IN THE HIGH COURT OF GUJARAT AT AHMEDABAD STAMP REFERENCE No. 1 of 2011 For Approval and Signature:
HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA HONOURABLE MR.JUSTICE A.L.DAVE HONOURABLE MR.JUSTICE V. M. SAHAI ========================================== =============== 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
Whether this case involves a substantial question of law as 4 to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================== =============== COSTAL GUJARAT POWER LIMITED - Applicant(s) Versus CHIEF CONTROLLING REVENUE AUTHORITY & 3 -
Respondent(s) ========================================== =============== Appearance :
MR MIHIR THAKORE, SR. ADVOCATE WITH MR NIRAV C THAKKAR for Petitioner MS MAITHILEE MEHTA, AGP for Respondent No.1 MR MIHIR JOSHI, SR. ADVOCATE WITH MR SANDEEP SINGHI FOR M/S SINGHI & CO for Respondent No.2 MR SN SOPARKAR AND MR RS SANJANWALA, SR. ADVOCATES WITH MR DILIP L KANOJIYA for Respondents No. 3 & 4 ========================================== ===============
CORAM : HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
And HONOURABLE MR.JUSTICE A.L.DAVE And HONOURABLE MR.JUSTICE V. M. SAHAI Date : 03/12/2012 CAV JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA)
1. This is a Reference under Section 54[1-A] of the Gujarat Stamp Act, 1958 (“Act”), which has been made by the Chief Controlling Revenue Authority, Gujarat State, Gandhinagar, in which this Bench has permitted the respondents no. 2 to 4 to appear as interveners vide order dated September 12, 2012 passed in OJ CA Nos. 227 of 2012 and 273 of 2012.
2. The brief facts of the case leading to the presentation of this Reference may be summed up thus:
2.1 The petitioner needed financial assistance for setting up an Ultra Mega Power Project in the area of Kutch-Bhuj and for that purpose, it secured assistance from few lenders. The lenders, thirteen in number, formed a consortium as a trust and executed a security trustee agreement inter se appointing one banker, viz. the State Bank of India, as a lead trustee, called, the security trustee. The duties of the security trustee are carved out in the said agreement of security trustees. The petitioner executed an Indenture of Mortgage for “Delayed After Assets Deed” with the State Bank of India, the said security trustee, mortgaging its assets as mentioned in the deed itself. The said document was presented for registration before the Sub Registrar, Mundra, by paying stamp duty of Rs. 4,21,000/-. The deed was registered at Sr. No. 3375 on January 6, 2009.
2.2 According to the Chief Controlling Revenue Authority [“CCRA”], the petitioner is liable to pay Rs. 54,62,000/- on the said deed and hence, demanded the balance amount of Rs. 50,41,000/- from the petitioner. The issue was forwarded for consideration of the Deputy Collector, Stamp Duty Valuation Organization, Bhuj-Kutch, under Section 33 of the Act.
2.3 The petitioner was given an opportunity of hearing and vide order dated April 3, 2010, the Deputy Collector held that the petitioner was liable to pay the deficit stamp-duty. The Revisional Application of the petitioner under Section 53[1] of the Act was dismissed vide order dated March 28, 2011. The petitioner thereafter made an application under Section 54[1-A] of the Act thereby giving rise to the present Reference Proceedings.
2.4 By way of this Reference, the opinion of this court has been sought on the following two questions:
[A] The deed of “Indenture the deed of mortgage for delayed after assets” which was registered on 6.1.2009 vide Regn. no. 3375 registered at office of Sub Registrar-Mundra [District Kachchh] by the applicant has paid Rs. 4,21,000/- whether as per provision of Sections 5, 3[a], 3[B] and the Schedule-1's Articles 6 and 36[b] the applicant is required to pay deficit stamp duty of Rs. 50,41,600/- or not?
[B] The deed of “Indenture the deed of mortgage for delayed after assets” which was registered on 6.1.2009 vide Regn. no. 3375, at the office of the Sub Registrar-Mundra [Dist.Kachchh] by the applicant is required to be considered as per Schedule- 1's Articles 6 and 36 as per simple mortgage and whether the applicant is required to pay Rs. 4,21,600/- or not?
