BOT lease stamp duty: statutory amendment upheld, but duty limited to the lessee's actual expenditure share.

The 2002 amendment fixing stamp duty for BOT lease deeds under the Indian Stamp Act was upheld because it did not alter the substantive law of lease, and neither legitimate expectation nor promissory estoppel can prevent a statutory change made in public interest. A BOT concession agreement was treated as a lease for stamp purposes because the Stamp Act uses a wider definition than the Transfer of Property Act and includes instruments letting tolls. However, stamp duty under the proviso is chargeable only on the amount likely to be spent by the lessee, so duty cannot be levied on the entire project cost and must be recomputed to reflect the lessee's actual share.

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Issues: (i) Whether the 2002 amendment inserting proviso (c) to Clause (C) of Article 33 of Schedule 1-A of the Indian Stamp Act, 1899 was ultra vires or defeated legitimate expectation and promissory estoppel; (ii) Whether the concession agreement executed under the BOT scheme was a lease within the meaning of the Transfer of Property Act, 1882 and the Indian Stamp Act, 1899; (iii) Whether stamp duty could be levied on the entire project cost or only on the amount likely to be spent by the lessee.

Issue (i): Whether the 2002 amendment inserting proviso (c) to Clause (C) of Article 33 of Schedule 1-A of the Indian Stamp Act, 1899 was ultra vires or defeated legitimate expectation and promissory estoppel.

Analysis: The amendment did not alter the concept of lease or trench upon the definition of lease under the substantive law. It only fixed the rate of stamp duty for a particular class of lease deeds under BOT projects. The doctrine of legitimate expectation protects fairness in administrative action, but it does not create an enforceable right against a statutory change. Likewise, promissory estoppel cannot be invoked to restrain legislative action, and a prior executive clarification cannot override a later statutory amendment enacted in public interest.

Conclusion: The challenge to the amendment failed, and the plea based on legitimate expectation and promissory estoppel was rejected.

Issue (ii): Whether the concession agreement executed under the BOT scheme was a lease within the meaning of the Transfer of Property Act, 1882 and the Indian Stamp Act, 1899.

Analysis: The Stamp Act gives the word "lease" a wider meaning than Section 105 of the Transfer of Property Act, 1882, and expressly includes an instrument by which tolls of any description are let. On the terms of the concession agreement, the essential ingredients of lease were found to be satisfied, and the agreement fell within the extended statutory definition for stamp purposes.

Conclusion: The concession agreement was held to be a lease liable to stamp duty.

Issue (iii): Whether stamp duty could be levied on the entire project cost or only on the amount likely to be spent by the lessee.

Analysis: The proviso charges duty at two per cent only on the amount likely to be spent under the agreement by the lessee. Duty is therefore not payable on sums funded by the lessor or other stakeholders. The demand raised on the whole project cost was inconsistent with the statutory language and required recalculation on the lessee's actual share of expenditure.

Conclusion: The demand on the entire project cost was set aside to that extent, and the authority was directed to recompute duty on the amount attributable to the lessee.

Final Conclusion: The appeals succeeded only in part: the validity of the amendment and the characterization of the agreement as a lease were upheld, but the stamp duty demand had to be restricted to the lessee's actual expenditure under the agreement.

Ratio Decidendi: For BOT concession agreements covered by the relevant proviso, stamp duty is chargeable only on the amount likely to be spent by the lessee, and a statutory amendment governing duty cannot be defeated by promissory estoppel or legitimate expectation.

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