Madhya Pradesh High Court
Smt. Bhagwati Devi Wd/O Shri Mahesh ... vs Registrar Katni & Ors on 28 March, 2012
1
IN THE HIGH COURT MADHYA PRADESH : AT JABALPUR.
Writ Petition No.947 OF 1999
Mahesh Chandra Gupta
Vs.
Registrar Katni and others.
PRESENT :: HON'BLE JUSTICE SHRI K.K. TRIVEDI.
Shri M.L. Jaiswal, Senior Advocate with Shri K.K. Gautam, learned
counsel for the petitioner.
Shri Samdarshi Tiwari, learned Govt. Advocate for respondents.
ORDER
(28.03.2012) 1: The controversy involved in this petition is with respect to the demand of payment of stamp duty, so issued by the Collector (Stamp) Jabalpur, vide order dated 17.9.1998 and the order passed by the Additional Commissioner, Jabalpur on 22.2.1999, rejecting the appeal of the petitioner. In short, the facts giving rise to such controversy are that the original petitioner Mahesh Chandra Gupta purchased the disputed property from one Smt. Khurshid M. Dubash, for a consideration of Rs.25 lacs and a sale deed was got executed in this respect. As the seller was required to go to Bombay and the determination of market value of the property was required to 2 take sometime, initially a stamp duty of Rs.40,000/- was paid on the sale deed and the same was presented before the Sub Registrar. Subsequently, it was intimated that in fact stamp duty was to be paid to the tune of Rs.3,21,875/- and original petitioner was called upon to pay deficit stamp duty of Rs.2,81,875/-. The original petitioner sought time for making payment of the said amount, but the payment was not made. Subsequently, a show cause notice was issued to the original petitioner indicating that there was a deficiency of stamp of Rs.4,19,251/-. It was also intimated that a penalty at ten times of deficient stamp duty would be levied. The original petitioner was not aware of such a notice as the same was not served on him personally, but was affixed at his residence when he was out of station and when he came to know about the said demand, he moved an application for issuance of a challan for the deposit of the deficit stamp duty. The matter was kept pending, but no challan was issued to the petitioner. He submitted a reply to the show cause notice and also filled up a challan for the amount of Rs.2,81,875/-, but since the same was not approved, the deposit could not be made. Subsequently, the Collector (Stamp) fixed the deficiency of Rs.2,81,875/- and imposed a penalty at ten times of the said amount totaling to Rs.28,18,750/- and made a demand for deposit of the said amount. The original petitioner preferred an appeal before the Additional Commissioner, Jabalpur, but the same was dismissed saying that the same was not maintainable and, therefore, the writ petition was required to be filed.
32: This Court has entertained the writ petition on 10.3.1999 and while issuing the notices to the respondents has directed that in case the petitioner deposits the stamp duty of Rs.2,81,875/-, no coercive steps shall be taken for the recovery of amount of penalty.
3: In response to the notice issued by this Court of this writ petition, a return has been filed by the respondents. It is contended by the respondents that the petition is not maintainable and is liable to be dismissed. It is submitted that no appeal would lie against the order of the Collector (Stamp) before Additional Commissioner, Jabalpur and in fact, appropriate appeal was never filed by the petitioner. It is contended that on a deficit stamp, the document was presented for registration. The said document was not registered only because the appropriate stamp duty was not paid. In fact, a stamp duty of Rs.3,21,875/- was required to be paid on the basis of the face value of the property so mentioned in the sale deed. Thus, there was a deficit payment of stamp duty amounting to Rs.2,81,875/-. The matter was referred to the higher authorities, in exercise of power under Section 33 of the Indian Stamp Act, 1899 (hereinafter referred to as the Act for brevity). In terms of the provisions of Section 38(2) of the Act, the Collector (Stamp) was required to examine the same. The case was, thus, registered, opportunity of hearing was given to the original petitioner, but even after representation before the 4 competent authority, it was expressed by the original petitioner that he was unable to deposit the deficit stamp duty. Time as requested was granted for the said purposes, but instead of depositing the said amount, a reply of show cause was filed which was rejected and the order impugned was passed on 17.9.1998 demanding payment of deficit stamp duty with penalty. The Collector was right in holding that since there was deficit payment of stamp duty, the petitioner was liable to pay a penalty as per the provisions of Section 40 of the Act, which could be ten times of the deficit stamp duty. This order was challenged in appeal, but the same was rightly dismissed by the Additional Commissioner as the appeal was required to be filed before the Board of Revenue. This being so, there was no case made out to interfere in the order impugned. It is contended that since the deficit stamp duty was to be recovered under Section 38(2) of the Act, the Collector has rightly proceeded under the provisions of Section 40 of the Act for recovery of deficit stamp duty with the penalty. Thus, it is contended that the petition being wholly misconceived, the same is liable to be dismissed.
