IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Civil Writ Petition No.5529 of 2009 Date of Decision : December 06, 2010. Devkee Polymers Pvt. Ltd. .....Petitioner versus The State of Punjab and others .....Respondents CORAM : HON'BLE MR.JUSTICE SURYA KANT. Present : Mr.Amit Singh, Advocate, for the petitioner. Mr.Anil Kumar Sharma, Addl.AG, Punjab. -.- 1. Whether Reporters of Local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? --- Surya Kant, J. The petitioner seeks quashing of the order dated 22.7.2008 (Annexure P-5) passed by the Collector, SAS Nagar, Mohali, directing it to affix stamp duty on the value of Rs.81,50,000/- in respect of the Sale Deed No.2706 dated 11.8.2004, as well as the order dated 27.1.2009 (Annexure P-7) passed by the Divisional Commissioner, Patiala Division, Patiala, dismissing the petitioner's appeal against the above mentioned order. 2] The undisputed facts are that the Official Liquidator issued a sale notice dated 28.6.2003 inviting tenders for the sale of assets of M/s Chandigarh Packaging Products Private Limited (a company in liquidation) which included the land measuring 8 kanals 2 marlas C.W.P.No .5529 of 2009 2 alongwith building and machinery etc. The petitioner-company made a lump-sum offer of Rs.81,50,000/- and it being the highest bidder, the Company Judge vide his order dated 12.2.2004 (Annexure P-1) confirmed the sale in favour of the petitioner. The Official Liquidator attached to the Company Court, vide his memo dated 21.7.2004 (Annexure P-2) informed the Tehsildar-cum-Sub Registrar, Kharar that as per the approved valuation report dated 17.7.1997, the land was valuing Rs.19,60,000/-; Building Rs.20,51,092/-; Plant and Machinery Rs.77,08,500/- and Stocks were valuing Rs.12,00,000/-, i.e., total Rs.1.03 crores but these assets could be sold for Rs.81,50,000/- only and if divided proportionately, the value of the land and building came to Rs.25.27 lacs only and therefore, “the Stamp Duty” was payable on the aforesaid value or on circle rate, if the circle rate was more than the aforesaid value. The petitioner accordingly affixed the Stamp Duty of Rs.1,51,700/- on the assessed value of the land and building amounting to Rs.25.27 lacs and got the Sale Deed No.2706 dated 11.8.2004 registered. 3] The Sub-Registrar, Kharar, however, referred the matter to the Collector under Section 47-A of the Indian Stamps Act, 1899 which led to the passing of the impugned order dated 22.7.2008 (Annexure P-5) by the Collector, S.A.S. Nagar Mohali, directing the petitioner to pay Stamp Duty on the total sale consideration of Rs.81,50,000/-, i.e., an amount of Rs.3,37,000/- alongwith interest @ 12% per annum in addition to the Stamp Duty of Rs.1,57,700/- already affixed. The petitioner unsuccessfully challenged the afore-stated order in appeal before approaching this Court. C.W.P.No .5529 of 2009 3 4] The solitary question that arises for consideration is as to whether the petitioner is also liable to affix Stamp Duty on the value of the 'machinery' and the 'stock' lying in the factory premises of the Company in liquidation and/or on the value of the land and building only? 5] It is indeed an admitted case that the sale notice dated 28.6.2003 pertained to all the assets of the company in liquidation and the petitioner's offer too was composite for all such assets. The valuation report dated 17.7.1997 accepted by the Company Court and a copy whereof has been handed over during the course of hearing also reveals that the property was an 'industrial unit' installed for the printing, lamination and to convert the printed material into rolls of the desired sizes ready for use as packing material. The valuation report acknowledges the following machinery installed in the unit:- “Roto-gravious Flexographic Printing Machine, make DCM-NANTERRE-FRANCE, type HLS-600-6, M/c No.1169803 fabricated in 1989, complete with winder, cyber scope, 6 nos. registers, brake unwinder & unwinding unit with Control Panels. 1 No. Laminator – SOFTAL, make DCM-NANTEREE FRANCE, 1988 model, Sl.No.58 88 70 (25 & 88 & 70) Solventless 1000, complete unit with Control Panels etc. Paper Converting Machine, J.D. Enterprises make, machine size 40” model Multiwinder II-1989. J.D.Enterprises make UNI-ROLL Machine size 50”, year of manufacture 1989. Various enabling machinery like compressor & transformer etc.” C.W.P.No .5529 of 2009 4 6] The valuation report further suggests as follows:- “The unit is closed for the last few years. The building is in good shape. The machinery installed in the production hall is covered with polythene sheets and seems to be well maintained though its functional suitability would only be known on its commissioning.” 7] The valuers have thereafter proceeded to assess the value of each component separately and concluded that the total value of the land, building, machinery and stocks was Rs.1,29,19,592, say Rs.1.30 crores. 