3. Mr. Thakore, the learned Senior Advocate appearing on behalf of the applicant, has, at the outset, drawn our attention to the definition of Instrument provided in Section 2(l) of the Act which is quoted below:
“2[l] “instrument” includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit policy of insurance, transfer of share, debenture, proxy and receipt.”
3.1 Mr. Thakore then referred to Section 3 of the Act which is the charging Section that charges the instruments listed in the Act with the duty of the amount indicated in Schedule 1. Section 3 of the Act, according to Mr.Thakore, charges the various instruments by which any right or liability is or is purported to be created, transferred, limited, extended, extinguished or recorded to duty as specified in Schedule 1 to the Act.
3.2 The controversy in the present case, Mr. Thakore continues, centres around an instrument wherein a single document of mortgage is executed by a borrower in favour of one Security Trustee [who may or may not be a lender to the borrower], mortgaging its assets for securing the amount borrowed from several lenders.
3.3 Mr. Thakore draws out attention to the fact that in this case, there is a security trustee agreement amongst the lenders inter se appointing a security trustee and a mortgage deed of the borrower with the said security trustee. Mr. Thakor further points out that the security trustee agreement among the lenders inter se is already separately stamped to proper duty as required by law.
3.4 Mr. Thakore has then drawn our attention to the provisions of Section 5 of the Act which reads as under:-
“5. Instruments relating to several distinct matters :-
Any instrument comprising or relating to several distinct matters or distinct transactions shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters or distinct transactions would be chargeable under this Act.”
3.5 Mr. Thakore contends that by taking aid of Section 5 of the Act, the State cannot lawfully contend that the various loans taken by the borrower from different lending banks are required to be treated as distinct matters and/or distinct transactions and the Deed of mortgage should, therefore, be charged with the aggregate amount of duty that would be payable as if different mortgage deeds were executed for securing the different loans. Thus, though the mortgage is a separate transaction, as opposed to the loan transaction between the borrower and the lending banks, according to Mr. Thakore, the State has unreasonably contended that the single deed of mortgage should be construed as distinct matters/transactions and ought to be stamped accordingly.
3.6 The submission of the State Government, according to Mr.
Thakore, is per se fallacious and misconceived and is based upon misreading and misconstruction of the provisions of Section 5 of the Act. Mr. Thakore contended that the Section 5, if at all, applies to a situation where several distinct matters or distinct transactions are clubbed in one single instrument because the said Section presupposes existence of distinct matters or distinct transactions. The levy of stamp duty under Section 3 read with Section 2 [l] of the Act, according to Mr. Thakore, is leviable on the instrument and not on transactions and as such, Section 5 cannot be construed to empower the State to levy duty on the transaction de hors the instrument and in this case, it is indisputable that there is only one instrument creating mortgage in favour of the security Trustee and consequently, the relationship between the borrower and the security trustee is independent of the relationship between the borrower and the lending banks. The relationship between the borrower and the Security Trustee, according to Mr. Thakore, is recognized and controlled by the provisions of the Indian Trusts Act and thus, the Security Trustee holds the mortgage for and on behalf of various beneficiaries, but the said fact in itself does not fictionally create separate/ distinct matters/ transactions involving various lending banks. For the purposes of Section 3 read with Section 2[1] and Schedule 1, according to Mr. Thakore, the Deed of Mortgage does not involve any distinct matters/transactions. The Deed of Mortgage in itself is a single transaction creating security in favour of the security Trustee only and merely because such creation of mortgage is for the benefit of the various lending banks, Mr. Thakore contends, the provisions of Section 5 do not get attracted. If the interpretation given by the State is accepted, according to Mr. Thakore, it would lead to absurd situations. By way of illustration, Mr. Thakore submits that if a company issues debentures to numerous persons and creates a common security by way of mortgage through creation of single Debenture Trust Deed, such Debenture Trust Deed would evidence a single transaction of mortgage to secure the amounts borrowed from multiple debentures holders. According to Mr. Thakore, if the argument of the State is accepted, separate duty will have to be paid treating the single mortgage as multiple mortgages, which is not the purpose of Section 5 of the Act.
