Controller of Estate Duty, Andhra Pradesh, Hyderabad vs Chief Controlling Revenue Authority, Board of Revenue Vs. T.

Judgment

1. Heard Sri Ishir Sripat, learned counsel for the petitioners, and Sri A.C. Mishra, learned Additional Chief Standing Counsel for the State-respondents.

2. By means of this writ petition, the petitioners have assailed the order dated 04.07.2023 passed by the District Magistrate, Hathras.

Learned counsel for the petitioners submits that vide trust deed, a public charitable trust in the name and style of Mateshwari Bhadrakali Public Charitable Trust was formed for better and effective management of the temple, its fund and its properties with the motive and interest to welfare of the poor men, to facilitate to the devotee visitors over the temple, which was presented for registration before the Sub-registrar concerned, who without registering the deed, made a report dated 06.07.2020 based on evaluation of the property of the trust, assessing the value of the aforesaid trust properties to the tune of Rs. 4,55,20,000/- plus Rs. 5 lacs cash and the stamp duty along with registration charges amounting to Rs. 22,95,250/- in all. Thereafter, pursuant to the reference being made by the respondent nos. 6 & 7 on the report of the Sub-registrar, a case was registered under Section 47-A of the 2 Indian Stamp Act before the Collector, Hathras and notices were issued to the petitioners and on the received of the same, the petitioners were put in appearance before the respondent concerned and filed its objection wherein specific pleadings have been made that without there being any spot inspection conducted in presence of the petitioner, the said report was prepared meaning thereby the same is an ex-parte report.

4. Thereafter, other inspection reports dated 03.02.2021, 19.11.2022 &

29.04.2023 were also submitted and in view of the report dated

29.04.2023, valuation of the land and superstructures were determined as Rs. 7,43,76,000/-, including Rs. 5 lacs cash, but without appreciating the law and completely ignoring the objection so filed by the petitioners, the impugned order dated 04.07.2023 holding the deficiency of stamp duty of Rs.40,10,479/- including penalty, was passed.

5. Learned counsel for the petitioners further submits that the provision of Article 62 (b)of the Uttar Pradesh Stamp Acts, 2008 is applicable where the liability for payment of Stamp duty is to be calculated as; for first 10,000/- at the rate of Rs.4% and 1% on the balance amount, which has totally been ignored.

6. He further submits that the present case is covered under Section 2 (24) of the Indian Stamp Act, 1899 which provides the definition of settlement which is beyond the disposition.

7. In support of his submission, he has placed reliance upon the judgement of Hon’ble Apex Court passed in the case of The Controller of Estate Duty, Andhra Pradesh, Hyderabad Vs. Kancharla Kesava Rao, AIR 1973 SC 2484 and the Full Bench judgment of the High Court of Madras passed in the case of The Chief Controlling Revenue Authority, Board of Revenue Vs. T. 3 Rangnathan Pillai, (1981) ILR 3 Mad 177. He prays for allowing the writ petition.

8. Per contra, learned Additional Chief Standing Counsel supports the impugned order and submits that the deed in question is a settlement of a transferable immovable property as mentioned in the preamble of the deed itself and refers that the property has been transferred to the public charitable trust and therefore, the property has rightly been assessed against the petitioners.

9. In support of his submission, he has placed reliance upon the judgment of Special Bench of Delhi High Court passed in the case of The Chief Controlling Revenue Authority Vs. Banarsi Dass Ahluwalia (Stamp Duty Reference No.3 of 1969, D/-23-12-1971)

10. Upon hearing the parties, the Court has perused the records.

11. It is admitted in the deed in question that a public charitable trust has been created for the purpose of proper and effective management of the affairs of the trust and temple.

12. The record shows that the properties were purchased before creating of the trust. The only purpose for creating the trust is to carry out all affairs of the trust without private motive and with a view to facilitate better to the devotee visitors of the temple.

13. The perusal of the deed in question does not demonstrate any disposition of assets for determining the stamp duty with reference to the substance as embodied in the instrument, which is a prime factor for levy of stamp duty.

14. The instrument has to be read and construed wholly rather in peace- meal merely because the trust deed does not cease to be a settlement deed for the purpose of stamp duty, if it answers the definition of settlement also. 4

15. It is well settled law that all trusts are not settlement and all settlements are not trust, however, the deed of trust can be a deed of settlement.

