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Laxmikant and anr. Vs. Collector and Assistant Superintendent of Stamps, Ahmedabad - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Case NumberStamp Ref. Nos. 1 and 2 of 1971
Judge
Reported inAIR1976Guj158; (1976)GLR408
ActsBombay Stamp Act, 1958 - Sections 2 - Schedule - Articles 4, 25, 52, 55, 55(A) and 56
AppellantLaxmikant and anr.
RespondentCollector and Assistant Superintendent of Stamps, Ahmedabad
Appellant Advocate P.T. Acharya, Adv.
Respondent Advocate J.R. Nanavati, Asst. P.P. and; H.V. Chhatrapati, Adv. of B.K. & G.
Cases ReferredGoli Eswariah v. Commr. of Gift Tax
Excerpt:
- - 797/ -together with the penalty of like amount......the document in question can be treated as a 'settlement' within the meaning of art. 55. the word 'settlement' is defined in clause (t) of section 2 of the act. this definition is as under:'(t) 'settlement means any nontestamentary disposition in writing of moveable or immoveable property made. (i) in consideration of marriage, (ii) for the purpose of distributing property of the settler among his family or those for whom he desires to provide, or for the purpose of providing for some person dependant on him, or (iii) for any religious or charitable purpose, and includes an agreement in writing to make such a disposition and where any such disposition has not been made in writing any instrument recording whether by way of declaration of trust or otherwise, the terms of any such.....
Judgment:

T.U. Mehta, J.

1. In both of these References the question involved is as to what is the proper Article of the First Schedlue of the Bombay Stamp Act, 1958 applicable to the case wherein a person throws his moveable property in the family hotch-potch and converts it from a separate property into a joint family property.

2. The point involved in both the References is the same and, therefore, we shall refer only to the facts relating to Reference No. 1/71. The facts of this Reference are that one Laxmikant alias Arvindbhai Chandulal Parikh, possessed the cash amount of Rs. 20,000/-. He threw this amount in the Common stock of the family consisting of himself, his wife and three minor sons by making a declaration in writing as found at Ann. 'B'. This declaration was made in a document bearing a stamp of Rs. 3/-. When it was presented for registration, the Collector and Assistant Superintendent of Stamps, Gujarat State found that it as chargeable with stamp duty of Rs. 800/- under Art. 55 (A) (ii) of the 1st Schedule of the Bombay Stamp Act 1968, (which is hereinafter referred to as 'the Act'), and therefore, was chargeable under Art. 25 (a) of that Schedule as a conveyance. He therefore found that there was a deficit of stamp duty of Rs. 797/-. Under the circumstances, he made an order under See. 39 (b) of the Act, requiring the stamp duty of Rs. 797/ -together with the penalty of like amount. He thus passed an order of recovery of the total amount of Rs. 1594/-, from the defaulter Laxmikant alias Arvindbhai Chandulal Parikh. The matter was there after taken to the Chief Controlling Revenue Authority, Gujarat State, who by his order D/- 11-11-1965 confirmed the view taken by the Collector, Thereafter a writ application was filed before this court in which the Chief Controlling Revenue Authority was directed by this court to make a Reference to this court under Section 54 (1) of the Act. Accordingly 'he present Reference is made and the following question is referred to us:

'Which is the proper article under which the document (Ann. B) dt. December 22, 1964 is chargeable with stamp duty under the Bombay Stamp Act, 1958. Article 55 (A) (ii) read with Article 25 t I a)/Article 52 (b) read with See. 6 of Bombay Stamp Act, 1958 or Article 4 as claimed by the applicant or any other Article,'

3. Article 55 of the First Schedule, under which the document in question is sought to be charged, speaks of a 'settlement.' Clause (1) thereof speaks of the instrument by which the settlement is made for a religious or charitable purpose. For this Reference, we are not concerned with this clause. Clause (ii) speaks of other cases and provides that the duty chargeable would be the same as leviable on a conveyance under clause (a) or (b), as the case may be, of article 25, for a consideration equal to the amount or value of the property settled. Thus, if the case falls under clause (ii) of Art. 55 (A), then the duty is to be charged as if the document in question is a conveyance and -that charge should, be made as provided either in clause (a) or (b) of Article 25. It is, therefore, necessary to see what the, Article 25 provides. Art. 25 (a) provides for a conveyance other than a conveyance specified in clause (b) not being a transfer charged or exempted under Article No. 59 and clause (b) contemplates a conveyance not being a transfer charged or exempted under Article No. 59, so far as it relates to immoveable property situate within an urban area. This case is not covered by Art. 59 and, therefore, it is not necessary to refer to that article. The charge which is to be made on conveyance falling either in clause (a) or (b) of Art. 26 is ad valorem and, according to the- table given there under.

4. The alternative plea of the Revenue is that if it is found that the document in question does not fall within Article 55 of the First Schedule as a settlement, it should be treated as a release falling under Article 52. It is, therefore, necessary to mention what Article 52 provides. This article provides for a release, that is to say, any instrument (not being such a release as is provided for by See. 24) whereby a person renounces a claim upon another person or against any specified property. Therefore, we have to consider in the alternative, whether the document, which is presented for registration, amounts to I release' within the meaning of this Article 52.

5. We shall first take up for our consideration the question whether the document in question can be treated as a 'settlement' within the meaning of Art. 55. The word 'Settlement' is defined in clause (t) of Section 2 of the Act. This definition is as under:

'(t) 'settlement means any nontestamentary disposition in writing of moveable or immoveable property made.

