CANAGASOORIYAM

Vs.

COMMERCIAL LEASING AND FINANCE PLC

SUPREME COURT
FERNANDO, J.
NAWAZ, J.
SAMAYAWARDHENA,J.
SC/APPEAL/23/2021
SC/CHC/LA/85/2020
HC/CIVIL/175/2013/MR
JULY 15, 2021

Stamp duty-Stamp Duty Act, No. 43 of 1982, sections 5(6), 33(1), 71-Stamp Duty (Special Provisions) Act, No. 12 of 2006, section 4(g)-Stamp duty payable on a bond-Fiscal legislation-Strict interpretation

The plaintiff instituted action against the defendant in the Commercial High Court to recover a sum of Rs. 130,819,394.78 with interest on the guarantee/indemnity tendered with the plaint. When this document was sought to be marked in evidence, the defendant objected on the basis that it is a bond which has not been duly stamped and therefore cannot be admitted in evidence. The Commercial High Court allowed the plaintiff to rectify the stamp deficiency, if any. The defendant appealed to the Supreme Court.

Held:

1. According to section 33(1) of the Stamp Duty Act, No. 43 of 1982, no instrument chargeable with stamp duty shall be received or admitted in evidence unless the proper duty and a penalty not exceeding three times the proper duty are paid.

2. The Stamp Duty (Special Provisions) Act, No. 12 of 2006, did not repeal the Stamp Duty Act. In terms of section 13 of the Stamp Duty (Special Provisions) Act. both Acts operate in parallel. If there is any inconsistency between the two with regard to the imposition or exemption of stamp duty or any other matter, the Stamp Duty (Special Provisions) Act prevails.

3. The Stamp Duty (Special Provisions} Act does not refer to the species of bonds but the Stamp Duty Act does to some extent. The Stamp Duty (Special Provisions} Act uses the word "bond" in

a generic sense. Section 5(6) of the Stamp Duty Act exempts from stamp duty only a bond of indemnity given to a public officer in the execution of his duty, not all bonds of indemnity. The document sought to be marked was a bond - a bond of indemnity.

4. All bonds are not liable to stamp duty. ln terms of section 4(g) of the Stamp Duty (Special Provisions) Act, for a bond to be subject to stamp duty, two requirements shall co-exist: it shall be for any definite and certain sum of money and affecting any property. The bond in question does not satisfy these two requirements.

5. According to section 71 of the Stamp Duty Act, "money" does not fall within the definition of "property". Money and property are two different concepts.

6. The levy of stamp duty is governed by the letter of the law and not by its spirit. All fiscal legislation is subject to strict interpretation. The court will look squarely at the statute without reading in or implying anything. There is no room for intendment, presumption or assumption. Consideration of the principles of equity, morality, ethics, logic, injustice etc. is irrelevant. Any ambiguity or uncertainty must be resolved in favour of the taxpayer, not the tax collector.

Cases referred to:

1. Ceylease Financial Services Ltd v. Sriyalatha [2006] 2 Sri LR 169

2. Seylan Bank Ltd v. Samdo Macky Sportswear (Pvt) Ltd [2008] 1 Sri LR 96

3. People's Bank v. Ocean Queen Marine (Pvt) Ltd [2016] 1 Sri LR 141

4. Ameen v. Malship (Ceylon) Ltd [1982] 2 Sri LR 483

5. Manager, Bank of Ceylon, Hatton v. Secretary, Hatton Dickoya Urban Council [2005] 3 Sri LR 1

6. Sohli Eduljee Captain (Secco Brushes Corporation) v. Commissioner General of Inland Revenue (1974) 77 NLR 350

7. Perera and Silva Ltd v. Commissioner General of Inland Revenue (1978) 79 (II) NLR 164 at 167-168

APPEAL from the Judgment of the Commercial High Court.

Neomal Pelpola for the Defendant-Appellant.

Hiran De Alwis with Medani Navoda for the Plaintiff-Respondent.

cur. adv. vult.

October 15, 2021

SAMAYAWARDHENA, J.

The plaintiff instituted this action against the defendant in the Commercial High Court to recover a sum of Rs. 130,819,394.78 with interest on "the guarantee and/or indemnity and/or agreement dated 30.12.2