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PETITIONER: BOARD OF REVENUE. U.P.

       Vs.

RESPONDENT: M/S. ELECTRONIC INDUSTRIES OF INDIA

DATE OF JUDGMENT04/09/1995

BENCH: KULDIP SINGH (J) BENCH: KULDIP SINGH (J) AHMAD SAGHIR S. (J)

CITATION:  1996 AIR  616            1995 SCC  (6) 108  JT 1995 (6)   618        1995 SCALE  (5)183

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T KULDIP SINGH, J.      Section 67-H(1)  of the  U.P. Town Improvement Act 1919 (the Act) provides that the duty imposed by the Indian Stamp Act, 1899  (the Stamp  Act)  on  any  deed  of  transfer  of immovable property  shall, in the case of immovable property situated within  an  area  to  which  the  Act  applies,  be increased by  2 per  cent on  the amount  or  value  of  the consideration with reference to which the duty is calculated under the  Stamp Act.  The question for our consideration is whether a document, on which the stamp duty as payable under the Stamp  Act has  been paid  but the  increased duty under Section 67-H(1)  of the  Act  has  not  been  paid,  is  not subjected to  the penal  provisions of  the Stamp Act and as such cannot  be impounded  under Section 33 of the Stamp Act and is further not liable to penalty under Section 40 of the said Act?  The High  Court has  answered the question in the affirmative and  in favour of the respondent. This appeal by way of  special leave  is by  the Board  of  Revenue,  Uttar Pradesh against  the judgment  dated July  10, 1979  of  the Allahabad High Court.      M/s. Electronic  Industries of  India,  the  respondent herein, executed  a mortgage  deed dated  April 7,  1973  in favour  of   the  U.P.  Financial  Corporation  whereby  the property of  the borrower  situated at  Ghaziabad within the area to  which the  Act applied,  was mortgaged  to secure a loan of  Rs. 6  lakh 36  thousand. On September 1, 1973, the authorities under  the Stamp  Act examined  the document and found that  the stamp  duty was deficient. As a consequence, the document was impounded under the provisions of the Stamp Act. The  respondent paid  the deficient  duty under protest and thereafter  submitted an application under Section 45 of the Stamp  Act  for  its  refund.  That  gave  rise  to  two questions which  were referred  for the  opinion of the High Court under  Section 57  of the Stamp Act. The questions are

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as under:-      "1.  Whether  an  instrument  of  simple      mortgage (mortgage without possession of      immovable property  situated in  an area      to which  the U.P.  Town Improvement Act      1919 (VIII  of 1919)  as amended  by the      Local Self  Government Laws  (Amendment)      Act, 1966  (XXIX of  1966) has been made      applicable is  a  deed  of  transfer  of      immovable property within the meaning of      Section 67-H of the said Act?      2.   Whether a  public officer is barred      from  impounding   (a  document)   under      Section 33  and the  Collector is barred      from  imposing   any  deficit  duty  and      penalty under  Section 40  and realising      the same  under Section  48 of the Stamp      Act on  a deed  of transfer of immovable      property situated  in an  area to  which      the  U.P.  Town  Improvement  Act,  1919      applied, on  which stamp duty as payable      under the  Stamp Act  only has been paid      and the increased duty under Section 67-      H of  the Town  Improvement Act  has not      been paid.?"      The first  question was  answered by  the High Court in the  affirmative   and  in   favour  of   the  Revenue.  The correctness of the High Court’s answer to the first question has not been challenged before us.      It would  be useful to have a look at the scheme of the Stamp Act.  Section 3  deals with  the instruments which are chargeable with duty. Sections 10 to 15 deal with the stamps and the  mode of  using them.  Section 27  provides that the consideration, if any, and all other facts and circumstances affecting the  chargeability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein. Section 33 deals with the examination and impounding of instruments which are not duly stamped. Section  40 empowers  the Collector  to assess  and impose the  penalty in  respect of the impounded instruments or the  instrument found by him not duly stamped. Section 48 provides the  mode of  recovery  of  duties  and  penalties. Section 64  further provides  penalty for omission to comply with the  provisions of  Section 27  of the  Stamp Act.  The Stamp Act  contains a  comprehensive scheme  about the levy, collection and  realization of  stamp duty  chargeable under it. It is a self-contained code. Section 67-H of the Act reads as under:-      "67-H     (1) :  The duty imposed by the      Indian Stamp  Act, 1899  on any  deed of      transfer of immovable property shall, in      the case  of immovable property situated      within an area to which this Act applies      be increased  by two  per  cent  on  the      amount or  value  of  the  consideration      with reference  to  which  the  duty  is      calculated under the said Act.      (2)  All collections  resulting from the      said increase shall, after the deduction      of incidental  expenses, if any, be paid      to the  Trust by the State Government in      such manner  as  may  be  prescribed  by      rules.      (3)  For the  purposes of  this Section,      Section 27 of the Indian Stamp Act, 1899

