MANU/WB/0874/2018

IN THE HIGH COURT OF CALCUTTA

MAT 593 of 2018, CAN 4227 of 2018, CAN 6364 of 2018, CAN 6601 of 2018 and MAT
624 of 2018
Decided On: 24.09.2018
SBPL Infrastructure Ltd. and Ors. Vs. State of West Bengal and Ors.
Hon'ble Judges/Coram:
Jyotirmay Bhattacharya, C.J. and Arijit Banerjee, J.
Counsels:
For Appellant/Petitioner/Plaintiff: S.K. Kapur, Ranjan Bhachawat, Sr. Advs., Arindam
Banerjee, Sandip Agarwal, Manoj Sharma, Sarbapriya Mukherjee, Ishaan Saha, Ratul
Das and Tanay Agarwal, Advs.
For Respondents/Defendant: Abhratosh Majumdar, Ld. A.A.G., T.M. Siddiqui, Soumitra
Mukherjee and Nilotpal Chatterjee, Advs.
Case Note:
Civil - Conveyance - Stamp duty - Section 42 of Indian Stamp Act, 1899
(Stamp Act) - Present appeal is filed to determine whether an instrument
executed between appellant and the respondent on a non-judicial stamp
paper of Rs. 10 and bearing endorsement under Section 42 Stamp Act is liable
to be assessed for stamp duty as a conveyance - Whether aforesaid
conveyance is liable to be assessed for stamp duty - Held, when instrument
bears endorsement under Section 42 of Stamp Act, issue of assessment of
stamp duty cannot be reopened - Stamp Act is a central legislation having all
India operation - Once defect of an instrument being unstamped or
insufficiently stamped is cured under Section 42 of Stamp Act, it is admissible
in evidence - It may be registered and acted upon and authenticated as if it
had been duly stamped - No territorial restriction is indicated in said provision
- Impugned order is set aside - Appeal allowed. [49]
JUDGMENT
Arijit Banerjee, J.
1 . The short question that falls for determination in this appeal is whether or not an
instrument, namely, a Nomination Agreement executed by and between the
appellant/writ petitioner and the respondent No. 11 in the State of West Bengal on a
non-judicial stamp paper of Rs. 10 and bearing endorsement of the Collector,
Hyderabad, under Sec. 42 of the Indian Stamp Act, 1899 (in short the 'Stamp Act') is
liable to be assessed for stamp duty in West Bengal as a conveyance under Art. 23 of
Schedule 1A to the Stamp Act.
2 . In a litigation between the respondent No. 11, India Media Services Pvt. Ltd. (in
short 'IMSPL') and the owners of a property known as 'Indian Express Building' situate
at Hyderabad, a consent decree dated 17 March, 2004 was passed by this Court
awarding the said property to IMSPL. By an agreement dated 5 December, 2005
described as a 'Nomination Agreement' (hereinafter referred to as the 'said agreement')
executed in Kolkata by and between IMSPL and the appellant, the appellant was
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nominated by IMSPL to receive convenience of the said property in its name and it is
recorded in the said agreement that the appellant accepted such nomination.
3 . Section 42 of the Stamp Act in so far the same is relevant for the present purpose
reads as follows:-
"S. 42. Endorsement of instruments in which duty has been paid under Section
35, 40 or 41.-(1) When the duty and penalty (if any), leviable in respect of any
instrument have been paid under Section 35, Section 40 or Section 41, the
person admitting such instrument in evidence or the Collector, as the case may
be, shall certify by endorsement thereon that the proper duty or, as the case
may be, the proper duty and penalty (stating the amount of each) have been
levied in respect thereof, and the name and residence of the person paying
them.
(2) Every instrument so endorsed shall thereupon be admissible in evidence,
and may be registered and acted upon and authenticated as if it had been duly
stamped, and shall be delivered on his application in this behalf to the person
from whose possession it came into the hands of the officer impounding it, or
as such person may direct:"
The said agreement bears an endorsement under Sec. 42 of the Stamp Act made by the
Collector, Hyderabad on 4 June, 2014 certifying that the proper deficit stamp duty of Rs.
50,000/- and penalty of Rs. 1,000/- aggregating Rs. 51,000/-, has been levied in
respect of the said agreement. It is not in dispute that the said amount of Rs. 51,000/-
has been paid by the appellant.
4 . Disputes and differences arose between the appellant and the IMSPL in relation to
the said agreement which were referred to arbitration. IMSPL as the claimant before the
sole Arbitrator prayed for cancellation of the Nomination Agreement. The appellant as
the respondent in the arbitration proceeding prayed for specific performance of the said
agreement. When the said agreement was produced before the learned Arbitrator in
support of the appellant's claim of specific performance, it was found that stamp duty
under Sec. 3 of the Stamp Act had not been paid at the place of execution of the
document, i.e., Kolkata. The said agreement was impounded under Sec. 33 of the
Stamp Act and was sent to the office of the Collector, Stamp Revenue, Kolkata for
assessment of stamp revenue.
5. On 30 August, 2017 the said agreement was assessed to stamp duty for a sum of Rs.
11,26,39,488/- under Sec. 35 of the Stamp Act. Such assessment was challenged by
way of two writ petitions being WP 23428(W) of 2017 and WP 27751(W) of 2017. By a
judgment and order dated 24 November, 2017 the said assessment order was set aside
by a learned Single Judge of this Court. The matter was remanded back to the Collector
for assessment afresh.
6. Fresh hearing was held and was concluded on 4 December, 2017. Since no order was
forthcoming from the Collector who had held the hearing and who was due to retire at
the end of February, 2018, another writ petition was filed by the appellant herein being
WP 3078(W) of 2018. By an order dated 12 February, 2018 a learned Single Judge of
this Court disposed of the writ petition by directing the Collector who had heard the
matter to pass a reasoned order within a fortnight from the date of the order or before
his retirement whichever was earlier.
7 . The concerned Collector, namely, one Don Bosco Lepcha retired upon reaching the
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age of superannuation on 28 February, 2018 without passing any order.
8 . On 23 March, 2018, the appellant filed a writ petition in this Court being WP
4475(W) of 2018 praying for inter alia, a declaration that the said Nomination
Agreement is duly stamped and also a declaration that the said agreement is not
covered under the provisions contained in Art. 23 of Schedule 1A to the Stamp Act as
amended in the State of West Bengal. During the pendency of the said writ petition, one
Manas Barman, Collector-in-Charge passed the final order on the aforesaid reference on
8 May, 2018, assessing the stamp duty for the said agreement at Rs. 3,79,39,028/- and
penalty at 96 per cent of the stamp duty amounting to Rs. 3,64,21,466/- and directed
that the total amount of Rs. 7,43,60,494/- was to be paid by the appellant as per Sec.
29 of the Stamp Act. By an application being CAN 3632 of 2018 filed in the writ petition
the appellant challenged the said order.
