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Judgment
Shri Sanjay Yadav, J. - The petition though is posted for consideration of I.A.No. 8071/2016 an application for vacating the stay; however taking into consideration the nature of issue involved, with the consent of learned counsel for the parties, the petition is finally heard.
The issue is as to whether the borrower and surety of a term loan advanced by a Commercial Bank for the poultry unit having mortgaged its immovable property towards security is exempted from paying stamp duty.
Facts not in dispute, briefly are that, the petitioner No. 1 availed term loan facility of Rs. 80.53 Lakhs from respondent No. 4 Bank to establish a poultry unit.
By way of security the petitioner No. 1 mortgage his land bearing survey No. 259/8 area 0.173 hectares, survey No. 259/11 area 0.459 hectares, survey No. 259/12 area 0.459 hectares survey No. 259/16 area 0.210 hectares, survey No. 501/1 area 0.101 hectare, survey No. 501/6 area 0.101 hectare, and survey No. 535/3 are 0.729 hectare: total area 2.846 hectare at village Thoonakala Patwari Halka No. 46 Tehsil and District Sehore.
Petitioner No. 2 who stood surety to said loan transaction also mortgaged her property bearing survey No. 501/8, 488/2, 504/1, 504/2 and 501/9 area,0.304, 0.210 ,0.405, 0.481 and 0.304 hectare respectively total area being 1.704 hectares at village Thoona Kala PH.No. 46 Tehsil and District Sehore. The mortgage was created on 3/12/2001.
The petitioners were subjected to notice on 23.8.2002 under Section 47-A(3) of the Indian Stamp Act 1899 (for short ''1899 Act''), which envisages that Collector (Stamps) may suo motu within five years from the date of registration of any instrument not already referred to him under sub section (1), call for and examine the instrument for the purposes of satisfying himself as to the correctness of the market value of the property which is the subject of any such instrument and the duty payable thereon and if, after such examination, he has reason to believe that market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty as aforesaid in accordance with the procedure provided for in sub section (2) the difference if any in the amount of duty shall be payable by the person liable to pay the duty.
The proceedings initiated under Section 33 read with Section 48-A of 1899 Act in furtherance to said notice culminated into an order dated 8.11.2002 holding the petitioners liable to pay the deficit Stamp duty of 4+1% amounting to Rs. Four Lacs and the penalty thereon under Section 40 to the tune of Rs. 4000/-. The reasons which find mention in the order are:
"_.k dk iz;kstu dqdqV ikyu gSA _.k ih;w"k T;ksfr"k] izksijkbVj] Hkksiky iksYV~h dks fn;k x;k gS] tks fd Hkwfe Lokeh ugha gSA
Hkwfe Lokeh] _.k xzfgrk ih;w"k T;ksfr"kh dh iRuh gSA cSad ds ''kk[kk izca/kd Jh ikBd }kjk mifLFkr gks mRrj izLrqr fd;k x;kA ewy uLrh ds LFkku ij Nk;kizfr izLrqr dh x;hA /kkjk 48([k) esa vfxze dk;Zokgh dh x;hA ''kk[kk izca/kd ds mRrj fnukad 07-11-2002 esa Hkksiky iksYV~h izksMDV dk mudh ''kk[kk }kjk d`f"k iz;kstu ds fy;s _.k fn;k x;k gS] tks fd LVkEi ,DV ds varxZr tkjh vof/k 657@6@vkj@78 fnukad 15-09-1978 ds rgr LVkEi ''kqYd dh NwV ds nk;js esa vkrk gSA