16. Perusal of the deed in question clearly shows a disposition for religious and charitable purpose and the instrument in question is covered under the definition of settlement as per Section 2 (24) of the Uttar Pradesh Stamp Act, 2008.

17. The Hon’ble Apex Court in the case of S.N. Mathur Vs. Board of Revenue and Ors., (2009) 13 SCC 301, in para nos. 5, 7, 8 & 9.4 has held as under:- “5. The question for consideration is not whether the instrument is a deed of trust or not. The fact that the instrument falls within the description of Trust deed is not in doubt. In fact that is not challenged by the State. The question is whether the instrument answers the definition of `settlement' and therefore would also come under the description of `settlement deed' in Article 58. The appellant contends that it will not, and for that purpose relies on the recitals of the trust deed that the Trust is created for preserving, protecting and managing the trust property known as `Mathur Atithishala' in Chitrakoot. The state contends that it will, and for that purpose relies on the operative portion of the instrument which shows that the three owners conveyed and transferred their property to the Trustees, to have and to hold the same and to own, possess and manage it as Trust Property. On the contentions raised, the question that arises for consideration is whether the instrument in question which answers the description of `Trust deed', will also answer the description of "settlement deed", and if so whether stamp duty is payable on the instrument, under Article 58 of Schedule I-B to the Act.

6. …….

7. The principles relating to charging stamp duty are well settled. They are: (i) The object of the Stamp Act is generation of revenue. It is therefore a fiscal enactment and has to be interpreted accordingly. 5 (ii) Stamp duty is levied with reference to the instrument and not in regard to the transaction, unless otherwise specifically provided in the Act. (iii) Stamp duty is determined with reference to the substance of the transaction as embodied in the instrument and not with reference to the title, caption or nomenclature of the instrument. (iv) For classification of an instrument, that is to determine whether an instrument comes within a particular description in an article in the Schedule to the Act, the instrument should be read and construed as whole. (v) Where an instrument falls under two or more descriptions in the Schedule to the Act, the instrument shall be chargeable with only one duty, that is the highest of the duties applicable to the different description. But where an instrument relates to several distinct matters, it shall be chargeable with the aggregate amount of duties to which separate instruments would be chargeable. Merely because an instrument answers the definition of a trust deed it does not cease to be a settlement deed for the purpose of stamp duty, if it answers the definition of `settlement' also. It is well settled that all trusts are not settlements, and all settlements are not trusts, but a deed of trust can also be a deed of settlement.

8. It is evident from the definition of "settlement" in section 2(24) that any non-testamentary disposition in writing, either of moveable or immovable property made for any religious or charitable purpose is a settlement. The definition also makes it clear that even where there is no such disposition in writing, any instrument recording whether by way of declaration of trust or otherwise, the terms of any of such disposition will also be a settlement. It is thus evident that not only instruments which are non-testamentary dispositions of property for any religious or charitable purpose, but also declarations of trust which record the terms of such disposition, are settlements. `Disposition' is a term of wide import which encompasses any devise or mode by which property can pass and includes giving away or giving up by a person of something which was his own (see : The Commissioner of Gift Tax Madras vs. N.S. Getty Chettiar - AIR 1971 SC 240 and The Collector of Estate Duty Andhra Pradesh vs. Kancharla Kesava Rao - AIR 1973 SC 2485). This Court has also held 6 that the word "disposition" refers to a bilateral or multilateral act of transfer and will not apply to a unilateral act as, for example, when a person treats his individual property as a joint family property. (See : Goli Eswariah vs. Commissioner of Gift Tax - AIR 1970 SC 1722). Black's Law Dictionary defines "disposition" as the act of transferring something to the care or possession of another; or relinquishment or giving up of property". In this case, the instrument is not termed as a "Settlement". It is clearly a declaration of trust and is described as a `deed of Trust'. But it records the terms of disposition of an immovable property for religious and charitable purposes. The operative portion of the instrument clearly recites that the three donors/Founders grant, convey and transfer their property `Mathur Atithishala' unto the trustees (that is the three founders and two others) and also declares that the Trust shall own, possess and manage the same as the absolute owner. The three executants of the Trust deed divested themselves of ownership of the property which was transferred to the Trust represented by five trustees. Thus there was a disposition for religious and charitable purposes. It is thus clear that the instrument answers the definition of "settlement" under section 2(24) of the Act. As the stamp duty leviable under a deed of settlement under Article 58 is more than the stamp duty leviable in regard to a deed of trust under Article 64, the authorities under the Stamp Act have rightly held that the instrument is chargeable with the higher duty prescribed under Article 58 applicable to a settlement.

