Location/place: Kalyan
Recently, I come to know that the Developer/Builder from the jurisdiction of the Kalyan Dombivali Municipal Corporation (KDMC) are, on the basis of news-article appeared in the “Hindustan Times”, informing their prospective purchasers of flat that they are required to pay 6% stamp duty on the “Agreement for Sale” [ 5% in terms of the Article 25(b) of the Bombay Stamp Act, 1958 as amended by the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2012 plus 1% alleged to have been imposed by the KDMC to compensate the losses due to abolition of Octroi ].
The stamp duty on the “Agreement for Sale” is the revenue of the State Government and is empowered to make laws in this regard in terms of Entry 63 of the List-II (State List) of the Schedule VII of the Constitution of India.
Although, by the constitutional provision embodied in Clause (a) of the Article 243X, the State Government may, by law, authorize a Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such conditions and limits, I am not aware of such law being enacted by the State Government explicitly authorizing the KDMC to levy additional stamp duty over and above the 5 % stamp duty levied by the State Government.
As per my knowledge, even the prospective purchasers of flats situated in comparatively big Municipal Corporations like Mumbai, Thane, Pune, etc. are required to pay 5% stamp duty only.
In view of the above, the so-called action of the KDMC is unconstitutional, arbitrary, ultra-vires and violative of the principle of Equality guaranteed under Article 14 of the Constitution.
Kindly share your views on the issue.
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