Dell International Services India ... vs The Regional Commissioner on 22 November, 2024

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Karnataka High Court

Dell International Services India ... vs The Regional Commissioner on 22 November, 2024

Bench: M.Nagaprasanna

Reserved on : 23.08.2024
Pronounced on : 22.11.2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 22ND DAY OF NOVEMBER, 2024

BEFORE

THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

WRIT PETITION No. 896 OF 2020 (GM-ST/RN)

BETWEEN:

1. DELL INTERNATIONAL SERVICES
INDIA PRIVATE LIMITED
A COMPANY UNDER
THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
DIVYASHREE GREENS, 12/1, 12/2A, 13/1A
KORAMANGALA INNER RING ROAD
BENGALURU, KARNATAKA
REPRESENTED BY ITS
AUTHORIZED SIGNATORY
MR. ABRAHAM KOSHY.

2. NTT DATE INFORMATION
PROCESSING SERVICES PRIVATE LIMITED
A COMPANY UNDER
THE COMANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
PLOT NO.123, EPIP 2ND PHASE
WHITEFIELD INDUSTRIAL AREA
BENGALURU - 560 066
KARNATAKA,
REPRESENTED BY
2

ITS AUTHORISED SIGNATORY
MS. DEEPA KRISHNAMURTHY
... PETITIONERS

(BY SRI GANAPATHI N. HEGDE, SR. ADVOCATE FOR
SRI THEJAS S.R., ADVOCATE)

AND:

1. THE REGIONAL COMMISSIONER
2ND FLOOR, BMTC BUILDING
K.H.ROAD, SHANTHINAGAR
BENGALURU - 560 027.

2. DEPUTY COMMISSIONER (STAMPS)
AND DISTRICT REGISTRAR
SHIVAJINAGAR,
3RD FLOOR, TRIUMPH TOWERS
NO.48, CHURCH STREET,
BENGALURU - 560 001.
... RESPONDENTS

(BY SRI REUBEN JACOB, AAG A/W.,
SRI RAHUL CARIAPPA K.S., AGA)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
ORDER DTD.24.10.2019 PASSED BY THE R-1 IN CASE
NO.STP(APPEAL)/12/2018-19 ANENXURE-A AND THE ORDER
DTD.18.6.2018 PASSED BY THE R-2 IN CASE
NO.DUS/SJN/SM/01:2018-19 VIDE ANNXURE-B AND ETC.,
3

THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 23.08.2024 COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-

CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

CAV ORDER

The 1st petitioner/Dell International Services India Private

Limited and another are knocking at the doors of this Court calling

in question an order dated 24-10-2019 passed by the 1st

respondent/Regional Commissioner under the Karnataka Stamp

Act, 1957 ('the Act' for short) confirming the order passed by the

2nd respondent/Deputy Commissioner (Stamps) and District

Registrar and have sought for consequential direction to refund a

sum of `1,22,94,000/- with interest from 24-09-2018 till the date

of payment.

2. Heard Sri Ganapathi N. Hegde, learned senior counsel

appearing for the petitioners and Sri Reuben Jacob, learned

Additional Advocate General appearing for the respondents.
4

3. Facts, in brief, germane are as follows:

The 1st petitioner is a Company incorporated under the

Companies Act, 2013 having its registered office in Bangalore. It is

said to be in the business of manufacturing and providing computer

technology solutions worldwide. Petitioner No.2 is again a

Company incorporated under the provisions of the Companies Act,

2013 having its registered office in Bangalore and is engaged in the

business of information technology and its allied services. On

27-04-2006, the 1st petitioner and the 2nd petitioner enter into a

business transfer agreement (hereinafter referred to as the

'agreement' for short). In terms of the agreement, the 1st petitioner

agrees for a lump sum consideration to sell to the 2nd petitioner its

IT services business division inter alia including the property. The

petitioners also agree and acknowledge the transaction. The

agreement contemplated transfer of business on a slump sale basis

as obtaining under the provisions of the Income Tax Act. In terms

of certain clauses of the agreement, the 1st petitioner agreed to

deliver to the 2nd petitioner registered conveyance duly stamped
5

and executed requiring fully and effectively vesting the assets

forming part of the agreement to the hands of the 2nd petitioner.

4. The 1st petitioner, for the purpose of payment of stamp

duty, computed the guidance value of Hoodi Industrial Area (EPIP)

together with registration fee at a sum of `2,93,75,250/-. This was

based upon the khata certificate obtained by the 1st petitioner from

the Bruhat Bengaluru Manahagara Palike ('BBMP') which reflected

that the property of the 1st petitioner was located in Hoodi

Industrial Area and that had cleared the doubt of the 1st petitioner

that it was not in Whitefield Industrial Area. Accordingly, the 1st

petitioner obtained a Bank draft for the aforesaid amount. The sale

deed comes to be executed and registered on 04-01-2017 when the

TDS challan and bank draft towards stamp duty and registration fee

were produced by the 1st petitioner before the office of the Sub-

Registrar.

5. The 2nd petitioner, about 15 months thereafter, receives a

notice from the 2nd respondent/Deputy Commissioner (Stamps) and

District Registrar invoking Section 45-A(3) of the Act, demanding
6

deficit stamp duty. The 2nd petitioner submits a reply to the notice.

The 2nd respondent then rejects all the contentions and determines

`2,45,87,838/- as deficit stamp duty and registration fee.

Aggrieved by the order of the District Registrar, the petitioners file

an appeal before the Appellate Authority. The Appellate

Authority/1st respondent rejects the appeal in terms of its order

dated 26-09-2019. Challenging the aforesaid orders of the Deputy

Commissioner (Stamps) and the Regional Commissioner/Appellate

Authority, the subject petition is preferred.

6. The learned senior counsel Sri Ganapathi N. Hegde,

appearing for the petitioners contends that the location of the

property is in doubt. Therefore, the petitioners sought information

from the Sub-Registrar. The office of the Sub-Registrar informs that

the property comes within the Hoodi Industrial area and not

Whitefield Industrial Area. The 1st petitioner, accordingly calculated

the market value based upon the value notified by the Government

itself. The learned senior counsel would submit that the 1st

petitioner inadvertently computed the guidance value by adding

40% to the subject property higher than the guidance value that
7

was required to be paid, only on the instructions of the Sub-

Registrar in 2016. The 1st petitioner computes the guidance value

of the property as per the rate applicable to Hoodi Industrial area

after adding 40% excess charges. It is, therefore, the petitioners

are not liable for payment of any deficit stamp duty, but the excess

that is paid is required to be refunded by the State. He would

contend that the 1st petitioner was never put to notice nor heard by

both the authorities/respondents. Before the Regional

Commissioner/1st respondent the 1st petitioner was not even

arrayed as a party to defend his case of deficit stamp duty. It is his

submission that it is not only in violation of Section 30 of the Act,

but in violation of principles of natural justice.

