TaxTMI 
TaxTMI 
2026 (8) TMI 148
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.... petitioner. The said loan was extended to one D.A. Rubber Industries Limited (which was formerly known as Ralson Industries Limited). On the date of assignment of the deed the overall liability towards the loan was Rs. 53,76,90,000/- and apart from the said outstanding liability, a sum of Rs. 4,75,00,000/- was also paid by the present petitioner as consideration regarding the said transaction. Accordingly, a Deed of Assignment was executed, however, an audit objection was raised to the effect that at the time of execution of Deed of Assignment, the stamp duties under the different heads were not transferred to the State Government and, therefore, resultantly there was loss to the public exchequer. The said audit objection was made in view of the provisions of section 75 of the M.P. Panchayat Raj Evam Gram Swaraj Adhiniyam, 1993 [hereinafter referred to as "the Act of 1993"] as well as section 161 of the M.P. Municipalities Act, 1961 (for brevity "the Municipalities Act"]. According to audit objection, the present petitioner was required to pay Rs. 1,42,63,010/- as deficit stamp duty. The said audit report was taken note of by the Collector of Stamps, who then passed the impugned o....
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.... (P) Ltd., through its Managing Director Dr. P. Sundarajan vs. Inspector General of Registration and Chief Controller of Revenue Authority and others, 2020 SCC OnLine Mad 20619; and ICICI Bank Limited vs. Official Liquidator of Aps Star Industries Limited and others, (2010) 10 SCC 1. 5. Per contra, the counsel for the respondents/State submits that the present writ petition is liable to be dismissed. It is the contention of the counsel that the audit objection is in consonance with Section 75 of the Act of 1993 as well as Section 161 of the Municipalities Act. The Authority having found that the transaction had taken place without making payment of statutory duties and the order has been rightly passed by the Collector of Stamps and the Collector of Stamps is empowered to pass such an order in terms of Section 47-A of the Stamps Act. It is also contended by the counsel that the audit objection which is contained in Annexure-P/6 clearly reflects that the audit objection was in regard to the percentage of duty under the provisions of the Act of 1993 as well as Municipalities Act. The audit objection has also been taken into consideration the duty amount already paid by the petitio....
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....etitioner became the lending entity and also the present petitioner acquired all the rights and duties which were available with the Union Bank of India. Meaning thereby, by virtue of execution of Deed of Assignment, all the transactions pertaining to release of the loan, disbursement of the loan and execution of mortgage deed qua immovable property remained the same and the present petitioner replaced the Union Bank of India as lending institution. 9. The audit report which has been made basis to pass the impugned order reveals that while submitting the said audit report, the Authority has taken into consideration the fact that as per the provisions of Section 75 of the Act of 1993 and also as per the provisions of the Municipalities Act, on transaction pertaining to immovable property situated within the territories of the Panchayat of a Municipality, certain amount of duty was to be recovered. Accordingly, calculating the duties at the rate of 0.1% of the amount of loan towards Panchayat Duty and 1% towards Municipal Duty, assessed the liabilities. Section 75 of the Act of 1993 as well as Section 161 of the Municipalities Act are reproduced herein : "[75. Duty on tra....
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....in any Municipal area. (3) The State Government shall, every year, pay to each Council from the Consolidated Fund of the State a grant-in-aid approximately equal to the extra duty realized under sub-section (1) in respect of the property situate within the are of each such Municipality. (4) The State Government may make rules for carrying out the purposes of this section." A perusal of the aforesaid statutory provisions reveal that there can be eventuality of imposition of stamp duty when a deed is being executed as regards the immoveable property. Meaning thereby, when any deed or conveyance is being executed in regard to immovable property situated within the Panchayat area or the Municipal area, stamp duty at a certain rate is required to be charged. Thus, the very transaction becomes leviable with duty as provided under the Act as well as Guidelines made thereunder. 10. In the case in hand, the Union Bank of India while sanctioning the loan in favour of borrower, had executed the Mortgage Deed in order to secure the loan availed by the borrower and on such mortgage, the stamp duties were paid by the Union Bank of India. Therefore, the stage of creation o....
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.... of the transaction where a loan is securitized or debt assigned to a reconstruction or a securitization company. 11. The audit report contained in Annexure-P/6 reveals that the Audit Authorities were persuaded by the fact that the immovable properties were situated within the Municipal limit and accordingly, making a reference to the statutory provisions of the Act of 1993 as well as the Municipalities Act, concluded that the duty to the tune of Rs. 1,42,63,010/- was required to be paid. The said audit report was accepted by the Collector of Stamps without even appreciating the aspect that in the case in hand, at the time of initial mortgage deed between the borrower and the Union Bank of India, the stamp duties were already paid to the State Government and subsequent execution of Assignment Deed was not a transaction creating mortgage over the immovable property belonging to the borrower. 12. Hence, the audit report prima facie has effect of double jeopardy so far as the petitioner is concerned, inasmuch as there can be no incidences of imposition of duty. Once the duty is already paid to the State Government at the time of original mortgage, charging of the same duty again....