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of The core legal issue considered in this judgment is whether the appellant is liable to pay stamp duty and penalty on an agreement to sell dated 03.09.2003, under the provisions of the Bombay Stamp Act, 1958. The specific question revolves around the applicability of Explanation I to Article 25 of Schedule I of the Bombay Stamp Act, which deems an agreement to sell as a conveyance if possession is transferred or agreed to be transferred, thus requiring stamp duty akin to a conveyance.
ISSUE-WISE DETAILED ANALYSIS
Relevant legal framework and precedents: The legal framework centers on the Bombay Stamp Act, 1958, particularly Article 25 of Schedule I and its Explanation I, which stipulates that an agreement to sell is deemed a conveyance if possession is transferred or agreed to be transferred before, at, or after the execution of the agreement without executing a conveyance. The court referenced precedents, including Veena Hasmukh Jain v. State of Maharashtra and Shyamsundar Radheshyam Agrawal v. Pushpabai Nilkanth Patil, which clarify that stamp duty is levied on the instrument rather than the transaction.
Court's interpretation and reasoning: The court interpreted Explanation I to mean that if an agreement to sell involves the transfer of possession, it is deemed a conveyance, necessitating stamp duty. The court emphasized that the duty is on the instrument, not the transaction, and that possession being transferred or agreed upon triggers the duty.
Key evidence and findings: The agreement to sell dated 03.09.2003 stated that the appellant was in possession of the property as a tenant and would receive ownership possession only upon execution of the sale deed. Despite this, the court found that the agreement implied a transfer of possessory rights, satisfying the conditions of Explanation I.
Application of law to facts: The court applied the principles from the Bombay Stamp Act and relevant case law to determine that the agreement to sell, which involved possession, was indeed a conveyance for stamp duty purposes. The fact that the appellant was in possession as a tenant did not negate the applicability of Explanation I, as the agreement implied a change in jural relationship.
Treatment of competing arguments: The appellant argued that no stamp duty was payable as the agreement did not transfer possession and was contingent on a future sale deed. The court rejected this, citing the legal position that the duty is on the instrument and the agreement's terms indicated possession was part of the transaction. The respondents argued successfully that the agreement was a deemed conveyance under the law.
Conclusions: The court concluded that the agreement to sell was liable for stamp duty as a conveyance under Explanation I to Article 25 of the Bombay Stamp Act. The order to impound the document and recover the deficit stamp duty and penalty was upheld.
SIGNIFICANT HOLDINGS
The court affirmed that the stamp duty is levied on the instrument rather than the transaction, as articulated in Veena Hasmukh Jain v. State of Maharashtra: "The duty in respect of an agreement covered by the Explanation is leviable as if it is a conveyance." The court held that the agreement to sell, which involved possession, was a conveyance for stamp duty purposes under Explanation I to Article 25 of Schedule I of the Bombay Stamp Act.
Core principles established: The judgment reinforced the principle that agreements to sell involving possession are deemed conveyances for stamp duty purposes. The ruling clarified that the duty is on the instrument, and possession, whether current or agreed, triggers the duty.
Final determinations on each issue: The court upheld the decisions of the lower courts to impound the document and recover the stamp duty and penalty, affirming that the agreement to sell was a conveyance under the Bombay Stamp Act. The appeal was dismissed, and the appellant was held liable for the stamp duty and penalty as determined by the lower courts.
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