(i) in consideration of marriage,

(ii) for the purpose of distributing property of the settler among his family or those for whom he desires to provide, or for the purpose of providing for some person dependant on him, or

(iii) for any religious or charitable purpose, and includes an agreement in writing to make such a disposition and where any such disposition has not been made in writing any instrument recording whether by way of declaration of trust or otherwise, the terms of any such disposition.'

6. This definition of the word 'settlement' shows that the document in question must be found to be a disposition. The word 'disposition' has been construed by Supreme Court in Goli Eswariah v. Commr. of Gift Tax, A. P. : [1970]76ITR675(SC) . The question which arose in that case was whether the unilateral declaration of a Hindu coparcener, whereby he throws his self acquired property into the common stock of joint family property, amounts to a transfer so as to attract the provisions of the Gift-tax Act, 19,58. The Supreme Court considered the relevant provisions of the Gift-tax Act. The expression 'transfer of property' is defined by Section 2(xxiv) of that Act as meaning 'any disposition, conveyance, assignment. settlement, delivery, payment or other aliention of property.' The definition further proceed to include other transactions, with which we are not considered in this reference. But the above general definition of the expression 'transfer of property' which is given in Section 2(xxiv) of the Gift-tax Act, shows that the word 'disposition' is used therein in conjunction with other transactions namely, 'conveyance, assignments, settlement, delivery, payment or other alienation of property' suggesting a bilateral transaction. The Supreme Court, held that the word 'disposition' is not a term of law and has no precise meaning. The Supreme Court therefore gathered this meaning in the context in which it is used and found that in the context in which this word is used, in Section 2(xxiv), it cannot mean 'to dispose of.' It further held that since this word is used along with other words indicating bilateral transactions it should be held as not referring to any unilateral act of declaration,

7. Now so far as the definition of 'settlement' as given by See. 2 M of the Stamp Act is concerned, it is found that the word 'disposition' is not used in context of any other bilateral transactions. Therefore, there is some scope for the argument that the word 'disposition' as used in Section 2 (t) should be given its natural meaning. But even if it is believed that the word is used in its natural dictionary meaning, the question which still remains to be considered is whether it is a 'disposition' simpliciter which is contemplated by Section 2 (t) of the Act. We have already quoted the whole definition of the word 'settlement' as given in Section 2 (t). That definition shows that 'disposition' should be for any of the three purposes mentioned in c1s. (i), (ii) and (iii). Clause (i) says that the dispositon should be in consideration of marriage, el. (ii) says that the disposition should before the purpose of distributing property of the settler among his family or those for whom he desires to provide or for the purpose of providing for some person dependant on him and clause (iii) says that disposition should be for a religious or charitable purpose. Therefore, unless the disposition evidenced by the document Ann. B falls within any of these three clauses, it cannot be said that it amounts to 'a settlement' as defined by clause (t) of See. 2 of the Act. The disposition evidenced by the document Ann. B is obviously not in consideration of marriage and it can also not be said that it is for the purpose of distribution of property among the family members or those for whom the executant wanted to provide for. When the property belonging to the individual coparcener is thrown in the common hotchpotch, there is no distribution for the simple reason that coparcener throwing property continues to remain the joint owner of the property. The word 'distribution' connotes some thing quite different from the joint ownership of the property. The person distributing property does not remain the owner thereof and creates ownership in favour of some other persons. Under these circumstances, we find that the disposition evidenced by the document Ann. B. is not covered even by clause (ii) of Section 2 (t) of the Act. It is obviously not covered by clause (iii). That 'disposition' simpliciter cannot amount to 'settlement' is even otherwise clear because if the word 'disposition' is used in its wider sense, then even the wasting a property or destroying a property, may amount to disposition, but such wastage or destruction of the property cannot be considered as a , settlement' within the meaning of clause (t) of Section 2. We therefore, conclude that the document found at Ann. B does not amount to a 'settlement', and if it does not amount to 'settlement' neither Art. 55 nor Art. 25 of the First Schedule of the Stamp Act is applicable to the facts of the case.

8. Next contention, which is to be considered is the alternative contention of the revenue that the document falls within the Art. 52 which contemplates the transactions by which release is made. But here is no scope for holding that the document amounts to a release because, release postulates that the claim is renounced in favour of a person, who has got some right in the property. Release also connotes that the person -eleasing his right does not retain any ownership right over it. Here the facts are that the property is thrown in the common hotch-pot with the result that v.hile before the said property was thrown, the person throwing the property was the sole owner, after it issothrown, he remains a joint owner. Therefore, retention of jont ownership, and the fact that the other members of the family had, previous to the throwing of the property in the joint stock of the family, no right in the property, conclusively shows that the transaction does not amount even toa release as contemplated by Art. 52 of the First Schedule.

9. Under these circumstances, what remains now to be considered is whether the disputed document is covered by Art. 4 of the First Schedule. This article refers to an 'affidavit' and says that it also covers other affirmations of declarations in case of persons who are by law allowed to affirm or declare instead of swearing. In our opinion, document Ann. B falls within this article and, therefore, it is chargeable with the stamp of Rs. 3.50.

10. Our answer to the questions, which are referred to us in both the cases is that the document in question is not covered by Art. 55 (A) (ii) or by Art. 52 (b) of the Stamp Act, but is covered by Art. 4 as claimed by the applicants. References are accordingly disposed of without any order as to costs.

11. Answer accordingly.


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