Harish Tea Traders Private Limited v. NCT of Delhi & Anr

Delhi High Court · 31 Aug 2023 · 2023:DHC:6485

Subramonium Prasad

W.P.(C) 14733/2021

2023:DHC:6485

civil petition_dismissed Significant

AI Summary

The Delhi High Court held that refund of stamp duty on unused but unspoiled stamp paper is barred if the refund application is made beyond six months under Section 54 of the Indian Stamp Act, 1899, dismissing the petitioner’s claim.

Full Text

W.P.(C) 14733/2021
HIGH COURT OF DELHI
Date of Decision: 31st AUGUST, 2023 IN THE MATTER OF:

W.P.(C) 14733/2021
HARISH TEA TRADERS PRIVATE LIMITED ..... Petitioner
Through: Mr. Varun Sharma, Advocate

VERSUS

NCT OF DELHI & ANR ...... Respondents
Through: Mr. Anupam Srivastava, ASC for GNCTD with Mr. Vasuh Misra, Advocate for R-1 & 2

CORAM:

HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD

JUDGMENT

1. The Petitioner has approached this Court for a direction to the Collector of Stamp, 5, Sham Nath Marg, Delhi-110054 to refund the Stamp Duty amount in respect of e-Stamp Certificate No. IN-DL41861804292093N amounting to Rs.4,80,000/- along with interest.

2. The facts of the case reveals that the Petitioner entered into an Agreement to Sell in the year 2015 for purchase of the land admeasuring 5 Bighas 18 Biswas in Khasra Nos.230 (5-18) located in the Revenue Estate of Village Surhera, Tehsil Najafgarh, Delhi. The stamp papers were purchased for a consideration which was fixed at Rs.80,00,000/-, on which the Petitioner was to pay a sum of Rs.4,80,000/- as Stamp Duty.

3. Upon payment of requisite amount, e-Stamp Certificate No. IN- DL41861804292093N was issued to the Petitioner on 12.08.2015. It is stated that the Petitioner entered into a Memorandum of Understanding/Consent Letter dated 05.02.2016 agreeing for extension to obtain NOC from the competent authority by a period of three months. Since the deal could not get through, a Deed of Cancellation was executed between the parties on 06.05.2016.

4. Since the deal could not be materialised, the Petitioner decided to surrender the e-Stamp Certificate No. IN-DL41861804292093N on 09.05.2016 to the Collector of Stamp with a request to refund the amount after deducting the penalty charges. Since no action was taken on the request of the Petitioner, the Petitioner approached this Court by filing the instant writ petition.

5. Notice was issued on 21.12.2021 in the matter. Counter affidavit has been filed by Respondent No.2 stating that the application for refund has been filed beyond the time prescribed under Section 54 of the Indian Stamp Act, 1899 and, therefore, the application for refund cannot be entertained.

6. Even though the application for refund has not been adjudicated by the Collector of Stamp, in view of the counter affidavit, this Court deems it expedient to proceed ahead and decide the writ petition on merits rather than remanding the matter back to the Collector of Stamps for taking a decision on the application for refund.

7. Learned Counsel for the Petitioner places reliance on Section 49 and 50 of the Indian Stamp Act, 1899 (hereinafter referred to as the ‘Stamp Act’). He states that Section 49 of the Stamp Act provides for allowance for spoiled stamps. He states that if the Collector of Stamp on an application made within time prescribed under Section 50 of the Stamp Act, is satisfied on facts, he can make allowances for impressed stamps spoiled in cases which are mentioned in Section 49 of the Stamp Act and relief can be granted under Section 50 of the Stamp Act on such application.

8. Section 49 and 50 of the Stamp Act on which reliance is placed by the Petitioner reads as under:-

“49. Allowance for spoiled stamps. — Subject to such

rules as may be made by the State Government as to

the evidence to be required, or the enquiry to be made,

the Collector may, on application made within the

period prescribed in section 50, and if he is satisfied as

to the facts, make allowance for impressed stamps

spoiled in the cases herein after mentioned, namely: —

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(a) the stamp on any paper inadvertently and undesignedly spoiled, obliterated or by error in writing or any other means rendered unfit for the purpose intended before any instrument written thereon is executed by any person:

(b) the stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto:

