Tata Teleservices Limited vs State Of Gujarat & 2 on 12 September, 2014

[Cites 84, Cited by 0]

Gujarat High Court

Tata Teleservices Limited vs State Of Gujarat & 2 on 12 September, 2014

Bench: C.L. Soni

      C/SCA/2064/2009                                 CAV JUDGMENT



          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             SPECIAL CIVIL APPLICATION NO. 2064 of 2009
                                  With
             SPECIAL CIVIL APPLICATION NO. 1532 of 2009
                                  With
             SPECIAL CIVIL APPLICATION NO. 1240 of 2009


FOR APPROVAL AND SIGNATURE:



HONOURABLE MR.JUSTICE C.L. SONI

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1   Whether Reporters of Local Papers may be allowed to see
    the judgment ?

2   To be referred to the Reporter or not ?

3   Whether their Lordships wish to see the fair copy of the
    judgment ?

4   Whether this case involves a substantial question of law as
    to the interpretation of the Constitution of India, 1950 or
    any order made thereunder ?

5   Whether it is to be circulated to the civil judge ?
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                TATA TELESERVICES LIMITED....Petitioner(s)
                               Versus
                 STATE OF GUJARAT & 2....Respondent(s)
================================================================
Appearance:
In SCA NO.2064 OF 2009
MR.DHAVAL DAVE, LD. SENIOR ADVOCATE APPEARING WITH MR.JIGAR
PATEL, ADVOCATE FOR THE PETITIONER(S) NO. 1

In SCA NO.1532 OF 2009
MR.SHALIN MEHTA, LD. SENIOR ADVOCATE APPEARING WITH MS.VIDHI
BHATT, ADVOCATE FOR THE PETITIONER(S) NO. 1

In SCA NO.1240 OF 2009


                                Page 1 of 80
       C/SCA/2064/2009                            CAV JUDGMENT



LEARNED SENIOR ADVOCATE MR.SAURABH SOPARKAR APPEARING
WITH MR.AMAR N. BHATT, ADVOCATE FOR THE PETITIONER(S) NO. 1


MR. P.P.BANAJI, LD. AGP FOR THE RESPONDENT(S) NO. 1
RULE SERVED FOR THE RESPONDENT(S) NO. 2 - 3
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        CORAM: HONOURABLE MR.JUSTICE C.L. SONI

                         Date:12/09/2014


                         CAV JUDGMENT

1. These petitions are filed by three different companies. They are the licensees authorised to provide telecommunication services to their customers under the provisions of the Telecom Regulatory Authority of India Act, 1997 ('TRAI Act' for short).

2. The customer application form/subscriber's application form/customer enrollment form provided by the petitioners with terms and condition attached to the form or given separately filled in by the intending customer and accepted by the petitioners to provide telecommunication services is considered as 'instrument' chargeable with duty under the Bombay Stamp Act, 1958 ('the Act' for short) by the respondents and the petitioners have been subjected to payment of stamp duty on subscribers base for different periods under the orders and the demand Page 2 of 80 C/SCA/2064/2009 CAV JUDGMENT notices impugned in these petitions filed under Article 226/227 of the Constitution of India.

3. The challenge made to the orders and to the demand notices is mainly on two grounds; one is that the customer application form is not an instrument within the definition of Section 2(l) of the Act and thus not chargeable to duty under the Act and the second is that even if it is considered as instrument no duty is leviable thereon unless dutiable events occur under the provisions of the Act.

4. Following are some relevant provisions of the Act.

2(d)"chargeable" means, as applied to an instrument executed or first executed after the commencement of this Act, chargeable under this Act, and as applied to any other instruments, chargeable under the law in force in the State when such instrument was executed or, where several persons executed the instrument at different times, first executed;

2(l)"instrument" includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt;

[Explanation. The term "document" also includes any electronic record as defined in clause (t) of sub section (1) of section 2 of the Information Page 3 of 80 C/SCA/2064/2009 CAV JUDGMENT Technology Act, 2000.] "17. Instruments executed in State:

All instruments chargeable with duty and executed by any person in this State shall be stamped before or [at the time of execution or immediately thereafter on the next working day following the day of execution]:

Provided that the clearance list described in Articles 18A, 18B, 18C, 18D or 18E of Schedule I may be stamped by an officer authorised by the State Government by rules made under this Act, if such clearance list is submitted for stamping by the clearing house of an Association in accordance with its rules and byelaws with the requisite amount of stamp duty, within two months from the date of its execution."

31. Adjudication as to proper stamps :

(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 one hundred rupees and not less than twenty five rupees] 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 affidavit or other evidence as he may deed necessary to prove all the facts and circumstances affecting the chargeablity of the instruments 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 Page 4 of 80 C/SCA/2064/2009 CAV JUDGMENT accordingly :

Provided that

(a) no evidence furnished in pursuance of this section shall be used against any person in any civil proceedings, except in an inquiry as to the duty with which the instrument to which it relates is chargeable;

and

(b) 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. (3) Where an officer appointed as Collector under clause (f) of section 2 has reason to believe that the market value of the property, which is the subject matter of the instrument, received by him for adjudication, has not been truly set forth therein, he shall, before assessing the stamp duty under his section, refer the instrument to the Collector of such district in which either the whole or any part of the property is situate, for determining, in accordance with the procedure laid down in section 32A, the true market value of such property and the property duty payable on the instrument.

33. Examination and impounding of instruments :

(1) [Subject to the provisions of section 32A, 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.

(2) For that purpose every such person shall Page 5 of 80 C/SCA/2064/2009 CAV JUDGMENT 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 the law for the time being in force in the State 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, 1988; (v of 1898).

(b) in the case of a Judge of High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court may appoint in this behalf.

(3) For the purpose of this section, in case of doubt,

(a) the State Government may determine what offices shall be deemed to be public offices;

and

(b) the State Government may determine who shall be deemed to be persons in charge of public offices.

34. Instruments not duly stamped in admissible in evidence etc.:

No instrument chargeable with duty [not being an instrument referred to in subsection (1) of section 32A)] 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 Page 6 of 80 C/SCA/2064/2009 CAV JUDGMENT officer unless such instrument is duly stamped :

Provided that

(a) any such instrument not being an instrument chargeable with a duty of twenty naye paise and less shall, subject to all just exceptions, 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 then 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 a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped ;

(c) 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;

(d) 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.

37. Instruments impounded how dealt with (1) Where 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 a penalty as provided by Section 34 or of duty as provided by Section 36, he shall send to the Collector an authenticated copy of such Page 7 of 80 C/SCA/2064/2009 CAV JUDGMENT 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.

38. Collector's power to refund penalty paid under Section 37, subsection (1):

(1) When a copy of an instrument is sent to the Collector under Section 37, subsection (1), he may, if he thinks fit refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument. (2) When such instrument has been impounded only because it has been written in contravention of Section 13 or Section 14, the Collector may refund the whole penalty so paid.

39. Collectors power to stamp instruments impounded (1) When the Collector impounds any instrument under Section 33, or receives any instrument sent to him under Section 37; subsection (2), not being an instrument chargeable with a duty not exceeding ten naye paise only or 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 the 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 Page 8 of 80 C/SCA/2064/2009 CAV JUDGMENT exceeds or falls short of five rupees:

Provided that, when such instrument has been impounded only because it has been 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, subsection (2), the Collector shall, when he has dealt with it as provided by the section return it to the impounding officer.

46. Recovery of duties, penalties and interest:

(1) Where any person required to pay any amount of duty, penalty or other sums under this Act does not pay the same within the time prescribed for its payment, he shall be liable to pay simple interest at the rate of [fifteen per cent] per annum on such amount or on any less amount thereof for the period for which such amount remains unpaid.

