In an interim reprieve to the state, the Bombay high court last week granted no stay on payment of stamp duty on delivery orders during imports but clarified that such payment will be subject to the outcome of a batch of almost 100 petitions on interpretation of law and certain provisions of the Stamp Act.
State advocate general Birendra Saraf on March 1 clarified before the high court that the state is not levying stamp duty on bills of entry but only on delivery orders, which he said is “permissible.” Challenging the duty on delivery orders, some petitioners sought an unconditional stay, stating that they would file an undertaking to eventually pay if the challenge fails. Not accepting such an undertaking, the HC bench of Justices Gautam Patel and Neela Gokhale said, “We are unable to see how the claim of the petitioners to a stamp-free clearance can be accepted even subject to this undertaking, which is difficult to enforce.”
“Stamp duty is a taxing or a fiscal measure under a dedicated statute. The payment is into revenue. Merely saying, as some petitioners do, that they do not trust the government is a less than persuasive argument. The remedies to that lie elsewhere and not in a writ court,” said the HC in its order.
“What is being sought in the guise of a stamp duty-free delivery order is literally a free pass,” said HC. “Petitioners… will be deemed to have paid the stamp duty on a delivery order as a payment under protest… but pay they must,” said the HC, adding if they succeed in the challenge, they would be entitled to a refund.
The issue of stamp duty levied on bills of entry for clearance of goods from customs areas was pending before HC since late 2021, when HC had stayed such levy. In December 2021, while staying stamp duty on bills of entry in imports, HC had relied on a Gujarat high court decision which had held that “no stamp duty was or could be levied on a bill of entry.” On March 1, HC noted that in view of the AG’s statement of not levying the duty on bill of entry, the need for continuing the stay did not arise.
The HC posted the entire group of matters to April 10 for final hearing and sought the state’s reply by March 25.
The HC also directed that among them one petitioner should become the lead petitioner whose counsel can argue all points, and others are to submit concise written submissions, as given exigencies of time, it would not be possible to hear all individually.
“This may be an unfortunate and regrettable departure from past practice, but the past is behind us and the future does not look very promising. All must work together to economise the time of the court,” said the HC.
Some of the petitioners, from the long list, before HC include Fiat India Automobiles Pvt Ltd, Morepen Laboratories, Ultratech Cement Ltd, Haier Appliances Pvt Ltd, Tata Motors Ltd, and Jaguar Land Rover India Ltd.