(c) in the case of bills of exchange payable otherwise than on demand or promissory notes— (1) the stamp on any such bill of exchange signed by or on behalf of the drawer which has not been accepted or made use of in any manner whatever or delivered out of his hands for any purpose other than by way of tender for acceptance: provided that the paper on which any such stamp is impressed, does not bear any signature intended as or for the acceptance of any bill of exchange to be afterwards written thereon: (2) the stamp on any promissory note signed by or on behalf of the maker which has not been made use of in any manner whatever or delivered out of his hands: (3) the stamp used or intended to be used for any such bill of exchange or promissory note signed by, or on behalf of, the drawer thereof, but which from any

omission or error has been spoiled or rendered useless, although the same, being a bill of exchange may have been presented for acceptance or accepted or endorsed, or, being a promissory note, may have been delivered to the payee: provided that another completed and duly stamped bill of exchange or promissory note is produced identical in every particular, except in the correction of such omission or error as aforesaid, with the spoiled bill, or note;

(d) the stamp used for an instrument executed by any party thereto which—

(1) has been afterwards found to be absolutely void in law from the beginning: (2) has been afterwards found unfit, by reason of any error or mistake therein, for the purpose originally intended: (3) by reason of the death of any person by whom it is necessary that it should be executed, without having executed the same, or of the refusal of any such person to execute the same, cannot be completed so as to effect the intended transaction in the form proposed: (4) for want of the execution thereof by some material party, and his inability or refusal to sign the same, is in fact incomplete and insufficient for the purpose for which it was intended: (5) by reason of the refusal of any person to act under the same, or to advance any money intended to be thereby secured, or by the refusal or non-acceptance of any office thereby granted, totally fails of the intended purpose: (6) becomes useless in consequence of the transaction intended to be thereby effected being effected by some other instrument between the same parties and bearing a stamp of not less value: (7) is deficient in value and the transaction intended to be thereby effected has been effected by some other instrument between the same parties and bearing a stamp of not less value: (8) is inadvertently and undesignedly spoiled, and in lieu whereof another instrument made between the same parties and for the same purpose is executed and duly stamped: Provided that, in the case of an executed instrument, no legal proceeding has been commenced in which the instrument could or would have been given or offered in evidence and that the instrument is given up to be cancelled. Explanation.—The certificate of the Collector under section 32 that the full duty with which an instrument is chargeable, has been paid is an impressed stamp within the meaning of this section.

50. Application for relief under section 49 when to be made.—The application for relief under section 49 shall be made within the following periods, that is to say, — (1) in the cases mentioned in clause (d) (5), within two months of the date of the instrument: (2) in the case of a stamped paper on which no instrument has been executed by any of the parties thereto, within six months after the stamp has been spoiled: (3) in the case of a stamped paper in which an instrument has been executed by any of the parties thereto, within six months after the date of the instrument, or, if it is not dated, within six months after the execution thereof by the person by whom it was first or alone executed: Provided that, — (a) when the spoiled instrument has been for sufficient reasons sent out of India the application may be made within six months after it has been received back in India; (b) when, from unavoidable circumstances, any instrument for which another instrument has been substituted, cannot be given up to be cancelled within the aforesaid period, the application may be made within six months after the date of execution of the substituted instrument.” (emphasis supplied)

9. Learned Counsel for the Petitioner states that in the present case the stamp paper was not used because the purpose for which the stamp paper was purchased, which was for execution of Sale Deed could not be achieved since the parties decided not to proceed forward with the Memorandum of Understanding wherein they had decided enter into a sale deed.

10. The contention of the learned Counsel for the Petitioner is that the present case is covered under Section 50(2) of the Indian Stamps Act which provides for refund of the stamp duty in the case of a stamped paper on which no instrument has been executed by any of the parties thereto, within six months after the stamp has been spoiled.

11. Learned Counsel for the Petitioner also places reliance on a judgment dated 26.09.2014 passed by the Division Bench of this Court in National Investor Forum Regd. V. Golden Forests India Ltd., W.P.(C) 1399/2010, wherein this Court permitted refund of the stamp duty in a case where the sale transaction could not be finalised. The Division Bench of this Court had placed reliance on Section 50(2) of the Stamp Act for directing such a refund.

12. Per contra, learned Counsel for the Respondents places reliance on Section 54 of the Stamps Act, which reads as under:-

“54. Allowance for stamps not required for use. —

When any person is possessed of a stamp or stamps

which have not been spoiled or rendered unfit or

useless for the purpose intended, but for which he has

no immediate use, the Collector shall repay to such

person the value of such stamp or stamps in money,

deducting [ten naye paise] for each rupee or portion

of a rupee, upon such person delivering up the same to

be cancelled, and proving to the Collector's

satisfaction—

(a) that such stamp or stamps were purchased by such person with a bona fide intention to use them; and

(b) that he has paid the full price thereof; and

(c) that they were so purchased within the period of six months next preceding the date on which they were so delivered: Provided that, where the person is a licensed vendor of stamps, the Collector may, if he thinks fit, make the repayment of the sum actually paid by the vendor without any such deduction as aforesaid.”