(2) All duties, penalties, interest and other sums required to be paid under this Act may be recovered by the Collector by distress and sale of the movable or immovable property of the person from whom the same are due, or as an arrears of land revenue.

46A. Furnishing of statement, return and information.

(1) The Collector may for the purpose of this Act, require any trading member of any stock exchange or an association as defined in clause

(a) of section 2 of the Forward Contract Page 9 of 80 C/SCA/2064/2009 CAV JUDGMENT (Regulation) Act, 1952 or any organization, institute, company or association or any person liable to pay duty under any Article of Schedule I, to submit a statement or return or to furnish any information in respect of any transaction within such period as may be prescribed by rules. (2) Where any trading member, organization, institute, company, association or any person fails to submit a statement or return or information as required under subsection (1) within the prescribed time, the Collector may, without prejudice to any other action which is liable to be taken against such person under any other provisions of this Act, after giving an opportunity of being heard, impose on such person a penalty of a sum not exceeding rupees five thousand for such default.] 53A. Revision of Collector's decision under Sections 32, 32A, 39 and 41:

(1) Notwithstanding anything contained in sub section (3) of Section 32, subsection (3) of Section 32A, subsection (2) of section 39 and subsection (2) of Section 41, when through mistake or otherwise any instrument is charged with less duty than leviable thereon, or is held not chargeable with duty, by the Collector, the Chief Controlling Revenue Authority may, within a period of six years from the date of certificate of the Collector under Sections 32, 32A, 39 or 41, as the case may be, required the concerned party to produce before him the instrument and, after giving a reasonable opportunity of being heard to the party, examine such instrument whether any duty is chargeable or any duty is less levied thereon and pass an order for recovery of the deficit duty, if any, from the concerned party. An endorsement shall be made on the instrument after payment of such deficit duty.

(2) On failure to produce the original instrument by the party, the Chief Controlling Page 10 of 80 C/SCA/2064/2009 CAV JUDGMENT Revenue Authority shall proceed under this section on the basis of the true copy or an abstract of the instrument filed with the Collector and such true copy or abstract shall be deemed to be the original instrument for the purposes of this section.

59. Penalty for executing, etc., instrument not duly stamped :

(1) Any person executing or signing otherwise than as a witness any instrument chargeable with duty without the same being duly stamped shall, on conviction for every such offence be punished with fine which may extend to five hundred rupees:

Provided that, when any penalty has been paid in respect of any instrument under Section 34, Section 39 or Section 58, the amount of such penalty shall be allowed in reduction of the fine (if any) subsequently imposed under this section in respect of the same instrument upon the person who paid such penalty.

(2) If a sharewarrant is issued without being duly stamped, the company issuing the same, and also every person who, at the time when it is issued, is the managing director or secretary or other principal officer of the company, shall on conviction be punished with fine which may extend to five hundred rupees.

62A. Penalty for breach of provision of Section 68, subsec. (2) :

Any person who commits a breach of the provisions of subsection (2) or Section 68 shall on conviction, be punished

(i) for a offence with fine which may extend to five hundred rupees;

Page 11 of 80 C/SCA/2064/2009 CAV JUDGMENT

(ii) for a second offence, with the fine which may extend to one thousand rupees, but which shall not be less than two hundred rupees; and

(iii) for a third and subsequent offences, with imprisonment for a term which may extend to two years and with fine which may extend to two thousand rupees.

67. Books, etc., to be open to inspection:

Every public officer having in his custody any registers, books, records, papers, documents or proceedings, the inspection whereof may tend to secure any duty, or to prove or lead to the discovery of any fraud or omission in relation to any duty shall at all reasonable times permit any person authorised in writing by the Collector to inspect for such purpose the registers, books, papers, documents and proceedings and to take such notes and extracts as he may deed necessary without fee or charge.

68.Collector's power to authorise officer to enter premises and inspect certain documents :

(1) The Collector may, where he has reason to believe that all or any of the instruments specified in Schedule I have not been charged at all or incorrectly charged with duty leviable under this Act, authorise in writing any officer to enter upon any premises where he has reason to believe that any registers, books, records, papers, documents, or proceedings relating to or in connection with any such instruments are kept and to inspect them, and to take such notes and extracts as such officer deems necessary, and if necessary, to seize them and to impound them under Section 33.

(2) Every person having in his custody or maintaining such registers, books, records, papers, documents or proceedings shall, when so required by the officer authorised under sub section (1), produce them before such officer and Page 12 of 80 C/SCA/2064/2009 CAV JUDGMENT at all reasonable times permit such officer to inspect them and take the notes and extracts as he may deem necessary.]

5. Arguments in common made by learned Senior Advocate Mr.Dhaval Dave appearing with Mr.Jigar Patel in Special Civil Application No.2064 of 2009, learned Senior Advocate Mr.Shalin Mehta appearing with Ms.Vidhi Bhatt in Special Civil Application No.1532 of 2009 and learned Senior Advocate Mr.Saurabh Soparkar appearing with Mr.Amar N. Bhatt for the petitioners in Special Civil Application No.1240 of 2009 are as under.

5.1 The customer application form is not an agreement between the parties. It neither creates any right or liability, nor does it transfer, limit, extend, extinguish or record any right or liability. It is simply a form to be filled in by the customer to enable the petitioners to collect and store customer data to provide services to them. A subscriber when fill in the form, it is a mere offer for future agreement as per section 2(a) of contract Act. It is not an agreement unless the offer of the subscriber is accepted in writing by the petitioners. It therefore Page 13 of 80 C/SCA/2064/2009 CAV JUDGMENT does not create any right or liability. The terms and condition attached with such form or separately given are to be observed by the customers for the purpose of the services provided by the petitioners. The ingredients of agreement are not satisfied on mere acceptance of form. Thus, it is not an instrument as defined in Section 2(l) of the Act.

5.2 Under the Act only instrument is chargeable with stamp duty. Therefore, if a document does not fall within the definition of 'instrument' it cannot be subjected to duty under the Act. The customer application form since not an agreement cannot be an instrument thus not chargeable to duty. 5.3 Even if the customer application form with terms and condition is to be considered as an agreement or a document creating, transferring, limiting, extending, extinguishing or recording any right or liability and thus an instrument as defined in the Act, then also unless dutiable events occur, no duty could be levied or recovered under the Act from the holder of the instrument.

Page 14 of 80 C/SCA/2064/2009 CAV JUDGMENT 5.4 A document called as 'instrument' within the meaning of Section 2(l) of the Act though executed in the State but not duly stamped cannot be charged with duty unless it is produced before the person authorized to receive evidence or comes before the public officer in performance of his functions and unless it is impounded as required by Section 33 of the Act.

5.5 No instrument can be charged with stamp duty unless it is sought to be enforced by the parties to such instrument. The Collector has no independent power under Section 68 of the Act either to search and inspect any document to find out whether such document is chargeable with stamp duty and duly stamped or to require any person to produce any document before him to inspect and to impound it for levy and recovery of the stamp duty. Such powers are only in context and analogues to the powers under Section 33 of the Act. 5.6 Even if there is a power to ask a person having custody of document to produce it before the concerned authority, failure to produce the document would not automatically attract levy and recovery of the stamp Page 15 of 80 C/SCA/2064/2009 CAV JUDGMENT duty. At the best prosecution could be launched for failure to comply with the order to produce the document.

5.7 Since, for the purpose of levy and recovery of stamp duty, impounding of document is mandatorily required, the petitioners could not have been ordered to pay the stamp duty on the basis of the subscribers' data and without original customer application forms before the concerned authority.

5.8 In any case, since the application form is executed by the customer, the petitioners are not liable for payment of the stamp duty on such application form.