9. By the impugned judgment and order dated 25 June, 2018 the said writ petition and
the application were disposed of by the learned Single Judge. The operative portion of
the impugned judgment and order reads as follows:-
".......... Hence, the liability of the petitioner to pay Stamp Duty in Kolkata
cannot be denied. The argument of Mr. Kapoor on Section 42 of the Stamp Act
1899 is also answered accordingly. The endorsement made by the Collector at
Hyderabad is relevant to the presentation of the document in the State of
Telangana. The only question that remains is the quantum of Stamp Duty.
25. The next argument of the petitioner was on the merits of the impugned
order. It was submitted that the order is perverse inasmuch as extraneous
materials not produced by the parties have been relied upon by the Collector-
in-Charge. It however appears to me that the method of assessment by
reference to the valuation of the property as published by the Government of
Telangana as on 2013 and the back calculation and the method adopted as also
the quantum of Stamp Duty therefore needs to be looked into afresh. It is
desirable that a higher authority in the Collectorate takes up the matter in
appeal and re-examines the same.
2 6 . It is true that the matter was fixed for consideration of interim reliefs.
However in view of the extensive arguments made by the partners over 2 days,
and in view of the observations made herein there is little left to be decided by
this Court in the Writ application.
2 7 . Hence it is ordered that the impugned order dated 8th May 2018 be
referred to the Chief Controlling Revenue Authority, Kolkata, under Section 56
of the Indian Stamp Act, 1899 for taking a decision of all claims of the
petitioner, in accordance with law. The said Chief Controlling Authority shall
hear and dispose of the appeal after giving a personal hearing to the writ
petitioner or its legal representatives and upon consideration of all materials
placed by the Writ Petitioner and Collector Stamp Revenue, Kolkata.
28. As a condition precedent for consideration of the Reference by the Chief
Controlling Revenue Authority and for using the document in evidence before
any forum and for the impugned order being kept in abeyance the petitioner
shall deposit 75% of the sum of Rs. 7,43,60,494/, being the sum adjudicated in
the impugned order, with the Collector of Stamp Revenue, Kolkata. The
payment of the amount indicated hereinabove shall be without prejudice to the
petitioner's rights and contentions under the Law.
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 29. The said sum must be kept by the Collector in a separate interest bearing
Fixed Deposit Account, in the name of his office, with any Nationalised Bank
and the same shall abide by the result of the order of the Chief Controlling
Revenue as aforesaid.
30. The proceedings before the Chief Controller shall be decided expeditiously
not later than a period of 3 months from the date of receipt of a formal
representation in writing by the writ petitioner, along with a copy of this order."
Being aggrieved the writ petitioner is before us by way of the present appeal.
Contention of the appellants:-
10. Appearing for the appellant, Mr. S.K. Kapur, learned Sr. Counsel, referred to Clause
91 of List I (Union List) of Schedule VII and Clause 63 of List II (State List) of Schedule
VII to the Constitution of India. Clause 91 of the Union List pertains to rates of stamp
duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters
of credit, policies of insurance, transfer of shares, debentures, proxies and receipts.
Clause 63 of the State List pertains to rates of stamp duty in respect of documents other
than those specified in the provisions of the Union List with regard to rates of stamp
duty. Mr. Kapoor submitted that by virtue of Clause 63 of the State List each State has
amended the Stamp Act.
11. Mr. Kapur referred to Section 3 of the Stamp Act and in particular to the proviso
introduced by the Bengal Stamp (Amendment) Act, 1922. The said proviso reads as
follows:-
"Provided also that, except as otherwise expressly provided in this Act, and
notwithstanding anything contained in clause (a), (b) or (c) of this section or in
Schedule I, the amount indicated in Schedule I-A to this Act, shall subject to
the exemptions contained in that Schedule, be the duty chargeable under this
Act on the following instruments mentioned in clauses (aa) and (bb) of this
proviso, as the proper duty therefor respectively:
(aa) every instrument mentioned in Schedule I-A as chargeable with
duty under that Schedule, which, not having been previously executed
by any person, is executed in Bengal on or after the first date of April,
1922; and
(bb) every instrument mentioned in Schedule I-A as chargeable with
duty under that Schedule, which, not having been previously executed
by any person, is executed out of Bengal on or after the first day of
April, 1922, and relates to any property situated, or to any matter or
thing done or to be done in Bengal, and is received in West Bengal."
12. Mr. Kapur then referred to Schedule 1A to the Stamp Act which pertains to Stamp
Duty payable on instruments in West Bengal. He referred to Articles 5(a) to 5(e).
Articles 5(a), (b) and (c) clearly do not apply to the facts of this case. Article 5(d)
pertains to agreements for sale or agreements for Lease-cum-Sale. The stamp duty
prescribed for such an agreement is as prescribed for a conveyance in respect of the
property in question. This would take us to Article 23. Article 23 contemplates
properties situate firstly, within the limits of Kolkata Municipal Corporation (KMC) and
Howrah Municipal Corporation (HMC); secondly, properties situate within any other
Municipality apart from KMC and HMC; and thirdly, property situate at any other place
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not being a Municipality or the KMC or the HMC. Learned Senior Counsel submitted that
the terms 'any other Municipality' or 'any other place' apart from any other Municipality
or KMC or HMC, must be construed as meaning any other Municipality or any other
place in West Bengal. Hence, Article 23 would not apply because the property is
admittedly situate in Hyderabad. If that be so, we have to fall back upon the residuary
provision in Article 5(e) which prescribes the stamp duty for all other documents as Rs.
10/-. Accordingly, the Nomination Agreement was executed on stamp paper of Rs. 10/-.
In this connection Mr. Kapur also submitted that conveyance of the same property in
question executed in Calcutta High Court between Indian Express and IMSPL was not
stamped at all since the property was situate in Hyderabad.
13. Learned Senior Counsel then submitted that West Bengal cannot charge stamp duty
in respect of a property situate beyond its territorial limits. West Bengal cannot legislate
for the whole of India. He referred to Article 245 of the Constitution of India which
reads as follows:-
"A. 245. Extent of laws made by Parliament and by the Legislature of States--
(1) Subject to the Provisions of this Constitution, Parliament may make
laws for the whole or any part of the territory of India, and the
Legislature of a State may make laws for the whole or any part of the
State.
(2) No law made by Parliament shall be deemed to be invalid on the
ground that it would have extraterritorial operation."
He submitted that a State may make laws for the whole or any part of that State. No
State law can have operation outside the territories of that State and to the extent any
State law purports to operate beyond the boundaries of that State, the same will be
invalid. This, however, is not the case with legislation made by the Parliament which
can make laws for the whole or any part of the Indian Territory. Further, Art. 245(2)
clarifies that even if a Parliament made law purports to have extra-territorial operation,
on that ground the law shall not be invalid.
