# M/S Anjali Exim Pvt. Ltd v. State of U.P. & Ors

- **Citation:** (2023) 9 ILRA 535
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-08-24
- **Case number:** Writ-C No. 1002142 of 2013
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-anjali-exim-pvt-ltd-v-state-of-u-p-ors-50841
- **Pages:** 7

## Headnote

C.S.C.

Held -
Where the petitioner purchased land for
establishing an Agro Food Park under the 10th
Five-Year Plan and was granted exemption from
stamp duty vide Government Notification dated
19.01.2005, the subsequent failure to establish
the industrial unit did not empower the
authorities to invoke Section 47-A of the Indian
Stamp Act, 1899. The exemption granted under
Section 9 of the Act was never revoked, and
stamp duty had been lawfully exempted at the
time of execution of the sale deed dated
20.06.2006. The subsequent policy changes
introduced
via
Government
Orders
dated
21.08.2009 and 12.11.2007 were prospective
and did not authorize retrospective recovery of
stamp
duty
through
Section
47-A.
The
impugned order demanding deficiency in stamp
duty and penalty was held to be arbitrary,
without jurisdiction, and liable to be set aside.

Case Law Discussed:

## Text

9 All. M/S Anjali Exim Pvt. Ltd. Vs. State of U.P. & Ors.
535
that the provisions of Section 47-A of the
Stamp Act do not provide for levy of stamp
on the instruments which have previously
been exempted by valid notification of the
State Government under Section 9 of the
Act of 1989. Accordingly, the impugned
order is clearly illegal and arbitrary and
deserves to be set aside.

27. In the light of the above, the
impugned order dated 26.11.2012 is illegal
and arbitrary and, consequently, is set
aside. The writ petition is, accordingly,
allowed.
----------
(2023) 9 ILRA 535
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 24.08.2023

BEFORE

THE HON'BLE ALOK MATHUR, J.

Writ-C No. 1002142 of 2013

M/S Anjali Exim Pvt. Ltd. ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
P.C. Mishra, Sachin Garg

Counsel for the Respondents:
C.S.C.

Held -
Where the petitioner purchased land for
establishing an Agro Food Park under the 10th
Five-Year Plan and was granted exemption from
stamp duty vide Government Notification dated
19.01.2005, the subsequent failure to establish
the industrial unit did not empower the
authorities to invoke Section 47-A of the Indian
Stamp Act, 1899. The exemption granted under
Section 9 of the Act was never revoked, and
stamp duty had been lawfully exempted at the
time of execution of the sale deed dated
20.06.2006. The subsequent policy changes
introduced
via
Government
Orders
dated
21.08.2009 and 12.11.2007 were prospective
and did not authorize retrospective recovery of
stamp
duty
through
Section
47-A.
The
impugned order demanding deficiency in stamp
duty and penalty was held to be arbitrary,
without jurisdiction, and liable to be set aside.

Case Law Discussed:

1. Shanti Bhushan (D) thr. Lrs. Vs St. of U.P. &
ors., 2023 SCC OnLine SC 489

2. Swedish Match AB Vs SEBI, (2004) 11 SCC
641

3. CIT Vs Ajax Products Ltd., 55 ITR 741

(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Sri Sachin Garg, learned
counsel appearing on behalf of the
petitioner as also the learned Standing
Counsel for the respondents, and perused
the records.

2. The petitioner in the present writ
petition has assailed the order dated
26.11.2012
of
the
Prescribed
Authority/Asstt. Commissioner (Stamp),
Raebareli, under the Indian Stamps Act,
1899 (hereinafter referred as 'Act of 1899'),
whereby in exercise of powers under
section 47-A he has determined the stampduty payable on the sale-deed executed by
the petitioner on 20.06.2006 to be deficit in
stamps and thereby directed the petitioner
to pay an amount of Rs. 94,940.00
alongwith
penalty
of
Rs.
43,980.00
alongwith 1.5% per month interest from
20.06.2006.

3. The question which has been raised
by the petitioner in the present writ petition
is as to whether once on the basis of the
exemption
Notification
issued
under
Section 9 of the Act of 1899, stamp-duty
has been exempted and the instrument
536 INDIAN LAW REPORTS ALLAHABAD SERIES
registered, can by subsequent change in the
Government Policy, provision of section
47-A be invoked requiring the person to
pay stamp duty on the market value of the
property?

