F. GAEBELE ,Petitioner , and COMMISSIONER OF STAMPS, Respondent

056-NLR-NLR-V-54-F.-GAEBELE-Petitioner-and-COMMISSIONER-OF-STAMPS-Respondent.pdf

TT. A. DE SILVA J.—Gaebele v. Commissioner of Stamps
231
1952Present : H. A. de Silva J.
GAEBELE, Petitioner, and COMMISSIONER OF STAMPS,
Respondent
S. G. 333—Application for revision in M. C. Colombo, 26,290
Stamp Ordinance {Cap. ISO)—Sections 26 (a), 27, 51—Agreement to convey—Duty bywhom payable—Interpretation of statute—Specific provision governs the general.
In the absence of an agreement to the contrary, section 26 (a) of the StampOrdinance has the effect of making the grantee or transferee liable to stampduty in respect of an agreement or contract to convey as though it were anactual conveyance provided for in section 27. Section 51 of the StampOrdinance, being a general clause, does not control the specific enactmentcontained in sections 26 (re) and 27.
Application to revise an order of the Magistrate’s Court, Colombo.Joseph St. George, for the petitioner.
N. T. D. Kanakaratne, Crown Counsel, for the Attorney-General.
Cur. adv. vult.
November 27, 1952. H. A. db Silva J.—
This is an application by the Commissioner of Stamps to recover a sumof Rs. 2,206 • 90 being the amount of deficiency of stamp duty Rs. 2,131 – 90due under Part I, ScheduleA and penalty Rs. 75 under section 41 (1) (6)of the Stamp Ordinance, Cap. 189, from the respondent who is the petitionerin respect of an agreement dated 1st September, 1945, between the Cal-cutta Metal Syndicate and the Ceylon Navigation and Salvage Co.,Ltd.
232
~FT. A. X>E SILVA J.—Gaebele v. Commissioner of Stamps
The learned Magistrate after trial ordered the respondent who is thepetitioner to pay the said sum. The respondent has applied to this Courtin revision to have the said order set aside. To this application the Com-missioner of Stamps has been named Respondent. I shall hereafter referto the Commissioner of Stamps as the respondent, and the respondent tothe application before the Magistrate as the petitioner.
In this application the construction and application of certain sectionsof the Stamp Ordinance, Cap. 189, come up for consideration. It will benecessary to state the facts briefly before I proceed to consider the pointsof law that were argued before me. By agreement dated the 1st Sep-tember, 1945, between the Calcutta Metal Syndicate and the Ceylon Na-vigation and Salvage Co., Ltd., the former agreed to convey to the lattertheir business for a certain consideration. The petitioner, Frederick Gae-bele, signed the agreement on behalf of the Calcutta Metal Syndicate.The stamp duty and the penalty referred to above were sought to be re-covered from the petitioner. -Although in the original Court a contentionamong others was put forward that it was not the petitioner who was lia-ble in any event, but the firm known as the Calcutta Metal Syndicate, thatcontention was abandoned in this Court by learned Counsel for the peti-tioner. The stamp duty on this agreement had not been paid either bythe Calcutta Metal Syndicate or the Ceylon Navigation and Salvage Co.,Ltd. Therefore steps were taken by the Commissioner of Stamps torecover the stamp duty and the penalty from the petitioner.