3.7 Mr. Thakore by referring to the decision of the Supreme Court in the case of in the case of The Commissioner of Income-tax, Patiala v. M/s. Shahzada Nand and Sons and others, reported in AIR 1966 SC 1342 contends that it is a settled legal position that Taxing Statutes have to be strictly construed and therefore, the language of Section 3 and Section 2[1] being plain and unambiguous, are incapable of the interpretation canvassed by the State with the aid of Section 5 of the Act. According to Mr. Thakore, the State is not entitled to recover any stamp-duty based upon its perception of the legislative intendment behind Section 5 of the Act and if upon the plain reading of the provisions of the Act, the instrument in question does not fall within the scope and purview of Section 5 of the Act, on the basis of the State's perception or understanding of the legislative intendment, no stamp-duty can be recovered as it is a settled legal position that the mere intendment cannot create liability to pay duty/tax and such liability would only flow out of clear and unambiguous provisions of the charging Section.
3.8 Lastly, Mr. Thakore submitted that it is also a well-settled principle of law that while interpreting a taxing statute capable of more than one interpretation, the interpretation in favour of the subject has to be found favour with as against the one favouring the Revenue. In support of such contention, Mr. Thkore relied upon the decision of the Supreme Court in the case of Board of Revenue U.P vs. Rai Saheb Sidhnath Mehrotra reported in AIR 1965 SC 1092. Mr. Thakore, therefore, prays for answering the Reference in favour of his client.
4. Ms. Mehta, the learned counsel appearing on behalf of the State-Respondent, has, however, opposed the aforesaid contentions of Mr. Thakore and at the same time, raised a preliminary objection as regards the maintainability of the present Reference by pointing out that the applicant has an alternative remedy available under Article 226 of the Constitution of India for challenging the appellate order.
4.1 On the merit of the Reference, Ms. Mehta submits that the present Reference has been made to this Court to interpret section 5 of the Act in the light of the present facts and circumstances. While interpreting section 5 and considering its scope, according to Ms. Mehta, it would be necessary to consider and interpret the phrase “Several Distinct Matters or Several Distinct Transaction” used in section 5 of the Act. Ms. Mehta contends that the scope and applicability of Section 5 and the scheme of the Act has been discussed in details by the Supreme Court in the case of Members, Board of Revenue, West Bengal vs. Arthur Paw Benthall reported in AIR 1956 SC 35 where the Reference was answered in favour of the Revenue. According to Ms. Mehta, the Supreme Court while considering the relevant provisions of the Act has laid down that Section 5 applies only when the instrument comprises more than one transaction and it is immaterial whether those transactions are of the same category or of different categories.
4.2 Ms. Mehta invited this Court to consider the meaning of the expression “Distinct Matter” which is given in Law Lexicon. According to Ms. Mehta, in its popular sense, the expression “Distinct Matters” would connote something different from “distinct categories”. Ms. Mehta submits that two transactions might be of the same description, but all the same, they might be distinct. Ms. Mehta, in this connection gives the following illustration:
If ‘A’ sells black-acre to ‘X’ and mortgages white–acre to ‘Y’, the transactions fall under different categories, and they are also distinct matters. But if ‘A’ mortgages Black-acre to ‘X’ and mortgages White- acre to ‘Y’, the two transactions fall under the same category, but they would certainly be distinct matters.
4.3 Ms. Mehta also requested us to consider the object of amending Section 5 by Gujarat Amendment Act, 2007 which, according to her, is to plug the loopholes and to make the provision of the Act easier and simple.
4.4 Ms. Mehta further contends that this court should also consider that the principle that fiscal statute should be strictly construed does not rule out the application of the principle of reasonable construction. According to her, the effect is to be given to the intention of any particular provision as apparent from the scheme. In this connection, Ms. Mehta referred to the decision of the Supreme Court in the case of Shree Sajjan Mills Ltd. v. Commissioner of Income -Tax M.P. Bhopal and another reported in AIR 1986 SC 484.
