'Prima Facie Good Case On Merit' : Kerala High Court Stays Lakshadweep Notification Increasing Stamp Duty

Observing that the the petitioner has made out  "prima facie a good case on merits", a single bench of Justice Raja Vijayaraghavan V has stayed all the proceedings through an interim order and issued a notice to the Lakshadweep Administration to that effect.

Petitioner Advocate Mohammed Salih P.M, a practising lawyer in the Kerala High Court and various Lakshadweep Courts, approached the Court being apprehensive of the "unscrupulous measures: being implemented by the Administration by issuing the said notification.

The petitioner represented by Advocate Saiby Jose Kidangoor submitted that the via the notification dated 5^th May 2021, the District Collector revised the existing stamp duty levied on the instruments for transferring interest in land through conveyance, gift, exchange, transfer or sale, in a way that violated the provisions of Indian Stamp Act and the Laccadive, Minicoy and Amindivi Islands (Protection of Scheduled Tribes) Regulations.

Standing Counsel for the Administration, Advocate S Manu, placing reliance on a Supreme Court decision, countered that the Apex Court condemned granting interim orders in matters related to collection of public revenue.

The petition stated that the said revision was brought to the notice of the petitioner when his father attempted to convey the title of some of his properties on the island to the petitioner. Upon approaching the Sub Registrar officer to execute the deed, he was informed that there was a hike in the stamp duty and that registration can be only if the increased stamp duty was paid.

It was after this incident that the petitioner enquired and realized that the said notification was issued, drastically revising the existing stamp duty levied on instruments for transferring interest in land. He pointed out that despite not being published in the Official Gazette, the Administration had implemented the said notification.

The notification increased the stamp duty significantly to 6% for female, 7% for jointly owned property by male and female and 8 % for others. The stamp duty rate was only 1% before, without any division based on caste or gender.

The main contention of the petitioner was that it was violative of Article 14 since there was no intelligible differentia or any rational basis for fixing varying rates of stamp duty. Moreover, only the Government was empowered to reduce or compound duties.

The petitioner submitted also that the main source of income of the inhabitants of the union territory is derived from the fishing industry or in the production and extraction of coir fiber. Therefore, this move by the Administration was alleged to be an attempt to deprive the financial disadvantage of the islanders, and to facilitate rich investors to privatise the islands.

He asserted that the erratic reforms implemented by the respondents were of utmost adverse effect on the people of Lakshadweep. The reformative measures and radical changes brought out by the Administration was allegedly implemented without taking into consideration of the factual situation of the inhabitants and the need for protecting them against exploitation by an advanced class.

The petitioner objected to the said revision of stamp duty, claiming that the move was without jurisdiction and highly arbitrary, unconstitutional, and violative of the fundamental rights, especially considering that the vast majority of the inhabitants of the islands are Scheduled Tribes.

As land was limited on the islands, and its transaction was strictly governed by the 1964 Regulations, the petitioner argued that transfer of land has to be made available at concessional stamp duty rates.

The Bench agreed with the petitioner and proceeded to issue an interim order staying the operation of the notification for three weeks. Meanwhile, the Administration was directed to file their response.

Title: Adv. Mohammed Salih P.M v. Union of India & Ors

Click here to read/download the order