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Gujarat High Court · body

2022 DIGILAW 1659 (GUJ)

STATE OF GUJARAT v. ABC BEARINGS LIMITED

2022-11-30

ARAVIND KUMAR, ASHUTOSH J.SHASTRI

body2022
ORDER : 1. Though the appeal is listed for admission, by consent of learned advocates, it is taken up for final disposal. 2. We have heard arguments of Mr. K.M. Antani, learned Assistant Government Pleader appearing for the appellant and Ms. Kalpana J. Brahmbhatt, learned counsel appearing for the respondents. 3. In this appeal, State lays a challenge to the order dated 16.10.2019 passed in Special Civil Application No. 13270 of 2018. Petitioner - a company known and called Antifriction Bearings Corporation Limited, registered under the Companies Act, 1956 with the jurisdictional Registrar of Companies was allotted an industrial plot by Gujarat Industrial Development Corporation (for short ‘GIDC’) bearing plot Nos. 1-B and 1-C admeasuring 57804 Sq. Mtrs. by executing a lease deed on 3.4.1980. Name of the company came to be changed to ABC Bearings Limited by virtue of resolution dated 17.6.2022 passed by the Board of Directors as required under Section 21 of the Companies Act, 1956. The constitution of the company was not challenged except change of name. Hence, appropriate application came to be filed with the Registrar of Companies, resulting in fresh certificate of incorporation consequent to the change of name came to be issued in favour of petitioner by the Deputy Registrar of Companies, Maharashtra, Mumbai as contemplated under Section 23(1) of the Companies Act, 1956. 4. In the aforesaid background, an application came to be submitted by petitioner to GIDC for entering the name of the allottee as ABC Bearings Limited in substitution to the name of the company The Antifriction Bearings Corporation Limited. On 15.3.2018, GIDC executed a deed of rectification, under which it was specifically stated that no consideration has flown between the parties, namely GIDC and ABC Bearings Limited. On an office order being passed by GIDC on 11.4.2018, aforesaid plots stood transferred to the name of petitioner company. The deed of rectification dated 15.3.2018 came to be tendered before the jurisdictional Sub-Registrar, i.e. Sub-Registrar, Bharuch for registration. Said document came to be impounded under Section 33 of The Gujarat Stamp Act, 1958 (for short ‘Stamp Act’) and came to be forwarded to Stamp Duty Valuation Office, Bharuch. The deed of rectification dated 15.3.2018 came to be tendered before the jurisdictional Sub-Registrar, i.e. Sub-Registrar, Bharuch for registration. Said document came to be impounded under Section 33 of The Gujarat Stamp Act, 1958 (for short ‘Stamp Act’) and came to be forwarded to Stamp Duty Valuation Office, Bharuch. On 27.3.2018, a show cause notice came to be issued to petitioner by Deputy Collector, Stamp Duty Valuation Department, Bharuch under Section 39(1)(b) of the Stamp Act intimating the petitioner that said deed of rectification is to be construed as a deed of transferring the ownership and as such it would partake the character and would fall within the ambit of the expression ‘conveyance’ as defined under Section 2(g) of Stamp Act and attracted duty as prescribed under Article 20 of Stamp Act and called upon the petitioner to show cause within 15 days as to why deficit stamp duty should not be recovered from them. Said notice was duly replied to by the petitioner, which was not accepted by respondent authorities, but resulted in second show cause notice being issued on 30.5.2018 and reply given to said show cause notice also did not yield any result in favour of petitioner. Subsequently on 11.6.2018, an order came to be passed by the Deputy Collector, Stamp Duty Valuation Department, Bharuch determining the market value of the property at Rs. 51,76,34,820/- and consequential stamp duty of Rs. 2,53,64,106/- as prescribed under Article 20(a) of the Stamp Act was demanded from petitioner after giving deduction of Rs. 250/- which was already paid on the instrument. A penalty amount of Rs. 1,00,000/- under Section 39(1)(b) of the Stamp Act was also levied and thus a total amount of Rs. 2,54,63,856/- was ordered to be paid by the petitioner. 5. Being aggrieved by the said order, a revision under Section 53 of the Stamp Act, 1958 came to be filed by petitioner before Chief Controlling Revenue Officer, State of Gujarat, Gandhinagar. Said petition was accompanied by an application seeking exemption from payment of 25% of the amount of duty prescribed under Section 53(1)(b) of the Stamp Act, 1958 which came to be rejected vide order dated 6.8.2018 and consequently, appeal/ petition filed under Section 53 was not entertained and petitioner was called upon to pay the amount already demanded within 15 days. Without challenging the order of impounding the document, show cause notices issued on 27.3.2018 and 30.5.2018 demanding payment of stamp duty as well as order dated 7.6.2018 passed by the Deputy Collector, Stamp Duty, Valuation Department, Bharuch came to be challenged before Single Judge in Special Civil Application No. 13270 of 2018 along with a prayer to declare the deed of rectification dated 15.3.2018 would not wall within the definition of Article 20 and Article 57 of Schedule-I of the Stamp Act, 1958. Said application having been allowed by the learned Single Judge has been challenged in this appeal. 