4. Brief facts of the case, as submitted
by the petitioner are that the Government of
India through Ministry of Food Processing
Industry had launched a scheme for
establishment of Green Field Agro Food
Park in the country during the 10th FiveYear-Plan with the object of providing
adequate infrastructure for Food Processing
Industry. The Government of Uttar Pradesh
also adopted the aforesaid policy and had
passed a notification dated 19.01.2005,
whereby they had decided to grant
exemption from stamp-duty as well as
exemption from registration-fees in respect
of purchase of land for setting up
Information Technology, Bio Technology
Business Process Outsourcing Unit, Call
Centers, Agriculture Processing Unit etc.,
which were being set up taking advantage
of the Green Field Agro Food Park Policy.

5. The petitioner being interested in
setting up Agro Food Park/Mega Food
Park, moved an application before the
Inspector General (Registration), U.P.,
seeking exemption from stamp-duty and
registration fees for purchase of the said
land. The application of the petitioner was
duly processed and the General Manager,
District Industry Centre, Raebareli, by
means of his letter dated 18.04.2006
directed the Sub Registrar, Maharajganj,
Raebareli,
to
grant
of
stamp-duty
exemption in respect of land areas
purchased by the petitioner for setting up the
Agro Food Park/Mega Food Park.

6. In pursuance of the aforesaid
exemption from stamp duty granted to the
petitioner, sale deed was registered on
20.06.2006.

7. After execution of the sale deed the
petitioner did not proceed to utilise the said
land for setting up of the Agro-based industry
for which the concessions were granted to
him. The collector initiated proceedings
under section 47A of the Indian Stamp Act
1899 on the ground that the petitioner had
failed to set up the industrial undertaking.
The exemption from stamp duty was granted
as per the policy of the State government, and
the petitioner not having complied with his
part of the commitment, he would be liable to
pay the amount of stamp duty which was
leviable on registering of the said sale deed.

8. It has been submitted by the counsel
for the petitioner that the State Government
has subsequently issued a Government Order
dated 21.08.2009 incorporating certain new
conditions in the implementation of the
scheme related to setting up of new Food
Processing Industries, where in order to seek
the benefits. The applicants will now have to
give a bank guarantee or fixed deposit for the
amount equivalent to stamp duty which
would been leviable had the applicants not
been given the benefit of exemption under the
said policy. The purpose of requiring the
applicants to give the bank guarantee or fixed
deposit is to ensure that the applicants after
purchasing the land, proceed to set up the
industrial unit, failing which the said bank
guarantee or fixed deposit was liable to be
encashed. The said change in policy ensured
that the applicants after availing of the
concession in stamp duty with regard to the
registration of land, granted by the State
government would proceed to set up the
industrial unit.

9. The said Government Order is in
the form of a clarification to the previous
9 All. M/S Anjali Exim Pvt. Ltd. Vs. State of U.P. & Ors.
537
Government order dated 19.01.2005. It
seems that after selection of the prospective
persons seeking to avail the benefit of the
Policy for setting up of new industries,
various benefits and concessions were
granted to them by the State Government,
but later on a number of applicants who
had
shown
keen
interest
and
even
purchased land, taking advantage of Policy
of the State Government, never established
the industrial undertaking , necessitating relooking
into
entire
policy
by
the
Government and consequently passing of
the Government Order dated 21.08.2009. In
the said government order, it was provided
that whenever such a matter comes up
before the State Government where a
person wants to take benefit of the Policy
of the Government of India as well as the
State of Uttar Pradesh for setting up of
theAgro Food Park/Mega Food Park etc.,
the said application would be duly
scrutinized by the Industries Department
and such applicants would also be directed
to give a performance-guarantee to ensure
that apart from seeking benefits made
available by the State Government, they
would also implement and establish their
Units in the State of Uttar Pradesh. It was
further provided that wherever exemption
in the stamp-duty is given, a bankguarantee would also be obtained for the
same amount and in case there is any
violation of the terms and conditions of the
Policy, the State Government would be at
liberty to invoke the said bank-guarantee.

10. In change in Government policy
was brought about to ensure setting up of a
new undertaking and in case they are not
established after purchase of the land, the
State Government would be at liberty to
encash the fixed deposit made available by
the prospective applicant seeking to set up
the new Industry.

