Summary
In Collector and Additional Superintendent of Stamps v. Arvind Brands Ltd, the Gujarat High Court dismissed an appeal by the stamp authorities against the quashing of a notice that impounded an agreement to sell and sought stamp duty on it as a conveyance. The agreement dealt with the transfer of a garment division, including immovable property and trademarks, between group companies. The Court noted that duty on an agreement to sell that creates no new right, title or interest is only Rs. 100 in Gujarat, that separate sale deeds had been executed and registered, and that the State raised its Section 19 plea for the first time in the appeal.
Stamp Duty Dispute over an Agreement to Sell
Arvind Brands Ltd, the original petitioner, entered into an agreement to sell with Arvind Mills Ltd. The agreement, dated 10 January 2000, dealt with the transfer of a division to a group company. It covered immovable property as well as the work undertaking or business, which included trademarks. According to the notice discussed by the Single Judge, the agreement was executed outside the State of Gujarat.
According to Arvind Brands, officers of the stamp authority entered its premises, took custody of the agreement and impounded it under Section 68 of the Gujarat Stamp Act, 1958, without following due process. A notice dated 3 January 2001 followed. As the Single Judge read it, the notice treated the agreement as a transfer of ownership of the property and of the trademark, and assessed market value for charging stamp duty.
Separate documents followed the agreement to sell. Sale deeds were executed and registered for the property in Gujarat, with stamp duty paid. The trademark assignment was executed and registered with the Trade Marks Registry at Mumbai, which the judgment calls Bombay. The agreement to sell itself carried stamp duty of Rs. 100.
Arvind Brands challenged the notice in Special Civil Application No. 649 of 2001. By a judgment dated 23 July 2013, the Single Judge allowed the writ petition and quashed the notice. The Collector and Additional Superintendent of Stamps then filed Letters Patent Appeal No. 54 of 2015, which the Division Bench decided on 30 September 2026.
Questions Before the Court
- Could the stamp authority impound the agreement to sell and issue a notice when the document had not been produced before it in the discharge of its official duty?
- Did the agreement to sell, which did not itself create any right, title or interest, attract stamp duty as a conveyance of the immovable property and the trademarks?
- Could the Gujarat stamp authority levy duty on a trademark assignment executed and registered in Mumbai?
- Could the State rely on Section 19 of the Gujarat Stamp Act, 1958 for differential stamp duty when it had not raised that plea before the Writ Court?
Arguments Presented By the Parties
Arvind Brands Ltd
- A notice under Section 68 had to be issued before the document was impounded, and the officer had not received the document in the discharge of his official work or duty.
- The stamp authority entered its premises, took custody of the agreement to sell and impounded it without adopting due process.
- Separate sale deeds had been executed for the property in Gujarat. The deed of assignment of the trademark was registered with the Trade Marks Registry in Maharashtra, complied with the law and was subject to Maharashtra law, since a trademark has no situs.
- The Gujarat stamp authority therefore had no jurisdiction to levy duty on that assignment.
- In the appeal, its Senior Counsel submitted that duty payable in Gujarat on an agreement to sell, which does not create any new right, title or interest, is only Rs. 100, and that this is what had been paid.
Collector and Additional Superintendent of Stamps
- The writ petition should be rejected because an alternative remedy was available.
- On merits, the agreement to sell covered immovable property as well as movable property in the form of the trademark.
- Under Section 2(g), which defines conveyance, any instrument that transfers or vests right, title and interest in property is a conveyance, and the agreement was therefore liable to stamp duty.
- The State admitted that the document had been impounded under Section 68. It did not deny that no prior notice was issued before those proceedings.
- In the appeal, the State relied on Section 19 of the Gujarat Stamp Act, 1958, arguing that where something is done in relation to property that is the subject of a transfer by conveyance, differential stamp duty is payable.
Court’s Analysis
The Single Judge’s Reasoning
The Single Judge first looked at the power under which the stamp authority acted. The notice charged duty in purported exercise of Section 33 of the Stamp Act. The Single Judge observed that Section 33 permits examination and impounding by a person or public officer in charge of a public office before whom the instrument is produced. That meant production before the officer in the discharge of his duty. Here, the agreement had been impounded when it was produced before another authority for compliance with other statutory provisions. Section 39, which deals with the Collector’s power, likewise assumes that the instrument has been received. If it has not, the recourse is to call upon the person concerned to produce it.
The Single Judge then turned to the nature of the document. The agreement to sell set out how the transaction was to be carried out by the two divisions. Pursuant to it, sale deeds had been executed for the property inter vivos and produced on record. Under the Transfer of Property Act, an agreement to sell does not create any right, title or interest, and interest in immovable property passes only by a registered sale deed. The notice, in the Single Judge’s view, proceeded on the wrong assumption that the agreement transferred ownership or title.
On the trademark, the Single Judge noted that assignment had to be effected by registration with the Trade Marks Registry at Bombay, and that the deed of assignment was executed and registered there. A trademark is movable property that has no situs. The Gujarat stamp authority therefore had no territorial jurisdiction over a document executed outside Gujarat or property situated outside it. Questions about any difference in duty, or valuation of the property, could arise at a later stage and were not relevant to the notice under challenge.
