TaxTMI 
TaxTMI 
2023 (11) TMI 1158
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....) (hereafter 'the Collector') whereby, the petitioner's application for a refund against E-stamp Certificate bearing No.IN-DL94299245494081N, was rejected on the ground that the said application was filed beyond the period of six months from the date of purchase of the E-stamp Certificate. FACTUAL CONTEXT 2. The petitioner is a company registered under the Companies Act, 1956 and was intending to purchase a land admeasuring 18 Bighas and 09 Biswas, titled, Khasra No. 31/11/1(2-6) 20/ 1 (4-00), 23/2 (3-04),24 (4-04) and 19/1(405), at village Rawta in Delhi (hereafter 'the subject property'). 3. On 19.09.2014, the petitioner filed an application with the concerned authorities (ADM, Government of NCT of Delhi) seeking permission / NOC for purchasing the subject property as the same was an agricultural property. 4. The total sale consideration for the subject property was agreed at Rs.2,03,71,875/-. On 18.04.2015, the petitioner purchased E-stamp paper bearing No.IN-DL94299245494081N in the sum of Rs.12,22,315/- for conveyance of the subject property. This was on the premise that the permission / NOC as sought for by the petitioner from the concerned authority would be gran....
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.... a levy payable on an instrument. Since in the said case the instrument for which the stamp paper was purchased (conveyance of the agricultural property) has not been executed, the charging event attracting the levy of stamp duty had not occurred. He contended that in the circumstances withholding of stamp duty would amount to collection of tax without the authority of law and thus, would violate Article 265 of the Constitution of India. He submitted that the State cannot withhold the amount which was paid in anticipation of a levy of tax considering that the charging event has not occurred. He submitted that the same would amount to expropriating the petitioner's property without the authority of law and thus, also fall foul of Article 300A of the Constitution of India. 11. The petitioner also assails the provisions of Section 54(c) of the Act, which limited the period within which refund of unutilized stamp paper could be sought as being arbitrary and irrational. The learned counsel submitted that the said period is shorter than the period of limitation provided under Section 49(d) of the Act. The petitioner submitted that in cases covered under Section 49(d) of the Act, the s....
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....ise, created for a transaction in a stock exchange, or depository by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; and (c) any other document mentioned in Schedule I, but does not include such instruments as may be specified by the Government, by notification in the Official Gazette;" 17. It is settled law that stamp duty is chargeable on the instruments as stipulated in the said Schedule and not the transactions in respect of which the instrument is executed. 18. Section 9A of the Act also specifies the instruments chargeable with duty for transactions in stock exchanges and depositories. 19. Section 10 of the Act contains provisions as to how the stamp duties are to be paid. Section 11 of the Act provides for the use of adhesive stamps. Sections 10 and 11 of the Act are set out below: "10. Duties how to be paid. - (1) Except as otherwise expressly provided in this Act, all duties with which any instruments are chargeable shall be paid, and such payment shall be indicated on such instruments, by means of stamps - (a) according to the provisions herein contained; or ....
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.... pay the duties. 24. The machinery provisions for collection of stamp duty are thus, sale of stamps papers / e-certificates and adhesive stamps. In terms of Section 10(1) of the Act, except as otherwise provided, all duties with which instruments are chargeable are required to be paid and such payment is required to be indicated on the instruments by means of stamps. It is thus, apparent that, the machinery provisions of the Act do provide for collection of the tax by sale of stamps and stamp duties even prior to such instruments coming into existence. 25. All taxing statutes contain provisions for levy and charge of tax, assessment of tax, collection and recovery of tax, as well as punition for evading payment tax. In almost all legislations tax is usually collected after the charging event. However, it would be erroneous to assume that a tax cannot be calculated prior to the taxing event. Income Tax Act, 1961 also provides for collection of tax by means of advance tax, which is based on the assessee's estimate of income. It is possible that an assessee's estimate of income on which advance tax is paid falls short of the income chargeable to tax. However, there is no doubt t....