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    shall be  so read and construed as if it      specifically  required  the  particulars      referred to therein to be separately set      forth in respect of :-           (a)  property situated  within  the                area notified, and           (b)  Property situated outside such                area:-      (4)  For the  purposes of  this section.      Section 64 of the Indian Stamp Act, 1899      shall be  so read and construed as if it      referred to  the Trust as well as to the      Government."      The short question for our consideration is whether the provisions of  Sections 33  and 40  of  the  Stamp  Act  are attracted to  the instruments  on which increased duty under Section 67-H(1) of the Act has not been paid.      The  High  Court  answered  the  question  against  the Revenue on the following reasoning:-      "The duty  payable under Section 67-H of      the  U.P.   Town  Improvement   Act   is      different than  the stamp  duty which is      to be  paid under the Stamp Act. Section      67-H  imposes   duty  on   transfer   of      property. The  Stamp Act  does not  make      any provision  for the  payment of Stamp      duty on  a deed  of transfer.  The  duty      leviable under  Section 67-H  is in  the      form of surcharge payable under the said      Act over  and above  the stamp duty. The      duty  payable   under  Section  67-H  is      assessed  independently   of  the  stamp      duty. The transfer duty is calculated on      the amount  of the consideration set out      in the  conveyance.  It  is  not  to  be      calculated in accordance with the manner      provided in the Stamp Act."      "The Legislature  applied only  Sections      27 and  64 of the Stamp Act to a deed of      transfer covered  by Section 67-H. There      is nothing  in the  Town Improvement Act      which could  show that  the rest  of the      provisions of  the Stamp  Act would also      apply. It  does not  appear  logical  to      hold that where only two provisions from      an existing  Act have  been incorporated      into a  subsequent  Act,  the  remaining      provisions of  the previous  Act can  be      deemed to  be incorporated  in the later      Act.      "The  departure   in   the   method   of      calculating the  duty covered by Section      67-H is a strong circumstance leading to      the  irresistible  conclusion  that  the      duty payable  under Section  67-H cannot      be treated as the same which is required      to be given under the Stamp Act.      The second difference is that the object      and purpose  of the  levy of  the  stamp      duty under  the Stamp  Act is  different      than  that   of  Section  67-H.  As  the      Legislature   advisedly    intended   to      differentiate between  the two  types of      charges, no  provision for  its levy was      made in  the Stamp  Act. That being so a

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    deed of  transfer  cannot  be  impounded      under Section  33 of  the Stamp  Act nor      can it  be subjected  to penalty because      the incresed  duty under  S.67-H of  the      Town Improvement Act has not been paid."      We are not inclined to agree with the reasoning and the conclusions reached by the High Court. A bare reading of the provisions of  Section 67-H(1)  of the  Act shows that it is the duty  "imposed by  the Indian  Stamp Act  1899" which is increased by  2 per  cent in respect of any deed of transfer of immovable  property within  the area  to  which  the  Act applies. The  document which  comes, within  the mischief of Section 67-H  (1) of  the Act,  is first  assessed to normal stamp duty under the Stamp Act and thereafter the stamp duty so assessed  is increased  by 2  per cent  on the  amount or value of the consideration with reference to which the stamp duty is  calculated under  the Stamp  Act. The  legislative- intent is  clear inasmuch  as that  even after  adding 2 per cent increase, the total stamp duty remains a levy under the Stamp Act. It would be doing violence to the simple language of the  statute to  hold that  2 per cent increase is only a surcharge and  is not  a duty under the Stamp Act. We are of the view  that the  High Court  was not justified in holding that the  additional duty  payable under Section 67-H of the Act was  not the  duty under the Stamp Act. The tenor of the section makes  it clear  that what  comes out after adding 2 per cent  increase is the stamp duty under the Stamp Act and not any other levy.      The  contention   that  the  Legislature  applied  only Sections 27  and 64  of the  Stamp Act to a deed of transfer covered  by  Section  67-H(1)  of  the  Act  and  the  other provisions of  the Stamp  Act are  not attracted,  is on the face of  it fallacious.  Reading, sub-section (3) and (4) of Section 67-H  of the  Act with  sub-section (1)  of the said section, clearly  shows that whole of the Stamp Act has been made applicable  to the documents covered by Section 67-H of the Act. Sections 27 and 64 of the Act have been modified in their applicability  to the  documents under Section 67-H of the  Act   for  the   purpose  of  adaptability.  The  other provisions  of   the  Stamp   Act  did   not   require   any modifications and as such are applicable mutatis mutandis.      The High  Court was  not justified  in holding that the method of  calculating the  additional duty being different, it could  not be  a duty  under the  Stamp Act. As mentioned above, the  document under Section 67-H(1) of the Act has in the first  instance to  be assessed  under the provisions of the Stamp  Act and thereafter the amount of stamp duty is to be increased  by 2  per cent  as  provided  under  the  said section. In  any case the plain reading of the provisions of Section 67-H  of the  Act makes it clear that the 2 per cent increase is  an addition  to the  stamp duty  and, as  such, cannot be  treated differently  despite the departure in the method of calculating the same.      The object  and purpose of levy of duty under the Stamp Act and  the additional  duty under  Section 67-H of the Act are the same inasmuch as both are fiscal enactments with the primary object  of raising  revenue for  the State. The only difference is  that the revenue realized under the Stamp Act goes  to   the  consolidated  fund  whereas  the  additional collection made under Section 67-H of the Act is paid to the Improvement Trust  concerned by  the State  Government.  The High Court was, therefore, not justified in holding that the object and  purpose of  the levy  under  the  Stamp  Act  is different than the one under Section 67-H of the Act.      We allow the appeal, set aside the impugned judgment of

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the High Court and answer the question No.2 in the reference under Section  57 of  the Stamp  Act in  the negative and in favour of  the appellant  - Board of Revenue, Uttar Pradesh. No costs. State of U.P. & Ors. V. Ishwari Singh & Anr. O R D E R      We have  today delivered  judgment in  Civil Appeal No. 1474/1980 titled  Board of Revenue, U.P. Vs. M/s. Electronic Industries of  India. For  the reasons recorded by us in the said judgment,  we allow this appeal, set aside the impugned judgment of  the High  Court dated 10.9.1980 and dismiss the Civil Miscellaneous Write Petition No. 8375 of 1973 filed by the respondent before the High Court. No costs.