MIAN ALLAH NAWAZ, J.- This is a Reference by Chief Revenue Authority, Punjab under Section 57 of the Stamp Act (II of 1912). The facts which are essential to its answer are as follows:-
1. Concern known as M/s Zeenat Textile Mills Ltd. (shortly stated 'Mill') was ordered to be liquidated by the Hon'ble Company Judge of this Court vide order dated 21.5.86. M/s Arif Sajjad and Nawab Saeedullah Khan, Advocates were appointed as Joint Official Liquidators to sell the afore-said 'Mill'.
In response to their invitation M/s Sajjad Enterprises (Pvt) Ltd, offered the highest bid in the sum of Rs.5.25 Crores, which was accepted by the Hon'ble Company Judge on 24.6.1986. Pursuant to it, the official liquidators executed an agreement to sell in favour of M/s Sajjad Enterprises on 6.7.1986. It was on 13.7.1987 that possession of the Mill was delivered to the buyers by the sellers. Thereafter a sale- deed was executed in favour of M/s Sargodha Industrial Urban Development Cooperative Society (hereinafter called 'Society), on the asking of M/s Sajjad Enterprises. This happened on 22.1.1987.
2. In this background, the Society moved the Collector for registration of the sale-deed dated 22.1.1987, maintaining that the above sale-deed executed by the official Liquidator in favour of the Society was exempt from Stamp Duty, under notification No. 2781 dated 23rd October, 1919, issued by the Governor General-in-Council, in exercise of his powers under Section 28, Clause (b), Cooperative Societies (hereinafter referred to as "Art II of 1912"). The Collector sent this application to Sub-Registrar, Faisalabad, on 25.1987. He impounded the said sale-deed and sent the application back to the Collector, stating therein that the instrument was liable to stamp duty in the amount of Rs.44,62^00/-. Feeling uncertain, the Collector sent the matter to the Chief Revenue Authority, under Section 56 of the Stamp Act, stating therein that he was not sure as to whether the society was immune from stamp duty under notification of 1919. As the Collector had not given his opinion, the Chief Revenue Authority sent back the matter to the Collector for recording his opinion.
Pursuant to it, the Collector opined that the instrument of sale was liable to duty of Rs.44,62,500/- and that the same was chargeable from the Seller, alongwith Registration Fee, under the relevant law. The Chief Revenue Authority heard the parties, perused the record of the same and came to form an opinion that Mian Muhammad Aslam, the Chairman of M/s Sajjad Enterprises and Mian Muhammad Aslam Chairman of the society were one and the same entity, that the Society had been registered in order to evade stamp duty, that the same be charged half from the Seller and half from the buyer. This is, how, this reference has come to this Court.
3. Mr.S.M.Zafar, Senior Advocate, appearing for the Society, advanced the following arguments to support the plea of Society; First, that the notification of 1919 was intended to encourage formation of Cooperative Societies, which were saved from stamp duty on documents executed by them or on their behalf. This concession was designed to stir up march of cooperative spirit in socio-economic life of the country. Continuing, he further contended that the sale-deed, presented before the Collector for registration, was executed by Mian Muhammad Aslam, as officer of the Society, and so the sale- deed dated 22.1.1987 was immune from Stamp duty. Reliance was placed on Shamim Akhtar Vs. Najma Baqai (PLJ 1978 S.C. 7).
Secondly, that an instrument stands executed, when it is signed within the terms of Section 2(12) of the Stamp Art. Relying upon this provision, it was suggested that the sale deed was executed by Mian Muhammad Aslam, as an official of the Society, which was registered on 13.1.1987, and so it was entitled to claim the benefit under Notification of 1919.
Thirdly, that the Society had not appeared on the scene as nominee. According to the learned counsel the official liquidators were directed to execute the sale-deed in favour of M/s Sajjad Enterprises or its nominee. Resultantly, the sale instrument dated 22.1.1987 was executed in favour of the Society and not M/s Sajjad Enterprises. On the strength of this circumstance, it was suggested that it was not M/s Sajjad Enterprises, who had purchased the Mills and its assets, but it was the Society which was the real purchaser of Mills for all practical purposes.
