Research › Search › Judgment

Gujarat High Court · body

2017 DIGILAW 1670 (GUJ)

VIDYAMANDIR TRUST, PALANPUR v. STATE OF GUJARAT

2017-09-20

N.V.ANJARIA

body2017
JUDGMENT : N.V.ANJARIA, J. The petitioner herein is a public trust for educational purposes, which, by filing the present petition under Article 226 of the Constitution, has prayed to set aside order dated 29th June, 2007/02nd July, 2007 passed by respondent No.2-Chief Controlling Revenue Authority, upholding order dated 28th June, 2005 of respondent No.3-Deputy Collector, Stamp Duty Valuation. The petitioner has also prayed to set aside said order dated 28th June, 2005 passed by respondent No.3-Deputy Collector. A further prayer is made to direct the respondents to refund the amount of deficit stamp duty paid with interest. 2. By the impugned orders, the authorities required the petitioner to pay the deficit stamp duty and penalty aggregating to Rs.08,10,150/-. The petitioner has further prayed to direct the respondents to refund the said amount with interest. 3. The petitioner purchased the property at survey No.1244/1 at Palanpur for a consideration of Rs.02,71,12,439/- by registered sale deed dated 29th October, 2004. In that transaction the petitioner Trust exchanged as part consideration, another property belonging to it bearing survey No.48. The deed was presented before the Sub-Registrar, Palanpur for registration. The Deputy Collector exercised powers under Section 39(1) of the Bombay Stamp Act, 1958 and issued notice in November, 2004 directing the petitioner to pay the deficit stamp duty of Rs.07,59,150/-. At the time of presentation of the document for registration, the petitioner trust had paid Rs.15,18,300/- towards stamp duty, however the Deputy Collector determined the stamp duty payable to be Rs.22,77,450/- demanding the deficit part. The petitioner replied and objected to the demand. The Collector passed order dated 28th June, 2005/05th July, 2005 requiring the petitioner to pay the deficit stamp duty amount and a fine of Rs.51,000/- totaling to Rs.08,10,150/- which the petitioner deposited under protest on 18th July, 2005. Yet another notice came to be issued to the petitioner on 05th February, 2005 stating inter alia that the benefit of reduced rate of stamp duty allowed under Order dated 29th October, 1992 of the Revenue Department would not be available to the petitioner Trust. 3.1 The Order provides for reduced rate of stamp duty in respect of conveyance executed in favour of any public trust. 3.1 The Order provides for reduced rate of stamp duty in respect of conveyance executed in favour of any public trust. The said Order passed in exercise of powers under Section 9 of the Bombay Stamp Act, 1958, a copy of which figures on record of the petition, may be extracted herein, ORDER Revenue Department, Sachivalaya, Gandhinagar, Dated the 29th October, 1992 Bombay Stamp 1958 No.GHM-92/132/M/STP/1478/3122/H-1: in exercise of the powers conferred by clause (a) of section 9 of the Bombay Stamp Act, 1958 ( Bom. LX of 1958) (hereinafter referred to as “the said Act” and in super session of Government Order, Revenue Department NO. GHM/79/94/STP/Gujarat hereby reduces with effect on and from the 3rd November, 1992, in the whole of the State of Gujarat the duty with which the instrument described in column-1 of the Table below, are chargeable under the said Act, to the duty at the rate specified in Column-2 of the said Table. TABLE Description of Instruments Reduced rate of stamp duty Any instrument of conveyance executed in favour of any Public Trust, which is registered under the Bombay Public Trusts Act, 1950. Four rupees for every sum of Rs.100 or part thereof (1) The immovable property specified in the instrument of conveyance is purchased by the Public Trust from its own fund. (2) The Public Trust becomes the sale owner of the immovable property. (3) The Public Trust has given an undertaking in writing to the effect that the whole of immovable property shall be utilized only for carrying out the objects of the trust. (4) The objects of the trust are to achieve public interest and in particular they are as such - (i) hospital facilities and health services, (ii) eradication of illiteracy (iii) development of cultural art, music or literature of Gujarat. (iv) educational facilities, (v) library activities, (vi) for improving the lot of youth and women (vii) welfare of backward classes, or (viii) for reducing unemployment (5) The trust gives written undertaking to the effect that the immovable property of the trust shall not be utilised for the activities involving the object of making profit only. (6) The trust shall not discriminate between citizens on the basis of caste, creed or sex. (6) The trust shall not discriminate between citizens on the basis of caste, creed or sex. (7) The trust committing any breach of any of the conditions laid down in this order shall be liable to pay forthwith to the Government, the amount of proper stamp duty and penalty, so ordered by the competent authority, in respect of the instrument of conveyance in which remission was claimed by the said trust prior to its breach. -Sd- Under Secretary to Government Revenue Department” 3.2 The petitioner preferred appeal under Section 53(1) of the Act before the Chief Controlling Revenue Authority which culminated into the impugned order. 