MANU/UP/2066/2007

Equivalent Citation: 2007 (69) ALR 24, 2007 4 AWC3684All

IN THE HIGH COURT OF ALLAHABAD

C.M.W.P. No. 46951 of 2005

Decided On: 03.08.2007

Appellants: A.D. State Developers

Vs.
Respondent: State of U. P. and Anr.

Hon'ble Judges/Coram:
B.S. Chauhan and R.K. Agrawal, JJ.

Counsels:
For Appellant/Petitioner/Plaintiff: Arvind Srivastava, Adv.

For Respondents/Defendant: S.N. Singh, C.B. Yadav, Archana Srivastava, Advs.

andS.C.

Case Note:
(1) Stamp Act, 1899 - Sections 31, 33 and 47A--Stamp duty--Deficiency--Order
determining duty under Section 31--Upheld by writ court--Not open to
authority to take any proceeding to revise aforesaid order. (2) Stamp Act,
1899--Sections 31, 33 and 47A--Stamp duty--Deficiency -- Once Collector
determined value of property and stamp duty--Not open to authorities to
reopen case and challenge same--Collector becomes functus officio--And
provisions of Section 33 have no application -- Impugned notice quashed.

JUDGMENT

R.K. Agrawal, J.

1. By means of present writ petition, Petitioner has challenged the notice dated
4.6.2005 issued by Deputy Inspector General of Stamp, Gorakhpur Mandal, Gorakhpur
under Section 47A/33 of the Indian Stamp Act (hereinafter referred to as "Act") relating
to the valuation and the deficiency of the stamp in Case No. 1/205-06, State v. A. D.
State Developers, on the ground that once the stamp duty has been determined under
Section 31 of the Act, the Respondent has no jurisdiction to reopen the valuation of the
property and the proceedings under Section 47A/33 of the Act suffers from manifest
illegality on the face of the record.

2. Heard learned Counsel for the parties.

3. Learned Counsel for the Petitioner submitted that for the determination of the stamp
duty of plot No. 1/2, area 4.07 acre located in Ramgarh Tal Pariyojna, district
Gorakhpur, which is located at 110 mtr. away from the main road, the Petitioner moved
an application under Section 31 of the Act on 21.11.2003. Additional District Magistrate
(F&R), Gorakhpur after getting the report from Tehsildar Sadar and having regard to
the location of the plot, vide order dated 20.3.2004 determined the amount of stamp
duty at Rs. 9.50 lacs @ 19 lacs per acre. Thereafter, an endorsement was made by

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Additional District Magistrate, (F&R), Gorakhpur holding power of the Collector on the
sale-deed executed on the stamp duty vide its order dated 26.3.2004 and has observed
that in pursuance of the application dated 21.11.2003 the sale-deed has been valued
and according to which a sum of Rs. 7,73,300 was payable towards stamp duty, which
has been paid. He further submitted that once the stamp duty has been determined
under Section 31 of the Act, it is not open to the Collector or the person authorised on
his behalf to raise the demand on the ground of deficiency under Section 33/47A of the
Act. He further submitted that the order dated 20.3.2004 was challenged by the State
Government in Writ Petition No. 21535 of 2007. This Court vide order dated 9.5.2007
dismissed the aforesaid writ petition and confirmed the order passed under Section 31
of the Act. It is submitted that the impugned notice dated 4.6.2005 purported to re-
open the case and disputing the valuation of the property and the stamp duty paid on
the instrument is absolutely illegal and liable to be quashed. In support of his
submission, he referred the various decisions.

4. Smt. Archana Srivastava learned standing counsel submitted that the valuation of
the property has not been made in accordance to the law and, therefore, the notice
dated 4.6.2005 has been rightly issued under Section 33/47A of the Act.

5. We have heard learned Counsel for the parties and gone through the records. The
present petition is being disposed of with the consent of the parties.

6. It is useful to refer relevant part of Sections 31, 32, 33 and 47A of the Act :

Section 31. Adjustment as to proper stamp.--

(1) When any instrument whether executed or not, and whether previously
stamped or not, is brought to the Collector and the person bringing it applies
to have the opinion of that officer as to the duty (if any), with which it is
chargeable, and pays the fee of such amount as may be fixed by the State
Government by notification in the official Gazette, the Collector shall
determine the duty (if any) with which, in his judgment, the instrument is
chargeable.

