- (1.) G. P. Mathur, J. This is a reference by the Additional Commissioner (Administration), Agra in his capacity as Chief Controlling Revenue Authority under Section 57 of the Indian Stamps Act (hereinafter referred to as the Act ).
(2.) THE relevant facts are that Smt. Chandra Prabha Sharma executed a sale deed of a house in favour of the applicants Girjesh Kumar Srivastava and his wife Smt. Surya Kumari on January 1, 1989 for a consideration of Rs. 1,05,000/ -. A stamp duty of Rs. 15,225/- was paid and the sale deed was registered in the office of Sub-Registrar Mathura, on February 1, 1989. THE instrument (Sale deed) was inspected by the Assistant Inspector General of Registration in his capacity as Assistant Commissioner (Stamps) on June 30, 1992. He was of the opinion that the property had been under valued, and accordingly a reference was made to the District Registrar by the Sub-Registrar on August 8, 1992. THE Additional District Magistrate (Finance and Revenue) in his capacity as Collector, issued notice to the applicants (Girjesh Kumar Srivastava and Smt. Surya Kumari) on May 26, 1993 and directed the Tehsildar to submit a report on the valuation of the property. THE applicants submitted a reply to the notice on July 28, 1993. THE Additional District Magistrate (Finance and Revenue) by his order dated December 13, 1993 held that the instrument had been under valued and directed the applicants to pay Rs. 8047. 00 towards deficiency in stamps duty and a penalty of Rs. 25/ -. Aggrieved, the applicants preferred a revision under Section 56 of the Act before the Addl. Commissioner who is also exercising the powers of Chief Controlling Revenue Authority. It was contended on behalf of the applicants that the instrument having been registered on February 1, 1989, the proceedings initiated by the Collector on May 26, 1993 were beyond limitation and further in proceedings under sub-section (4) of Section 47-A of the Act the Collector had no power to impose penalty. THE Additional Commissioner was of the opinion that the contentions raised on behalf of the parties involved complicated questions of law which arose frequently and therefore, the same required a decision by the High Court. He accordingly made a reference to this Court under Section 57 of the Act by his order dated March, 27, 1996. The precise questions which require consideration have not been formulated in the order of reference but the issues raised require determination of the following questions: (1) Whether in proceedings under sub-section (4) of Section 47-A of the Act, penalty can also be imposed if the Collector holds that the market value of the property has not been truely set forth in the instrument and consequently there is deficiency in stamps duty? (2) Whether the limitation of four years as provided in sub-section (4) of Section 47-A of the Act is for making a reference by a Court or any one of the authorities enumerated in the sub-section or it is for initiation of proceedings by the Collector? First Question Chapter IV of the Act deals with Instrument Not Duly Stamped, Sub-section (1) of Section 33 provides that every person having by law or consent of parties authority to receive evidence and every person incharge 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. Sub-section (2) of the same Section provides that for this 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 in force when such instrument was executed or first executed. Section 35 provides that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped. Proviso (a) and (b) to this Section lay down that if the deficiency in stamp duty and penalty is paid the instrument may be admitted in evidence. Sub-section (1) of Section 38 provides that when the person impounding an instrument under Section 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 35 or of duty as provided by Section 37, 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. Under sub-section (2) of this section if the deficiency in stamp duty and penalty is not paid the person impounding the instrument is required to send it in original to the Collector. Section 40 gives power of the Collector-regarding the instrument which have been impounded. It provides that if he is of the opinion that the instrument is duly stamped or is not chargeable with duty he shall certify the same by making an appropriate endorsement to that effect. However if he is of the opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of proper duty or the amount required to make up the same, together with a penalty of five rupees or if he thinks fit a amount not exceeding ten times of the amount of proper duty or of the deficient portion thereof, Sub-sections (4) and (5) of Section 33 lay down that if deficiency in stamp duty is noticed from the copy of any instrument, the Collector may suo motu or on a reference from any Court or from any one of the authorities mentioned in sub-section, call for the original instrument for the purposes of satisfying himself as to the adequacy of the duty paid thereon and if the instrument is not produced he may require payment of deficit stamp duty together with penalty under Section 40 on the copy of instrument. The sections referred to above would show that the Legislature has made a specific provision for payment of penalty in addition to deficiency in stamp duty wherever such a deficiency is noticed from the instrument itself or a copy thereof.
