IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 22.10.2010 CORAM: THE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN W.P.Nos.24774 of 2006 and 15468 of 2007 W.P.No.24774 of 2006: M/s.Khivraj Tech Park Private Ltd. 617, Anna Salai, Chennai-600 006 represented by its Managing Director Mr.Ajit Kumar Chordia .. Petitioner versus 1. The Secretary Department of Information Technology Government of Tamil Nadu Secretariat, Fort St. George Chennai-600 009. 2. M/s.Electronics Corporation of Tamilnadu Ltd. 692, Anna Salai, Nandanam Chennai-600 035 represented by its General Manager (IT P&D) .. Respondents W.P.No.15468 of 2007: M/s.Shriram Properties Ltd. Lakshmi Neela Rite Choice Chamber 1st Floor, New No.9, Bazzullah Road T.Nagar, Chennai-600 017 rep. by its Chief Operating Officer R.Murugesan .. Petitioner versus 1. The Secretary Department of Information Technology Government of Tamil Nadu, Secretariat Fort St. George Chennai-600 009. https://hcservices.ecourts.gov.in/hcservices/ 2. M/s.Electronics Corporation of Tamilnadu Ltd. 692, Anna Salai, Nandanam Chennai-600 035, represented by its Managing Director. 3. The Secretary Department of Commercial Taxes & Registration Government of Tamil Nadu, Secretariat Fort St. George Chennai-600 009. 4. The District Registrar Chennai Central 20, Seethammal Road Alwarpet Chennai-600 018. .. Respondents PRAYER: W.P.No.24774 of 2006 is filed under Article 226 of the Constitution of India for the issue of a writ of Certiorarified Mandamus to call for the Proceedings in No.GM ITPD/ELCOT/987/2006 dated 09.05.2006 of the 2nd respondent, to quash the same and to direct the said respondent to issue the certification, entitling the petitioner to 50% concession in respect of Stamp Duty and Registration charges in terms of G.O.Ms.No.15, IT Department dated 22.05.2003, G.O.Ms.No.15, IT Department dated 21.07.2004 and all other applicable Government Orders relating to the aforesaid subject. W.P.No.15468 of 2007 is filed under Article 226 of the Constitution of India for the issue of a writ of Certiorarified Mandamus to call for the proceedings in No.ELCOT/ITPD/1074/ SDE/2007 dated 1.3.2007 on the file of the 2nd respondent, to quash the same and to direct the second respondent to issue the certification entitling the petitioner to the 50% concession in respect of stamp duty and registration charges and refund of excess stamp duty and registration charges collected from the petitioner in respect of document of sale dated 15.12.2005 being the sum of Rs.5,60,87,500 together with interest at 12% per annum from the date of collection till the date of refund pursuant to G.O.Ms.No.15, IT Department dated 22.05.2003, G.O.Ms.No. 15, IT Department dated 21.07.2004 and all other applicable Government Orders relating to the aforesaid subject. For petitioner in both W.Ps. : Mr.V.Ramachandran Senior Advocate for Dr.Anita Sumanth For 1st respondent in W.P.No. 24774 of 2006/respondents -1, 3 & 4 in W.P.Nos.15468 of 2007 : Mr.P.S.Raman https://hcservices.ecourts.gov.in/hcservices/ Advocate General Assisted by Mrs.R.Anitha Addl. Government Pleader For 2nd respondent in both W.Ps.: Mr.P.S.Raman Advocate General for Mr.N.Vijayan for M/s.King & Partridge ORDER The petitioner herein in W.P.No.24774 of 2006 challenges the order dated 09.05.2006 on the file of the second respondent denying the benefit of G.O.Ms.No.15, Information Technology Department dated 21.7.2004, holding that the 50% concession in respect of stamp duty and registration charges as per the said Government Order would be applicable to the first transaction by the I.T.Companies/ITEs for the conveyance of the property and hence prays that the second respondent be directed to issue the certification in terms of G.O.Ms.No.15, Information Technology Department dated 21.7.2004, entitling the petitioner to 50% concession in respect of stamp duty and registration charges for the conveyance of the property. Writ Petitioner in W.P.No.15468 of 2006 seeks similar prayer in respect of the proceedings dated 1.3.2007 made by the second respondent herein. 2. The petitioner in W.P.No.24774 of 2006 is a company stated to have as its object the setting up of Software Technology Park. The petitioner contends that as per the 2002 I.T. Policy of the State, and G.O.Ms.No.15 dated 21.7.2004, the petitioner is entitled to have the benefit of 50% exemption from payment of stamp duty in respect of purchase of the property. Basing its claim on G.O.Ms.No.15 dated 21.7.2004 in respect of purchase of the land for putting up the I.T. Park, the petitioner submitted an application in Annexure A on 08.04.2006 to ELCOT, the second respondent herein, informing them that the petitioner has put up an I.T. Park in the name of Olympia Technology Park and sought for certification as to the eligibility for the remission of stamp duty. 3. Learned Senior Counsel appearing for the petitioner contended that so long as the petitioner satisfied the requirement in G.O.Ms.No.15 dated 21.7.2004, the question of denial of the benefit of remission does not arise. Learned Senior Counsel pointed out that the petitioner has been considered as an I.T. Industry as per the Central and State enactments. In the above circumstances, going by the recognition granted under those enactments, the benefit be extended to the petitioner. 