NO. 387 of 2021
A release deed executed by a member of a Hindu Undivided Family in favor of another member is deemed a conveyance and subject to stamp duty, emphasizing the necessity for such transactions to benefit all co-owners.
Headnote:(A) Gujarat Stamp Act, 1958 - Sections 2(g), 2(l), 33, and Article 49(b) - Letters Patent Appeal - The State challenged the Single Judge's ruling that impounding of release documents was illegal and that the money recovered was to be refunded. The original petitioner contended that the release deeds executed between family members should not attract market value stamp duty. The court held that the release deed in favor of one coparcener was a conveyance, not a release, and thus subject to stamp duty. (Paras 1, 8, 86)
(B) Family Law - Hindu Undivided Family (HUF) - The court discussed the nature of HUF property and the presumption of jointness. It emphasized that properties purchased as HUF assets remain HUF properties unless proven otherwise. (Paras 24, 25)
(C) Legal Principles - The court reaffirmed that a release deed must benefit all co-owners and cannot be construed as a conveyance if it only benefits one. (Paras 70, 72)
Facts of the case:
The original petitioner challenged the stamp authority's decision to impose stamp duty on release deeds executed by his sister in favor of him concerning properties previously owned by their father as Karta of HUF and individually. (Paras 2, 6, 53)
Findings of Court:
The court found that the release deed concerning the HUF property could not be treated as a release but as a conveyance subject to stamp duty. The deed concerning the individual property was also deemed a conveyance. (Paras 86)
Issues: The main issues were whether the release deeds were subject to stamp duty and the nature of the properties involved. (Paras 1, 86)
Ratio Decidendi: The court reasoned that a release deed must benefit all members of a joint family and that the intention of the executants must be considered to determine the nature of the documents. (Paras 70, 72)
Result: The Letters Patent Appeal was allowed in part, affirming the imposition of stamp duty on the deeds as conveyances. (Paras 86, 87)
CAV JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. Letters Patent Appeal No. 689 of 2023 is filed by the State against the judgment and order dated 12.12.2022 passed by the learned Single Judge in holding that the orders dated 02.07.2019 and 03.06.2020 passed by the authorities under the Gujarat Stamp Act’ 1958 are illegal and hence liable to be set aside, further that the money recovered by the State respondents from the original petitioners is to be refunded. Whereas, the Letters Patent Appeal No.864 of 2023, is a cross-appeal preferred by the original Writ petitioner to modify the Judgment of the learned Single Judge dated 12.12.2022 to the extent of granting 12% interest on the amount directed to be refunded by the State respondents. Hence, both the appeals are heard together and decided by this common judgement and order.
2. The original petitioner namely the respondent herein had filed the writ petition challenging the orders passed by the Stamp authorities in impounding two documents termed as release documents treating them as “transaction for-say” and imposing stamp duty on it, based on the market price.
3. Certain facts relevant to decide the controversy, at hands, are that the father of the original petitioner namely Mr. Mukeshbhai Hirabhai Patel purchased two parcels of agricultural lands in Zundal Village, District Gandhinagar admeasuring 0–51–60 sq.mts as Survey No. 11/1, and land admeasuring 0–54–62 sq.mts in Survey No. 11/2, by way of two registered sale deeds dated 24.02.2000. The lands in question were converted into Non-agricultural lands. On 26.03.2013 and 07.07.2013, the father of the petitioner declared the pedigree stating that the Joint Hindu family in the name of Mukeshbhai Hirabhai Patel (HUF) comprised of himself, his wife, a daughter and a son (who is the original petitioner herein). In the year 2015, the names of the wife, daughter and son were mutated in the revenue records in Form – 6 and Form – 7/12 along with the owner – father namely Mr. Mukesh Patel, on an application filed by the owner father during his lifetime.
4. Vide two Release Deeds dated 27.12.2016, executed on a stamp paper of Rs.100/-, the daughter had relinquished her right to the extent of her share in favour of the son (namely her brother, i.e. the petitioner herein) in respect of the two lands namely Survey No. 11/1 and Survey No. 11/2. The said documents executed as Release deeds were presented before the Sub-Registrar for registration when show-cause notices dated 08.05.2017 and 14.09.2017 were issued impounding the documents under Section 33 of the Gujarat Stamp Act’ 1958. The stamp authorities opined that the stamp duty of Rs.100/- was inadequate and the correct stamp duty was to be levied on the basis of the market value of the relinquished portion of the share of the executant in the lands in question.
5. Before the learned Single Judge, it was argued by the learned counsel for the original petitioner that the instruments of release presented for registration cannot attract the stamp duty under Schedule I of Article 20 as a ‘conveyance’ by treating the said documents falling within the ambit of Article 49 (b) of Schedule I read with Section 2(c), Section 5 and Section 39(1)(b) of the Gujarat Stamp Act’ 1958.
6. It was argued that the release deeds relinquishing her share was executed by the sister in favour of her real brother out of love and affection and without any consideration and therefore, it cannot be said to be a transaction or conveyance for the purposes of levy of stamp duty at the market value. As regards the mutation entries of entering the names of three family members in the revenue records during the lifetime of the owner, it was argued that the mutation entries are made only for fiscal purposes and they cannot be considered as transaction or conveyance in favour of the persons, whose names were recorded in the revenue record. Moreover, the lands in question were belonging to HUF and
