1991 (1) TMI 441 - HC - Wealth-tax

Summary

Issues Involved:
1. Exemption from paying stamp duty for Central Government employees.
2. Legality of the levy of stamp duties on documents registered in 1975, 1977, and 1978.
3. Discrimination between State and Central Government employees regarding stamp duty exemption.
4. Requirement of personal hearing before the imposition of stamp duty.
5. Use of cyclostyled forms for sending endorsements.

Detailed Analysis:

1. Exemption from Paying Stamp Duty for Central Government Employees:
The petitioners, Central Government employees in Karnataka, sought exemption from paying stamp duty on Mortgage Deeds executed for housing loans. They argued that similar exemptions were granted to State Government employees and Central Government employees in other states, citing an Official Memorandum dated 31-5-1978 from the Ministry of Works and Housing. However, the State Government contended that the exemption was withdrawn by an amendment in 1979, and the Official Memorandum had no statutory force, thus not binding on the State.

2. Legality of the Levy of Stamp Duties on Documents Registered in 1975, 1977, and 1978:
The petitioners claimed that the levy of stamp duties on documents registered in 1975, 1977, and 1978 was illegal, as the Government of India Memorandum provided exemptions during those years, which was withdrawn only in 1979. The State Government countered that the amendment to Section 46A of the Karnataka Stamp Act, 1957, effective from 17-4-1980, ended the earlier concessions, and the legislation was enacted following due procedure.

3. Discrimination Between State and Central Government Employees Regarding Stamp Duty Exemption:
The petitioners argued that the differential treatment in stamp duty exemptions between State and Central Government employees violated Article 14 of the Constitution of India. The State Government defended this by stating that economic legislations should be viewed with greater latitude and that the classification was based on reasonable grounds, considering the financial position of the employees. The court cited the Supreme Court ruling in R.K. GARG v. UNION OF INDIA, emphasizing judicial deference to legislative judgment in economic matters and the principle of reasonable classification.

4. Requirement of Personal Hearing Before the Imposition of Stamp Duty:
Some petitioners contended that they were not given a personal hearing before the imposition of stamp duty. The court held that under Sections 9, 19, and 46A of the Karnataka Stamp Act, the State Government had the discretion to extend exemptions, and the petitioners did not have a vested right to a personal hearing. Hence, this contention was not upheld.

5. Use of Cyclostyled Forms for Sending Endorsements:
The petitioners objected to the use of cyclostyled forms for sending endorsements. The court found no fault with this practice, as a common order was made and sent to all petitioners in a standardized form. This contention was deemed without force.

Conclusion:
The court dismissed the writ petitions, upholding the State Government's amendment that withdrew the stamp duty exemption for Central Government employees. The court found the classification between State and Central Government employees reasonable and in line with economic legislation principles. The petitioners' contentions regarding personal hearings and the use of cyclostyled forms were also rejected.