7. The learned Additional Advocate General, per contra, would

vehemently contend that the consideration paid under the

agreement between 27-04-2016 and 03-08-2016 was under-valued

according to the determination made by the 2nd respondent. For the

property that was undervalued and conveyed, the deficit stamp

duty is demanded. Suo motu case is registered under Section
8

45-A(3) of the Act to detect under-valuation and therefore, the

proceedings were initiated and notice was issued. The subject

property is claimed to be falling within Hoodi Industrial Area as per

the information provided by the Karnataka Industrial Area

Development Board to the 1st petitioner. It does not depict that it

is Hoodi Industrial Area but Hoodi Village. Therefore, the deficit

stamp has emerged. The relevant entry for calculating guidance

value is found at Sl.No.613 of the Whitefield Industrial Area where

the property is situated and not Hoodi Industrial Area. He would

submit that the orders passed by the Deputy Commissioner

(Stamps) and the Regional Commissioner are in accordance with

law and the 1stpetitioner who had undervalued the property while

executing the sale deed cannot escape deficit stamp duty. Insofar

as non-issuance of notices to the petitioners is concerned, the

learned Additional Advocate General would submit that it is a

matter of record that they were not heard as it was a suo motu

proceedings initiated under the Act.
9

8. I have given my anxious consideration to the submissions

made by the respective learned counsel and have perused the

material on record.

9. The afore-narrated facts are not in dispute. The issue in

the subject petition is the sale between the 1st petitioner and the

2nd petitioner. The determination of stamp duty is the fulcrum of

the lis. According to the learned senior counsel for the petitioners

that the petitioners were informed by the Sub-Registrar that the

property comes within Hoodi Industrial Area. But, according to the

State Government, it is coming within the Whitefield Industrial

Area, Hoodi Village. Therefore, the stamp duty according to the

State ought to have been paid depicting the property to be coming

under Whitefield Industrial Area - EPIP, Hoodi Village. The dispute,

therefore, lies with regard to the identification of the property and

the place where the property is situated for the purpose of

determination of stamp duty. The sale deed takes place on

04-01-2017. Long thereafter, the 2nd petitioner-purchaser of the

property from the hands of the 1st petitioner receives a notice under

Section 45A of the Act. The notice reads as follows:
10

"FORM - II
(See Rule 4)

FORM OF NOTICE PRESCRIBED UNDER RULE 4 OF
THE KARNATAKA STAMP (PREVENTION OF
UNDERVALUATION OF INSTRUMENTS) RULES 1977

Case No:DUS/SJN/SM/01/2018-19 Dated:
08/05/2018
Document No: 4857/2016-17 (Sale Deed)

To
M/s. NTT DATA INFORMATION
PROCESSING SERVICES PVT. LTD.,
Plot No 12, EPIP Phase II,
Whitefield industrial Area
Hoody Village,
Bangalore - 560 066

1. Please take notice that the above mentioned case is
called for Suo-Motto by the undersigned from registering
Office at SHIVAJINAGAR SRO, under Sub-Section (3) of
Section 45-A of the Karnataka Stamp Act, 1957,
(Karnataka Act 34 of 57) of determination of (a) the Market
Value, of the properties covered by the instrument of
conveyance exchange/gift registered as Document No.
1597/2016-17, Dated: 01/12/2016 (Sale Deed), and (b)
the stamp duty payable on the above instrument.

2. You seems to be not complied with Section 28 of K.S.A.
1957. Hence this notice.

3. You are hereby required to submit your representations
if any in writing to the undersigned within 21 days from the
date of service of this notice to show that the market value
of the properties have been truly and correctly set forth in
the instrument. You may also produce all evidence in
support of your representation within the time allowed.

4. If no representations are received within the time
allowed the matter will be disposed of on the basis of the
facts available.
11

5. This case is posted for hearing on: 25/05/2018 at 3.00
PM.

Bangalore.

Sd/-
District Registrar &
Deputy Commissioner of Stamps,
Shivajinagar Registration District,
Dated: 08/05/2018. Bangalore - 560 001."

The notice is indicative of the fact that the market value of the

instrument involved in the transaction has been undervalued. This

is replied to by the 2nd petitioner/purchaser as he was the noticee.

The reply was in detail that the petitioners have not undervalued

and need not pay any deficit stamp duty. What comes about is the

order dated 18-06-2018.

10. What could be gathered from the order is that, the 1st

petitioner/vendor who had on certain premises determined the

stamp duty and paid, is not even made a party in the proceedings.

The 2nd petitioner defends the action by submitting a reply. A

detailed order is passed by the 2nd respondent determining deficit

stamp duty to be paid by the 2nd petitioner. The order reads as

follows:
12

"..............
ಅಂ ಮ ಆ zÉÃ ಶ

9. ಕ ಾ ಟಕ ಮು ಾ ಂಕ ಾ 1957 ರ ಕಲಂ 45-A (2) ರಂ ೆ ಾಗೂ ಕ ಾ ಟಕ
ಮು ಾ ಂಕ ಯಮ 1977ರ ಅ ಯಮ 7 ರಂ ೆ ಮತು! ೋಂದ$ (ಕ ಾ ಟಕ ದುಪ&) ಾ
1975 (ಕ ಾ ಟಕ ಆ'( 28/1975) ರ ಕಲಂ-80-A ಪ ಾರ, ಪ ²ßತ ಸ* !+ೆ ಇರುವ ಅನುಕೂಲಗಳ0
ಾಗೂ ದ1ಾ!2ೇಜು ೋಂದ$ 4ನದಂದು ಇದಂತಹ 6ಾ7! 8ಾರುಕ9ೆ( 8ೌಲ;ವನು< ಾಗೂ
ಾಖ>ಾ ಗಳ7?ಯ ಅಂ@ ಅಂಶಗಳನ*ಯ ಸ* !ನ 8ಾರುಕ9ೆ( 8ೌಲ;ವನು< ಾಗೂ Aಾವ ಸBೇ ಾದ
ವ; ಾ;ಸ ಶುಲCಗಳನು< ೆಳDನಂ ೆ ಣ FGರು ೆ!ೕ ೆ.

PÀæ.¸ÀA «ªÀgÀ ªÀiË®å gÀÆ.UÀ¼À°è
1 ಕಂ& ೆ 8 ರಂ ೆ ಸ* !ನ 8ೌಲ; TDS ಆಧರದIವಯ 331,00,68,000
2 ದ1ಾ!2ೇJನ7? ನಮೂ4Gರುವಂ ೆ 8ಾರುಕ9ೆ( 8ೌಲ; 293,75,25,000
3 ವ; ಾ;ಸKರುವ 8ಾರುಕ9ೆ( 8ೌಲ; 37,25,43,000
4 ವ; ಾ;ಸKರುವ 8ಾರುಕ9ೆ( 8ೌಲ; ೆC Aಾವ ಸBೇ ಾDರುವ
ೊರ ೆ ಶುಲCಗಳ0
5 ಮು ಾ ಂಕ ಶುಲC 5.6% ರಂ ೆ gÀÆ:2,08,62,408
6 ೋಂದ$ Oೕ 1 % ರಂ ೆ gÀÆ: 37,52,430
7 Aಾವ ಸBೇ ಾದ ಒಟು( ಶುಲC : gÀÆ:2,45,87,838

