TMI Blog2015 (8) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... h 13 financial institutions. Had this borrower entered into a separate mortgage deed with these financial institutions in order to secure the loan there would have been a separate document for distinct transactions. On proper construction of this indenture of mortgage it can safely be regarded as 13 distinct transactions which falls Under Section 5 of the Act. It is held that the Respondent is liable to pay deficit stamp duty together with interest as directed by the revenue authorities - Appeal allowed. - Civil Appeal No. 6054 of 2015 (Arising out of S.L.P. (C) No. 32319 of 2013) - - - Dated:- 11-8-2015 - M.Y. Eqbal and Arun Mishra, JJ. For Appellant: Preetesh Kapur, Hemantika Wahi and Jesal Wahi, Advs. For Respondents: C. Aryama Sundaram, Sr. Adv., Ananya Kumar, Pragya Chauhan, Dheeraj Nair, Rohini Musa, Abhishek Gupta, Sandeep Singh, Shamik Bhatta, Gaurav Mitra, K.R. Sasiprabhu, Vishnu Sharma, Reha Mitra, Deepali Dwivedi, Somiran Sharma and Biju Raman Deb, Advs. JUDGMENT M.Y. Eqbal, J. 1. Leave granted. 2. The Full Bench of the Gujarat High Court on reference made by the Chief Controlling Revenue Authority, State of Gujarat Under Section 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by issuing show cause notice dated 5.11.2009. The issue was forwarded for consideration of the Deputy Collector, Stamp Duty Valuation Organisation, Bhuj-Kutch Under Section 33 of the Act. 8. The Respondent was given an opportunity of hearing and vide order dated April, 3, 2010, the Deputy Collector held that the Respondent was liable to pay the deficit stamp duty with the amount of penalty of ₹ 250/-. 9. The revision application filed by the Respondent Under Section 53[1] of the Act was dismissed vide order dated March, 28, 2011. The Respondent thereafter made an application Under Section 54[1-A] of the Act thereby giving rise to the Reference Proceedings. 10. By way of the Reference, the opinion of the High Court was sought on the questions referred hereinabove. 11. The High Court opined that the State of Gujarat is not entitled to recover any additional stamp duty based upon its perception of the legislative intendment behind Section 5 of the Act. The Court noted that stamp duty is payable on instruments and not on transactions. Therefore, merely because the intended effect was achieved by executing one single document as against different sets of documents, suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being erroneous and contrary to the provisions of the Stamp Act in the matter of Payment of Stamp Duty. Learned Counsel submitted that the High Court has failed to appreciate that the Respondents had formed the consortium and had executed the present mortgage instead of several distinct instruments of mortgage with the sole purpose of evading Stamp Duty. Learned Counsel submitted that admittedly the Respondents had availed financial assistance from 13 lenders for its project and consequently, the Respondent was required to execute mortgage deed in favour of the 13 lenders. However, in order to avoid payment of Stamp Duty on each mortgage deed, the Respondent got the lenders to form a consortium and appointed State Bank of India as security trustee. Thus, in substance, the mortgage deed between the SBI on behalf of the lenders and Respondent is a combination of 13 mortgages dealing with the Respondents and such lenders, hence, the Respondent cannot be allowed to evade payment of stamp duty by forming a consortium. 15. Learned Counsel further submitted that the instrument in question relates to several distinct matters or distinct transactions inasmuch as the Respondent borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of action would amount to indirectly stamping the loan agreements and STA twice, which is impermissible in law, since those instruments had already been separately and individually stamped. 19. Lastly, it was contended that in any event, in the instant case, even if a doubt arises with regard to the interpretation of the Mortgage Deed, and as to whether it comprises distinct matters or not, the benefit of such doubt must be given to the Assessee, i.e. the Respondent No. 1, since it is a settled principle of interpretation of fiscal statutes that in case of ambiguity, the interpretation favourable to the Assessee must be adopted. 20. In light of the aforesaid, it is submitted that the impugned judgment, which has rightly decided the matter in favour of the Respondent (Assessee) and against the Appellant (revenue), does not suffer from any infirmity. Therefore, the present appeal ought to be dismissed by this Court. As a sequitor to the dismissal of the appeal, the Appellant should also be directed to refund the excess stamp duty amount of ₹ 50,41,600/- that was deposited, under protest, by Respondent No. 1. 