R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6th DAY OF AUGUST, 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION NO.12376/2014 (GM-ST/RN) c/w WRIT PETITION NOs.12377/2014 & 12379/2014 In W.P. No.12376/2014 BETWEEN:
1. Sri. Ansari Mohammed Laiquddin Aged about 62 years, S/o Mr. Ansari Mohammed Akbruddin 2. Mrs. Sabah Laiq Ansari Aged about 59 years, W/o Sri. Ansari Mohammed Laiquddin.
Both are residing at No.401, A Wing, Blue Bird, Sherly Rajan Road, Opp. Rizvi College, Bandra (West), Mumbai – 400 050.
Represented by their General Power of Attorney Holder Mr. John Robert Colaco, Aged about 55 years, S/o late F.B.L. Colaco, R/at Villa No.14, Hollywood Town, Sadahalli Post, Devanahalli Taluk, Bengaluru – 560 110. ... Petitioners (By Sri. Manjunath Prasad H.N., Advocate) AND:
1. State of Karnataka Represented by its Inspector General of Registration and Commissioner of Stamps, No.720, Shimsha Bhavan, Jayanagar, Bengaluru – 560 082.
2. Sub-Registrar Devanahalli Taluk, Devanahalli, Bengaluru Rural District – 562 110.
3. Sri. Agnelo Francisco Cabral Aged about 67 years, S/o late Caetan Xavier Cabral 4. Smt. Terezinha Diniz Cabral Aged about 52 years, W/o Sri. Agnelo Francisco Cabral 5. Sri. Trevor Savio Cabral Aged about 27 years, S/o Sri. Agnelo Francisco Cabral All are R/at P.O. Box No.732, Abudhabi, United Arab Emirates.
Nos.3 and 5 duly Represented by GPA Holder Smt. Terezinha Diniz Cabral, P.O. Box No.732, Abudhabi.
United Arab Emirates. … Respondents (By Sri. N. Dinesh Rao, AAG a/w Sri. S. Chandrashekaraiah, HCGP for R1 & R2;
V/o dated 02.04.2014 notice to R3 to R5 are dispensed with) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the endorsement dated 02.01.2012 at Annexure-D issued by respondent No.1 and to direct the respondents to refund the excess stamp duty of Rs.3,89,160/- (Rupees Three Lakhs Eighty Nine Thousand One Hundred and Sixty only) collected by the respondents in respect of GPA dated 25.03.2011 at Annexure-A.
In W.P. No.12377/2014 BETWEEN:
1. Smt. Juliana Pereria W/o Mr. Cyril Jacob Clement Pereira, Aged about 63 years, 2. Mr. Cyril Jacob Clement Pereria S/o late Victor Jerome Pereira, Aged about 72 years, Presently both residing at:
Adama-Opco, P.O.Box No.303, Abudhabi, UAE.
Represented by their General Power of Attorney Holder Mr. John Robert Colaco, Aged about 55 years, S/o late F.B.L. Colaco, R/at Villa No.14, Hollywood Town, Sadahalli Post, Devanahalli Taluk, Bengaluru – 560 110. ... Petitioners (By Sri. Manjunath Prasad H.N., Advocate) AND:
1. State of Karnataka Represented by its Inspector General of Registration and Commissioner of Stamps, No.720, Shimsha Bhavan, Jayanagar, Bengaluru – 560 082.
2. Sub-Registrar Devanahalli Taluk, Devanahalli, Bengaluru Rural District.
3. Sri. Cedric Francis Pinto S/o Sri. Lawrence Pinto, Aged about 47 years, 4. Smt. Lunina Jacintha Pinto W/o Cedric Francis Pinto, Aged about 41 years, Both are R/at P.O. No.98174, Dubai, U.A.E.