10. ಈ Tೕ7ನಂ ೆ ಧ UGರುವ ೊರ ೆಯುಳV ಮು ಾ ಂಕ ಶುಲC ರೂ 2,08,62,408 /-
ೋಂದ$ ಶುಲC ರೂ 37,25,430/- ಗಳನು< ಆ ೇಶ ೊರ&Gದ 4 ಾಂಕ4ಂದ 90 4ನಗWೆX ಳ+ಾD
(The District Registrar, Shivajinagar, Bangalore) EªÀgÀ ºÉ¸ÀjUÉ AiÀiÁªÀÅzÉÃ gÁ¶ÖçÃPÀÈvÀ
¨ÁåAPï (Nationalised Bank).ನ7? ಮು ಾ ಂಕ ಶುಲC ಮತು! ೋಂದ$ ಶುಲCವನು< ಪ ೆ;ೕಕ2ಾD
ಅಸಲು &.& : Aೇ ಆಡ Z ಪ[ೆದು, \ೊ ೆ+ೆ Bಾ;ಂ@ನ IFSC code ಾಗೂ ಪ 2ಾ4ಯ PAN
ನಂಬU ೊಂ4+ೆ ಾಜರು ಪ&Gದ7? ಾನೂನು Uೕ ಾ; ಮುಂ4ನ ಕ ಮ ೆ+ೆದು ೊಳV>ಾಗುವ^ದು.

11. ಒಂದು 2ೇWೆ ಗ4ತ ಸಮಯದ7?, ಹಣವನು< ಜ8ಾ 8ಾಡ4ದ7?. 1ಾ7_ಾನ `ೇಕಡ
12%ರ ಬ&abಂ4+ೆ ೊರ ೆ ಇರುವ ಶುಲCಗಳನು< ಕಂ ಾಯದ Bಾ@ ಎಂದು ಪUಗ$G ಾನೂನು
ಪ ಾರ ವಸೂಲು 8ಾಡ>ಾಗುವ^ದು.

ಈ ಆ ೇಶವನು< 4 ಾಂಕಃ 18/06/2018 ರಂದು ಬeರಂಗ2ಾD ಈ Aಾ ಾರದ7?
fೂೕgಸ>ಾFತು."
13

It then comes to the knowledge of the 1st petitioner, as it is the 1st

petitioner who had sold the property in favour of the 2nd petitioner.

The petitioners then file an appeal against the order of the 2nd

respondent. The Appellate Authority rejects the appeal by the

following order:

"ಪ ಕರಣದ Kದ;8ಾನ:

TೕಲhನK ಾರರು J>ಾ? ೋಂದiಾ ಾUಗಳ0, j2ಾJನಗರ, BೆಂಗಳXರು ಇವರ
ಅ ೇಶ ಸಂkೆ;: &ಯುಎl/ಎl\ೆಎI/ಎl.ಎಂ/01/2018-19/364 4 ಾಂಕ 18-06-
2018ರ ಆ ೇಶದ Kರುದ TೕಲhನKಯನು< 4 ಾಂಕ: 27-08-2018 ರಂದು ಸ7?Gದು, ೊರ ೆ
ಶುಲCದ `ೇ. 50 ರಷು( nೇವ$ ಇo(ರು ಾ!pೆ.

TೕಲhನKಯು BೆಂಗಳXರು ಪqವ ಾಲೂ?ಕು, ಕೃಷspಾಜಪ^ರ ೋಬt, ಹೂ&
+ಾ ಮದ ಸ2ೆ ನಂ:202, 203, 207 ಮತು! 208 ರ7? ೆ.ಐಎ&v ರವರು ಅwವೃ4x
ಪ&ಸ>ಾDರುವ ಇ.y.ಐ.y-2 2ೈ{ Oೕ|a ೈ+ಾU ಾ ಪ ೇಶದ Aಾ?{ ನಂ:123 ರ 40,059
ಚದರ ~ೕಟZ KG!ೕಣ Kರುವ ಆG!ಯ ಕ ಯ ೆC ಸಂಬಂ Gದು, ದ1ಾ!2ೇಜನು< ರೂ.
2,93,75,21,000/- ಗt+ೆ TೕಲhನK ಾರರು ೋಂದ$+ೆ ಾಜರುಪ&Gರು ಾ!pೆ. ಸದU
ದ1ಾ!2ೇಜು ಅಪ8ೌಲ;2ಾD ೆ ಎಂದು 2 ೇ ಪ 2ಾ4ಯು ಉ>ೆ?ೕ€Gದು, ಪ j<ತ ಸ* !ನ
8ಾರುಕ9ೆ( 8ೌಲ; ರೂ. 3,31,00,68,000/- ಗWೆಂದು 1 ೇ ಪ 2ಾ4ಗಳ0 ಧ UGರು ಾ!pೆ.
TೕಲhನK ಾರರು ಸದU ಆ ೇಶವನು< ಪ j<Gದು, TೕಲhನKಯು ಸ ಾಲದ7?ರುವ^ದUಂದ
ಪ ಕರಣವನು< K6ಾರiೆ+ೆ ಅಂDೕಕUG ೊಂಡು ಉಭಯತ Uಗೂ K6ಾರiೆ+ೆ ಅವ ಾಶ
8ಾ& ೊಡ>ಾFತು.

TೕಲhನK ಾರರ TೕಲhನK ಮತು! 7€ತ ೇt ೆಯ7? tGದಂ ೆ, 1 ಮತು! 2 ೇ
TೕಲhನK ಾರರು slump sale ಆ‚ಾರದ Tೕ>ೆ ಕpಾರನು< ಆ ಾಯ ೆU+ೆ ಾ ಅ&
8ಾ& ೊಳV>ಾD ೆ ಾಗೂ ಅದರಂ ೆ, ಕ ಯ ಪತ ೋಂದ$ 8ಾ& ಾಗ ಪ j<ತ ಸ*ತು! 2ೈ{
Oೕ|aನ7? ಬರುವ^ ಾD o.&.ಎl. Aಾವ ಸ>ಾD ೆ. ಆದpೆ ಸದU ಸ*ತು! ƒೌ ಕ2ಾD ಹೂ&
+ಾ ಮದ7?ರುವ^ದು ೆ.ಐ.ಎ.&.v. ರವರು ೕ&ರುವ eಂಬರಹದಂ ೆ ವ;ಕ!2ಾಗುತ! ೆ ಮತು! ಹೂ&
14

+ಾ ಮದ ಸ*ತು!ಗt+ೆ 2ೈ{ Oೕ|a ಪ ೇಶದ ಸ* !Dಂತ ಕ&T 8ೌಲ;2ಾDರುತ! ೆ. ಆದpೆ,
ಸದU ಅಂಶಗಳನು< ಗಣ ೆ+ೆ ೆ+ೆದು ೊಳV ೆ ಎ.J.ರವರ ಆ„ೇಪiೆಯನು< 8ಾತ
ಗಮನದ7?ಟು( ೊಂಡು ದ1ಾ!2ೇಜು ಅಪ8ೌಲ;2ಾD ೆ ಎಂದು ಆ ೇjGರುವ^ದUಂದ ಪ j<ತ
ಆ ೇಶವನು< ರದುಪ&ಸBೇ ೆಂದು TೕಲhನK ಾರರು ೋUರು ಾ!pೆ.