5.9 The revisional authority though specifically directed by this Court in earlier round of litigation to decide the questions as to whether a document or a so called agreement or enrollment form which is not produced before any authority for its enforceability could be compelled to be produced by the authority under the Act for examination as to whether the same is stamped or not and whether the authority under the Act could recover the stamp duty and penalty thereon Page 16 of 80 C/SCA/2064/2009 CAV JUDGMENT and the question as to whether if the enrollment form is produced before the authority under the Act for verification and not for its enforceability whether the same can be subjected to payment of the stamp duty.

5.10 The show cause notice under Section 39 of the Act and the impugned orders are without jurisdiction as the mandatory requirement of impounding the document for levy and recovery of the stamp duty is not followed. Since, impounding of the document is sine quanon, it has to be physically received or produced in original as provided under Section 33 of the Act and for such purpose power under Section 68 of the Act could not be exercised.

5.11 Unlike fiscal law for assessment, stamp duty is one time tax, therefore, strict construction of the provisions of the Act is required for construing a document to be an instrument and for subjecting it to stamp duty.

5.12 The impugned orders and the demand notices are passed just on the basis of a single blank customer application form and on subscribers' base, which is Page 17 of 80 C/SCA/2064/2009 CAV JUDGMENT not permissible.

5.13 The notice under Section 68 to produce document/application form cannot be taken as the impounding of the document. Section 68 is not the end of the matter. If there is noncompliance of the notice under Section 68 or any breach of the provision in connection with a document, the authorities may take other action if permissible under law. There is no deeming provision of treating noncompliance of the notice under Section 68 as impounding of document. 5.14 Only those instruments which fall in Schedule1 are chargeable with stamp duty. The customer application form does not find place in Schedule1 and therefore is not chargeable with stamp duty.

6. Learned Senior Advocates have relied on the following authorities:

(1) In the case of Secretary to the Commissioner of Salt, Akbari and Separate Revenue, Vs. South Indian Bank Limited, reported in XXXVIII Indian Law Reports

349.

(2) In the case of Chandrama Singh v. Awadh Bihari Singh and another, reported in AIR 1959 (Patna) 353 Page 18 of 80 C/SCA/2064/2009 CAV JUDGMENT (3) In the case of Food Corporation of Indian and Others v. Babulal Agrawal, reported in (2004) 2 SCC 712 (4) In the case of Carlil Versus The Cabrolic Smoke Ball Company, reported in 2. Q. B. 484 (5) In case of District Registrar and Collector, Hyderabad and Another V. Canara Bank and Others, reported in 2005 (1) SCC 496 (6) In the case of Som Dutt Builders Limited v. State of U.P. and others, reported in AIR 2005 (All) 234 (7) In the case of Dresser Rand S.A. V. Bindal Agro Chem Ltd. And Anr., reported in 2006 (1) SCC 751 (8) In the case of President, Kankaria Apartment Co. op. Housing Society Ltd. Ahmedabad, v. The Chief Controlling Revenue Authority, Ahmedabad and another, reported in AIR 1984 (Guj) 118 (9) In the case of S.T.Industries, Surat V. Chief Controlling Revenue Authority, reported in AIR 1994 (Guj) 153 (10) In the case of the Chief Controlling Revenue Authority, Ahmedabad v. Nutan Mills Ltd., Ahmedabad, reported in 18 GLR 409 (11) In case of Hariom Agrawal V. Prakash Chand Malvia, reported in 2007 (8) SCC 514 (12) In the case of Government of Uttar Pradesh and Page 19 of 80 C/SCA/2064/2009 CAV JUDGMENT others v. Raja Mohmad Amir Ahmad Khan, reported in AIR 1961 (SC) 787 (13) In the case of Commissioner of Incometax, Madras v. Kasturi and Sons Ltd., reported in AIR 1999 (SC) 1275

7. Learned AGP Mr.P.P.Banaji submitted that since customer application form when signed by the consumer with the terms and conditions and accepted by the petitioners for consideration, it is an agreement between the parties. Mr.Banaji submitted that it creates right and liability for both the parties and thus an instrument within the meaning of Section 2(l) of the Act. Mr.Banaji submitted that if the acceptance is not conveyed by the petitioners on the customer application form, the customer does not get simcard. Mr.Banaji submitted that the customer application form is a standard form of the contract and thus, on its acceptance by the petitioners, it becomes an agreement and thus, an instrument for the purpose of the Act. Mr.Banaji submitted that in the nature of the services to be provided by the petitioners, the consumer is left with no bargain power and in the changed scenario, a standard form of contract duly filled in Page 20 of 80 C/SCA/2064/2009 CAV JUDGMENT by the consumer when accepted by the petitioners, establishes relationship of the consumer and the service provider. Mr.Banaji submitted that such type of the standard form of contract is even used in relation to electricity and gas connection and the companies like Adani Gas Limited, GSPC Gas Company Ltd, etc. use such standard forms of contract for their customers and they pay stamp duty thereon and therefore it cannot be said that the standard form used by the petitioners to provide telecom services to their consumer is not an instrument.

8. Mr.Banaji submitted that various terms and conditions like levy of statutory charges, referring the dispute between the parties to the agreed forum etc, agreed upon between the petitioners and the customer would strongly suggest that the customer application form with terms and conditions is taken as agreement. Mr.Banaji submitted that the definition of the instrument is inclusive and as per the explanation below the definition, even the electronic record is treated as a document. Mr.Banaji submitted that the authorities have got ample power under Section 46 and 68 of the Act to inspect, to call for the document and Page 21 of 80 C/SCA/2064/2009 CAV JUDGMENT to impound the document for the purpose of stamp duty. Mr.Banaji submitted that in exercise of such powers if a person holding the document like the petitioners, does not cooperate, then even in absence of the physical production of the documents, it is always open to the respondents to rely on the details available with the department, which in present case is, the subscriber base, for the purpose of levy and calculation of the stamp duty. Mr.Banaji submitted that in fact all other companies have paid stamp duty on such standard forms and even have sought permission to use franking machine considering their large subscriber base. Mr.Banaji submitted that the customer application form being an instrument chargeable with duty on its execution is mandatorily required to be duly stamped and therefore, it cannot be said that unless the events contemplated in Section 33 of the Act take place, there cannot be any levy or recovery of the duty in respect of such form. Mr.Banaji submitted that it is not correct to say that only when parties want to enforce the document or only when the document either comes before the public officer or is produced in evidence, the stamp duty Page 22 of 80 C/SCA/2064/2009 CAV JUDGMENT could be levied. Mr.Banaji submitted that if a document is chargeable with duty and executed but not duly stamped, it is always open to the respondents on information to search for or inspect the document to find out whether the document is stamped with proper duty or not.

9. Mr.Banaji has relied on the following authority. (1) In the case of Bihar State Electricity Board, Patna and others v. M/s. Green Rubber Industries and others, reported in AIR 1990 (SC) 699

10. Mr.Banaji thus urged to dismiss the petitions.

11. Having heard the learned advocates for the parties, it appears that the law on stamp duty requires every instrument chargeable with duty and executed in the State to be duly stamped. The instrument executed after the commencement of the Act is made chargeable with duty under the Act and as regards other instruments executed before the commencement of the Act, they are made chargeable with duty as per the law then prevailing as could be seen from the definition of "chargeable".

12. Section 3 makes provision for charging the amount Page 23 of 80 C/SCA/2064/2009 CAV JUDGMENT of duty indicated in ScheduleI on the instruments of the descriptions mentioned therein.

13. Section 17 of the Act mandates that all the instruments chargeable with duty and executed by any person in the State shall be stamped before or at the time of or immediately after the execution. The word 'executed" or "execution" is defined to mean signed or signatures respectively.

