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TMI Blog1999 (1) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration disclosed in the agreement was shown at Rs. 3,75,000 for the purpose of purchase of the flat and a registration fee of Rs. 3,750 was paid in addition to copying fee and postal charges. The Sub-Registrar of Bombay, by a letter sent to the appellants in February 1988, informed them that the agreement had been impounded and being sent to the Superintendent of Stamps, Bombay. There was also a communication sent by the Assistant Director of Town Planning, Stamp and Valuation dated March 9, 1990 in terms of Rule 3(1) of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1981 to the appellants informing them that he had received a reference from the Collector under Section 32A of the Bombay Stamp Act for determination of true market value of the property and he had reason to believe that the market value of the property had not been truly and fully set out. The first appellant by a reply sent on October 26, 1990 stated inter alia various contentions that the document in question is only an agreement for sale and no right, title or interest passed on to the appellants so as to attract duty as a conveyance and/or instrument; that Section 32A of the Bombay Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the agreement it was stated that subject to the purchaser making full payment of all amounts due and payable by him under the agreement and subject to force majeure, possession of the said premises is expected to be delivered by the builders to the purchaser on or before the 30th November, 1987. The agreement was dated 8th October, 1987 and the possession was to be handed over by 30th November 1987. Paragraph 13 provided that in the event of any amount by way of premium, development tax, betterment charges or any other tax or payment of a similar nature or security deposit for water connection which was payable to the State Government or Municipal Corporation would be paid by the purchasers in proportion to the area the purchasers have agreed to purchase. Paragraphs 14 and 15 of the agreement read as follows :- "14. Nothing contained in these presents is intended to be nor shall it be deemed to be a grant, demises, conveyance, assignment or transfer in law of the said property premises or the building thereon, or any part thereof to the purchaser by the builders. "15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Here, in the present case, by Explanation I to Article 25 of the Schedule 1, what has been done is to provide for levy of duty on a "transaction", namely, handing over possession and not on the "instrument" as such and hence the provision is ultra vires the Constitution. Under Entry 44 of List Ill-Concurrent List of the Seventh Schedule of the Constitution, any State as well as the Central Government levy stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty and in respect of such instruments mentioned in Entry 91 of List 1-Union List of the Seventh Schedule to the Constitution. A duty is leviable under Section 3 of the Bombay Stamp Act which indicates the instruments executed in the State or those outside the State but brought into the State for the first time relating to any property situate or to any matter or thing done or to be done in the State shall be chargeable to stamp duty prescribed under the Bombay Stamp Act. Article 25 of Schedule I refers to conveyance and the amount of conveyance as sought to be explained by the Explanation. Explanation I to Article 25 of Schedule I to the Bombay Stamp Act reads as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have already been fulfilled such as by passing of a consideration and delivery of possession of the property and what remained to be done is a mere formality of execution of a sale deed; it would be necessary to collect duty at a later stage itself though right, title and interest may not have passed as such. Still by reason of the fact that under the terms of the agreement there is an intention of sale and possession of the property has also been delivered, it is certainly open to the State to charge such instruments at a particular rate which is akin to a conveyance and that is exactly what has been done in the present case. Therefore, it cannot be said levy of duty is not upon the instrument but on the transaction. Therefore, we reject the contention raised on behalf of the appellants in that regard. The learned counsel for the appellants urged that the character of an instrument cannot be determined by reason of a subsequent event to take place such as handing over of possession. But a close examination of the provisions of the Explanation will make it clear that in the case of an agreement to sell immoveable property possession is transferred at any time without executing th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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