(3.) SECTION 27 (1) of the Act provides that the consideration (if any) and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truely set forth therein. This provision came up for consideration before the Supreme Court in Himalaya House Company v. Chief Controlling Revenue Authority, AIR 1972 SC 899 and it was held that a failure to comply with the requirements of the section is merely punishable under SECTION 65 of the Act and that there was no provision in the Stamp Act which empowered the authorities to make an independent enquiry of the value of the property conveyed for determining the duty chargeable. It was further held that for the purpose of Article 23, the value of consideration must be taken to be one as set forth in the conveyance deed. The effect of this decision was that in case a person did not set forth the true amount for which the transaction had taken place, the authorities had no power to recover the requisite stamp duty which was payable on the real market value. In order to meet this difficulty large number of States in India amended the Stamp Act. By SECTION 2 of U. P. Act No. XI of 1969 which came into force on Ist October, 1969, SECTION 47-A was inserted after S. 47 in the parent Act. Sub-sec. (1)of this section provides that if the market value of any property which is the subject of any instrument on which duty is chargeable on the market value of the property, as set forth in such instrument is less than even the minimum value determined in accordance with any Rules made under this Act the registering officer appointed under the Indian Registration Act, 1908, shall refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. Sub-sec. (2) provides that if the register-ing officer while registering any instrument on which duty is chargeable on the market value of the property has reason to believe that the market value of the property which is the subject of such instrument, has not been truely set forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. Under sub-section (3) of this SECTION the Collector is required to determine the market value of the property which is the subject of the instrument and the duty payable thereon. This sub-section further provides that the difference, if any, in the amount of duty shall be payable by the person liable to pay duty. Sub-section (4) of SECTION 47 which deals with the situation in hand reads as follows; SECTION 47-A (4) "the Collector may, suo motu, or on a reference from any Court or from the Commissioner of Stamps or an Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any officer authorised by the Board of Revenue in that behalf within four years from the date of registration of any instrument on which duty is chargeable on the market value of the property not already referred to him under sub-section (1) or sub-section (2), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the subject of such instrument and duty payable thereon, and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty payable thereon in accordance with the procedure provided for in sub-section (3 ). The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty. " Both sub-sections (3) and (4) provide for payment of difference in the amount of duty as a result of determination of the market value of the property by the Collector. The sub-sections make no reference to payments of penalty as has been done in sub-section (5) of SECTION 38. Sub-section (1) of SECTION 38 and in Clause (b) of SECTION 40 (1) of the Act. The legislative intent is very clear and it shows that if after accepting the market value of the property as given in the instrument the same is found to be deficiently stamped the person liable to pay stamp duty shall not only be liable to pay the deficiency therein but shall also be liable to pay penalty. However, the Legislature has deliberately made a difference in a case where on the market value of the property as shown in the instrument, there is no deficiency in stamp duty but such deficiency is revealed as a result of a fresh determination of its market value by the Collector under sub-section (3) or sub-section (4) of SECTION 47-A of the Act. If the Legislature wanted that in such a case also where deficiency in stamp duty has been revealed as a result of a fresh determination of market value of the property a penalty should be imposed, a specific provision to that effect would have been made. The Stamp Act was enacted in the year 1899 and SECTION 47-A was inserted by the U. P. , Legislature seventy years later in the year 1969. The Legislature was fully aware of the fact that the Act makes provision for payment of penalty of an amount not exceeding ten times of the amount of proper duty or the deficient portion thereof. However, while enacting SECTION 47-A, the Legislature has deliberately refrained from making any provision for payment of penalty whatsoever. The only inference which can be drawn is that while exercising power under SECTION 47-A of the Act if the Collector, after determination of the market value of the property, comes to the conclusion that its value has not been correctly set forth in the instrument, he can only require payment of difference in the amount of duty as a result of such determination but he cannot impose any penalty on account of the deficiency in stamp duty which may have been revealed as a result of such re-determination of market value of the property. This very question has been considered by a Division Bench in, Kaka Singh v. Addl. Collector, AIR 1986 All 107 and it was held as follows in para-17 of the report (at p. 110 of AIR); "we find force also in the argument of the petitioner's learned counsel that since S. 47-A does not empower the Collector to impose penalty in the event of his finding that the market value was not truly set forth in the instrument, such an order imposing the same would be beyond S. 47-A. For imposing penalty in a case like the present, power was specifically to be conferred. In the absence of a specific provision made in that respect, it is not possible to uphold the contention of the Standing Counsel that penalty could be imposed whenever and wherever the Collector under S. 47-A finds that the value set forth was not true, S. 47-A as stated above, was brought in recently to cover a case of evasion. While enacting S. 47-A, the Legislature although empowered the Collector to determine the market value of the property, which is the subject of conveyance and the duty payable thereon, it did not make any provision empowering the Collector to impose penalty. " The same question was again considered by another Division Bench in, Jugal Kishore v. State of U. P. , AIR 1992 All 194, which after expressing agreement with the view taken in Kaka Singh, (1986 All LJ 49), (supra) held as follows in paras-4 and 5 of the report; "from a mere glance at sub-section (4) of Section 47-A it is apparent that the Collector (A. D. M. Finance in the present case) does not have any power to impose penalty in these proceedings. . . . . . . . . . . . . . It is worthy of note that while enacting Section 47-A the Legislature did not authorise the Collector to impose any penalty. Under this provision the only power vested in the Collector was to determine the market value of the property and if he finds that the duty paid on the instrument in question is less than that payable on the correct market value of the property, he may order that the difference may be realised from the party to the instrument. ";