14. It is nowhere provided in the Act that the execution of instrument must take place before any public authority. Therefore, any instrument chargeable with duty where ever signed stands executed and mandatorily required to be stamped.

15. However, the question raised is whether a customer application form is an instrument chargeable with duty or not.

16. As per Section 2(e) of the Contract Act, every promise and every set of promises forming consideration for each other is an agreement. What is charged under the Act is an agreement as an instrument falling within ScheduleI. Though, the agreement Page 24 of 80 C/SCA/2064/2009 CAV JUDGMENT could be an oral agreement, but in the context of the Act, only the agreement in the form of a document is chargeable with duty.

17. The customer application form signed by the consumer for the purpose of getting telecommunication services and accepted by the petitioners is considered by the respondents to be an agreement, falling within the residuary article No.5(h) of the Schedule No.I.

18. The customer application forms either contained a declaration by customer that the particulars filled in the forms are correct and to abide by the terms and conditions or an undertaking by the customer to abide by terms and conditions including the acceptance of plan for terif, billing, contract period, method of usage of service etc. In the case of Special Civil Application No.1240 of 2009, the undertaking with the application refers about the declaration of correctness of the particulars stated in the customer agreement form. Initially, treating the same as an undertaking, the petitioner therein was charged with duty of Rs.60, but thereafter it was taken as an agreement. The petitioner was then Page 25 of 80 C/SCA/2064/2009 CAV JUDGMENT subsequently ordered to be charged with duty of Rs.50 under Article 5(h).

19. It is not in dispute that the application to be made by intending consumer for getting telecommunication services from the petitioners is to be made in set form on terms and conditions settled by the petitioners. It is nothing but a standard contract form where the consumer has no scope for negotiation. Such customer application form duly filled in by the consumer is accepted by the petitioners with the settled terms and conditions. The respondent authorities have observed that the form is signed by the consumer which could be said to be executed by the consumer and the petitioners put their mark/their symbol through their authorized officer as acceptance of the form for the purpose of providing telecom services. Such execution by both of them is exchange of reciprocal promises by them for consideration. By such acceptance of the customer application form duly signed with terms and conditions set by the petitioners, a relationship of consumer and service provider is established between them. For such purpose, the petitioners invite offer from the Page 26 of 80 C/SCA/2064/2009 CAV JUDGMENT intending consumer through their desired mode for providing them services on settled terms and conditions including the fixed charge for such services and the intending consumer when makes offer, the same is accepted by the petitioners. Such offer and acceptance of offer is for consideration from the side of the consumer to pay necessary charges and from the side of the petitioners to provide services for such charges. It is thus an agreement which creates right and liability between the consumer and the service providers.

20. In fact, the terms settled by the petitioners for the purpose of providing telecommunication services, are indication of the intention to bind both of them with relationship as consumer and service provider out of which both are getting their promises fulfilled against the consideration agreed. The terms and conditions which are almost of identical nature in all the cases, are about the rights and obligation of the parties for availability of service, payment of charges by the consumer, the application of terif plan, consumer's liability to pay taxes, duties in addition to the charges for services, Page 27 of 80 C/SCA/2064/2009 CAV JUDGMENT suspension/disconnection/termination of services on account of happening of the events mentioned, as regards the jurisdiction for deciding the dispute or differences arising or initiated in connection with the services and many other clauses like billing and payment etc and they could be pressed into service when rights and obligations are sought to be enforced between the parties before any forum. For such nature of the terms and conditions, it could be well said that the parties intended to take the customer application form duly executed by them as an agreement for performance of the reciprocal promises for consideration agreed.

21. Learned Senior Advocates for the petitioners however submitted that the customer application form when signed by the consumer is not an agreement in praesenti and it is just for accepting the prescribed amount for further contract of providing services as a licensee.

22. In the case of Carlil (supra), the question was whether the advertisement which was the only written or printed document, affecting the contract, required Page 28 of 80 C/SCA/2064/2009 CAV JUDGMENT to be stamped as an agreement before it could be admitted in evidence. It is observed in the said judgment that whether a written or printed document falls within the requirement of agreement or a memorandum of agreement under the Stamp Duty Act depends upon its character at the time when it was committed to writing, or print and issued. If at the time, no concluded contract had been arrived at by the contracting parties, it certainly could not in any sense be treated as an agreement, nor could it be treated as a memorandum of an agreement, for there could be no memorandum of an agreement which had no existence. No document requires an agreement stamp, unless it amounts to an agreement. The mere fact that a document may assist in providing a contract does not render it chargeable with stamp duty, it is only so chargeable with the document amounts to an agreement of itself or to a memorandum of an agreement already made. A mere proposal or offer until accepted, amounts to nothing. If accepted in writing, the offer and acceptance together amount to an agreement; but, if accepted by payroll, such acceptance does not convert the offer into an agreement nor into a Page 29 of 80 C/SCA/2064/2009 CAV JUDGMENT memorandum of agreement, unless, indeed, after acceptance, something is said or done by the parties to indicate that in the future it is to be so considered.

23. In the case of Bihar State Electricity Board, Patna and others (supra), Hon'ble Supreme Court has held and observed in para No.21 as under:

21. "21. It is true that the agreement is in a standard form of contract. The standard clauses of this contract have been settled over the years and have been widely adopted because experience shows that they facilitate the supply of electric energy.

Lord Diplock has observed: "If fairness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would raise a strong presumption that their terms are fair and reasonable." Schroder Music Co. Ltd. v. Macaulay, [1974] 3 All ER 6 16 (624). In such contracts a standard form enables the supplier to say: "If you want these goods or services at all, these are the only terms on which they are available. Take it or leave it." It is a type of contract on which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone. The contract, which frequently contains many conditions is presented for acceptance and is not open to discussion. It is settled law that a person who signs a 286 document which contains contractual terms is normally bound by them even though he has not read them, even though he is ignorant of the precise legal effect. In view of clause 4 having formed one of the stipulations in the contract Page 30 of 80 C/SCA/2064/2009 CAV JUDGMENT along with others it cannot be said to be nudurn pactum and the maxim nudum pactum ex quo non oritur actio does not apply.

Considered by the test of reasonableness it cannot be said to be unreasonable inasmuch as the supply of electricity to a consumer involves incurring of overhead installation expenses by the Board which do not vary with the quantity of electricity consumed and the installation has to be continued irrespective of whether the energy is consumed or not until the agreement comes to an end. Every contract is to be considered with reference to its object and the whole of its terms and accordingly the whole context must be considered in endeavouring to collect the intention of the parties, even though the immediate object of enquiry is the meaning of an isolated clause. This agreement with the stipulation of minimum guaranteed charges cannot be held to be ultra vires on the ground that it is incompatible with the statutory duty. Differences between this contractual element and the statutory duty have to be observed. A supply agreement to a consumer makes his relation with the Board mainly contractual, where the basis of supply is held to be statutory rather than contractual. In cases where such agreements are made the terms are supposed to have been negotiated between the consumer and the Board, and unless specifically assigned, the agreement normally would have affected the consumer with whom it is made, as was held in Northern Ontario Power Co. Ltd. v. La Roche Mines Ltd., [1938] 3 All ER 755."

24. In the case of Food Corporation of India and Others (supra), Hon'ble Supreme Court while construing the nature of the agreement between the parties as to whether the agreement was itself creating rights Page 31 of 80 C/SCA/2064/2009 CAV JUDGMENT between the parties or was to secure another document which would create such rights, held and observed in para No.10.

"10. ...