4. Per contra, learned Advocate General submitted that the I.T. Policy of the Government of Tamil Nadu seeks to extend the benefit of https://hcservices.ecourts.gov.in/hcservices/ remission of stamp duty and registration charges to the benefit of the industries which are actually in the business of I.T. The petitioner being not one such industry, it is not entitled to have the benefit of remission. He emphasized on the object of the policy that I.T. Park is treated as an industry only for the specific purpose, namely, for locating the same in the backward areas, to which alone, the benefits are available. Barring that, Information Technology Parks will not be entitled to any remission from duty as a matter of course. Referring to the Notification granting concession on stamp duty and registration charges, learned Advocate General urged that going by the wordings of the notification, the remission is granted in respect of purchase of lands by I.T. industries alone, that the duty remitted is intended to make available the capital needed by the I.T. industry. The notification thus issued has a purpose and it is not intended for one who is in the business of putting up construction and selling the I.T. Parks therein, which does not, by any stretch of imagination, make petitioner like builders an I.T. Company. Given the purport of the policy to usher in greater and better growth in the I.T. sector, the respondents have correctly interpreted the Government Order to deny the benefit of exemption to the petitioner. 5. With the object of promoting investment in I.T. Sector, the Government of Tamil Nadu introduced several measures granting incentives to Units in I.T. Parks/STPs one of which happens to be in the field of granting remission to Units in private Information Technology Parks (ITPs) from payment of stamp and registration duties at the time of allotment of sites/built up space as in the case of units in ElCOT/SIPCOT. Apart from this, the Government also extended measures to encourage Units outside the Parks by giving stand alone Units the same incentives as in the Units/Software Technology Parks (STPs). G.O.Ms.No.300 dated 03.11.1997 was exclusively made for the above-said purpose. This was further modified under G.O.Ms.No.20, I.T. Department, dated 21.6.1999, that the developers in private STPs/ITPs have to register the property first on payment of stamp duty and then claim the reimbursement from ELCOT. The claims are to be scrutinised by a Committee of experts given under the Government Order. G.O.Ms.No.22 dated 05.09.2000 was issued giving explicit definition of what constituted an ITP/STP. The said definition reads as follows: (a) the facility must have high band width global connectivity. (b) be fully occupied by software units. (c) At least 50% of the total turn over of the units must be for exports. (d) ELCOT will be the certifying authority. (e) In addition, for CMDA's purposes, the plot area on which such facility is located must be a minimum of 2000 square meters. G.O.Ms.No.22 dated 05.09.2000 prescribed the conditions for https://hcservices.ecourts.gov.in/hcservices/ certification of I.T. buildings for the purpose of consideration of reimbursement of stamp duty in accordance with the I.T. Policy, 1997. 6. The Government of Tamil Nadu laid down its I.T. Policy called I.T. Policy, 2002, which stated that in tune with the object of making Tamil Nadu as the destination of choice for I.T. investment, to upgrade the quality of life for the citizens through e-Governance and I.T. applications in Government, to empower people in the rural areas so as to bridge the digital divide; to develop Research and Development initiatives; to promote use of Tamil in Information Technology, etc., the Government has decided to grant certain fiscal incentives, apart from certain other incentives to I.T. industries as defined therein in the policy set up already, anywhere in Tamil Nadu, as well as to those new industries set up. The terminology used in the policy is as follows: (a) IT Companies will include IT Services (ITS), IT enables Services (ITES), Private Communication Providers (PCPs), Software Industries including Services and Training Institutions as covered in IT Policy 1997, IT maintenance & servicing units and hardware units as covered in IT Policy 1997. (b) IT Services are broadly defined as systems integration, processing services, Information Services (IS) outsourcing, packaged software support and installation, hardware