Kartheepan Tourist Bus Service vs The Government of Tamil Nadu and Others

K.P. Sivasubramaniam, J.—The petitioner, a Tourist bus service has sought for Certiorarified Mandamus to call for the records relating to

the order of the second respondent dated 30.6.1995 and to direct the respondents to grant exemption of stamp duty in respect of the sale deed

dated 25.4.94 bearing pending document No. 375/94 Sub-Registrar''s office, Adayar, executed by the 4th respondent Tamil Nadu Small

Industries Corporation Limited (TANSI) in favour of the petitioner and register the same.

According to the petitioner, they have purchased an extent of 2283 sq. mts. together with an AC sheet roofed building measuring 1012.31 sq.

mts. and an AC sheet roofed shed measuring 221.18 sq. mts. land in Thiru Vi. Ka. Industrial Estate, Guindy from TANSI under the sale deed

dated 25.4.94. The petitioner submits that TANSI is an undertaking of the Government of Tamil Nadu and a Company registered under the

Companies Act. The total sale consideration for the purchase was Rs. 56,65,194. The petitioner sought for exemption of stamp duty for the said

sale on the basis of the Government Order issued by the first respondent in G.O.Ms.No. 169, Commercial Taxes and Religious Endowment

Department dated 7.6.93. In terms of the said Government Order, a purchaser would be entitled to exemption to stamp duty for three years with

effect from 25.1.1993. The purport of the Government Order was to grant to the small entrepreneurs a relief from paying heavy stamp duty so that

the same can be utilized for the development of the industries.

The petitioner further contends that the property was purchased by the petitioner from TANSI which had been formed with the assistance of the

Government and registered under the Companies Act. However, the third respondent has refused to grant exemption and kept the registration of

the deed in abeyance and allotted pending No. 375/94. By a notice dated 27.5.94, the third respondent sought to impound the document and the

petitioner was directed to pay the alleged deficit stamp duty of Rs. 7,62,466 apart from levying penalty of Rs. 250, The petitioner, thereupon,

preferred a revision before the second respondent to set aside the said order. However, the third respondent also had confirmed the order and

dismissed the revision petition. Hence, the above writ petition.

In the counter filed by the fourth respondent-TANSI, it is contended that the company was at present undertaking an exercise to restructure the

staff pattern to make it a profitable venture and some of the units are under closure. As far as the transaction with the petitioner is concerned, an

agreement for sale was entered into between both parties and the matter was referred to the appropriate authority of the Income Tax Department

for obtaining no objection certificate and the appropriate authority had issued the required certificate. The sale deed was executed on 25.4.94 with

the Sub-Registrar, Adyar after receiving the full value. The respondent has nothing to do with the exemption of stamp duty and it is for the

Government to decide.

Learned Counsel for the petitioner submits that the refusal on part of the authority to grant exemption was against the very purport of the

Government Order issued in G.O.Ms.No. 169 dated 7.6.93. The object of having issued such a notification was to encourage the industrial

entrepreneurs. Though it is true that TANSI has not been specifically named in the Government Order, TANSI will certainly fall under the

expression, ""Industrial Estates formed with the assistance of the Government and registered under the Companies Act, 1956"". The learned

Counsel further states that when the other Industrial Development Corporations such as SIDCO, SIPCOT, TACIID have been included, there is

no reason who TANSI could not be included.

Learned Counsel also relies on the judgments of the Supreme Court in Broach Distt. Co-operative Cotton Sales Ginning and Pressing Society

Limited Vs. Commissioner of Income Tax, Ahmedabad, and in Commissioner of Income Tax, Amritsar Vs. Straw Board Manufacturing Co. Ltd.,

in support of his contention that all provisions prescribing concessional rate of tax must be liberally construed.

7.1 have also heard the learned Government Pleader''s contentions that exemption of stamp duty cannot be inferred or presumed and it is only

transactions with the institutions which have been specifically mentioned in the Government Order will be entitled for the benefit of exemption and

TANSI not having been mentioned in the Government Order, it will not apply to transactions relating to TANSI and the purchase cannot claim the

benefit of exemption of stamp duty. The Government Pleader further submits that TANSI was involved only in the manufacturing activities and not

in the promotion of the industrial estates.

Learned counsel for the petitioner, in reply refers to the Memorandum of Association of TANSI and in particular refers to Clauses 6, 12 and

Clause 6 contemplates aiding, assisting, financing, protecting and promoting the interests of small or any other industries in the State and to

provide them with assistance of all kinds including capital, credit, means, resources, etc. Clause 12 deals with promotion and operation of schemes

for development of Industries in the State. Clause 20 deals with the object of establishing, promoting, subsidizing and otherwise assisting any

company for the purpose of setting up of any industry or any industrial undertaking, acquiring any property or furthering any of the objects of the

Company. The contention of the learned Government Pleader that the TANSI is not involved in promoting any establishment is disputed and the

petitioner is a purchaser from TANSI.