The agreement dated 12.2.1986 would squarely be covered by clause (v) of Subsection (2) of Section 17 quoted above. Since it merely creates a right to obtain another document which will when executed would create such a right. It would be necessary to refer to the conditions of the agreement at this juncture. Clause 8 of the agreement quoted earlier is clear, in providing that upon completion of the plinths etc. the premises would be handed over to the defendant under a lease agreement to be executed between the parties in the prescribed proforma. Thus clause 8 only talks of execution of a lease deed between the parties in a prescribed proforma under which the defendant would be entitled to get possession of the premises on completion. The necessary stamp duty was to be borne by the plaintiff. It is thus clear that agreement dated 12.2.1986 itself is not a lease deed requiring registration. It only creates a right of getting another document executed creating rights and liabilities in respect of immovable property. The Trial Court as well as the High Court, has, in this connection placed reliance upon a decision reported in AIR 1959 SC p.620, Trivenibai and Anr. Vs. Smt.Lilabai. Paragraph 15 of the judgment reads as under:

"15. In construing this document it is necessary to remember that it has been executed by laymen without legal assistance, and so it must be liberally construed without recourse to technical considerations. The heading of the document, though relevant, would not determine its character. It is true that an agreement would operate as a present Page 32 of 80 C/SCA/2064/2009 CAV JUDGMENT demise although its terms may commence at a future date. Similarly it may amount to a present demise even though parties may contemplate to execute a more formal document in future. In considering the effect of the document we must enquire whether it contains unqualified and unconditional words of present demise and includes the essential terms of a lease. Generally if rent is made payable under an agreement from the date of its execution or other specified date, it may be said to create a present demise. Another relevant test is the intention to deliver possession. If possession is given under an agreement and other terms of tenancy have been set out, then the agreement can be taken to be an agreement to lease. As in the construction of other documents, so in the construction of an agreement to lease, regard must be had to all the relevant and material terms; and an attempt must be made to reconcile the relevant terms if possible and not to treat any of them as idle surplusage."

It is thus clear that if the agreement is such which may amount to a present demise even though the document may be contemplated to be executed later on it may be a document or agreement creating the rights. There must be demise of the property in praesenti. But an agreement for securing another agreement or deed in future would not be such an agreement or document which may require registration. Clause 8 of the agreement did not create any right in praesenti nor there was any immediate demise of the property. It was only an executory agreement. The construction of the plinth it seems had yet to start with other facilities and amenities. On completion, such a certificate was to be obtained from the defendant. It was thereafter that the possession was to be handed over under the lease agreement which Page 33 of 80 C/SCA/2064/2009 CAV JUDGMENT was to be executed between the parties. The construction was to be strictly in accordance with the directions and specifications of the defendant. Condition no.9 also contemplated that if the structure was found defective or workmenship was faulty the defendant could refuse to take possession of the premises and the earnest money was liable to be forfeited. Hence it is evident that no possession, right or title had passed on in praesenti at the time of execution of the agreement, and there were many prior conditions attached thereto. Such an agreement, in our view, has been rightly held to be only an executory agreement and not an agreement creating rights in the immovable property, hence not compulsorily required to be registered. It was a mere agreement between the parties which was not registered but was admissible in evidence."

25. In the case of Kasturi & Sons Ltd.(supra), the question was about applicability of Section 41(2) of the Income Tax Act. The Hon'ble Supreme Court while observing that the taxing statute has to be strictly construed, on construction of the terms of the contract of insurance whereunder the asset was covered, held that the terms of contract since giving option to insurer to replace the asset insured, on exercise of the option to replace the asset, nature of contract gets altered to a contract of reinstatement as per the terms and does not remain a contract for insurer which was a contract for money. Page 34 of 80 C/SCA/2064/2009 CAV JUDGMENT

Therefore, it always depends upon the terms agreed between the parties. This judgment, therefore, will be of no help to the case of the petitioners.

26. The customer application form when duly signed by the consumer and accepted by the petitioners for providing services for the consideration does not remain a simple proforma document or a document to provide assistance for entering into any further contract between the parties. The customer application form duly filled in, signed by the consumer and accepted on behalf of the petitioners after putting mark/symbol of the company thereon with necessary charges is itself acted upon with terms and conditions attached to it for the purpose of providing services to the consumer. By such process, both have executed a Page 35 of 80 C/SCA/2064/2009 CAV JUDGMENT document for a specific purpose. Therefore, it cannot be said that it is not an agreement in presentee. It is required to be noted that after accepting the signed customer application form with necessary charges, both the parties start acting upon it as per their reciprocal promises. Therefore, it is an agreement between the parties chargeable to duty.

27. At this stage, reference to the TRAI Act is required to be made. The petitioners who are service providers are the licensees as defined in the TRAI Act. They are authorised to charge for such services only as per the rates fixed by the authority under the TRAI Act. Section 14 provides for adjudication of the dispute by the Appellate Tribunal. As per the said provision, the complaint of any individual consumer is maintainable before the forum established under Section 9 of Consumer Protection Act, 1986 ('Consumer Act' for short).

28. The definition of consumer, service and complaint under Section 2 of the Consumer Act, reads as under:

2(d) "consumer" means any person who,

(i) buys any goods for a consideration which has been Page 36 of 80 C/SCA/2064/2009 CAV JUDGMENT paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of dererred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system or deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose];

[Explanation. For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood by means of self employment;] 2(o) "service" means service of any description which is made available to potential [users and includes, but not limited to, the provision of] facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other Page 37 of 80 C/SCA/2064/2009 CAV JUDGMENT energy, board or lodging or both, [housing construction,] entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service; 2(c) "complaint" means any allegation in writing made by a complainant that [(i) an unfair trade practice or a restrictive trade practice has been adopted by [any trader or service provider];]

(ii) [the goods bought by him or agreed to be bought by him suffer from one or more defects;

(iii)[the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;

[(iv) a trader or the service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price

(a) fixed by or under any law for the time being in force;

(b) displayed on the goods or any package containing such goods;

(c) displayed on the price list exhibited by him by or under any law for the time being in force; Page 38 of 80 C/SCA/2064/2009 CAV JUDGMENT

(d) agreed between the parties;] [(v) goods which will be hazardous to life and safety when used are being offered for sale to the public,

(a) in contravention of any standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force;

(b) if the trader could have known with due diligence that the goods so offered are unsafe to the public;] [(vi) services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be injurious to life and safety;] with a view to obtaining any relief provided by or under this Act;

29. Thus, conjoint reading of the TRAI Act and Consumer Act would give an indication that it is on account of relationship between service provider and the consumer, the consumer gets right to make complaint in connection with the services provided to him by the service provider.

30. In the case of Jatya Pal Singh and Others Versus Union of India and Others, reported in 2013 (6) SCC Page 39 of 80 C/SCA/2064/2009 CAV JUDGMENT 452, though before the Hon'ble Supreme Court the question was not that customer application form could be said to be an agreement, however, in the context of maintainability of the writ petition at the instance of former employees of the telecommunication companies on the ground that the companies are not State within the meaning of Article 12 of the Constitution of India, nor they are performing as public functions, Hon'ble Supreme Court has observed in paragraphs no.45, 46, 49, 53, 54 as under:

"45. Merely because TATA Communication Limited is performing the functions which were initially performed by OCS would not be sufficient to hold that it is performing a public function. It has been categorically held in the case of Ramana Dayaram Shetty (supra) if only the functions of the Corporation are of public importance and closely related to Government functions, it would be a relevant factor in classifying the Corporation as an instrumentality or agency of the Government.

46. As noticed above, the functions performed by VSNL/TCL are not of such nature which could be said to be a public function. Undoubtedly, these operators provide a service to the subscribers. The service is available upon payment of commercial charges.

49. In our opinion, the functions performed by VSNL/TCL examined on the touchstone of the aforesaid factors cannot be declared to be the performance of a public function.

