A Mayawati government decision not to refund bank guarantee and stamp duty paid by project developers in Uttar Pradesh even if the government failed to acquire the land promised for them has been tweaked by new chief minister Akhilesh Yadav.
Accordingly, the state government has decided to return the R1,220-crore bank guarantee paid by the Anil Dhirubhai Ambani Group in 2006 for a special economic zone at Noida, which was later scrapped by the Mayawati government. The UP government has also asked the Noida district magistrate to withdraw a demand for R1,000-crore stamp duty as the government could not provide the promised 2,500 acres.
State infrastructure and industrial development commissioner Anil Kumar Gupta told FE: ?Instead of the 2,500 acres for the project, the state government could acquire only 700 acres, due to which the project could not come up. Since the previous Mayawati government had already issued an order in 2011 that stated that if the state government was unable to acquire land for a project, it will not impose any stamp duty on the developer, we only took the same logic backwards and said that the order was with retrospective effect from 2006 instead of 2011.? Gupta said that the Cabinet?s decision to refund stamp duty charges was applicable to all such cases where land could not be transferred to the developer for no fault of the developer and where they were ready to forgo all claims on the land.
Following the decision, ADAG has withdrawn from the Allahabad High Court a lawsuit filed on the matter.
In 2006, UP had approved an SEZ project in Noida when Mulayam Singh Yadav. Towards this, ADAG had deposited a bank guarantee of Rs 1,220 crore. According to the terms of the agreement, the UP government was required to provide 2,500 acres to ADAG for which the company was liable to pay a stamp duty of Rs 1,000 crore. However, when the Bahujan Samaj Party’s Mayawati became chief minister in 2007, she scrapped the project citing breach of rules. By then, the government was able to acquire only 700 acres. However, Noida officials refused to refund the bank guarantee to ADAG. Further, citing the provisions of UP Stamps and Registration Act, it said stamp duty is payable on the land on which a project comes up irrespective of whether the project sees the light of the day or not. ADAG went to court and obtained a stay on the move. However, in 2011, the Mayawati government passed an order that stamp duty demand should not be raised where the government has not been able to acquire the land for any project.
A section of the officials interpreted the 2011 order as applicable on a prospective basis and said it should not be applied in the case of ADAG. However, as explained by Gupta, the current government was of the view that it should be applied in all such cases where the state government has not been able to provide land.