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Judgment
Abhilasha Kumari, J.—These petitions under Arts. 226 and 227 of the Constitution of India have been preferred, inter alia, laying challenge to the orders dated 15-4-2013, passed by respondent No. 1, the Chief Controlling Revenue Authority, whereby the applications of the petitioners made under Sec. 44 of the Gujarat Stamp Act, 1958 ("the Act" for short) for the refund of the excess amount of stamp duty paid by them, have been rejected. Both the petitions arise out of identical issues of fact and law and have been heard together; therefore, they are being decided by a common judgment.
For the sake of convenience, the facts as obtaining in Special Civil Application No. 17485 of 2013, may be noticed. They are as follows :
"2.1. The petitioner executed a Deed of Allotment on 31-3-2011, with Nandoli Co-operative Housing Society, for property bearing sub-plot No. AX-04, admeasuring 540 sq. yards in Suramya-VII Scheme at village Nandoli, Taluka Kalol, District Gandhinagar, for a total consideration of Rs. 13,50,000/-. The said instrument was executed on a non-judicial stamp of Rs. 66,500/-. By a Circular dated 2-4-2011, the State Government instructed every Sub-Registrar of the State of Gujarat to commence the implementation of the Annual Statement of Rates 2011 (commonly known as "Jantri"), from 1-4-2011. Thus, the stamp duty would now be based upon the calculation of the market value of the immovable property based on the new Jantri - 2011, with effect from 1-4-2011. The petitioner was called upon to pay the difference of stamp duty of Rs. 51,732/- and made the payment of this amount. Thereafter, the petitioner presented the said Deed of Allotment for registration before respondent No. 4-Sub-Registrar on 13-7-2011 and obtained a Certificate under Sec. 32 of the Act. It is the case of the petitioner that in the meanwhile, a petition came to be preferred in this Court, being Special Civil Application No. 9311 of 2011, challenging the Circular dated 2/4-4-2011 of the State Government, on the basis of which the stamp duty had been levied in the cases of the petitioners. During the pendency of this petition, the State Government issued a clarification dated 9-8-2011, to the effect that the date of the execution of the document would be relevant for the computation of the market value of the property and not the date of presentation. On the basis of the above clarification and the statement made by the learned Assistant Government Pleader appearing in that case, the petition came to be disposed of.
2.2. It is the case of the petitioners herein that after coming to know of the decision of the State Government dated 9-8-2011, they made applications for refund of the excess amount of stamp duty under Sec. 44(2) of the Act, on 12-9-2011. These applications came to be rejected by respondent No. 1, by passing the impugned orders, on the ground that it is the date of the presentation of the document that is relevant and not the date of its execution.
2.3. Aggrieved thereby, the petitioners have approached this Court by way of the present petitions."
Mr. Hriday Buch, learned Advocate for the petitioners, has submitted that there is no dispute regarding the fact that the Deed of Allotment was executed on 31-3-2011. It was presented for registration on 13-7-2011 and was registered on 19-7-2011. However, as per the definition of "market value" contained in Sec. 2(na) of the Act, the market value is to be calculated taking into consideration the price which the property which is the subject-matter of the instrument would have fetched, if sold in the open market on the date of the execution of the instrument. It is submitted that taking into consideration the definition of "market value" as per Sec. 2(na) of the Act, and as the Deed of Allotment was executed on 31-3-2011, the market value as obtaining on 31-3-2011 ought to have been taken into consideration for the calculation of the stamp duty and not the market value prevailing on the date of the presentation of the document.
3.1. It is further submitted that the State Government has itself issued a clarification dated 9-8-2011 in this regard, wherein it is clearly stated that the market value prevailing on the date of the execution of the document would be relevant for the computation of me market value of the property upon which the stamp duty is leviable. It is submitted that this decision was placed on record by the learned Assistant Government Pleader during the hearing of Special Civil Application No. 9311 of 2011 and is reflected in the order dated 17-8-2011 passed in that petition.