14. Mr. Kapur submitted that law for any particular plot of land must be lex situs i.e.,
law of the place where the land is situated. He submitted that as per Sec. 28 of the
Registration Act conveyance in respect of the property in question is to be registered in
Hyderabad by paying stamp duty applicable there. If the appellant has to pay stamp
duty assessed by the Kolkata Collectorate which has been done on the basis that the
Nomination Agreement is a conveyance, then, if the appellant succeeds in the
arbitration and conveyance is executed in its favour in respect of the property in
question, it will have to pay stamp duty again for registration of the conveyance in
Hyderabad. This would amount to double taxation. Schedule 1A to the Stamp Act is a
revenue provision and has to be strictly construed. Mr. Kapur also referred to a
communication dated 19 April, 2017 from the Dy. Inspector General of Registration
(Revenue), West Bengal to the Collector in Charge, Collector of Stamp Revenue, Kolkata
to the effect that the concerned nomination deed pertains to property situated in
Hyderabad and as such adjudication of stamp duty cannot be made in West Bengal. Mr.
Kapur then referred to the principle called 'doctrine of territorial nexus' evolved by the
Apex Court to find out whether or not the provisions of a particular State law have
extra-territorial operation. In this connection he referred to the decision of the Apex
Court in the case of Shrikant Bhalchandra Karulkar & Ors. vs. State of Gujarat & Anr.,
MANU/SC/0810/1994 : (1994) 5 SCC 459 and in particular paragraph 7 of the judgment

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which reads as follows:-
"7. It is no doubt correct that under Articles 245 and 246 of the Constitution of
India the Legislature of a State can make laws for the State or any part thereof.
It would be overstepping the limits of its legislative field when it purports to
affect men and property outside the State. In other words the State Legislature
has no legislative competence to make laws which have the extra-territorial
operation. Meaning of the words "extraterritorial operation have been
authoritatively laid down by this Court in various judgments. A State Legislature
has plenary jurisdiction to enact laws in respect of subjects in Lists II and III,
Seventh Schedule, Constitution of India. Such laws may be in respect of
persons within the territory, of property-immovable or movable-situated within
the State, or of acts and events which occur within its borders. So long as the
law made by the State legislature is applicable to the persons residing within its
territory and to all things and acts within its territory, it cannot be considered
extraterritorial. This Court-over a period of three decades has evolved a
principle called "doctrine of territorial nexus" to find out whether the provisions
of a particular State law have extra-territorial operation. The doctrine is well
established and there is no dispute as to its principles. If there is a territorial
nexus between the persons/property subject-matter of the Act and the State
seeking to comply with the provisions of the Act then the Statute cannot be
considered as having extraterritorial operation. Sufficiency of the territorial
connection involves consideration of two elements, the connection must be real
and not illusory and the liability sought to be imposed under the Act must be
relevant to that connection. The Act has to satisfy the principles of territorial
nexus which are essentially discernible from the factual application of the
provisions of the Act."
15. In support of his submission that once an endorsement is made under Sec. 42 of
the Stamp Act upon payment of stamp duty and penalty, if any, the defect of the
document being unstamped is permanently cured and the document becomes admissible
for all times to come in all proceedings, Mr. Kapur relied on three decisions. Firstly, he
referred to the decision of the Apex Court in the case of Hindustan Steel Ltd. vs. Messrs
Dilip Construction Company, MANU/SC/0474/1969 : (1969) 1 SCC 597, wherein it was
observed, inter alia, that the Stamp Act is a fiscal measure enacted to secure revenue
for the State on certain classes of instruments. It is not enacted to arm a litigant with a
weapon of technicality to meet the case of his opponent. In terms of Sec. 42(2), every
instrument endorsed by the Collector under Sec. 42(1) shall be admissible in evidence
and may be acted upon as if it has been duly stamped. Secondly, reliance was place on
a Full Bench decision of the Lahore High Court in the case of Nand Lal vs. The Crown,
ILR 21 Lahore 628. The question before the Full Bench was that assuming that a proper
certificate was given under Sec. 41(1) of the Stamp Act in respect of a document,
whether such certificate is final for all purposes or whether the Collector can reassess
the document on the ground that there had been a mistake in the assessment and the
instrument was really chargeable with a larger stamp duty. It was held that if the
Collector certifies by endorsement on an instrument that it is duly stamped or that it is
not so chargeable as the case may be, then such certificate is conclusive evidence of the
matter stated therein. The certificate is final and the decision cannot be reviewed either
by the Collector himself or by any other authority. Thirdly, Mr. Kapur relied on a
decision of a Division Bench of the Madras High Court in the case of Y.A.A.V.R.
Sethuraman Chettair vs. K.K.R.M.R.M. Ramanathan Chettiar (died), represented by his
legal representatives, Muthiah Achi & Ors., 59 LW 280, wherein it was observed, inter
alia, that when an instrument originally not sufficiently stamped is certified as duly
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stamped by a person duly authorised in that behalf on payment of the deficit duty as
determined by him with or without a penalty, as the case may be, it may be acted upon
'as if it had been duly stamped' which means that the instrument bears a stamp of not
less than the proper amount and that such stamp has been affixed in accordance with
the law for the time being in force. In other words, the instrument, when certified as
aforesaid, becomes effective and enforceable.
Contention of the State:-
16. Mr. Majumdar, Learned Addl. Adv. General, appearing for the State referred to Sec.
2(6) of the Stamp Act which reads as follows:-
"'Chargeable' means, as applied to an instrument executed or first executed
after the commencement of this Act, chargeable under this Act, and, as applied
to any other instrument, chargeable under the law in force in India when such
instrument was executed or, where several persons executed the instrument at
different times, first executed".
17. Learned Counsel submitted that stamp duty was chargeable on the document in
question i.e., the Nomination Agreement on execution of the document. It is the situs of
execution of the document that is relevant. Admittedly, the document was executed in
Kolkata. He then referred to Sec. 2(12) of the Stamp Act which provides that 'executed'
and 'execution', used with reference to instruments, mean 'signed' and 'signature'.
1 8 . Mr. Majumdar submitted that the writ petitioner submitted to the West Bengal
jurisdiction. Only when the assessment was not favourable, the same is sought to be
challenged. He submitted that Sec. 42 endorsement on the Nomination Agreement
suffers from jurisdictional error since the Collector at Hyderabad had no authority to
make such endorsement. It is only the revenue authority in West Bengal which has
jurisdiction to make such endorsement. As such, the endorsement under Sec. 42 is
void.
19. Learned Counsel then submitted that one cannot read the words 'in West Bengal'
either in Art. 23(b) or in Art. 23(c) of Schedule IA to the Stamp Act. The property in
question is situated either within the territorial limits of a Municipality or within the
territorial limits of any other local body in Telangana. Hence, either Art. 23(b) or Art.