Duly Represented by their GPA Holder Sri. Wesley Pius Pinto S/o Lawrence Pinto, Residing at House No.877, Hosamane, Chikmagalur – 577 101. … Respondents (By Sri. N. Dinesh Rao, AAG a/w Sri. S. Chandrashekaraiah, HCGP for R1 & R2;
V/o dated 04.08.2014 notice to R3 and R4 are dispensed with) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the endorsement dated 02.01.2012 at Annexure-D issued by respondent No.1 and to direct the respondents to refund the excess stamp duty of Rs.3,24,000/- (Rupees Three Lakhs Twenty Four Thousand only) collected by the respondents in respect of GPA dated 28.02.2011 at Annexure-A.
In W.P. No.12379/2014 BETWEEN:
1. Mrs. Deborah D. Gambhir Aged about 42 years, 2. Sri. Percivial Patrick Sequeira, Aged about 42 years, Both residing at Flat No.401, 4th Floor, (New Building), Sweet Home Park, Behind Mugaon Church, Vasai – 401 201, Thane District.
Represented by their General Power of Attorney Holder Mr. John Robert Colaco, Aged about 55 years, S/o late F.B.L. Colaco, R/at Villa No.14, Hollywood Town, Sadahalli Post, Devanahalli Taluk, Bengaluru – 560 110. ... Petitioners (By Sri. Manjunath Prasad H.N., Advocate) AND:
1. State of Karnataka Represented by its Inspector General of Registration and Commissioner of Stamps, No.720, Shimsha Bhavan, Jayanagar, Bengaluru – 560 082.
2. Sub-Registrar Devanahalli Taluk, Devanahalli, Bengaluru Rural District – 562 110.
3. Mr. Kenneth John Sequeira Aged about 31 years, S/o Mr. John Louis Sequeira, 4. Mrs. Wilma Sequeira Aged about 30 years, W/o Mr. Kenneth Sequeira, Respondent Nos.3 and 4 are R/at:
No.201, Sheikh Mohd. Building, Karama, P.O. Box No.27181, Dubai, U.A.E. … Respondents (By Sri. N. Dinesh Rao, AAG a/w Sri. S. Chandrashekaraiah, HCGP for R1 & R2;
V/o dated 04.08.2014 notice to R3 and R4 are dispensed with) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the endorsement dated 02.01.2012 at Annexure-D issued by respondent No.1 and to direct the respondents to refund the excess stamp duty of Rs.2,04,120/- (Rupees Two Lakh Four Thousand One Hundred and Twenty only) collected by the respondents in respect of GPA dated 30.09.2010 at Annexure-A.
These writ petitions coming on for Preliminary Hearing in ‘B’ Group this day, the Court made the following:
ORDER All these writ petitions are filed by the petitioners for a writ of certiorari to quash the endorsements bearing No.STP-199/11-12, STP-194/11-12 and STP-196/11-12 dated 02.01.2012 at Annexure-D in all the writ petitions issued by respondent No.1-Inspector General of Registration and Commissioner of Stamps, Bengaluru and a writ of mandamus directing the respondents to refund the excess stamp duty of Rs.3,89,160/- in respect of GPA dated 25.03.2011, Rs.3,24,000/- in respect of GPA dated 28.02.2011 and Rs.2,04,120/- in respect of GPA dated 30.09.2010 at Annexure-A in all the writ petitions.
I. Facts of the case:
2. It is the case of the petitioners that they are the owners of the property residentially converted vacant land bearing No.85, having Khatha No.268/123/85 measuring 7206 Sq. Ft. situated at Hollywood Town, Hathore Village, Kundana Hobli, Devanahalli Taluk, Bengaluru Rural District having purchased under a registered Sale Deed dated 11.09.1996, property bearing Katha No.203/86/87 measuring 6000 Sq. Ft. situated at Swiss Town, Illathore Village, Devanahalli Taluk, Bengaluru Rural District having purchased under a registered Sale Deed dated 01.10.2004 and property bearing Katha No.146/358 measuring 3780 Sq. Ft. situated at Swiss Town, Illathore Village, Devanahalli Taluk, Bengaluru Rural District having purchased under a registered Sale Deed dated 15.07.2003.