3.2. It is further contended that the petitioners have apprised respondent No. 1 of the decision dated 9-8-2011 of the State Government and the order passed in Special Civil Application No. 9311 of 2011, and it is clear from the impugned orders that respondent No. 1 is well conversant with the decision of the State Government and the order of this Court. Though, respondent No. 1 has stated in the impugned orders that the definition at Sec. 2(na) of the Act is applicable, he has misapplied the said definition by taking into consideration the date of the presentation of the instrument instead of the date of its execution.
3.3. Taking this Court through the affidavit-in-reply filed on behalf of respondent No. 1, it is submitted by the learned Advocate for the petitioners that the only ground raised in the said affidavit is that the petitioners have voluntarily paid the stamp duty at the relevant point of time, therefore, according to respondent No. 1, they cannot claim a refund of the excess amount under Sec. 44 of the Act.
3.4. It is contended that respondent No. 1 cannot retain any amount of excess stamp duty paid by a person and can only retain what is permissible in law. The aspect of voluntary payment by the petitioners does not entitle respondent No. 1 to retain an excess amount that is not legally due.
3.5. The learned Advocate for the petitioner has placed reliance upon a judgment of this Court in Shamjibhai Ranchhodbhai Dabhi Vs. Chief Controlling Revenue Authority and Others, (2009) 2 GLH 191 : (2009) 2 GLR 1757 , in order to buttress the above submission.
3.6. The learned Advocate for the petitioners has further relied upon a judgment of the Supreme Court in HMM Ltd. and another Vs. The Administrator, Bangalore City Corporation, Bangalore and another, AIR 1990 SC 47 : (1997) 91 ELT 27 : (1989) 4 JT 147 : (1989) 4 SCC 640 : (1989) 1 SCR 353 Supp , in support of his submission that the State Government has no right to retain any amount that is refundable as that would amount to undue enrichment.
On the strength of the above submissions, it is prayed that the impugned orders be quashed and set aside and the petitions allowed.
Ms. Vacha Desai, learned Assistant Government Pleader for the respondents has opposed the submissions advanced by the learned Advocate for the petitioners and has supported the orders passed by respondent No. 1. She has submitted that the said orders have been passed after taking into consideration the provisions of Sec. 2(na) of the Act, and other material on record. Besides this, the petitioners have voluntarily paid the stamp duty, therefore, they cannot ask for a refund under the provisions of sub-sec. (2) of Sec. 44 of the Act. Had the petitioners been aggrieved by the levy of stamp duty, they could have challenged it by preferring an appeal under Sec. 53(1) of the Act. By not doing so, the petitioners have impliedly accepted the stamp duty determined by the impugned orders and the stamp duty has been paid without any objection.
On the strength of the above submissions, it is prayed that the petitions be rejected.
In rejoinder, Mr. Hriday Buch, learned Advocate for the petitioners submits that Sec. 44 of the Act is a specific provision providing for the refund of excess stamp duty. If the submissions made by the learned Assistant Government Pleader, regarding filing an appeal instead against the levy of stamp duty are to be accepted, it would amount to rendering Sec. 44, nugatory. It is further submitted that once it is found that stamp duty has been wrongly levied, the principles of law enunciated by the Supreme Court in the judgment of HMM Ltd. and another Vs. The Administrator, Bangalore City Corporation, Bangalore and another, AIR 1990 SC 47 : (1997) 91 ELT 27 : (1989) 4 JT 147 : (1989) 4 SCC 640 : (1989) 1 SCR 353 Supp would come into play.
This Court has heard learned Counsel for the respective parties, perused the averments made in the petitions, contents of the impugned orders and other documents on record.
The short, but fundamental question that arises for determination by this Court is, whether the market value of the property which is the subject-matter of an instrument is to be determined by taking into consideration the date of the execution of the said instrument, or the date of its presentation before the Sub-Registrar?
