Engineering major Larsen & Toubro (L&T) has approached the Mumbai high court against the Maharashtra government for the recovery of stamp duty of Rs 64 crore in connection with the development of integrated complex at Seawoods railway station at Navi Mumbai. The notice in this regard was served by the Chief Controlling Revenue Officer for the payment of said stamp duty for L&T's development agreement with the state-run City and Industrial Development Corporation (Cidco) for the project.
The stamps and registration department has treated the development agreement as lease instead of development agreement. However, L&T has argued that it was an agreement to lease and not agreement for lease and therefore it does not attract the stamp duty.
However during the hearing the state government submitted that it was ready to charge only Rs 100 on the ultimate lease deed, if the L&T pays the disputed amount of stamp duty at present. L&T on its behalf told the court that it was not ready to adopt such course in view of the uncertainty as to when the lease deed would be executed and as to whether the lease deed would be executed or not.
A state government official, who did not want to be identified, told Business Standard "There is no provision giving the set off of the stamp duty on particularly the documents pertaining to lease." The official informed that the next hearing is slated for April 24.
When contacted L&T confirmed that it has filed a writ petition in the high court. However the company declined to further comment citing that the project was subjudice.
The controversy involved in L&T's writ petition was about the nature of the instrument dated April 21, 2008 executed by Cidco in favour of the former for the development of integrated complex at Seawood railway station in Navi Mumbvai. Cidco and L&T signed develoment agreement (DA) on April 21, 2008 for the same. L&T has paid lease premium of Rs 724 crore of the total amount of Rs 1809 crore. As per the DA, the balance lease premium was to be paid in three installments due on April 2009, 2010 and 2011.
