Allahabad High Court
Orissa Cement Ltd. vs Chief Controlling Revenue Authority, ... on 10 October, 2003
Equivalent citations: 2004(1)AWC871, 2004 ALL. L. J. 277, 2004 A I H C 1136, (2004) 96 REVDEC 21, (2004) 1 ALL WC 871, 2004 ALL CJ 1 594
Author: Rakesh Tiwari
Bench: Rakesh Tiwari
JUDGMENT Rakesh Tiwari, J.
1. Heard counsel for the parties.
2. This writ petition has been filed challenging the order dated 30.10.1984 passed by the Chief Controlling Revenue Authority under the Stamps Act and order of Additional District Collector (Finance and Revenue) Varanasi, dated 30.11.1983 and for a direction to him for endorsing certificate on proposed sale deed certifying that full stamp duty has been paid by the petitioner.
3. No counter-affidavit was filed by the State in spite of time being granted twice but a counter-affidavit filed on 29.5.2003 is on record, which was not served on the petitioners.
4. The petitioner is a public limited company. It entered into an agreement of sale for purchasing the land, building and machinery of Central Jute Mills Ltd. Sahupuri, Varanasi. A draft sale deed was prepared and was presented to the Collector, Varanasi under Section 31 of the Stamp Act for giving his opinion on 6.2.1981 with regard to proper stamp duty, chargeable on the said deed. The petitioner paid requisite fee under Section 31 of the Act. This application was registered under the Stamp Act as case No. 49/80-81. The Collector adjudicated and by order dated 16.2.1981 determined that stamp duty on the sale deed was chargeable as Rs. 8,71,972.50.
5. The total order passed on the application filed by the petitioner itself is as under :
^^layXu ys[ki= ij 85 iPpklh :i;s izfr gtkj dh nj ls 1]02]58]291 ,d djksM+ nks yk[k vV~Bkou gtkj nks lkS bD;kucs :i;s ij ns; LVkEi 8]71]972@50 vkB yk[k bdgRrj gtkj ukS lkS cgRrj :i;k ipkl iSlk ek= dh LVkEi ns; gksrs gaS A g- vLi"V 16-2-1981 vfrfjDr ftykf/kdkjh ¼foÙk ,oa jktLo½ okjk.klh**
6. In view of the aforesaid order the petitioner was directed to deposit Rs. 8,71,972.50 which was deposited in cash under Challan No. 28, dated 2.3.1981 in the Treasury of State Bank of India, Varanasi. The Chief Treasury Officer, Varanasi issued a certificate of depositing the amount under Section 10A of the Stamp Act read with G.O. No. 2864/10-500 (17-C) 74, Lucknow dated 22.4.1975.
7. The petitioner thereafter presented the said deed along with order dated 7.3.1981 and the certificate dated 7.3.1981 before the Registrar for registration. The Registrar impounded the document under Section 33 of the Stamp Act and referred the matter to the Additional Collector (F and R), Varanasi, i.e., the same authority which passed order under Section 31 of the Act stating that the deed is not properly stamped and less stamp duty has been paid. The Additional Collector (F and R), Varanasi issued a notice to the petitioner fixing 4.9.1981 as date of hearing. The petitioner filed objections before the Additional Collector on 4.9.1981. This case was registered as case No. 66 of 1981-82.
8. The Additional Collector (F and R) by his order dated 30.11.1983 held that the stamp duly liable to be paid comes to Rs. 76,94,727.50 as against Rs. 8,71,972.50 paid by the petitioner. Thus, there was deficiency of Rs. 68,22,755. He also imposed penalty of Rs. 1,77,245 on the petitioner. Thus total demand comes to Rs. 70,00,000 (Seventy lacs).
9. The petitioner filed a revision No. 9 (N) 1983-84 before the Chief Controlling Revenue Authority, which was allowed by him vide order dated 30.10.1984. He quashed the order of the Collector but remanded the case back for fresh decision on merits in accordance with observations made by him. This writ petition has been filed against this order of remand in which it has been observed by the Chief Controlling Revenue Authority that the order of the Collector under Section 31 is "mere a communication" of the amount of duty chargeable and the order dated 16.2.1981 is not endorsement upon the deed hence there is no bar in re-determination of stamp duty/order of rehearing. He held that said order is not endorsement on the deed hence it is not final and the document can be impounded under Section 33 of the Act.
10. Section 32(3) of the Stamp Act runs as under :
"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."
11. The first question raised is whether the order dated 16.2.1981 passed on the application is an endorsement on the deed, can be treated as endorsement under Section 32(3) of the Act.
12. A Full Bench of this Court in the case of Mohd, Amir Ahmad v. Dy. Commissioner and Ors., AIR 1956 All 453, considered scope of the Sections 31, 32 and 33 of the Act, in which it was held that:
"The procedure, in cases to which Sections 31 and 32 apply is 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 realisation nor can be levy any penalty though it may be that he can order the prosecution of the applicant."
13. The above case was confirmed by the Hon'ble Supreme Court in appeal in 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 an 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."
14. There is no dispute that an application under Section 31 of the Act was filed by the petitioner on which adjudication order was passed and in pursuance thereof the petitioner was directed to deposit the stamp duty, which was duly deposited. The only lacuna pointed out is that certificate was not endorsed upon the deed itself.