23(c) will apply. Art. 5(e) is a residuary article which will apply only when no other
Articles apply. However, Art. 5(d) and consequently Art. 23 squarely apply as the
document in question is in essence an agreement for sale. As regards extra-territorial
operation of the West Bengal amendment to the Stamp Act, Mr. Majumdar submitted
that under Sec. 18(3) of the Indian Independence Act, 1947, the British laws were
allowed to continue to operate. The 1947 Act was repealed by Art. 395 of the
Constitution. However, Art. 372(1) of the Constitution provides that notwithstanding the
repeal by the Constitution of the enactments referred to in Art. 395 but subject to the
other provisions of the Constitution, all the laws in force in the territory of India
immediately before the commencement of the Constitution shall continue in force
therein until altered or repealed or amended by a competent legislature or other
competent authority. The West Bengal amendment to the Stamp Act was of 1922, that
is, pre-constitutional. Hence, the same was continued by the Indian Independence Act,
1947 and, thereafter, by Art. 372(1) of the Constitution. Explanation II of Art. 372
provides that any law passed or made by a Legislature or other competent authority in
the territory of India which immediately before the commencement of the Constitution
had extra-territorial effect as well as effect in the territory of India shall, subject to any

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such adaptations and modifications as aforesaid, continue to have such extra-territorial
effect. This, according to Mr. Majumdar, preserves the extra-territorial effect of the West
Bengal amendment to the Stamp Act. He also referred to Art. 13(3)(b) of the
Constitution which provides that 'laws in force' includes laws passed or made by a
Legislature or other competent authority in the territory of India before the
commencement of the Constitution and not previously repealed, notwithstanding that
any such law or any part thereof may not be then in operation either at all or in
particular areas.
20. Learned Counsel then referred to Sec. 17 of the Stamp Act which provides that all
instruments chargeable with duty and executed by any person in India shall be stamped
before or at the time of execution. He submitted that execution of the document is the
taxable event and not the transaction to which the document relates. Hence, stamp duty
is payable on a document in accordance with the law of the State where the document
is executed. In this connection he referred to the decision of the Apex Court in the case
of New Central Jute Mills Co., Ltd. & Anr. vs. State of West Bengal & Ors.,
MANU/SC/0256/1963 : AIR 1963 SC 1307. In particular reliance was placed on
paragraphs 14 and 20 of the judgment which read as follows:-
"14. Primarily, the liability of an instrument to stamp duty arises on execution.
Execution in India itself made the instrument liable to stamp duty under Section
3(a) as it stood before the amendment. Under Section 3(c) execution out of
India, where the instrument relates to property situated or any matter or thing
done or to be done in India together with the further fact that the instrument is
received in India, made the instrument chargeable with duty. In amending the
Stamp Act what the State legislatures substantially did was to treat the
particular State as equivalent to India. Thus, after the amendment by the U.P.
legislature the position in law is that execution of an instrument in Uttar
Pradesh is made the primary dutiable event and liability to stamp duty arises on
such execution. Apart from that, liability also arises where the instrument
though executed out of Uttar Pradesh relates to property situated or any matter
or thing done or to be done in Uttar Pradesh and is received in Uttar Pradesh. It
may be mentioned that the changes in the law made by the other State
legislatures are exactly similar.
"20. The result of this will be that if an instrument after becoming liable to duty
in one State on execution there becomes liable to duty also in another State on
receipt there, it must first be stamped in accordance with the law of the first
State and it will not require to be further stamped in accordance with the law of
the second State when the rate of that second State is the same or lower; and
where the rate of the second State is higher, it will require to be stamped only
with the excess amount and that in accordance with the law and the rules in
force in the second State."
2 1 . Mr. Majumdar then referred to the decision of the Apex Court in the case of
Hindustan lever & Anr. vs. State of Maharashtra & Ors., MANU/SC/0934/2003 : (2004) 9
SCC 438, wherein it was observed in the context of the Bombay Stamp Act that the duty
charged by the State Legislature is on the execution of the instrument. The measure of
charging the stamp duty may be fixed or ad valorem which is to be determined by the
legislature. Learned Counsel also relied on a Full Bench decision of the Bombay High
Court in the case of The Chief Controlling Revenue Authority, Maharashtra State, Pune &
Anr. vs. M/s. Reliance Industries Limited, Mumbai & Anr., MANU/MH/0426/2016 : AIR
2016 Bom 108, wherein at paragraph 20 of the reported judgment it was observed that
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as per the scheme of the Bombay Stamp Act, it is the instrument which is chargeable to
duty and not the transaction and, therefore, even if, the scheme may be the same that is
transaction being the same, if the scheme is given effect to by a document signed in the
State of Maharashtra it is chargeable to duty as per rates provided in Schedule I. As per
the scheme of the Act, the taxable event is the execution of the instrument and not the
transaction. If a transaction is not supported by execution of an instrument, there will
not be a liability to pay stamp duty. Therefore, essentially the duty is leviable on the
instrument and not on the transaction.
2 2 . Mr. Majumdar then referred to the non obstante clause in the West Bengal
amendment to Sec. 3 of the Stamp Act and relied on the decision of the Apex Court in
the case of Assistant General Manager, Central Bank of India & Ors. vs. Commissioner,
Municipal Corporation for the City of Ahmedabad & Ors., MANU/SC/0742/1995 : (1995)
4 SCC 696, in support of his submission that a non obstante clause has overriding
effect. Referring to the averments in paragraph 5 of the writ petition, Learned Counsel
submitted that although the instrument in question is described as Nomination
Agreement, in fact, it is an agreement for purchase of a property. Nomenclature of a
document is not decisive. The substance of the document is to be considered to
ascertain the nature of the document. Hence, Entry 5(d) of Schedule IA to the stamp Act
would apply. Learned Counsel finally referred to the decision of the Apex Court in the
case of National Mineral Development Corporation Ltd. vs. State of M.P. and Anr.,
MANU/SC/0447/2004 : (2004) 6 SCC 281, and in particular referred to paragraph 23 of
the reported judgment wherein it was observed inter alia that for the purpose of levying
any charge not only is the charge to be authorised by law, it has also to be computed.
The charging provision and the computation provision may be found at one place or at
two different places depending on the draftsman's art of drafting and methodology
employed. In the later case, the charging provision and the computation provision,
though placed in two parts of the enactment, shall have to be read together as
constituting one integrated provision. The charging provision and the computation
provision may differ qualitatively. In case of conflict, the computation provision shall
give way to the charging provision. In case of doubt or ambiguity the computing
provision shall be so interpreted as to act in aid of charging provision. If the two can be
read together homogeneously then both shall be given effect to, more so, when it is
clear from the computation provision that it is meant to supplement the charging
provision and is, on its own, a substantive provision in the sense that but for the
computation provision the charging provision alone would not work. The computing
provision cannot be treated as mere surplusage or of no significance; what necessarily
flows therefrom shall also have to be given effect to. Learned Counsel submitted that
Section 3 of the stamp Act which is the charging provision must be read together with
the computation provisions which are Article 5(d) read with Article 23 of Schedule IA to
the stamp Act.
