Madhya Pradesh High Court
The State Of M.P. vs M/S Hindustan Vidyut Product Ltd. & Anr. on 4 May, 2023
Author: Maninder S. Bhatti
Bench: Maninder S. Bhatti
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE MANINDER S. BHATTI
ON THE 4 th OF MAY, 2023
WRIT PETITION No. 148 of 2005
BETWEEN:-
THE STATE OF M.P. (MADHYA PRADESH)
.....PETITIONER
(BY SHRI PRADEEP SINGH - GOVT. ADVOCATE)
AND
M/S HINDUSTAN VIDYUT PRODUCT LTD. & ANR.
(MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI R.S. JAISWAL - SENIOR ADVOCATE WITH SHRI K.K. GAUTAM,
ADVOCATE)
This petition coming on for admission this day, th e court passed the
following:
ORDER
The petitioner-State has filed this petition while praying for the following reliefs :
"(i) quash the order dated 07-07-2004 (Annexure-P/1) passed by the Board of Revenue, M.P. Gwalior;
(ii) Any other suitable relief deemed fit in the facts and circumstances of the case may also kindly be granted together with the cost of this petition."
2. The facts as narrated in the memo of writ petition reflect that, an Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 2 agreement dated 30-08-2000 was executed at New Delhi, by which the respondent No.4 agreed to sell its business along with moveable and immovable properties as going concern, to the respondent No.1 - M/s Hindustan Vidyut Product Limited.
3. The said agreement was executed on a stamp paper of Rs.100/- which was notarized by a Public Notary at New Delhi. The business which was subject-matter of agreement, is located at Mandideep, District Raisen. On the basis of a letter dated 22-12-2001 received from the Collector, Bhopal, a show cause notice was issued to the respondent No.1 by the Collector of Stamp, Raisen, dated 07-01-2002, calling upon the respondent No.1 to appear on 29- 01-2002 and show cause the aspect regarding deficiency of stamp duty, payable on the said agreement.
4. The said show cause notice was replied by the respondent No.1. The Collector on considering the reply, passed an order dated 18-02-2002 directing the respondent No.1 to pay an amount of Rs.23847856/- towards the deficit stamp duty and a sum of Rs.3577193/- towards penalty under Section 40(b) of the Indian Stamp Act, 1899 [hereinafter referred to as "Act of 1899"].
5. The respondent No.1 being aggrieved by the order passed by the Collector of Stamp, Raisen, preferred a revision before the Board of Revenue, M.P., Gwalior, which vide impugned order dated 07-07-2004 (Annexure-P/1) allowed the revision preferred by the respondent No.1 and concluded that the respondent No.1 was only liable to pay a sum of Rs.958800/- as stamp duty. Thus, assailing the order dated 07-07-2004 (Annexure-P/1) passed by the Board of Revenue, this petition is filed.
6. Learned counsel for the petitioner contends that in the present Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 3 petition, the core issue is to the effect, that as to whether the Board of Revenue, Gwalior had power to entertain a revision against the order which is passed under Section 47-A of the Act of 1899 ? It is contended by the learned counsel for petitioner that the provision of Section 47-A of the Act of 1899 is taken recourse to, where an instrument is found to be undervalued.
7. In the case in hand, the agreement dated 30-08-2000 was found to be undervalued, as the stamp duty in terms of Article 23 of the Schedule-I of the Act of 1899, was not paid. Accordingly, the Collector in exercise of powers conferred under Section 47-A of the Act of 1899 passed an order dated 18-02-2002.
8. Learned counsel or petitioner strenuously urged that the order passed by the Collector under Section 47-A of the Act of 1899 is appealable before the Commissioner of the Division in terms of Section 47-A(4) of the Act. Learned counsel for petitioner further submits that Section 56 of the Act of 1899 provides for revision and in terms of proviso (i) to Section 56(4) a revision is only maintainable against an order which is not appealable. Meaning thereby, it is the contention of the learned counsel that, if an order passed under the Act of 1899 is appealable, no application for revision is maintainable by virtue of the bar contained in the proviso (i) to Section 56(4) of the Act of 1899.
