Leases With Deposit Outside 2003 Stamp Concession: Raj HC

Leases With Security Deposit Fall Outside 2003 Stamp Duty Concession: Rajasthan High Court Rejects Adding Words to Notification

Published: 18 October 2026 · NyayVidhan

The Rajasthan High Court allowed 56 State appeals against Indus Tower Ltd. and held that the stamp duty concession notification of 05.03.2003 covers only leases where the rent is fixed and no premium is paid or delivered, the class in clause (a) of Article 33 of the Schedule to the Rajasthan Stamp Act, 1998. A lease that stipulates a security deposit falls under clause (c) and outside the notification; holding otherwise would add words to it (paras 28, 30, 32).

Key holdings

Notifications under the repealed stamp law survive under Section 91(2) of the 1998 Act unless inconsistent or superseded (para 12).

The 05.03.2003 notification covers only leases with rent fixed and no premium, clause (a) of Article 33 (paras 27-28, 30).

A lease stipulating a security deposit falls under clause (c), even without a premium (paras 28, 30).

Adding words to a taxing notification offends strict and literal construction; doubt in a concession favours the revenue (para 30).

A pure question of law may be decided in appeal though not argued before the Single Judge (para 31).

Case explainer by NyayVidhan: an account of this judgment and the law it laid down, not the court's text. The judgment itself is the authoritative version.

Brief Facts

Land owners across Rajasthan executed identical leases of 19 years and 11 months in favour of Indus Tower Ltd., a registered infrastructure provider setting up multi-tenant towers for wireless communication, with a refundable security deposit (para 2). Duty was paid at 2% of the yearly rent by applying the notification of 05.03.2003. On an audit objection, the Collector (Stamps) demanded deficit duty at the conveyance rate under Article 33(c)(i) of the 1998 Act (para 2). The Tax Board finally ruled for Indus Tower on 04.10.2017 (para 3), and a Single Judge dismissed the State's writ petitions on 26.09.2018 (opening paragraph, para 4).

Court's Findings

The Bench upheld the Single Judge's view that the 2003 notification survived the 1998 Act: Section 91(2) keeps such notifications alive unless inconsistent or superseded, no inconsistency was shown, and the supersession of 14.07.2014 confirmed it (paras 11-12). The State's new argument, not raised before the Single Judge, was decided as a pure question of law (paras 13, 31). Relying on Kesoram, Orient Fabrics and Hameed Joharan, the Court said fiscal statutes are construed strictly; under Dilip Kumar, doubt in an exemption goes to the revenue (paras 19-22). The notification must be read with the Schedule and Section 22 of the Rajasthan General Clauses Act, 1955 (paras 23-25). Its words, rent fixed and no premium paid or delivered, are those of clause (a) of Article 35 of the old Schedule, now Article 33 (paras 27-28). Where security charges are advanced in addition to rent, the lease falls under clause (c) even without a premium (para 28). Extending the notification to such leases would add the words "whether or not security charges/security deposits are advanced", against strict and literal construction (paras 29-30). Even if ambiguous, a concession is read in favour of the revenue (para 30).

Legal Principle

A stamp duty concession granted under the power to reduce duty on a class of instruments covers only the class its words describe, read with the Schedule. Courts cannot add words to extend it to leases with a security deposit; strict and literal construction applies, and any doubt in a concession is resolved for the revenue (paras 27-30).

Precedents Relied Upon

State of W.B. v. Kesoram Industries Ltd. & Ors. (2004) 10 SCC 201
Relied Upon Discussed at ¶ 19
Constitution Bench: a taxing statute is interpreted in the light of what is clearly expressed; nothing is implied or imported, and equitable considerations are out of place.
Collector of Central Excise, Ahmedabad v. Orient Fabrics (P) Ltd. (2004) 1 SCC 597
Relied Upon Discussed at ¶ 20
Restated the settled principle that a levy needs clear, specific and express authority of law (Article 265).
Hameed Joharan (Dead) & Ors. v. Abdul Salam (Dead) by LRs & Ors. (2001) 7 SCC 573
Relied Upon Discussed at ¶ 21
The Stamp Act is a fiscal statute whose applicability is restricted to its scheme; it requires strict, not liberal, construction.

View all precedents (8)

Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company & Ors. (2018) 9 SCC 1
Applied Discussed at ¶ 7, 21, 22, 30
Constitution Bench: ambiguity in a taxing provision favours the assessee, but in interpreting a tax exemption the benefit of doubt goes to the revenue; applied to the concession notification. Also cited by the State.
State of Rajasthan & Anr. v. Sarvotam Vegetables Products & Ors. (1996) 8 SCC 639
Relied Upon Discussed at ¶ 7, 25
The power of exemption must be exercised consistently with the Act; a rate-reducing notification cannot be read apart from the enabling provision. Also cited by the State.
Commissioner of Income Tax v. Hindustan Bulk Carriers (2003) 3 SCC 57
Relied Upon Discussed at ¶ 7, 26
A statute must be read as a whole, each provision construed with reference to the others so that they harmonise. Also cited by the State.
Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal & Ors. (2011) 1 SCC 236
Referred To Discussed at ¶ 7
Cited by the State in support of its submissions; not discussed further in the judgment.
State of Gujarat & Ors. v. Essar Oil Limited & Anr. (2012) 3 SCC 522
Referred To Discussed at ¶ 7
Cited by the State in support of its submissions; not discussed further in the judgment.

Leases With Security Deposit Fall Outside 2003 Stamp Duty Concession: Rajasthan High Court Rejects Adding Words to Notification

Judgment Intelligence

Key holdings

Brief Facts

Court's Findings

Legal Principle

Precedents Relied Upon

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