4: In the rejoinder, the petitioner has refuted all the allegations made in the return of the respondents and has reiterated whatever was stated earlier. It has further been contended that there was a Scheme made by the State Government on 5.1.2002 granting exemption from payment of stamp duty and this being so, the order impugned is said to be 5 bad in law. It is contended that when the representation was made for making application of the Scheme formulated by the State Government, the same was rejected by the District Registrar saying that the Scheme made in the year 2002 was not attracted in the case of the petitioner as the transaction had taken place in the year 1998 much before coming into force of the Scheme.
5: This Court has thought it better to call for the record and after great difficulty, the record is produced before this Court, only when the notice was issued to the Collector (Stamp) to remain present in the Court.
6: Heard learned counsel for the parties at length and perused the record.
7: A perusal of order dated 17.9.1998 (Annx.D to the writ petition) passed by the Collector (Stamp) Jabalpur, indicates that the matter was referred by the Sub Registrar to the Collector (Stamp) only for the purposes of initiating action for recovery of the deficit stamp duty. The opening paras of the order impugned indicates that the sale deed dated 1.6.1995 was presented with a stamp of Rs.40,000/-. As per the assessment of the stamp duty by the Sub Registrar, the said document was to be registered on payment of stamp duty of Rs.3,21,875/-. It is the fact recorded in the order that notice was issued to the party concerned for payment of deficit stamp duty in terms of provisions of Section 35(f) of the Act. It was indicated that the 6 party concerned was intimated to deposit a deficit stamp duty of Rs.2,81,875/- and for the said purposes, the time was taken by the original petitioner, but the said deficit stamp duty was not made good. The order further says that the matter was thereafter referred to the Collector in exercise of power under Section 38(2) of the Act on 19.10.1995. The original record produced before this Court reveals that on receipt of such a memo, case was registered and a notice was issued to the petitioner on 1.6.1998. The letter by which the reference was made itself is available in the original record, which in fact speak something else. In fact, there was something more stated in the memo dated 19.10.1995, which is not reflected in the order of the Collector (Stamp). In fact, the Sub Registrar has written that the matter is being referred to the Collector (Stamp) for recovery of the deficit stamp duty as per the provisions of Section 38(2) of the Act as also for the purposes of assessing the market value of the property which was said to be transferred under the disputed sale deed and after fixing the stamp duty to recover the same from the petitioner. The notice so issued on 1.6.1998, which has been placed on record as Annx.R/3 indicates that the petitioner was informed about the registration of such a case and on the back of it, it was said that there was some sort of assessment made in view of the provisions of Section 33 of the Act and after assessing the market value, the stamp duty payable on the said deed was assessed to be Rs.4,59,251/- out of which only an amount of Rs.40,000/- was deposited, therefore, the petitioner was liable to pay 7 Rs.4,19,251/- and a penalty was also required to be imposed on the said deficit stamp duty. The petitioner was required to give reply to this. The notice contains the recital that since the petitioner was out of station, had gone to attend the marriage, the notice was affixed on the house of the petitioner in presence of two witnesses. Though a subsequent notice Annx.R/4 is also produced, but it was said that the same was served on the petitioner. Nothing more is found in the record except an application for payment of deficit stamp duty made on 24.6.1998 and a reply submitted by the petitioner. A perusal of the records further indicates that only twice the notice was sent to the petitioner on 10.7.1995 and 18.7.1995 by the Deputy Registrar Mudwara, Katni and on both the occasions, notices were accepted by the petitioner. The order sheets recorded by the Collector (Stamp) indicate nothing as to what sort of enquiry with respect to assessment of market value of the property was conducted and whether any opportunity of hearing was extended to the petitioner in the said enquiry or not. The order sheet indicates that on 24.6.1998 the learned counsel for the original petitioner made a request that stamp duty amount is a big amount and, therefore, time may be allowed to deposit the same. The time was allowed upto 27.6.1998 and on this date a reply was submitted, but the same was rejected and the case was closed for orders. On 13.9.1998, it was recorded that the order is passed separately. However, the date of order indicates that it was never passed on 13.9.1998, on the other hand, the same was passed on 17.9.1998.