Page 40 of 80 C/SCA/2064/2009 CAV JUDGMENT

The State has divested its control by transferring the functions performed by OCS prior to 1986 on VSNL/TCL.

53. In the present case, as noticed earlier, all telecom operators are providing commercial service for commercial considerations. Such an activity in substance is no different from the activities of a bookshop selling books. It would be no different from any other amenity which facilitates the dissemination of information or DATA through any medium. We are unable to appreciate the submission of the learned counsel for the appellants that the activities of TCL are in aid of enforcing the fundamental rights under Article 21(1)

(a) of the Constitution. The recipients of the service of the telecom service voluntarily enter into a commercial agreement for receipt and transmission of information.

54. The function performed by VSNL/TCL cannot be put on the same pedestal as the function performed by private institution in imparting education to children. It has been repeatedly held by this Court that private education service is in the nature of sovereign function which is required to be performed by the Union of India. Right to education is a fundamental right for children upto the age of 14 as provided in Article 21A. Therefore, reliance placed by the learned counsel for the appellants on the judgment of this Court in Andi Mukta (supra) would be of no avail. In any event, in the aforesaid case, this Court was concerned with the nonpayment of salary to the teachers by the Andi Mukta Trust. In those circumstances, it was held that the Trust is duty bound to make the payment and, therefore, a writ in the nature of Page 41 of 80 C/SCA/2064/2009 CAV JUDGMENT mandamus was issued."

31. In the case of Dresser Rand S.A. (supra), Hon'ble Supreme Court while considering the question as to whether a tender document containing general instructions to bidders and conditions of purchase is an agreement or a contract, held and observed in para No.31 and 32 as under:

"31. In Rickmers Verwaltung (supra), the appellant contended that though the agreement drawn up on 11.11.1993 was not formally signed by the parties, the contemporaneous correspondence between them showed that a binding contract came into existence between the parties in terms of such draft dated 11.11.1993 and clause 53 of the said 'agreement' provided for arbitration and therefore, the claim raised by the appellant had to be settled by reference to arbitration. The first Respondent (Indian Oil Corporation Ltd) on the other hand contended that no arbitration agreement had been executed between the parties and the correspondence between the parties did not bring about any enforceable contract between the parties, because the fundamental conditions of the terms of the bargain were neither agreed upon nor fulfilled by the parties. This Court accepted the contention by the first respondent that there was no 'arbitration agreement' on the following reasoning: "14. From a careful perusal of the entire correspondence on the record, we are of the opinion that no concluded bargain had been reached between the parties as the terms of the standby letter of credit and performance guarantee were not accepted by the respective parties. In the absence of acceptance of the Page 42 of 80 C/SCA/2064/2009 CAV JUDGMENT standby letter of credit and performance guarantee by the parties, no enforceable agreement could be said to have come into existence. The correspondence exchanged between the parties shows that there is nothing expressly agreed between the parties and no concluded enforceable and binding agreement come into existence between them. Apart from the correspondence relied upon by the learned single Judge of the High Court, the Fax messages exchanged between the parties, referred to above, go to show that the parties were only negotiating and had not arrived at any agreement. There is a vast difference between negotiating a bargain and entering into a binding contract. After negotiation of bargain in the present case, the stage never reached when the negotiations were completed giving rise to a binding contract. The learned single Judge of the High Court was, therefore, perfectly justified in holding that Clause 53 of the Charter Party relating to Arbitration had no existence in the eye of law, because no concluded and binding contract ever came into existence between the parties." [Emphasis supplied]

32. Parties agreeing upon the terms subject to which a contract will be governed, when made, is not the same as entering into the contract itself. Similarly, agreeing upon the terms which will govern a purchase when a purchase order is placed, is not the same as placing a purchase order. A prelude to a contract should not be confused with the contract itself. The purpose of Revision No. 4 dated 10.6.1991 was that if and when a purchase order was placed by BINDAL, that would be governed by the "general conditions of purchase" of BINDAL, as modified by Revision No.4. But when no purchase order was placed, neither the 'general conditions of purchase' nor the arbitration clause in the 'General Conditions of Purchase' became effective or enforceable. Therefore, Page 43 of 80 C/SCA/2064/2009 CAV JUDGMENT initialling of 'Revision No. 4' by DR and BINDAL on 10.6.1991 containing the modifications to General Conditions of Purchase, did not bring into existence any arbitration agreement to settle disputes between parties.

In the nature of the controversy, the above decision shall have no application to the facts of the present case.

32. However, heavy reliance is placed by learned Senior Advocates for the petitioners on the decision of Madras High Court in the case of the Secretary to the Commissioner of Salt, Akbari and Separate Revenue (supra). In the said case reference by Board of Revenue under Section 53 of the Indian Stamp Act was made to High Court for a decision on the question of stamp duty on certain entries in the confidential register maintained by the South Indian Bank. The entries contained in the Bank Register were as regards the declaration of the borrower. The second part of the declaration of the borrower was an unconditional undertaking not to further encumber his property until he repays loan which he proposed to obtain from the Bank. The Collector before whom the confidential register of the Bank was produced in the course of an income tax inquiry impounded the documents and they Page 44 of 80 C/SCA/2064/2009 CAV JUDGMENT were considered to be in the nature of the agreements liable to stamp duty. In such facts, the Madras High Court held that declaration in the form appended to the letter of reference could not itself constituted any agreement. The Madras High Court in the said judgment quoted the portion of Queen's Bench judgment referred above. Therefore, what is relevant is the character and nature of the document.

Thus, in the facts of the case before Madras High Court, what is held by the Madras High Court will have no bearing on the facts of the present case.

33. Then comes a question, whether in respect of an instrument chargeable with duty but not duly stamped, are the authorities empowered to levy or collect the duty unless the events for impounding of the instrument take place. Learned Senior Advocates for the petitioners submitted that there is no power available with the authorities to make search, inspect the instrument or document and to impound it for levy and recovery of stamp duty unless such instrument is sought to be enforced by producing the same in the evidence or comes before the public officer in performance of his functions.

Page 45 of 80 C/SCA/2064/2009 CAV JUDGMENT

34. Section 31 provides for determination of the duty by the Collector with which any instrument is chargeable when a person brings the instrument and applies for the opinion of the Collector by paying fees for such determination. However, this section does not empower the Collector to impound the instrument for the purpose of stamp duty though instrument is brought before him for his opinion and determination of duty chargeable.

35. Section 32A provides for determination of the market value in respect of the property which is subject matter of instrument brought for registration or before the person under Section 33 of the Act and for determination of duty payable.

36. Section 33 provides that every person having by law or by consent of the parties authority to receive evidence and every person in charge of public office except the police officer, before whom an instrument, chargeable in his opinion with duty, is produced or comes in performance of his functions shall if it appears to him that such instrument is not duly stamped, impound the same. For the purpose of Page 46 of 80 C/SCA/2064/2009 CAV JUDGMENT impounding, such person is required to examine the instrument so chargeable and produced or comes before him to ascertain whether it is duly stamped.

37. Section 33 thus casts statutory duty upon the person mentioned therein while performing his functions to impound the instrument if it appears to him that such instrument is not duly stamped.

38. Section 39 speaks about the power of the Collector to take action in respect of instruments impounded by him under section 33 or received by him under section 37(2) of the Act either to make endorsement thereon that the instrument is duly stamped or that it is not chargeable with the duty or if chargeable with duty but not duly stamped and to require payment of difference of stamp duty with penalty.

