Civil Writ No. 227-D of 1962. Case: The Delhi Cloth and General Mills Co. Ltd. and Ors. Vs The Chief Commissioner and Anr.. High Court of Punjab (India)
| Case Number | Civil Writ No. 227-D of 1962 |
| Judges | I.D. Dua and D.K. Mahajan, JJ. |
| Issue | Stamp Act; Registration Act, 1908 - Sections 3, 5, 6, 7, 17, 18, 57, 78, 79, 80 and 89; Land Improvement Loans Act, 1883; Agriculturists' Loans Act, 1884; Bombay Public Trusts Act - Section 58; Administration of Madras Hindu Religious and Charitable Endowments Act, 1951 - Section 76(1); Constitution of India - Articles 12, 14, 19, 19(1), 110, 1... |
| Citation | AIR 1964 P&H 492, 1964 (2) ILR 681 (P&H) |
| Judgement Date | May 07, 1964 |
| Court | High Court of Punjab (India) |
Judgment:
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The short question that arises for determination in this petition under Article 226 of the Constitution is whether the demand of Rs. 1,25,157.50 nP. as registration fee is, in fact, a fee or a tax. The Contention of the Petitioners is that it is a 'tax and not a fee.
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Petitioner No. 1 is the Delhi Cloth and General Mills Company Limited, Bara Hindu Rao, Delhi--herein-after referred to as the Company. Petitioners Nos. 2 and 3 are the Directors of the said Company and Petitioners Nos. 4 and 5 are the trustees. The Respondents are the Chief Commissioner, Delhi, and the Sub-Registrar, Delhi.
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The Company floated debenture loan of Rs. 2.5 crores and to secure the repayment of the said loan executed debenture trust deed on the 10th April, 1962, mortgaging some of its properties for the consideration of Rs. 2.5 crores in favour of Petitioners Nos. 4 and 5 as trustees for debenture-holders, under the said debenture trust deed. The Collector of stamps, Delhi, Assessed the stamp duty on the debenture trust deed at Rs. 2,50,300/- under the Indian Stamp Act. This duty was paid by the Company. When the debenture trust deed was presented before the Sub-Registrar, Delhi, on the 14th May,' 1962, for registration, the Sub-Registrar demanded a sum of Rs. 1,25,157.50 nP. as registration fee. This demand was made in pursuance of notification No. F. 12(20)/52-GAR dated the 15th December, 1952, issued under Sections 78 and 79 of the Indian Registration Act, 1908. The notification is Annexure 'A' to the petition. In this the table of tees for registration has been set out. The basis of the fee for registration is the value or consideration money specified in the document sought to be registered. The minimum fee chargeable is Rs. 2/8/-. If the value or consideration money is up to Rs. 1,000/-, the maximum fee levi-able is Rs. 12/8/-. For documents in which the value or consideration money is between Rs. 300/- and Rs. 1,000/-various amounts are specified in the Schedule ranging from Rs. 3/12/- to Rs. 12/8/-. For documents in which the value or consideration money is above Rs. 1,000/-, for every one thousand rupees, a fee of Rs. 5/- is payable in addition to the sum of Rs. 12/8/-, which is the fee for the first one thousand rupees. In this manner, the tee calculated on the sum of Rs. 2.50 crores comes to Rs. 1,25,157.50 nP. The stand taken up by the Petitioners was that this fee was not, in fact, a fee but was tax in the guise of fee. Consequently the Petitioners look back the document and moved the present petition in this Court. They maintain that they are prepared to pay any reasonable fee for registration of the document, 'that the fee demanded from them for registration has no correlation with the services to be rendered under the Indian Registration Act and is so excessive that it is merely a pretence for fee, that it is not fee and in reality is a tax and as such its levy is illegal and void and unconstitutional.
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In paragraph 15 of the petition, it is slated that:
the Petitioners under sand that registration fee is mixed with the other revenues of Delhi Administration and the amount so realised is spent by Respondent No, 1 not only on the establishment of the office of the Respondent No. 2 but also on other accounts not connected in any way with the office of the Respondent No. 2. The amount of registration fees is thus used as a part of general revenue of the state.
It is further maintained that the work involved in the registration of documents is the same irrespective of the value or consideration money, the length or the nature of the document. The levy of fee on the basis of the scale based on the value or consideration money is attacked as being discriminatory and thus violative of Article 14 of the Constitution. The notification is also attacked as being violative of Article 19(1)(f) and (g) of the Constitution as imposing an illegal impost. In the end it is prayed that the notification in question be not given effect to, and that the Sub-Registrar be directed to register the debenture trust deed on payment of some reasonable' fee which has proportion to the services to be rendered.
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In the return filed by the State in reply to paragraphs 11 and 15 of the petition, it is stated as follows-
***with reference to, para 11, I deny that the fee demanded for registration has no correlation with the services rendered, or that it is a mere pretence of fee or that it is in the nature of tax or that it's levy is illegal or void or unconstitutional. The fee demanded is absolutely in accordance with valid law. It has direct correlation to the services rendered and the benefit derived by the person seeking registration of document. The document in the present case would, on registration, entitle the Petitioner company to secure repayment of a huge sum of Rs. 2.5 crores. It is not necessary that the amount collected as registration fee should in every case be approximate to the expenses incurred by the Government in rendering any particular service. The amount collected remains a 'fee' as long as it is a payment for a special work done for the benefit of the person paying.
I do not dispute the facts stated in para 15 of the petition I, however, submit that 'the mere fact that amounts collected on account of registration fee are merged in general revenues would not make it a tax'. I submit that whether or not a particular levy is a tax would always be a question of fact to be determined in the circumstances of each case. In the present case I submit that the amount levied as registration fee is a fee and not a tax.
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It would thus be clear that it is not disputed that the registration fee forms part of the general revenue of the State and is not credited to any distinct or separate account, It is not utilised for the exclusive purposes of the services rendered for which the levy is collected but is utilised as revenue for the general purposes of the administration.
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It would also be clear that the scale of fees prescribed in the schedule Annex-are 'A' has no correlation to the raising of necessary funds to meet the legitimate expenses in connection with the legistration of documents and the maintenance of the Registration Department. The tee has also no connection with the length of the document. A document running into ten or twenty pages of the value of Rs. 500/- is chargeable to Rs. 8/- as tee, while a document of the value of Rs. 2.50 crores is chargeable to a fee of Rs. 1,25,157.50 nP. though it may be just a page. This disparity assumes greater importance if one keeps in mind that the services contemplated by the Registration Act and actually rendered are common to both the cases. On the face of it, it is hard to follow the relationship between the' fee and the services rendered or to be rendered.
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At this stage it will be proper to examine the scheme of the Registration Act and its purpose.
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As observed in Veerappan Chetty v. Kadiresan Chetty 20 Ind Cas 385 (Mad),
The primary object of...
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