9.4. Neither of the three decisions relied on by Appellant is therefore of any assistance. In Banarsi Dass Ahluwalia (supra), relied on by the respondents, a Special Bench of the Delhi High Court was considering an instrument whereby the founder created a public charitable trust and appointed himself as the first trustee and dedicated and endowed upon trust his various assets and properties and declared that the business and properties described thereunder, shall no longer be the personal business and properties of the founder but shall be held in Trust. The Delhi High Court held that the term `settlement' had a larger ambit than `trust' having regard to the definition of settlement in section 2(24). It also held that while a trust made for the purposes specified in section 2(24) would always be a settlement, the converse may not be true. The Court therefore held that the deed of trust also answered the 7 definition of `settlement' and having regard to section 6, when an instrument is covered by both Articles 64 and 58 of the Act, it shall be chargeable to duty under Article 58 as the duty thereunder was higher than the duty under Article 64. This decision reiterates the principle enunciated by the Allahabad High Court in Sridhar (supra). Be that as it may.”

18. The Hon’ble Apex Court has dealt the judgment relied upon by the learned Standing Counsel and therefore, it does not make any aid to the State.

19. From perusal of the record, it shows that the deed specifically falls within Section 2 (24) i.e. settlement and stamp duty is liable to be paid accordingly.

20. In view of the aforesaid facts as well as the judgments quoted above, the impugned orders cannot be sustained in the eyes of law and the same are hereby quashed.

21. Accordingly, the writ petition is allowed.

22. Any amount deposited by the petitioners pursuant to the impugned orders, shall be refunded to them along with interest @ 4% per annum, within a month from the date of production of certified copy of this order. Order Date :-10.03.2025 Pravesh Mishra/- (PIYUSH AGRAWAL, J.) PRAVESH KUMAR MISHRA High Court of Judicature at Allahabad

Learned counsel for the petitioners submits that vide trust deed, a public charitable trust in the name and style of Mateshwari Bhadrakali Public Charitable Trust was formed for better and effective management of the temple, its fund and its properties with the motive and interest to welfare of the poor men, to facilitate to the devotee visitors over the temple, which was presented for registration before the Sub-registrar concerned, who without registering the deed, made a report dated 06.07.2020 based on evaluation of the property of the trust, assessing the value of the aforesaid trust properties to the tune of Rs. 4,55,20,000/- plus Rs. 5 lacs cash and the stamp duty along with registration charges amounting to Rs. 22,95,250/- in all. Thereafter, pursuant to the reference being made by the respondent nos. 6 & 7 on the report of the Sub-registrar, a case was registered under Section 47-A of the 2 Indian Stamp Act before the Collector, Hathras and notices were issued to the petitioners and on the received of the same, the petitioners were put in appearance before the respondent concerned and filed its objection wherein specific pleadings have been made that without there being any spot inspection conducted in presence of the petitioner, the said report was prepared meaning thereby the same is an ex-parte report.

4. Thereafter, other inspection reports dated 03.02.2021, 19.11.2022 &

29.04.2023 were also submitted and in view of the report dated

29.04.2023, valuation of the land and superstructures were determined as Rs. 7,43,76,000/-, including Rs. 5 lacs cash, but without appreciating the law and completely ignoring the objection so filed by the petitioners, the impugned order dated 04.07.2023 holding the deficiency of stamp duty of Rs.40,10,479/- including penalty, was passed.

5. Learned counsel for the petitioners further submits that the provision of Article 62 (b)of the Uttar Pradesh Stamp Acts, 2008 is applicable where the liability for payment of Stamp duty is to be calculated as; for first 10,000/- at the rate of Rs.4% and 1% on the balance amount, which has totally been ignored.