Submission on behalf of the Respondent No. 11 (IMSPL):
2 3 . Appearing on behalf of the respondent number 11, Mr. Jayanta Kumar Mitra,
Learned Senior Advocate, formulated 5 propositions:-
(a) The primary dutiable event is the execution of the Nomination Agreement,
(b) Liability to pay stamp duty arose in the State where the instrument was
executed i.e. West Bengal (c) The liability having arisen in West Bengal, it can
only be discharged in accordance with the stamp laws applicable in West
Bengal (d) An instrument can be said to be duly stamped only if it bears the
stamp of the amount and description in accordance with the law of West Bengal
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 where the instrument was executed (e) If the real property is in another State,
the liability to pay stamp duty arises first under the stamp laws of the first State
i.e. West Bengal and the second liability arises under the laws of the second
State i.e. Telangana when the instrument is received there.
Learned Senior Counsel submitted that all these propositions are to be found in the
cases of New Central Jute Mills Co. Ltd. & Anr. (supra) and The Chief Controlling
Revenue Authority, Maharashtra State, Pune & Anr. (supra).
24. Mr. Mitra referred to Sec. 17 of the Stamp Act and submitted that the stamping of
the instrument has to be before or at the time of the execution of the instrument. This is
a statutory mandate. An instrument that is chargeable with stamp duty, cannot be
executed in one State and then subsequently taken to another State and stamped there.
He submitted that the Nomination Agreement under consideration is one for sale,
assignment, indemnity and nomination rolled into one. It has to be stamped as if it was
a conveyance in accordance with Art. 23 of Schedule 1A to the Stamp Act. There is no
scope for applying Art. 5(e) of Schedule IA. Once the instrument is covered by Art. 5(d)
of Schedule IA and one is taken to Art. 23, there is no looking back. One cannot then
come back to Art. 5(e). According to Mr. Mitra Art. 23(b) or Art. 23(c) of Schedule IA
would apply. Arts. 23(b) and 23(c) will have to be given an expansive meaning. The
said Articles cannot be read to be restricted to territories in West Bengal. He pointed out
that in Art. 23A, West Bengal is mentioned, but not so in Art. 23.
2 5 . On extra-territorial operation of a statute, Mr. Mitra referred to the 7 Judges'
decision of the Apex Court in the case of Bengal Immunity Company Limited vs. State of
Bihar & Ors., MANU/SC/0083/1955 : AIR 1955 SC 661. Relying on paragraphs 106 and
107 of the said judgment he submitted that a law enacted by the State in respect of a
matter assigned exclusively to its jurisdiction stands on the same footing as a law
passed by the Parliament on a matter within its jurisdiction. Both the legislators derive
their authority from the same source, i.e., The Government of India Act, 1935 or the
Constitution of India. Under these statues, the State is not subordinate to the Centre, its
authority being supreme in respect of the matters entrusted to it. A subordinate
legislature has plenary powers in respect of the topics assigned to it and this principle
will apply as much to the State with reference to the matters enumerated in the State
List as to the Centre with reference to the topics mentioned in the Union List and the
Concurrent List. If legislation with extra-territorial operation is within the competence of
the Union, it is equally within the competence of the State. The words 'extra-territorial
operation' are used in two different senses as connoting firstly, laws in respect of acts
or events which take place inside the State but have operation outside, and secondly,
laws with reference to the nationals of a State in respect of their acts outside. In its
former sense, the laws are strictly speaking intra-territorial though loosely termed
'extra-territorial' and that under Art. 245(1) it is within the competence of the
Parliament and of the said legislatures to enact laws with extra-territorial operation in
that sense. The words 'laws with extra-territorial operation' in Art. 245(2) must be
understood in their second and strict sense as having reference to the laws of a State
for their nationals in respect of acts done outside the State. He submitted that the West
Bengal amendment to the Stamp Act may have extra-territorial operation in the first
sense which is quite permissible and would not invalidate the said provisions of law.
26. Mr. Mitra then referred to the decision of the Apex Court in the case of State of
Bombay vs. R.M.D. Chamarbaugwala & Anr., MANU/SC/0019/1957 : AIR 1957 SC 699,
which is on the concept of territorial nexus and extraterritorial operation of a statute.
The Apex Court observed that the doctrine of territorial nexus is well-established and
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there is no dispute as to the principle. If there is a territorial nexus between the person
sought to be charged and the State seeking to tax him, the taxing statute may be
upheld. Sufficiency of the territorial connection involves a consideration of two
elements, namely, the connection must be real and not illusory and the liability sought
to be imposed must be pertinent to that connection. It is of no importance on the
question of validity of the statute that the liability imposed is or may be altogether
disproportionate to the territorial connection. If the connection is sufficient in the sense
mentioned above, the extent of such connection affects merely the policy and not the
validity of the legislation. The question whether in a given case there is sufficient
territorial nexus is essentially one of fact.
27. Mr. Mitra then referred to Secs. 45 and 56 of the Stamp Act. Sec. 45 pertains to the
power of the Revenue Authority to refund the penalty of excess duty in certain cases.
Sec. 56 provides inter alia that the power exercisable by a Collector shall be subject to
the control of the Chief Controlling Revenue Authority. Further, if any Collector, acting
under Secs. 31, 40 or 41, feels doubt as to the amount of duty with which any
instrument is chargeable, he may draw up a statement of the case and refer it, with his
own opinion thereon, for the decision of the Chief Controlling Revenue Authority. Such
authority shall consider the case and send a copy of its decision to the Collector who
shall proceed to assess and charge the duty, if any, in conformity with such decision.
Mr. Mitra submitted that either the Collector or the Chief Controlling Revenue Authority
should assess the stamp duty in the present case. The facts and figures are with them.
They are experts in the field. The Writ Court is not the proper forum for assessing the
stamp duty. The High Court in exercise of its power under Art. 226 should not act as the
assessing authority. Referring to the impugned judgment and order, Mr. Mitra submitted
that the Learned Single Judge also felt that assessment of stamp duty is not within the
Court's domain. Hence, he referred the matter to the Chief Controlling Authority under
Sec. 56 of the Stamp Act. How a statutory provision has been understood and
implemented by the authorities in the past would throw some light on interpretation of
such provision. Hence, the matter should be referred to the revenue authority for
assessment of the stamp duty. Mr. Mitra also submitted that by the order under
challenge in this appeal both the writ petition and CAN 3632 of 2018 were disposed of.
The CAN had additional parties and additional prayers. This could not be done without
amending the writ petition. This is a glaring irregularity.
28. Mr. Mitra also referred to Sec. 57 of the Stamp Act which provides essentially that
the Chief Controlling Revenue Authority may state any case referred to it under Sec.
56(2) or otherwise coming to its notice and refer such case, with its own opinion
thereon to the High Court which shall be decided by not less than three Judges of the
High Court.