9. It is vehemently argued by the learned counsel for petitioner that in the present case, a notice was issued to the respondent No.1, in terms of Section 48-B of the Act of 1899. Thereafter, the order under Section 47-A of the Act of 1899 has been passed. It is contended by the learned counsel, that an order where an instrument is found to be undervalued, is passed under Section 47-A of the Act of 1899 only, and there are no provisions to pass an order in eventuality where the instrument is found to be undervalued.
Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 410. Thus, learned counsel for petitioner submits that this important aspect of the matter was not considered by the Board of Revenue, and the Board of Revenue proceeded to pass the order impugned dated 07-07-2014. Thus, submits that the impugned order deserves to be set aside.
11. Per contra, learned senior counsel appearing for the respondent No.1 submits that the present petition filed by the petitioner is misconceived, inasmuch as the order passed by the Collector, dated 18-02-2002, is not an order passed under Section 47-A of the Act of 1899. It is further contended by the learned senior counsel that in absence of any order under Section 47-A of the Act of 1899, the ground as regards maintainability of the revision before the Board of Revenue is ill-founded.
12. It is strenuously urged by the learned senior counsel that there is no provision of appeal against an order passed under Section 48-B of the Act of 1899. It is contended by the learned counsel that the order dated 18-02-2002 passed by the Collector of Stamp is an order under Section 19-A read with Section 48-B of the Act of 1899. Therefor, the same was not appeallable and the revision was rightly entertained.
13. Learned senior counsel for the respondent has placed reliance on the decision of Chhattisgarh High Court reported in 2004(1) MPHT 33 (CG) - Raymond Ltd. and ors. vs. State of Chhattisgarh which has been affirmed by the Apex Court reported in AIR 2007 SC 2854.
14. Learned senior counsel further submits that the Board of Revenue while considering the tenor of the agreement, concluded that by the said agreement there was a proposal to transfer the property in future and, therefore, part consideration was received by the parties. Accordingly, the Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 5 Board of Revenue rightly concluded that the order of imposing stamp duty was unreasonable. Therefore, the Board of Revenue set aside the order passed by the Collector of Stamp and directed the respondent No.1 to pay the stamp duty to the tune of Rs.958800/- which has already been paid by the respondent No.1. Thus, submits that the present petition deserves to be dismissed.
15. Heard the rival submissions advanced on behalf of the parties and perused the records.
16. The controversy which requires adjudication in the present petition, as to whether the order passed by the Collector of Stamp dated 18- 02-2002 is an order under Section 47-A of the Act of 1899 or an order passed under any other provisions like 48-A and 19-A of the Act of 1899 ?
17. To deal with the aforesaid issue, it is first apt to refer a few provisions of the Act of 1899. Section 19-A of the Act of 1899 is reproduced hereunder :
"19-A. Payment of duty on certain instruments liable to increased duty in Madhya Pradesh under clause (bb) of section 3.-
- Where any instrument has become chargeable in any part of India other than MP. with duty under this Act or under any other enactment for the time being in force in any part of India and thereafter becomes chargeable with higher rate of duty in the Madhya Pradesh under clause (bb) of the first proviso to section 3.
(i) the amount of duty chargeable on such instrument shall, notwithstanding anything contained in the first proviso to Section 3, be the amount chargeable on it under Schedule- I-A less the amount of duty, if any already paid on it in India,
(ii) such instrument shall in addition to the stamps, if any, already affixed thereto, be stamped with the stamps necessary for the payment of the amount of duty chargeable on it under clause (i) Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 6 in the same manner and at the same time and by the same person as though such instrument were an instrument received in India for the first time at the time when it becomes chargeable with the higher duty."
18. Section 19-A of the Act of 1899 provides for payment of duty on certain instruments liable to increase duty in Madhya Pradesh under clause (bb) of Section 3. According to the said provisions where any instrument has become chargeable in any part of India other than Mahya Pradesh with duty under this Act or under any other enactment for the time being in force in any part of India and, thereafter becomes chargeable with a higher rate of duty in Madhya Pradesh. The instrument shall be stamped with the stamps necessary for the payment of the amount of duty chargeable. So far as Section 19-A(i) is concerned, the same does not provide for any adjudication regarding undervalued instruments and payment of deficit stamp duty thereon.
