LexVEENA HASMUKH JAIN AND ANR. versus STATE OF MAHARASHTRA AND ORS.
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A VEENA HASMUKH JAIN AND ANR. j.- v. STATE OF MAHARASHTRA AND ORS. JANUARY 28, 1999 B [S.P. BHARUCHA ANDS. RAJENDRA BABU, JJ.) Bombay Stamp Act, 1958-:-Section 2(g)-Schedule I, ATticle 25, Ex- planation I-Conveyance-Agreement to sell with delivery of possession, in c future, present or past amounts to conveyance and duty to be levied accord- ingly-Agreement for sale executed in tenns of Section 4 of the Maharashtra Ownership Flat Act, 1963-Sale of immovable property and handing over the possession within specific time without executing conveymtce-H.eld, docu- ment falls within scope of Explanation I of ATticle 25 and attracts duty as if conveyance and the levy of stamp duty is on instrument and not on any D transaction. The appellant executed agreement for sale of flat in terms of Section 4 of the Maharashtra Ownership Flats Act, 1963 and paid registration fee in addition to other charges. Thereafter, the Sub-Registrar through letter E informed the appellants that the agreement had been impounded. The Assistant Director of Town Planning Stamp and Valuation also informed the appellants that he had received reference from Collector under S- 32A of Bombay Stamp Act for determination of true market value of the property. F The appellants contended that, the document is only an agreement for sale since no right, title or interest passed on to the appellant so as to ~ attract duty as a conveyance or instrument; therefore, Section 32A of the Bombay Stamp Act had no application and appellant was not liable for [ duty under Entry 25 of Schedule I of the Act. Even before the disposal of G these objections, the appellant filed a Writ Petition. The High Court upholding the stand taken by the State in the matter of levy of duty dismissed the petition seeking the quashing of the provisions of the ·- .. Bombay Stamp Act relating to determination of market value and took the view that the agreement in question could be construed to be a conveyance falling under Section 2 (g) of the Act inasmuch as the right, title and H interest in the flat stands transferred in favour of the purchaser on 302 V.H.JAINv. STATE 303 - ~. payment of instalments. A In these appeals, challenging the order of the High Court the appel· lant contended that the conclusion reached by the High Court was not correct because agreement in question was executed in terms of Section 4 of the Maharashtra Ownership Fh1ts Act which cannot be construed to be B a conveyance, Under the Act duty can be levied only on instrument and not on any transaction and here the levy of duty is on a transaction which is handing over possession and not on the instrument. Dismissing the appeals, this Court c HELD : 1. The duty in respect of an agreement covered by Explana· tion I to Article 25 of Section I is leviable as if it is a conveyance. Under the Act duty can be levied only on instrument and not on any transaction. It there is an agreement to sell immovable property and possession of such property is transferred to the purchaser before the execution or at the time D of execution or subsequently without executing any conveyance in respect thereof, such an agreement to sell is deemed to be a "conveyance". In the event a conveyance Is executed in pursuance of such agreement sub· sequently, the stamp duty already paid and recovered on the agreement of sale which is deemed to be a conveyance shall be adjusted towards the total E duty leviable on the conveyance. The agreement entered into clearly provides for sale of an immovable property and there is also a specific time within which possession has to be delivered. Therefore, the document . in question clearly falls within the scope of the Explanation I and it is open to the Legislature to levy duty on different kinds of agreement in different rates. If the Legislature thought that it would be appropriate to collect F duty at the stage of agreement itself if it fulfils certain conditions instead of postponing the collection of such duty till the completion of the trans· action by execution of a conveyance deed inasmuch as all substantial conditions of a conveyance have already been fulfilled such as by passing of a consideration and delivery of possession of the property and what G 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 hav
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