IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRP.No. 500 of 2010()
1. A.RENGA SWAMY CHETTIAR, AGED 67,
... Petitioner
Vs
1. MARI CHETTIYAR, D/O.CHENNAVADAN
... Respondent
2. V.PALANI SWAMY, BUSINESS,
For Petitioner :SRI.K.B.MOHANDAS
For Respondent : No Appearance
The Hon'ble MR. Justice THOMAS P.JOSEPH
Dated :30/09/2010
O R D E R
"C.R."
THOMAS P.JOSEPH, J.
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C.R.P. No.500 of 2010
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Dated this the 30th day of September, 2010
O R D E R
Question raised for a decision in this revision is whether a
document of sale executed pursuant to an agreement for sale and
a decree for its specific performance passed before Section 28A of
the Kerala Stamp Act, 1959 (for short, “the Act”) as amended by
the Kerala Finance Act, 2009 came into force is liable for stamp
duty based on fair value of the land as on the date of registration
if the document is presented for registration after Section 28A of
the Act came into force?
2. Petitioner before me entered into an agreement to
purchase the suit property from respondent No.1 as per an
agreement dated 04.03.1995 for a total consideration of
Rs.60,000/- and paid Rs.10,000/- as advance at the time of
agreement. Though petitioner was ready and willing to perform
his part of the contract and get the sale deed executed,
respondent No.1 was not agreeable and that led to petitioner
filing O.S. No.1243 of 1995 in the court of learned Principal
Munsiff, Thrissur. That resulted in Annexure-III judgment dated
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11.02.2000 and a decree for specific performance of the
agreement for sale was granted permitting petitioner to get the
sale deed executed on deposit of the balance sale consideration
of Rs.50,000/- in court with notice to the respondents. It was also
directed in the decree that respondent No.1 shall execute the
sale deed in favour of petitioner on receipt/deposit of balance
sale consideration within three months from the date of decree
(11.02.2000) and in case respondent No.1 failed to do so,
petitioner could get the sale deed executed through court.
Respondent No.1 did not execute the sale deed and hence
petitioner got the sale deed executed through court on
26.07.2010 (admittedly after Sec.28A relating to fair value of the
land was introduced in the Act). That document was presented
for registration before the Sub Registrar, Pazhayannor. The Sub
Registrar as per Annexure-9, letter dated 07.08.2010 intimated
the court that petitioner is liable to pay stamp duty in accordance
with fair value for the land fixed as per Notification
No.2435/2008 dated 17.11.2009. According to the Sub Registrar
fair value of the land fixed as per the said Notification is
Rs.3,61,900/- and hence petitioner is to pay stamp duty of
Rs.25,333/-. Petitioner filed Annexure-A7, application before
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learned Sub Judge contending that he is liable to pay stamp duty
only for the sum of Rs.60,000/- stated in the sale deed which is
the real consideration since the sale deed was executed
pursuant to the agreement for sale dated 04.03.1995. Learned
Sub Judge directed petitioner to produce non-judicial stamp paper
for the deficit amount. That order is under challenge in this
revision. Learned counsel for petitioner contends that though
the sale deed was executed through court on 26.07.2010 it was
due to the failure of respondent No.1 to execute the sale deed
pursuant to the agreement for sale dated 04.03.1995 and hence
liability of petitioner to pay stamp duty has to be fixed as on the
date fixed for performance of the agreement dated 04.03.1995.
3. On the above question I have heard learned
Government Pleader to whom notice of this revision was given. I
have also heard learned Senior Advocate, Shri T.Krishnanunni
who appeared as Amicus curie. Learned Government Pleader and
Learned Senior Advocate submitted that the liability to pay stamp
duty has to be decided as on the day the document is presented
for registration and in the present case since before that,
Sec.28A was introduced in the Act petitioner is liable to pay
stamp duty based on the fair value under the said provision.
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Reliance is placed on the decision in State of Rajasthan v.
M/s.Khandaka Jain Jewellers (AIR 2008 SC 509), Abid
v. Revenue Divisional Officer (2010 [3] KLT 419) and
State Bank of Haryana v. Manoj Kumar (2010) 4 SCC
350).
4. Rule 34 of Order XXI of the Code of Civil Procedure
(for short, “the Code”) provides the procedure for execution of
document as per a decree. Sub-rule(4) states:
“(4) The decree holder shall deliver to the
court a copy of the draft with such alterations (if any)
as the court may have directed upon the proper
stamp paper if a stamp is required by the law for the
time being in force; and the Judge or such officer as
may be appointed in this behalf shall execute the
document so delivered.”
Sub-rule (6)(a) states:
“Where the registration of the document is
required under any law for the time being in force,
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the court; or such officer of the court as may be
authorised in this behalf by the court, shall cause the
document to be registered in accordance with such
law.”