4. Heard learned senior advocate Mr.Shalin Mehta assisted by learned advocate Mr.Girish Patel for the petitioner and learned Assistant Government Pleader Ms.Snusha Joshi for the respondent state authorities. 4.1 The respondent authorities took a view that the document in question was liable to be treated as deed of exchange as it involved the exchange of property, and the same was not a sale and was not in the nature of sale deed and that the same was not a Conveyance, therefore, the benefit of reduced rate of stamp duty as provided in the Revenue Department’s Order dated 29th October, 1992 would not be available to the petitioner trust. 4.2 The stamp duty on Conveyance is charged under Article 20 to Schedule-I to the Stamp Act, 1958. Article 20 prescribes stamp duty for various classes of Conveyances mentioned in the Article in its sub-clauses. As far as the instrument of exchange of property is concerned, the stamp duty charged under Article 26 to Schedule-I of the Act. It provides that on the instrument of exchange of property, the same duty as is leviable on a conveyance under Article 20 on the market value of the property shall be payable. In other words, the stamp duty whether payable in respect of the instrument of exchange of property or for Conveyance under Article 20, is at the same rate. In this view, whether the authorities have treated the document in question as instrument of exchange of property and not as a Conveyance pales into insignificance, as the stamp duty payable would be the same. 5. The moot question that remains is whether the instrument in question executed by the petitioner Trust would be covered under aforestated Order 29th October, 1992. 5. The moot question that remains is whether the instrument in question executed by the petitioner Trust would be covered under aforestated Order 29th October, 1992. It may be stated that even while treating the instrument of exchange as deed of exchange, it would remain as conveyance. Section 2(g) defines conveyance. Within the scope of said definition, the document in question executed in favour of a public trust would include the aforesaid Order dated 29th October, 1992 providing reduced rate of stamp duty would as such apply. 6. Coming to the core question, the authorities denied the applicability and benefit of the said Order for reduced stamp duty on the ground that one of the conditions prescribed in the Order is that the immovable property specified in the instrument of conveyance is purchased by the petitioner trust from its own fund and since the trust exchanged its property while purchasing the other property, it cannot be said to have purchased the same out of its own funds. While rest of the conditions are satisfied, as per the respondent authorities, there was a exchange of another property, hence the property specified in the conveyance was not purchased by the petitioner trust from trust’s own fund. 6.1 Now, the aforesaid Order is made under Section 9 of the Act which provision inter alia provides for power to reduce, remit or compound duties. Section 9 reads as under, “9. Power to reduce, remit or compound duties: The State Government may, by rule or order published in the Official Gazette, (a) reduce or remit, whether prospectively or retrospectively, in the whole or any part of the State the duties with which any instruments or any particular class of instruments or any of the instruments belonging to such class, or any instruments when executed by or in favour of any particular class of persons, or by or in favour of any members of such class are chargeable, and (b) provide for the composition or consolidation of duties in the case of issues by any incorporated company or other body corporate of bonds or marketable securities other than debentures [or any instrument chargeable with duty under schedule I]” 6.2 Thus, Section 9 is clear that it gives the benefit of stamp duty leviable at lesser or reduced rate in favour of certain preferred class of public trusts. The Order mentions to cover for stamp duty leviable at the reduced rate in respect of class of instruments belonging to such executed by or in favour of public trust classified in terms of their activities and objects. The public trust who exist and function for the objects of medical and health services, literacy, educational facilities, library activities, welfare of backward class and the class of youth, are extended the benefit of reduced rate of stamp duty in respect of any Instrument or Conveyance executed in favour of such trust. 6.3 In the present case, without the benefit of said Order, the stamp duty payable was at the rate of 8.4%, however by reaping the benefit of the reduced rate, the rate of stamp duty payable would be 5.6% of the total including surcharge. As the authorities opined that the benefit of reduced stamp duty is not available to the petitioner trust in respect of the instrument in question, it is held liable to pay the deficit stamp duty as above. 