21. Before deciding the question first of all we shall deal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Costal Gujarat Power Limited and State Bank of India as in the capacity as security trustee for the Senior Lenders as set out in the schedule of this mortgage deed. In the said deed it is mentioned inter alia that pursuant to the Senior Loan Agreement entered into between the borrower and senior lenders, each of the senior lenders have agreed to extend to the borrower the loan to the maximum extent set out in schedule-I. By this indenture, English Mortgage in respect of immovable property was created. The relevant clauses of Mortgage deed are set out herein below: (Emphasis given) 2. Benefit of Indenture. The Security Trustee, acting for the benefit of the secured parties shall hold the Security created by the borrower in its favour this indenture over the mortgaged properties including convents and mortgages given by the borrowers pursuant hereto, upon trust for the benefit of the secured parties subject to the powers and provisions contained herein and in the Security Trustee Agreement, for the due payment of the mortgage Debt and performance of all obligations under the financing Documents. 4. Grant and Transfers: For the consideration aforesaid and as continuing sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty over each other and the secured parties once such mortgage and charge in relation to the Mortgaged properties is created in their favour. 26. Clauses 18.1 and 18.3 are also relevant and reproduced herein under: 18.1 Section 67A of the Transfer of Property Act, 1882: The provisions of Section 67-A of the Transfer of Property Act, 1882, shall not apply to these presents. Notwithstanding that the Security Trustee may hold two of more mortgages executed by the Borrower including these presents in respect of which the Security trustee has the right to obtain the kind of decrees Under Section 67 of the Transfer of Property Act, 1882, the Security Trustee shall be entitled to sue and obtain such decree on any of such mortgages without being bound to sue on all such mortgages in respect of which the mortgage money shall have become due. 27. Clause 23.1, deals with the manner of payment of stamp duty. The said clause reads as under: 23.1. Stamp Duty and Other Fees on Execution, Registration, etc.: The Borrower shall pay all stamp duty, other duties, taxes, fees, penalties or other charges payable on or in connection with the execution, issue, delivery, registration of this In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciple instrument only shall be chargeable with the duty prescribed in Schedule I for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of [one hundred rupees] instead of the duty (if any) prescribed for it in that Schedule. (2) The parties may determine for themselves which of the instruments so employed shall, for the purposes of Sub-section (1), be deemed to be the principal instrument. Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed. Section 5-Instrument relating to several distinct matters or distinct transactions. Any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instrument, each comprising or relating to one of such matters or distinct transactions, would be chargeable under this Act. 6. Instruments coming within several descriptions in Schedule I.-Subject to the provisions of the last preceding section, an instrument so framed as to come within two or more of the descriptions in Schedule I, shall, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter Under Section 56(2) of the Act to the decision of Chief Controller, Revenue Authority, who eventually referred it to the High Court of Calcutta stating his own opinion that stamp duty was payable on the power for as many respective capacities as the principal executes the power . The majority view of the Bench held that the different capacities of the executants would not constitute the distinct matter for the purpose of Section 5 of the Act and that the proper duty and instrument was payable Under Article 48(d) of Schedule 1(a) of the Stamp Act. 34. Answering the Reference, the Constitution Bench of this Court elaborately discussed the scope and object of Sections 4, 5, and 6 of the Stamp Act and finally allowed the appeal. Their Lordship held: We are unable to accept the contention that the word matter in Section 5 was intended to convey the same meaning as the word description in Section 6. In its popular sense, the expression distinct matters would connote something different from distinct categories . Two transactions might be of same description, but all the same, they might be distinct. If A sells Black-acre to X and mortgages White-acre to Y, the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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