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Allahabad High Court · body

2014 DIGILAW 2794 (ALL)

Vishal Retail Pvt. Ltd. v. State of U. P.

2014-09-09

SURYA PRAKASH KESARWANI

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JUDGMENT Surya Prakash Kesarwani, J. 1. Heard Sri Atul Kumar Pandey, learned Counsel for the petitioner and Sri B.P. Singh Kachhwah, learned Standing Counsel for the respondents. Briefly stated the facts of the present case are that the instrument in question was executed in favour of the petitioner by M/s. L.J. Builders, whereby, an area of 30344 Sq. Mts. of the constructed building was given on lease for 12 years under a Memorandum of Understanding and no stamp duty was paid. By letter No. 653 dated 13.12.2006, the Deputy Commissioner (Stamp), Kanpur Nagar referred the matter to the District Magistrate, Kanpur Nagar, under section 33(4) of the Indian Stamp Act, 1899 (hereinafter referred to as the 'Act')- Thereafter, a notice dated 16.1.2007 was issued by the Additional District Magistrate (Finance & Revenue), Kanpur Nagar to the petitioner requiring him to show cause as to why deficiency in stamp duty to the tune of Rs. 63,00,400 and penalty and interest be not demanded. The petitioner submitted a reply dated 8.3.2007 stating therein that he is ready to pay the entire deficiency of stamp duty as alleged, provided the penalty and interest be waived off. Thereafter, the petitioner submitted an application dated 27.4.2007 in Stamp Case No. 555 of 2006-07 in which it has been stated that a sum of Rs. 63,00,000/- has been deposited by him towards the alleged deficiency of stamp duty through Bank Draft No. 10040 dated 9.4.2007 of UTI Bank Ltd., Delhi. He again requested to waive off the interest and penalty. A sum of Rs. 400/- was also deposited by him through treasury challan dated 28.4.2007. Under the circumstances, the Collector, Kanpur Nagar passed the order dated 28.3.2007 in Stamp Case No. 33 of 2006-07, under section 33/47-A of the Act, determining the stamp duty of Rs. 63,00,400/- and also demanded interest at the rate of Rs. 1.5% per month w.e.f. 17.12.2005. The penalty of Rs. 1,99,600/- was also imposed. 2. Aggrieved with this order, the petitioner filed Stamp Revision No. 6 of 2007-08 before the Chief Controlling Revenue Authority Board of Revenue, U.P. Allahabad, which was dismissed by the impugned order dated 14.7.2014. Aggrieved with this order, the petitioner has filed the present writ petition. 3. Learned Counsel for the petitioner submits that just after issuance of notice itself, the petitioner has deposited the entire deficiency of stamp duty as pointed out by the authority. Aggrieved with this order, the petitioner has filed the present writ petition. 3. Learned Counsel for the petitioner submits that just after issuance of notice itself, the petitioner has deposited the entire deficiency of stamp duty as pointed out by the authority. The petitioner was under bona fide belief that no stamp duty is chargeable on the memorandum of understanding and as such no stamp duty was paid. However when a notice was issued and it was pointed out that there is deficiency of stamp duty, as the instrument in question is chargeable as a lease deed under Article 35(a)(iv) of Schedule I-B, the petitioner has immediately paid the entire amount on the condition that the penalty may be waived off. He submits that there is no suppression of fact in the deed. The entire details is duly set forth in the memorandum of understanding and as such no penalty could have been imposed. 4. Learned Standing Counsel submits that under section 47-A(3) of the Act, there is no provision to waive off interest. He submits that little amount of penalty has been imposed and, therefore, it may not be interfered with. 5. I have carefully considered the submissions of the learned Counsel for the parties. 6. There is no dispute with regard to the stamp duty. The only dispute involved in this writ petition is as to whether the interest is payable by the petitioner under the facts and circumstances of the case and whether the penalty of Rs. 1,99,600/- has been lawfully imposed by the authorities. So far as the first question is concerned, suffice it to say that interest under section 47-A of the Act is a statutory interest The interest is payable by operation of law. There is no provision under the Act, which provides for waiver of interest There is no dispute regarding stamp duty which has been accepted and deposited by the petitioner. Therefore, on the admitted facts of the case, since there is no dispute on the quantum of stamp duty and as such the petitioner is liable to pay interest on the deficient amount of stamp duty from the date of execution of the instrument, as provided under section 47-A(3) of the Act. Under circumstances, I do not find any infirmity in the impugned orders with regard to payment of interest. 7. So far as the levy of penalty of Rs. Under circumstances, I do not find any infirmity in the impugned orders with regard to payment of interest. 7. So far as the levy of penalty of Rs. 1,99,600/- is concerned, I find some force in the submission of the learned Counsel for the petitioner. The penalty under section 47-A is a discretionary penalty. The facts and circumstances clearly reveals that the moment it was pointed out that there is deficiency of stamp duty, the petitioner immediately offered to deposit the entire amount even without waiting for the order with the condition that penalty may be waived. 8. The entire demand of stamp duty determined by order dated 28.3.2007 was deposited by the petitioner by Bank Draft of Rs. 63,00,000.00 dated 9.4.2007 and balance Rs. 400.00 vide challan dated 28.4.2007 total Rs. 63,00,400.00 which was the amount shown in the show cause notice. Under the circumstances, levy of penalty of Rs. 1,99,600/- cannot be said to be justified. Since, technically there is a default and as such the imposition of token penalty would meet the ends of justice. 9. In view of the aforesaid facts and circumstances of the case, the penalty is reduced to Rs. 25,000/-. In result, the writ petition is partly allowed. The penalty is reduced from Rs. 1,99,600/- to Rs. 25,000/-. The impugned order dated 14.7.2014 passed by the Chief Controlling Revenue Authority Board of Revenue, U.P. Allahabad in Stamp Appeal No. 06 of 2007-08 stands modified accordingly.