15. The endorsement on the deed itself is only a procedural requirement. There is no denial that the Collector passed adjudication order though it is only one line order containing no reasons. Section 31 is substantive law and Section 32 is procedure. The order was transcribed on the application to which deed was annexed. The order itself says "on the annexed deed" the duty has been determined. Thus order was made part of deed, which was annexed and is as good as endorsement on the deed itself. It is an order of adjudication by which duty was adjudicated and was not communication. The order was transcribed on an application and was annexed to the deed. The adjudication will not become ineffective and will not make the order non-existent or make the order invalid if it is written on the application itself instead of proposed deed. Transcribing order is procedural as held by Full Bench (supra).
16. Procedural lapse or irregularity does not affect the legality and validity of an order particularly when deed was made annexure to the order. The order dated 16.2.1981 is not communication as held by the Controlling Authority, respondent No. 1. Procedure is provided for advancing justice and is not a tool for doing injustice. The petitioner complied with all formalities of law and matter was adjudicated. He has no control on the office of Collector, The Collector had to make endorsement. The petitioner was not at fault if order is endorsed on the application and was not endorsed on the deed. It will amount to injustice if the order duly passed is not given legal effect on such technical ground. A litigant cannot be made to suffer for lapses of authority. I am of the opinion that order passed and noted on the application, which is annexed to deed is part of the deed and is sufficient compliance of Section 32 of the Act though the Collector was duty-bound to make endorsement on the deed itself on which he made adjudication. For procedural lapse on the part of Court, litigant cannot be made to suffer in view of the doctrine actus curiae neminem gravabit.
17. Reliance has been placed on the case of C.I.T. v. Ghaswala, (2002) 1 SCC 633, in which the Apex Court held :
"It is normal rule of constitution that when a statute vests certain power on an authority to be exercised in a particular manner then the said authority has to exercise it only in the manner provided in the statute itself."
18. The submission that the Collector is duty bound to endorse the order on the deed and order passed on the application under Section 31 is not legal and valid and cannot be accepted. As discussed above, there is sufficient compliance of the above-mentioned procedure in this case. The substantive provision is Section 31(1) of the Act. Section 32 is procedure. The Apex Court in the cases of Syed Mohd. Bakar v. Abdul Habib Hasan Arab, 1998 (4) SCC 343, observed thus :
"A procedural law is always in aid of justice, not in contradiction or to defeat the very object which is sought to be achieved. A procedural law is always subservient to the substantive law. Nothing can be given by a procedural law which is not sought to be given by a substantive law and nothing can be taken away by the procedural law what is given by the substantive law."
19. A Division Bench of this Court in the case of Chunni Lal Barman v. Board of Revenue, U. P. and Ors. AIR 1951 All 851 held thus :
"Sections 31 and 32, Stamp Act, make it clear that when an instrument is presented to the Collector for his opinion as to the duty chargeable upon it, he is not authorised 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."
20. It is submitted that respondent No. 1 had no jurisdiction to reopen the question of valuation of the property under Section 33 of the Act and the order imposing penalty is also without jurisdiction. The contention of the petitioner has force and the impugned orders do not stand to legal scrutiny as the impugned orders appear to be beyond the scope of Section 33 of the Stamp Act, but these orders have been challenged under Article 226 of the Constitution of India, which is a discretionary remedy. The order dated 16.2.1981 quoted above is cryptic and one line order. It does not contain any reason nor disclose any basis for determining the value of the property sought to be sold. No material is disclosed in the order for determining the market value as Rs. 1,02,58,291 on which stamp duty of only Rs. 8,71,972.50 paise was determined by the then Additional District Magistrate (Finance and Revenue). As against that in reference Additional District Magistrate (Finance and Revenue), an officer of the same rank, calculated on 30.11.1983 the value of the property as Rs. 7,23,97,434.06 paise. He supported the opinion/report of property valuer and found that stamp of Rs. 76,94,727.50 paise was liable to be paid. The procedure laid down under Section 32 was not fully complied with. Full market value with complete details and basis have been disclosed in the report dated 30.11.1983. The difference in market value and stamp duty payable thereon is very substantial. The facts speak for themselves. To me the first adjudication of 16.2.1981 does not appear to be an honest discharge of duty. The value of the property could not appreciate so to bring above appreciation in value of stamp duty alone to more than Rs. 76,94,727.50 in 2-1/2 years. It is mere ipse dixit of the Additional District Magistrate and highly doubtful in view of opinion dated 30.11.1983. Ulterior motives in the above background cannot be ruled out. It is defrauding the State with the aid of law in connivance with officers. The difference of more than Rs. 68,00,000 (Rupees Sixty Eight Lacs) in stamp duty alone cannot be overlooked. It is evasion of duty by connivance of officers. It will cause substantial loss to the public exchequer and is against public interest.
21. The market value of property and stamp duty payable thereon as found out by the impugned order has not been challenged before me. The petitioner has been using this amount in its commercial activities under unconditional interim order dated 17.1.1985, i.e.. for 18 years. Considering the circumstances stated above in the present case, I am not inclined to exercise discretionary jurisdiction under Article 226 of the Constitution in favour of the petitioner. The writ petition is, therefore, dismissed. The interim order is vacated. No order as to costs.
22. Before parting it appears to me that the order under Section 31 of the Stamp Act has been passed without any reason or basis of valuation of the property. The Secretary, Department of Revenue, Government of U. P., Lucknow is directed to issue direction to all the Collectors exercising power under Section 31 of the Stamp Act to pass reasoned orders giving full particulars regarding market value of the property and basis of calculation of stamp duty. Provision should also be made for reference, review/revision of the orders passed under Section 31 of the Stamp Act.
23. A copy of this order be sent to the Secretary, Department of Revenue, Government of Uttar Pradesh, Lucknow for necessary action forthwith.