6.4 One of the conditions in the aforesaid Order for availing the benefit of reduced rate of stamp duty is that the immovable properties specified in the Instrument or Conveyance is purchased by the public trust “from its own fund”. In the present case, while the petitioner-trust purchased the property, another property was given in exchange on the count of which, the respondent authorities refused the petitioner trust to give the benefit of the reduced rate of stamp duty supplying a reasoning that since there was an exchange of property, it cannot be said that the other property purchased was from Trust's own fund. The conditions in the nature of “from its own fund” and the word “fund” falls for consideration as to its application and as to its implication, application and interpretation. The object of the Order is to give benefit in the stamp duty to certain class of Trust. It is in the context of this object that, the conditions emanating from “from its own fund” has to be applied. 6.5 If applied in the literal sense based on sole grammatical construction, the words “from its own fund” and the concept of “fund” may denote the money only, to suggest that the property must have been purchased by the Trust from its own money. 6.5 If applied in the literal sense based on sole grammatical construction, the words “from its own fund” and the concept of “fund” may denote the money only, to suggest that the property must have been purchased by the Trust from its own money. If looked at rationally, it may not auger well with the object of allowing reduced rate of stamp duty to the trusts engaged in activities of the nature of public purposes and public good. 6.6 One of the cannons of interpretation is purposive interpretation. Maxwell says about purposive interpretation thus, “Where the language of a statute, in its ordinary meaning and grammatical construction leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence. This may be done by departing from the rules of grammar, by giving an unusual meaning to particular words, by altering their collocation, by rejecting them altogether, or by interpolating other words, under the influence, no doubt, of an irresistible conviction that the legislature could not possibly have intended what the words signify, and that the modifications thus made are mere corrections of careless language and really give the true intention.” 6.7 In Hindustan Lever Limited v. Ashok Vishnu Kate [ (1995) 6 SCC 326 ], the Supreme Court quoted the rule of purposive construction from Francis Bennion's Statutory Interpretation (2nd Edition) and explained the role of purposive interpretation of a statute or rule as against literal interpretation. It was stated that, “A purposive construction of an enactment is one which gives effect to the legislative purpose by- (a) following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose (in this Code called a purposive and- literal construction), or (b) applying a strained meaning where the literal meaning is not in accordance with the legislative purpose (in the Code called a purposive-and-strained construction).” 6.8 In U.P. Bhhodan Yagna Samiti v. Braj Kishor [ (1988) 4 SCC 274 ], the words “landless person” were held to mean “landless peasant”. The object of the U.P. Bhhodan Act cause to give land to the landless farmers, in that view the expression “landless person” employed in the act was construed to mean “landless peasant” only, without which a landless businessman would also stand included in the landless person. Such literal interpretation would have defeated the object of the law in asmuch as even a very rich businessman owning the land would be regarded as landless person. 6.9 In Paul Enterprises and others v. Rajib Cheterjee & Co. [ (2009) 3 SCC 709 ] the word in focus for includation was “unemployed youth”, which was in the context of giving licence for running country spirit shop, for which unemployed youth was eligible under the West Bengal Excise (Selection of Persons for Grant of Licence at New Sites for Retail Sale of Spirit & Certain Other Intoxicants other than Foreign Liquor on Categories of Licences and Licence for Denatured Spirit) Order, 2000. Giving the contextual meaning and departing from literal and dictionary meaning, the Supreme Court stated that a person cannot be said to be employed only because he earns his bare subsistence livelihood by engaging himself in some work, holding the respondents to be qualified for grant of licence as unemployed. Therefore despite the fact that respondents had been earning some money, it was ruled that the same would not disentitle them from taking part in the selection process for grant of licence. 6.10 Plowden opines to explain the purposive interpretation in this way, “It is not the words of the Law but the internal sense of it that makes the law, and our law (like all others) consists of two parts, viz., body and soul, the letter of the law is the body of the law and the sense and reason of the law is the soul of the law... And it often happens when you know the letter you know not the sense, for sometimes the sense is more confined and contracted than the letter, and sometimes it is more large and extensive.” 