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2010 (2) TMI 1038 - HC - Indian LawsLegality and correctness of the Circular dated 29th March 2006 issued by the State Government stating, inter alia, that stamp duty at the rate of Re. 1/- per ₹ 1000/- or part thereof is payable on goods imported through Ports and the Circular dated 10th January 2007 issued by the Respondent No. 3 - Gujarat Maritime Board stating, inter alia, that No Demand Certificate (NDC) in respect of the vessel arrived at Magdalla (Surat) Port will be issued after submission of clearance from Registrar of Stamp Duty regarding payment of stamp duty on the entire imported cargo and that NDC will not be issued by the said office to the vessels of import cargo without receipt of Stamp Duty Clearance challenged Held that - In case of a bill of lading, the Act is not applicable and no stamp duty can be levied. In short, Section 2(1) and Section 74 of the Bombay Stamp Act clearly exclude a bill of lading from the purview of the Bombay Stamp Act. Thus, mere filing of bill of entry would not mean that the petitioner is required to pay stamp duty especially the goods are imported by way of Bill of Lading. As in the present case the tax has already been paid on bill of lading, there is no question of making any further tax on the same. If the bill of lading and the bill of entry are in the same name and if the person whose name is in the bill of lading is taking the goods, no separate stamp duty can be levied as the stamp duty is already paid under the Central Act. Again imposing tax on the very same person would amount to double taxation on the same person. However, if the goods are transferred to a third person the bill of entry will come into play and the third party is required to make the payment in accordance with Article 24. Therefore, no fault can be found in Article 24 and even the Circulars issued on the basis of the said Article. Thus if the bill of lading and the bill of entry are in the same name and if the person whose name is in the bill of lading is taking the goods, no separate stamp duty can be levied as the stamp duty is already paid under the Central Act. Again imposing tax on the very same person would amount to double taxation on the same person. However, if the goods are transferred to a third person the bill of entry will come into play and the third party is required to make the payment in accordance with Article 24. Therefore, no fault can be found in Article 24 and even the Circulars issued on the basis of the said Article.
Issues Involved:
1. Legality and correctness of the Circular dated 29th March 2006 issued by the State Government regarding stamp duty on goods imported through ports. 2. Legality and correctness of the Circular dated 10th January 2007 issued by the Gujarat Maritime Board regarding the issuance of "No Demand Certificate" (NDC) contingent on stamp duty clearance. Detailed Analysis: Issue 1: Legality and Correctness of the Circular dated 29th March 2006 The Circular dated 29th March 2006 issued by the State Government mandates that stamp duty at the rate of Re. 1/- per Rs. 1000/- or part thereof is payable on goods imported through ports. The petitioners, who are manufacturers of steel products with a captive jetty at Hazira, argue that the only document involved in the delivery of cargo is a bill of lading. They contend that stamp duty can only be levied on a document or instrument, and since the bill of lading is excluded from the purview of the Bombay Stamp Act under Sections 2(1) and 74, no stamp duty is leviable on it. The petitioners further argue that the State Government lacks the legislative competence to prescribe stamp duty on a bill of lading, as this falls under the jurisdiction of the Central Government per Entry 91 of List 1 of Schedule 7 of the Constitution of India. Issue 2: Legality and Correctness of the Circular dated 10th January 2007 The Circular dated 10th January 2007 issued by the Gujarat Maritime Board stipulates that a "No Demand Certificate" (NDC) will only be issued after the submission of clearance from the "Registrar of Stamp Duty" regarding the payment of stamp duty on the entire imported cargo. The petitioners argue that this requirement would result in heavy demurrage charges if vessels are detained for want of an NDC due to non-payment of stamp duty on the delivery order. They contend that amended Article 24 of the Bombay Stamp Act applies only to situations where a delivery order is issued and produced before the Port Authorities, which is not the case for their captive jetty where delivery is direct against a bill of lading. Court's Analysis and Judgment: Analysis of Circular dated 29th March 2006 The Court examined the nature of the bill of lading and its exclusion from the definition of "instrument" under the Bombay Stamp Act. The bill of lading serves three purposes: it is a receipt for goods shipped, evidence of the contract for the carriage of goods, and a document of title for the goods specified. The Court noted that since the cargo is directly delivered to the petitioners without entrustment to the Port Authorities, there is no bailment and thus no need for a delivery order. The Court concluded that the bill of lading, being excluded from the definition of "instrument" under Sections 2(1) and 74 of the Bombay Stamp Act, cannot attract stamp duty. Analysis of Circular dated 10th January 2007 The Court analyzed the amended Article 24 of the Bombay Stamp Act, which prescribes stamp duty on "delivery orders" in respect of goods. The Court clarified that Article 24 applies to cases where a delivery order is issued and produced before the Port Authorities for obtaining delivery of imported goods. Since the petitioners receive direct delivery of cargo against a bill of lading, Article 24 does not apply. The Court emphasized that imposing stamp duty on the same person for the same transaction would amount to double taxation, which is not permissible. Conclusion The Court declared that since the goods are delivered in the same name as in the bill of lading, no stamp duty can be levied. Consequently, the impugned Circular dated 29th March 2006 and the Circular dated 10th January 2007 were quashed and set aside. The Court ruled that the petitioners are not required to obtain "Stamp Duty Clearance" for the issuance of an NDC. The petitions were disposed of with no order as to costs. Final Judgment: The Court quashed and set aside the Circular dated 29th March 2006 and the Circular dated 10th January 2007, ruling that no stamp duty is leviable on the bill of lading and that the petitioners are not required to obtain "Stamp Duty Clearance" for the issuance of an NDC. The petitions were disposed of with no order as to costs.
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