39. Section 40 gives power to the Collector to receive the stamp duty without following the procedure under section 33 and 39 of the Act from a person who produces instrument chargeable with duty and not duly stamped within one year from its execution. Page 47 of 80 C/SCA/2064/2009 CAV JUDGMENT

40. Section 46 provides for recovery of interest on unpaid amount of duty and penalty under the Act as also provides for recovery of all duties and penalties and interest etc. by the Collector by distress and sale of the movable or immovable property of the person from whom such dues are due or recoverable or as arrears of land revenue. Section 46A authorizes the Collector to require any person including the organization, institute, company or association, liable to pay duty under any Article of Schedule I to submit the statement or return or to furnish any information in respect of any transaction within such period as may be prescribed by the rules and of imposition of penalty on such person on his failure to submit such information.

41. Chapter - V provides for allowances for stamps in certain cases. Section 49 which comes under this chapter has made provision for allowances in case of printed forms no longer required by the corporation which reads as under:

Section 49. Allowance in case of printed forms no longer required by corporations:

The Chief Controlling Revenue Authority or the Collector if empowered by the Chief Controlling Page 48 of 80 C/SCA/2064/2009 CAV JUDGMENT Revenue Authority in this behalf may, without limit of time, make allowance for stamped papers used for printed forms of instruments by any banker or by any incorporated company or other body corporate, if for any sufficient reason such forms have ceased to be required by the said banker company or body corporate; provided that such authority is satisfied that the duty in respect of such stamped papers has been duly paid.

42. ChapterVII provides for offences and procedure for not paying the stamp duty, for false declaration,for breach of the provisions of section 68(2) and for other breaches. ChapterVII is for supplemental provisions where under Section 67 provides that every public officer having in his custody any registers, books, records, papers, documents or proceedings, the inspection whereof may tend to secure any duty or to prove or lead to the discovery of any fraud or omission in relation to any duty, shall at all reasonable times permit any person authorized in writing by the Collector to inspect for such purpose the registers, books, papers, documents and proceedings and to take such notes and extracts as he may deem necessary without fee or charge.

43. Subsection (1) of Section 68 provides that the Collector may, where he has reason to believe that all Page 49 of 80 C/SCA/2064/2009 CAV JUDGMENT or any of the instruments specified in Schedule I have not been charged at all or incorrectly charged with duty leviable under this Act, authorize in writing any officer to enter upon any premises where he has reason to believe that any registers, books, records, papers, documents or proceedings relating to or in connection with any such instruments are kept and to inspect them and to take such notes and extracts as such officer deems necessary and if necessary to seize them and to impound them under Section 33.

44. Subsection (2) of section 68 require that every person having in his custody or maintaining such registers, books, records,papers, documents or proceedings shall, when so required by the officer authorized under sub section (1), produce them before such officer and at all reasonable times permit such officer to inspect them and take the notes and extracts as he may deem necessary.

45. It appears that, the powers under Section 68 are not independent, but are to be exercised in furtherance of powers under Section 33 of the Act. Page 50 of 80 C/SCA/2064/2009 CAV JUDGMENT The powers available under Section 68 with the Collector are to be exercised in relation to an instrument, where the Collector has reasonable belief that it is not stamped or improperly stamped and where the Collector has reason to believe that any registers, books or other documents relating to or in connection with such instrument are kept in any premises. On such reasonable belief, the Collector may authorize any officer to inspect such registers or other documents and to take notes and extracts as the officer authorised deems necessary and even to seize and impound them if the officer deems it so necessary. But, such impounding of the documents is in relation to any instrument specified in ScheduleI in respect of which the Collector has reason to believe that it is not charged at all or incorrectly charged with duty under the Act. Thus, such powers under Section 68 are not to be exercised just to find out any instrument from any place to examine whether it is duly stamped or not.

46. In the case of District Registrar and Collector (supra), the Hon'ble Supreme Court dealt with the challenge to section 73 of the Andra Pradesh Act, Page 51 of 80 C/SCA/2064/2009 CAV JUDGMENT which reads as under:

"73 (1) Every public officer or any person having in his custody any registers, books, records, papers, documents or proceedings, the inspection whereof may tend to secure any duty, or to prove or lead to the discovery of any fraud or omission in relation to any duty, shall at all reasonable times permit any person authorized in writing by the Collector to enter upon any premises and to inspect for such purposes the registers, books, records, papers, documents and proceedings, and to take such notes and extracts as he may deem necessary, without fee or charge and if necessary to seize them and impound the same under proper acknowledgment:

Provided that such seizure of any registers, books, records, papers, documents or other proceedings, in the custody of any Bank be made only after a notice of thirty days to make good the deficit stamp duty is given.

Explanation : For the purposes of this proviso 'bank' means a banking company as defined in section 5 of the Banking Regulation Act, 1949 and includes the State Bank of India, constituted by the State Bank of India Act, 1955 a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959, a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 and in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, a Regional Rural Bank established under the Regional Rural Banks Act, 1976, the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964, National Bank for Agriculture and Rural Development established under the National Bank for Agriculture and Rural Development Act, 1981, the Life Page 52 of 80 C/SCA/2064/2009 CAV JUDGMENT Insurance Corporation of India established under the Life Insurance Corporation Act, 1956, The Industrial Finance Corporation of India established under the Industrial Finance Corporation Act, 1948, and such other financial or banking institution owned, controlled or managed by a State Government or the Central Government, as may be notified in this behalf by the Government.

(2) Every person having in his custody or maintaining such registers, books, records, papers, documents or proceedings shall, when so required by the officer authorized under subsection (1), produce them before such officer and at all reasonable times permit such officer to inspect them and take such notes and extracts as he may deem necessary.

(3) If, upon such inspection, the person so authorized is of opinion that any 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 from the person liable to pay the stamp duty; and in case of default the amount of the duty shall be recovered as an arrear of land revenue."

47. By above Section, the Collector was given unbridled and unrestricted powers to enter, search any premises, to inspect whether any instrument is chargeable with duty and to require the payment of duty if the instrument is not duly stamped.

48. Hon'ble the Supreme Court in the said case has declared above Section 73 of A.P.Act ultra vires the Constitution. So far as the powers under Section 68 Page 53 of 80 C/SCA/2064/2009 CAV JUDGMENT read with Section 67 of the Act are concerned, they stand on different footing. Before exercising the powers under Section 68 of the Act, the Collector has to arrive at reasonable belief in respect of the instruments that they are either not charged with duty or improperly charged and also to arrive at reasonable belief that other documents relating to such instruments are kept in any premises and only then he can authorise any officer to inspect them and impound them if necessary.

49. But impounding of an instrument appears to be sine qua non for the purpose of levy and collection of the duty thereon under the Act. Such impounding could be only of original instrument. Section 33, 37 clearly suggest that only original and not the photocopy could be impounded.

50. There is no difference between the language of Section 33 of the Indian Stamp Act, 1899 and Section 33 of the Act. In the context of Section 33 of the Indian Stamp Act, in the case of Chandrama Singh (supra), the Patna High Court has held and observed as under:

Page 54 of 80 C/SCA/2064/2009 CAV JUDGMENT

"2. Learned counsel for the petitioner put forward the argument that the lower Court had nopower to impound this document and demand payment of stamp duty and penalty, and its order was wholly without jurisdiction. He submitted that for an execution under O. 21, R. 16 of the Code the production of the deed of assignment was not necessary and further that production, as envisaged by S. 33(1) of the Indian Stamp Act is voluntary production, and a production under compulsion of the Court's order is not a production in law and, therefore, the deed of assignment, though produced in Court, did not come within the purview of S. 33(1) of the Act. This contention is wholly untenable and cannot be accepted as correct. SubSection (1) of S. 33 provides as follows :

"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."