4. Mr Abdul Sattar Najam, the learned Advocate General, Punjab, appearing on behalf of Chief Revenue Authority, took up the position that the Society was not entitled to any exemption from stamp duty on following grounds:
(i) That the offer of M/s Sajjad Enterprises was accepted by the Company Judge of the Lahore High Court on 24.6.1986. Agreement to sell was executed on 6.7.1986, and possession of Mill was given to M/s Sajjad Enterprises (Pvt.) Ltd. On 13.7.86. According to the learned Advocate General, the transaction of sale of Mill by Liquidator, for all purposes, was complete on 13.7.1986. Till that time, the Society had not been formed and registered. It' was later on brought into existence by Mian Muhammad Aslam, by employing an ingenious mechanization in order to save the stamp duty.
Continuing, he contended that on the facts and circumstances of the case, it was evident that the Society had entered into arena with unclean motive to deprive the Exchequer of huge Stamp revenue.
(ii) That the notification of 1919 was under Section 28 of Act II of 1912, which Act was repealed by the Sindh Cooperative Societies (West Pakistan Amendment) Ordinance (VII of 1965), which was promulgated on 30.4.1965. The notifications issued under the Act II of 1912 were repealed under Section 72(3) of Ordinance VII of 1965.
Resultantly, according to him, notification of 1919 stood erased and became non-existent.
(iii) That the Society was registered at Lahore, while the Mill, which was sold by the Liquidators, was situated in Faisalabad, and the arena of the business operation of the Society was at Sargodha. On these facts it was clear that the sale-deed was liable to stamp duty.
5. From the above narration, it becomes dear that following questions were referred to this Court under Section 57 of the Stamp Act for decision:
(i) Whether the sale-deed dated 22.1.1987 executed by the Joint Official Liquidators in favour of Society was exempt from the Stamp Duty under notification of 1919?
(ii) If not, who is liable to pay the Stamp Duty on the above instrument?
6. This notification was issued by the Governor General-in-Couldn, in purported exercise of authority under section 28 of Act II of 1912. It remitted the stamp duty, with which under any law, for the time being in force, instrument executed by or on behalf of any sodety, for the time being registered or deemed to be registered under the Act, or instrument executed by any officer or the member of such society and relating to the business of society was leviable. Evidently this notification had two parts Under the first part, the stemp duty was remitted on the instruments, which were executed by or on behalf of society, for the time being, registered or deemed to be registered under that Act. In the second part, it saved the instrument, executed by any officer or a member of such society from the stamp duty. Both the parts were made subservient to a condition that instruments were executed in relation to the business of the society. From the above it becomes clear that the words "by", "on behalf of" and "relating to business" were used intentionally to provide the parameters for remission, The word "by" has a number of meanings. It also means "through certain means, act, agency or instrumentality. See Black Law Dictionary 5th Edn. 182.
Similarly, the word "business", according to dictionary meaning is a comprehensive term. It has no definite or concrete connotation, but is a general term, with various meaning^ Its meaning in a particular statute, depends upon its context, or upon the purpose of legislature and the use of the word. See Words & Phrases Permanent Edn. Vol 5A, published by West Publishing Company. This word is defined by Black's Dictionary in the following manner:- "BUSINESS: Employment, occupation, profession, or commercial activity engaged in for gain or livelihood. Activity or enterprise for gain, benefit, advantage or livelihood. Union League Club Vs. Johnson, 18 Cal,2d 275, 108 2nd 478, 490. Enterprise in which person engaged shows willingness to invest time and capital on further outcome. Doggett Vs. Bumet, 62 App. D.C. 103, 65 F. 2nd 191,194.
That which habitually consumes or occupies or engages the time, attention, labour, and effort of persons, as a principal activity or a serious concern or interest, for livelihood or profit."
7. The result of whatever has been stated above, is that this notification will be applicable to those instruments, which are executed by or on behalf of society registered under the Act, or deemed to be registered under the Act, or the instruments executed by the officers of such societies, provided these instruments relate to the business activities of registered or deemed to be registered societies. The underlying object of this facility is to encourage march of co-operative spirit in the socio-economic dynamics of society.