29. Learned Sr. Counsel also referred to a decision of a learned Single Judge of this
Court in the case of Dr. Swapnadin Lahiri vs. Tridib Das Roy, MANU/WB/0562/1999 :
(1999) II CWN 527, wherein it was observed inter alia that in view of the explanation
added to Art. 5 of Schedule IA to the Stamp Act, even in case of a mere agreement for
sale where there is no promise to deliver possession immediately after or before
execution of the agreement, even if it is a mere agreement to transfer or deliver
possession of immovable property with an intention to transfer right, interest or title to
such property at any future date by executing a separate conveyance, such agreement is
to be stamped as if it is a conveyance as mentioned in Art. 23 of the said Schedule. We
have considered the said decision. There is no quarrel with the proposition of law laid
down therein but in our opinion, this decision is of not much relevance to the points
involved in this case.
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30. Regarding Sec. 42 of the Stamp Act, Mr. Mitra submitted that this provision would
have come to the writ petitioner's aid had stamp duty been paid on the Nomination
Agreement in accordance with the West Bengal Stamp Laws. Sec. 42 cannot be read in
isolation. It has to be read along with Sec. 3 and Sec. 17 of the Act. Regarding the
decision in Nand Lal (supra), he submitted that the issue of territorial nexus was not
discussed in that case. Regarding the decision in Hindustan Steel Ltd. (supra), he
submitted that the issue in that case was completely different which was although an
instrument which is not stamped as required by the Stamp Act, may, on payment of
stamp duty and penalty, be admitted in evidence, whether or not such an instrument
can be acted upon. He submitted that this decision has no relevance to the facts of the
present case.
As regards the letter dated 19 April, 2017 written by the Dy. Inspector General of
Registration (Revenue), West Bengal to the Collector in Charge, Calcutta of Stamp
Revenue, Calcutta, referred to above, Mr. Mitra submitted that this letter cannot be read
in isolation. He referred to the order of the learned Arbitrator dated 8 July, 2017
whereby the original of the Nomination Agreement was impounded by the learned
Arbitrator and sent to the Collector of Stamp Revenue, Calcutta for assessment of stamp
duty. He then referred to a letter dated 1 August, 2017 written by the Collector of Stamp
Revenue, Calcutta to the Commissioner & Inspector General (Registration and Stamps),
Telengana, requesting the addressee to inform the Collector about the present market
value of the properties mentioned in the Schedule to the Nomination Agreement since
the land in question is situated in Telengana.
Appellants in reply:-
31. In reply, Mr. Kapur, learned Sr. Counsel submitted that the principal prayer in the
writ petition is for a declaration to the effect that the West Bengal Revenue Authorities
cannot impose stamp duty on the Nomination Agreement. This is a question of law and
should be decided by this Court. He further submitted that Art. 23 of Schedule IA to the
Stamp Act should be read down as otherwise the Bengal Amendment to the Stamp Act
will be rendered unconstitutional by purporting to have operation outside the State.
32. As regards the decision of the Apex Court in Bengal Immunity Company Limited
(supra), learned Sr. Counsel submitted that the paragraphs relied upon by learned
Counsel for the respondent No. 11 are part of the dissenting judgment of a learned
member of the bench. Four learned Judges out of seven declined to answer the question
of extra-territoriality. Hence, this decision is no authority on the point of extra-territorial
operation of a statute.
3 3 . Mr. Kapur further submitted that in the case of amalgamation, etc., of two
companies if the transferor company has properties in various States including West
Bengal, then, only the property of the transferor company which is situate in West
Bengal is chargeable to stamp duty in West Bengal as provided by Art. 23A of Schedule
IA to the Stamp Act. This is obviously because of the principle of territorial nexus.
3 4 . After Mr. Kapur, Learned Sr. Counsel concluded his submission in reply, Mr.
Mukherjee, Ld. Sr. Counsel appearing for the respondent No. 11, urged another point in
support of his submission that a State law can have extra territorial operation. He
referred to Sec. 30B of the Registration Act, 1908 which is a West Bengal amendment.
The said Section reads as follows:-
"30B. Special power of registration in certain cases by Registrar of Assurances,
Calcutta. Notwithstanding anything contained elsewhere in this Act, the
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 Registrar of Assurances, Calcutta, may without regard to the situation in any
part of India outside the State of West Bengal of the property to which a
document relates, receive and register the document where such document is in
the nature of_
(a) A mortgage bond executed by an employee of a Government, a
statutory body or a local authority in favour of such Government,
statutory body or local authority as security for advances taken by such
employee for house-building purposes; or
(b) A reconveyance executed by a Government, a statutory body or a
local authority in favour of employee of such Government, statutory
body or local authority on repayment of the advances taken by such
employee for house-building purposes."
He submitted that Sec. 30B(b) contemplates that the Registrar of Assurances, Calcutta
may receive and register a document which is in the nature of a re-conveyance of a
property notwithstanding that the property may be situate anywhere in India outside the
State of West Bengal. He then referred to Art. 54 of Schedule IA to the Stamp Act which
pertains to re-conveyance of mortgaged property. Art. 54(a) provides that if the
consideration for which the property was mortgaged does not exceed Rs. 1000/-, a
deed of reconveyance of such property would attract the same duty as a conveyance
(Art. 23) for the amount of such consideration as set forth in the reconveyance. He
submitted that a reconveyance of a property situate anywhere outside the State of West
Bengal would still attract Art. 23 and hence, the argument that Art. 23 only pertains to
properties situate in West Bengal as fallacious. He further submitted that the Stamp Act
is a taxing statute and nothing can be added to the provisions contained therein. In this
connection he relied on extracts from 'Principles of Statutory Interpretation' by G.P.
Singh, 13th Ed., (2012) in support of his submission that a taxing statute is to be
strictly construed. Nothing is to be read into, nothing is to be implied. He also relied on
the decision of the Apex Court in the case of M/s. Polestar Electronic (Pvt.) Ltd. vs.
Additional Commissioner, Sales Tax & Anr., MANU/SC/0337/1978 : (1978) 1 SCC 636,
in support of such submission.
3 5 . In response, Mr. Bhachawat, Ld. Senior Adv., appearing for the appellants
submitted that a provision in the Registration Act cannot have any relevance for the
purpose of interpreting a provision of the Stamp Act. Further, Sec. 30B of the
Registration Act gives a special power of registration in certain cases to the Registrar of
Assurances, Calcutta. It starts with the words 'notwithstanding anything contained
elsewhere in this Act'. This does not mean that it has any overriding effect as far as
other statutes are concerned.