support and installation and IT training and education. (c) IT enabled Services are human intensive services that are delivered over telecom networks or the internet to the range of business segments which will include: • Medical Transcription • Legal Database processing • Remote Maintenance • Back office operations – Accounts, Financial services • Data Processing • Call Centres • Engineering and Design • Geographic Information Services • Human Resources Services • Insurance Claim Processing • Payroll Processing • Revenue Accounting • Support Centres • Website Services • Business Process Outsourcing (BPOs) (d) Private Communication Providers include Class A, Class B and Class C – Internet Service Providers, Right of Way Memorandum of Understanding (MOU) holders, Basic Service Providers and Value added service providers like Kiosk Operators under the Rural Access to Services through Internet Project. https://hcservices.ecourts.gov.in/hcservices/ 7. In dealing with the concessions extended to the I.T. industry, particularly under the head "fiscal incentives", while stating that the I.T. industry will continue to enjoy the facilities already granted, apart from those announced in the policy, the policy contained further concessions to new industries started in I.T. Parks as well as to those stand alone units outside the I.T. Parks/STPs. The concession granted to new industries put up in the ITPs is as follows: " New industrial units (small, medium or major) where more than 40% of the total workers employed are women shall be eligible for an additional capital subsidy of 5% of investment in fixed assets subject to a ceiling of Rs.10 lakhs. Relaxation of FSI (Floor Space Index) to the extent of 100% will be given in designated I.T. Parks. Such requests need to be addressed to the concerned Regional Development Authorities. 50% exemption of the Stamp Duty and the Registration fee will be given at the time of purchase of a land/building for IT industries. This will be conditional to the concerned company putting up the facilities to commence the operations within twelve months from the date of the transaction. The certification in this regard will be undertaken by ELCOT. " 8. The Policy also stated that the Information Technology Park would be treated as an "industry" and would be eligible for backward area capital subsidy benefits. Going by the object thus treating the I.T. Park as an "industry", it is clear that the primary purpose of treating I.T. Park as an "industry" is only for the specific purpose of granting certain capital subsidy benefits by locating these parks in the backward areas. Accordingly G.O.Ms.No.15 dated 22.05.2003 was issued containing various incentives including fiscal incentives as narrated above. In G.O.Ms.No.15 dated 21.7.2004, the Government considered G.O.Ms.No.22, IT Department dated 5.9.2000, G.O.Ms.No. 15, IT Department dated 22.5.2003 as well as the letter from the Inspector General of Registration in D.O. Letter No.58895/C2/03 dated 8.12.2003 and the letter from Managing Director, ELCOT, under Letter Rc.No.GM IT P&D/ELCOT/565/2003 dated 14.1.2004 as to the criteria to be specified by which the I.T. units would qualify for eligibility to the concessions as provided by the Government. In response to a query from the Registration Department to specify the criteria by which Units would qualify for eligibility to concession in the payment of stamp duty, G.O.Ms.No.15 dated 21.07.2004 was made specifying the conditions subject to which the 50% remission from stamp duty and registration fee would be granted. The concession granted under https://hcservices.ecourts.gov.in/hcservices/ G.O.Ms.No.20 dated 21.6.1999, giving 100% reimbursement to I.T. Units stood automatically withdrawn. The said Government Order stated that after considering the proposals of the Inspector General of Registration and the Managing Director, ELCOT, it was pointed out that the Managing Director, ELCOT had brought to the notice of the Government that a number of builders had come forward to put up I.T. buildings to meet the present demand and that for this purpose, the definitions of I.T. buildings needs to be formulated for setting standards in future verifications; that the Government had examined the proposal of the Inspector General of Registration and Managing Director, ELCOT and ordered for 50% exemption on stamp duty and Registration fees to be given to I.T. Companies/ Industries at the time of purchase of land/building subject to the conditions stated therein. The notification further stated that the companies occupying the I.T. buildings should be I.T. companies as prescribed in I.T. Policy 2002 of Tamil Nadu. Clause 7(f) of the Policy provided the default clause that on failure to comply with the conditions. The duty/fee shall be recovered by way of forfeiture of bank guarantee which will be obtained while extending 50% exemption of stamp duty and registration fee. In terms of the said policy, it is clear that the I.T. Companies seeking concession as stated in the Government Order should execute an undertaking in favour of the Managing Director, ELCOT and on the certificate of the ELCOT, the registering authority would extend the concession on stamp duty and registration charges. In the event of any violation of the conditions, the exemption granted would stand revoked. The notification contains the annexure as regards the declaration to be made by the I.T. industry concerned when applying for availing the concessions. 