I have considered the submissions of both sides. Following is the extract of the Government Order in G.O.Ms.No. 169, Commercial Tax

Department dated 7.6.93, which requires to be interpreted.

In exercise of the powers conferred by Clause (a) of Sub-section (i) of Section 9 of the Indian Stamp Act, 1899 (Central Act II of 1899), the

Governor of Tamil Nadu hereby remits the duty chargeable under the said Act in respect of the instruments executed by the Tamil Nadu Small

Industries Development Corporation Limited (SIDCO), the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT), Tamil

Nadu Corporation for Industrial Infrastructure Development Limited (TACIID) and the Industrial Estates formed with the assistance of the

Government and registered under the Companies Act, 1956 (Central Act 1 of 1956), or under the Tamil Nadu Co-operative Societies Act, 1983

(Tamil Nadu Act 30 of 1983) relating to the sale as well as lease of the Industrial plots and Industrial sheds and this remission of duty shall not

apply to subsequent sale or lease made by the allottees to others.

The notification hereby made shall come into force on the twenty fifth January, 1993, and shall remain in force upto and inclusive of the twenty

forth January, 1996.

A perusal of the above extracted portion of the Government Order would disclose that apart from mentioning of SIDCO, SIPCOT and

TACIID, there is no specific mention of any other institution of the TANSI. Thereafter, it is contended by the respondent that there is no scope for

including TANSI as falling under the G.O. In my opinion, the said contention overlooks the expression, ""Industrial estates formed with the

assistance of the Government and registered under the Companies Act, 1956"", which means that any other institution which could fit in with the

said expression would also be governed by the G.O. Therefore, we have to see whether TANSI would be covered by the expression.

I have also perused the file relating to the issuance of the said G.O. The letter from the Inspector General of Registration to the Secretary,

Commercial Tax and Religious Endowment Department dated 21.12.1992 discloses that several institutions, corporations, including private

institutions have been requesting exemption and that the request may be granted. It is also stated that the benefits were also sought by many of the

Government owned industrial corporations and that therefore the said request may be accepted by the Government. It is only based on the said

recommendation, the Government Order as stated above had been issued.

It is true that TANSI has not been specifically mentioned. But considering that they are also involved in the promotion of industrial estates and

fully owned by the State Government, there is no reason as to why TANSI should not be treated as falling under the expression of ""industrial

estates formed with the assistance of the Government"". Clauses 6, 12 and 20 of the Articles of Association of TANSI had already been referred to

above and therefore TANSI is not a mere commercial venture of the State Government but also like any other undertaking like SIDCO or

SIPCOT, involved in promotion and assistance for setting up any industry and acquiring properties for such objects. There is also no doubt over

the position that it is an Industrial Estate formed by the Government and registered under Companies Act. A perusal of the sale-deed shows that

the land was transferred to TANSI in terms of the Government Grants Act, 1895. Therefore, I am inclined to hold that TANSI would fall under

the residuary expression in the G.O. It is true that any liability under a fiscal legislation has to be strictly interpreted in favour of the Revenue. But it

is equally a settled principle of taxation law that provisions relating to concessions and reliefs have to be liberally interpreted.

I am inclined to agree with the contentions of the learned counsel for the petitioner relating to the interpretation of similar provisions by the

Supreme Court in Commissioner of Income Tax, Amritsar v Straw Board Manufacturing Co. Ltd., 1989 Supp(2) S.C.C. 523. Having regard to

the object of providing concessional rate and higher development rate by providing deduction u/s 80-E of the Income Tax Act., the Supreme

Court held that provision for concessional rate of tax should be liberally construed.

In Broach Distt. Co-operative Cotton Sales Ginning and Pressing Society Limited Vs. Commissioner of Income Tax, Ahmedabad, while

dealing with exemption u/s 81(i)(c) of the Income Tax Act, the Supreme Court held that while interpreting taxing statutes, exemption clauses

intended to encourage co-operative activities must be liberally construed.

Therefore, having regard to the above said rulings and the object of the Government Order being to encourage and to give relief and incentive

to the small industrial entrepreneurs, there is no reason why TANSI should not be included in the category of industrial estates formed with the

assistance of the Government.

In the results, the petitioner is entitled to succeed and I am unable to sustain the impugned order of the respondents rejecting the petitioner''s

request to apply the benefit of the said Government Order. The writ petition is allowed. No costs.