Court sets aside penalty, upholds stamp duty charge on sale consideration.

The court partially allowed the writ petition, setting aside the penalty imposed by the Additional Collector as it was without jurisdiction. The orders regarding the stamp duty chargeable on the entire sale consideration of Rs. 118 lacs were upheld. Both parties were directed to bear their own costs.

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Issues Involved:
1. Deficiency of stamp duty on the sale transaction.
2. Inclusion of plant and machinery value in the sale consideration.
3. Imposition of penalty by the Additional Collector.

Detailed Analysis:

1. Deficiency of Stamp Duty on the Sale Transaction:
The writ petition under Article 226 of the Constitution of India arose from orders passed by stamp authorities demanding additional stamp duty due to a deficiency. The petitioner purchased an industrial unit for Rs. 23,20,000 and paid stamp duty of Rs. 33,600. However, the Sub-Registrar made a reference under Section 33/47-A of the Indian Stamp Act, 1899, leading to a show cause notice and subsequent determination by the Additional Collector that the market value of the property was Rs. 118 lacs. Consequently, the stamp duty chargeable was Rs. 17,11,000, resulting in a deficiency of Rs. 13,74,600, along with a penalty of Rs. 13,74,500.

2. Inclusion of Plant and Machinery Value in the Sale Consideration:
The primary issue was whether the plant and machinery should be included in the sale transaction of immovable property for stamp duty purposes. The petitioner argued that the plant and machinery were movable properties and should not be included in the sale consideration. However, it was undisputed that the entire industrial unit, including land, building, plant, and machinery, was purchased for Rs. 118 lacs. The court examined whether these items could be classified as "movable property" or "immovable property" under the General Clauses Act, 1897, and the Transfer of Property Act, 1882. The court referred to previous judgments, including Official Liquidator Vs. Sri Krishna Deo and Duncans Industries Ltd. Vs. State of U.P., which held that machinery embedded in the earth for permanent use constitutes immovable property.

The court concluded that the plant and machinery, being permanently fastened to the earth, were immovable properties. The sale deed and agreement indicated that the entire industrial unit, including the plant and machinery, was sold as a single transaction, and there was no provision for severing or removing the machinery. Therefore, the stamp duty was chargeable on the entire sale consideration of Rs. 118 lacs.

3. Imposition of Penalty by the Additional Collector:
The court addressed the imposition of a penalty by the Additional Collector. The sale transaction occurred on 02.03.1995, and the impugned order was passed on 30.01.1996. At that time, there was no provision under Section 33/47-A of the Indian Stamp Act, 1899, empowering the Collector to impose a penalty for deficiency in stamp duty. The provision for imposing a penalty was introduced by an amendment in 2001, which was not retrospective. The court referred to the Full Bench decision in Girish Kumar Srivastava Vs. State of U.P. and others, which held that in the absence of any provision authorizing the Collector to impose a penalty, the same could not be imposed. Consequently, the imposition of the Rs. 13,74,500 penalty was deemed without jurisdiction and set aside.

Conclusion:
The court partially allowed the writ petition. The orders dated 30.01.1996 and 06.12.2001 were set aside to the extent of the penalty imposed, as it was without jurisdiction. The rest of the orders were upheld, confirming the stamp duty chargeable on the entire sale consideration of Rs. 118 lacs. Both parties were ordered to bear their own costs.

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