Prithvi Raj, J.
(1) Sudershan Talkies (Delhi) Private Ltd. (herein called 'the petitioner) took over the business of Sudershan Talkies, including its assets and liabilities, owned by Sarvshri Brij Lal Chawla and Surender Chawla in lieu of which 1440 equity shares of Rs. 100.00 each of Sudershan Talkies (Private) Ltd. were allotted to them. The Company in pursuance of the provisions of section 75(1) of the Companies Act, 1956 (1 of 1956) (herein called . 'the Companies Act) filed a return before the Registrar of Companies in respect of the said 1440 fully paid up shares for Rs. 100.00 each allotted to Brij Lal Chawla and Surender Chawla for having acquired the business of Sudershan Talkies for a total consideration of Rs. 1,45,354.85 paise. Since no deed had been executed between the parties in respect of this transaction the particulars of the contract for allotment of the above-said shares, required to be furnished under section 75(2) of the Companies Act, were furnished in Form 3 prescribed under the Companies Act. Stamp duty of Rs. 5.00 was paid on Form 3, by affixing the adhesive stamp of the said value on it.
(2) The Assistant Registrar of Companies, on examining Form 3, was of the view that the document was not properly stamped. He accordingly impounded the same and forwarded it under section 38 of the Indian Stamp Act, 1899 (Act Ii of 1899) (herein called the 'Stamp ;Act') to the Collector of Stamps for Realizing the proper stamp duty together with the penalty. The Collector agreed with this view holding that if the contract particulars of which were supplied in Form 3, had been reduced to writing, it would have been a deed of conveyance of immovable property. The Collector by his order dated 17th May, 1969, required the petitioners to make good the deficiency of stamp duly amounting to Rs. 4365.00 as also pay the sum of Rs. 7,267.75 paise as transfer duty under section 147 of the Delhi Municipal Corporation Act along with penalty in the sum of Rs. 11,627.75 paise. 'The petitioner challenged the said order in revision before the Chief Controlling Revenue Authority but remained unsuccessful. Aggrieved by the order dated 30th September, 1969, passed by the Chief Controlling Revenue Authority, the petitioner challenged the same in Civil Writ Petition No. 1317 of 1969. By C. M. petition No. 1556-W of 1969 filed along with the writ petition, the petitioner prayed that the Collector be restrained from effecting recovery of the amount demanded. V. S. Deshpande J. before whom C. M. P. No. 1556-W of 1969 came up for hearing stayed the recovery of the amount, on the condition that the petitioner was to make an application to the Chief Revenue Controlling Authority for making a reference to this Court under section 57 of the Stamp Act. The petitioner accordingly made an application before the Chief Revenue Controlling Authority contending that the following substantial questions of law were involved in the case which should be referred to the High Court :
(1)Whether a return under section 75 of the Complies act in this case amounts to a sale deed or it is only an agreement to sell though the property conveyed includes immovable property which could not be sold or conveyed otherwise than by a registered sale deed.
(2)Whether the immovable property included in the said return could validly be conveyed by the said return under section 75 of the Companies Act and the firm concerned was not required to execute another deed of sale duly stamped and registered.
(3)Whether a return under section 75 of the Companies Act which purports to convey property including immovable property is an agreement to transfer property in future and is thus not a conveyance.
(4)Whether the duty on transfer of property charged under section 147 of the Delhi Municipal Corporation Act be treated at par with the duties livable under the Stamp Act for the purposes of the penalty.
(3) The Chief Controlling Revenue Authority by its order dated 11th May, 1970. declined to refer the first three questions for the reasons stated in his order which for the purpose of answering the present reference are not required to be gone into. In respect of question No. 4, it was held that the provision of section 147 of the Delhi Municipal Corporation Act, 1957, (herein called 'the Corporation Act') is in the nature of increasing the stamp duty and consequently any default in payment of the surcharge would attract all the provisions of the Stamp Act including impounding of documents and imposition of penalty. The Chief Controlling Revenue Authority, however, in the exercise of powers vested in it under section 57(1) of the Stamp Act, has referred the following question to this Court for its opinion :
'WHETHERtransfer duty under section 147 of the Delhi Municipal Corporation Act which is recoverable as a surcharge is subject to the provisions of section 33 and 40 of the Indian Stamp Act in regard to impoundment and penalty'.
(4) With a view to answering the reference it would be appropriate to note the relevant provisions of the Corporation Act. Section 113(l)(e) authorises the Corporation to levy a duty on the transfer of property. Sub-section (2) of section 147 envisages that the said duty shall be levied :
'(A)in the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899, as in force for the time being in the Union Territory of Delhi, on every instrument of the description specified below, and (b) at such rate as may be determined by the Corporation not exceeding five percent on the amount specified below against such instruments : Instruments: Description of instrument Amount on which duty should be levied. (i) Sale of immovable The amount or value of property the consideration for the sale, as set forth in the instrument
(5) It is evident from. a perusal of section 147 that the duty leviable, under the said section, is in the form of surcharge livable under the Corporation Act over and above the Stamp duty. The transfer duty is thus assessed independently of the stamp duty. The proceeds so collected are credited to the fund of the Corporation. That being so, a conveyance deed cannot be impounded under section 33 of the Stamp Act, nor can it be subjected to penalty under section 40 of the said Act for failure to pay the duty envisaged by section 147 of the Corporation Act. We are fortified in this view by the judgment of a Full Bench of this Court in Dayal Singh v. The Collector of Stamps, (1972) Del 593 wherein it was observed that the transfer duty livable under section 147 of the Corporation Act, on the transfer of property in the form of surcharge is livable under the Corporation Act; that the transfer duty is levied and collected over and above the samp duty, being payable to the Corporation and goes to the Corporation fund; and that the transfer duty is not a percentage of the stamp duty, on the other hand it is a percentage of the amount or value of the consideration for the sale as set forth in the instrument of conveyance. Further, the trans- fer duty is assessed independently of the stamp duty on the amount of consideration for sale. In the premises, it was held that a sale deed is not 'chargeable' to transfer duty under the Stamp Act and that the instrument of sale, 'cannot either be impounded under section 33 or can be subjected to the imposition of a penalty under section 40 of the Stamp Act on the ground .that the duty on transfer of property levied' under the Corporation Act, 'is either not paid or is insufficiently paid'.
(6) The view taken by the Chief Controlling Revenue Authority that 'the provision-of section 147 is in the nature of increasing the stamp duty and consequently any default in the payment of this surcharge would attract all the provisions of the Stamp Act including impounding of documents and imposition of penalty' is unwarranted on a plain reading of section 147
(7) The question referred accordingly, is answered in the negative but in the circumstances of the case, parties are left to bear their respective costs.
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