_.k xzfgrk ,oa tekurnkj dk dqy d`f"k Hkwfe 25 ,dM+ ls de gSA ''kk[kk izca/kd }kjk ;g Hkh tkudkjh esa yk;k x;k fd ,d gh _.k ds fy;s muds }kjk nks vyx&vyx ca/kd i= fd;s x;s gSaA nksuksa gh ca/kd i= izk:i&5 esa fy;s x;s gSaA ,oa izk:i esa varj ugha gSA
fo"k; %& Hkkjrh; LVkEi ,DV esa LVkEi ''kqYd dk NwV ds izko/kku dk dM+kbZ ls fu/kkZj.k fd;k tkuk vko'';d gSA
LVkEi ''kqYd dh izHkk;krkZ nLrkost ij gS u fd lEO;ogkj ij vr% lS)kafrd :i ls nksuksa foys[k dks i`Fkd ,oa Lora= :i ls LVkEi ''kqYd NwV ds fy;s ns[ks tkuk gksxkA
vkSj pwafd fopkjk/khu foys[k esa _.k xzfgrk Jh ih;w"k T;ksfr"kh dh (1) Hkwfe ca/kd ugha gSA (2)10 gSA ls U;wu Hkwfe Lokeh gksus dk izek.khdj.k cSad ds ''kk[kk izca/kd us ugha fd;k gSA vr% foys[k ij LVkEi ''kqYd dh NwV izkIr ugha gksxhA foys[k ij 4+1 dh nj ls 4%00 yk[k dk LVkEi ''kqYd izHkk;Z gksxkA lkFk gh /kkjk 40 ds varxZr ''kkfLr 4000 dqy 4]04]000 pqdkus dk vkns''k fd;k tkrk gSA"
In a suo motu proceeding, the amount of Rs. 404000/- was corrected to Rs. 406650/- by order dated 18.12.2012.
These orders are maintained till the stage of Revision before the Board of Revenue which dismissed the Revision by impugned order dated 30.12.2010 holding:
5- vkosndx.k fo}ku vfHkHkk"kd }kjk izLrqr rdksZa ds lanHkZ esa vfHkys[k ,oa vkns''kksa dk voyksdu fd;k x;kA bl izdj.k ds fujkd.k ds fy, fuEufyf[kr fcUnq fopkj.kh; gSa%&
D;k vkosnd ih;w"k T;ksfr"kh dks uksVhfQds''ku uacj 657-VI-R-78 fnukad 15-09-1978 ds vuqlkj ikWYV~h QkWeZ gsrq fy;s x;s _.k ij LVkEi M~;wfV ls NwV dh ik=rk gS\\
6&1- ''kklu }kjk tkjh uksVhfQds''ku uacj 657-VI-R-78 fnukad 15-09-1978 esa ;g izko/kku gS fd&
(1) .................
(2) a bhumiswami not covered by (1) above but having not exceeding ten hectares; In favour of banks for securing loans for agricultural purposes.
"mDr izko/kku ls Li"V gS] fd ,slk HkwfeLokeh ftlds ikl 10 gsDVj ls de Hkwfe gks] mls mDr uksfVfQds''ku fnukad 15-09-1978 }kjk d`f"k gsrq _.k ysus ij LVkWEi M~;wfV ls NwV iznku dh x;h gSA bl uksfVfQds''ku esa Agricultural purposes esa poultry farming dks ''kkfey fd;k x;k gSA
6-2- e/;izns''k d`f"k] m/kkj izorZu rFkk izdh.kZ micU/k cSad vf/kfu;e 1972 dh /kkjk 2&[k ds vuqlkj d`"kd ls vfHkizsr gS og O;fDr tks d`f"k esa yxk gksa vFkkZr d`f"k dk;Z ls gh eq[;r% mDr O;fDr dk thou fuokZg gksrk gksaA ;fn d`f"k gh vk; dk eq[; L=ksr gS ,oa d`f"k vk; ds vfrfjDr vU; dksbZ Hkh L=ksr fdlh O;fDr ds ikl miyC/k ugha gS ,oa Lo;a og [ksrh djrk gS ;k ukSdjksa ds }kjk djokrk gSA