(2) For this purpose the Collector may require to be furnished with an
abstract of the instrument, and also with such affidavit or other evidence, as
he may deem necessary to prove that all the facts and circumstances
affecting the chargeability of the instrument with duty, or the amount of the
duty with which it is chargeable, are fully and truly set forth therein and may
refuse to proceed upon any such application until such abstract and evidence
have been furnished accordingly :

Provided that :

(a) no evidence furnished in pursuance of this section

shall be used against any person in any civil
proceedings, except in an inquiry as to the duty with
which the instrument, to which it relates, is
chargeable ; and (b) any person be whom any such
evidence is furnished shall on payment of the full duty
with which the instrument to which it relates is
chargeable, be relieved from any penalty which he may
have incurred under this Act by reasons of the omission
to state truly in such instrument any of the facts or

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 circumstances aforesaid.

Section 32. Certificate by Collector.--

(1)...

(2) When such instrument is, in his opinion, not chargeable with duty, the
Collector shall certify in manner aforesaid that such instrument is not so
chargeable.

(3) Any instrument upon which an endorsement has been made under this
Section, shall be deemed to be duly stamped, or not chargeable with duty,
as the case may be, and if chargeable with duty, shall be receivable in
evidence or otherwise, and may be acted upon and registered as if it has
been originally duly stamped :

Provided that nothing in this Section shall authorise the Collector

to endorse :

Section 33. Examination and impounding of

instruments.--(4) Where deficiency in stamp duty paid
is noticed from the copy of any instrument, 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 Stamp or an Assistant Commissioner
of Stamps, or any officer authorised by the Board of
Revenue in that behalf, call for the original instrument
for the purpose of satisfying himself as to the adequacy
of the duty paid thereon, and the instrument so
produced before the Collector shall be deemed to have
been produced or come before him in the performance
of his functions.

Section 47A. Under-valuation of instrument.--(3) The Collector may, suo

motu, 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
State Government 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), call
for and examine the instrument of the purpose of satisfying himself as to the
correctness of the market value of the property, which is the subject of such
instrument, and the 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 such instrument, he may determine the market value of
such property and the duty payable thereon :

Provided that, with the prior permission of the State Government

an action under this Sub-section may be taken after a period of
four years but before a period of eight years from the date of
registration of the instrument on which duty is chargeable on the
market value of the property.

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 Explanation.--The payment of deficit stamp duty by any person under any
order of the registering officer under Sub-section (1) shall not prevent the
Collector from initiating proceedings on any instrument under Sub-section
(3)).

7. We find substance in the argument of learned Counsel for the Petitioner. This Court
vide order dated 9.5.2007 upheld the order dated 20.3.2004 passed under Section 31
of the Act. Once the order dated 20.3.2004 determining the stamp duty at Rs. 9.50 lacs
has been upheld, it is not open to the authority to take any proceeding revising the
aforesaid order. This Court held as follows :

This writ petition has been filed challenging the impugned order dated
20.3.2004 passed by the authority under the provisions of Section 31 of the
Indian Stamp Act.

One Sri Hari Mohandas Agrawal had filed an application under Section 31 of
the Indian Stamp Act stating that he wanted to purchase the land in dispute,
the details of which were given in the application and thus requested the
Statutory Authority to tell the amount of stamp duty which he was liable to
pay. The Statutory Authority decided the said application vide impugned
order dated 20.3.2004 directing the Petitioner to pay the stamp duty to the
tune of Rs. 9,50,000. This order has been challenged after expiry of more
than three years.

Ms. Archana Srivastava, learned standing counsel has submitted that the
amount so determined in the impugned order is very low and it could have
been much higher as per the rate of market value prevailing at the relevant
time and it could have been determined after making the enquiry from the
property dealers as what the rate prevailing at that time.

The order impugned has been passed considering the circle rate fixed by the
District Collector, examining the geographical situation of the land and taking
full note of the situation of the road observing that the land in dispute is
situate just beside the road, though it was not the main road but it was very
important road for the egress and ingress. Thus, the order impugned is not
liable to be interfered with.