The quantum of duty and penalty is not in dispute. The only disputeis as to who is liable to pay the stamp duty and penalty, the petitioner as con-tended for by the Commissioner of Stamps, or the Ceylon Navigation andSalvage Co., Ltd., as contended for by the petitioner. Section 27 of theStamp Ordinance, Cap. 189, is headed duties by whom payable. Section27 runs thus," In the absence of an agreement to the contrary the expense ofproviding the proper stamps shall be borne (a) in the case of any of thefollowing instruments, namely :—”. Sixteen instruments of various kindsare enumerated and thereafter the following phrase appears, “ by theperson drawing, making, or executing such instruments ”. Thereaftersection 27 runs thus," (6) in the case of a policy of insurance, by the personeffecting the insurance ; (c) in the case of a conveyance, by the grantee ;
It is not necessary to reproduce in this case the rest of section 27. It isabundantly clear that in the absence of an agreement to the contrary inthe case of a conveyance the obligation to pay the stamp duty rests on thegrantee. Section 27 as it stood, makes only an actual conveyanceliable to stamp duty and not an agreement to convey. The Stamp Ordi-nance was later amended for the purpose of making an agreement orcontract for the conveyance or transfer liable to stamp duty by OrdinanceNo. 47 of 1941. By section 10 of the said Ordinance two new sectionswere introduced to the principal Ordinance to have effect as sections 26 (a)and 26 (6) respectively. Section 26 (a) provides thus—“ any agreementor contract for the conveyance or transfer of any business or share in anybusiness …. shall be charged with the same ad valorem duty, to bepaid by the grantee or transferee, as if it were an actual conveyance ortransfer of the business, or share in the business, or such other property,as the case may be, agreed or contracted to be conveyed or transferred
H. A. DE SILVA 3 .-—Qaebele v. Commissioner of Stamps
233
The above amendment thus has the effect of making an -agreement orcontract to convey any business or share in any business liable to stampduty as though it were an actual conveyance as provided for in section27 of the principal Ordinance.
The grantee is clearly the Ceylon Navigation and Salvage Co., Ltd. Ithas been argued by learned Counsel for the petitioner that the partyliable was not the petitioner or the firm whom he represents, but theCeylon Navigation and Salvage Co. Ltd. Learned Crown Counsel whoappeared for the Commissioner of Stamps has argued that under section 51of the Stamp Ordinance (Cap. 189) every person executing an instrumentchargeable with stamp duty is liable to pay to the Commissioner of Stampsthe stamp duty and penalty. He also argues that under section 51 (3) aperson who pays the stamp duty and penalty is entitled to recover fromsome other person the said stamp duty and penalty if by agreement orotherwise such other person was bound to pay the stamp duty. Section27 of the Stamp Ordinance has made specific provision for the parties toarrive at an agreement as to who is liable to pay the duty. In the absenceof such an agreement the law clearly provides as to the person who isbound to pay the stamp duty. In the various instruments enumerated insection 27, Al-16, the person drawing, making, or executing such instru-ment is made liable to pay the stamp duty. In the case of a conveyancethe grantee is made liable. What is contained in the principal Ordi-nance is repeated in section 26 (a) which was introduced by OrdinanceNo. 47 of 1941. It must be borne in mind that section 51 of the StampOrdinance (Cap. 189) was an introduction to the principal Ordinance byamending Ordinance No. 18 of 1930. The principal Ordinance is No. 22of 1909 which has certain amendments introduced from time to time.The amending Ordinance No. 47 of 1941 was enacted after the amendingOrdinance No. 18 of 1930.
There is no evidence in this case that the tw.o parties to this instrumentcame to an agreement as to who was liable. That being so it is necessaryto find out upon a construction of the various provisions of the StampOrdinance as to who is liable. I have had the advantage of the variousarguments urged on behalf of the respective parties. Learned Counsel forthe petitioner has urged that in construing a Fiscal Statute if two cons-tructions of the said Statute are equally possible and reasonable, the cons-truction more favourable to the subject must be enforced. He has citedthe following authorities for consideration :—Dewar v. Commissioner ofInland Revenue x. Lord Hanworth observed thus :—
“ Now I desire to make two observations in reference to IncomeTax and Sur-Tax generally. As has often been pointed out, if thesubject is within a charging section, he must pay ; if he is not withinthe charging section he has not to pay
It is argued that sections 27 and section 26 (a) of the Stamp Ordinanceare the charging sections, and that section 51 is merely the recoveringsection. Learned Crown Counsel lays great store upon section 51 tojustify the steps taken by the Commissioner of Stamps by virtue of thepowers conferred by that section. Learned Crown Counsel’s argument is
1 {1935) 2 Ei.B.D. 351 at 359.