The term "market value" was defined in Sec. 2(na) of the Act in the following terms:
"2.(na) "market value", in relation to any property which is the subject-matter of an instrument means the price which such property would have fetched if sold in open market on the date of execution of such instrument."
A plain reading of the said definition leaves no manner of doubt that the market value of a property which is the subject-matter of an instrument means the price which such property would have fetched if sold in the open market on the date of the execution of such instrument. There is no denial of the fact that the instruments in the present cases, which are Deeds of Allotment, have been executed on 31-3-2011, a day prior to the coming into force of the Jantri - 2011. Therefore, as per the definition of market value in Sec. 2(na), the market value of the property would mean the market value fetched if the property would have been sold in the open market on 31-3-2011, which is the date of the execution of the Deeds of Allotment. That the date of the execution of the instrument is 31-3-2011, has not been controverted by respondent No. 1 in the impugned orders or the affidavits-in-reply filed in the present petitions. In fact, in the impugned orders, respondent No. 1 has referred several times to the provisions of Sec. 2(na). However, after having done so, respondent No. 1 appears to have misdirected himself by taking the market value as it prevailed on the date of the presentation of the instrument, that is, 13-7-2011, instead of on 31-3-2011, when the instruments were executed.
It is significant to note that the Jantri - 2011, came into effect from 1-4-2011. Obviously, after 1-4-2011, higher Jantri rates would prevail and the market value would be calculated as per those higher rates. There would, therefore, be a corresponding increase in the levy of stamp duty after 1-4-2011, insofar as the market value of the property which is the subject-matter of an instrument is concerned.
The petitioner in Special Civil Application No. 17485 of 2013 paid stamp duty at the rate of Rs. 66,500/- as per the market value prevailing as on 31-3-2011. Thereafter, he was called upon to pay the difference of stamp duty of Rs. 51,732/-, which was paid by him on 13-7-2011. The petitioner in Special Civil Application No. 17486 of 2013 initially paid stamp duty at the rate of Rs. 77,500/-. He later paid the difference in stamp duty of Rs. 60,391/- when called upon to do so by the respondents. It is only thereafter that the petitioners obtained Certificates of Registration under Sec. 32 of the Act. Thereafter, on 12-9-2011, the petitioners preferred applications under Sec. 44 of the Act, for the refund of the excess amount of stamp duty, on the basis of the decision of the State Government dated 9-8-2011, clarifying that stamp duty was to be levied as per the market value prevailing on the date of the execution of the instrument and not on the date of its presentation. The petitioners also brought to the notice of respondent No. 1, the proceedings of Special Civil Application No. 9311 of 2011 and the order dated 17-8-2011, whereby the petition was disposed of, on the basis of the decision dated 9-8-2011 of the State Government.
A perusal of the impugned orders reveals that respondent No. 1 was very well aware of the said decision of the State Government and has also referred to in his orders. However, contrary to the provisions of Sec. 2(na) and the decision of the State Government dated 9-8-2011, respondent No. 1 has refused to refund the excess stamp duty levied upon the petitioners, by taking into consideration the market value as on the date of the presentation of the instruments for registration, instead of considering the date of their execution, as required by Sec. 2(na) of the Act and the decision of the State Government dated 9-8-2011.