6-3- bl izdj.k esa vkosnd ih;w"k T;ksfr"kh] izksijkbVj] es0 Hkksiky iksYV~h }kjk lsUV~y (cSad) ds dqDdqV ikyu gsrq _.k fy;k x;k gS rFkk ?kks"k.kk izk:i ikWap esa euh"kk T;ksfr"kh iRuh ih;w"k T;ksfr"kh dh 1-704 gs0 Hkwfe ca/kd j[kh x;hA blls Li"V gS fd vkosnd ih;w"k T;ksfr"kh }kjk dqDdqV ikyu ds fy;s _.k fy;k x;k gS] fdUrq mlds HkwfeLokeh LoRo esa Hkwfe gksus dk dksbZ izek.k dysDVj vkWQ LVkWEi ds vfHkys[k esa ugha gSA dysDVj vkWQ LVkWEi ds vfHkys[k esa vkosnd }kjk ,slh Hkh dksbZ lk{; ;k izek.k izLrqr ugha fd;k x;k fd mldh vk; dk eq[; L=ksr d`f"k vk; gSA ,slh fLFkfr esa euh"kk T;ksfr"kh ds LokfeRo dh Hkwfe ca/kd j[kus ek= ls vkosnd ih;w"k T;ksfr"kh dks d`"kd gksuk ekU; ugha fd;k tk ldrkA uksfVfQds''ku fnukad 15-09-1978 }kjk mlh HkwfeLokeh dks d`f"k _.k ysus ij NwV iznku dh x;h gS ftlds LokfeRo esa 10 gsDVj ls de Hkwfe gksaA bl izdj.k esa vkosnd ih;w"k T;ksfr"kh ^d`"kd* gksdj mlds LokfeRo esa 10 gs0 ls de Hkwfe gksuk fl) ugha fd;k x;k gS] bl dkj.k uksfVfQds''ku fnukad 15-09-1987 ds vuqlkj mls LVkWEi M~;wfV ls NwV iznku ugha djus esa dysDVj vkWQ LVkWEi }kjk dksbZ =qfV ugha dh x;h gSA"
The contentions on behalf of petitioners who question the imposition of levy are that the loan having been availed for agriculture purpose and the petitioners'' joint and individual holding of the property being less than 25 acres/10 hectares and being exempted vide notification No. F-4-1-1981- VIR dt 22/3/1982, no stamp duty is chargeable as the same is exempted. Even the mortgage by the surety, it is urged, is exempted from the Stamp duty as per Article 40 Schedule IA (from 1.4.1997 to 12.8.2002) of 1899 Act. Except these no other contentions are made.
Respondents have refuted these contentions. It is urged that the petitioners do not belong to the class which is exempted from the duty. It is urged that even Exemption (1) appended to Explanation under Article 40 of 1899 Act will not cover the petitioner No. 2.
Considered rival contentions.
At the outset, it be remembered that an exemption notification under a statue pertaining to taxation is to be strictly construed and unless the condition stipulated therein are fulfilled, person (s) claiming exemption will not be entitled for the benefit which flaws from such notification.
In Commissioner of Central Excise New Delhi v. Hari Chand Shri Gopal (2011) 1 SCC 236, it has been held -
"29. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the noncompliance of which would not affect the essence or substance of the notification granting exemption.
In Novopan Indian Ltd. (supra), this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave (1996) 2 SCR 253, held that (Novopan India Ltd. Case SCC P.614 para 16)
"16.......such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption."
In B. Premanand v. Mohan Koikal (2011) 4 SCC 266, it is held -
"24. The literal rule of interpretation really means that there should be no interpretation. In other words, we should read the statute as it is, without distorting or twisting its language. We may mention here that the literal rule of interpretation is not only followed by Judges and lawyers, but it is also followed by the lay man in his ordinary life. To give an illustration, if a person says "this is a Civil Appeal No. 2684 OF 2007 pencil", then he means that it is a pencil; and it is not that when he says that the object is a pencil, he means that it is a horse, donkey or an elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean."