4.5 Ms. Mehta further contended that while interpreting a taxing statute, it would be necessary for this Court to also consider that a provision or statute, or words, or phrases are to be understood in that sense in which people dealing with the subject understands and relied upon the decision of the Supreme Court in the case of Real Optical Co. vs. Appellate commissioner of Customs and another reported in 2001 (9) SCC 391. Thus, according to Ms. Mehta, in the present case, the word “Instrument”, though defined in a technical sense in which the transaction is understood by the people dealing with it, it is the transaction that leads to executing an instrument, and therefore, there was an amendment by the Gujarat (Amendment) Act, 2007. Ms. Mehta contends that it would be necessary to consider the meaning and intention of a statute while interpreting the same and in support of such contention she relied upon the decision of the Supreme Court in the case of The Commissioner of Income-tax, Patiala, Appellant v. M/s.
Shahzada Nand and Sons and others reported in AIR 1966 SC 1342. Ms. Mehta, therefore, prays for answering the Reference in favour of the Revenue.
5. The learned counsel appearing on behalf of the Respondents no. 2 to 4 have virtually adopted the submission of Mr. Thakore and have opposed the contentions of Ms. Mehta.
6. Before answering the Reference, we first propose to deal with the preliminary objection raised by Ms. Mehta, the learned advocate appearing for the State-respondent, regarding maintainability of the present Reference.
7. According to Ms. Mehta, the order of CCRA can be challenged before this Court by preferring a writ-application under Article 226 of the Constitution of India and thus, the petitioner has an alternative remedy to challenge the order passed under Section 53 of the Act before this Court. Such being the position, according to Ms. Mehta, this Reference should not be entertained.
8. We are of the view that the aforesaid submission is devoid of any substance. The remedy of Reference being a statutory remedy provided under the Act, it is preposterous to suggest that inspite of existence of such a statutory provision, this Court should not give the benefit of a statutory remedy to a litigant on the ground of the existence of an alternative remedy under Article 226 of the Constitution of India. In our opinion, the position would have been different if instead of taking recourse to the provision of Reference prescribed by the Statute, the petitioner had approached this Court under Article 226 of the Constitution of India; in that circumstance, it could be successfully contended that in view of the existence of an alternative remedy of Reference provided under the Statute, this Court should not entertain the application under Article 226 of the Constitution of India.
9. Therefore, we are unable to accept the aforesaid preliminary objection raised by the State as regards the maintainability of the Reference in question.
10. We now propose to consider the points referred to this Court under Section 54[1-A] of the Act.
11. After hearing the learned counsel for the parties and after going through the provisions contained in the Act, it appears that according to Section 2[l], an “instrument” has been defined as including every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit policy of insurance, transfer of share, debenture, proxy and receipt.
12. Section 3 of the Act is the charging Section which charges the instruments with a duty of the amount specified in Schedule 1 of the Act. In the Schedule 1 to the Act, the description of the instruments and the proper duty chargeable thereon is given. Thus, on a conjoint reading of Section 3 and Schedule 1 of the Act, the amount of duty payable on the instrument specified in the said Schedule is to be paid. In other words, it is the instrument by which any right or liability is or purported to be created, transferred, limited, extended, extinguished or recorded, is chargeable to duty.
13. In the case before us, the controversy is as regards the instrument, wherein, a single document of mortgage is executed by a borrower in favour of one security trustee. It may not be out of place to mention here that for the purpose of creating a valid mortgage, it is not the necessity of law that it must be executed by a borrower in favour of a lender only. The definition of the mortgage as given in Section 58(a) of the Transfer of Property Act is quoted below:
“A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.”
13.1 Therefore, in accordance with the definition of “mortgage” as provided in the Transfer of Property Act, a security trustee of different lenders can be a party to a mortgage deed of the borrower. Similarly, a person other than the borrower can execute a deed of mortgage of his property to secure the debt of others. It is also not in dispute that a security trustee agreement among the lenders had been separately executed and appropriate amount of stamp-duty as required under the Act is also paid.
