Oral Order

1. When the matter is called out and taken up for hearing, at the outset, learned AGP has fairly submitted that the issue raised in the petition is already decided by Hon'ble Division Bench vide CAV Judgment dated 3.7.2013 in Special Civil Application No.2113 of 2012.

2. In present petition, the petitioner has prayed, inter alia, that:-

'18-a.That this Hon'ble Court be pleased to issue writ or order or direction declaring that the circular dated 30.4.2011 issued by the respondent No.2 is illegal, arbitrary and ultra vires the provisions of the Bombay Stamp Act and null and void abinitio.

b. That this Hon'ble Court be pleased to issue writ or order in the nature of mandamus or any other appropriate writ order or direction quashing and setting aside the circular dated 30.4.2011 issued by the respondent No.2.'

3. Thus, the petitioner challenged the legality and propriety of the circular dated 30.4.2015 and prayed that the said circular may be declared ultra vires.

4. Hon'ble Division Bench considered the challenge against said circular in Special Civil Application No.2113 of 2012.

In the said case (i.e. the matter involved in Special Civil Application No.2113 of 2012), the Collector under the provisions of the Stamp Act had over ruled the claims and contentions of the said petitioner in light of the circular dated 30.4.2011. This aspect is recorded by the Court in paragraph No.2.6 of the said decision, relevant part whereof reads thus:-

'2.6 ....However, the Collector overruled the objections raised by the petitioner bank and took the view vide order dated 21st November 2011 that the petitioner bank was liable to pay the deficit stamp duty to the tune of Rs.7,51,620/- and penalty together with the interest amount. It also appears on plain reading of the order passed by the Collector that a Circular dated 30th April 2011 issued by the office of the Inspector of Registration, Gandhinagar, was relied upon, which states that if the bank takes over the possession of the secured asset from a defaulter under the provisions of the SARFAESI Act then such an act of taking over of the possession under a panchnama creates a right in favour of bank to put such property to auction and such a transaction will amount to transfer of the property and, therefore, stamp duty should be recovered accordingly on such a transaction.'

4.1 In that view of the matter, the said petitioner questioned the legality of the said circular dated 30.4.2011.

4.2 During the hearing before the Court, the respondents contended that the said circular is valid. The contention of the respondents with regard to the said circular is found in paragraph No.3.1, which reads thus:-

'3.1 The Circular dated 30th April 2011 as well as the order dated 21st November 2011 passed by the Collector, Stamp Valuation Cell, are absolutely legal and proper and the same are not liable to be quashed and set aside. The Circular dated 30th April 2011 is not ultra vires the provisions of the Act. The Act is purely a fiscal statute and its sole object is to increase the revenue and, therefore, all its provisions must be construed as having in view of the protection of the revenue. M/s.Dairyden Limited-the debtor had mortgaged the property in question with the petitioner bank in respect of which the requisite stamp duty was paid by M/s.Dairyden Limited. However, on failure on the part of the debtor in repaying the loan amount the petitioner bank took over the possession of the property under the SARFAESI Act. The orders dated 17th August 2009 and 17th November 2009 passed by the District Magistrate as well as the panchnama dated 18th December 2009 are all instrumental in transferring the physical possession of the property in question from M/s.Dairyden Limited to the petitioner bank.'

4.3 Hon'ble Division Bench considered the rival submissions and held and observed, inter alia, that:-

'9. It is true that power of the High Court to issue prerogative writs under Article 226 of the Constitution of India is plenary in nature and cannot be curtailed by other provision of the Constitution of India or a Statute but the High Courts have imposed upon themselves certain restrictions on the exercise of such power. One of such restrictions is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction under Article 226 of the Constitution of India. But again, this rule of exclusion of writ jurisdiction on account of availability of an alternative remedy does not operate as an absolute bar to entertain a writ petition but is a rule of discretion to be exercised depending on the facts of each case. On this aspect, the following observations by the Constitution Bench of the Supreme Court in A.V. Venkateswaran, Collector of Customs v. Ramchand Sobhraj Wadhwani and another, reported in AIR 1961 SC, which still holds the field, are quite apposite : The passages in the judgment of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive, and (2) that even beyond them a discretion vested in the High Court to have entertained the petition and granted the petitioner relief notwithstanding the existence of an alternative remedy. We need only add that the broad lines of the general principles on which the Court should act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus preeminently one of the discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court.

11. In the present case, we are of the opinion that, for the reasons which we shall record herein after, the order impugned as well as the Circular dated 30th April 2011 are wholly without jurisdiction and thus, the objection raised by the learned Advocate General as regards availability of alternative remedy deserves to be overruled.

12. The stance of the State Government has really baffled us. We fail to understand as to how a panchnama drawn at the time of taking over of the physical possession of the secured asset pursuant to the order passed by the District Magistrate under Section 14 of the SARFAESI Act could be termed as an instrument creating any right or liability in favour of the bank so as to bring it within the ambit of conveyance as defined under Section 2, Clause (g) of the Act of 1958. The authorities seem to be labouring under a serious misconception of law that a secured creditor can take over the possession of the secured assets only if there is an order passed by the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, under Section 14 of the SARFAESI Act. Section 14 is a provision which provides that if the secured creditor wants to seek the help of the local police in taking over of the physical possession of the secured asset, anticipating obstruction at the end of such debtor, then in such circumstances, the secured creditor may seek help of the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, but in a given case, the bank may not deem fit to avail of the provision of Section 14 of the SARFAESI Act and on their own also could take over the physical possession of the secured asset. In such circumstances, it is absolutely unreasonable on the part of the authorities to assert that a panchnama drawn at the time of taking over of the possession creates a right in favour of the secured creditor and since it creates a right it is only thereafter that such assets could be put by the secured creditor to auction.

