A.P.SOLVEX LTD. Vs. STATE OF PUNJAB

JUDGEMENT

(1.) Petitioner has challenged the amendment carried out by the State of Punjab in the Indian Stamp Act, 1899 in the Indian Stamp (Punjab Amendment) Act, 2005 (hereinafter referred to as 'Amendment Act, 2005') notified on 16.05.2005 by which Section 3-C was inserted after Section 3-B in the principal Act imposing and charging additional stamp duty as specified in Schedule 1-B known as the 'Social Security Fund' on the instruments mentioned in entry 23 of Schedule 1-A on the conveyance deeds, which are executed within the area of 5 Kms. outside the Municipal Corporation or Class- 1 Municipalities in the State of Punjab.

(2.) Petitioner-A.P.Solvex Ltd. (hereinafter referred to as 'Company') purchased land and building on 02.06.2008 and paid all the stamp duties as applicable and assessed by the respondents. On 23.02.2010, the Auditor General, Punjab raised objections with regard to undervaluation of the property and indicated that the recovery should be effected from the petitioner-Company on account of undervaluation of the stamp duty in view of Section 47-A of the Indian Stamp Act. It was pointed out that the property being an industry including machinery and building would be covered under the commercial category instead of agriculture chahi category and, therefore, the stamp duty should have been charged accordingly and affixed.

(3.) Notice to the petitioner was issued under Section 47-A to appear on 15.04.2010 by the District Collector, Sangrur vide summons (Annexure P-7). Petitioner appeared and submitted his reply on 07.06.2010. An objection was taken by the petitioner- Company that the report was without any basis as the valuation of the property was done by the bank and on that basis, the purchase was got effected. The enquiry, which proceeded, thereafter led to the passing of the order dated 29.08.2011 (Annexure P-10) by the District Collector agreeing with the valuation of the property. However, it was pointed out that the Government of Punjab had upgraded the Municipal Council, Sunam to Class-I on 12.03.2008, which is prior to the date of execution of the sale deed dated 02.06.2008 and, therefore, additional tax @ 3% as Social Security Fund was leviable as the said property fell within the radius of 5 Kms. of the municipal limit. The amount was assessed at Rs. 6,75,000/- on the value of the sale deed i.e. Rs. 2,25,00,000/- and the demand was raised.