No Dispute on the Sale Deeds and the Rs. 100 Duty
The Division Bench recorded that there was no dispute in the appeal about the sale deeds having been executed for the properties covered by the agreement to sell. The agreement itself was executed on a stamp of Rs. 100. Under the Gujarat Stamp Act, 1958, the duty payable in Gujarat on an agreement to sell that does not create any new right, title or interest is only Rs. 100. The Assistant Government Pleader could not dispute this submission of the Senior Counsel for Arvind Brands.
Section 19 Raised for the First Time in Appeal
The State’s submissions in the appeal were based on Section 19, on the premise that differential stamp duty is payable where something is done in relation to property that is the subject of a transfer by conveyance. The Court noted that this plea had not been taken before the Writ Court and was being raised for the first time in the appeal. It added that no other argument could be raised to assail the finding of the Single Judge that the notice rested on an assumption. That assumption was that the agreement to sell was in fact a sale of immovable property and a sale and transfer of the trademark, although separate sale deeds had been executed and registered with the competent registering authorities for each property.
Registered Sale Deeds Not Impounded, Use of the Trademark in Gujarat Not Relevant
The Court pointed out that the registered sale deed executed in Gujarat pursuant to the agreement to sell had not been impounded. It held that the submissions about the sale or assignment of the trademark as intellectual property, and its use in Gujarat for the business of Arvind Brands, were of no relevance for the purposes of the Gujarat Stamp Act, 1958. Finding no good ground to interfere with the judgment under appeal, the Court dismissed the appeal.
What the Division Bench Did Not Decide
The Division Bench did not examine Section 19 on its merits, since the plea had not been taken earlier. It also did not separately discuss the Single Judge’s reasoning on the situs of a trademark. It stated only that the use of the trademark in Gujarat was of no relevance for the Gujarat Stamp Act, and it left the Single Judge’s judgment undisturbed.
Findings of the Court
- The notice rested on the assumption that the agreement to sell was a sale of immovable property and a sale and transfer of the trademark, although separate sale deeds had been executed and registered for each property.
- An agreement to sell that does not create any new right, title or interest attracts stamp duty of only Rs. 100 in Gujarat, and the State could not dispute this.
- The plea under Section 19 of the Gujarat Stamp Act, 1958 was not taken before the Writ Court and was raised for the first time in the appeal.
- The registered sale deed executed in Gujarat pursuant to the agreement to sell had not been impounded.
- The sale or assignment of the trademark and its use in Gujarat for the business of Arvind Brands were of no relevance for the purposes of the Gujarat Stamp Act, 1958.
- There was no good ground to interfere with the judgment of the Single Judge. The appeal was dismissed, with no order as to costs.
Court’s Order
The Division Bench dismissed the Letters Patent Appeal. It found no good ground to interfere with the judgment of the Single Judge, which had quashed the notice, and made no order as to costs.
Relevant Paragraphs
The following extracts are reproduced from the judgment of the Division Bench. The first extract is the passage of the Single Judge’s judgment that the Division Bench quotes in paragraph 9. Spellings and punctuation are as in the judgment.
Paragraph 9, quoting the Single Judge, on the effect of an agreement to sell
“Admittedly it is an agreement to sell and as per the provisions of the Transfer of Property Act, such an agreement to sell does not create any right, title and interest and the interest in the immovable property can be transferred only by registered sale deed.”
Paragraph 12 on the Rs. 100 duty
“The agreement to sell was executed on a stamp of Rs.100/- and as per the provisions of the Gujarat Stamp Act’ 1958, it was submitted by the learned Senior Counsel appearing for the respondent that the stamp duty payable in the State of Gujarat on an agreement to sell, which does not create any new right, title and interest, is only Rs.100/-.”
Paragraph 14 on the Section 19 plea
“To deal with the same, we may note, at the outset, that the plea of Section 19 of the Stamp Act, 1958 had not been taken before the Writ Court and is being raised for the first time in this appeal.”
Paragraph 16 on the sale deeds and the trademark
“It is also pertinent to note that the registered sale deed, executed pursuant to the agreement to sell, in the State of Gujarat has not been impounded. The submissions with regard to the sale / assignment being of trademark / intellectual property and the use of the said property in the State of Gujarat for the businesses of the original petitioner / respondent herein is of no relevance for the purposes of the Gujarat Stamp Act’ 1958.”
Paragraph 17 on dismissal
“For the aforesaid, we do not find any good ground to interfere in the judgment impugned. The present appeal is dismissed, accordingly. No order as to costs.”
Case Citation
Collector and Additional Superintendent of Stamps v. Arvind Brands Ltd, R/Letters Patent Appeal No. 54 of 2015 in R/Special Civil Application No. 649 of 2001, High Court of Gujarat at Ahmedabad, decided on 30 September 2026, Sunita Agarwal, C.J. and Divyesh A. Joshi J. Neutral citation: C/LPA/54/2015 (GJHC240430242015).
Visited on 6 October 2026. Case judgment: Collector and Additional Superintendent of Stamps v. Arvind Brands Ltd on Indian Kanoon
Disclaimer
This case blog is based on the author’s understanding of the judgment. Understandings and opinions of others may differ. An AI application was used to generate parts of this case blog based on user inputs and prompts.