State Of Rajasthan vs. M/S Niramaya Wellness Retreats Private Limited

Held

The Court held that the agreement dated March 26, 2018, between the parties was indeed a "leave and licence" agreement, chargeable with stamp duty under the Rajasthan Stamp Act. The Court reasoned that the agreement assigned the right of user and management of immovable property, which could not have been exercised without the owner's permission. This nature of the agreement aligns with the definition of "leave and licence." The Court noted that the absence of a specific clause for payment of fee by respondent no. 1 to respondent no. 2 did not alter the nature of the document. Furthermore, the admission by respondent no. 2 that the agreement was a "leave and license" whereby respondent no. 1 was given complete authority to operate the hotel fortified the appellant's claim. The Court also found that the Revisional Authority erred in exercising its jurisdiction under Section 65(2) of the Act by going beyond examining the legality, propriety, and regularity of the proceedings before the Collector. Unless the Collector's finding was perverse, the Revisional Authority ought not to have interfered by taking a different view. Therefore, the order of the Revisional Authority was quashed, and the writ petition was allowed.

Facts

The State of Rajasthan, through its Sub-Registrar and Collector (Stamps), Jaipur, filed a writ petition challenging an order dated December 22, 2021, passed by the Rajasthan Tax Board, Ajmer. The Board had set aside an earlier order dated June 23, 2021, by the Collector (Stamps). The Collector had held that an agreement dated March 26, 2018, between M/s Niramaya Wellness Retreats Private Limited (respondent no. 1) and M/s Chitra Hospitality And Development Services Pvt. Ltd. (respondent no. 2) was a "leave and licence" agreement, thus liable for stamp duty under the Rajasthan Stamp Act. Respondent no. 2, the owner of Hotel Royal Heritage, had entered into this agreement with respondent no. 1 for operating and managing the hotel.

Key Issues

1. Whether the agreement dated March 26, 2018, between the parties constitutes a "leave and licence" as defined under Section 2(xxi-a) of the Rajasthan Stamp Act, 1998, and is therefore chargeable with stamp duty (turning on Section 2(xxi-a) and Article 5(g) of the Schedule to the Act)? 2. Whether the Revisional Authority (Rajasthan Tax Board) exceeded its jurisdiction under Section 65 of the Rajasthan Stamp Act by reappraising the evidence and substituting its own conclusion for that of the Collector (Stamps) without addressing the Collector's reasoning? Contentions of the Petitioner (State of Rajasthan): The Revisional Authority exceeded its jurisdiction by acting as an appellate court and substituting its own views. The agreement's terms and conditions clearly fall within the definition of a "leave and licence," making it chargeable with stamp duty. The Revisional Authority's finding is contrary to law and suffers from an error of record. Contentions of the Respondent (M/s Niramaya Wellness Retreats Private Limited): The agreement was a simple hotel management agreement, not a "leave and licence," as no right was transferred, only management. Therefore, it is exempted under Article 5(g). The Collector wrongly held it to be a "leave and licence" in the absence of a consideration clause payable for the licence. The Revisional Court's order requires no interference.