14. According to the learned advocate for the State, in view of Section 5 of the Act, the State is entitled to take into consideration the various transactions of loan entered into by the borrower with the different lending banks and those transactions are to be treated as “distinct matters” or “distinct transactions” and therefore, the Deed of Mortgage should be charged with the aggregate amount of duty that should be payable for separately securing those different transactions of loan. In other words, according to the State, although a mortgage in law is a separate distinct transaction as opposed to the loan transaction between the borrower and the lender, the single mortgage deed should be construed as “distinct matters” or “distinct transactions” and should be, accordingly, stamped.
15. We find substance in the contention of the learned counsel for the petitioner and the intervening parties that Section 5 applies in a situation where several “distinct matters” or “distinct transactions” are clubbed in one single instrument. It is rightly contended by Mr. Thakore, the learned Senior Advocate appearing on behalf of the petitioner, that the said Section presupposes the existence of “distinct matters” or “distinct transactions”. We cannot lose sight of the fact that the levy of stamp-duty under Section 3 read with Section 2[l] of the Act is on an instrument and not on the object behind the instrument, and therefore, the provision contained in Section 5 cannot be construed in a way so as to empower the State to levy duty on a transaction de hors the instrument. In the case before us, there being only one instrument creating a mortgage by a borrower in favour of a security trustee, such relation between the borrower and security trustee is independent of the relationship between the borrower and the lending banks. The relationship between the borrower and the security trustee is that of a mortgagor and the mortgagee. By taking aid of the provision of the Indian Trust Act and after creation of a different valid trust deed and making payment of stamp-duty thereon in accordance with law, the State Bank of India became the security trustee of the lending Banks and held the mortgage for and on behalf of those beneficiaries. Therefore, by the instrument in question, either fictionally or otherwise, no separate or distinct matters or transactions are created.
16. As the duty on mortgage in question is a single transaction creating security in favour of the security trustee who acquired such status by virtue of another Trust deed stamped in accordance with law, the fact that the mortgage is for the benefit of various lending banks as the beneficiaries under a different trust deed, does not attract the provisions of Section 5 of the Act. The rights of the mortgagee created under the mortgage have accrued only in favour of the security trustee and no other person.
17. It is settled legal position that the Taxing Statutes have to be strictly construed. In this connection, we may appropriately refer to the following observations of the Supreme Court in the case of The Commissioner of Income-tax, Patiala v. M/s. Shahzada Nand and Sons and others reported in AIR 1966 SC 1342 [pp 1347, paragraph 8]:
“Before we advert to the said arguments, it will be convenient to notice the relevant rules of construction. The classic statements of Rowlatt, J., in Cape Brandy Syndicate v. Inland Revenue Commrs., (1921) 1 KB 64 at p. 71, still holds the field. It reads:
"In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
To this may be added a rider: in a case of reasonable
doubt, the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. "The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the Court as to what is just or expedient." The expressed intention must guide the Court. Another rule of construction which is relevant to the present enquiry is expressed in the maxim, generalia specialibus non-derogant, which means that when there is a conflict between a general and a special provision, the latter shall prevail. The said principle has been stated in Craies on Statute Law, 5th Edn., at p. 205, thus :
"The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply."
But this rule of construction is not of universal application. It is subject to the condition that there is nothing in the general provision, expressed or implied, indicating an intention to the contrary; see Maxwell on Interpretation of Statutes, 11th Edn., at pp. 168-169. When the words of a section are clear but its scope is sought to be curtailed by construction, the approach suggested by Lord Coke in In re; Heydon's case, (1584) 3 Co. Rep. 7a, yields better results:
"To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope, and object of the whole Act; to consider, according to Lord Coke : 1. What was the law before the Act was passed; 2. What was the mischief or defect for which the law had not provided;
3. What remedy Parliament has appointed; and 4. The reason of the remedy."”
(Emphasis supplied by us).