11. In pursuance of the aforesaid
Government Orders a notice under section
47-A of the Stamps Act was sent to the
petitioner by the Assistant Commissioner
(Stamps), Raebareli, directing him to showcause as to why deficiency in stamp-fees be
not recovered from him with regard to the
registration of sale-deed on 20.06.2006.
The petitioner duly responded to the said
show-cause notice and filed his objections.
He stated that the said sale-deed was
registered on the basis of the exemption
granted by the State Government in
pursuance
of
the
Notification
dated
19.01.2005 in terms of the letter dated
28.03.2006.

12. It was further submitted by him
that there is no infirmity in the exemption
of stamp-duty granted to the petitioner as
on the basis of the subsequent notification
neither has the initial Notification dated
19.01.2005 been superseded or taken back
nor any conditions exist for invocation of
the proceedings under section 47-A of the
Stamps Act 1899 and, consequently, the
order as proposed to be passed in the showcause notice could not be passed.

13. The Assistant Commissioner
(Stamps) duly considered and rejected the
objections raised by the petitioner and by
means of the impugned order 26.11.2012
directed the petitioner to deposit the
amount, equivalent to the valuation as per
the market-value of the land. In the said
order, it has been stated that the said land
was given to the petitioner in pursuance of
the Policy of the Government wherein the
petitioner was to set up a new undertaking
and only such undertakings were given
benefits of exemption of the stamp-duty,
who had agreed to set up new Industries in
pursuance of the Policy of the State
Government. The petitioner having not
538 INDIAN LAW REPORTS ALLAHABAD SERIES
complied with the directions of the State
Government and despite repeated letters no
Industrial Unit was established by him and
consequently by means of the impugned
order the petitioner was directed to pay the
full Stamp-duty, which he was liable to
liable to pay as if the exemption was not
granted to him.

14. Learned counsel for the petitioner
has submitted that the impugned order is
illegal and arbitrary and is without
jurisdiction as such an order could not have
been passed in exercise of its powers under
section 47-A of the Act of 1899. It has
further been submitted that the Rules and
conditions and provisions existing on the
date of execution of the document are the
only relevant factors, which could have
been taken into consideration while levying
stamp-duty on the instrument. Subsequent
changes and considerations occurring after
the execution of the said instrument cannot
be taken into account while passing an
order under section 47-A of the act of 1899
and hence the order is illegal and deserves
to be set aside.

15. In the present case it is stated that
on the date when the instrument was
registered, i.e. on 20.06.2006, there was a
valid order for exemption passed in favour
of the petitioner in pursuance of the
Government Notification dated 19.01.2005.
It is stated that neither the exemption
granted to the petitioner, nor the Policy of
the State Government dated 19.01.2005 has
been revoked and, consequently, the
impugned order is illegal and arbitrary. He
further submits that a bare reading of
section 47-A of the Act of 1899 would
indicate that the determination of the
stamp-duty has to be only with reference to
the provisions existing on the date of
execution of the said instrument, and
further there was no deficiency in the
stamp-duty paid by the petitioner on the
date of execution of the said document, as
the State Government had exempted the
stamp-duty in case of the petitioner, and,
consequently, even if there is a variation in
Government Policy subsequently, that shall
have no bearing or influence on the duty
paid by the petitioner at the time of
execution of the sale-deed.

16. Learned counsel for the petitioner
has also relied on the judgment of the
Supreme Court in the case of Shanti
Bhushan (D) thr. Lr. and ors. v. State of
U.P. & ors., 2023 SCC Online SC 489,
wherein it is stated that Registering
Authority has to ascertain the correct
market-value on the date of execution of
the document. It is stated that on the date of
execution of the said document the
petitioner having a valid exemption letter,
which was duly honoured and accepted by
the respondents and consequently no
variation in the same is permissible and
consequently assailed the impugned order.
Lastly it was submitted that a perusal of the
subsequent Government order would also
indicate that provision has been made for
recovery of the amount, equivalent to the
stamp-duty, payable by the person seeking
benefit of the Policy of the Government for
setting up of a new Unit. The subsequent
Policy provides for submission of a Bank
Guarantee as a Fixed Deposit and in case
such a person does not fulfill the conditions
of the Policy and does not set up the Fresh
Unit, it was open for the Government to
invoke the bank-guarantee and encash the
Fixed Deposit, so as to restitute themselves
as if the stamp-duty has in fact been paid.
Even in the subsequent Policies and
Notifications
dated
21.08.2009
or
22.11.2007 it has not been provided that
resort can be had to provisions of section
9 All. M/S Anjali Exim Pvt. Ltd. Vs. State of U.P. & Ors.
539
47-A of the Indian Stamps Act 1899 to
recover the deficit stamp-duty paid on
execution of such instrument.