3. It is further case of the petitioners that they were intending to sell their properties and accordingly, appointed Mr. John Robert Colaco as their Power of Attorney Holder under a registered General Power of Attorney dated 25.03.2011, 28.02.2011 and 30.09.2010, authorizing the attorney to sell the property as the petitioners were not in a position to be personally present to execute the sale deed on account of their other pre- occupation. At the time of execution of the registered GPA before respondent No.2, petitioners have paid stamp duty of Rs.3,89,160/-, Rs.3,24,000/- and Rs.2,04,120/-
respectively. It is further case of the petitioners that Power of Attorney executed (stated supra), was without consideration and it did not create any right, interest in or over the property in favour of the agent and it is only an authorization/authority to sell the property. On the basis of the said Power of Attorney executed, the Power of Attorney Holder inturn has executed absolute Sale Deed in favour of Mr. Agnelo Francisco Cabral, Mrs. Terezinha Diniz Cabal and Mr. Trevor Savio Cabral in W.P. No.12376/2014, Mr. Cedric Francis Pinto and Mrs. Lumina Jacintha Pinto in W.P. No.12377/2014 and Mr. Kenneth John Sequeira and Mrs. Wilma Sequeira in W.P. No.12379/2014 as per Annexure-B in all the writ petitions for valuable consideration and the stamp duty was paid on the respective sale deeds.
4. It is further case of the petitioners that respondent No.2 without denoting or reducing the stamp duty, already paid on the GPAs, in respect of the same property has not refunded the excess stamp duty collected from the petitioners. Therefore, the attorney holder in all the writ petitions made representations to respondent No.1 on 15.12.2011 requesting for refund of excess stamp duty paid on the GPAs, which was not denoted on the sale deeds. The respondent No.1 considering the representations made by the petitioners, by the impugned endorsements dated 02.01.2012 at Annexure-D in all the writ petitions rejected the representations on the ground that the parties to the GPAs and parties to the Sale Deeds are different and in view of proviso to Article 41(eb) of the Karnataka Stamp Act, 1957 (for short ‘the Act,) the parties to the GPAs and parties to the Sale Deeds should be same in respect of same properties. Hence, the present writ petitions are filed.
II. Statement of Objections by the State:
5. The State filed statement of objections justifying the action of respondent No.1 and contended that on the date of execution of the registered GPAs, as per Article 41 (eb) of the Schedule to the Karnataka Stamp Act 1957, stamp duty at the conveyance rate (i.e., Article 20 (1) of the Act) was payable on the said GPA. As per the amended proviso to Article 41(eb) of the Schedule to the Act w.e.f. 01.04.2011, stamp duty paid on the GPAs is adjustable on the sale deed executed, if the parties and the property contained in the GPAs and the sale deeds are one and the same. The parties to the GPAs and sale deeds are entirely different. Therefore, the parties to the GPAs and the sale Deeds are not one and the same. It is further contended that the sale deeds came to be executed subsequent to the amendment to the provisions of Article 41 (eb) of the Schedule to the Act i.e., after 01.04.2011. Hence, stamp duty paid on the GPAs is not adjustable on the sale deeds, because of the fact that the parties comprised in the GPAs and sale deeds are not one and the same, which is pre-requisite as per existing proviso to Article 41 (eb) of the Schedule to the Stamp Act. It is further contended that the amendment of the Act was made in accordance with law and nothing is irrational, illogical and contrary to law and it does not amounts to double taxation as contended by the petitioners. Therefore, sought to dismiss the writ petitions.
6. I have heard the learned counsel for the parties to the lis.
III. Arguments advanced by the learned counsel for the petitioners 7. Sri. Manjunath Prasad H.N., learned counsel appearing for the petitioners in all the writ petitions contended with vehemence that the impugned endorsements issued by respondent No.1 dated 02.01.2012 Annexure-D in all the writ petitions are erroneous and contrary to the materials on record and are liable to be quashed. He further contended that as per Article 41(eb) of the Schedule to the Act, petitioners have paid stamp duty on the registered GPAs executed in favour of their agent, who is outsider of the family member and same was treated as conveyance under Article 20(1) of the Schedule to the Act. Article 20(1) of the Schedule to the Act stipulates conveyance as that on the market value of the property which is the subject matter of the conveyance. The proviso as on the date of agreement was that the duty paid on such instrument is adjustable towards the duty payable on such instrument of sale or transfer executed subsequently in favour of either the attorney holder or any other person. Therefore, the State Government, in all the writ petitions, should have refunded the excess stamp duty in view of the proviso to Article 41 (eb) stated supra.