In fact, it appears that respondent No. 1 has merely referred to the definition of "market value" contained in Sec. 2(na) of the Act, for the mere sake of reference. Far from applying the definition of "market value" in the present cases, respondent No. 1 has passed orders in contradiction of the said definition. Instead of taking the date of the execution of the instruments as the date for the calculation of the market value of the property, respondent No. 1 has insisted upon treating the date of the presentation of the document as the date on which the market value is to be calculated. No discernible reason, whatsoever, has been given by respondent No. 1 in the impugned orders for such a misapplication of Sec. 2(na). By passing the impugned orders in a manner contrary to Sec. 2(na), respondent No. 1 has virtually attempted to re-write the definition of "market value" in Sec. 2(na) of the Act, which cannot be countenanced. In the view of this Court, taking into consideration the provisions of Sec. 2(na) of the Act and the decision of the State Government dated 9-8-2011, which is in consonance with the said definition, it is clear that in passing the impugned orders respondent No. 1 has committed a glaring and patent error of law which cannot be permitted to stand. The rejection of me applications of the petitioners, without assigning any cogent reasons, except for reiterating that it is the date of presentation that is relevant date for computing me market value, would ultimately amount to undue enrichment on the part of the respondents. In this regard, the observations of the Supreme Court in HMM Ltd. and another Vs. The Administrator, Bangalore City Corporation, Bangalore and another, AIR 1990 SC 47 : (1997) 91 ELT 27 : (1989) 4 JT 147 : (1989) 4 SCC 640 : (1989) 1 SCR 353 Supp are relevant and are reproduced hereinbelow :
"12. These observations, in our opinion, in view of the contentions raised on behalf of the Municipality here are apposite in this case. The aforesaid Rule 24 does not apply. In that view, Rules 25 and 26 have no scope of application. Indubitably, amounts have been realised as octroi on the entry of the goods on which octroi was not leviable because these were not for use or consumption within the municipal limits. Mere physical entry into the city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale. In this case, putting the powder from the drums to the bottles for the purpose of exporting or taking these out of the city is neither use nor consumption of the Horlicks powder attracting the levy of octroi. Such amounts, therefore, cannot be retained by the respondent-Corporation. There is no dispute as to me quantum in view of the fact that the amount has now been found to be certified to be credited pursuant to the direction of the learned Single Judge of me High Court. We see no ground as to why amount should not be refunded. Realisation of tax or money without the authority of law is bad under Article 265 of the Constitution. Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits. So these amounts become collection without the authority of law. The respondent is a statutory authority in the present case. It has no right to retain the amount, so far and so much. These are refundable within the period of limitation. There is no question of limitation. There is no dispute as to the amount. There is no scope of any possible dispute on the plea of undue enrichment of the petitioners. We are, therefore, of the opinion that the Division Bench was in error in the view it took. Where there is no question of undue enrichment, in respect of money collected or retained, refund, to which a citizen is entitled, must be made in a situation like this."
(Emphasis supplied)
Insofar as me provisions of Sec. 44 of me Act are concerned, this Court in Shamjibhai Ranchhodbhai Dabhi v. Chief Controlling Revenue Authority, 2009 (2) GLH 191 : [2009 (2) GLR 1757], has held as below :
"15. Having heard the learned Advocates appearing for the parties and having considered the rival submissions, the Court is of the view that there is no dispute about the fact that a mistake was committed in mentioning the exact area of the land, which was 15,884 sq. meters as against it was mentioned as 63,536 sq. meters, and accordingly, on this area of land, the petitioner has paid the stamp duty of Rs. 25,19,886/- + Rs. 2,02,000/-. Thus in all Rs. 27,21,886/- were paid by the petitioner. In fact the petitioner is required to pay stamp duty of Rs. 8,00,554/-. Thus the petitioner is entitled to the refund of excess stamp duty paid. The petitioner''s claim is objected only on the ground that the application was not made in time and that the said deficit stamp duty was paid under Sec. 32A of the Act. However, the respondent being a State Authority cannot retain any amount paid in excess under some genuine or bona fide mistake. Equity demands that if the petitioner is not liable to pay the stamp duty and still it is paid, the same is required to be refunded. There is no justification on part of the respondent authority in denying the claim of refund of excess stamp duty. However the Court looking to the issue involved and equity in the matter, tilts the balance in favour of the petitioner and holds that the petitioner is entitled to refund of the excess stamp duty paid under genuine or bona fide mistake."