8] The order dated 22.5.2003 passed by the Company Court as well as the sale notice published in the newspapers crystalize that the sale of the assets was to be on “as is where is” basis, and not restricted to the transfer of the land and building only. 9] According to Schedule 1-A of the Indian Stamp Act, 1899 as applicable in the State of Punjab, the Stamp Duty on a Conveyance Deed is payable as per the rates prescribed at Sr.No.23 where such a 'Conveyance Deed' amounts to sale of the “immovable property”. Similarly, the “Certificate of Sale” is also required to be registered with the stamp duty at the rate prescribed for a Conveyance Deed if such 'Sale Certificate' pertains to the property put up for sale as a separate lot and sold in auction by a Civil/Revenue Court of the Collector (see Sr.No.18). 10] The expression “Conveyance” as defined in Section 2 (10) of the Act includes a conveyance on sale and every instrument by which the property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by the Schedules. C.W.P.No .5529 of 2009 5 11] The Indian Stamp Act does not define the expression “immovable property”. The General Clause Act, 1897, however, provides that unless there is anything repugnant in the subject or context, the 'immovable property' shall include the land, benefits arises from the land and the things attached to the earth or permanently fastened to anything attached to the earth. 12] Section 3 of the Transfer of Property Act, 1882 excludes standing timbers, growing crops or grass from the expression “immovable property”. Section 54 of the said Act defines “Sale” to mean transfer of ownership in exchange for a price which, in the case of tangible immovable property of the value of one hundred rupees and/or upwards, can be made only by a registered document. 13] The co-joint reading of the relevant provisions of the different Statutes leaves no room to doubt that the liability to affix the Stamp Duty is not limited qua an 'immovable property' only. The Stamp Duty is payable even on the transfer of a 'movable property', if such property also falls within Schedule 1-A of the Stamp Duty Act (as applicable in the State of Punjab) and is transferable through an instrument like a 'Conveyance Deed'. It is also evident that the permanent fixtures imbedded in the earth or affixed in the land are integral part of the 'immovable property'. 14] Applying these legal parameters to the facts of the case in hand, it can be safely inferred that the 'plant' and 'machinery' were permanently installed/affixed in the factory building and were inseparable components of the 'immovable property' intended to be sold by way of the C.W.P.No .5529 of 2009 6 sale notice dated 28.6.2003. 15] It was a case of 'composite offer' to sell the business of the company in liquidation which included its land, building, machinery and the stocks lying in the factory premises. Keeping that intent behind the sale transaction in view, the Stamp Duty was undoubtedly liable to be affixed in the manner as approved by the Hon'ble Supreme Court in Duncans Industries Limited versus State of U.P. (2000) 1 Supreme Court Cases 633, holding that:- “10. .......... It is not the case of the appellant when it contends that the possession of plant and machinery was handed over separately to the appellant by the vendor that these machineries were dismantled and given to the appellant, nor is it possible to visualise from the nature of the plant that is involved in the instant case that such a possession de hors the land could be given by the vendor to the appellant. It is obviously to reduce the market value of the property the document in question is attempted to be drafted as a Conveyance Deed regarding the land only............. xx xx xx xx xx xx 13. For the reasons stated above, we are of the considered opinion that the vendor as per the conveyance deed dated 9.6.1994 has conveyed the title it had not only in regard to the land in question but also to the entire fertilizer business in “as is where is” condition including the plant and machinery standing on the said land. Therefore, the authorities below were totally justified in taking into consideration the value of these C.W.P.No .5529 of 2009 7 plant and machineries alongwith the value of the land for the purpose of the Act.” (emphasis applied) 16] As a result of the above discussion and following the dictum in Duncans Industries's case (supra), I do not find any ground to interfere with the impugned orders so far as the same call upon the petitioner to affix the additional Stamp Duty on the sale consideration paid by it for the 'plant' and 'machinery' in addition to the 'land' and 'building'. However, the 'raw material' and 'stocks', in the facts and circumstances of the case in hand, though intended to be sold and purchased by the parties pursuant to the sale notice dated 28.6.2003, cannot be treated as a component of the 'immovable property' and the sale consideration paid proportionately qua such raw-material/stocks is liable to be deducted out of the lump-sum amount of Rs.81,50,000/- paid by the petitioner. 17] The writ petition is accordingly allowed in part to the extent above and the Collector, S.A.S.Nagar Mohali is directed to re-calculate the liability of the petitioner to affix the additional Stamp Duty and registration charges within a period of one month from the date of receiving a certified copy of this order. The petitioner shall affix/deposit the additional amount within a period of two months from the date of receiving notice from the Collector, S.A.S.Nagar, Mohali. 18] Dasti. December 06, 2010 (SURYA KANT) Mohinder JUDGE