HANUMAN VITAMIN FOODS PVT. LTD. AND ORS. versus THE STATE OF MAHARASHTRA AND ANR.

Citation: [2000] SUPP. 1 S.C.R. 623 · Decided: 20-07-2000 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Dismissed
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Judgment (excerpt)

HA NUMAN VITAMIN FOODS PVT. LTD. AND ORS. 
A 
v. 
THE STATE OF MAHARASHTRA AND ANR. 
JULY 20, 2000 
[M.B. SHAH AND S.N. VARIAVA, JJ.] 
B 
Bombay Stamp Act, 1958: Schedule I-Article 25(b)(i) Co-operative 
Society-Share transfer-Instrument of-Instrument of transfer amounting to 
conveyance of property-Held such an instrument liable to stamp duty under C 
Article 25 (b) (i). 
Constitution of India, 1950 
Seventh Schedule-list /-Entry 91-List II-Entry 63-Co-operative 
Society-Share-Transfer of-Transfer instrument conveying property-Levy D 
of Stamp Duty-Legislative competence of State Legislature. 
The appellant, a member of a co-operative society, was in occupation of 
an office premises in a building at Bombay. By an instrument dated 31st 
March, 1986 it transferred five shares in the co-operative society in favour 
of other appellants for a consideration of Rs. 9,46,900. The Superintendent E 
of Stamps held that the document executed by the appellant was a conveyance 
of property and thus chargeable with Stamp Duty under Article 25 (b) (i) of 
the Bombay Stamp Act, 1958. A writ petition filed by the appellant was 
dismissed by the Bombay High Court holding that the instrument of transfer 
amounted to conveyance of property and was chargeable with stamp duty under 
Article 2S(b) (i). The High Court also rejected the contention of the appellant F 
that levy of stamp duty on transfer of shares was beyond the legislative 
competence of the State Legislature. 
Against he decision of High Court an appeal was preferred before this 
Court. A writ petition under Article 32 was also filed. In both the matters the G 
questions which arose for consideration were: 
(a) Whether transfer of shares in a co-operative Society is subject to 
levy of stamp duty under the Bombay Stamp Act, 1958? and 
(b) Whether the State legislature has legislative competence to levy H 
623 
624 
SUPREME COURT REPORTS [2000] SUPP. I S.C.R. 
A stamp duty on transfer of shares? 
Dismissing the Civil Appeal as well as the Writ Petition, the Court 
HELD: The stamp duty is sought to be levied under Article 25, Schedule 
I of the Bombay Stamp Act. It is being levied not on transfer ofshares but on 
B the basis that the agreement is a conveyance. There is no dispute that there 
is legislative competence illl the State Government to levy stamp duty on a 
conveyance of property. In view of the fact that such an instrument is not an 
instrument of transfer of shares, but it is, in fact a conveyance, the second 
question regarding legislative competance no longer survives. [626-F-G) 
c 
Veena Hasmukh Jain and Another v. State of Maharashtra and Ors., 
(199915 SCC 725, relied OD: 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3707 of 1990. 
D 
From the Judgment and Order dated 16/17.2.89 of the Bombay High 
E 
Court in W.P. No. 1820of1986. 
WITH 
Writ Petition (C) No. 379of1995 
(Under Article 32 of the Constitution of India.) 
Krishan Mahajan, Ms. MusharaffChoudhry, R.F. Nariman, P.H. Parekh 
and Sunil Dogra for the Appellants. 
' 
F 
Ashok Kumar Gupta for the Petitioners. 
S.B. Wad, S.V. Deshpande and A.S. Bhasme for the Respondents. 
The Judgments of the Court was delivered by 
G 
S.N. V ARIA VA, J. This Civil Appeal is against the Judgment dated 16/ 
17th February, 1989. The questions raised in this Appeal are:- (ai whether 
transfer of shares in a Co-operative Society is subject to levy of stamp duty 
under the Bombay Stamp Act, 1958 and (b) whether the State Legislature has 
legislative competence to levy stamp duty on transfer of shares. 
H 
Briefly stated the facts are as follows: 
I 
, 
HANUMAN VITAMIN FOOD PVT. LTD. v. STATE [S.N. VARIAVA, J.) 625 
The I st Appellant was a member of Dalamal Tower Promises Co- operative A 
Society Ltd. As such member the !st Appellant was the holder of 5 shares 
each bearing distinctive Nos. 711 to 715. As such member the I st Appellant 
was in occupation of office premises No. 904 on the 9th floor of the building 
known as Dalamal Tower situated at 211, Nariman Point, Bombay 400 021. By 
an Instrument dated 31st March, 1986 the I st Appellant transferred in favour 
of Appellants Nos. 2, 3, 4, 5 and 6 the said 5 shares for a consideration of B 
Rs. 9,46,900/-. The said Instrument of Transfer, inter alia, set out that the 
Dalamal Tower Premises Co-operative Society Ltd. was the owner of the 
building Dalamal Tower; that the !st Appellant was a member of the said 
society holding the said 5 shares; that one of the incident
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