1 ೇ ಪ 2ಾ4_ಾದ J>ಾ? ೋಂದiಾ ಾUಗಳ0, j2ಾJನಗರ, BೆಂಗಳXರು
ರವರು ಕಂ& ೆ2ಾರು ಉತ!ರದ7? tGದಂ ೆ, ಕ ಾ ಟಕ ಮುಂ ಾ ಂಕ ಾ ಕಲಂ 2(1)(v)
ಅನ*ಯ ಪ j<ತ ಸ*ತು! ೋಂದ$ ಆದ 4 ಾಂಕ ೆC 8ೌಲ; ಧ UಸBೇ ಾDರುವ^ ೇ ೊರತು
ವ;ವ ಾರ ವ+ಾ ವiೆ ಾಖ>ೆಗಳ 4 ಾಂಕ ೆC ಅಲ? `ೇ.1% ರಷು( o.&.ಎl ಕ&ತವ^ ಕ ಯ
ಪತ ೋಂದ$ ಆದ ನಂತರ ಅನ*ಯ2ಾಗ7ದು, kಾ ೆ ವ+ಾ ವiೆ 8ಾನದಂಡ2ಾಗುವ^4ಲ?.
ಕ ಾ ಟಕ ಮುಂ ಾ ಂಕ ಾ ಮತು! ಆ ಾಯ ೆpೆ+ೆ ಾ ಇ2ೆpೆಡು Kwನ<Kದು ದ1ಾ!2ೇJನ
8ಾರುಕ9ೆ( 8ೌಲ;ವನು< _ಾ8ಾನು1ಾರ J>ಾ? ೋಂದiಾ ಾUಗಳ0 ಧ UಸBೇ@ದು,
ಆ ಾಯ ೆರ+ೆಯು ಆ ಾಯದ Tೕ7ನ ೆU+ೆ 8ಾತ ಆDರುತ! ೆ. TೕಲhನK ಾರರು ಖುದು
ರೂ. 3,31,00,68,000/- ೆC `ೇ.1% ರಂ ೆ o.&.ಎl ಜT 8ಾ&ರುವ^ದUಂದ ೊರ ೆ ಶುಲC
Aಾವ ಸBೇ ಾD ೆ. TೕಲhನK ಾರU+ೆ K6ಾರiೆ+ೆ ಅವ ಾಶ 8ಾ& ೊಡ>ಾDದು,
TೕಲhನK ಾರರ ಆ„ೇಪiೆ ಾನೂ +ೆ ಅನುಗುಣ2ಾDರದ ಾರಣ _ಾ8ಾನು1ಾರ ಸೂಕ!
ಆ ೇಶ ೊರ&ಸ>ಾD ೆ. ಆದUಂದ TೕಲhನKಯು ವ\ಾ+ೊtG ಉt ೆ ೊರ ೆ ಶುಲCಗಳನು<
Aಾವ ಸಲು ಆ ೇjಸBೇ ೆಂದು J>ಾ? ೋಂದiಾ ಾUಗಳ0 ೋUರು ಾ!pೆ.

TೕಲhನK ಾರರ TೕಲhನK ಮತು! J>ಾ? ೋಂದiಾ ಾUಗಳ ಕಂ& ೆ2ಾರು
ಉತ!ರ ಾಗೂ ಲಭ; ಾಖ>ೆಗಳನು< ಪUjೕ7ಸ>ಾD, TೕಲhನK ಾರರ TೕಲhನKಯ7?
ಪ 1ಾ!yGರುವ ಅಂಶ/ ಾರಣಗಳನು< J>ಾ? ೋಂ ಾiಾ ಾUಗಳ ಮುಂ ೆಯೂ ತಂ4ದು
ಇದನು< ಪ j<ತ ಆ ೇಶ ೊರ&ಸು2ಾಗ ಗಣ ೆ+ೆ ೆ+ೆದು ೊಂ&ರು ಾ!pೆ. J>ಾ?
ೋಂದiಾ ಾUಗಳ ಆ ೇಶವ^ ಸೂಕ! ಾರಣಗtಂದ ಕೂ&ದು, ಸ*ಯಂ ಸ...ಷ(
ಆ ೇಶ2ಾDರುತ! ೆ. TೕಲhನK ಾರರು ತಮh 2ಾದದ7? 1 ೇ TೕಲhನK ಾರರನು< K6ಾರiೆ
2ೇWೆ ಪ†+ಾರpಾD 8ಾ&ಲ?2ೆಂದು tGದು, ಕpಾUನಂ ೆ ಕ ಯ ಾರ/ಖUೕ4 ಾರ ಇಬ‡ರ7?
_ಾpಾದರೂ ಸಹ ಶುಲC Aಾವ ಸಬಹು ೆಂದು ೇtದರೂ ಕ ಾ ಟಕ ಮುಂ ಾ ಂಕ ಾ ಯ&
ೊರ ೆ ಶುಲCವನು< ಖUೕ4 ಾರUಂದ>ೇ ವಸೂಲು 8ಾಡBೇ ಾDರುತ! ೆ. ಆದUಂದ
TೕಲhನK ಾರರ 2ಾದ ಒಪ...ಲು ಬರುವ^4ಲ?. ಆದ ಾರಣ ಪ j<ತ ಆ ೇಶದ7? ಮಧ;
ಪ 2ೇjಸುವ ಅಗತ; ೆ ಕಂಡು ಬಂ4ರುವ^4ಲ?2ೆಂದು TೕಲhನK Aಾ ಾರವ^ ಅwAಾ FG ೆ.
15

ಆದUಂದ ಈ ೆಳಕಂಡ
ಆ ೇ ಶ

TೕಲhನKಯನು< ರಸCUG ೆ. J>ಾ? ೋಂದiಾ ಾUಗಳ ಆ ೇಶ ಸಂkೆ;:
&ಯುಎl/ ಎl\ೆಎI/ಎl.ಎಂ/01/2018-19/364 4 ಾಂಕ 18-06-2018ರ ಆ ೇಶವನು<
ಎ ! e&4 ೆ.

ಆ ೇಶವನು< jೕಘ 7y+ಾರU+ೆ ಉಕ!>ೇಖನ ¤Ãr Bೆರಳಚು‰ಪ&G ಪUಷCUG
4 ಾಂಕ 26-09-2019 ರಂದು fೂೕgಸ>ಾFತು. "

The Appellate Authority does not consider any of the grounds urged

by the petitioners in their appeal memorandum. The State seeks to

defend the action by filing statement of objections contending that

the petitioners have falsely undervalued the property by projecting

it to be situated in Hoodi Industrial Area and though the sale was

settled at `331,00,68,000/- but falsely valued the property at

`293,75,25,000/-, on the ground that Hoodi Industrial Area

guidance value is applicable, to evade stamp duty and registration

fee. In fact, the market value of the property in Hoodi Industrial

Area is `331,00,68,000/- and guidance value would not be

applicable to this document. Therefore, there has been violation of

law is the defence. Whether the 1st petitioner was at any time

given opportunity to put forth its defence before the original
16

authority/Deputy Commissioner (Stamps) is answered by the

respondents.