13. He states that since the application for refund is not made within six months, the stamp cannot be refunded under Section 54(c) of the Stamps Act.

14. Heard learned Counsel for the parties and perused the material on record.

15. A perusal of Section 49 and 50 of the Stamps Act indicates that Section 49 and 50 of the Stamps Act is applicable when the stamp paper is spoiled whereas Section 54 is applicable when the stamp paper is not used, i.e., where the stamp paper is not rendered unfit or useless for the purpose intended. Sections 49, 50 & 54 of the Stamp Act, therefore, apply in entirely different fields.

16. Section 49 of the Stamp Act provides that when an application is made to a Collector within the time prescribed under Section 50 of the Act that the stamp paper has been spoiled because of reasons mentioned in Section 49 then he can make allowances for such stamp paper. Section 50 provides for relief for applications made under Section 49 of the Stamp Act.

17. The facts of the present case indicate that stamp paper was purchased for the purpose of executing a Sale Deed. The parties decided not to execute the sale deed and entered into a Deed of Cancellation. Section 49 and 50 of the Stamp Act, therefore, cannot apply to the present case for the reason that the stamp has not been spoiled. Section 50 of the Stamp Act applies only in cases where the relief under Section 49 of the Stamp Act is being claimed. Section 50 only gives the timeline for applications made under Section 49 of the Stamp Act.

18. Section 49 and 50 of the Stamp Act, therefore, does not apply in cases where stamp paper is not spoiled and the person who has purchased the stamp paper has no immediate use.

19. The present case is not covered by any of the stipulations mentioned in Section 49 of the Stamp Act, and, therefore, cannot come within the ambit of Section 50 of the Stamp Act as the time limit prescribed in Section 50 of the Stamp Act applies only for applications for relief under Section 49 of the Stamp Act.

20. The present case, therefore, falls squarely within Section 54 of the Stamps Act. The Apex Court in Thiruvengadam Pillai v. Navaneethammal & Anr., (2008) 4 SCC 530, has categorically stated that a stamp paper which has been purchased six months prior to the date it is put to use can be used but it cannot be refunded. The Apex Court in the said case has observed as under:- “11... We will deal with the second contention first. The Stamp Act, 1899 nowhere prescribes any expiry date for use of a stamp paper. Section 54 merely provides that a person possessing a stamp paper for which he has no immediate use (which is not spoiled or rendered unfit or useless), can seek refund of the value thereof by surrendering such stamp paper to the Collector provided it was purchased within the period of six months next preceding the date on which it was so surrendered. The stipulation of the period of six months prescribed in Section 54 is only for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper...” (emphasis supplied)

21. A perusal of the Division Bench shows that the Division Bench was dealing with a case under Section 49 and 50 of the Stamp Act and did not consider the applicability of Section 54 of the Stamp Act with which this Court is directly concerned.

22. A perusal of the above shows that Section 54 of the Stamp Act provides for allowance when a person who is in possession of the stamp paper which is not spoiled or rendered unfit or useless for the purpose intended and which does not have any immediate use thereof makes an application to the Collector for refund provided that the stamp was purchased within a period of six months next preceding the date on which the stamp was delivered to the Collector for cancellation. Section 54 of the Stamp Act, therefore, clearly prescribes the time limit in such cases within which a stamp is purchased and must be delivered to the Collector for cancellation.

23. If the contention of the Petitioner is accepted that Section 50(2) of the Stamps Act would be applicable even in the case where stamp paper has not been used then the word "spoiled" in Section 50(2) of the Act will have no meaning and will be rendered obsolete. The stamp papers cannot be sold to a person if the purpose of purchase of the stamp papers is not mentioned. Annexure P-2 of the Writ Petition is a copy of the e-stamp paper. There is no averment in the Writ Petition that the e-stamp paper has been used. In the present case, as mentioned above, the stamp paper has not been used for the purpose for which it has been purchased and has not been spoiled which is the requirement of Sections 49 & 50 of the Stamp Act. The present case would, therefore, come within the four corners of Section 54 of the Stamps Act as the stamp paper purchased by the Petitioner was not put to use at all and was lying with the Petitioner without any immediate use.

24. The petition is dismissed along with pending application(s), if any.

SUBRAMONIUM PRASAD, J AUGUST 31, 2023

Harish Tea Traders Private Limited v. NCT of Delhi & Anr

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