17. Learned Standing Counsel, on the
other hand, has opposed the writ petition.
He has submitted that the petitioner has
taken benefit of the Policy of the State
Government and obtained exemption from
stamp-duty while registering the said land,
which were for the object of setting up of a
new Unit. The petitioner himself has
violated the Policy of the State Government
and despite repeated reminders has not set
up a Unit and consequently it was open for
the State Government to withdraw the
benefit granted to him and, hence, he
supported the impugned order.

18. I have heard the counsels of the
parties and perused the record. From a
perusal
of
the
Notification
dated
19.01.2005 it is clear that all such persons
who intended to set up an Agriculture/Food
related business with regard to Food
Processing etc. were given the benefit of
exemption from stamp-duty to as to enable
them to purchase land at a lower cost,
which policy was framed to promote
Industrialization in the State of U.P. The
petitioner intending to take benefit of the
policy of the State Government also made
an application, and after scrutinizing his
application and finding the same to be in
order exemption from stamp-duty was
granted
by
means
of
order
dated
28.03.2006. It is after a lapse of nearly six
years that the State Government realized
that the petitioner has not fulfilled his
commitment and has not set up the
industrial Unit, consequently, proceedings
under section 47-A of the Indian Stamps
Act, 1899 were initiated and a notice was
issued to the petitioner on 01.06.2012
asking him to pay the market-value of the
stamp-duty with regard to the sale-deed
executed by him on 20.06.2006.

19. The petitioner has questioned the
very initiation of proceedings under section
47-A of the act of 1899 in the facts of the
present case. To answer the question as
raised in the present petition it is noticed
that as per section 47-A of the Act of 1899
power has been vested upon the Prescribed
Authority to require the person executing
the instrument for paying full stamp-duty
on the market-value of the property, as set
forth in the said instrument. The exercise
can be done immediately after presentation
of the said instrument for registration. It is
not the case of the respondents that on the
date of execution of the said instrument the
petitioner had not paid adequate stampduty. It is admitted that the petitioner was
exempted from payment of stamp-duty in
accordance to notification issued by the
State government in exercise of powers
under section 9 of the Indian Stamps Act
1899, where power has been reserved to the
Government to reduce or remit, whether
prospectively or retrospectively, in the
whole or any part of the territories under its
administration, the duties with which any
instruments or any particular class of
instruments, or any of the instruments
belonging to such class, or any instruments
when executed by or in favour of any
particular class of persons or by or in
favour of any members of such class, are
chargeable. The power accordingly is
vested with the State Government to reduce
or remit the stamp-duty as per section 9 of
the Act of 1899. The State Government had
invoked the provision of Section 9 of the
Act of 1899 while issuing the exemptionnotification dated 19.01.2005.

20. It is evident that the power of the
State Government under section 9-A is only
540 INDIAN LAW REPORTS ALLAHABAD SERIES
with regard to "reduce or remit" the stampduty, which was accordingly done when it
notified its intentions to reduce and exempt
the stamp-duty by means of Notification
dated 19.01.2005. There is no other order
which has been brought on record either by
the petitioner or by the respondents
cancelling, revoking or modifying the
remission of stamp-duty on the Units
established in pursuance of the Policy of
the State Government.

21. Considering the fact that the State
government had issued an order dated
28/03/2006 exempted the levying of Stamp
duty in case of the petitioner was setting up
the industrial unit in pursuance of the
policy of the State government, there was
no infirmity or deficiency in the stamp duty
paid by the petitioner on the date of its
registration. The Supreme Court in number
of cases has held that the relevant date for
the purposes of determining the stamp duty
payable on the instrument, is the date of its
execution. In the present case the sale deed
was executed on 20/06/2006 a valid
exemption order passed by the State
government was in existence. The Supreme
Court in the case of Shanti Bhushan(D)
Thr. Lr. and Others vs State of U.P. and
Others 2023 SCC OnLine SC 489 have
observed:-

?23.Hence, when a sale deed is
presented for registration, the registering
authority must ascertain the correct market
value of the property subject matter of the
document on the date of execution of the
document. The stamp duty is payable on the
basis of such market value and not on the
consideration mentioned in the document.
If the consideration mentioned is more than
the market value, the stamp duty will be
payable on the consideration shown.
Moreover, the market value mentioned in
the agreement for sale or the market value
prevailing on the date of the agreement or
the market value prevailing on the date on
which the bargain was struck is of no
relevance for deciding the stamp duty. The
relevant market value is the one which
prevails on the date of execution of the
conveyance. Therefore, we have no manner
of doubt that the appellants were under an
obligation to pay stamp duty calculated on
the market value of the sale deed property
on the date of execution of the sale deed.?

