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Judgment
Akil Kureshi, J.—The appeal is directed against the decision of the Learned Single Judge in Special Civil Application No. 1172/2008 dated 25.6.2008 by which the Learned Single Judge was pleased to dismiss the petition filed by the appellants herein.
Shortly stated, facts of the case are as follows:
Appellant No. 1 and appellant No. 2 entered into an agreement dated 29.6.1981 through which they agreed inter-alia for:
i) lease of partition of land belonging to appellant No. 1;
ii) sale of plant and machinery etc of appellant No. 1 in favour of appellant No. 2 for a sum of Rs. 56 lakhs.
iii) sale of part of and of appellant No. 1 for a sum of Rs. 22.50 lakhs.
On the next date, the parties entered into a registered sale deed for sale of part of the land mentioned in clause(iii) above for sum of Rs. 22.50 lakhs. Document was properly stamped considering the sale price of land in question. On 03.10.89, Deputy Collector, Stamp Duty, Rajkot issued a show cause notice to the appellants stating inter-alia that on the sale deed dated 30.6.1981, proper stamp is not affixed. It was further stated that considering the agreement dated 29.6.1981, the sale deed dated 30.6.1981 conveyed not only the land but also the plant and machinery which was valued at Rs. 64,30,000/- and therefore, proper stamp was not affixed in the document dated 30.6.1981.
The appellants resisted the said proceedings. However, the Deputy Collector passed an order dated 23.1.1995 and demanded additional stamp duty of Rs. 7,71,400/-. He further observed that on the said additional stamp duty, ten times penalty could be imposed. However, considering long passage of time, he demanded penalty of half that much i.e. Rs. 42,23,000/- . He also demanded additional registration fee of Rs. 31,175/-. In aggregate, he demanded additional sum of Rs. 50,26, 625/- from the appellants. Said order was challenged by the appellants before this Court in Special Civil Application No. 1172/1995 which was initially admitted and interim protection was granted in favour of the appellants. Learned Single Judge however, by his impugned order dated 25.6.2008 dismissed the petition on the sole ground that the order passed by the Deputy Collector challenged by the appellants in the main Special Civil Application was appealable and thus the appellants had alternative statutory remedy available. It is against the said order that the appellants have approached this Court by filing Letters Patent Appeal.
Learned Advocate Shri Apoorva Vakil appearing for the appellants contended that:
the sale deed dated 30.6.1981 did not convey the plant and machinery and only transferred land at Rs. 22,50,000/- for which proper stamp was already fixed.
the document in question was never impounded by the Collector and, therefore, the authority lacked power to levy additional stamp duty.
the power to demand additional duty lie with the Collector and the Deputy Collector, therefore, could not have exercised the powers.
after long delay having initially admitted the petition, learned Single Judge could not have relegated the petitioners to alternative remedy
On the other hand, learned AGP Ms. Manisha Shah opposed the appeal and contended that:
the powers of the Collector were delegated to the Deputy Collector who was therefore, competent to decide the issue.
the appellants created a device to avoid proper stamp duty. On 29.6.1981 the agreement to transfer the entire land, plant and machinery of the Mills was entered into. On the next day, sale deed was entered into between the parties though ostensibly pertaining to only land. However, combined reading of the two documents would establish that the entire mill Company was transferred from the appellant No. 1 to appellant No. 2. She submitted that entire issue arose upon the audit party raising the objection.
the statutory appeal was available under the Bombay Stamp Act. Learned Judge therefore, committed no error in relegating the appellants before the Appellate Authority
Having thus heard the learned advocates appearing for the parties at considerable length, we find that the Deputy Collector did not lack authority to resolve the issue. Learned AGP has placed on record notification dated 30.11.1989 by which the powers of the Collector have been delegated to in the Deputy Collector, Rajkot for entire Rajkot District including Rajkot city area.
The main question however, is whether the Deputy Collector could have levied the additional stamp duty and consequential penalty from the appellants?
Section 33 of the Bombay Stamp Act pertains to examination and impounding of instruments and reads as follows:
Examination and impounding of Instruments:
(1) [Subject to the provisions of section-32A, every person] having by law or consent of parties authority to receive evidence, and every person in charge of a public office except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped with a stamp of the value and description required by the law for the time being in force in the State when such instrument was executed or first executed:
Provided that
(a) Nothing herein contained shall be deemed to require any Magistrate or Judge of Criminal Court to examine or impound, if he does not think fit so to do any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898(v of 1898) .
(b) in the case of a Judge of High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court may appoint in this behalf.
(3) For the purpose of this section, in case of doubt,
(a) the State Government may determine what officers shall be deemed to be public offices; and
(b) the State Government may determine who shall be deemed to be persons in charge of public offices.
Section 37 of the Bombay Stamp Act refers to how instrument impounded are to be dealt with and reads as follows:
Instruments impounded how dealt with:
(1) When the person impounding an instrument u/s 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by Section 34 or of duty as provided by Section 36, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Collector.