19. Sections 31 and 32 of the Act of 1899 being relevant, for the present purpose, are reproduced hereunder :
"31. Adjudication as to proper stamp.-Â"(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 a fee of such amount (not exceeding five rupees and not less than fifty naye paise, as the Collector may in each case direct, 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 Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 7 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 proceeding, except in an enquiry as to the duty with which the instrument to which it relates is chargeable; and
(b) every person by 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 reason of the omission to state truly in such instrument any of the facts or circumstances aforesaid.
32. Certificate by Collector.-(1) When an instrument brought to the Collector under Section 31 is, in his opinion, one of a description chargeable with duty, and
(a) the Collector determines that it is already fully stamped, or
(b) the duty determined by the Collector under Section 31, or such a sum as, with the duty already paid in respect of the instrument, is equal to the duty so determined, has been paid, the Collector shall certify by endorsement on such instrument that the full duty (standing the amount) with which it is chargeable has been paid.
(2) When such instrument is, in his opinion, not chargeable Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 8 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 had been originally duly stamped:
Provided that nothing in this section shall authorise the Collector to endorse-
(a) any instrument executed or first executed in 98[India] and brought to him after the expiration of one month from the date of its execution or first execution, as the case may be;
(b) any instrument executed or first executed out of 99[India] and brought to him after the expiration of three months after it has been first received in 100[India]; or
(c) any instrument chargeable 101[with a duty not exceeding ten naye paise,] or any bill of exchange or promissory note, when brought to him, after the drawing or execution thereof, on paper not duly stamped."
20. A perusal of Section 31 of the Act of 1899 stipulates an adjudication as to proper stamp. In terms of the said provision where any instrument, whether executed or not or whether previously stamped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as regards quantum of duty which is chargeable, then the Collector shall determine the duty.
21. Therefore, as per Section 31 of the Act it is crystal clear that a person who is uncertain about payment of quantum of the stamp duty, has the Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 9 remedy to approach the Collector for determination of correct stamp duty. Accordingly, a certificate in terms of Section 32 of the Act of 1899 is issued by the Collector in terms of Section 31 of the Act.
22. A perusal of sections 31 and 32 of the Act of 1899 reveals that in both the sections there is no provision of appeal, so far as an order under Section 31 of the Act of 1899 is concerned.
23. Section 47-A of the Act of 1899 which is relevant for the present purpose, is being reproduced hereunder :
"47-A. Instruments under-valued, how to be dealt with.--(1) If the Registering Officer, appointed under the Registration Act, 1908 (16 of 1908) while registering any instrument fins that the market value of any property which the subject-matter of such instrument has been set forth less than the minimum value determined in accordance with any rules under this Act, he shall before registering such instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon.
(1-A). Where the market value as set forth in the instrument is not less than the minimum value determined in accordance with any rules under this Act, and the Registering Officer has reason to believe that the market value has not been truly setforth in the instrument, he shall registere such instrument and thereater refer the same to the Collector for determination of market value of such property an proper duty thereon.
(2) On receipt of a reference under sub-section (1), the Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner, as may be prescribed, determine the market value of the property which is the subject-matter of such instrument and the duty as aforesaid. The difference, if any, in the amount of duty shall be payable by the person liable to pay the duty.
Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 10(3) The Collector may, suo moto, within five years from the date of registration of any instrument 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 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 setforth in the instrument, he may determine the market value of such property and duty as aforesaid in accordance with the procedure provide 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.
Provided that nothing in this sub-section shall apply to any instrument registered prior to the date of the commencement of the Indian Stamp (Madhya Pradesh Amendment) Act, 1975.
{(3-A) For the purpose of enquiries under this section, the Collector shall have the power to summon and enforce the attendance of witness including the parties to the instrument, or any of them and to compel the production of documents by the same means and so far as may be in the same manner, as is provided in the case of civil court under the Code of Civil Procedure, 2908 (Cent. Act V of 1908.} [(4) Any person aggrieved by an order of the Collector under sub-section (2) or sub-section (3) may, in the prescribed manner appeal against such order to the Commissioner who may either himself decide the appeal or transfer it to the Additional Commissioner of the Division.] (5) Any person aggrieved by an order passed in appeal under sub-section (4) may in the prescribed manner appeal against such order to the Chief Controlling Revenue-authority, Madhya Pradesh.
Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 11(6) every first and second appeal shall be filed within thirty days from the date of the communication of the order against which the appeal is filed, alongwith a certified copy of the order to which objection is made and shall be presented and verified in such manner as may be prescribed.
Provided that in computing the period aforesaid, the time requisite for obtaining a copy of the order appealed against shall be excluded.
(7) The appellate authority shall follow such procedure as may be prescribed:
Provided that no order shall be passed without affording opportunity of being heard to the appellant.
(8) The order passed in second appeal or, where no second appeal is preferred the order passed in first appeal shall be final and subject to orders passed in first or second appeal, as the case may be, the order passed by the Collector under sub-
section (2) or sub-section (3) shall be final and shall not be called into question in any civil court or before any other authority whatsoever.
[Explanation.- For the purpose of this Act, Market Value of any property shall be estimate to be the price which in the opinion of the Collector or the Appellate Authority, as the case may be, such property would have fetched or would fetch if sold in the open market on the date of execution of this instrument.]"
24. A perusal of Section 47-A of the Act of 1899 reflects that if the Registering Officer appointed under the Registration Act, 1908 while registering any instrument finds that the market value of any property which is the subject- matter of such instrument has been set forth less than the minimum value Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 12 determined in terms of the statutory provisions, he shall refer the instrument to the Collector for determination of the market value of such property to be payable.
25. As per Section 47-A(1-A) of the Act of 1899 where the Registering Officer is of the view, that the market value as set forth is not less than the minimum value and the Registering Officer has reason to believe that the market value has not been truly set forth, he can refer to the same to the Collector for determination. The Collector upon receipt of the reference after extending opportunity of hearing to the parties, determines the market value of the property and the difference, if any, and the amount of duty shall be payable by the person liable to pay the duty.
26. An order passed by the Collector of Stamp under Section 47-A of the Act of 1899 is appealable, in terms of Section 47-A(4) of the Act before the Commissioner of the Division. Section 47-A(5) of the Act provides that an order passed by the appellate authority is further appealable before the Chief Controlling Revenue Authority, Madhya Pradesh. Therefore, there are provisions of first as well as second appeal under Section 47-A(4) & (5) of the Act of 1899. Section 48-B of the Act of 1899 being relevant for the present purpose, are extracted hereunder :
"48-B. Original instrument to be produced before the Collector in case of deficiency- Where the deficiency of stamp duty is noticed from a copy of any instrument, the Collector may, by order require the production of original instrument from a person in possession or in custody of original instrument for the purpose of satisfying himself as to the adequacy of amount of duty paid thereon. If the original instrument is not produced before him Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 13 within the period specified in the order, it shall be presumed that the original document is not duly stamped and the Collector may proceed in the manner provided in this Chapter.
Provided that no action under this section shall be taken after a period of five years from the date of execution of such instrument."
[Emphasis supplied]
27. A perusal of Section 48-B of the Act of 1899 stipulates that when deficiency of stamp duty is noticed from a copy of an instrument, the Collector may, by order require the production of original instrument from a person in possession or in custody of the original instrument for the purpose of satisfying himself as to the adequacy of amount of duty paid thereon. If the original instrument is not produced before him within the period specified in the order it shall be presumed that the original documents is not duly stamped and the "Collector may proceed in the manner provided in the Chapter".
28. Therefore, Section 48-B of the Act of 1899 comes into picture, when deficiency of stamp duty is noticed from a copy of instrument and thereafter the person concerned is called upon to produce the original of the instrument. In the present case, the Collector, Bhopal vide communication dated 22-12-2001 referred the matter to the Collector of Stamp, Raisen, bringing to his knowledge that an agreement dated 30-08-2000 has been notarized by the Notary at New Delhi with the registration No.1065/1997 and the said agreement was referred to the Collector of Stamp, as there was deficiency of stamp duty. Thereafter, the Collector of Stamp issued a notice to respondent No.1 on 04-01-2002 which is contained in Annexure-P/3.