In the case at hand, the petitioner seeks benefit of notification dated 22.3.1982 which is in following terms:
No. F-4-1-1981-VI-R, DATED 22.3.1982; Published in M.P. Rajpatra, Asadharan, dated 22.3.1982 p.416.-
The State Government has remitted with effect from the 23rd March, 1982, Stamp duty chargeable on-
(a) mortgage deeds; and
(b) hypothecation deeds forming part of such mortgage deeds; when executed by-
(i) a person belonging to a Scheduled Caste or a Scheduled Tribe, holding land as a pattadhari under Revenue Book Circular IV-3-10; or
(ii) a person not covered by (i) above but having a holding not exceeding ten hectares as pattadhari under Revenue Book Circular IV-3-10;
in favour of Banks for securing loans for agricultural purposes.
Explanation.-In this notification :
(a) "bank" means-
(i) a banking company as defined in the Banking Regulation Act, 1949 (No. 10 of 1949);
(ii) the State bank of India constituted under the State Bank of India Act, 1955 (No. 23 of 1955);
(iii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (No. 38 of 1959);
(iv) a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer or Undertakings) Act, 1970 (No. 51 of 1971);
(v) the Agricultural Refinance Corporation constituted under the Agricultural refinance Corporation Act, 1963 (No. 10 of 1963);
(vi) the Madhya Pradesh State Argo Industries Development Corporation Ltd., Bhopal;
(vii) Agricultural Finance Corporation Ltd. a company incorporated under the companies Act, 1956 (No. 1 of 1956);
(viii) a Regional Rural Bank established under sub-section (1) of Section 3 of Regional Rural Bank Act, 1976 (No. 21 of 1976);
(b) "Agricultural purposes" means making land fit for Cultivation, Cultivation of land, improvement of land including development of sources of irrigation, raising and harvesting of crops, horticulture, forestry, planting and forming, cattle breeding, animal husbandry, dairy farming, seed farming, Pisiculture, agriculture, sericulture, piggery and poultry farming and the acquisition of implements and machinery in connection with any such activity."
No doubt the loan availed is for setting up a poultry unit. The question is whether petitioners would fall within the class of persons who are exempted, which as per clause (b) of the notification dated 22.3.1982 are the
(i) person belonging to a Scheduled caste or a Scheduled Tribe, holding land as a pattadhari under Revenue Book Circular IV-3-10; or
(ii) person not covered by (i) above but having a holding not exceeding ten hectares as pattadhari under Revenue Book circular IV-3-10.
Evidently, the petitioners are not covered by (i) above and to be covered under (ii) they must be a Pattadhari under Revenue Book Circular IV-3-10, who is a person finds mention in RBC IV-3 (d) and ([k)
dafMdk 3- caVu ds fy, izkFkfedrk dze& jktLo foHkkx ds vUrxZr ''kkldh; Hkwfe mlh xkao ds vFkok lehiorhZ xzke ds dksVokj dks ;fn fu;ekuqlkj Hkwfe nsuk ''ks"k gks rks mlds fy, fu/kkZfjr Hkwfe lqjf{kr dh tkdj ''ks"k Hkwfe ml xkao ds "Hkwfeghu" O;fDr;ksa rFkk ,sls O;fDr;ksa dh lgdkjh laLFkkvksa dks fcuk izhfe;e ds fuEufyf[kr izkFkfedrk ds dze ls cafVr dh tkosxh&
d & fuEufyf[kr oxksZa ds Hkwfeghu O;fDr;ksa dks&