8. Applying these principles, to the fact and circumstance of the reference in hand, we find that the offer of Messrs Sajjad Enterprises was accepted on 24.6.1986; that the agreement to sell was executed by liquidators in favour of Messrs Sajjad Enterprise/nominee on 6.7.1986; that the possession of the Mills was given to the seller on 13.1.1987 and draft sale was executed on 22.1.1987.
The Society for which benefit was claimed was registered on 13.1.1987.
9. From the above, it is quite clear that neither the Society was formed at the time of making offer by the sellers, nor at the time of acceptance of offer by the Company Judge of the High Court,- nor at the time of handing over the possession of Mills by Liquidators to Messrs Sajjad Enterprises. It, therefore, clearly follows that the Society was born much after these episodes, with an ulterior object. On the above chain of undisputed facts, can it be said that instrument of sale signed by Mian Muhammad Aslam was in connection with the business activity of the Society? The answer to this proposition is very clear and very loud. This society had not been bom at the relevant times highlighted above. How an unborn Society could be burdened with operation of commercial activities, requiring time, attention and labour in pursuit of gains, and involving employment of Cooperative funds. All these activities are of a dynamic nature and involve conscious collective efforts. Could these be attributed to a Society which is yet to be bom? Answer is simple 'No'. On the above analysis we have no difficulty in saying that instrument of sale signed by Mian Muhammad Aslam did not relate to business of Society and so it was not exempt from payment of Stamp duty under notification of 1919.
10. In so far as the contention of learned counsel for the Revenue Authority that the notification of 1919 had been repealed under Section 72(3) of the Cooperative Societies Act, 1925 is concerned, we are not persuaded to accept it. Section 72 ibid is the amalagum, repealing Cooperative Societies Act, 1912, and saving the Societies which were existing at the time of enforcement of this Act and which were registered under the cooperative Societies Act, 1912. It further enacts that all rules, regulations, notifications and orders, made or issued under this Act, or which were in force at the time of commencement of Cooperative Societies Act, 1925, were to continue with operational effect, until these were contrary to some provisions of Act. This provision postulates the principle of continuity and does not create any vacuum. This being the position, we are clear in our mind that notification of 1919 and is alive and existing one.
11. Turning to the next question, we find that answer to it is furnished by Section 29 of the Stamp Act, read with Section 55(l)(d) of the Transfer of Property Act. The plain reading of Section 55(l)(d) indicates that it is the duty of the buyer to prepare draft of the sale transaction, tender the price of the land to the seller for the purpose of formal registration of the deed. When this provision is read with Section 29 of the Stamp Act, it becomes dear that the duty of pay Stamp in respect of transaction of sale lies upon the buyer, who is to get the document of sale registered. This is, however, subject to the condition that the; parties may agree between themselves about manner of payment of Stamp duty, and in that case the only person liable to pay stamp duty would be that person who is made liable under the agreement. This course is neither prohibited by Section 29 of the Stamp Act, nor by Section 55(l)(d) of the Transfer of Property Act. We answer second question accordingly. The Reference is answered in the terms indicated above.
12. While parting with this judgment, we have found certain, glaring features of this Reference. The highest offer of Messrs Sajjad Enterprises was accepted on 26.6.1986. The official Liquidators executed an agreement to sell it favour of the Seller of 6.7.1986. According to this agreement, it was the buyer/Messrs Sajjad Enterprises, who had to pay the cost of execution o instrument of sale. We have come across the instrument of sale allegedly executed by the Liquidators. It shows the position otherwise. We have also come across an application by Official Liquidators before the Company Judge, wherein it was dearly stated that it was the buyer who was to pay the stamp duty. We are not called upon to resolve this anomaly between the agreement to sell and the sale deed made available to us and stand of liquidators before the Company Judge. It will be for the Collector to determine this question in the light of the answers of this Reference and strictly in accordance with law. Let this answer/decision be sent to Chief Revenue Authority under the seal of Registrar of this Court. The Chief Revenue Authority shall send the decision to the Collector for further proceedings.