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....the stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto: (c) in the case of bills of exchange [payable otherwise than on demand] or promissory notes- (1) the stamp on [any such bill of exchange] signed by or on behalf of the drawer which has not been accepted or made use of in any manner whatever or delivered out of his hands for any purpose other than by way of tender for acceptance: provided that the paper on which any such stamp is impressed, does not bear any signature intended as or for the acceptance of any bill of exchange to be afterwards written thereon: (2) the stamp on any promissory note signed by or on behalf of the maker which has not been made use of in any manner whatever or delivered out of his hands: (3) the stamp used or intended to be used for ^1[any such bill of exchange] or promissory note signed by, or on behalf of, the drawer thereof, but which from any omission or error has been spoiled or rendered useless, although the same, being a bill of exchange may have been presented for acceptance or accepted or endorsed, or, being a promissory note, may have been ....
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....hin the following periods, that is to say, - (1) in the cases mentioned in clause (d) (5), within two months of the date of the instrument: (2) in the case of a stamped paper on which no instrument has been executed by any of the parties thereto, within six months after the stamp has been spoiled: (3) in the case of a stamped paper in which an instrument has been executed by any of the parties thereto, within six months after the date of the instrument, or, if it is not dated, within six months after the execution thereof by the person by whom it was first or alone executed: Provided that, - (a) when the spoiled instrument has been for sufficient reasons sent out of 1 [India], the application may be made within six months after it has been received back in [India]; (b) when, from unavoidable circumstances, any instrument for which another instrument has been substituted, cannot be given up to be cancelled within the aforesaid period, the application may be made within six months after the date of execution of the substituted instrument. *** *** *** 54. Allowance for stamps not required for use. - When any person is poss....
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....ch it was so surrendered. The stipulation of the period of six months prescribed in Section 54 is only for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper. Section 54 does not require the person who has purchased a stamp paper, to use it within six months. Therefore, there is no impediment for a stamp paper purchased more than six months prior to the proposed date of execution, being used for a document." 33. Thus, there is no impediment in using the stamp paper for discharge of stamp duty payable on an instrument even after the period as specified under Section 54(c) of the Act has expired. There is considerable merit in the petitioner's contention that there is an anomaly in restricting the time period for seeking an allowance under Section 54 of the Act to only six months after the stamp paper has been purchased when compared with the time period available for making an application in respect of stamps that are spoiled, obliterated or rendered unfit for use. In terms of Section 50(2) of the Act, an application for relief under Section 49 of the Act in respect of stamp paper on which no instrument has been executed can b....
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....rt had interpreted Section 52 of the Maharashtra Stamp Act, 1958 which is similarly worded as Section 54 of the Act, in the following manner: "21. Section 52 deals with provision of allowance in case of stamps that are not required for use. There are two kinds of stamps that are not required for use. The first is where the stamp is spoiled, as covered by Section 47 of the Act. The second is where the stamp is not spoiled but the stamp is not needed since the purchaser has no use of it. Section 52 specifically excludes the first of category since it is already covered by Section 47. The provision only applies to the class in the second category. Thus, Section 52 covers stamps that are not spoiled but which are of no use to the applicant by the occurrence of any subsequent event that renders the purpose of purchase of stamp void or nugatory. For the application of Section 52-A, the applicant must have purchased the stamp on the payment of full price, with a bona fide intention to use it. However, within six months from the purchase of the stamp, the purpose of the purchase has not been fulfilled. Such a situation can arise in multiple circumstances. For example, a person may....
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....later). The appellant was given an option to either purchase the said residential flat or receive the refund of the amount paid along with interest and compensation. Since, the appellant elected to receive a refund from the builder and did not go ahead with the purchase of the residential unit, the E-stamp certificate purchased by him was no longer useful. He thus, applied for refund of the stamp paper immediately thereafter on 16.07.2016. The Supreme Court read the provisions of Section 50(2) of the Maharashtra Stamp Act, 1958 - which, as noted above, is identically worded as Section 54 of the Act - and held the same to be confined to only those cases where the applicant was aware that the stamp would not be of use within the period of six months of its purchase, either because the purpose for which the same was purchased has been abandoned, or there was a delay of six months in executing the same. In the facts of the said case, the Supreme Court held that the appellant had no knowledge that the stamp purchased would have no use within the period of six months from its purchase and allowed the refund. 41. The facts in the present case are not dissimilar. The petitioner in this ....
