ANIL PURUSHOTTAM KAKAD Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) THE controversy in this case relates to the proper stamp duty leviable on a deed of assignment by which the assignors transferred their running business including the goodwill thereof and all tangible and intangible rights, benefits and privileges pertaining and appertaining to the said business including the tenancy right in respect of the business premises and two garages and the telephone connection bearing No. 293179. The consideration for the transfer was a sum of Rs. 21,80,000/ -. The said deed was registered and stamp duty thereon amounting to Rs. 1,10,000/ - was paid classifying the said deed of assignment as a conveyance of movable property within the meaning of Article 25(a) of the Bombay Stamp Act, 1958 ('the Act'). The deed was tendered for registration on 10.9.1981. On 4.5.1988, after about 7 years thereof, a notice was issued to the petitioner by the Recovery Officer in the Office of the Collector, Bombay, demanding a sum of Rs. 2,12,800/ - as arrears of stamp duty and penalty in respect of above deed of assignment. The petitioner filed a revision application under Section 53(1) of the Act before the Collector of Bombay, who is Chief Controlling Revenue Authority under the Bombay Stamp Act. The revision petition was rejected by the Collector by his order dated 13.9.1988. In his order it was observed by the Collector that in pursuance of the said agreement, the assignors had, for a consideration of a sum of Rs. 21,00,000/ - paid by the assignees, transferred their business along with goodwill, all tangible and intangible assets, rights, benefits and privileges pertaining to the said business including the tenancy rights, in respect of the said business and two garages etc., on which the stamp duty had been levied as per Article 25(a) of the Act. As, later, it was found that the duty had been wrongly collected under Article 25(a), the case was reopened by the Superintendent of Stamps and the demand was raised for the difference of the duty leviable under Article 25(b) and the amount paid by the Assignees under Article 25(a). The Collector was of the opinion that the transfer to tenancy rights in the business along with the goodwill and tangible and intangible rights made the transaction in question chargeable under Article' 25(b) instead of Article 25(a) of the Act. It is this order of the Collector which has been challenged by the petitioners by the present writ petition.

(2.) THE contention of the petitioners, is that by the deed of assignment in question, the petitioners having assigned and transferred the running business along with its goodwill, benefits and rights, Article 25(a) was attracted and, as such, the transfer amounted to transfer of movable property. The learned Counsel for the respondents, on the other hand, submits that though the transfer was a transfer of running business and goodwill, as a result of its, certain tenancy rights also got transferred in favour of the petitioners, which in fact amounts to transfer of immovable property and, as such, Article 25(b) will be attracted. In that view of the matter, the entire consideration paid to the assignors, according to the respondents, amounted to consideration for the transfer of tenancy rights in the shop premises and the two garages,

(3.) IN the instant case, on facts, it may be observed that the impugned order of the Collector does not show as to what part of sum of Rs. 21,80,000/ - which is the consideration for the transfer of the goodwill of the business including interest in the tenancy has been attributed by him to the transfer of the tenancy. I asked the learned Counsel for the respondents to ascertain from the records of the Collector whether any such attempt had been made by him at any stage, because even if his contention is accepted, by virtue of clause (c), only that part of the consideration which can be attributed to the transfer of tenancy rights would attract higher stamp duty prescribed under Article 25(b). The learned Counsel, after verifying the records and making necessary enquiries from the Collector, was fair enough to state that no such bifurcation has been made by him and the amount of stamp duty at the higher rate applicable to assignment of immovable property has been calculated on the total consideration paid for goodwill of the going concern treating it as case of assignment of immovable property. That being the factual position, the impugned order cannot be sustained on that count itself.