13. We have, in so many words, made the position of law very clear in the case of Canara Bank v. Palco Recycle Industries Limited reported in AIR 2013 Gujarat 50 that a conjoint reading of all the subsections of Section 13 indicates that after taking possession of the assets in terms of Section 13, Clause (4) of the Securitization Act, the secured creditor gets a right to sell the property for realization of its dues as if the sale has been made by the secured creditor himself. We have also taken the view that Sub-section (8) of the said Section clearly indicates that if the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor and no further steps shall be taken by him for transfer or sale of that secured asset.

14. Therefore, even after taking possession, if before sale of the property, a debtor pays the amount as mentioned in Sub-section (8) to the secured creditor, in that event no further steps should be taken by the secured creditor and the debtor will be entitled to get back the possession.

17. We are of the view that the entire exercise undertaken by the respondent authorities is contrary to law. It is also well-known that one and the only proper test in interpreting a Section in a taxing statute would be that the question is not at what transaction the section is according to some alleged general purpose aimed, but what transaction its language according to its natural meaning fairly and squarely hits. Imposition of tax is a constitutional function. A taxing or a fiscal statute demands strict construction. It must never be stretched against a tax bill so long natural meaning for the charging section is adhered to and when the law is certain then a strange meaning thereto should not be given. It is also well settled rule of construction of a charging Section that before taxing a person it must be shown that he falls within the ambit thereof by clear words used as no one can be taxed by implication. It is further well settled that a transaction in a fiscal legislation cannot be taxed only on any doctrine of the substance of the matter as distinguished from its legal signification, for a subject is not liable to tax on supposed spirit of the law or by inference or by analogy, as sought to be suggested by learned Advocate General. The taxing authorities cannot ignore the legal character of the transaction and tax it on the basis of what may be called substance of the matter. One must find the true nature of the transaction [see Commissioner of Central Excise, Pondicheri v. Acer India Limited (2004) 8 SCC 173]. We have no hesitation in holding that the action of the respondent authorities is contrary to the Constitutional mandate as provided under Article 265 of the Constitution of India. Article 265 reads as under:

265. Tax not to be imposed save by authority of law:- No tax shall be levied or collected by authority of law.

19. Our final conclusions in the matter are as under:

(A) The Circular dated 30th April 2011, Annexure-F to this petition, issued by the respondent no.3 is held to be ultra vires the provisions of the Gujarat Stamp Act, 1985 and Article 265 of the Constitution of India.

(B) The impugned order dated 21st November 2011 passed by the respondent no.1 is declared to be illegal and is accordingly set aside.

(C) The order passed by the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, under Section 14 of the SARFAESI Act 2001 could not be termed as an instrument as defined under Section 2, Clause (i) of the Gujarat Stamp Act, 1958 creating any right or liability in favour of the secured creditor so as to bring it within the sweep of the definition of conveyance as defined in Section 2, Clause (g) of the Act, 1958. In the same manner, the panchnama drawn at the time of taking over of the physical possession of the secured asset pursuant to the order passed by the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, in exercise of powers under Section 14 of the Act 2002 would also not create any special right in favour of the secured creditor so as to bring such a panchnama within the sweep of the definition of the term instrument as defined under Section 2, Clause (i) of the Act.'

4.4 It can be seen from paragraph No.19(A) of the said decision that Hon'ble Division Bench has held that the circular dated 30.4.2011 is ultra vires of the provisions of the Gujarat Stamp Act and Article 265 of the Constitution of India.

4.5 Thus, the subject matter of present petition and the challenge raised by the petitioner as well as the relief prayed for in present petition are governed by the said judgment by Hon'ble Division Bench in Special Civil Application No.2113 of 2012.

Therefore, the said decision will apply and govern the subject matter of present petition and the petition stands decided and disposed of in terms of the said judgment dated 3.7.2013 in Special Civil Application No.2113 of 2012.

5. Before concluding, it is appropriate to mention that the Court is informed that the above mentioned decision of Hon'ble Division Bench is carried in appeal before Hon'ble Apex Court.

6. Mr. Shah, learned advocate for the petitioner, submitted that without prejudice to the contentions, the petitioner has deposited the amount in question.

7. In view of the fact that the decision by Ho

n'ble Division bench is pending consideration before Hon'ble Apex Court and in view of the fact that the petitioner has, as claimed by Mr. Shah, learned advocate, deposited the entire amount in question, the question, which would arise is about petitioner's right to claim refund of the amount paid by the petitioner. 8. The said issue can be dealt with by the authority only after the decision by Hon'ble Apex Court. 9. In that view of the matter, the deposit / payment made by the petitioner during pendency of this proceedings shall be subject to decision by Hon'ble Apex Court. Under the circumstances, it is further clarified that:- '7. For the reasons stated above, the petition is partly allowed. It is directed that the case of the petitioner shall stand governed by the decision of Hon'ble Supreme Court in the proceedings of above said Special Leave to Appeal filed against the judgment rendered in Special Civil Application No.2113 of 2012 in so far as it concerns the validity of circular dated 30.04.2011. If decision in above referred proceedings before Hon'ble Supreme Court goes against the respondents as regards the validity of the said circular, the respondents shall refund the amounts paid by the petitioner pursuant to the demand notice dated 10.2.2009 within a period of six weeks from the date of decision of Honble Supreme Court. With aforesaid observations, clarifications and direction, present petition stands disposed of.