88: Now it has to be examined whether at any point of time, the Deputy Registrar or the Sub Registrar of Stamp was of the opinion that the market value of the property which was sold, was rightly assessed or indicated in the sale deed or not. On a perusal of the order passed by the Collector (Stamp) and reading the memo by which the matter was referred to the Collector (Stamp) by the Sub Registrar, it is clear that there was no doubt in the mind of Sub Registrar that the market value of the property sought to be transferred under the instruments in question was improperly stated. On the other hand, the Sub Registrar has categorically said that on the basis of the proper market value of the property, assessment of stamp duty was done and it was found that the original petitioner was required to pay a stamp duty of Rs.3,21,875/- and since only stamps of Rs.40,000/- were submitted with the sale deed, the original petitioner was required to pay the stamp duty of Rs.2,81,875/- more.
9: If this stamp duty was not being paid, the matter was required to be referred for recovery under Section 38(2) of the Act, but not for the purposes of assessment of market value of the property. This particular aspect was taken note of by the Collector (Stamp), but in fact, the Collector (Stamp) was swayed with one aspect that the matter was still to be considered in the light of provisions of Section 33, 35 and 40 of the Act. It was considered by the Collector (Stamp) as if he was empowered to 9 impose a penalty for non-payment of deficit stamp duty to the tune of ten times of the deficit stamp duty under the said provisions. For the purposes of proper appreciation, the provisions of Sections 33, 35, 38 and 40 of the Act are reproduced hereunder :-
"33. Examination and impounding of instruments - (1). 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 :
[Provided that nothing contained in this sub- section shall be deemed to authorise the Collector to impound any instrument which has not been executed but is brought to him under Section 31 for determining the duty with which the instrument is chargeable or any instrument which he is authorised to endorse under section 32.] (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 law in force in India 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;
(b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3)For the purposes of this section, in cases of doubt :-
(a) the State Government may determine what offices shall be deemed to be public offices; and 10
(b) the State Government may determine who shall be deemed to be persons in charge of public offices.
35. Instruments not duly stamped inadmissible in evidence etc.- 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 :
Provided that -
(a) any such instrument [shall] be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped of the amount required to make up such duty together with a penalty of five rupees, or when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;
(b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt, and such receipt, if stamped, would be admissible in evidence against him then such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the person tendering if;
(c) Where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;
(d) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure 1898 (5 of 1898);
(e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government, or where it bears the certificate of the Collector as provided by Section 32 or any other provision of this Act.
(f) any such instrument not being a bill of exchange or promissory note shall, subject to all just exceptions, be registered or authenticated on payment of the duty with which the same is 11 chargeable, or in the case of an instrument insufficiently stamped, of the amount required to make up such duty.
38. Instruments impounded, how dealt with - (1) 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 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.
(2) In every other case the person so impounding an instrument shall send it in original to the Collector.