More so, no satisfactory explanation has been furnished for approaching this
Court after an inordinate delay of three years except that in 2006 some
application has been received by the Statutory Authority and the permission
has been granted in February, 2006 to examine the issue. We are of the
opinion that in such a case where the Statutory Authority had exercised its
quasi-judicial powers determining the valuation of immovable properties, the
State Authority should not approach the writ court unless the allegations of
collusion or fraud or corrupt motive is alleged. Admittedly, State has not
initiated any disciplinary proceedings against the official who had passed the
impugned order. We do not see any justification to interfere in the matter.
The petition lacks merit and is accordingly dismissed.

8. Division Bench of this Court in the case of Chunni Lal Burman v. Board of Revenue,
U. P. and Ors. AIR 1951 SC 851, held as follows :

Sections 31 and 32 of Stamp Act, make it clear that when an instrument is

presented to the Collector for his opinion as to the duty chargeable upon it,

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 he is not authorized to impound the document if he comes to the conclusion
that the instrument is not sufficiently stamped. It would appear that it is his
duty to determine the stamp duty payable upon the instrument. If the
applicant pays the deficiency, if any, and if the conditions mentioned in
Section 32 are fulfilled, the Collector is then bound to make an endorsement
on the document that it is sufficiently stamped. He cannot impound the
document and cannot impose a penalty as he is bound to do so under
Section 33 read with subsequent sections.

9. Full Bench of this Court in the case of Mohd. Amir Ahmad v. Dy. Commissioner and
Ors. MANU/UP/0158/1956 : AIR 1956 All 453, considered the scope of the Sections 31,
32 and 33 of the Act and held as follows:

The procedure, in cases to which Sections 31 and 32 apply in that when an

instrument is brought before the Collector, he proceeds to give his opinion.
After the Collector has given his opinion it is left entirely to the applicant to
pay the duty or not and the Collector cannot under either of these sections
compel its realization nor can levy any penalty though it may be that he can
order the prosecution of the applicant.

10. The above case was confirmed by the Apex Court in appeal State of U. P. v. Mohd.
Amir Ahmad, AIR 1971 SC 787. Interpreting the Sections 31, 32 and 33 of the Act in
paras 5 and 6 of the judgment it held thus :

The words "every person ....before whom any instrument....is produced or

comes in the performance of his functions" in Section 33 refer, firstly, to
production before judicial or other officers performing judicial functions as
evidence of any fact to be proved and secondly, to other officers who have to
perform any function in regard to those instruments when they come before
them e.g. registration. They do not extend to the determination of the
question as to what the duty payable is. They do not cover the acts, which
fall within the scope of Section 31, because that section is complete by itself
and it ends by saying that the Collector shall determine the duty with which,
in his judgment, the instrument is chargeable, if it is chargeable at all.

The scheme of the Act shows that where a person is simply seeking the
opinion of the Collector as to the proper duty in regard to an instrument, he
approaches him under Section 31. If it is not properly stamped and the
person executing the document wants to proceed with effectuating the
document or using it for the purpose of evidence, he is to make up the duty
under Section 32 the Collector will then make an endorsement and the
instrument will be treated as if it was duly stamped from the very beginning.
But if he does not want to proceed any further than the seeking the
determination of the duty payable ; then, no consequence will follow, and an
executed document is in the same position as instrument which is
unexecuted and unstamped and after the determination of the duty the
Collector becomes functus officio and the provisions of Section 33 have no
application. The provisions of that section are a subsequent stage when
something more than mere assessing of the opinion of the Collector is to be
done.

11. In view of the above law laid by the Apex Court and by this Court once the Collector
has determined the value of the property and the stamp duty, it is not open to the
authorities concerned to re-open the case and challenge the same. The Collector

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becomes functus officio and provisions of Section 33 of the Act have no application.

12. In view of the above, the impugned notice dated 4.6.2005 is liable to be quashed.

13. In the result, writ petition is allowed and the impugned notice dated 4.6.2005 is
hereby quashed.

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