6. He further submits that the present case is covered under Section 2 (24) of the Indian Stamp Act, 1899 which provides the definition of settlement which is beyond the disposition.

7. In support of his submission, he has placed reliance upon the judgement of Hon’ble Apex Court passed in the case of The Controller of Estate Duty, Andhra Pradesh, Hyderabad Vs. Kancharla Kesava Rao, AIR 1973 SC 2484 and the Full Bench judgment of the High Court of Madras passed in the case of The Chief Controlling Revenue Authority, Board of Revenue Vs. T. 3 Rangnathan Pillai, (1981) ILR 3 Mad 177. He prays for allowing the writ petition.

8. Per contra, learned Additional Chief Standing Counsel supports the impugned order and submits that the deed in question is a settlement of a transferable immovable property as mentioned in the preamble of the deed itself and refers that the property has been transferred to the public charitable trust and therefore, the property has rightly been assessed against the petitioners.

9. In support of his submission, he has placed reliance upon the judgment of Special Bench of Delhi High Court passed in the case of The Chief Controlling Revenue Authority Vs. Banarsi Dass Ahluwalia (Stamp Duty Reference No.3 of 1969, D/-23-12-1971)

10. Upon hearing the parties, the Court has perused the records.

11. It is admitted in the deed in question that a public charitable trust has been created for the purpose of proper and effective management of the affairs of the trust and temple.

12. The record shows that the properties were purchased before creating of the trust. The only purpose for creating the trust is to carry out all affairs of the trust without private motive and with a view to facilitate better to the devotee visitors of the temple.

13. The perusal of the deed in question does not demonstrate any disposition of assets for determining the stamp duty with reference to the substance as embodied in the instrument, which is a prime factor for levy of stamp duty.

14. The instrument has to be read and construed wholly rather in peace- meal merely because the trust deed does not cease to be a settlement deed for the purpose of stamp duty, if it answers the definition of settlement also. 4

15. It is well settled law that all trusts are not settlement and all settlements are not trust, however, the deed of trust can be a deed of settlement.

16. Perusal of the deed in question clearly shows a disposition for religious and charitable purpose and the instrument in question is covered under the definition of settlement as per Section 2 (24) of the Uttar Pradesh Stamp Act, 2008.

17. The Hon’ble Apex Court in the case of S.N. Mathur Vs. Board of Revenue and Ors., (2009) 13 SCC 301, in para nos. 5, 7, 8 & 9.4 has held as under:- “5. The question for consideration is not whether the instrument is a deed of trust or not. The fact that the instrument falls within the description of Trust deed is not in doubt. In fact that is not challenged by the State. The question is whether the instrument answers the definition of `settlement' and therefore would also come under the description of `settlement deed' in Article 58. The appellant contends that it will not, and for that purpose relies on the recitals of the trust deed that the Trust is created for preserving, protecting and managing the trust property known as `Mathur Atithishala' in Chitrakoot. The state contends that it will, and for that purpose relies on the operative portion of the instrument which shows that the three owners conveyed and transferred their property to the Trustees, to have and to hold the same and to own, possess and manage it as Trust Property. On the contentions raised, the question that arises for consideration is whether the instrument in question which answers the description of `Trust deed', will also answer the description of "settlement deed", and if so whether stamp duty is payable on the instrument, under Article 58 of Schedule I-B to the Act.

6. …….

7. The principles relating to charging stamp duty are well settled. They are: (i) The object of the Stamp Act is generation of revenue. It is therefore a fiscal enactment and has to be interpreted accordingly. 5 (ii) Stamp duty is levied with reference to the instrument and not in regard to the transaction, unless otherwise specifically provided in the Act. (iii) Stamp duty is determined with reference to the substance of the transaction as embodied in the instrument and not with reference to the title, caption or nomenclature of the instrument. (iv) For classification of an instrument, that is to determine whether an instrument comes within a particular description in an article in the Schedule to the Act, the instrument should be read and construed as whole. (v) Where an instrument falls under two or more descriptions in the Schedule to the Act, the instrument shall be chargeable with only one duty, that is the highest of the duties applicable to the different description. But where an instrument relates to several distinct matters, it shall be chargeable with the aggregate amount of duties to which separate instruments would be chargeable. Merely because an instrument answers the definition of a trust deed it does not cease to be a settlement deed for the purpose of stamp duty, if it answers the definition of `settlement' also. It is well settled that all trusts are not settlements, and all settlements are not trusts, but a deed of trust can also be a deed of settlement.