Section 39 of the Bombay Stamp Act pertains to Collector''s power to stamp instruments impounded and reads as under:
Collector''s power to stamp instruments impounded:
(1) When the collector impounds any instrument u/s 33, or receives any instrument sent to him under Sub-section (2) of Section 37, not being an instrument chargeable with a duty of twenty naye paise, or less he shall adopt the following procedure:
(a) If he is of opinion that such instrument is duly stamped or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be;
(b) If he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion therefore, whether such amount exceeds or falls short of five rupees:
Provided that, when such instrument has been impounded only because it has been written in contravention of Section 13 or Section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under Clause (a) of Sub-section (1), shall for the purpose of this Act, be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under Sub-section (2) of Section 37 the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
Reading the above provisions in conjunction, it can be seen that u/s 39 of the Bombay Stamp Act, any instrument which has been impounded by the Collector u/s 33 himself or has received any instrument under Sub-section (2) of Section 37 and if he is of the opinion that such instrument is not duly stamped, he shall require the payment of proper duty together with penalty and in case of document received under Sub-section (2) of Section 37, return the same to the impounding officer after its examination is completed. Thus powers u/s 39 can be exercised with respect to such instruments which are either impounded by the Collector himself or any other authority referred to in Section 33(1) and which has been after impounding sent by such authority as provided under Sub-section (2) of Section 37. Admittedly, in the present case, document in question was never impounded. This has been the case of the appellants from the beginning and it has not been seriously disputed by the respondents. However, to put the matter beyond any possible controversy, we had specifically inquired with the learned AGP whether at any point of time either the Collector or any other competent authority had impounded the document in question. After taking instructions in this regard, it was stated before us that the document was never impounded.
Under the situation, the Collector or as in the present case his delegatee had no authority to follow the procedure u/s 39 of the Act and demand additional stamp duty and other charges including the penalty.
We may however, notice that with introduction of Section 32A in the Bombay Stamp Act, situation has changed. Section 32A which was inserted in the Bombay Stamp (Gujarat Amendment) Act, 1982 reads as follows:
32A. Determination of market value of property which is the subject matter of conveyance.
[(1) Instrument of conveyance, exchange, gift certificate of sale, partition, partnership, settlement or power of attorney or to sell immovable property when given for consideration or transfer of lease by way of assignment presented for registration under the provisions of Registration Act, 1908 shall be accompanied by a true copy thereof; [and the settlement in such form as may be prescribed by rules] and if an officer registering such instrument under the aforesaid Act or any person referred to in Section 33 before whom such instrument is produced or comes in the performance of his functions, has reason to believe that the consideration set forth therein does not approximate to the market value of the property which is the subject matter of such instrument, or as the case may be, the market value of the property which is the subject matter of such instrument has not been truly set forth therein, he [shall before] registering the instrument or as the case may be, performing his functions in respect of such instrument refer the instrument or true copy thereof to the Collector of such district in which either the whole or any part of the property is situated for determining the true market value of such property and the proper duty payable on the instrument under this sections].
[Provided that for the purpose of this sub-section, the consideration set forth in an instrument executed by the State Government, the Central Government, a local authority, Gujarat Housing Board, Gujarat Slum Clearance Board or Gujarat Industrial Development Corporation, shall be deemed to be the true market value of the property which is the subject matter of such instrument;
(2) On receipt of the instrument under Sub-section (3) of Section 31 or instrument or true copy of instrument under Sub-section (1) of this section, the Collector of the district shall, after giving the parties concerned a reasonable opportunity of being heard, and in accordance with the rules made by the State Government in this behalf, determine the true market value of the property which is the subject matter of the instrument and the proper duty payable thereon.
(3) Upon such determination, the Collector of the district shall require the party liable to pay the duty, to make payment of such amount as is required to make up the difference between the amount of duty determined under this sub-section and the amount of duty already paid by him and shall also require such party to pay a penalty [of two hundred and fifty rupees or the amount of the proper duty or of the deficient portion thereof whichever is less] and on such payment, return the instrument to the officer referred in Sub-section (3) of Section 31 or, as the case may be, Sub-section (1) of this section:
(4) The Collector of the district may, suo motu or on receipt of information from any source, within (six years) from the date of registration of any instrument referred to in Sub-section (1), (not being the instrument upon which an endorsement has been made u/s 32 or the instrument in respect of which the proper duty has been determined by him under Sub-section (3) or an instrument executed before the date of the commencement of the Bombay Stamp (Gujarat Amendment) Act, 1982 (Guj.21 of 1982) call for examine the instrument for the purpose of satisfying himself as to the correctness of the consideration or of the market value of the property which is the subject matter of such instrument and the duty payable thereon; and if on such examination, he has reason to believe that the consideration does not approximate to the market value of such property or, as the case may be, market value of such property has not been truly and fully set forth in the instrument, he shall proceed as provided in Sub-sections (2) and (3).
Thus, Sub-section (4) of Section 32A now gives specific power to the Collector either suo motu or on receipt of information from any source to call for and examine any instrument for the purpose of satisfying himself as to correctness of the consideration or of the market value of the property which is the subject matter of such instrument and the duty payable thereon and if on such examination, he has reason to believe that consideration does not approximate to the market value of such property, or the market value of such property has not been truly and fully set forthwith in the instrument, to proceed as provided in sub-sections(2) and (3) i.e. to determine the proper duty payable thereon and also to levy penalty as prescribed. Significantly however, Sub-section (4) of Section 32A excludes from its sweep instruments executed before the date of commencement of the Bombay Stamp (Gujarat Amending Act) 1982. In the present case as already noted, the document was entered into on 30.6.1981 i.e. prior to introduction of the Bombay Stamp (Gujarat Amending Act) 1982.
Under the circumstances, in our view the Collector could not have levied additional stamp duty from the appellants either exercising powers u/s 39 or Section 32A of the Bombay Stamp Act.
Though it is not an inviolable rule that once the writ petition is admitted, the petitioner cannot be relegated to the alternative remedy, in facts of the present case, when we find that the entire dispute can be judged on the basis of statutory provisions, we do not find it necessary to insist that the appellants must first exhaust the statutory appeal. In view of this, we do not examine other contentions of the appellants since they would ordinarily require at first instance examination at the hands of the Appellate Authority.
In the result, appeal is allowed. Decision of the Learned Single Judge is set aside. Order dated 22.1.1995 by which additional stamp duty registration fee and penalty are demanded from the appellants is quashed.
Appeal is disposed of accordingly.