8. He would further contend that the executant of power of attorney shall sell the property only to the attorney then only, the stamp duty will be adjusted. This amendment will make General Power of Attorney redundant and the authority given by the principal to the agent is meaningless. He would contend that Article 265 of the Constitution of India prohibits levy of the tax except authority of law. The impugned amendment intends to restrict adjustment of stamp duty already paid on GPAs only, if the sale or transfer takes place between the same parties in respect of the same properties. There is absolutely no rational behind the amendment. Duty is always paid on the nature of transaction and it has nothing to do with the persons. Therefore, he would further contend that the impugned endorsement issued by the State Government is contrary to the materials on record. He would further contend that when the original stamp duty is paid on the registered GPA as conveyance, question of paying stamp duty again would not arise. Therefore, respondent No.1-State Authority is not justified in rejecting the claim of the petitioners for refund of the stamp duty excess paid. Therefore, he sought to quash the impugned orders at Annexure-D in all the writ petitions.
9. In support of his contentions, learned counsel for the petitioners has relied upon the following judgments:
“(1) In the case of Sharma Transport Vs. Government of A.P. and Others reported in (2002) 2 SCC 188 at para Nos.22, 23 and 24.
(2) In the case of Dalmiya Cement Venture Limited Vs. The State of Karnataka and Others reported in ILR 2017 KAR 4989 at para No.9 and sought to allow the writ petitions.
IV. Arguments advanced by the learned Additional Advocate General:
10. Per contra, Sri. N. Dinesh Rao, the learned Additional Advocate General, while justifying the impugned action of the respondents as per Annexure-D in all the writ petitions, contended that the petitioners in all the writ petitions have not invoked the provisions of Section 16 of the Stamp Act, by producing both the instruments and the petitioners have not paid the stamp duty on the sale deed executed. It is only the purchaser, who purchased the property shall pay the stamp duty. Therefore, the petitioners are not entitled for the relief sought for before this Court. He further contended that the GPAs and Sale deeds should be between the same parties in respect of same properties in view of proviso of Article 41 (eb) of the Schedule to the Act after amendment i.e., on 01.04.2011. Admittedly, the parties to the GPAs and parties to the sale deeds are entirely different. He would further contend that representations for refund were made by the Power of Attorney Holder and not by the petitioners. Therefore, he sought to dismiss the writ petitions.
V. Consideration:
11. I have given my anxious consideration to the arguments of the learned counsel for the parties and perused the material on record carefully.
12. Having heard the learned counsel for the parties, it is not in dispute that all the petitioners are the owners of the properties morefully mentioned in the writ petitions, who are intending to sell their properties and appointed Mr. John Robert Colaco as their Power of Attorney by executing different registered GPAs i.e., on 25.03.2011, 28.02.2011 and 30.09.2010. According to the pleadings of the writ petitions, power of attorney holder is not a family member of the petitioners. Article 41 (eb) of the Schedule to the Stamp Act clearly indicates that when GPA given to person other than the father, mother, wife or husband, sons, daughters, brothers, sisters in relation to the executant authorizing such person to sell immovable properties situated in the Karnataka State, the stamp duty as a conveyance under Article 20 (1) on the market value of the property which is the subject matter of the power of attorney has to be paid. It is undisputed fact that in all the writ petitions the GPA Holder was not a family member of the petitioners. Therefore, when they authorized such person to sell the immovable properties, the provisions of Article 20 (1) of the Schedule to the Stamp Act attracts as conveyance. It is also not in dispute that on the basis of the said GPAs, the GPA holder executed sale deeds in favour of different persons on 16.05.2011, 04.06.2011 and 12.07.2011 i.e., after amendment of the proviso to Article 41 (eb) of the Schedule to the Stamp Act w.e.f. 01.04.2011.
