In the scheme of said Act, Section 3 is the charging section, which, in terms provides that subject to the provisions of said Act and the exemptions contained in Schedule-I thereto, the instruments mentioned in Schedule-I shall be chargeable with duty of the amount as indicated. This means that every instrument mentioned in Schedule-I (unless the same is exempted) would be chargeable to the stamp duty of the amount as indicated in Schedule-I. This is the general rule. Section 4 of the said Act, however constitutes a sort of an exception to the general rule contained in Section 3 of the said Act.
21. Section 4 of the said Act, inter alia, provides that where, in case of any specific instruments, i.e., development agreement, sale, mortgage or settlement, if several instruments are employed for completing the transaction, then the principal instrument only shall be chargeable with duty prescribed in Schedule-I and each of the other instruments shall be chargeable with duty of Rs.100/-instead of the duty, if any, prescribed for it in that schedule. Sub-section 2 of Section 4 of the said Act enables the parties determine for themselves which of the instruments so employed shall for the purposes of sub-section 1, be deemed to be the principal instrument. Sub-section 3 of Section 4 of the said Act provides that where parties fail to determine the principal instrument between themselves, then the officer before whom the instrument is produced may, for the purposes of this section, determine the principal instrument. The proviso to Section 4, which governs the entire Section provides that the duty chargeable on principal instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments so employed.
25. From the scheme of Section 4 of the said Act, it is clear that the same is not intended to enable the parties to an instrument, to either evade or avoid payment of proper stamp duty thereon. The provisions of Section 4 of the said Act only exempt parties from rigors of Section 3 of the said Act, which would, in the absence of provisions contained in Section 4 of the said Act, require the parties to pay stamp duty as prescribed under Schedule-I upon each of the several instruments employed in completing one and the same transaction. The limited exemption is therefore, in respect of several instruments employed in completing one and the same transaction, so long as proper duty is paid upon any one of the instruments, which may either have been determined by the parties or by the Officer before whom such instrument is produced for registration as the 'principal instrument'. Further, notwithstanding such determination by the parties or the Officer and notwithstanding the character of such principal instrument, stamp duty thereon shall be the highest duty, which would be chargeable in respect of any of the several instruments so employed for completing one and the same transaction. Upon the remaining instruments again notwithstanding their nomenclature or character, instead of payment of entire stamp duty as prescribed under Schedule-I, there would be sufficient compliance, if duty of Rs.100/-as prescribed under Section 4 of the said Act is paid in respect thereof.
26. In case of Farida Memon and ors. Vs. The Collector of Stamps and ors. Writ Petition No. 1462 of 2008 decided on 18 July 2014 upon which reliance was placed by Mr. Godbole, this Court had the occasion to observe thus:
13] From the scheme of section 4 to the said Act, it appears that the liberty granted to the parties for determining which from out of the series of instruments employed in a single transaction, shall be principal instrument, is basically for sake of convenience of the parties. However, the scheme is not to enable the parties to either evade the stamp duty or for that matter pay stamp duty upon any one of the instruments, which would bear the lowest stamp duty in the series of instruments. On the contrary the proviso, which applies to the entire section makes it clear that the duty chargeable on the instrument, so determined shall be highest duty which would be chargeable in respect of 'any of the said instruments employed'. The expression 'any of the said instruments employed' as appearing in the proviso to section 4 makes it clear that the stamp duty, even upon the principal instrument which may have been determined by the parties themselves, shall be the highest duty which would be chargeable in respect of any of several instruments used in a single transaction of either sale, mortgage, settlement or development agreement.
IN THE HIGH COURT OF BOMBAY
Writ Petition No. 9923 of 2014
Decided On: 30.01.2015
Prasun Developers Vs. State of Maharashtra and Ors.
Hon'ble Judges/Coram:
M.S. Sonak, J.
Citation: MANU/MH/0111/2015,AIR 2015 (NOC) 541 Bom
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