18. Applying the above principles to the facts of the present case, we find that the language of Section 3 and Section 2[1] are plain and unambiguous and are incapable of the interpretation canvassed by the State with the aid of Section 5 of the Act. The right to recover tax/duty flows from the clear and unambiguous provisions of law. The State is not entitled to recover any stamp-duty based upon its perception of the legislative intendment behind Section 5 of the Act. If upon plain reading of the provisions of the Act, the instrument in question does not fall within the scope and purview of Section 5 of the Act, on the basis of the State's perception or understanding of the Legislative intendment, no stamp-duty can be recovered as it is settled legal position that the mere intendment cannot create liability to pay duty/tax and such liability would only flow out of clear and unambiguous provisions of the charging Section.
19. The reliance placed by the State on the decision of the Supreme Court in the case of The Member, Board of Revenue, Appellant v. Arthur Paul Benthall reported in AIR 1956 SC 35 is, in our opinion, also misconceived. In the said matter before the Supreme Court, a Power of Attorney whereby the donee of the power was jointly and severally conferred the power to act for in his individual capacity and also as Executor, Administrator, Trustee, Managing Agent, Liquidator and all other capacities. The provisions of Sections 3 to 6 of the Act were considered to determine whether the said Power of Attorney involved distinct matters as contemplated by Section 5 of the Act. The Supreme Court in paragraph 15 concluded that the instrument comprised distinct matters in respect of several capacities of the donee of the power. In the facts of the said case, Section 5 was held to be applicable. On the other hand, the instrument involved in the present case is a single Deed of Mortgage executed by the borrower in favour of the Trustee Bank in terms of the Transfer of Property Act. Thus, the applicant is the mortgagor and the S.B.I., in the capacity of a trustee, is the mortgagee. The instrument does not involve either “distinct matters” or “distinct transactions” so as to attract Section 5 of the Act.
20. We have already pointed out that that stamp-duty is payable on the instrument and not on the transactions. At this juncture, we may profitably refer to the decision of the Supreme Court in the case of Hindustan Lever & Anr. V. State of Maharashtra & Anr., reported in AIR 2004 SC 326. In the said decisions, it was held that in construction of the deeds under the fiscal statutes like the Stamp Act, the Courts will have to go on the basis of what is stated in the document and not to carry out an exercise so as to ascertain its intended effect. The following observations are relevant and quoted below: [pp 335] “21. In the case of the Commissioner of Inland Revenue v.
G. Anous and Co. and others (1891) Vol XXIII Queen's Bench Division 579, considered as to what interpretation has to be placed upon the expression "conveyance on sale" with regard to S. 70 of the Stamp Act, 1899 and held :-
"The term conveyance on sale includes every instrument and every decree or order of any Court or of any Commissioners, whereby any property upon the sale thereof is legally or equitably transferred to or vested in the purchaser or any other person on his behalf or by his direction."
22. The Court held that the thing, which is made liable to stamp duty is the "instrument." It is not a transaction of purchase and sale, which is struck at, it is the "instrument" whereby the purchase and sale are affected which is struck as. It is the "instrument" whereby any property upon the sale thereof is legally or equitably transferred and the taxation is confined only to the instrument whereby the property is transferred. If a contract of purchase or sale or a conveyance by way of purchase and sale, can be, or is, carried out without an instrument, the case would not fall within the section and no tax can be imposed. Taxation is confined to the instrument by which the property is transferred
legally and equitably transferred.
(Emphasis supplied).
21. Therefore, merely because the intended effect is achieved by executing one single document as against different sets of documents, such fact would not enable the State authority to justify its conclusion that the result achieved by executing one single document comes within the purview of Section 5 of the Act.
