2004(3) ALL MR 495
IN THE HIGH COURT OF JUDICATURE AT BOMBAY(NAGPUR BENCH)

S.A. BOBDE, J.

Hardasmal S/O. Hiranand Gurnani Vs. State Of Maharashtra & Anr.

Second Appeal No.425 of 2003

7th October, 2003

Petitioner Counsel: Mr. V. R. MUNDRA

Bombay Stamp Act (1958), Ss.25(a), 2(ja) - Immovable properties - What is - Rice mill with plant and machinery - Is immovable property within meaning of S.2(ja) of the Act.

Transfer of Property Act (1882), S.3.

Term "immovable property" is clearly defined in section 2(ja) of the Bombay Stamp Act. It specifically includes things permanently fastened to anything attached to the earth within the definition of "immovable property". Having regard to the fact that the rice mill was purchased, as it is, along with the plant and machinery already installed, and the rice mill having all the while been in a condition permanently fastened to the factory premises which was obviously attached to the earth, the Courts below have correctly decided the issue and held it to be immovable property within the meaning of section 2(ja) of the Bombay Stamp Act. AIR 1998 SC 1489 - Referred to. [Para 4]

Cases Cited:
Sirpur Paper Mills Ltd. Vs. Collector of Central Excise, Hyderabad, AIR 1998 SC 1489 [Para 4]


JUDGMENT

JUDGMENT :- The substantial question of law involved in this Second Appeal is : Whether the rice mill purchased by the appellant is immovable property or movable property?

2. On 27-10-1994 the appellant purchased the entire immovable property comprising the rice mill and the machineries under two different sale deeds. On the same day, an immovable property comprising of land, building, shed, etc. was purchased for consideration of Rs.7,00,000/- while plant, machineries consisting of rice mill, rollers, paddy cleaner, three cama polishers, separators, electric motors, etc. were purchased for Rs.7,00,000/-. On the purchase of machineries, the appellant paid stamp duty of Rs.21,000/- at 3% under article 25(a) of the Bombay Stamp Act, 1958. According to the appellant, the plant and machinery being an immovable property, the stamp duty at the rate of 3% under article 25(a) was the proper duty payable. This is the only property in dispute. There is no dispute about the immovable property purchased under another sale deed. In view of an audit note of the Accountant General, Maharashtra, the respondent no.2, Jt. Dist. Registrar & Collector of Stamps, demanded stamp duty by calculating the valuation under article 25(b)(iv) and called upon the appellant to deposit stamp duty of Rs.24,500/- by letter dated 4-1-1996. Article 5(b)(iv) reads as follows :-

" 'A' Class Municipal Thirty rupees

Councils excluding the areas of those such Municipal Councils falling within the limit of the Bombay Metropolitan Region but including Cantonment of Ahmednagar, for every rupees 500 or part thereof."

Since the appellant did not pay, recovery proceedings were initiated under the Maharashtra Land Revenue Code. The appellant, therefore, filed the present suit contending that he is not liable to pay stamp duty at the rate of 6.5% under Article 25(b)(iv), but liable to pay stamp duty only at the rate of 3% under article 25(a). Both the Courts below have dismissed the suit.

3. The question raised in this Second Appeal is liable to be answered in accordance with the definition of "immovable property" in the Bombay Stamp Act, 1958. Section 2(ja) defines "immovable property" which reads as follows :-

"(ja) "immovable property" includes land, benefit to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth."

It is clear that the plant and machinery in question was in respect of a rice mill and was permanently fastened to the structure inside which was obviously attached to the earth. The above definition of "immovable property" is similar to that of "immovable property" under the Transfer of Property Act, 1882 which reads as follows :-

"3. Interpretation clause

In this Act, unless there is something repugnant in the subject or context,-

"immovable property" does not include standing timber, growing crops or grass."

"attached to earth means-

(a) rooted in the earth, as in the case of trees and shrubs;

(b) imbedded in the earth, as in the case of walls or buildings; or

(c) attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached."

The Courts below have rightly construed the definition of "immovable property" and have correctly applied the same to the rice mill as being immovable property.

4. Mr. Mundra, learned counsel for the appellant, relied on a decision of the Supreme Court in Sirpur Paper Mills Ltd. Vs. Collector of Central Excise, Hyderabad (A.I.R. 1998 S.C. 1489), wherein the status of a paper making machine which was erected by a company by using duty paid components was considered. The duty paid components purchased from the market worked out to about 90% of the parts required for the machine. In the background of these facts, Their Lordships took the view that the word "goods" contemplated by section 3 of the Central Excises and Salt Act must be viewed as goods i.e. movable and marketable. In this case, the Tribunal had rejected the contention of the assessee that merely because the machine was permanently attached to the ground, it cannot be considered as goods. It was found that the whole purpose behind attaching the machine to a concrete base was to prevent wobbling of the machine and to secure maximum operational efficiency. In the circumstances, the Tribunal held that the machine must be treated as goods because if somebody wants to purchase, the whole machinery could be dismantled and sold to him in parts. Mr. Mundra, learned counsel for the appellant, submits that it is the same with the present rice mill and, therefore, the present rice mill should not be treated as immovable property. It is clear that what must be treated as immovable property or not must be decided on the basis of the definition provided by the Act itself. The dispute in the matter before the Supreme Court did not involve the construction of the definition of "immovable property" such as in the present case. It appears from the judgment, the question was whether the machine, the components of which were purchased from the market were excisable goods produced or manufactured in India or not. It appears that about 90% of the machines was purchased from the market. The question was whether the machine should be treated as goods. It is clear that the definition of the word "immovable property" did not fall for consideration as in the present case. Here we have immovable property clearly defined in section 2(ja) of the Bombay Stamp Act. It specifically includes things permanently fastened to anything attached to the earth within the definition of "immovable property". In my view, having regard to the fact that the rice mill was purchased, as it is, along with the plant and machinery already installed, and the rice mill having all the while been in a condition permanently fastened to the factory premises which was obviously attached to the earth, I am of view that the Courts below have correctly decided the issue and held it to be immovable property within the meaning of section 2(ja) of the Bombay Stamp Act.

5. In the result, the Second Appeal is, therefore, dismissed.

Second Appeal dismissed.