Case Law Details
State of Rajasthan Vs Indus Tower Ltd (Rajasthan High Court)
In a crucial ruling, the Rajasthan High Court addressed the issue of reduced stamp duty applicable to lease deeds where rent is fixed and no premium is paid or delivered. The judgment was delivered in the case of State of Rajasthan Vs Indus Tower Ltd.
The core issue in this case revolved around the interpretation of a 2003 notification which the respondent, Indus Tower Limited, claimed allowed it a reduced rate of stamp duty on lease deeds. The Court however concluded that this notification only applied to leases specified in Clause (a) of Article 33 of the Schedule appended to the Act of 1998. If the lease terms include a security deposit, the lease falls under clause (c) of the same Article, and thus, the notification does not apply. Hence, Indus Tower Limited’s claim of reduced rate of stamp duty was deemed untenable.
The Court also noted that if ambiguity were to arise, the benefit of doubt should resolve in favor of the revenue, not the assessee. As a result, the Court allowed the appeals filed by the State, setting aside prior orders and concluding that the notification dated 05.03.2003 was not applicable for the leases executed in favor of Indus Tower Limited.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. Learned Senior Counsel-cum-AAG Mr. Sandeep Shah appearing for the State submits that the controversy involved in these matters are squarely covered by the judgment dated 11.2022 rendered by the Coordinate Bench of this Court in D.B. Civil Special Appeal (Writ) No.193/201 9 (The State of Rajasthan & Anr. Vs. Indus Tower Ltd. & Anr.) and other connected matters.
2. The relevant portion of the said judgment, as relied upon by the learned Senior counsel, reads as follows :-
30. The argument of learned counsel for the respondent that even if security charges/security deposits are stipulated under the terms of the lease, notification dated 05.03.2003 would be applicable because the rent is fixed and the premium is not paid or delivered, would amount to amend notification dated 05.03.2003 by adding a further clause as- “whether or not security charges/security deposits are advanced”.
Such interpretation is not only against the strict construction of the notification, but it also violates the principle of literal construction. Addition or substitution of words or phrases in the notification issued in exercise of powers under Section 9 of the Act of 1899, which is a taxing statute, is not warranted at all in the present case. Therefore, we have to conclude that notification dated 05.03.2003 is applicable only to class of leases as specified in Clause (a) of Article 33 of the Schedule appended to the Act of 1998 and once the terms of lease stipulate security deposit, the lease becomes classifiable under clause (c) of Article 33 of the Schedule appended to the Act of 1998 and such leases are taken out of the purview and applicability of notification dated 05.03.2003.
In any case, even if it is to be taken as a case of ambiguity, notification dated 05.03.2003 being in the nature of concession clause, the same principle of interpretation as is applicable in the case of exemption clause, as laid down by the Constitution Bench of the Hon’ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar and Company & Others (supra) has to be applied that in such a case, the benefit of doubt must be resolved in favour of the revenue and not in favour of the assessee. Thus, viewed from any angle, the respondent-Indus Tower Limited was not entitled to benefit of notification dated 05.03.2003 and claim of reduced rate of stamp duty in respect of lease deeds executed in its favour, is not tenable in law.
31. Consequently, the order of the Tax Board passed in favour of the respondent-Indus Tower Limited is illegal and unsustainable in law and it is declared that in the matter of levy of stamp duty on the class of leases executed in favour of the respondent-Indus Tower Limited, notification dated 05.03.2003 shall not apply.
Though this aspect was not raised/argued before the learned Single Judge, it being a pure question of law relating to applicability of rates of stamp duty, the issue has been decided by us in these appeals in favour of the revenue and against the respondent-Indus Tower Limited after affording full opportunity of hearing to the respondents.
32. Consequently, appeals filed by the State are allowed and the order passed by the learned Single Judge and the order passed by the Tax Board in all the cases are set set aside and it is declared that notification dated 05.03.2003 is not applicable in respect of the class of leases executed in favour of respondent-Indus Tower Limited and therefore, the respondent-Indus Tower Limited would be liable to pay stamp duty as per the provisions of the law, which were in force on the date of execution of lease deeds without claiming benefit of notification dated 05.03.2003. Appropriate proceedings shall be drawn for recovery of short payment of stamp duty by the competent authority under the law.
33. No order as to costs.
34. Office is directed to place a copy of this judgment on the record of each connected appeal.
3. Learned counsel for the respondent is not in a position to dispute the same.
4. In view of the submissions so made by learned counsel for the parties, the writ petitions filed by the petitioners are allowed in the same terms as given in the case of The State of Rajasthan & Anr. Vs. Indus Tower Ltd. & Anr (supra) and the order dated 22.05.2017 (Annex.-6) passed by the learned Rajasthan Tax Board, Ajmer and order dated 30.06.2010 (Annex.5) passed by the Collector (Stamps), Pali are quashed and set aside. The matters are remanded back to the District Collector (Stamps) Pali for fresh adjudication of the issue involved while keeping into consideration judgment of The State of Rajasthan & Anr. Vs. Indus Tower Ltd. & Anr (supra).
5. With the aforesaid directions, the writ petitions are disposed of. Stay petitions as well as all other pending applications also stand disposed of.
