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2003 DIGILAW 226 (CAL)

PATTON ESTATES PVT LTD v. STATE OF WEST BENGAL

2003-05-06

AMITAVA LALA

body2003
A. LALA, J. ( 1 ) SEVERAL writ petitions are filed on the self-same issue. Hence, this Court was pleased to direct all such matters to be heard analogously and dispose of by delivering a judgment which will govern the field. ( 2 ) THE relevant point for consideration is when the registering authority under the Stamp Act found an instrument of conveyance is undervalued and directed the party concerned to pay enhanced value, can such authority also direct such party to pay enhanced duty under Calcutta Improvement Act, 1911 proportionately with such enhancement" ( 3 ) SECTION 82 of the Calcutta Improvement Act, 1911 says that the duty imposed by the Indian Stamp Act, 1899, on instruments of sale, gift and usufructuary mortgage, respectively, of immovable property shall, in the case of instruments affecting immovable property situated in the Calcutta Municipality and executed on or after the commencement of this Act be increased by 2% on the value of the property so situated, of (in the case of an usufructuary mortgage) on the amount secured by the instrument, as set forth in the instrument. It further speaks that section 27 of the Indian Stamp Act, 1899 will be applicable herein as regards particulars of the property whether the same is within the Calcuta Municipality or outside. Section 27 says the consideration if any, and all other facts and circumstances affecting the chargeability of any instruments with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein. Such section 27 was substituted by West Bengal Amendment with effect from 31st January, 1994. So far the earlier part is concerned, the same was replaced as it is but the additional part was incorporated under sub-section (2) therein wherefrom I find that in the case of the instruments relating to immovable property chargeable with an ad valorem duty on the market value of the property, and not on the consideration set forth therein, the instrument shall fully and truly set forth the annual land revenue in the case of revenue paying land, the annual rental or gross assets, if any, in the case of other immovable property, the local rates, municipal or other taxes, if any, to which such property may be subject, and any other particulars which may be prescribed by rules made under this Act. Section 47a was also substituted by West Bengal Amendment with effect from 31st January, 1994 which deals with instruments of conveyance etc. undervalued. Section 47b speaks about appeal. Section 47c speaks about suo motu revision by the Chief Controlling Revenue Authority. Thus, in totality, modalities are prescribed under the Indian Stamp Act by way of amendment to ascertain the actual market value of the property and impose ad valorem duty thereon not on the consideration set forth therein. ( 4 ) THE case of the petitioner is that when the valuation set forth in the instrument has already been made by one then there is no scope of investigation of the valuation so far as the Calcutta Improvement Act is concerned. The amended Indian Stamp Act clearly speaks about investigation as to the valuation under that Act alone but not under the Calcutta Improvement Act, which clearly speaks about the value as set forth in the instrument as yet. Therefore, the basis of the two Acts are not only distinct or different but also reverse. ( 5 ) THE whole contention of the parties opposing the prayer is that when the scope of investigation and ascertainment of ad valorem duty has already been made in the Indian Stamp Act then the rate of duty under Calcutta Improvement Act will deemed to be increased. I am sorry to say that it is not an acceptable proposition. ( 6 ) IN AIR 1975 SC 1492 (The Martand Dairy and Farm v. The Union of India and Ors.) a three Judges' Bench of the Supreme Court held that it is not for the Court to manage an obscure fiscal astrology but merely to construe what has been expressed in plain words. Again in 1999 (6) SCC 604 (Davis v. Sebastian) the Supreme Court held that it is a well-settled principle of interpretation that words in a statute shall be given their natural, ordinary meaning nothing should be added to them nor should any word be treated as otiose. In AIR 1989 SC 611 (The Member-Secretary, Andhra Pradesh State Board for Prevention and Control of Water Pollution v. Andhra Pradesh Rayons Ltd. and Ors.) again a three Judges' Bench of the Supreme Court held that to find out the intention of the legislation, if possible it should be found out from the language used in case of doubt. In AIR 1989 SC 611 (The Member-Secretary, Andhra Pradesh State Board for Prevention and Control of Water Pollution v. Andhra Pradesh Rayons Ltd. and Ors.) again a three Judges' Bench of the Supreme Court held that to find out the intention of the legislation, if possible it should be found out from the language used in case of doubt. The purpose of legislation should be sought for to clarify the ambiguity only, if any. There is no absurdity in the literal meaning. In a case of a fiscal statute, the provision not only be literally construed but also be strictly construed. ( 7 ) IN two judgments of the Supreme Court reported in AIR 1998 SC 120 (Commissioner of Wealth-tax, Gujarat-III, Ahmedabad v. Ellis Brigade Gymkhana etc.) and AIR 1998 SC 537 (The State of Punjab and Ors. v. Naranjan Dass Doomra Rice and Gen. Mills and Ors.) the Supreme Court held that the rule of construction of a charging section is that before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section. No one can be taxed by implication. A charging section has to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all. By the aforesaid subsequent judgment it is held that the Court found that levy of development cess by the Municipal Committee in such case is not valid when the order of refund was directed with interest. ( 8 ) ACCORDING to me there is a gulf of difference between evading tax/fees/duties and avoiding tax/fees/duties etc. First one is impermissible in law but the second one is permissible in law. Nullus Videtur dolo facere qui suo jure utitur which means if a man takes advantage of his legal right he cannot be considered a wrong-doer. Permission is embodied under the statute. Sometimes it is specific but sometimes it is implied. When it is specific there cannot have any doubt. But when it is implied the basic requirement would be to dispel doubt from the mind of the Court. ( 9 ) THEREFORE, the question is whether the permission granted by the law is specific or implied. Sometimes it is specific but sometimes it is implied. When it is specific there cannot have any doubt. But when it is implied the basic requirement would be to dispel doubt from the mind of the Court. ( 9 ) THEREFORE, the question is whether the permission granted by the law is specific or implied. According to