9. Thus going by the above Government Order, necessary notifications are issued in exercise of the powers under Clause (a) of Sub Section (1) of Section 9 of the Indian stamp Act 1899, reducing 50% of the duty chargeable under the said Act in respect of instruments relating to purchase of land or land and building by I.T. companies/Industries, subject to the conditions stated therein. It further pointed out that the companies occupying the I.T. building should be I.T. companies as defined in the I.T. Policy of 2002 of Tamil Nadu. 80% of the built-up area of the I.T. building should be occupied by IT/ITES Units; for this purpose, a registration with STP/EOU appropriate licence with the communication provider would be sufficient and the time duration for setting up the I.T. building would be 12 months. Based on ELCOT's certification, the registering authority will extend the concession. The reduction will be applicable only for the first transaction by the IT/ITES Company. On 5.11.2004, yet another Government Order was issued, giving 50% exemption on stamp duty and registration fee for purchase of a land/building for I.T. industries with effect from 19.09.2002, subject to satisfying the conditions stipulated in G.O.Ms.No.15 dated 21.07.2004. https://hcservices.ecourts.gov.in/hcservices/ 10. For the purpose of the writ petition, it is suffice to point out that the policy provides for certain benefits to the industries which are in the actual execution of I.T. related activity. This however, does not mean that a person who purchases the land as a business proposition for the purpose of constructing a building to be later on given to I.T. Park, would also be treated as I.T. industry to enjoy the benefit of the stamp duty and registration concession. 11. Under G.O.Ms.No.122 dated 27.7.2004, the Government further pointed out that the companies occupying the I.T. building should be I.T. companies as defined in the I.T. Policy, 2002; that 80% of the built-up area of the I.T. building should be occupied by IT/ITES Units. Apart from that, the notification grants certain concessions, taking note of the notification, which is an appendix to G.O.Ms.No.122 dated 27.7.2004. Going by the object, the concession granted by the Government is only with the reference to the IT Companies as defined in the policy and not to those who facilitate in providing any infrastructure to an I.T company. 12. The admitted case of the petitioner herein is that it had purchased the land for the purpose of construction of I.T. companies to be used as I.T. Parks. Going by the Policy of the Government that 50% concession on stamp and registration to be given to those who are actually in the I.T. industry, is only to facilitate the I.T. companies to have better cash flow for its industrial activity, I do not find any justification in accepting the plea of the petitioner that the mere fact that the petitioner is engaged in constructing an I.T. Park for sale, would entitle them to the benefit of the stamp and registration concession as contemplated in the Government Orders. 13. It is no doubt true that G.O.Ms.No.122 dated 27.7.2004 is not happily worded; yet, going by the I.T. Policy and the fact that the purport of the policy is to grant of 50% concession on stamp and registration and make available to the I.T. Industries the capital which they may require, it stands to reason that the person who constructs the I.T. Park cannot be treated as an "industry" for the purpose of extending the benefit of the Government Order. In the circumstances, I have no hesitation in accepting the stand of the respondents herein that the Government Order granting 50% concession for registration cannot be extended to the petitioner herein, he being the owner of the building, which ultimately was made for use of by the I.T. Industries. 14. Learned senior counsel appearing for the petitioner contends that having regard to the purpose for which the building has been constructed, the benefit has to have a meaning that without proper https://hcservices.ecourts.gov.in/hcservices/ infrastructure given by companies like the petitioner, the location of I.T. Park is not possible. The plan submitted by the petitioner for setting up the I.T. Park was approved by the Housing and Urban & Rural Development Department vide G.O.Ms.No.355 dated 15.11.2005. The petitioner is recognised as an I.T. Park. Hence, the view taken by the respondents go against the very spirit of the Policy and the Notification. 