S.N. Variava, J. - (1.) This Civil Appeal is against the judgment dated 16/17th February, 1989. The questions raised in this Appeal are:- (a) whether transfer of shares in a Co-operative Society is subject to levy of stamp duty under the Bombay Stamp Act, 1958, and (b) whether the State Legislature has legislative competence to levy stamp duty on transfer of shares.
(2.) Briefly stated the facts are as follows: The 1st appellant was a member of Dalamal Tower Premises Co-operative Society Ltd. As such member the 1st appellant was the holder of 5 shares each bearing distinctive Nos. 711 to 715. As such member the 1st appellant was in occupation of office premises No. 904 on the 9th floor of the building known as Dalamal Tower situated at 211, Nariman Point, Bombay-400021. By an Instrument dated 31st March, 1986 the 1st appellant transferred, in favour of appellants Nos. 2, 3, 4, 5 and 6, the said 5 shares for a consideration of Rs. 9,46,900/-. The said Instrument of Transfer, inter alia, set out the Dalamal Tower Premises Co-operative Society Ltd. was the owner of the building Dalamal Tower; that the 1st appellant was a member of the said society holding the said 5 shares; that one of the incidents of membership was that the member had a right to occupy specific office premises in the building Dalamal Tower and as such the 1st appellant had a right to occupy premises No. 904 on the 9th floor of the Dalamal Tower, which office premises admeasured 557 sq. ft. of built-up area. The Instrument went on to state that for a consideration of Rs. 9,46,900/- paid by the transferees to the transferor, the transferor transferred the said 5 shares to the transferees and that the transferees accepted the said shares.
(3.) By a letter dated 23rd April, 1986 the Advocates of the 1st appellant forwarded the Instrument of transfer to the Superintendent of Stamps for adjudication under the provisions of Bombay Stamp Act, 1958. In the said letter the Advocates stated that, in their opinion, the Instrument of transfer was wholly exempted from duty, but that it was sent for adjudication by way of abundant caution. By a reply dated 22nd May, 1986 the Superintendent of Stamps informed the Advocates for the 1st appellant that the document for adjudication was a conveyance of property chargeable with stamp duty under Article 25(b)(i) of the Bombay Stamp Act on the present market value of the said property. By the said letter the Superintendent of Stamps requested for details regarding premises No. 904 in Dalamal Tower and also called for a valuation report and other relevant documents.;