CREST HOTEL LIMITED Vs. ASSISTANT SUPERINTENDENT OF STAMPS

JUDGEMENT

(1.) ON 7 September, 1986, petitioners, Crest Hotels Ltd. entered into an agreement of sale of a flat being that No. 121 on 1st floor of the building named Madhuli which was still to be constructed and open car parking space therein. It was lodged for registration with the Sub-Registrar of Assurances at Bombay on 29 September, 1986. The said agreement was later on cancelled by the parties by a deed of cancellation dated 6 October, 1988. The deed of cancellation was also lodged for registration with the Sub-Registrar of Assurances at Bombay. The document of cancellation was executed on a stamp paper of Rs. 10/ -. The Sub-Registrar of Assurances, being of the opinion that the stamp duty prescribed under Article 25-B of Schedule 1 to the Bombay Stamp Act, 1958 ("the Act") was applicable, forwarded the same to the Assistant Stamp Superintendent, Bombay. The Assistant Stamp Superintendent, Bombay held that stamp duty under Article 25-B of Schedule I to the Act was chargeable on the deed of cancellation in question. As it was executed on a stamp paper of Rs. 10/-, the Assistant Stamp Superintendent determined the deficient stamp duty at Rs. 2,17,890/ -. Penalty of Rs. 21,000/- was also levied. By a letter dated 4 January, 1990 the petitioners were directed to pay the said amount of deficient stamp duty and penalty within one month. The petitioners have challenged the above order of the Assistant Stamp Superintendent.

(2.) THE contention of the petitioners is that the deed of cancellation is chargeable to duty at the rates specified in Article 15 of Schedule I to the Act which, at the material time, read as under:

(3.) THE contention of the respondents is that the cancellation of agreement of sale in this case amounts to reconveyance of the property by the purchaser to the owner with whom the agreement to sell had been originally entered into. Reliance is placed in this connection on Explanation to Article 25 of Schedule I to the Act.