me, quantum of payability of duty on transfer of immovable property is specific under section 82 of the Calcutta Improvement Act, 1911. The same is 2% on the basis of the value of the property as set forth in the instrument. By incorporation of amended section 27 for the State of West Bengal the legislature wanted to introduce ad valorem market value duty of the property not on the consideration set forth therein. Therefore, the introduction is specific not to accept the consideration set forth in the instrument which is the basic requirement of the Calcutta Improvement Act, 1911. Therefore, unless the Calcutta Improvement Act is correspondingly amended, one cannot ask for similar application in respect of the duty as regards Calcutta Improvement Act. The value given in the instrument by a party is the value so far as the Calcutta Improvement Act is concerned. But the value which has been made by a party in respect of the Stamp Act may not be the value so far as the State amendment of the Indian Stamp Act is concerned. There the basic difference lies. ( 10 ) MOREOVER, the West Bengal amendment as regards Indian Stamp Act was made for the purpose of ascertainment of valuation of different areas as per the local market rate. On the other hand, the Calcutta Improvement Act has fixed a duty at the rate of 2% on the value setforth in the instrument giving uniform rate. Therefore, if the valuation increases proportionately with the valuation of the different areas as per the inspection under State amended Indian Stamp Act then the uniform rate as per the Calcutta Improvement Act within the prescribed area of the city cannot be uniform. Thus, under no stretch of imagination it can be said that the valuation even for the improvement of Calcutta will proportionately be increased along with the State Amended Stamp Act. Thus, under no stretch of imagination it can be said that the valuation even for the improvement of Calcutta will proportionately be increased along with the State Amended Stamp Act. ( 11 ) THAT apart, there is no scope of investigation of valuation for the purpose of ascertainment of duty as it is not available under section 82 of the Act. There is a reason behind it. The Calcutta Improvement Act was originally made for the purpose of improvement of Calcutta but subsequently the improvement is not only being carried out by the Calcutta Improvement Authority alone. Calcutta Municipal Corporation, Public Works Department of the State, Calcutta (Kolkata) Metropolitan Development Authority are also rendering their respective services towards the people, at large, at the City of Calcutta and suburbs. However, the duty as per section 82 of the Act is not the betterment duty but a duty in addition to the betterment duty which is introduced byway of amendment under sections 78 (a), 78 (b) and 78 (c) of the Act. There the process of imposition of betterment fees is prescribed. If there is any dispute a person can proceed before the Arbitrator. Therefore, even such payment of duty at the rate of 2% on the consideration set forth in the instrument cannot be said to be area wise betterment fees. Therefore, what is it" This is nothing but a luxury fees applicable to a person to have immovable property within the City of Calcutta. Hence, such luxury fees cannot be said to be increased with the increment of any valuation of the property and that is why sub-section (2) of section 82 says that for the purpose of this. Section 27 of the Indian Stamp Act, 1899 specifically requires the particulars whether the property situated in the Calcutta Municipality and outside the Calcutta Municipality. Therefore, the only requirement under section 82 is to give the particulars of the property whether the same is situated within or outside the Calcutta Municipal Corporation. ( 12 ) THEREFORE, in coming to the conclusion I have to hold that the words which are taken to be used ordinarily in the sense that they bore at the time of the statute be treated to be appropriate meaning for the purpose of due consideration. ( 12 ) THEREFORE, in coming to the conclusion I have to hold that the words which are taken to be used ordinarily in the sense that they bore at the time of the statute be treated to be appropriate meaning for the purpose of due consideration. The construction of the statute should be made in accordance with the policy and object of the statute which are as follows: (A) A statute should be construed in a manner to carry out the intention of the legislature; (b) The intention is best declared by the words themselves; (c) Even modification or contradiction of language of the legislature is permissible in order to secure the intention; (d) Even the words can be regarded as surplusage; (e) The intention of the legislature must be discovered from the words of the statute; (f) If the words are ambiguous the policy of the legislature, the scope and object of the statute and various Rules and presumptions of construction will show the intention; ( 13 ) THEREFORE, had there been a different meaning or meanings it would have been read by applying the aforesaid principles. But, according to me, language of the statute is so clear and explicit that there is no scope of necessary implication. When the intention of the legislature pre-dominates by giving a clear and explicit meaning there is no scope to make a different meaning of such statute on the strength of the amendments of different Act. The intention and meaning of the statute is to be sought in the words used. If they are plain and unambiguous, the words must be applied as they stand, even if there is a suspicion that the result may not represent the real intention of the legislature. The governing principle is semper in dubiis banigniora praeferenda i. e. in all doubtful matters the beneficial should be preferred. ( 14 ) THUS, I hold that the petitioners are liable to pay duty @ 2% only on the value of the property as set forth in the instrument and not otherwise by way of any necessary implication. ( 15 ) WITH the above observation the writ petition stands disposed of. This writ petition has a binding effect upon all other matters. ( 15 ) WITH the above observation the writ petition stands disposed of. This writ petition has a binding effect upon all other matters. Since the writ petitions are pending prior to or before 31st March, 2003 within which certain relieves are prescribed by the authorities by way of circular, the petitioners will be entitled for such relieves till the date of production of the judgment and order of this Court before such authority by applying the principle of lis pendens provided the applications for obtaining certified copies are made. However, no order is passed as to costs. Xerox certified copies of this judgment will be supplied to the parties within seven days from the date of putting requisites for drawing up and completion of the order and certified copy of this judgment. Writ petition disposed of.