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2001 DIGILAW 1528 (AP)

M. Kamakshamma v. M. Saraswathi Devi

2001-11-23

S.B.SINHA, V.V.S.RAO

body2001
S. B. SINHA, CJ. ( 1 ) A reference to this Court has been made by a learned single Judge of this Court by an order dated 8-10-2001: whether the stamp duty and penalty leviable under Explanation I of Article 47-A can be levied only on the portion of the amount paid, in view of the recitals made in an agreement of sale coupled with delivery of possession or is leviable on the total consideration specified in the agreement of sale though a portion of the sale consideration is payable at a future date i. e. , on the date of execution of a registered sale deed. ( 2 ) AN agreement of sale was entered into on 17-10-1996 whereby and where under an amount of Rs. 1,00,000/- out of a total consideration of Rs. 1,40,000/- was paid by way of advance and later on 20-3-1997 the sale deed was executed. Submissions: ( 3 ) MR. O. Manohar Reddy, the learned counsel appearing on behalf of the petitioner contends that the Court below erred in law in holding that the document dated 17-10-1996 is a sale deed only on the ground that the possession has been delivered to the petitioner and that the court below ought to have seen that mere delivery of possession of the property to the agreement holder does not convert the agreement of sale into a sale deed. ( 4 ) THE learned Counsel appearing on behalf of the respondents, on the other hand, would submit that the decision of a division Bench of this Court in B. Ratnamala v. G. Rudramma is absolutely explicit and unambiguous. ( 5 ) THE rival contentions of the learned counsel for the parties revolve round interpretation of Article 47-A of the schedule I-A appended to the Indian Stamp act (for short the Act ) vis-a-vis Section 35 thereof. Section 3 of the Act provides for the mode and manner as regards chargeability of instruments with duty. Findings: ( 6 ) SECTION 3 (a) and Article 47-A of the schedule IA (Explanation I) respectively read thus: instruments chargeable with duty:- subject to the provisions of this Act and the. Section 3 of the Act provides for the mode and manner as regards chargeability of instruments with duty. Findings: ( 6 ) SECTION 3 (a) and Article 47-A of the schedule IA (Explanation I) respectively read thus: instruments chargeable with duty:- subject to the provisions of this Act and the. exemptions contained in schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefore, respectively, that is to say- (a) every instrument mentioned in that schedule which, not having been previously executed by any person, is executed in India on or after the first day of July, 1899; provided that no duty shall be chargeable in respect of- (2) any instrument for the sale, transfer or. other disposition, either absolutely or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel registered under the Merchant shipping Act, 1894, or under Act 19 of 1838, or the Indian Registration of Ships Act, 1841 (57 and 58 Vict, section 60,10 of 1841), as amended by subsequent Acts. 47-A: Sale as defined in Section 54 of the Transfer of Property Act:- explanation I:- An agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a "sale" under this article: provided that, where subsequently a sale deed is executed in pursuance of an agreement of sale as aforesaid or in pursuance of an agreement referred to in clause (B) of Article 6, the stamp duty,, if any, already paid or recovered on the agreement of sale shall be adjusted towards the total duty leviable on the sale deed. ( 7 ) THE question, which therefore, arises for consideration is as to whether the penalty shall be levied on the consideration mentioned in the agreement for sale or in the deed of sale. ( 8 ) THE Act is a fiscal statute. It is now well settled that fiscal statute must be construed strictly. In H. S. Ltd. v. M/s. Dilip construction it has been held : the Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments: it is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. In H. S. Ltd. v. M/s. Dilip construction it has been held : the Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments: it is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. The stringent provisions of the act are conceived in the interest of the revenue. Once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of the initial defect in the instrument. ( 9 ) IN Federation of A. P. Chamfers of commerce and Industry v. State of A. P. , it has been held: it is trite law that a taxing statute has to be strictly construed and nothing can be read into it. and quoted with approval a passage from cape Brandy Syndicate which is in the following terms: in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can look fairly at the language used. ( 10 ) KEEPING in view the aforementioned principles the provisions of the Act will have to be considered. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can look fairly at the language used. ( 10 ) KEEPING in view the aforementioned principles the provisions of the Act will have to be considered. Section 35 and the proviso thereto read thus: instruments not duly stamped inadmissible in evidence, etc.