11. It is a matter of fact that the notice was issued to the 2nd

petitioner and determination is made in favour of the 2nd petitioner.

Both the petitioners prefer appeal before the Appellate Authority

and the Appellate Authority does not consider any of the

submissions made in the appeal and by a perfunctory order rejects

the appeal filed against determination of deficit stamp duty.

Therefore, there is violation of the principles of natural justice in the

case at hand, as the determination of undervaluation of instrument

is done under Rule 5 of the Karnataka Stamp (Prevention of

Undervaluation of Instruments) Rules, 1977 ('the Rules' for short).

No copy of the kind of such determination was ever served upon

any of the petitioners. The purport of Rule 5 of the Rules and

Section 45A of the Act need not detain this Court for long or delve

deep into the matter, as the coordinate Benches of this Court have

elucidated with regard to both the aforesaid provisions i.e., the Act

and the Rules. Insofar as compliance with natural justice, when

there is determination under rule 5 of the Rules, a coordinate Bench
17

in this Court in SYED WALI PEER KHADRI v. THE CHAIRMAN,

BDA1 has held as follows:

".... .... ....

6. On perusal of the impugned orders passed by both
the authorities, I find that there is no application of mind to
the relevant materials. The original authority-the District
Registrar has not taken into consideration principles required
to be kept in mind for determining market value except
making reference to the general principles to be looked into.
None of the specific principles have been adopted. There is
nothing to show whether any enquiry was held with regard to
the market value of the adjacent lands or what was the
guideline value of the land at the relevant point of time and
such other relevant criteria as provided under Rule 5 of the
Karnataka Stamp (Prevention of Undervaluation of
Instruments) Rules, 1977."

Another coordinate Bench on the very same subject in T.K.

DEEPAK v. THE REGIONAL COMMISSIONER, BANGALORE

DIVISION2 has held as follows:

".... .... ....

7. Per contra, learned Additional Advocate General
appearing for respondents submits that the guidelines value
is only for the purpose of prima-facie determination of rate of
an area concerned, it is not the final market value under the
Stamp Act. 'Market value' is defined under Section 2 (mm) of
Karnataka Stamp Act, 1957. He further submits that there is
a procedure prescribed under Rule 5 of Karnataka Stamp
(Prevention of Under Valuation of Instruments) Rules, 1977 (
for short 'Rules'). As per Rule 5, the authority has
1
2015 SCC OnLine Kar 1629
2
W.P.No.26417 of 2012 decided on 07-02-2019
18

determined the market value under the above provisions and
passed an order. Therefore, he submits that the impugned
orders at Annexures-D series and Annexure-J are in
accordance with law. Hence, he sought for dismissal of the
writ petitions.

8. The first contention which is raised by the
learned counsel for the petitioner is that the impugned
orders vide Annexures-D series passed by the District
Registrar are contrary to the principles of natural justice. He
has not given any opportunity to the petitioner. As per the
order sheet, it is very clear that pursuant to the notice issued
by the authority, the petitioner has filed objections. Then
respondent No.2 - District Registrar has issued a notice
fixing the date on 02.03.2002 for conducting the spot
inspection. But on that day nobody was present on behalf of
the petitioner. For four years, no proceeding has taken
place. Only on 25.01.2006, the matter was taken up and
finally order has been passed. It is very much clear that the
impugned order is passed by the District Registrar without
giving any opportunity to the petitioner. The appellate
authority, without application of mind and without
considering the contentions raised by the petitioner has
passed the impugned order vide Annexure-J which is
contrary to the provisions of the Act and the Rules.
Therefore, the impugned orders vide Annexures-D series
and J are unsustainable in law.

9. Accordingly, writ petitions are allowed. The orders
dated 25.01.2006 at Annexure-D series and the order dated
30.01.2012 at Annexure-J are quashed. The matter is
remitted back to District Registrar - 2nd respondent to
reconsider the matter in accordance with law as per the
provisions of Karnataka Stamp Act and Rule 5 of Karnataka
Stamp (Prevention of Under Valuation of Instruments )
Rules, 1977 within six months from the date of the receipt of
a copy of this order."

The coordinate Benches hold that prior to the said determination,

the noticee should have an opportunity to defend the action. In
19

DEEPAK's case supra, the Registrar had issued notice fixing the

date on 02-03-2002, but nobody was present on behalf of the

petitioner therein and on subsequent dates. The determination of

deficit stamp duty was set aside and the matter was remanded

back to the hands of the Appellate Authority to afford opportunity

and determine the same. Thus, the determination of stamp duty

under Rule 5 of the Rules is in violation of the principles of natural

justice in the case at hand and on that score alone the petition

deserves to succeed.

12. The provision to determine deficit stamp duty and its

claim is under Section 45A of the Act. Section 45A of the Act reads

as follows:

"45A. Instrument of conveyance, etc.
undervalued how to be dealt with. - (1) If the registering
officer appointed under the Registration Act, 1908 (Central Act
XVI of 1908) while registering [any instrument of,-

(a) Conveyance [Section 2(1)(d)];

(b) Gift [Article 28(a)];

(d) Settlement [Article 48-A(I)];

(e) Reconstitution of Partnership [Article 40-B(a)];
20

(f) Dissolution of Partnership [Article 40-C(a)];

(g) An agreement to sell covered under sub-clause (i) of
clause (e) of Article 5;

[(h) a lease covered under item [(vi)] of Article 30;]

(i) A power of Attorney covered [under clause (e),
clause (ea) and clause (eb)] of Article 41;

(j) Release [(Article 45-(a)];

(k) Conveyance under a decree or final order of any
Civil Court has reason to believe.]

[(l) Agreement [Article 5(f)]

(m) Award [Article 11(a)]

(n) Trust [Article 54(A)(iii)]

(o) Transferable development Rights (Article 20(7)).]

having regard to the estimated market value published by the
Committee constituted under section 45-B, if any, or
otherwise, that the market value of the property which is the
subject-matter of such instrument has not been truly set forth,
he shall after arriving at the estimated market value,
communicate the same to the parties and unless the parties
pay the duty on the basis of such valuation, shall keep pending
the process of registration and refer the matter along with a
copy of such instrument to the Deputy Commissioner for
determination of the market value of the property and the
proper duty payable thereon.]

instrument specified in sub-section (1) and the duty payable
thereon.] The difference, if any, in the amount of duty, shall
be payable by the person liable to pay the duty. [with interest
at twelve per cent per annum if he does not pay within ninety
days from the date of order of the Deputy Commissioner]:

[Provided that the payment of interest is not applicable
to instruments executed prior to 31st day of March, 2006.]

(3) The Deputy Commissioner may, suo motu
within two years from the date of registration of [any
instrument specified in sub-section (1)] not already
referred to him under sub-section (1), 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-matter of any instrument
specified in sub- section (1) 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 the instrument, he may
determine by order the market value of such property
and the duty payable thereon in accordance with the
procedure provided for in sub-section (2). The
difference, if any, in the amount of duty, shall be
payable by the person liable to pay the duty [with
interest at twelve percent per annum if he does not pay
within ninety days from the date of order of the Deputy
Commissioner]:

Provided that nothing in this sub-section shall
apply to any instrument registered before the
commencement of the Karnataka Stamp (Amendment)
Act, 1975:

[Provided further that the payment of interest is
not applicable to instruments executed prior to 31st day
of March 2006.]

