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TMI Blog1964 (11) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 1,00,000 as contended by the executants. (2) Whether in view of the provisions of Section 24 of the Stamp Act, the sale consideration shall be deemed to be ₹ 5,55,000 and duty liable to be paid thereon as held by the Board. (3) Whether the consideration of the sale will be deemed to be Rs. Ten Lakhs, i.e., the entire amount due to the mortgagee Bank, and duty is payable thereon. (4) On what amount is the additional stamp duty under section 107 of the Kanpur Development Act, 1945, leviable. The High Court gave the following answer to the first three questions : "The document in question is a sale deed for a consideration of ₹ 1,00,000 only and that the Stamp duty payable in respect of it was to be calculated on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plots. Out of this ₹ 66,000 was payable to Messrs Shyam Sunder Gupta and Satya Parkash Gupta in respect of their share in the Kanpur Ice and Cold Storage Factory, and the remainder to the vendors. The Chartered Bank agreed to release from its charge the properties to be conveyed to the vendees provided a sum of ₹ 5,00,000 was paid to it. The vendees agreed to pay the said Bank a sum of ₹ 4,89,000, while the vendors agreed to pay ₹ 1 1,000 to the Ban& to make up the balance. In pursuance of this agreement, the vendors handed over the possession of plant and machinery of the two factories to the vendees, who paid before December 15, 1952, ₹ 3,89,000 to the said Bank. On December 15, 1952, the sale-deed in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, shall be deemed to be part of the consideration for the sale; Provided that, where property subject to a mortgage is transferred to the mortgagee, he shall be entitled to deduct from the duty payable on the transfer the amount of any duty already paid in respect of the mortgage." The charging article is Art. 23, which is as follows : "Conveyance [as defined by section 2 (10) ], not being a transfer charged or exempted under No. 62,- Where the amount or value of the consideration for such conveyance as set forth therein does not exceed ₹ 50; Where it exceeds ₹ 50 but does not exceed ₹ 1 00 The section has a history and it is set out in the judgment of Rankin, C.J., in U.K. Janardhana Rao v. Secret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, it is quite plain that the fair incidence of this tax would be altogether frustrated and defeated. A proprietor has an estate worth pound 20,000. There is a bond upon it for ₹ 10,000. He sells that estate, and the purchaser pays to him the difference between the amount of the bond and the value of the estate, so that the bond being for pound 10,000 he pays pound 10,000. The day after he obtains inferment he pays off the bond. Well, the practical result of that is that he has paid pound 20,000 as the purchase money of this estate, and he has obtained a conveyance with an ad valorem stamp of the value of pound 10,000. That is a simple defeating of the purpose and intention of the Legislature as expressed in this clause, and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cretary of State([1931] I.L.R. 58 Cal. 33.) and of the Bombay High Court in Waman Martand Bhalerao v. The Commissioner Central Division((1925) I.L.R. 49 Bom. 73.) that the phrase "subject to a mortgage or other encumbrance" in the explanation to s. 24 qualifies the word 'sale' and not the word 'property'. We need hardly say that the Stamp Act is a taxing statute and must be construed strictly, and if two meanings are equally possible, the meaning in favour of the subject must be given effect to. Before we consider the facts of this case, we may mention that it is plain from the explanation that it is only the unpaid mortgage money that is deemed to be part of the consideration. If the mortgage money has been paid off by the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, falls within Art. 23. This leaves ₹ 11,000, and the question arises whether this sum should be taken into consideration for the purpose of levying stamp duty. Regarding this item, the High Court held as follows : " It is true that till the date of sale the sum of 1 1,000 had not been paid and there was a charge on the property in respect of that amount. The vendors themselves had, however, taken liability for that amount and had agreed to pay it. It had been expressly provided in the sale deed that the property was being sold free from the charge. The vendees were in no way liable for the amount and had not undertaken to pay it. In these circumstances the property cannot be said to have been sold subject to the charge of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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