13. In view of the provisions of Article 41 (eb) of the Schedule to the Stamp Act, when any person executed GPA authorizing the third party other than family members to sell immovable properties situated in the State of Karnataka, the stamp duty as conveyance under Article 20 (1) of the Market value of the property, which is the subject matter of the power of attorney has to be paid. Therefore, it is relevant to consider the definition of conveyance as contemplated under the provisions of Section 2 (d) reads as under:
“2 (d) “Conveyance” includes, -
(i) a conveyance on sale;
(ii) every instrument;
(iii) every decree or final order of any Civil Court;
(iv) every order made by the High Court under [Section 394 of the Companies Act, 1956] in respect of amalgamation of companies, by which property, whether movable or immovable or any estate is transferred to, or vested in, any other person, and which is not otherwise specifically provided for by the schedule;”
A plain reading of the said definition clearly depicts that by any of modes of conveyance stated supra, by which property, whether movable or immovable or any estate is transferred to, or vested in, any other person, which is not otherwise specifically provided for by the schedule amounts to conveyance;
14. Admittedly, in the present case the petitioners have executed the power of attorney in favour of third party other than father, mother, wife, husband, sons and daughter, brothers, sisters in relation to the executant, authorizing the third party as Power of attorney to sell immovable property. The stamp duty under Article 20 (1) of the market value of the property which was the subject matter of the power of attorney has to be paid. Therefore, as stated supra, it amounts to conveyance. Immovable property was transferred to or vested in the power of attorney holder, therefore, the petitioners are not entitled for refund of amount as claimed. Therefore, the impugned order passed by the authority refusing to refund the amount is just and proper.
15. Sri. Manjunath Prasad, learned counsel for the petitioners has contended that as on the date of the execution of GPAs, the proviso to Article 41 (eb) of the Schedule to the Act stipulates that “provided that the duty paid on such instrument is adjustable towards the duty payable on the instrument of sale or transfer executed subsequently, in favour of either the attorney holder or any other person.” But as on the date of sale deeds executed the proviso came to be amended with effect from 01.04.2011 which read as under:
“Provided that, the duty paid on such power of attorney is adjustable towards the duty payable on agreement for sale under Article 5 (e) or on instrument of sale or transfer, as the case may be, executed between the same parties in respect of the same property.”
16. By careful reading of both GPAs and the Sale Deeds executed after the amendment, clearly indicates that the parties to the registered GPAs and sale deeds are entirely different, though properties are one and the same. The amendment of the proviso clearly depicts that “provided that the duty paid on agreement for sale is adjustable towards duty payable on the agreement of sale under Article 5 (e) or on instrument of sale or transfer as the case may be executed between the same parties and in respect of same properties”. Admittedly, as on the date of the GPAs executed, the Power of Attorney holder was not a family member of the petitioners. Therefore, the Power of Attorney executed by the petitioners in favour of third party authorizing him to sell the immovable properties amounts to conveyance as contemplated under Article 20 (1) of the Schedule to the Stamp Act. Accordingly, the stamp duty collected by the jurisdictional Sub-Registrar, at the time of registration, when the sale deeds came to be executed on the basis of the GPAs by the GPA Holder in favour of third parties, the purchasers, who have purchased the property must pay the stamp duty on the sale deed and not either by the petitioners or GPA holder. It is also not in dispute that the petitioners have not filed any application before the Deputy Commissioner for that purpose and on production of both instruments, be denoted upon such first mentioned instrument, as contemplated under the provisions of Section 16 of the Stamp Act, 1957 which reads as under:-
“6. Denoting duty. – Where the duty with which an instrument is chargeable, or its exemption from duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of such last mentioned duty shall, if application is made in writing to the Deputy Commissioner for that purpose, and on production of both the instruments, be denoted upon such first mentioned instrument, by endorsement under the hand of the Deputy Commissioner or in such other manner, if any, as the State Government may by rules prescribe.”
