Case Note & Summary
The petitioner, Abhijeet Ashoka Infra Structure Pvt. Limited, entered into a Concession Agreement with the State of Maharashtra on 16/11/1998 for constructing a bridge across the Vainganga river on a Build, Operate and Transfer (BOT) basis. The Collector of Stamps initiated proceedings to adjudicate proper stamp duty payable on the agreement. By communication dated 05/07/2005, the Collector treated the agreement as a lease under Section 2(n)(iii) of the Maharashtra Stamps Act, 1958 and called upon the petitioner to show cause why stamp duty should not be recovered under Section 39(1)(b). The petitioner submitted its explanation on 19/07/2005, contending that the Concession Agreement could not be treated as a lease. However, on 11/11/2005, the Joint District Registrar and Collector of Stamps passed an order under Section 39(1)(b) demanding deficit stamp duty of Rs.7,84,76,540/-. The petitioner appealed under Section 53(1A) of the Act, but the appeal was rejected by the Chief Controlling Revenue Authority (respondent No.2) on 28/02/2006. The petitioner also filed an application under Section 54 seeking a reference of the question of law to the High Court, but no orders were passed on that application. Aggrieved, the petitioner filed the present writ petition challenging the order dated 28/02/2006. The court examined the nature of the Concession Agreement and held that it did not create a leasehold interest as there was no transfer of exclusive possession or interest in land. The agreement merely granted a license to construct and operate the bridge for a specified period. Therefore, the agreement could not be treated as a lease under Section 2(n) of the Act and was not chargeable to stamp duty under Article 36(b) of Schedule-I. The court quashed the impugned orders and allowed the writ petition.
Headnote
A) Stamp Duty - Lease - Definition - Section 2(n) Maharashtra Stamps Act, 1958 - Concession Agreement on BOT basis - The court considered whether a Concession Agreement for constructing a bridge on Build, Operate and Transfer (BOT) basis amounts to a 'lease' under Section 2(n) of the Act. Held that such an agreement does not create a leasehold interest as there is no transfer of exclusive possession or interest in land; it is merely a license to construct and operate the bridge for a specified period. (Paras 2-10)
B) Stamp Duty - Article 36(b) Schedule-I - Applicability - Maharashtra Stamps Act, 1958 - The Collector of Stamps adjudicated the agreement as a lease under Article 36(b) and demanded deficit stamp duty of Rs.7,84,76,540/-. The court held that the agreement is not a lease and thus not chargeable under Article 36(b). The demand was quashed. (Paras 2-12)
Issue of Consideration
Whether a Concession Agreement entered into on Build, Operate and Transfer (BOT) basis for constructing a bridge can be treated as a 'lease' under Section 2(n) of the Maharashtra Stamps Act, 1958 and liable to stamp duty under Article 36(b) of Schedule-I to the said Act.
Final Decision
The court allowed the writ petition and quashed the order dated 28/02/2006 passed by the Chief Controlling Revenue Authority and the order dated 11/11/2005 passed by the Collector of Stamps. The Concession Agreement was held not to be a lease under the Maharashtra Stamps Act, 1958, and thus not liable to stamp duty under Article 36(b) of Schedule-I.
Law Points
- Interpretation of 'lease' under Section 2(n) of Maharashtra Stamps Act
- 1958
- Concession Agreement under BOT model not a lease
- No transfer of exclusive possession or interest in land
- Agreement for construction and operation of bridge on BOT basis is not a lease under Article 36(b) of Schedule-I
Case Details
2020 LawText (BOM) (03) 100
Writ Petition No.2365 of 2006
A. S. Chandurkar, Vinay Joshi
Shri D. V. Chauhan for petitioner, Ms Tajwar Khan, Assistant Government Pleader for respondents
Abhijeet Ashoka Infra Structure Pvt. Limited
1. The Joint District Registrar (Class-I) and The Collector of Stamps, Bhandara, 2. The Chief Controlling Revenue Authority (Appellate Authority), Maharashtra State, Pune
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Nature of Litigation
Writ petition challenging order of Chief Controlling Revenue Authority confirming demand of deficit stamp duty on a Concession Agreement treated as lease.
Remedy Sought
Petitioner sought quashing of order dated 28/02/2006 passed by Chief Controlling Revenue Authority and order dated 11/11/2005 passed by Collector of Stamps demanding deficit stamp duty.
Filing Reason
Petitioner aggrieved by adjudication of Concession Agreement as a lease under Maharashtra Stamps Act and demand of deficit stamp duty of Rs.7,84,76,540/-.
Previous Decisions
Collector of Stamps passed order on 11/11/2005 under Section 39(1)(b) demanding deficit stamp duty; appeal under Section 53(1A) rejected by Chief Controlling Revenue Authority on 28/02/2006; application under Section 54 for reference to High Court not decided.
Issues
Whether a Concession Agreement on BOT basis for constructing a bridge constitutes a 'lease' under Section 2(n) of the Maharashtra Stamps Act, 1958?
Whether such agreement is chargeable to stamp duty under Article 36(b) of Schedule-I to the said Act?
Submissions/Arguments
Petitioner argued that the Concession Agreement is not a lease as defined under Section 2(n) of the Act as there is no transfer of exclusive possession or interest in land; it is merely a license to construct and operate the bridge.
Respondents contended that the agreement falls within the definition of lease under Section 2(n)(iii) as it grants a right to use the land for a period and thus is chargeable under Article 36(b).
Ratio Decidendi
A Concession Agreement entered into on Build, Operate and Transfer (BOT) basis for constructing a bridge does not create a leasehold interest as there is no transfer of exclusive possession or interest in land. Such an agreement is merely a license to construct and operate the bridge for a specified period and does not fall within the definition of 'lease' under Section 2(n) of the Maharashtra Stamps Act, 1958. Consequently, it is not chargeable to stamp duty under Article 36(b) of Schedule-I to the said Act.
Judgment Excerpts
The challenge raised in this writ petition is to the order dated 28/02/2006 passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune thereby confirming the order dated 11/11/2005 passed by the Collector of Stamps in proceedings under the Maharashtra Stamps Act, 1958.
By the said order, the agreement between the parties has been adjudicated as a 'lease' falling under Article 36(b) of Schedule-I to the said Act.
The facts in brief are that an advertisement was issued by the State of Maharashtra for constructing a bridge across Vainganga river. That work was to be done on 'Build, Operate and Transfer' (BOT) basis.
The petitioner submitted its explanation on 19/07/2005 and after exchange of communications, the Joint District Registrar and Collector of Stamps called upon the petitioner to pay deficit stamp duty of Rs.7,84,76,540/-.
Procedural History
The Collector of Stamps initiated proceedings for adjudication of stamp duty on a Concession Agreement dated 16/11/1998. On 05/07/2005, the Collector issued a show cause notice treating the agreement as a lease. The petitioner submitted explanation on 19/07/2005. On 11/11/2005, the Collector passed an order under Section 39(1)(b) demanding deficit stamp duty of Rs.7,84,76,540/-. The petitioner appealed under Section 53(1A) and also filed an application under Section 54 for reference to the High Court. The appeal was rejected by the Chief Controlling Revenue Authority on 28/02/2006. The petitioner then filed the present writ petition on 2006.
Acts & Sections
- Maharashtra Stamps Act, 1958: Section 2(n), Section 2(n)(iii), Section 39(1)(b), Section 53(1A), Section 54, Article 36(b) of Schedule-I