Court's View:
36. The primary prayers in the writ petition on which the impugned order was passed
are for a declaration that the Nomination Agreement in question is duly stamped and
also for a declaration that the said agreement is not covered by Art. 23 of Schedule IA
to the Stamp Act. There is a further prayer for directing the respondents to return to the
appellants the original copy of the Nomination Agreement. The Ld. Single Judge in
effect held that the said agreement is insufficiently stamped and accordingly referred
the matter to the Chief Controlling Revenue Authority, Calcutta under Sec. 56 of the
Stamp Act for taking a decision regarding the stamp duty payable. If the appellants are
correct in their submission that the said agreement is duly stamped and not covered by

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Art. 23 of Schedule IA to the Stamp Act, then the Ld. Single Judge should not have
referred the matter to the Chief Controlling Revenue Authority, Calcutta nor should have
directed that for using the said document in evidence before any forum the appellants
shall deposit 75 per cent of the sum of Rs. 7,43,60,949, being the sum adjudicated by
the Collector of Stamp Revenue, Calcutta.
37. The Collector who passed the final assessment order which was impugned before
the Ld. Single Judge was not the same person who had heard the parties. It is
completely unacceptable that one person holding the office of Collector hears the
concerned parties and another person, being his successor in the same post without
hearing the parties, passes the assessment order. This is inconceivable. The order of
Manas Barman, the Collector who passed the final assessment order is completely
indefensible. To be fair to the respondents they were also ad idem on this point. The
said assessment order is set aside.
38. Now, coming to the moot point of whether the agreement in question is sufficiently
stamped or not, the appellants argued that Rs. 10/- was the stamp duty payable and the
agreement was accordingly executed on a non-judicial stamp paper of Rs. 10/-. Their
alternative agreement was that, in any event, the issue of assessment of stamp duty
cannot be reopened since the said agreement bears endorsement of the Collector at
Hyderabad under Sec. 42 of the Stamp Act.
39. The respondents argued that the said agreement would attract stamp duty as per
Art. 23 of Schedule IA to the Stamp Act read with Art. 5 thereof. We will proceed on the
basis that the agreement is one relating to sale or lease-cum-sale of immovable
property. If that be so, prima facie Art. 5(d) of Schedule IA is attracted. The proper
stamp duty prescribed for such a document is the same duty as is prescribed for a
conveyance (Art. 23). Art. 23, as noted hereinabove, contemplates properties situate
within the territorial limits of firstly, KMC or HMC; secondly, within the territorial limits
of Municipal Corporation or Municipality or a notified area other than those included in
the first category; and thirdly, properties situate in the areas other than those included
in the first two categories. The argument of the respondents that Municipal Corporation
or Municipality or a notified area mentioned in Art. 23(b) or other areas mentioned in
Art. 23(c) will include any area in India is not acceptable to us. Schedule IA to the
Stamp Act is a State amendment. The State can legislate in respect of any activity
happening or any person residing within its territorial limits. A State legislation cannot
have extra territorial operation. It is impossible for us to accept the respondents'
submission that by the State amendment, the State can charge stamp duty in
accordance with Art. 23 of Schedule IA for conveyance in respect of properties situate
outside the State, be it Kashmir or be it Kerala. This would militate against Art. 245 of
the Constitution of India which clearly states that a Parliamentary legislation will not be
invalid on the ground that it purports to have extra territorial operation. However, as
regards State legislation, there is no such saving provision
4 0 . In Nautam Prakash DGSVC, VADTAL & Ors. vs. K.K. Thakkar & Ors.,
MANU/SC/8132/2006 : (2006) 5 SCC 330, the Apex Court observed that the office for
administration of the Trust in question was situate in the State of Gujarat. Only some
properties of the Trust were situate in Maharashtra. The Trust was registered in Baroda.
The Apex Court held that in terms of Clause 4(b) of the Bombay Charity Commissioner
(Regional Re-Organization) Order, 1960 the jurisdiction of the Assistant Charity
Commissioner, Greater Bombay was confined only to the management of the property
situate within the State of Maharashtra. It was further observed that the legislature of a
State while enacting a law is required to maintain the territorial nexus. Only in certain
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cases, extra-territoriality may be accepted. Ordinarily, therefore, the legislation enacted
by a State will be applicable only within the territorial limits thereof. There is a general
presumption that the legislature does not intend to exceed its jurisdiction. It was further
observed, whether in the area of international law or domestic law, lex situs, has to be
determined in the context of the proper law applicable thereof, be it in the realm of
contract or otherwise. Thus, it is clear that the State can legislate with respect to
property situate within its territorial limits or with respect to persons residing in that
State, but not beyond that. In Shrikant Bhalchandra Karulkar (supra), the Apex Court
observed, inter alia, that the State would be over-stepping the limits of its legislative
field when it purports to affect men and property outside the State.
41. Mr. Mitra, Ld. Senior Counsel, appearing for the respondent No. 11 relied on the
Apex Court decision in Bengal Immunity Company Ltd. (supra) to support his
submission that a State law can have extra territorial operation where the law is in
respect of acts or events which take place inside the State but have operation outside.
Mr. Kapur, Ld. Senior Counsel, pointed out that the said observation relied on by Mr.
Mitra is part of a dissenting judgment of a learned Member of the Bench. He pointed out
that four learned Judges out of seven did not answer the question of extraterritoriality.
Hence, the said decision does not help Mr. Mitra. We have gone through the said
decision and we find that Mr. Kapur is right.
42. The decision in the case of State of Bombay vs. RMD Chamarbaugwala (supra) also
does not help the respondents. We do not find sufficiency of territorial connection
between the State of West Bengal and a property situate in Hyderabad. There is no real
connection for the State to charge stamp duty on the basis that the Nomination
Agreement is a conveyance of a property situate in Hyderabad. Mere execution of the
Nomination Agreement in West Bengal in respect of a property situate in Hyderabad
would not, in our considered view, attract Art. 23 of Schedule IA to the Stamp Act.
43. Learned Counsel for the respondents submitted that execution of the document is
the primary chargeable event in so far as the stamp duty is concerned. Hence, stamp
duty will be attracted in accordance with Schedule IA of the Stamp Act. In this
connection, reliance was placed on the Apex Court decision in the case of New Central
Jute Mills Co. Ltd. & Anr. (supra). We are not for a moment saying that no stamp duty
is payable on the said Nomination Agreement. According to us, Art. 23 of Schedule IA is
not attracted. What is applicable is Art. 5(e) which is the residuary article, which
prescribes the stamp duty of Rs. 10/-.
44. It is also pertinent to note that a communication dated 19 April, 2017 was sent by
the Dy. Inspector General of Registration (Revenue), West Bengal to the Collector-in-
Charge of Stamp Revenue, Calcutta stating therein that the concerned Nomination
Agreement relates to property situate in Hyderabad and as such adjudication of stamp
duty cannot be made in West Bengal. It was only subsequently when the Ld. Arbitrator
impounded the said agreement and sent the same to the Collector for assessment of
proper stamp duty that the stand of the State changed.
45. In course of argument, Mr. Kapur, Ld. Senior Counsel, had called upon learned
Counsel for the State to demonstrate a single instance where an agreement for sale
executed in West Bengal in respect of a property situate outside West Bengal has been
charged with stamp duty in accordance with Art. 23 of Schedule IA to the Stamp Act.