(emphasis supplied)
Reading the above provisions the decree holder, where the
document were to be registered as per the law for the time being
in force, is to produce the proper stamp paper.
5. Section 28A of the Act is as under:
“28A. Fixation of fair value of land.- (1)
Every Revenue Divisional Officer shall, subject to
such rules as may be made by the Government in
this behalf, fix the fair value of the lands situate
within the area of his jurisdiction, for the purpose of
determining the duty chargeable at the time of
registration of instruments involving lands,
(2) The Revenue Divisional Officer shall, in
fixing the fair value of a land under sub-section (1),
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have regard inter alia to the following matters,
namely:-
(a) development of the area in
which the land is situate such as the
commercial importance, facilities for
water supply, electricity, transport and
communication;
(b) proximity of the land to
markets, bus stations, railway stations,
factories, educational institutions or other
institutions;
(c ) the geographical lie of the
land, the nature of the land such as dry,
waste, wet or garden land, fertility,
nature of crop, yielding capacity and cost
of cultivation; and
(d) such other matters as may be
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Act.
(3) The fair value of land fixed under sub-
section (1) shall be published in such manner as may
be provided in the rules made under this Act.
(4) Any person aggrieved by the fixation of
fair value under sub-section (1) may, within thirty
days of its publication under sub-section (3), appeal
to the Collector.”
(emphasis supplied)
6. Thus fixation of fair value is for the purpose of
determining the duty chargeable at the time of registration of
instruments involving lands.
7. Section 45A of the Act deals with instrument not
bearing stamp of sufficient amount as per fair value of the land
and states how such documents are to be dealt with. Under sub-
sec (1), notwithstanding anything contained in the Act the
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registering officer shall while registering an instrument transfer
any land, other than an instrument of partition, settlement or gift
among the members of a family, chargeable with duty verify
whether the value of land or the consideration set forth in the
instrument is the fair value of that land. Under sub-sec.(2) if on
such verification, the registering officer is satisfied that value of
the land or consideration set forth in the instrument is not less
than fair value of the land, he shall duly register the instrument.
Under sub-sec.(3) if on such verification the registering officer
finds that value of the land or consideration set forth in the
instrument is less than fair value of the land (fixed under Sec.28A
of the Act) he shall by order direct payment of proper stamp
duty on the fair value of the land within a period of seven days
from the date of the order and on payment of deficit stamp duty
the instrument shall be duly registered. Thus reading Secs.28A
and 45A of the Act it leaves me in no doubt that the instrument
is liable to stamp duty based on fair value of the land in respect
of which the instrument is executed and that can only be the fair
value as on the day the instrument is presented for registration.
The Supreme Court in State of Rajasthan v. M/s.Khandaka
Jain Jewellers (supra) dealing with the Stamp Act (Act 2 of
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1899) and referring to the relevant provisions of the Rajasthan
Stamp Law (Adaptation) Act has held that the relevant date for
determining market value and stamp duty payable on the sale
deed was the current market value on the date when the
document was tendered for registration. The fact that purchaser
had to litigate for getting a sale deed was held to be immaterial.
The Supreme Court observed,
“…An agreement to sell is not a sale. An agreement
to sell becomes a sale after both the parties signed
the sale deed. A taxing statute is not contingent on
the inconvenience of the parties. It is needless to
emphasise that a taxing statute has to be construed
strictly, and considerations of hardship or equity have
no role to play in its construction…”
It was further observed,
“….The expression “execution” read with
Section 17 (of the Rajasthan Stamp Law (Adaptation
Act) leaves no manner of doubt that the current
valuation is to be seen when the instrument is
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sought to be registered. The Stamp Act is in the
nature of a taxing statute, and a taxing statute is not
dependent on any contingency….”
(emphasis supplied)
The Supreme Court quoted a passage from Rowlatt J, quoted with
approval by Viscount Simon as under:
“In a taxing Act one has to look merely at which at
what is clearly said. There is no room for any
intendment. There is no equity about a tax. There is
no presumption as to tax. Nothing is to be read in,
nothing is to be implied. One can only look fairly at
the language used.”
Bhagwati J., said in A.V. Fernandez v. State of Kerala (AIR
1957 SC 657),
“In construing fiscal statutes and in
determining the liability of a subject to tax one must
have regard to the strict letter of the law. If the
revenue satisfies the court that the case falls strictly
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within the provisions of the law the subject can be
taxed. If on the other hand, the case is not covered
within the four corners of the provisions of the taxing
statute, no tax can be imposed by inference or by
analogy or by trying to probe into the intention of the
Legislature and by considering what was the
substance of the matter.”