8. It is evident from the definition of "settlement" in section 2(24) that any non-testamentary disposition in writing, either of moveable or immovable property made for any religious or charitable purpose is a settlement. The definition also makes it clear that even where there is no such disposition in writing, any instrument recording whether by way of declaration of trust or otherwise, the terms of any of such disposition will also be a settlement. It is thus evident that not only instruments which are non-testamentary dispositions of property for any religious or charitable purpose, but also declarations of trust which record the terms of such disposition, are settlements. `Disposition' is a term of wide import which encompasses any devise or mode by which property can pass and includes giving away or giving up by a person of something which was his own (see : The Commissioner of Gift Tax Madras vs. N.S. Getty Chettiar - AIR 1971 SC 240 and The Collector of Estate Duty Andhra Pradesh vs. Kancharla Kesava Rao - AIR 1973 SC 2485). This Court has also held 6 that the word "disposition" refers to a bilateral or multilateral act of transfer and will not apply to a unilateral act as, for example, when a person treats his individual property as a joint family property. (See : Goli Eswariah vs. Commissioner of Gift Tax - AIR 1970 SC 1722). Black's Law Dictionary defines "disposition" as the act of transferring something to the care or possession of another; or relinquishment or giving up of property". In this case, the instrument is not termed as a "Settlement". It is clearly a declaration of trust and is described as a `deed of Trust'. But it records the terms of disposition of an immovable property for religious and charitable purposes. The operative portion of the instrument clearly recites that the three donors/Founders grant, convey and transfer their property `Mathur Atithishala' unto the trustees (that is the three founders and two others) and also declares that the Trust shall own, possess and manage the same as the absolute owner. The three executants of the Trust deed divested themselves of ownership of the property which was transferred to the Trust represented by five trustees. Thus there was a disposition for religious and charitable purposes. It is thus clear that the instrument answers the definition of "settlement" under section 2(24) of the Act. As the stamp duty leviable under a deed of settlement under Article 58 is more than the stamp duty leviable in regard to a deed of trust under Article 64, the authorities under the Stamp Act have rightly held that the instrument is chargeable with the higher duty prescribed under Article 58 applicable to a settlement.

9.4. Neither of the three decisions relied on by Appellant is therefore of any assistance. In Banarsi Dass Ahluwalia (supra), relied on by the respondents, a Special Bench of the Delhi High Court was considering an instrument whereby the founder created a public charitable trust and appointed himself as the first trustee and dedicated and endowed upon trust his various assets and properties and declared that the business and properties described thereunder, shall no longer be the personal business and properties of the founder but shall be held in Trust. The Delhi High Court held that the term `settlement' had a larger ambit than `trust' having regard to the definition of settlement in section 2(24). It also held that while a trust made for the purposes specified in section 2(24) would always be a settlement, the converse may not be true. The Court therefore held that the deed of trust also answered the 7 definition of `settlement' and having regard to section 6, when an instrument is covered by both Articles 64 and 58 of the Act, it shall be chargeable to duty under Article 58 as the duty thereunder was higher than the duty under Article 64. This decision reiterates the principle enunciated by the Allahabad High Court in Sridhar (supra). Be that as it may.”

18. The Hon’ble Apex Court has dealt the judgment relied upon by the learned Standing Counsel and therefore, it does not make any aid to the State.

19. From perusal of the record, it shows that the deed specifically falls within Section 2 (24) i.e. settlement and stamp duty is liable to be paid accordingly.

20. In view of the aforesaid facts as well as the judgments quoted above, the impugned orders cannot be sustained in the eyes of law and the same are hereby quashed.

21. Accordingly, the writ petition is allowed.

22. Any amount deposited by the petitioners pursuant to the impugned orders, shall be refunded to them along with interest @ 4% per annum, within a month from the date of production of certified copy of this order. Order Date :-10.03.2025 Pravesh Mishra/- (PIYUSH AGRAWAL, J.) PRAVESH KUMAR MISHRA High Court of Judicature at Allahabad