(4) The order of the Deputy Commissioner under sub-
section (2) or (3) shall be communicated to the person liable
to pay the duty. A copy of every such order shall be sent to
the registering officer concerned.
22

(5) Any person aggrieved by an order of the Deputy
Commissioner under sub-section (2) or sub-section (3) may,
prefer an appeal before the [Regional Commissioner] and all
such appeals shall be preferred within such time and be heard
and disposed off in such manner as the State Government
may by rules prescribe.]

[Provided that no appeal shall be admitted unless the
person aggrieved has deposited, in the prescribed manner,
fifty per cent of the difference in the amount of duty as
determined by the Deputy Commissioner under sub-section
(2) or (3):

Provided further that, whereafter the determination of
the market value by the Appellate Authority or determined
again by the Deputy Commissioner on a remand of the case,
the stamp duty borne is found to be sufficient, the amount
deposited shall be returned to the person concerned:

[Provided also that such person shall pay the difference
in duty along with interest at twelve per cent per annum if he
does not pay with in ninety days from the date of order of the
Deputy Commissioner or sixty days from the date of order of
the Appellate Authority, so however, the
payment of interest is not applicable to instruments executed
prior to eighteenth day of August, 1999]."

What is invoked is Section 45-A(3). Section 45-A(3) of the Act

permits the Deputy Commissioner (Stamps) who may suo moto

within two years from the date of registration of any instrument and

if after such examination has reason to believe that the market

value of such property has not been truly set forth, determine the

deficit stamp duty to be paid. There are certain other statutory
23

obligations under Section 45-A of the Act. The notice so issued and

the order so passed are quoted hereinabove.

13. The demand is for deficit stamp duty. It cannot be done

without compliance with the principles of natural justice is by now

too well settled a principle of law. This very issue came up before

this Bench in CHAITRA D.R. v. SENIOR SUB-REGISTRAR3 and

this Bench set aside demand notice reserving liberty to the

Competent Authority to initiate action after compliance with the

principles of natural justice. In the said case, it is held as follows:

".... .... ....

9. The afore-narrate facts are not dispute and
therefore, need not be reiterated. The documents brought
before the office of the Sub-Registrar were all registered on
13.08.2021 as per the market value assessed and demanded
by the Sub-Registrar. The petitioner in the subject petition
has paid the following amount:

"A) Stamp Duty: Rs.36,440/-
B) Surcharge: Rs.1095/-
C) Cess: Rs.3640/-
D) Registration Fee: Rs.7280/-
E) Scanning Fee: Rs.350/-
F) SA: Rs.40/-"
(Emphasis added)

3
W.P.No.24395 of 2021 and connected matters decided on 02-03-2023
24

Likewise, all the petitioners have paid the said amount.
The petitioner purchases the said site property from the
vendor to construct a residential house. After about a month,
the impugned demand notice comes about by the Sub-
Registrar demanding deficit stamp duty of Rs.47,800/- over
and above what was paid as indicated hereinabove.
Therefore, it becomes germane to notice the power for
demand of deficit stamp duty, from whose hands it can be and
the procedure to be followed prior to such demand. To
consider those issues, it is germane to notice Section 45-A of
the Act. Section 45-A of the Act states that registering
authority has the power to refer the matter along with a copy
of the instrument to respondent No.1 for determination of
market value of the property and proper duty payable thereon.
Section 45-A of the Act reads as follows:

"45A. Instrument of conveyance, etc. undervalued
how to be dealt with. - (1) If the registering officer appointed
under the Registration Act, 1908 (Central Act XVI of 1908)
while registering [any instrument of,-

(a) Conveyance [Section 2(1)(d)];

(b) Gift [Article 28(a)];

(d) Settlement [Article 48-A(I)];

(e) Reconstitution of Partnership [Article 40-B(a)];

(f) Dissolution of Partnership [Article 40-C(a)];

(g) An agreement to sell covered under sub-clause (i) of
clause (e) of Article 5;

[(h) a lease covered under item [(vi)] of Article 30;]

(i) A power of Attorney covered [under clause (e),
clause (ea) and clause (eb)] of Article 41;

(j) Release [(Article 45-(a)];

(k) Conveyance under a decree or final order of any
Civil Court has reason to believe.]
25

[(l) Agreement [Article 5(f)]

(m) Award [Article 11(a)]

(n) Trust [Article 54(A)(iii)]

(o) Transferable development Rights (Article 20(7)).]

having regard to the estimated market value published
by the Committee constituted under section 45-B, if any, or
otherwise, that the market value of the property which is the
subject matter of such instrument has not been truly set forth,
he shall after arriving at the estimated market value,
communicate the same to the parties and unless the parties
pay the duty on the basis of such valuation, shall keep pending
the process of registration and refer the matter along with a
copy of such instrument to the Deputy Commissioner for
determination of the market value of property and the proper
duty payable thereon.]

(2) On receipt of a reference under sub-section (1), the
Deputy Commissioner shall, after giving the parties a
reasonable opportunity of being heard and after holding an
inquiry in such manner as the State Government may by rules
prescribe, determine by order [as for as may be within ninety
days from the date of receipt of such reference] the market
value of the property which is the [subject-matter of instrument
specified in sub-section (1) and the duty payable thereon.] The
difference, if any, in the amount of duty, shall be payable by
the person liable to pay the duty. [with interest at twelve per
cent per annum if he does not pay within ninety days from the
date of order of the Deputy Commissioner]:

[Provided that the payment of interest is not applicable
to instruments executed prior to 31st day of March, 2006.]

such property and the duty payable thereon in accordance with
the procedure provided for in sub-section (2). The difference, if
any, in the amount of duty, shall be payable by the person
liable to pay the duty [with interest at twelve percent per
annum if he does not pay within ninety days from the date of
order of the Deputy Commissioner]:

Provided that nothing in this sub-section shall apply to
any instrument registered before the commencement of the
Karnataka Stamp (Amendment) Act, 1975:

[Provided further that the payment of interest is not
applicable to instruments executed prior to 31st day of March
2006.]

(4) The order of the Deputy Commissioner under sub-
section (2) or (3) shall be communicated to the person liable to
pay the duty. A copy of every such order shall be sent to the
registering officer concerned.

[Provided that no appeal shall be admitted unless the
person aggrieved has deposited, in the prescribed manner, fifty
per cent of the difference in the amount of duty as determined
by the Deputy Commissioner under sub-section (2) or (3):

Provided further that whereafter the determination of
the market value by the Appellate Authority or determined
again by the Deputy Commissioner on a remand of the case the
stamp duty borne is found to be sufficient, the amount
deposited shall be returned to the person concerned:

6. Respondent No.1 - District Registrar has power
either on reference from the registering authority or suo-motu
to enquire into and determine whether there is any
undervaluation in the registration of any instrument and if so,
what is the differential stamp fee and registering fees that is
actually payable for registering such an instrument. The
relevant rules namely, Rules 3 to 7 of the Rules, 1977, read as
follows:

"3. Furnishing of statement of market value.- (1) If
an instrument relates to a number of items of properties, the
market value shall be specified in respect of each item
separately. For this purpose the party executing the document
shall attach a separate statement to the instrument, furnishing
therein information about the various items of properties
involved and his own assessment of the market value of each of
these items separately (in Form I).

