A Gurgaon-based builder on Thursday challenged the recent decision of the Haryana government to earn revenue by imposing stamp duty on an agreement entered into between a builder and a landowner in the Punjab and Haryana High Court.
Issuing notices to Haryana,the court has asked the government to explain within three weeks the rationale behind imposing stamp duty on such agreements. It also asked Haryana to explain why such levy of stamp duty not be stayed.
The directions were passed on a petition filed by Deftech Builders,alleging that Haryana has issued notices to over 400 builders in Gurgaon asking them to pay up three per cent stamp duty on agreements they enter into with landowners for construction of various projects.
According to sources,Haryana has already recovered crores of rupees from builders in such a manner as the decision had come into force in 2011.
Advocate Ashish Chopra,counsel for the petitioner,argued that levy of stamp duty solely on agreements entered into between a builder and a landowner,especially a farmer,is nothing but an illegitimate source to earn revenue and harass the parties concerned.
He added,Haryana is unjust in levying stamp duty with retrospective effect. Invoking the Indian Stamp Act-1899,two years ago,Haryana had decided to charge three per cent stamp duty on agreements entered into for development purposes.
According to the Act,if a state authority finds that the stamp duty charged is insufficient for any document that has been used as evidence (agreement),then it can charge duty. Contesting this,the builder has claimed that the relevant section of the Act does not apply to agreements.