- (1.) This is an appeal from a judgment of the High Court at Bombay and it relates to the jurisdiction of the Court to direct the Chief Controlling Revenue Authority and the Superintendent of Stamps at Bombay to state a case for the opinion of the Court under section 57 of the Stamp Act.
(2.) The respondent company, for its business, borrowed money from the Central Bank of India Ltd. at Bombay. In order to secure the loan a document was executed on the 22nd of March, 1945, with a stamp of Rs. 16-8-0, on the footing that it was a deed of hypothecation without possession of the goods. When the deed was sent to the Sub-Registrar for registration he impounded the same and sent it to the Stamp Office. The Assistant Superintendent of Stamps wrote to the respondent that the document was a mortgage with possession, chargeable with duty under article 40(a) of the Schedule and inquired why it was not duly stamped before execution. The respondent's solicitors in their reply contended that the document was not, and was never intended by the parties to be, a mortgage with possession. They pointed out that no possession of the property had been given or was intended to be given, except in certain contingencies and therefore the document was properly stamped. In reply the Assistant Superintendent intimated that the document was chargeable with duty of Rs. 56,250 and a penalty of Rs. 5,000 had been imposed. The respondents were asked to pay the amount forthwith, On the 27th July, 1945, the respondent filed a suit against the Central Bank contending that the document was not a mortgage with possession. It was alleged that since a doubt had arisen as to whether the document gave effect to the common intention of the parties the Court's directions were sought for and if the Court found that the document as framed did not give effect to the said common intention of the parties the instrument may be rectified. On 9th August, 1945, the respondent's solicitors informed the Assistant Superintendent that such a suit had been filed and requested that the demand for payment of stamp duty and penalty may not be pressed under the circumstances. In the future correspondence, on behalf of the appellant, the demand was reiterated and resort to the coercive procedure of section 48 of the Stamp Act was threatened. The Collector thereafter sent a letter to the respondents on the 17th January, 1946, demanding payment. On the 25th of January, 1946, the suit filed by the respondent was disposed of by the Court and the rectification as prayed was ordered. The respondent's solicitors immediately intimated the result of the suit to the Assistant Superintendent and sent a copy of the deed showing the rectifications made in the original document. A similar letter was also sent to the Collector of Bombay. On the 1st February, 1946, the respondent's solicitors enquired of the Assistant Superintendent of Stamps whether he was agreeable to make a reference under section 56(2) to the appellant, as the question of liability to pay the stamp duty and penalty involved important questions of law. A petition on behalf of the respondent to the appellant was also filed on the 5th of February in which it was prayed that either the order of the Assistant Superintendent of Stamps be rescinded or in the alternative a case may be referred under section 57 of the Stamp Act for the opinion of the High Court. This petition was rejected on the 4th July, 1946. The respondent thereupon filed a petition in the High Court on the 19th of July, 1946, praying that a writ of certiorari may be issued against the appellant, or an order may be made against him under 4 45 of the Specific Relief Act, to cancel the levy of the stamp duty and penalty as claimed on behalf of the appellant or in the alternative the appellant may be ordered under section 57 of the Stamp Act to refer the matter to the High Court for its opinion. The matter came for hearing before Mr. Justice Blagden who did not grant the first relief but directed the appellant to state a case under section 57 of the Stamp Act to the Court for its opinion. The appellant filed an appeal but failed. He has now come in appeal to this Court.
(3.) Two points have been urged on behalf of the appellant. The first is whether under section 57 of the Stamp Act there is an obligation on the appellant to state a case, and if not whether the High Court had jurisdiction to give a direction to that effect. The second point is whether having regard to the terms of section 226(1) of the Government of India Act, 1935, the High Court had jurisdiction to order the appellant to state the case, it being a matter relating to the revenue. Under this head it is also argued that the matter had proceeded beyond the stage of assessment and had reached the stage of recovery. Therefore, the High Court of Bombay had no jurisdiction to pass the order it did. The material part of section 57 of the Stamp Act runs as follows : "57. (1) The Chief Controlling Revenue-authority may state any case referred to it under section 56, sub-section (2), or otherwise coming to its notice, and refer such case, with its own opinion thereon - * * * * (b) if it arises in the Province of Bombay, to the High Court at Bombay;....";