7. The Mimansa Rules of Interpretation which are traditional principles of interpretation, which are solution oriented principles, are also applied by the courts. The purposeful construction is based on principle of “Sarthakeya”. The Mimansa Rules of Interpretation which are traditional principles of interpretation, which are solution oriented principles, are also applied by the courts. The purposeful construction is based on principle of “Sarthakeya”. In Surjit Singh v. MTNL [ (2009) 16 SCC 722 ], the Apex Court quoted Jaimini Sutra 6:3:9 that where there is a conflict between the purpose and the material, the purpose is to prevail, because in the absence of the prescribed material a substitute can be used, for the material is subordinate to the purpose. The Court explained that in the mimansa system the Linga principle is the rule of purposive interpretation as against Shruti principle which means literal interpretation. Comparing the decision in U.P. Bhhodan Yagna Samiti (supra) which construed the word “landless person” as reference to hereinbefore, it was observed that such was a Linga principle which is a principle of suggestive power of words or expressions. 7.1 The real exercise in the process of purposive interpretation is to cull out the internal sense of language, group of words or a word in a statute, regulation or rule. The object-oriented construction or purposive interpretation is a process by which the Court brings out the meaning from the group of words or word in the provision which will stand with the object of legislation, regulation, rule of executive instruction as the case may be, to make its application in subservience to the object and purpose which such provision seeks to achieve and for which it is enacted and exists. The purposeful interpretation not only irons out the arbitrariness from the application of the provision, since it upholds the purpose of the statute or provision of rule, such exercise redeems itself into the realm of reasonabless and justness, which are again facets of Article 14 of the Constitution. 7.2 Keeping in view the aforesaid principle in mind, and further having regard to the object of the aforesaid Order, it would be both improper and irrational, if the words “from Trust's own fund” is viewed as referring to the money part only. The 'fund' may not be pedantically equated with money. When it is said that Trust must have purchased the property from its own funds, it implies that the property is purchased by the Trust from its own resources. The 'fund' here mean 'resources'. The 'fund' may not be pedantically equated with money. When it is said that Trust must have purchased the property from its own funds, it implies that the property is purchased by the Trust from its own resources. The 'fund' here mean 'resources'. The resources may include monetary fund or any other resource which may be in non-monetary form, as in the instant case, the Trust has exchanged another property of his ownership so long as the source or fund was not from outside. 7.3 In this case, the petitioner-Trust purchased the property by exchanging its own another property. It is not anybody's case that the property exchanged was not of the ownership of the petitioner-Trust. When by exchanging its own property the petitioner-Trust purchased another property and gave such another property as part of consideration, it has to be unnecessarily viewed that the Trust purchased the property “from its own fund”. The interpretation attached by the authorities to the words “from its own fund” and thereby denying the benefit of the reduced rate of stamp duty disregards the object and purpose for allowing such reduced rate of stamp duty. The Court would not permit the authorities to eschew the meaningful and purposeful interpretation. 8. As noticed above, the Courts have applied the purposive interpretation in different way in different situations. In Hindustan Lever Limited (supra) the Court observed that the Court should not reluctant to adopt purposive interpretation in the cases where applying the literal meaning of language used would lead to results, which would clearly defeat the purpose. The task with which the Court of justice is engaged, remains one of construction to be a justice-oriented and a purpose-achieving, even when this involves an act of reading into the words what is apparently or expressly not included. There would be no gainsaying, applying the rational yardstick and purposive approach that the petitioner-Trust is entitled to the benefit of Order dated 29th October, 1992 of the reduced rate of duty in respect of the transaction in question. 9. As a result of above discussion and reasons, the petition is allowed in terms of prayer 7(A) by setting aside order dated 28th June, 2005 as well as order dated 05th July, 2005 passed by respondent Nos.3 and 2 authorities respectively. The respondents are directed to refund amount of Rs.08,10,150/- deposited before the petitioner under protest within four weeks. 9. As a result of above discussion and reasons, the petition is allowed in terms of prayer 7(A) by setting aside order dated 28th June, 2005 as well as order dated 05th July, 2005 passed by respondent Nos.3 and 2 authorities respectively. The respondents are directed to refund amount of Rs.08,10,150/- deposited before the petitioner under protest within four weeks. Rule is made absolute. Petition allowed.