1- vkfnoklh tkfr] vuqlwfpr tkfr rFkk fiNM+k oxZ
2- Lora=rk laxzke lSfud tks fd blh rglhy ds fuoklh gksa ftlesa fd mUgsa Hkwfe vkoafVr dh tk;sxh]
3- d`f"kd Jfed]
4- vU; xzkfe.k Hkwfe ghu]
5- os jkstxkj d`f"k rks fd mlh rglhy ds fuoklh gks] ftuesa fd mUgsa Hkwfe vkoafVr dh tk;sxh vkSj ftuds ifjokj ds ikl 6 gSDVj ls vf/kd Hkwfe u gksA
[k& fuEufyf[kr oxksZa ds Hkwfe ghu O;fDr;ksa dh lgdkjh laLFkkvksa dks&
vkfnoklh tkfr vuqlwfpr tkfr rFkk fiNM+k oxZ]
1- vkfnoklh tkfr]
2- vuqlwfpr tkfr]
2&v fiNM+k oxZ]
3- d`"kd Jfed] rFkk
4- vU; xzkeh.k Hkwfeghu%
ijUrq ;fn caVu dh tkus okyh Hkwfe fdlh xSj vkckn xzke esa fLFkr gks] rks mldk caVu iM+kslh xzke ds Hkwfeghu O;fDr;ksa ;k mudh lgdkjh laLFkkvksa dks mij mfYyf[kr izkFkfedrk dze ds vuqlkj fd;k tk,xk%"
ijUrq ;g vkSj fd ,sls O;fDr;ksa ;k laLFkkvksa dks ;fn igys dksbZ Hkwfe fcuk izhfe;e fy;s nh xbZ gks vkSj mUgksaus ml Hkwfe dks csp fn;k gks rks mUgsa dksbZ Hkwfe izkIr djus dh ik=rk ugha gksxh%
ijUrq ;g vkSj fd ''kklu fo''ks"k ifjfLFkfr esa bl ifji= esa crkbZ xbZ Jsf.k;ksa ds O;fDr;ksa ds vykok vU; Jsf.k;ksa ds O;fDr;ksa dks foKfIr izlkfjr dj d`f"k dk;Z ds fy, fdlh Hkh lhek rd Hkwfe caVu fd;s tkus ds fo''ks"k vkns''k tkjh dj ldsxkA" and extended Bhumiswami Right under Revenue Book Circular.
As to the contention that petitioner No. 2 would be covered by Exemption (1) under Explanation to Article 40 of 1899 Act which envisages :
Mortgage deed not being an agreement relating to Deposit of Title Deeds, Pawn or Pledge (No. 6), Bond (No. 15), Mortgage of a crop (No. 41), Respondent in Bond (No. 56), or Security Bond (No. 57)-
(a) when possession of the property or any part of the property comprised in such deed is given by the mortgagor or agreed to be given;
The same duty as a Conveyance (No. 23) for a market value equal to the amount secured by such deed.
(b) when possession is not given or agreed to be given as aforesaid;
The same duty as a Bond (No. 15) for the amount secured by such deed.
Explanation:- A mortgagor, who gives to the mortgagee a power of attorney to collect rents or a lease of the property mortgaged or part thereof, is deemed to give possession within the meaning of this article;
(c) when a collateral or auxiliary or additional or substituted security or by way of further assurance for the above mentioned purpose where the principal or primary security is duly stamped.
For every Rs. 1000 or part thereof secured
Three rupees.
Exemptions
(1) Instruments executed by persons taking advances under the Land Improvement Loans Act, 1883 (19 of 1883), or the Agriculturists Loans Act, 1884 (12 of 1884) or by their sureties as security for the repayment of such advances.
(2) Letters of Hypothecation accompanying a bill of exchange
Since the loan taken by the petitioner is not under the Land Improvement Loans Act 1883 or the Agriculturists Loans Act 1884, petitioner No. 2 is not exempted from paying the Stamp Duty under 1899 Act.
The impugned order when tested on the anvil of the above analysis, cannot be faulted with as the petitioners are not covered by the class of persons who are exempted from paying the stamp duty.
Consequently, petition fails and is dismissed. No costs.