High Court of Bombay: Interim stay on levy of Stamp Duty on Bills of Entry
Viraj Profiles v. The State of Maharashtra & Ors.
The High Court of Bombay in Viraj Profiles v. The State of Maharashtra & Ors. (Viraj Profiles) and other related tagged matters has relied upon a judgement of the High Court of Gujarat wherein it laid down that Stamp Duty is not leviable on a Bill of Entry (BOE). By an interim order, it has stayed the collection of Stamp Duty on BOE’s for clearance of goods from Customs Notified Areas under Article 29 of the Maharashtra Stamp Act,1958 (Maharashtra Stamp Act).
Circular introducing stamp duty on goods imported through ports
High Court of Gujarat struck down the validity of the Circular
Division Bench of the Gujarat High Court upholds the judgement
– Stamp Duty is payable on BOE as a BOE is a ‘Delivery Order’ in respect of goods; and
– BOE constitutes to be ‘an instrument’ or a document that creates or is supposed to create a right or liability on entitlement of delivery of goods.
– In Union of India v. Chowgule & Co. Pvt. Ltd., only the importer named in BOE is entitled to seek clearance of goods from customs and is not permitted to endorse/assign the BOE. The very nature of BOE does not satisfy pre-requisites of Article 24 of Schedule 1 of the Bombay Stamp Act as it refers to an instrument which is negotiable in nature i.e. capable of endorsement / assignment / transfer;
– In Escorts Limited v. Union of India, it was laid down that BOE is a document filed by the importer giving particulars of the goods which is signed by the assessing officer, thereby signifying his approval. This, in itself, is an order of assessment.
– It was further laid down that since BOE signifies itself as an order of assessment, that is required to be produced before Custom Authorities for clearance of goods, it is distinct and different from delivery of goods. Hence, it does not fall under the purview of Article 24 of Schedule 1 of the Bombay Stamp Act.
Challenge to Reliance Industries
STAMP DUTY IS NOT LEVIABLE ON BOE
Revisiting applicability of Stamp Duty on BOE
The High Court of Bombay relying upon Reliance Industries, has granted an interim stay on the levy of Stamp Duty on BOE. The judgement in Reliance Industries is directly applicable to imports the in State of Maharashtra as Article 29 of the Maharashtra Stamp Act has provisions that are pari-materia to the provisions of the Bombay Stamp Act as applicable to the State of Gujarat (i.e. Article 24).
Reliance Industries interalia has held that, BOE comes into play to ensure clearance of goods from warehouse or dock or port. While BOL is a document of title used by its carriers as it entitles a person named therein or his assignee/endorsee to deliver the mentioned goods.
Noting such distinct differences between the two, it is evident that a BOE entitles only the person named therein to seek clearance of goods from customs and importer and such an importer cannot assign/ endorse.
Article 29 of Schedule 1 of Maharashtra Stamp Act specifically refers to an “instrument entitling any person therein named, or his assigns or the holder thereof, to the delivery”. Such a negotiable instrument is capable of endorsement/assignment/transfer and would enable the assignee of the person named therein or the holder of the instrument to take delivery. Since BOE is non-negotiable in nature, Stamp Duty is not leviable.
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The information contained in this document is intended for informational purposes only and does not constitute legal opinion or advice. This document is not intended to address the circumstances of any individual or corporate body. Readers should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein.
 Viraj Profiles v. The State of Maharashtra & Ors. , W.P. (L) No. 12718 of 2021.
 Essar Steel Limited & Anr. v. Superintendent of Stamps & Ors., Special Civil Application No. 1490 of 2007.
 Letters Patent Appeal No. 6 of 2011.
 Union of India v. Chowgule & Co. Pvt. Ltd, (1985) 20 ELT 57 ( further affirmed by the Supreme Court in Chowgule & Co. Pvt. Ltd. V. Union of India, 1987 (28) ELT 39 (SC) ).
 Escorts Limited v. Union of India , 1998 (97) ELT 211 (SC).
 Abhishri Packaging Pvt. Ltd. v. The State of Maharashtra W.P. (L) No. 11697 of 2022.
 Cambro Nilkamal Pvt. Ltd. v. The State of Maharashtra, W.P. No. (L) 9387 of 2022.
 Indexone Infracon Pvt. Ltd. v. The State of Maharashtra, W.P. No. (L) 487 of 2022.
 Indexone International Pvt. Ltd. v. The State of Maharashtra, W.P. No. (L) No. 2078 of 2022.
 Jaguar Land Rover India Ltd. v. The State of Maharashtra & Ors., W.P. No. (L) No. 11453 of 2022.
 KRYFS Power Components Ltd. v. The State of Maharashtra, W.P. No. (L) No. 2863 of 2022.
 Nilkamal Storage Systems Pvt. Ltd. v. The State of Maharashtra, W.P. No. (L) No. 9393 of 2022.
 Nilkamal Ltd. v. The State of Maharashtra through Department of Registration and Stamps & Ors., W.P. No. (L) No. 9390 of 2022.
 Responsive Industries Ltd. v. The State of Maharashtra through Department of Registration and Stamps & Ors., W.P. No. (L) No. 3061 of 2022.
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 Tata Autocomp Systems Ltd. v. The State of Maharashtra & Ors. , W.P. No. (L) No. 478 of 2022.
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 Tata Motors Ltd. v. The State of Maharashtra, W.P. No. (L) No. 10265 of 2022.