It is apposite to refer to the observations made by Shah, J (quoted
in State of Rajastan v. M/s.Khandaka Jain Jewellers (supra),
“In interpreting a taxing statute, equitable
considerations are entirely out of place. Nor can
taxing statutes be interpreted on any presumptions
or assumptions. The court must look squarely at the
words of the statute and interpret them. It must
interpret a taxing statute in the light of what is clearly
expressed; it cannot imply anything which is not
expressed; it cannot import provisions in the statute
so as to supply any assumed deficiency.”
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The Supreme Court in M/s.Goodyear India Ltd. v. State
of Haryana (AIR 1990 SC 781) pointed out,
“…It has been said and said on numerous
occasions that fiscal laws must be strictly construed,
words must say what they mean, nothing should be
presumed or implied, these say so. The true test
must always be the language used.”
Hence Sec.28A of the Act has to be read and interpreted in the
way it is enacted making liability for stamp duty as on “the time
of registration of the instruments involving lands”.
8. Profitable reference can also be made to the decision
of the Supreme Court in State of Haryana v. Manoj Kumar
(supra) as well. That was a case where a decree for specific
performance of an agreement to sell was granted in favour of the
plaintiff and registration was done on the basis of the sale price
given in the transfer deed (carried forward from the agreement
for sale). Question arose whether stamp duty paid was proper.
The Supreme court observed in paragraph 29 that the view of the
High Court that stamp duty paid was proper is wrong and that
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finding of the High Court would have far reaching ramification
and consequences. If genuineness of the sale price entered into
by the buyer and seller cannot be questioned, then in majority of
the cases it is likely that the State would ever receive stamp duty
according to the circle rate or the Collector rate. The Supreme
Court held that no sale deed can be registered for an amount less
than the amount notified by the Collector. The Supreme Court in
State of Rajsthan v. M/s.Khandka Jain Jewellers (supra)
directed the Collector to determine valuation of the instrument
on the basis of market value of the property at the date when the
document was tendered for registration. It follows that the
mere fact that agreement for sale was executed fixing time for
performance of the agreement which respondent No.1 did not
comply, petitioner had to engage in a litigation with respondent
No.1 and the decree for execution of sale deed was passed or
even the document itself was executed before Sec.28A of the Act
was brought into force do not exonerate petitioner from
payment of stamp duty based on fair value fixed as per Sec.28A
of the Act as on the day the document was presented for
registration after Sec.28A of the Act came into force.
9. This Court in Abid v. Revenue Divisional Officer
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(supra) referring to Secs.28A and 45B of the Act held that if
stamp duty based on the fair value is not paid it is within the
power of the registering authority to proceed under Sec.45A(1)
and (3) of the Act. It was also held that the registering authority
is entitled to verify whether consideration mentioned in the
document is in accordance with the fair value fixed for the land.
In the light of the above decisions the inescapable conclusion is
that notwithstanding that the sale deed was executed pursuant
to an agreement for sale, a decree for specific performance was
passed and the document of sale was executed before Sec.28A of
the Act came into force, the sale deed if presented for registration
after the said provision came into force is liable to stamp duty in
accordance with fair value of the land fixed under Sec.28A of the
Act and in force on the day the document is presented for
registration.
10. True, in this case as against the procedure of
registering authority directing payment of additional stamp duty
within the period stipulated under Sec.45A (3) of the Act and in
case of failure to comply, refusing to register the document the
registering authority has informed the court wherefrom the
document was send up for registration that the document
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requires additional stamp duty in accordance with fair value of
the land. I do not find anything illegal or improper in that
procedure. Petitioner in the circumstances is liable to pay
additional stamp duty as stated by the registering authority and
ordered by the court, under Sec.28A of the Act.
In the light of my above discussion I answer the question
raised as follows:
A document of sale, notwithstanding that it is executed
pursuant to an agreement for sale and a decree for its specific
performance passed before Sec.28A of the Act came into force is
liable to stamp duty if presented for registration after Sec.28A of
the Act came into force in accordance with the fair value of the
land fixed under that provision and in force on the date the
document is presented for registration if consideration mentioned
in the document is less than such fair value. It makes no
difference that the litigation (for specific enforcement of the
agreement for sale) was pending in court for long and the statute
was enacted in the meantime. The taxing statute has to be
construed as it is. That the value of the property soared up in the
meantime is also no reason not to apply the taxing statute.
The principle, “Actus curiae neminem gravabit” cannot
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affect the principles of interpretation of a taxing statute (See
State of Rajasthan v. M/s.Khandaka Jain Jewellers [supra]).
Revision is devoid of merit. Petition is dismissed.
THOMAS P. JOSEPH, JUDGE.
vsv