15. I do not accept the contention of the petitioner that the recognition, under other enactment, of the petitioner as an I.T. industry would be decisive of the status of the petitioner for the purpose of applying the benefit under the Notification. As already noted G.O.Ms.No.22 dated 05.09.2000 lists out the qualification of I.T. Parks (ITP) and Software Technology Parks (STP). G.O.Ms.No.15 dated 22.5.2003 gives the definition of I.T. companies. Under fiscal incentives, the notification stated that ITP would be treated as an Industry and eligible for backward area capital subsidy benefits. Further private ITP developers would be given assistance in land acquisition and and rezoning wherever required. G.O.Ms.No.15 dated 21.07.2004 responded to the query from the Inspector General of Registration as regards the criteria by which the I.T. Units would qualify for eligibility to the concession on stamp duty and registration charges. G.O.Ms.No.122 dated 27.07.2004 pointed out to the Government Orders G.O.Ms.No.15 dated 22.05.2003 and G.O.Ms.No.15 dated 21.7.2004 specifically stating that 50% concession on stamp duty and registration would be given at the time of purchase of a land/ building for I.T. companies and thus shall be conditional to the concerned company putting up facilities to commence the operation within 12 months from the date of the transaction and certification in this regard. This is reiterated in G.O.Ms.No.18 dated 05.11.2004. Thus going by these Government Orders, it is clear that the petitioner, who is in the construction business, is not entitled to be called as an I.T. industry to qualify for the concession. Whatever might have been its status vis-a-vis other enactments, for the purpose of applicability of the Government Order, one has to go by the understanding given therein. Hence, the mere fact of the petitioner constructing the I.T. Park, does not bestow on the petitioner the status of an I.T. industry to extend the benefit of the Notification as an "I.T. industry", as had been contemplated under the I.T. Policy, 2002. As rightly pointed out by the respondents, the benefits of the concession are meant for I.T. companies. The petitioner has filed the list of I.T. companies occupying the area built by the petitioner, which makes it abundantly clear that the petitioner is not an I.T. industry engaged in developing I.T. related industry. Given the fact that the provision granting exemption has to be read strictly and in this case, the Government had clearly meant the concessions to go to the "I.T. Industry", I have no hesitation in accepting the plea of the learned Advocate General appearing for the respondents that the concession https://hcservices.ecourts.gov.in/hcservices/ granted under the Government Order is not applicable to the petitioner. It is a well settled proposition of law that the notifications granting concessions have to be construed strictly and once an industry satisfies the definition therein, full play must be given to the terms of the notification. On the facts of the case, I have no hesitation in rejecting the plea of the petitioner. In the circumstances, W.P.No.24774 of 2006 stands dismissed. 16. In W.P.No.15468 of 2007, the petitioner has sought for a Writ of Certiorarified Mandamus, seeking refund of the charges paid by way of stamp duty. In terms of G.O.Ms.No.15, I.T. Department dated 22.5.2003 and G.O.Ms.No.15, I.T. Department dated 21.7.2004 and in the light the order passed in W.P.No.24774 of 2006, W.P.No.15468 of 2007 also stands dismissed, as the petitioner is not entitled to the refund stamp duty. In the result, both these writ petitions are dismissed. Connected M.P.Nos.1 and 2 of 2006, M.P.Nos.1 and 2 of 2007 and M.P.No.1 of 2010 in W.P.No.24774 of 2006 and M.P.No.1 of 2010 in W.P.No.15468 of 2007 stand closed. No costs. Sd/- Asst.Registrar /True Copy/ Sub.Asst.Registrar ksv To 1. The Secretary Department of Information Technology Government of Tamil Nadu Secretariat, Fort St. George Chennai-600 009. 2. The General Manager (IT P&D) M/s.Electronics Corporation of Tamilnadu Ltd. 692, Anna Salai, Nandanam Chennai-600 035. 3. The Managing Director M/s.Electronics Corporation of Tamilnadu Ltd. 692, Anna Salai, Nandanam Chennai-600 035. https://hcservices.ecourts.gov.in/hcservices/ 4. The Secretary Department of Commercial Taxes & Registration Government of Tamil Nadu, Secretariat Fort St. George Chennai-600 009. 5. The District Registrar Chennai Central 20, Seethammal Road Alwarpet Chennai-600 018. + 2 ccs to M/s. Dr. Anita Sumanth, Advocate Sr.76405, 76406 + 1 cc to the Government Pleader Sr.76533 W.P.Nos.24774 of 2006 and 15468 of 2007 BVN(CO) Eu 24.1.11 https://hcservices.ecourts.gov.in/hcservices/