6. The contention of the State before the learned Single Judge was to the effect that Special Civil Application was not maintainable which was held to be not tenable on the ground that levy of stamp duty was without jurisdiction. It is also contended that learned Single Judge had proceeded to hold that instrument was not a conveyance by examining it on merits and held it to be a deed of rectification and there was no transfer of any interest in the immovable property that too for any consideration. 7. At the outset, it requires to be noted that contention raised by the State before the learned Single Judge and reiterated by Mr. K.M. Antani, learned Assistant Government Pleader before this Court merits acceptance inasmuch as learned Single Judge exercising jurisdiction under Articles 226 and 227 of the Constitution of India could not have usurped the power of Revisional Authority which was available to the said authority under Section 53 of the Stamp Act to examine as to whether the instrument is to be treated as “conveyance” or “rectification deed” simplicitor by examining all the relevant material that was placed by the petitioner. On this short ground itself, impugned order is liable to be set aside. 8. Be that as it may. The fact that order impounding the document as well as directing the petitioner to pay deficit stamp duty having been challenged by the petitioner before the Revisional Authority under Section 53 was undisputedly accompanied by an application filed by petitioner for waiver of 25% amount of duty as prescribed under clause (b) of sub-section (1) of Section 53. Prima-facie, document in question would reflect it as “rectification deed” and it does not reveal any transaction of transfer of immovable property having taken place between parties. Prima-facie, document in question would reflect it as “rectification deed” and it does not reveal any transaction of transfer of immovable property having taken place between parties. However, we do not propose to go into said issue. It would open for the Revisional Authority to examine said issue under Section 53(1) of the Act. It is for this reason, we are of the considered view that application for waiver which had been filed and rejected requires to be allowed. To the extent of assailing or questioning the order of rejection of the application for pre-deposit dated 6.8.2018 alone was susceptible to be scrutinized by the learned Single Judge under Article 226 or Article 227 of the Constitution of India and not the order impounding the document or the order dated 7.6.2018 passed by the Deputy Collector determining the Stamp Duty on the instrument as it was subject matter of scrutiny under revision which was required to be examined by the Revisional Authority alone. As such, we are of the considered view that findings recorded by the learned Single Judge would be sustainable to the extent stated herein-above as examination of merits of the case was not called for or warranted and to that extent, the order of learned Single Judge requires to be set aside or in other words, Special Civil Application filed under Articles 226 and 227 of the Constitution of India for the prayers indicated in application is held to be not maintainable by upholding the plea put forward by State. However, on peculiar facts, we are of the considered view that application for waiver which has been rejected deserves to be allowed inasmuch as issue of instrument being liable to be levied with stamp duty being still at large before the Revisional Authority. 9. For reasons afore-stated, we proceed to pass the following: ORDER: (1) Appeal is ALLOWED in PART. (2) Order of the learned Single Judge dated 16.10.2019 passed in Special Civil Application No. 13270 of 2018 to the extent of holding the petition filed under Articles 226 and 227 of the Constitution of India maintainable is set aside and petition filed assailing the order dated 7.6.2018 is dismissed. However, the order dated 6.8.2018 rejecting the application for waiver is hereby set aside and application for waiver stands allowed in the peculiar facts of the case. However, the order dated 6.8.2018 rejecting the application for waiver is hereby set aside and application for waiver stands allowed in the peculiar facts of the case. (3) Revisional Authority is directed to examine the revision on merits without insisting for 25% of the amount to be deposited as a stand alone case by virtue of peculiar facts obtained as narrated hereinabove. (4) The observation made herein-above is for the limited purpose of examining the correctness of order and finding recorded by learned Single Judge and respondent authority without being influenced by any of these observations shall adjudicate the revision petition on merits and in accordance with law. (5) It is also made clear that in view of order of learned Single Judge having been set aside, the Revisional Authority shall examine the revision petition on merits and in accordance with law without being influenced by any of the observations. (6) Revisional Authority shall dispose of the revision petition/application within ONE MONTH from the date of receipt of the copy of this order. 10. All pending applications stand consigned to records.