17. Admittedly, in the present case what is challenged is only the endorsement issued by respondent No.1 dated 02.01.2012 refusing to refund the stamp duty in view of the amended proviso of Article 41 (eb) of the Schedule to the Stamp Act. Admittedly, the amended provision of the Act is not challenged in the present writ petitions. As on the date of execution of the sale deed, the amendment of provision to Article 41 (eb) of the Schedule to the Act was in force. As per proviso of amendment, only the Stamp Duty can be adjustable towards the duty payable on the agreement of sale or instrument of sale or transfer, as the case may be, executed between the same parties in respect of same properties. Admittedly, parties to the GPAs and parties to the Sale Deeds are entirely different. Therefore, in view of the proviso of amended Article 41 (eb) of the Schedule to the Act petitioners are not entitled to refund of excess amount as alleged. The Respondent No.1 considering the entire materials on record by the impugned endorsements dated 02.01.2012 rightly rejected the representations on the ground that the parties to the GPAs and sale deeds are entirely different. Therefore, petitioners are not entitled to refund of the stamp duty paid on the GPAs in view of Article 41 (eb) of the Stamp Act and same is in accordance with law.
18. Sri. Manjunath Prasad, learned counsel for the petitioners relied upon the dictum of the Hon’ble Supreme Court in the case of Sharma Transport stated supra with regard to promissory estoppel, wherein the Hon’ble Supreme Court has held that it is indeed pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned. The former is equally bound as the latter. Therefore, the Government cannot claim any immunity from the doctrine of promissory estoppel and it cannot say that it is under no obligation to act in a manner i.e., fair and just or that it is not bound by the considerations of honesty and good faith. In fact, the Government should be held to high standard of rectangular rectitude while dealing with citizens. Since the doctrine of promissory estoppel is an equitable doctrine, it must yield where the equity so requires. If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the Government. The Government is required to carry out the promise, the Court would have to balance the public interest in the Government’s carrying out the promise made to the citizens. This Court has no quarrel with the dictum of the Hon’ble Apex Court to the facts and circumstances of that case and has no application to the facts of the present case.
19. In case the amendment was not in force as on 01.04.2011, it was bound on the State Government to adjust the amount as per unamended provisions of Article 41 (eb) of the Schedule to the Act that the duty paid on such instrument is adjustable towards duty payable on such instrument of sale or transfer executed in favour of either or any other person. Admittedly, in the present case, as on the date of instrument of sale or transfer, sale deed was registered in favour of third parties. The amendment was with effect from 01.04.2011. Therefore, in view of the amendment, only to the same parties in respect of same properties the adjustment of stamp duty is permissible.
20. Insofar as the judgment relied upon by the learned counsel with regard to the Dalmiya Cement’s case, this Court while the considering the provisions of Article 41 (eb) or 20 (1) of the Schedule to the Stamp Act with regard to refund of excess stamp duty paid, the said judgment and provisions of Section 44 of the Stamp Act has no application to the facts and circumstances of the present case. It is not the case of the petitioners that the authorities exercising the powers under the provisions of Sections 34 or 39 of the Stamp Act held that penalty or excess duty paid should be refunded. The entire case of the petitioners is that once GPA holder executed sale deeds and amount was paid on the registered GPAs, the same should be refunded in view of unamended provisions. But, it is impermissible in view of amendment of proviso to Article 41(eb) of the Schedule to the Act. Therefore, the said judgment has also no application to the facts and circumstances of the present case.
VI. Conclusion 21. The material on record clearly depicts that it is not the case of the petitioners in all the writ petitions that GPAs is executed in favour of same parties and the sale deeds are also executed in favour of the same parties. In the absence of said pleadings, the impugned endorsements issued by respondent No.1 exercising the power under proviso to Article 41 (eb) with effect from 01.04.2011 is just and proper.
22. The petitioners have not made out a ground to interfere with the impugned endorsements Annexure-D in all the writ petitions in exercise of power under Articles 226 and 227 of the Constitution of India. Accordingly, writ petitions stand dismissed.
Ordered accordingly.
MBM Sd/- JUDGE