Explanation.- (1) If an instrument covers land
comprising several survey numbers of sub-division numbers,
the market value shall be specified for the land covered by each
survey number or sub-division number as the case may be
separately.

(2) The registering officer shall, before registering an
instrument, satisfy himself that the party has attached with the
instrument a statement, giving the market value for each of the
properties separately by sub-rule (1).

(3) The registering officer may, for the purpose of
finding out whether the market value has been correctly
furnished in the instrument, make such enquiries as he may
deem fit. He may elicit from the parties concerned any
information bearing on the subject and call for and examine
any records kept with any public officer or authority.

(4) For the purpose of this rule, the statement of market
value shall apply only to the instruments of conveyance,
exchange or gift as mentioned in Section 45-A of the Karnataka
Stamp Act, 1957 .

[3-A Communication of Value-The estimated
market value arrived at by the Registering Officer under section
45-A shall be communicated to the parties in Form I-A].

4. Procedure on the receipt of reference under
section 45-A- (1) On receipt of a reference under sub-section
28

45-A from a registering officer, the Deputy Commissioner shall
issue a notice in Form II, -

(i) to every person by whom, and

(ii) to every person in whose favour the instrument has
been executed, informing him of the receipt of the reference
and asking him to submit to him, his representation if any, in
writing to show that the market value of the property has been
truly set forth in the instrument, and also to produce all
evidence that he has in support of his representation, within 21
days from the date of service of the notice.

(2) The Deputy Commissioner may, if he thinks, fit,
record a statement from any person to whom a notice under
sub-rule (1) has been issued.

(3) The Deputy Commissioner may for the purpose of
his enquiry, -

(i) call for any information or record from any public
office, officer or authority under the Government or any local
authority;

(ii) examine and record statements from any
member of the public, officer or authority under the
Government or the local authority; and

(iii) inspect the property after due notice to the
parties concerned.

[(4) ]. Xxxxxx (Omitted.)

5. Principles for determination of market value-The
Deputy Commissioner shall, as far as possible, have also regard
to the following points in arriving at the [xxx] market value : -

(1) In the case of lands, -

(i) classification of the land as dry, garden, wet and
the like;

(ii) classification under various classes of soil in the
survey records;

(iii) the rate of revenue assessment for each
classification;
29

(iv) other factors which influence the valuation of the
land in question;

(v) points, if any, mentioned by the parties to the
instrument or any other person which require
special consideration ;

(vi) value of adjacent land or lands in the vicinity ;

(vii) average annual yield from the land for five
consecutive years till the determination and
nearness to road and market, distance from
village site, its location in general, level of land,
transport facilities, facilities available for
irrigation, such as tanks, wells and pumpsets;

(viii) the nature of crops raised on the land.

(2) In the case of house sites.-

(i) the general value of house sites in the locality ;

(ii) nearness to road, railway station, bus route ;

(iii) nearness to market, shops and the like ;

(iv) amenities available in the place like public offices,
hospitals and educational institutions ;

(v) development activities, industrial improvements
in the vicinity ;

(vi) land tax and valuation of sites with reference to
taxation records of the local authorities
concerned;

(vii) any other features having a special bearing on
the valuation of the site; and

(viii) any special features of the case represented by
the parties.

(3) In the case of buildings.-

(i) area of the land;
30

(ii) plinth area and built up portion in each of the
storeys;

(iii) year of construction;

(iv) material of the wall and material of the roofing;

(v) locality in which constructed;

(vi) amenities provided such as water supply, electric
supply (ordinary or all electric), sewerage, well
and garage;

(vii) rate of depreciation;

(viii) fluctuation in rates;

(ix) any other features that have a bearing on the
value;

(x) property tax with reference to taxation records of
local authority concerned ;

(xi) the purpose for which the building is being used
and the income, if any, by way of rent per annum
secured on the building; and

(xii) any other special feature having bearing on the
valuation.

(4) Properties other than lands, house-sites and
buildings, -

(i) the nature and conditions of the property ;

(ii) purpose for which the property is being put to
use; and

(iii) any other special features having a bearing on
the valuation of the property.

6. Procedure after arriving at provisional market
value.-xxxxx (Omitted)

7. [Order] determining the market value.-(1) The
Deputy Commissioner shall after considering the
representations received in writing and those urged at the time
31

of the hearing and after a careful consideration of all the
relevant factors and evidence placed before him, pass an order,
determining the market value of the properties and the duty
payable on the instrument, communicate the order to the
parties (xxx)

(2) A copy of the order shall be communicated to the
Registering Officer concerned [to take steps to collect the
difference in the amount of stamp duty, if any and register the
document]."

The afore-quoted is the statutory framework under
which the Registering Authorities would be required to
act. What would unmistakably emerge is that, when an
instrument is presented for registration, the Registering
Authority would examine the instrument, come to a prima
facie conclusion as to whether the market value disclosed
on the instrument is genuine and if he has any reason to
believe that the depiction of the market value on the
instrument is improper, or likely to result in
undervaluation of the property, he should keep the
registration pending and refer the instrument to the
District Registrar for determination of the market value
and proper stamp duty payable thereon.

10. In terms of the afore-quoted mandate, the
Registering Authority shall communicate to the parties,
the estimated market value arrived by him qua the
instrument. The Authority has power to initiate suo motu
proceedings within two years from the date of registration
of such instrument. The District Registrar is also required
to record the statement from any person to whom notice
has been issued. This is the duty cast upon the District
Registrar in the aftermath of the said registration. On the
bedrock of the aforesaid mandate of the statute, the
impugned demand notice is required to be noticed and it
reads as follows:
32

"£ÉÆÃnÃ¸ï
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¢£ÁAPÀ: 30-08-2021 jAzÀ 07-09-2021 gÀAvÉ C£ÀÄ¸Àj¹..
2. ZÉÊvÁæ.r.Dgï PÉÆÃA UÉÆÃ¥Á®PÀÈµÀÚ J£ï vÁªÀÅ ¢£ÁAPÀ:
13-08-2021 gÀAzÀÄ avÀæzÀÄUÀð G¥À£ÉÆÃAzÀtÂ PÀbÉÃjAiÀÄ°è
ºÁdgÀàr¹zÀ zÀ¸ÁÛªÉÃdÄ ¸ÀASÉå:CDG-1-03451-2021-
22 gÀAvÉ £ÉÆÃAzÁ¬Ä¸À®ànÖgÀÄª

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**-**-**
¢£ÁAPÀ: 13-08-2021 gÀAzÀÄ £ÉÆÃAzÁ¬Ä¹gÀÄªÀ zÀ¸ÁÛªÉÃdÄ ¸ÀASÉå:
CDG-1-03451-2021-22 UÉ ¸ÀA§A¢ü¹zÀAvÉ F PÉ¼ÀPÀAqÀ ««zsÀ ¯ÉPÀÌ
²Ã¶ðPÉUÉ ¸ÀPÁðj ±ÀÄ®Ì PÉÆgÀvÉ GAmÁVgÀÄvÀÛzÉ DzÀÝjAzÀ ¸ÀzÀj PÉÆgÀvÉAiÀiÁVgÀÄªÀ
MlÄÖ ±ÀÄ®Ì gÀÆ.47800/- UÀ¼À£ÀÄß PÉ-2 ZÀ£À¯ï ªÀÄÆ®PÀ ¸ÀPÁðgÀPÉÌ ¥ÁªÀw¸À®Ä F
ªÀÄÆ®PÀ ¸ÀÆa¹zÉ.