40. Collectors power to stamp instruments impounded-(1) When the Collector impounds any instrument under section 33, or receives an instrument sent to him under Section 38, sub-section (2), not being ( a receipt), a bill of exchange or promissory note, 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 thereof, whether such amount exceeds or falls short of five rupees;
Provided that when such instrument has been impounded only because it has when 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 purposes of this Act, be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under section 38, sub-section (2), the 12 Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer. "
10 : Section 33 of the Act deals with examination and impounding of instruments, Section 35 of the Act deals with instruments not duly stamped inadmissible in evidence and Section 40 of the Act prescribes Collectors power to stamp instruments impounded. Section 38 of the Act simply refer the instruments impounded how are to be dealt with. Section 40 of the Act would be attracted only when impounding of an instrument is done by the Collector. But, recovery of deficit stamp duty is not to be done under this provision. In fact, the provisions of Section 48 of the Act would be attracted in case of recovery of deficit stamp duty. The inaction or speedy action required, which was not taken, was the real cause for not making payment of deficit stamp duty as it was categorically said by the original petitioner that he was wiling to deposit the amount of the duty which was assessed by the Sub Registrar and for the said purposes even he has submitted an application for issuance of a challan. It is nowhere stated as to how and why the challan was not accepted. Notices issued to the petitioner as have been discussed herein above were not correct. Impounding of document was not necessary in view of the law laid down by the Division Bench of this Court in case of Umesh Kumar son of Prakash Chand Sharma V. Rajaram son of Ramchandra Jat and another [2010(2) MPLJ 104]. It is now clear that for the purposes of registration even the original petitioner was ready to pay the assessed stamp duty. Thus, imposition of maximum penalty on the petitioner for non- 13 payment of the said amount was not proper. It is to be kept in mind that there was delay in taking cognizance of the fact that the instrument was improperly stamped and that recovery of deficit stamp duty was to be done. Though the matter was referred in the year 1995, but the notice was issued in the year 1998 by the Collector (Stamp). The petition itself was filed in the year 1999 and under the order of the Court, the deficit stamp duty has already been paid by the original petitioner. In view of the law laid down by the full bench of High Court of Gujrat in the case of M/s Shailesh Taxtile Industries V. The Chief Controlling Revenue Authority (AIR 1994 Gujrat
153), the period was not very much material, but the conduct of the party concerned was required to be taken note of. 11 : It is recorded in the order sheet dated 19.1.2000 of this writ petition that the stamp duty as per the direction of this Court was already paid on 10.3.1999. Now the only question remains with respect to imposition of penalty. Without the intervention of the Court if the stamp duty as offered by the petitioner would have been accepted, the controversy whatever would have come to an end at that time. In view of this, there is no requirement of imposition of penalty in such a severe term which is the maximum prescribed under the Act. However, this cannot be overlooked that the original petitioner has not paid the stamp duty properly at the relevant time when the instrument was presented by him for registration. There was delay caused on the part of the original petitioner as right from 14 1995 despite knowledge of the fact that he was required to pay the deficit stamp duty till the matter was referred in 1998, no attempt was made for depositing the stamp duty. These aspects are required to be taken into consideration and for the said purposes, some sort of penalty is required to be imposed on the original petitioner for not depositing the stamp duty.
Therefore, it would be appropriate to send back the matter to the Collector (Stamp) for taking a decision afresh only with respect to the imposition of a penalty on the deficit stamp duty subsequently deposited by the petitioner and pass an appropriate orders. The Collector (Stamp) is required to keep in mind that he was not impounding the document under the order of the Court and, as such, he is required to exercise his discretionary power in more appropriate manner. 12 : In view of the aforesaid, the writ petition is disposed of by quashing the order impugned. The matter is remitted back to the Collector (Stamp) Jabalpur to fix the penalty exercising his discretionary power, only with respect to the recovery of deficit stamp duty, which the original petitioner has deposited in terms of the interim direction issued by this Court. It will be obligatory on the part of the legal representatives of the original petitioner, who have been brought on record after the death of original petitioner, to pay the said amount of penalty and the instruments submitted by the original petitioner would be registered and delivered to the legal representatives of the original petitioner on payment of amount of penalty so fixed by 15 the Collector (Stamp). The said exercise be completed within a period of one month from the date of receipt of certified copy of this order.
13 : With the aforesaid, the writ petition stands finally disposed of. There shall be no order as to costs.
(K.K. TRIVEDI) JUDGE /03/2011 A.Praj.