29. A perusal of the first paragraph of the notice, dated 04-01-2002 Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 14 reflects that the Collector of Stamp called upon the respondent No.1 to submit his response to the notice, as the instrument was sent for recovery of the deficit stamp duty. Therefore, this notice dated 04-01-2002 was a notice under Section 48-B of the Act of 1899 and the said notice was replied by the respondent No.1, vide his reply dated 28-01-2002 contained in Annexure-P/4 by which a request was made to withdraw the notice while disputing the imposition of stamp duty. Thereafter, the Collector proceeded to pass the order dated 18- 02-2002, contained in Annexure-P/5.
30. The Collector, as discussed hereinabove, when a notice under Section 48-B of the Act of 1899 is issued, it is within the right to proceed in the manner provided in Chapter IV of the Act of 1899. Undisputedly, Chapter IV consists of Section 47-A and it is graphically clear that an undervalued instrument is dealt with in terms of Section 47-A of the Act of 1899.
31. Accordingly, in view of the aforesaid statutory provisions the Collector passed an order dated 18-02-2002 and the said order was passed in exercise of powers conferred under Section 47-A of the Act of 1899. Neither Section 19-A nor Section 48-B of the Act of 1899 contains any eventuality of adjudication. On the contrary, process of adjudication has been laid down in Section 47-A of the Act of 1899. Therefore, the remedy against such adjudication is also provided in the same section of preferring a first and second appeal before the appellate authorities.
32. Thus, though the order of the Collector dated 18-02-2002 starts with the opening phrase, that a case was initiated under Section 48-B read with Section 19-A of the Act of 1899, but the order pertaining to an undervalued instrument has been passed by the Collector under Section 47-A of the Act of 1899. As per operative paragraph of the order, it is unequivocally clear that the Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 15 respondent No.1 was called upon to pay deficit stamp duty of Rs.2,38,47,856/- as according to the Collector the agreement in question was found to be undervalued.
33. Therefore, the order passed by the Collector was an order under Section 47-A o the Act of 1899. Hence, the said order was appealable in terms of Section 47-A(4) of the Act and, therefore, no revision against the said order was maintainable, in view of the bar contained in proviso (i) to Section 56(4) of the Act of 1899. The order of the Collector dated 18-02-2002 contained in Annexure-P/5 was appealable before the Commissioner of the Division. Thus, revisional jurisdiction against the said order could not have been exercised by the Board of Revenue.
34. Contention of the learned senior counsel that no objection regarding maintainability of the revision was taken before the Board of Revenue is of no consequence, inasmuch as the issue involves a pure question of law and the present petition has been filed while disputing the jurisdiction of the Board of Revenue which is evident from para 6.2 of the memo of writ petition.
35. The judgment relied upon by the learned Senior Counsel pertains to sections 31 and 31 of the Act of 1899 and the judgment of Chhattisgarh High Court in Raymond Ltd. and another (supra) does not deal with an order passed under Section 47-A of the Act. Therefor, the said decision has no applicability to the facts of the present case.
Accordingly, the judgement of the Apex Court as well, in Raymond Ltd. and another (supra) has also no applicability to the facts of the present case.
36. In view of the aforesaid analysis, this Court has no hesitation to Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM 16 hold that the Board of Revenue exercised jurisdiction which was not vested in it by law, while entertaining a revision against an order which was appealable in terms of Section 47-A(4) of the Act of 1899. Hence, the order passed by the Board of Revenue is unsustainable.
37. In view of the aforesaid analysis, the impugned order dated 07- 07-2004 contained in Annexure-P/1 passed by the Board of Revenue, stands set aside. Respondent No.1 is at liberty to prefer an appeal before the Commissioner of the Division, in terms of Section 47-A(4) of the Act of 1899.
38. If such an appeal is preferred by respondent No.1 before the aforesaid appellate authority within a period of 60 days from today, the same shall be decided by the appellate authority within a further period of four months [120 days] while extending opportunity of hearing to all concerned, including the petitioner herein.
39. Petition stands allowed to the extent indicated hereinabove.
MANINDER S. BHATTI) JUDGE ac Signature Not Verified Signed by: AJAY KUMAR CHATURVEDI Signing time: 5/11/2023 5:18:54 PM