ªÀÄÄAzÁæPÀ ±ÀÄ®Ì (0030-02-103-0- 36000/-
01-000)
C¢ü¨sÁgÀ ±ÀÄ®Ì (Surcharge) 1000/-
(0030-02-103-0-01-000)
¸É¸ï (Cess) (0030-02-103-0- 3600/-
01-000)
£ÉÆÃAzÀtÂ ±ÀÄ®Ì ((0030-02-103-0- 7200/-
01-000)
MlÄÖ ±ÀÄ®Ì 47800/-
"

The demand is payment of deficit stamp duty at
Rs.47,800/-. Identical demand notices are issued in all
these cases. A perusal at the impugned demand notice
does not indicate any procedure being followed prior to
raising the said demand. What is referred to is an
audit/inspection report dated 30.08.2021 and
07.09.2021. Therefore, it becomes ostensible that the
action of issuance of the impugned demand is on the
33

strength of audit or inspection reports on the aforesaid
dates.

11. The State has filed its elaborate statement of
objections admitting that no procedure was followed,
defending the action taking recourse to a audit enquiry
conducted on 03.09.2021. The audit enquiry points at
alleged fraud played by one Deed Writer C.Manjunath
Yadav and the said alleged fraud played has resulted in
short remittance of close to Rs.1,68,16,875/- for all the
registrations that took place where he was the Deed
writer and on the said dates. Original register was also
placed for a perusal for this Court. The original register
indicates that the stamp duty as contended in the writ
petition has been paid and the same has been remitted.
If the Deed Writer has only written it and has not
remitted the amount, the petitioners cannot prima facie
be held guilty of undervaluing the property and resulting
in demand of deficit stamp duty.

12. The learned Additional Government Advocate
would also contend that a crime is registered against the
Deed Writer Sri.C.Manjunath Yadav in Crime No.173 of
2021 and the investigation is underway. Several
communications are also appended to the statement of
objections, all seeking to demonstrate that there is
payment of deficit stamp duty on account of
typographical error or fraud played by Sri.C.Manjunath
Yadav. The officers of the office of the Sub-Registrar have
all been placed under suspension pending departmental
enquiry. These factors brought before the Court by way
of statement of objections can hardly be a justification for
not following the procedure mandated under the Act. If a
statute prescribes a particular mode of performance of
action; such action shall be performed only in accordance
with the statute. Courts have time and again repeated
that the prescription under the statute for performance of
a duty cannot be deviated, come what may.
34

13. The Apex Court in the case of BABU
VERGHESE v. BAR COUNCIL OF KERALA4 after
extracting the celebrated judgment in the case of
TAYLOR V. TAYLOR has held as follows:

"31. It is the basic principle of law long
settled that if the manner of doing a
particular act is prescribed under any statute,
the act must be done in that manner or not at
all. The origin of this rule is traceable to the
decision in Taylor v. Taylor [(1875) 1 Ch D
426 : 45 LJCh 373] which was followed by
Lord Roche in Nazir Ahmad v. King Emperor
[(1936) 63 IA 372 : AIR 1936 PC 253] who
stated as under:

"[W]here a power is given to do a
certain thing in a certain way, the thing must
be done in that way or not at all."

32. This rule has since been approved
by this Court in Rao Shiv Bahadur Singh v.
State of V.P. [AIR 1954 SC 322 : 1954 SCR
1098] and again in Deep Chand v. State of
Rajasthan [AIR 1961 SC 1527 : (1962) 1 SCR
662] . These cases were considered by a
three-Judge Bench of this Court in State of
U.P. v. Singhara Singh [AIR 1964 SC 358 :
(1964) 1 SCWR 57] and the rule laid down in
Nazir Ahmad case [(1936) 63 IA 372 : AIR
1936 PC 253] was again upheld. This rule has
since been applied to the exercise of
jurisdiction by courts and has also been
recognised as a salutary principle of
administrative law."

(Emphasis supplied)

The Apex Court in the judgment afore-extracted
holds that if a statute prescribes a particular mode of
action, the action shall be in that mode and by no other
method. Therefore, if deficit stamp duty had to be
demanded from the petitioner or the petitioners, in all

4
AIR 1999 SC 1281
35

these cases, action ought to have been taken in terms of
the procedure prescribed in the statute. The Competent
Authority has a duty to satisfy itself with regard to the
document being registered as undervalued. The
satisfaction will form into an opinion; an opinion into a
demand. The opinion or the satisfaction cannot be left at
the mercy of an audit report. The audit report cannot
mean that the Competent Authority has applied its mind
in terms of the statute. It is an external document.
Therefore, the action taken on the basis of the audit
report resulting in the impugned demand, is thus,
rendered unsustainable and its unsustainability would
result in its obliteration as admittedly no procedure
stipulated under the statute, is followed.

14. For the aforesaid reasons, the following:

ORDER

             (i)      Writ Petitions are allowed.
             (ii)     Impugned demand notice dated 13.09.2021

issued by the respondent stands quashed.

(iii) Liberty is reserved to the competent authority to initiate action if necessary, if available in law, after following due process of law, bearing in mind the observations made in the course of the order."

What is projected in the case at hand is an identical issue. Therefore, on both the counts of Section 45A and Rule 5 of the Rules, the issue stands answered as aforesaid, in the afore-quoted judgments.

14. The determination by the State is that it is Whitefield Industrial Area, Hoodi Village. The defence is that it is Hoodi Industrial Area-EPIP. Therefore, when the issue was shrouded with seriously disputed questions of fact, an inquiry ought to have been conducted by the 2nd respondent/Deputy Commissioner (Stamps) prior to determination. The vendor of the property/1st petitioner was not even heard in the matter and plethora of defences are projected in the subject petition before this Court. Therefore, all these needs to be thrashed out by the authority who suo motu determined the deficit stamp duty, which is contrary to law.

15. For the aforesaid reasons, the following:

ORDER

(i) Writ Petition is allowed.

(ii) Both the orders - order dated 18-06-2018 passed by the 2nd respondent/Original Authority in Case No. DUS/SJN/SM/01:2018-19 and order dated 24-10-2019 passed by the 1st respondent/Appellate Authority in case No.STP(Appeal)/12/2018-19 stand quashed. 37

(iii) The matter is remitted back to the Deputy Commissioner (Stamps)/2nd respondent to hear the petitioners and then determine deficit stamp duty, if any to be paid by the petitioners, bearing in mind the observations made in the course of the order.

Sd-

(M. NAGAPRASANNA) JUDGE bkp CT:MJ

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