(Emphasis supplied)
It is clear from the principles of law enunciated by the Supreme Court and this Court in the judgments quoted hereinabove, that respondent No. 1, being a statutory authority, has no right, whatsoever, to retain any amount paid by the petitioners in excess of the stamp duty that is legally and validly leviable upon the instruments executed by them. Respondent No. 1 cannot retain the excess amount that has been paid by the petitioners in a bona fide manner, even though, it may have been paid voluntarily and without protest. When it is found that, as per the relevant provisions of law, the amount paid by the petitioners is in excess of what was actually payable by them, it becomes the duty of State authorities to refund such excess amount and not retain it merely on the ground that it has been paid voluntarily.
Thus, the action of respondent No. 1 in rejecting the applications for refund preferred by the petitioners is not only unsustainable in law, being in violation of Sec. 2(na) of the Act, it is also highly inappropriate, as it results in retaining the excess amount of stamp duty paid by the petitioners. There is no justification on the pan of the State authorities to retain any amount, over and above, what is legally leviable upon the petitioners under the statute. The reason for the refusal to refund the excess amount, as expressed in the affidavit-in-reply, is the voluntary nature of the payment made by the petitioners. This Court is unable to agree with this reason put forth by respondent No. 1, that an amount paid voluntarily by a citizen can be appropriated by a statutory authority just because it has been paid without objection. The State is bound by law to impose stamp duty as per the provisions of the statute but is certainly neither authorised, nor justified, to retain even a single rupee, over and above, the amount actually due and payable as per law.
The other objection raised in the affidavit-in-reply, to the effect that the petitioner ought to have preferred an appeal under Sec. 53(1) of the Act against the levy of excess stamp duty instead of filing an application under Sec. 44 of the Act is without any substance as the legislature, in its wisdom, has thought it fit to enact Sec. 44 of the Act for just such a contingency that arises in the present cases, namely, the refund of the excess amount of stamp duty. At this stage, the provisions of Sec. 44 of the Act may be noticed :
"Sec. 44. Power to Revenue Authority to refund penalty or excess duty in certain cases :
(1) Where any penalty is paid under Sec. 34 or Sec. 39, the Chief Controlling Revenue Authority may, upon application in writing made within one year from the date of the payment, refund such penalty wholly or in part.
(2) Where, in the opinion of the Chief Controlling Revenue Authority stamp duty in excess of that which is legally chargeable has been charged and paid under Sec. 32, Sec. 34 or Sec. 39, such authority may, upon application in writing made by the party concerned within three months from the date of receipt of the order charging the same, refund me excess."
The legislature, while enacting Sec. 44, appears to have been conscious of the fact that situations can occur when an excess amount of stamp duty has been levied and paid by a citizen. With a view to obviating the difficulties that may arise and ensuring that a remedy is available in such cases, Sec. 44(2) of the Act has been enacted. In cases where excess stamp duty has been paid, an application can be made under Sec. 44(2) of the Act for the refund of the excess amount. In the present cases, the applications have been made within the prescribed time period. There is, therefore, no requirement of filing an appeal under Sec. 53(1) of the Act as contended by respondent No. 1 in the affidavit-in-reply.
The cumulative effect of the above discussion is that this Court considers it just and proper to quash and set aside the impugned orders dated 15-4-2013, passed by respondent No. 3, in both the petitions in the interest of justice.
Accordingly, the orders dated 15-4-2013, impugned in both the petitions, are hereby quashed and set aside. Respondent No. 1 is directed to refund the excess amount of stamp duty paid by the petitioners, taking into consideration the market value of the property as it stood on 31-3-2011, that is, the date of the execution of the instruments. Such refund shall be made with interest at the rate of 6% per annum from the date of the payment of the excess amount of stamp duty, within a period of four weeks from the date of the receipt of a copy of this judgment.
The petitions are allowed, in the above terms. Rule is made absolute, accordingly, in both the petitions. There shall be no orders as to costs.