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....guous provisions for refund in the given case. 46. Article 265 of the Constitution of India proscribes levy of collection of tax except by authority of law. The Act is a law and therefore, it is erroneous to contend that the collection of duties is without authority of law. The lack of express provisions for refund of stamp duty under the Act is required to be tested on the anvil of other provisions of the Constitution of India. Mafatlal Industries Ltd. v. Union of India: (1997) 5 SCC 537. 47. In the aforesaid regard it is relevant to refer to the case of Committee-GFIL v. Libra Buildtech Private Limited & Ors. (2015)16 SCC 31. In the said case, the applicants had purchased the stamp paper and handed them over to the Committee constituted by the Supreme Court in the case of Securities and Exchange Board of India v. Golden Forests India Limited (2009) 16 SCC 206. referred to as (GFIL Committee) in respect of affairs of Golden Forests India Limited. The sale deeds in respect of certain properties were executed on the stamp paper, however, the possession of the properties was not handed over to the applicants. Subsequently, the transactions were cancelled by the High Court as GI....
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....e accomplished. Lastly, the applicants in law were entitled to claim restoration of all such benefits/advantages from the State once the transaction was cancelled by this Court on 26-9-2012 in the light of the principle contained in Section 65 of the Contract Act which enable the party to a contract to seek restoration of all such advantage from other party which they took from such contract when the contract is discovered to be void or becomes void. This was a case where contract in question became void as a result of its cancellation by order of this Court dated 26-9-2012 which entitled the applicants to seek restitution of the money paid to the State for purchase of stamp papers. 26. In our considered opinion, while deciding a case of this nature, we have to also bear in mind one maxim on equity, which is well settled, namely, actus curiae neminem gravabit meaning - an act of the court shall prejudice no man. In Broom's Legal Maxims, 10th Edn., 1939 at p. 73 this maxim is explained saying that it is founded upon justice and good sense and afforded a safe and certain guide for the administration of law. This maxim is also explained in the justice and applies to our juris....
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....dia Ltd. CM APPL.15884/2013 in W.P.(C) No.1399/2010 decided on 26.09.2014, GFIL Committee invited bids for the purchase of 1398 kanal and 3 marla of land in district Panchkula, which included a partially constructed tourist complex. The applicant in the said case was the highest bidder and the bid was confirmed in its favour. The applicant had thereafter deposited Rs.2,50,02,000/- towards the stamp duty and the stamp paper for the aforesaid amount was also purchased. However, the transaction fell through as 21 kanal and 12 marla of land were not included in the site plan of the parcel of land on which the resort was to be constructed and was advertised for sale. The sale confirmed in favour of the applicant was cancelled and GIFL Committee was directed to refund the consideration received. The applicant also applied to the Sub-Divisional Magistrate, Panchkula for the refund of the stamp duty. However, the same was denied on the ground that the application was filed approximately one year, six months after the date of the purchase of the stamp paper. In that case the paper was purchased on 10.04.2012 and the application for refund was made on 10.10.2013. In the following context,....
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.... neminem gravabit, i.e. the act of Court can prejudice none." (Emphasis Added) 49. In Dr. Poornima Advani's case, the applicant sought a refund of the stamp duty amount of Rs.28,10,000/- on account of the loss of Estamp certificate. The said application was rejected on the ground that the there was no provision in the Act for the refund of stamp duty in cases wherein, the E-stamp was lost. The learned Single Judge had construed the expression 'obliterate' as used in Section 49(a) of the Act to include the cases where the stamp paper had been lost. The Court also referred to the principle that it would be open for the Court to supplement the text of the statute to give effect to the legislative intent. 50. The Government of NCT of Delhi appealed the decision of the learned Single Judge before the Division Bench of this Court. However, the said appeal was dismissed by an order dated 18.03.2019 (Govt. of NCT & Anr v. Dr. Poornima Advani & Anr. LPA No. 188/2019 ). The Division Bench of this Court upheld the judgment passed by the learned Single Judge and held as under: - "7. A detailed order passed by the learned writ court, in our considered view, cannot be int....