22. We find from the document in question that the State Bank of India is the only mortgagee under the instrument and no rights in the mortgaged property had been crated in favour of secured parties or any other persons. Similarly, the SBI alone has been empowered to enforce the mortgage against the applicant under the said instrument. As would appear from Clause 15.1 of the instrument, it is specifically stated that the security created under the Deed in favour of the security trustee shall become enforceable by the security trustee upon the occurrence of an event of default. Moreover, we have already pointed out that nowhere in the Transfer of Property Act, 1882, it is stipulated that the payment of money advanced or to be advanced by way of a loan is to be secured by the borrower in favour of the lender. It can be secured by a person on behalf of the borrower and in favour of a person at the choice of a lender and thus, a mortgage may be created to secure payment of money advanced by a person other than a mortgagee. Therefore, the stamp-duty being the required duty under the Act, it is assessed on the basis of the instrument and not on consideration of the contents of another instrument which is also duly stamped under the Act. As pointed out by the Supreme Court in the case of Hindustan Lever and Anr. [supra], we find no substance in the contention of the learned advocate for the State that duty is to be paid as if separate mortgage deeds have been created in favour of all the lending Banks.
23. We also do not find any substance in the contention of Ms.
Mehta that by taking aid of the Circular of the Government of Gujarat and the statement of objects and reasons in respect of Section 5 of the Act, we should interpret the above Section which would deviate from the provisions of the Act itself including Section 5. In construing a taxing statute, one is to look at what is clearly stated and there is no room for ascertaining the intendment. It is also settled law that there is no equity in the tax and there is no presumption as to tax and nothing is to be read and nothing is to be implied. In this connection, we may profitably refer to the following observation of the Supreme Court in the case of State of West Bengal v. Kesoram Industries Ltd. and Ors., reported in AIR 2005 SC 1646 [pp 1693] :
“111. The judicial opinion of binding authority flowing from several pronouncements of this Court has settled these principles: (i) in interpreting a taxing statute, equitable considerations are entirely out of place. Taxing statutes cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any deficiency; (ii) before taxing any person it must be shown that he falls within the ambit of the charging section by clear words used in the Section; and (iii) if the words are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject. There is nothing unjust in the tax-payer escaping if the letter of the law fails to catch him on account of Legislature's failure to express itself clearly. (See, Justice G.P. Singh, ibid, pp.638-639).”
24. We, now propose to deal with the other two decisions cited by Ms.
Mehta.
24.1 In the case of Sree Sajjan Mills Ltd (supra), while construing the provisions contained in Section 40A of the Income Tax Act, 1961, the Supreme Court held that where the intention of the legislature in enacting the provision in question was to put an embargo on the deduction, the interpretation suggested by the assessee defeated that purpose and in that context held that the principle that fiscal statutes should be strictly construed does not rule out the application of the principles of reasonable construction to give effect to the purpose or intention of any particular provision as apparent from the scheme of the Act, with the assistance of such external aids as are permissible under the law. In the case before us, the conjoint effect of the clear language of the definition of instrument, the charging section and the schedule 1 leaves no doubt about the intention of the legislature about the scope of Section 5 of the Act and thus, there is no scope of taking any external aid so long as there is no amendment of the charging section and the definition of the instrument. We, thus, find that the said decision has no application to the facts of the present case.
24.2 In the case of Real Optical Co. (supra), the Supreme Court held that it is a settled position of law that in interpreting items in statutes like the Excise Acts or the Sales Tax Acts, resort should be had not to the scientific or technical meaning of the terms or expres- sions used but to how the product is identified by the class or section of people dealing with or using the product. However, if any term or expression has been defined in the enactment then it must be under- stood in the sense in which it is so defined. It is also common experi- ence that the identity of an article is associated with its primary func- tion inasmuch as a customer buys it to perform a specific function from it.
25. We fail to appreciate how the principles laid down in that case can be of any assistance to the State in this case. In the case before us, no body is disputing that the instrument in question is a mortgage deed and that according to the provisions of the Act the same should be charged in accordance with the schedule 1. Thus, by no stretch of imagination, we can treat the said mortgage deed as a combination of thirteen separate mortgage deeds executed by the thirteen lenders by taking aid of the above principles. We, therefore, find that those decisions are of no help to the State.
26. On consideration of the entire materials on record, we, thus, an- swer the Reference as follows:
Point - [A] No Point- [B] Yes
27. The Reference is answered accordingly.
[BHASKAR BHATTACHARHA, CJ] [A.L. DAVE, J.] [V.M. SAHAI, J.] pirzada/-