The State was unable to show even one such instance. IMSPL (respondent No. 11) has
filed two applications under O. 41 R. 27 of the CPC. The first of those applications is
CAN 6364 of 2018. Documents have been annexed to the said application to show that

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even for conveyance executed in West Bengal in respect of properties situate outside
West Bengal, stamp duty has been charged in accordance with Art. 23 of Schedule IA.
We have gone through such documents. The first document is a conveyance of a
property situate in Patna. The said conveyance is registered in West Bengal on a non-
judicial stamp paper of Rs. 10/-. The second document is a conveyance dated 2 March,
1995 in respect of a property situate at Rash Behari Avenue, Kolkata. The third
document is a sale deed executed on non-judicial stamp paper of Rs. 10/- in respect of
a property in Uttar Pradesh. The fourth document is an indenture of sale in respect of a
property situate in Uttar Pradesh executed on stamp paper of Rs. 1575/-. The last
document which is dated 29 July, 1989 is a deed of sale dated 29 July, 1989 in respect
of a property situate in Mathura. It is not clear from the copy of the sale deed annexed
to the application as to how much stamp duty was paid on such sale deed. None of the
said documents establishes that for an agreement of sale in respect of property situate
outside West Bengal, stamp duty for the purpose of registration has been charged in
accordance with Art. 23 of Schedule IA to the Stamp Act. In any event, payment of
higher stamp duty than is required by a party in respect of an indenture in a given case
would not change the law.
The respondent No. 11 has filed another application being CAN 6601 of 2018 praying
for a direction on the State to produce all records lying in the office of Registrar of
Assurances, Kolkata relating to the documents/instruments registered after 31 January,
1994 till date at the Office of the Registrar of Assurances, Kolkata relating to property
situated outside the State of West Bengal. We see no reason to pass any order on such
application. The court is not going to fish out any evidence for a party. As noted above,
in spite of being called upon by the appellants, the State could not show one instance
where stamp duty has been charged by the State in relation to an agreement for sale
pertaining to a property situate outside West Bengal, in accordance with Art. 23 of
Schedule IA to the Stamp Act.
4 6 . Learned Counsel for the respondents argued that Art 23A which pertains to
conveyance in respect of amalgamation, merger, etc., envisages transfer of a property
situate in West Bengal. However, no such mention of 'West Bengal' is there in Art. 23.
Hence, the words 'West Bengal' should not be read into Art. 23. We are not able to
accept this submission. We look at it in a different way. Art. 23A contemplates that
stamp duty can only be charged when a property of the transferor company is located in
the State of West Bengal. The said provision does not levy stamp duty in respect of
properties of a company that may be situate outside the State of West Bengal. This also
supports our view that the State did not intend to charge stamp duty in accordance with
Art. 23 of Schedule IA to the Stamp Act in respect of registration of a conveyance or
agreement of sale pertaining to a property situate outside West Bengal.
4 7 . There is no doubt that the State can charge stamp duty for registration of any
instrument pertaining to transfer of a property in accordance with Art. 23 so long as the
property is situate within the territorial limits of the State. However, it is not possible
for us to accept the submission that the State of West Bengal can charge stamp duty in
accordance with Art. 23 in respect of an agreement of sale executed in West Bengal in
respect of property anywhere in India. This would also lead to gross injustice to a
citizen. If A and B enters into an agreement of sale in respect of a property in
Pondicherry and if for registration of such agreement they have to pay the same stamp
duty as is applicable for conveyance in accordance with Art. 23, it will lead to double
taxation since when the property is actually sold and conveyance is executed and
registered, the purchaser will have to pay full stamp duty applicable for a conveyance in
Pondicherry in view of the provision of Sec. 28 of the Registration Act. Such a situation
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cannot be countenanced.
48. For the reasons indicated above, we are of the view that Art 23 of Schedule IA to
the Stamp Act does not apply to the Nomination Agreement in question. It is Art. 5(e)
of Schedule IA which is attracted and accordingly the Nomination Agreement is duly
stamped.
4 9 . Coming to the second question, we are of the view that once the Nomination
Agreement bears the endorsement under Sec. 42 of the Stamp Act, the issue of
assessment of stamp duty cannot be reopened. We have discussed above the decision
of the Apex Court in the case of Hindustan Lever & Anr. (supra), the decision of a Full
Bench of the Lahore High Court in the case of Nand Lal (supra) as well as the decision
of the Madras High Court in the case of YAAVR Sethuraman Chettair (supra), all of
which support the view we are taking. The Stamp Act is a central legislation having all
India operation. Once the defect of an instrument being unstamped or insufficiently
stamped is cured following the procedure under Sec. 42 of the Stamp Act, it shall be
admissible in evidence and may be registered and acted upon and authenticated as if it
had been duly stamped. No territorial restriction is indicated in Sec. 42. The defect is
cured once and for all and the instrument is admissible in evidence and can be acted
upon anywhere within the territory of India. It is irrelevant as to the Collector of which
State has issued the certificate under Sec. 42. In our view, once the Collector of a State
certifies by endorsement on an instrument that proper duty, or proper duty and penalty,
as the case may be, have been levied in respect of an instrument, then, notwithstanding
the State where the instrument was executed, the instrument becomes admissible in
evidence and may be registered and acted upon and authenticated as if it had been
stamped from the very inception. It is a legal fiction which has to be given full effect.
50. We are not impressed with the argument of the respondent No. 11 on the basis of
S ec. 30B of the Registration Act. It is a special power granted to the Registrar of
Assurances, Kolkata as an exceptional case. The facts of the present case do not come
within the purview of the said Section. Further, the said provision does not have any
bearing on the Stamp Act.
51. For the reasons aforestated, this appeal succeeds. The order impugned is set aside.
The writ application is allowed. The respondents are directed to handover the original of
the Nomination Agreement to the appellant company within seven days from date. It is
declared that the Nomination Agreement is sufficiently stamped and admissible in
evidence and may be registered and acted upon.
5 2 . MAT 593 of 2018 along with CAN 6364 of 2018 and CAN 6601 of 2018 are
accordingly disposed of. There will be no order as to costs.
53. In view of the judgment passed in MAT 593 of 2018, MAT 624 of 2018 is also
accordingly disposed of. MAT 624 of 2018 would also be governed by the judgment
delivered in MAT 593 of 2018.
54. Urgent certified photocopy of this judgment and order, if applied for, be given to
the parties upon compliance of necessary formalities.
Jyotirmay Bhattacharya, C.J.
I agree.
Later:

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After the judgment is delivered, prayer is made on behalf of the respondent No. 11 for
stay of operation of the judgment and order for four weeks, though the State
Government has not prayed for stay of operation of the judgment and order. However,
to give an opportunity to the respondent No. 11 to approach the higher forum, there
will be stay of operation of this judgment and order for a period of two weeks from
date.
© Manupatra Information Solutions Pvt. Ltd.

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