22. Considering the above facts and
arguments of the learned counsel for the
parties, I find force with the contention
raised by the petitioner that such an
exercise of power, as has been done in the
present case under section 47-A, could not
have been invoked against the petitioner, as
there was no infirmity with regard to the
stamp-duty leviable on the instrument on
the dates of its registration. The relevant
date to be considered for exercise of
powers under section 47-A is the date of
execution of instrument. The respondents
have also not demonstrated any infirmity in
exemption of the stamp-duty payable on
the sale-deed, which was registered on
20.06.2006. The cause of action, even
according to the respondents, arose only
subsequent to 20.06.2006, when after lapse
of a considerable period of time the
petitioner did not establish the Unit in
pursuance of the Policy of the State
Government.

23. The State Government, when
faced with the situation that intending
entrepreneurs who have taken benefit of the
Policy of the Food Processing Industry,
have purchased land, but subsequently
failed to set up the Industry, issued a
clarification by means of Notification dated
21.08.2009 and 12.11.2007 and introduced
9 All. M/S Anjali Exim Pvt. Ltd. Vs. State of U.P. & Ors.
541
strict guidelines for setting up of new
Industries by persons, who have taken
benefit of the Policy. The clarification is
clearly prospective in nature, as it is silent
about the action which would be taken
against person who has already taken
advantage of exemption-Notification, but
failed to set up the Industrial Unit.

24. The relevant fact in this case is, as
already provided by the State Government
in its Notification dated 21.08.2009 and
12.11.2007, where it is provided that in
case such persons have deposited Fixed
Deposit or Bank Guarantee, it was open for
the State Government to encash the same.
We do not find any provision by which the
stamp-duty, which was in fact leviable by
Notification dated 19.01.2005, but stood
exempted
by
a
valid
exemption
notification, can be recovered subsequently.
The exercise of power, as has been done in
the present case, is clearly de hors the
provisions of the Act and the Rules as well
as
the
Notification
issued
by
the
respondents itself.

25. Indian Stamps Act, 1989, being a
fiscal statute, the provisions thereof have to
be strictly interpreted. Supreme Court in
the case of Swedish Natch AB Vs. SEBI,
2004 (11) SCC 641 and CIT Vs. Ajax
Products Ltd., 55 ITR 741 has held that
while interpreting the provisions of fiscal
legislation courts should neither add nor
subtract a word from the provisions of
instant meaning of the sections. It may be
mentioned that the foremost principle of
interpretation of fiscal statutes in every
system of interpretation is the rule of strict
interpretation which provides that where
the words of the statute are absolutely clear
and unambiguous, recourse cannot be had
to the principles of interpretation other than
the literal rule.

26. Accordingly, while interpreting
such a statute, equitable considerations
cannot be applied. A taxing statute has to be
interpreted in accordance with what is
clearly
expressed
therein.
While
interpreting such a statute and determining
the liability to pay tax, the provisions are
required to be construed strictly. In other
words, the rule of literal construction must
be applied while interpreting a taxing
statute. It must be interpreted in terms of
the natural construction of the words used.
There is no scope to imply anything which
is not expressly provided. There is no scope
for application of equitable principles while
deciding levy of stamp duty. Present case
cannot be decided on the basis of equity
and this Court is of the considered view
that the provisions of Section 47-A of the
Stamp Act do not provide for levy of stamp
on the instruments which have previously
been exempted by valid notification of the
State Government under Section 9 of the
Act of 1989. Accordingly, the impugned
order is clearly illegal and arbitrary and
deserves to be set aside.

27. In the light of the above, the
impugned order dated 26.11.2012 is illegal
and arbitrary and, consequently, is set
aside. The writ petition is, accordingly,
allowed.
----------
(2023) 9 ILRA 541
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 24.08.2023

BEFORE

THE HON'BLE ALOK MATHUR, J.

Writ-C No. 1002143 of 2013

M/S Anjali Exim Pvt. Ltd. ...Petitioner
Versus
State of U.P. & Ors. ...Respondents