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Issues Involved: Liability to pay stamp duty under the Karnataka Stamp Act for a copy of an instrument registered outside Karnataka, jurisdiction of the Special Deputy Commissioner under Section 33(1) and Section 46-A of the Karnataka Stamp Act, definition of "instrument" under Section 2(j) of the Karnataka Stamp Act, and applicability of the Supreme Court decision in New Central Jute Mills Co. Ltd. v. State of West Bengal.
Issue-wise Detailed Analysis: 1. Liability to Pay Stamp Duty on a Copy of the Instrument: The primary issue was whether the petitioner was liable to pay stamp duty under the Karnataka Stamp Act on a copy of the instrument received by the Sub-Registrar when the instrument was registered outside Karnataka. The petitioner, a government company, had mortgaged its immovable properties to the Industrial Finance Corporation of India (IFCI), and the deed was registered in Delhi. The copy of this instrument was forwarded to the District Registrar, Chitradurga, as per statutory requirements. The Special Deputy Commissioner of Chitradurga demanded the difference in stamp duty payable if the document had been registered in Karnataka, which was higher than that in Delhi. The court held that the copy received did not fall within the definition of "instrument" under Section 2(j) of the Karnataka Stamp Act, 1957. Therefore, the petitioner was not liable to pay the additional stamp duty demanded. 2. Jurisdiction of the Special Deputy Commissioner under Section 33(1) of the Karnataka Stamp Act: The petitioner argued that the Special Deputy Commissioner had no jurisdiction to demand the difference in stamp duty under Section 33(1) of the Karnataka Stamp Act, as the copy of the instrument was not an "instrument" per the Act's definition. The court agreed, stating that the power to impound documents under Section 33(1) applies only to instruments, not copies of instruments. The court found no material evidence that the instrument was produced before or came to the Special Deputy Commissioner in the performance of his functions, thus invalidating the jurisdiction exercised by the Special Deputy Commissioner. 3. Definition of "Instrument" under Section 2(j) of the Karnataka Stamp Act: Section 2(j) defines "instrument" as any document by which any right or liability is created, transferred, limited, extended, extinguished, or recorded. The court concluded that the copy of the registered mortgage deed received by the Registrar at Chitradurga did not meet this definition. The court emphasized that the document in question was merely a copy, not the original instrument, and hence, could not be subjected to stamp duty under the Karnataka Stamp Act. 4. Applicability of Section 46-A of the Karnataka Stamp Act: The Special Deputy Commissioner also exercised power under Section 46-A, which allows for the recovery of stamp duty not levied or short levied. The court ruled that Section 46-A applies only to instruments, not copies of instruments. Therefore, the demand for additional stamp duty under this provision was also deemed improper and an instance of jurisdictional overreach. 5. Applicability of the Supreme Court Decision in New Central Jute Mills Co. Ltd. v. State of West Bengal: The respondents relied on the Supreme Court decision in New Central Jute Mills Co. Ltd. v. State of West Bengal, which dealt with the liability of an instrument executed in one state and registered in another. The court distinguished the present case, noting that the Supreme Court's decision pertained to an instrument, not a copy of an instrument. Therefore, the precedent was inapplicable to the facts of this case. Judgment: The writ petition was allowed, and the impugned orders demanding the additional stamp duty were quashed. The court held that the Special Deputy Commissioner had improperly exercised jurisdiction and made an unwarranted demand. The rule was made absolute, and the writ petition was allowed.
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