- No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any pubic office, unless such instrument is duly stamped: provided that- (a) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, a sum of equal to ten times such duty or portion; ( 11 ) A bare perusal of the proviso appended to Section 35 of the Act would clearly go to show that an instrument chargeable with duty shall be admitted in evidence on payment of duty with which the same is chargeable and in case of instrument insufficiently stamped, on the amount required to make up, with a penalty of a sum equal to 10 times such duty. ( 12 ) IT is not in dispute that Article 47-A of Schedule I-A of the Act has been enacted for the purpose of protection of the State revenue so that the parties to a conveyance may not evade stamp duty. ( 13 ) WHERE by reason of the provisions of the statute the entire stamp duty has been paid, in our opinion, the deficit stamp duty may not be payable for the purpose of section 35 or Section 36 of the Act. ( 14 ) THE main object of enacting Sec. 35 is to recover the stamp duty. ( 13 ) WHERE by reason of the provisions of the statute the entire stamp duty has been paid, in our opinion, the deficit stamp duty may not be payable for the purpose of section 35 or Section 36 of the Act. ( 14 ) THE main object of enacting Sec. 35 is to recover the stamp duty. If stamp duty on the said instrument has already been paid while executing a deed of sale it must be held that stamp duty payable on a deed of sale in terms of the legal fiction created in article 47-A must be held to have been paid. An agreement for sale is not a deed of sale in terms of Section 54 of the Transfer of property Act. A legal fiction has been created as regards nature of the said instrument. Any agreement of sale would be held to be a deed of sale, by which possession was delivered, for the purpose of payment of the stamp duty and for no other. But for the aforementioned provision an agreement for sale could have been executed on a stamp paper, duty whereof would be leviable on agreement. ( 15 ) THE object of enacting the said article was to prevent the mischief of evasion from payment of stamp duty. The object must be held to have been fulfilled as soon as a sale deed is executed and the full duty is paid. An agreement for sale, on execution of the deed of sale, except for certain purposes loses its identity because such an agreement has already been acted upon. ( 16 ) ONCE, having regard to the explanation appended to Article 47-A, the entire duty is paid the question of making up of any amount required by way of stamp duty would not arise. ( 17 ) THE matter has been considered by the apex Court in Veena Hasmukh Jain and another v. State of Mah, and others in the following terms: the duty in respect of an agreement covered by the Explanation is leviable as if it is a conveyance. ( 17 ) THE matter has been considered by the apex Court in Veena Hasmukh Jain and another v. State of Mah, and others in the following terms: the duty in respect of an agreement covered by the Explanation is leviable as if it is a conveyance. The conditions to be fulfilled are if there is an agreement to sell immoveable property and possession of such property is transferred to the purchaser before the execution or at the time of execution or subsequently without executing any conveyance in respect thereof such, an agreement to sell is deemed to be a "conveyance". In the event a conveyance is executed in pursuance of such agreement subsequently, the stamp duty already paid and recovered on the agreement of sale, which is deemed to a conveyance shall be adjusted towards the total duty leviable on the conveyance. ( 18 ) THE learned Court below has relied upon a Division Bench decision of this court in B. Ratnamala v. G. Rudramma (1 supra ). Therein a question arose as to whether a tenant, who purchases the property, would be liable to pay the stamp duty although no factual delivery of possession had been effected. ( 19 ) OVERRULING a decision of a learned single Judge of this Court in M. A. Gafoor v. Mohd. Jani, it was held that the expression "possession of the property agreed to be sold" employed in Article 47-A must be given its full effect. It was held that once the character of possession is changed, the tenant continuing in possession in a different capacity viz. , as owner would amount to delivery of possession at a subsequent stage. ( 20 ) THE said decision in the fact of this case has no application. It is further well- known that a decision is an authority for what it decides and not what can logically be deduced therefrom. ( 21 ) IN C. I. T. v. Sun Engineering Works (P) limited Dr. A. S. Anand, J. (as the learned judge then was) stated the law in the following terms:. . . . . . . . It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this court, divorced from the context of the question under consideration and treat it to be the complete law declared by this Court. . . . . . . . It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this court, divorced from the context of the question under consideration and treat it to be the complete law declared by this Court. The Judgment must be read as a whole and the observations from the Judgment has to be considered in the light of the questions which were before this court. . . . . . . . " ( 22 ) IN Jaya Sen v. Sujit KR. Sarkar it was held-"it is now well-known that a decision is an authority for what it decides and not what can logically be deduced therefrom. It is also well-known that even a slight distinction in fact or an additional fact may make a lot of difference in decision making process (See Quinn v. Lealhain, [ (1990-1903) aer (Rep.) 1], Krishna Kumar v. Union of India [ 1990 (4) SCC 207 ], commissioner of Income Tax v. Sun engineering Co. Ltd. ( AIR 1993 SC 43 ), regional Manager v. Pawan Kumar dubey ( AIR 1976 SC 1766 ) and municipal Corporation of Delhi v. Gurnam Kaur [ (1988) 1 SCC 101)". ( 23 ) IT is now well-known that a little variation of fact and/or some additional fact may lead to a different conclusion. In regional Manager v. Pawan Kumar Dubey it is held: one additional or different fact may make a world of difference between conclusion in two cases when the same principle are applied in each case to similar facts. ( 24 ) FOR the purpose of construction of a statute, the rule of purposive construction must be taken recourse to. (See: DM, apsrtc, Vizianagaram v. State Transport appellate Tribunal and JT. Registrar of Co-op. Societies v. T. A. Kuttappan. ( 25 ) IN the result, we answer the reference holding that the stamp duty and penalty leviable by the Court under Section 35 of the Stamp Act would be on the portion of the sale consideration, which is payable as covenanted at a future date and not on the entire value of the sale consideration on which the parties to the agreements accepted. ( 26 ) THE matter may be placed before the learned single Judge for disposal on merits.