Madras High Court: Exemption from Stamp Duty Granted Under Tamil Nadu Cooperative Societies Act is Not Applicable under Multi-State Cooperative Societies

Madras High Court: Exemption from Stamp Duty Granted Under Tamil Nadu Cooperative Societies Act is Not Applicable under Multi-State Cooperative Societies

The Madras High Court has observed that exemption from payment of stamp duty granted under Section 51 of the Tamil Nadu Cooperative Societies Act, 1983 is not applicable to the cooperative societies registered under the Multi-State Cooperative Societies Act, 2002.

The factual matrix of the case is that the petitioner- The Royal Lands and Nest Cooperative Housing Society Ltd., was registered under the Multi-State Cooperative Societies Act 2002. They were enjoying the benefit of a Government Order issued in 1966 whereby the State had exempted societies from payment of stamp duty.

The learned counsel for the petitioner mainly contended that stamp duty exemption was granted by the State of Tamil Nadu in G.O.Ms.No.2179 dated 29.06.1966, and the petitioner society had availed the said benefit of exemption from the stamp duty for long years.

The applicability of the said Government Order had been considered by the Government, more specifically by the Commercial Tax and Registration Department and in its letter dated 9 April, 2009, the Government clarified that the cooperative societies registered under the Multi-State Cooperative Societies Act, 2002, is also deemed to be a cooperative society under the Tamil Nadu Cooperative Societies Act. Thus, the petitioner availed the stamp duty exemption.

However, the Commercial Tax and Registration Department issued an impugned order in letter dated 21 October, 2013, stating that the exemption granted in G.O.Ms.No.2179 dated 29 June, 1996 is not applicable to the cooperative societies registered under the Multi-State Cooperative Societies Act, 2002.

In the context of the Tamil Nadu Cooperative Societies Act, Subsection (22) of Section 2 of the Act defines) ‘registered society’ means a co-operative society registered or deemed to be registered under this Act. Therefore, a registered society under the Tamil Nadu Cooperative Societies Act means that the cooperative societies registered under the Tamil Nadu Cooperative Societies Act ,1961 or 1983 alone is a society within the definition.

While, Section 51 of the Tamil Nadu Cooperative Societies Act, 1983, indicates ‘Powers to exempt from stamp duty and registration fee.’

The Petitioners argued that under Section 173 of the Tamil Nadu Cooperative Societies Act, 1983, saving clause has been provided and therefore, the multi-state cooperative societies are also to be included for granting stamp duty exemption. In this regard, Section 173 of the Tamil Nadu Cooperative Societies Act, 1983, provides that certain ‘existing societies’ at the time of inception of the state enactment must be registered under the said act. Therefore, the cooperative societies which were registered under the Tamil Nadu Cooperative Societies Act, 1961, alone are protected under Section 173, and certainly not the cooperative societies registered under the multi-state cooperative societies act 2002.

The single judge Justice SM Subramaniam at the outset remarked that a cooperative society registered under the Multi State Cooperative Societies Act 2002 is a multi-state cooperative society within the provisions of the Act and thus, the said multi state cooperative societies cannot be construed as a cooperative society or deemed to be a cooperative society under the provisions of the Tamil Nadu Cooperative Societies Act, 1983.

The Court clarified that the Tamil Nadu Cooperative Societies Act is a state enactment, Multi-State Cooperative Societies Act is a central enactment. The procedure for registration and the competent authorities are different and therefore, exemption from stamp duty is to be granted independently under the provisions of the acts concerned. Unlike Section 51 of the Tamil Nadu Cooperative Societies Act, wherein powers to exempt from stamp duty and registration fee is granted, there is no such specific provisions under the Multi-State Cooperative Societies Act, 2002 for grant of stamp duty exemption.

“In the present case, the Government of Tamil Nadu, by invoking the powers under Section 51 of the Tamil Nadu Cooperative Societies Act granted exemption from stamp duty and registration fees to the cooperative societies registered under the provisions of the Tamil Nadu Cooperative Societies Act, 1983. Such exemption cannot be expanded under the provisions of the Tamil Nadu Cooperative Societies Act and more so, the petitioner society is a multi-state cooperative society registered under the central enactment,” observed the Court.

Thus, the Court held that the Government letter issued in letter no.18639/J1/08-5, dated 9 April, 2009, was in violation of the provisions of the Tamil Nadu Cooperative Societies Act since there cannot be any deemed registration of a central cooperative society as state cooperative society, since the registrations are independent and separate.

The judge was of the view that the cooperative movement or area of operation, business transactions are well defined under the central act and the state act. While so, a multi-state cooperative society registered under the central act cannot be considered as a cooperative society under the state act for the purpose of granting exemption from payment of stamp duty and registration fees.

In this regard, the clarificatory letter issued through the impugned order dated 21.10.2013 was in consonance with the principles of law and in accordance with the provisions of the Tamil Nadu Cooperative Societies Act. Consequently, the Multi-State Cooperative Societies Act, 2002 are not entitled to get the benefit of the exemption from payment of stamp duty and registration fees and if at all, such exemption is to be granted it must be granted by the Government of India, stated the Court.

This being the factum established, the petitioner was not entitled for the relief as such sought for in the present writ petition and the order impugned is in consonance with the provisions of the state act. Accordingly, the Court held that writ petition was devoid of merits and dismissed it.