234
H. A. DE SILVA J.—Oaebele v. Commissioner of Stamps
that by virtue of section 51 it is open to the Commissioner to proceedagainst one or the other of the parties to this agreement to recover thestamp duty and penalty, if any, notwithstanding the clear provisions ofsections 26 (a) and 27. There is undoubtedly a conflict betweensections 26 (a) and 27 on the one side and section 51 on the other. Thatbeing so it is necessary to find out when there are conflicting provisionsin the same statute which provisions shall prevail. Craies on StatuteLaw, 5th Ed., page 205, has been cited to me. The learned author hasreproduced at page 205 a dictum of Romilly, M. R., in Pretty v. Solly l.The learned Judge has stated the principle thus:—
“ The general rules which are applicable to particular and generalenactments in statutes are very clear ; the only difficulty is in theirapplications. The rule is, that whenever there is a particular enact-ment and a general enactment in the same statute, and the lattertaken in its most comprehensive sense, would overrule the former, theparticular enactment must be operative, and the general enactmentmust be taken to affect only the other parts of the statute to which itmay properly apply ”.
The rule of law referred to by Romilly, M. R., in Pretty v. Solly, has beenstated by the Master of the Rolls in De Winton v. The May, &c.,of Brecon a.The Master of the Rolls has stated thus,
“ When an Act of Parliament contains two sets of provisions one beingspecific, with precise directions to do particular things, and the otherbeing general, prohibiting certain acts, which in their general sense willinclude the particular acts in the statute, the general clause does notcontrol the specific enactment ”.
It is argued that section 51 (1) and (3) of the Stamp Ordinance are generalsections and that sections 26 and 27 are specific sections which are notcontrolled by the general sections.
The following cases cited at the argument afford guidance' and assist-ance in the construction of these sections of the Stamp Ordinance. 1936A. I. R. Calcutta Series, page 814, at page 815. The judgment rims thus,
“ In applying the rules deducible from the provisions contained insection 5, Stamp Act, to which reference has been made above the canonsof construction applicable to Eiscal’s Statutes must be kept in viewand in case of doubt, the construction of a Eiscal’s Statute should beconstrued strictly in favour of and beneficial to the subject. Therecannot be any equitable construction of a Eiscal’s Statute ; and theCrown seeking to recover a tax must bring it within the letter of the law ;otherwise the subject is free. ” Vide the following :—1938 A. 1. R.Madras Series, page 498, at page 499. Venkatsubba Rao J., has obser-ved thus,
“ The Court-fees Act is a taxing statute and it is settled law that theintention to impose a charge upon the subject must be shown by clearand unequivocal language ”.
(1859) 26 Beav. 606 at 610.
2 28 L. J. Ch. 598 at 604.
Silva o. Ekanayahe
235
In Re Estate of Margaret Wemham 1 Bonser, C.J., stated that in inter*preting an Ordinance imposing burdens on the subject, it must be cons-trued favourably to the subject. This principle has been emphasized inthe various authorities that have been cited before me. Vide Bhana Ma-han v. Emperor, 1936 A. I. It., Bombay Series, page 256, where the ruleof law has been stated thus,
“ Where there is a specific provision in a statute as well as a generalone and the case is covered by the specific provision, it is the specificprovision, which must govern the case and not the general ”.
Learned Crown Counsel referred me to Speyer Bros. v. Commissioner ofInland Revenue 2. I do not think this au.hority has any application tothe point under discussion. What was decided in that case *was thatwhere a document comes within each of two categories chargeable withduty under the Stamp Act of 1891, the Crown is entitled to only oneof the duties but it may choose the higher.
The principles governing the construction of a statute such as thishave been laid down in no uncertain terms and I have come to the con-clusion after consideration of the sections 26 (a), 27 and 51 of the StampOrdinance that the contention of the learned counsel for the petitionermust be upheld.
The order of the learned Magistrate is set aside and the application ofthe Commissioner of Stamps is disallowed.
Order set aside.