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....ediate use' as used were read in the context of the limitation period as prescribed by the said provision. The words 'immediate use' are interpreted to mean the permanent abandonment of the purpose for which the stamps were purchased or a delay of more than six months for the purpose for which it was purchased. 53. We are of the view that denial of refund of the stamp duty collected even though no duty is payable because the charging event has not occurred and the cause of action for claiming the refund has not arisen, militates against the scheme of providing for allowance of stamps. Clearly, if the provisions of the Act are construed in a manner so as to permit collection and retention of stamp duty, which is not chargeable without any recourse for refund whatsoever, it would run contrary to the scheme of the Act. If Section 54 of the Act is read as restricting the right for seeking refund in a case such as the present one, it would suffer from the vice of arbitrariness and fall foul of Article 14 of the Constitution of India. 54. However, as noted above, it is well settled that an enactment must be presumed to be constitutionally valid and the court must make every effort ....
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....d rules for admission to Smt. N.H.L. Municipal Medical College was violative of Articles 14 and 15 of the Constitution of India insofar as it confined the definition of "the local students" to students who had passed their SCC examination and the qualifying examination from the institutions located within the limits of Ahmedabad Municipal Corporation. Thus, the students who had completed their qualifying education located just outside the municipal limits were not treated as local students and thus, were excluded from seeking admission as local students. However, the Supreme Court effectively re-wrote Rule 7 of the concerned rules, to save the same from the vice of Article 14 and also included students who had completed their qualifying education from schools and colleges situated within the Ahmedabad Urban Development Area within the definition of the local students. The relevant extract of the said decision reads as under: "13. Though the High Court was right in coming to the conclusion that the rule in question does suffer from an element of arbitrariness, we are of the opinion that the remedy does not lie in striking down the impugned rules the existence of which is ne....
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.... of which the Act is woven, but he can and should iron out the creases." This statement of law made by Lord Denning has been consistently followed by this Court starting in the case of M. Pentiah v. Muddala Veeramallappa [AIR 1961 SC 1107] and followed as recently as in the case of S. Gopal Reddy v. State of A.P. [(1996) 4 SCC 596, 608 : 1996 SCC (Cri) 792 : AIR 1996 SC 2184, 2188] (SCC at 608 : AIR at p. 2188). Thus, following the above rule of interpretation and with a view to iron out the creases in the impugned rule which offends Article 14, we interpret Rule 7 as follows: "Local student means a student who has passed HSC (sic SSC)/New SSC Examination and the qualifying examination from any of the high schools or colleges situated within the Ahmedabad Municipal Corporation limits and includes a permanent resident student of the Ahmedabad Municipality who acquires the above qualifications from any of the high schools or colleges situated within the Ahmedabad Urban Development Area." 58. A plain reading of Section 54(c) of the Act indicates that it provides for a period of six months for claiming refund from the date when the stamp duty was purchased. However....
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....prescribed, the application must be made within a reasonable period. In case no time is provided for an Act, the same must be done in a reasonable period. What would be a reasonable period must be construed in the context of the provisions of the Act. Section 54(c) of the Act and Section 50 of the Act indicate that the legislative intent to confine the period for seeking allowance to not exceed six months after the cause of action has arisen. Thus, in cases where the applicant applies for refund of unused stamps/stamp certificate within a period of six months of becoming aware that he has no immediate use of the same, the claim for refund cannot be stated to be delayed and must be admitted. This is, obviously, subject to the applicant satisfying clauses (a) and (b) of Section 54 of the Act- the Stamps must have been purchased for full consideration with the bonafide purpose to use them. 61. In the present case, it was not contested that the petitioner had applied for a refund immediately after becoming aware that the NOC for purchasing the subject property was not forthcoming. 62. The petitioner's claim can be looked at with another perspective. It is apparent that the petiti....