This section empowers certain authorities to impound documents not duly stamped in the circumstances set forth in the section and to admit it in evidence under S. 35 of the Stamp Act on payment of the excess duty and penalty. It will appear that to attract the provisions of the said SubSection three conditions must be fulfilled : (1) the authority empowered to impound a document must be the authority specified therein, (2) the instrument in question is not stamped according to the Stamp Act and (3) the instrument "is produced or comes in the performance of his functions".

This section does not specify how the document is to be produced. There is no doubt that the production of a document under compulsion is not a production as envisaged Page 55 of 80 C/SCA/2064/2009 CAV JUDGMENT in SubSection (1) of S. 33. At the same time it would be wrong to restrict the operation of S. 33(1) to voluntary production only. When the expression "is produced" is considered in juxtaposition with the expression "comes in the performance of his functions" along with the object of this act, in my opinion, production of a document in obedience to the order of the Court is also a production within the meaning of S. 33(1). But, it must be assumed that the document whose production the Court directs must necessarily be the document relevant for the enquiry or the case before it. If the documents produced either voluntarily or in obedience to the orders of the Court are wholly irrelevant, the order of production cannot be said to be legal order and the production of those documents will not be a production as contemplated by S. 33.Where, however, a document, not duly stamped, is relevant for an enquiry or a case of which the officer is in seisin and that document is produced by a party to that enquiry or case, either voluntarily or in obedience to the order or summons of a Court, such a document "is produced or comes in the performance of his functions", as it is down in the aforesaid section."

51. In the case of Raja Mohammad Amir Ahmad Khan (supra), Hon'ble Supreme Court on interpretation of Section 31, 32, and 33 of the Indian Stamp Act has held and observed in para No.2 to 6 as under:

2. The decision of this appeal depends upon the interpretation of Ss. 31, 32 and 33 of the Stamp Act. The relevant portion of S. 31 provides: Section 31 (1) "When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector Page 56 of 80 C/SCA/2064/2009 CAV JUDGMENT and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, any pays a fee of such amount (not exceeding five rupees and not less than eight annas) 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''.

It is admitted that the document in dispute was submitted to the Collector for his opinion under S. 31 and the opinion of the Collector was sought as to what the duty should be. Under S. 32 of the Act when such an instrument is brought to the Collector under S. 31 and he determines that it was already fully stamped or he determines the duty which is payable on such a document and that duty is paid, the Collector shall certify by endorsement on the instrument presented that full duty with which it is chargeable has been paid and upon such endorsement being made, the instrument shall be deemed to be fully stamped or not chargeable to duty as the case may be. Under the proviso to S. 32, the Collector is not authorised to make the endorsement if an instrument is brought to him a month after the date of its execution. Then follows S. 33 which is as follows:

Section 33. "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 an 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.

(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 the Page 57 of 80 C/SCA/2064/2009 CAV JUDGMENT law in force in British 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 a 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 case of doubt.

(a) the collecting Government may determine what offices shall be deemed to be public offices; and

(b) the collecting Government may determine who shall be deemed to be persons incharge of public offices.''

3. The decision of this appeal depends upon the interpretation to be put upon the words "before whom any instrument chargeable.....is produced or comes in the performance of his functions''. Dealing with these words the High Court held:

"With all respect, therefore, we agree that the learned Judges deciding Chuni Lal Burman v. Board of Revenue, U. P., AIR 1951 All 851, took a correct view of the words "is produced or comes in the performance of his functions'' used in S. 33 of the Act to mean "the production of the instrument concerned in evidence or for the purpose of placing reliance upon it by one party or the other''.'' The High Court was also of the opinion that the object of paying the whole stamp duty was to get the instrument admitted into evidence or its being acted upon or registered or Page 58 of 80 C/SCA/2064/2009 CAV JUDGMENT authenticated as provided in Ss. 32(3), 35, 38(1) and 48(1) of the Stamp Act.

4. Counsel for the State referred to the various sections of the Act; first to the definition section; S. 2(11) which defines what is "duly stamped''; S. 2(14) which defines "instrument'' and S. 2(12) which defines "executed''. He than referred to S. 3 which lays down what "chargeable'' means and then to S. 17 which provides that all instruments chargeable with duty and executed by any person in British India shall be stamped before or at the time of the execution. Certain other sections, i. e., Ss. 35 and 38(1) were also referred to and so also Ss. 40(1)(a), 41, 42 and 48 but in our opinion it is not necessary to refer to these sections. What has to be seen is what is the consequence of a person applying to a Collector for his determination as to the proper duty on an instrument. The submission on behalf of the State (appellant) was that if an instrument whether stamped or not is submitted for the opinion of the Collector before it is executed, i.e., it is signed, then the Collector is required to give his determination of the duty chargeable and return the document to the person seeking his opinion but if the document is scribed on a stamped paper or unstamped paper and is executed then different consequences follow. In the latter case it was submitted that under S. 33 the Collector is required to impound the document if he finds that it is not duly stamped. On the other hand it was submitted on behalf of the respondent that on his giving his opinion the Collector becomes functus officio and can take no action under S. 33. It is these two rival contentions of the parties that require to be decided in this case.

5. After an inordinately long delay, the Collector determined the amount of duty payable and impounded the document. Power to Page 59 of 80 C/SCA/2064/2009 CAV JUDGMENT impound is given in S. 33 of the Act. Under that section any person who is a Judge or is incharge of a public office before whom an instrument chargeable with duty in produced or comes in the performance of his functions is required to impound the instrument if it appears to him not to be duly stamped. The question is does this power of impounding arise in the present case? The instrument in dispute was not produced as a piece of evidence nor for its being acted upon, e.g., registration, nor for endorsement as under S. 32 of the Stamp Act but was merely brought before the Collector for seeking his advise as to what the proper duty would be. The words "every person...before whom any instrument... is produced or comes in the performance of his functions'' refer firstly to production before judicial or other officers performing judicial functions as evidence of any fact to be proved and secondly refer 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 S. 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. Section 31 does not postulate anything further to be done by the Collector. It was conceded that if the instrument is unexecuted, i.e., not signed and the opinion of the Collector is sought, he has to give his opinion and return it with his opinion to the person seeking his opinion. The language in regard to executed and unstamped documents is no different and the powers and duties of the Collector in regard to those instruments are the same, that is, when he is asked to give his opinion, he has to determine the duty with which, in his judgment the instrument is Page 60 of 80 C/SCA/2064/2009 CAV JUDGMENT chargeable and there his duties and powers in regard to that matter end. Then follows S.

32. Under that section the Collector has to certify by endorsement on the instrument brought to him under S. 31 that full duty has been paid, if the instrument is duly stamped, or it is unstamped and the duty is made up, or it is not chargeable to duty. Under that section the enforcement can be made only if the instrument is presented within a month of its execution. But what happens when the instrument has been executed more than a month before its being brought before the Collector? Section 31 places no limitation in regard to the time and there is no reason why any time limit should be imposed in regard to seeking of opinion as to the duty payable.

6. Chapter IV of the Act which deals with instruments not duly stamped and which contains Ss. 33 to 48, provides for impounding of documents, how the impounded documents are to be dealt with, Collectors' powers to stamp instruments impounded and how the duties and penalties are to be recovered. It would be an extraordinary position if a person seeking the advice of the Collector and not wanting to rely upon an instrument as evidence of any fact to be proved nor wanting to do any further act in regard to the instrument so as to effectuate its operation should also be liable to the penalties which unstamped instruments used as above might involve. 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 S. 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 purposes of evidence, he is to make up the duty and under S. 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 Page 61 of 80 C/SCA/2064/2009 CAV JUDGMENT 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 S. 33 have no application. The provisions of that section are a subsequent stage when something more than mere asking of the opinion of the Collector is to be done."

52. In the case of President, Kankaria Apartment Co. op. Housing Society Ltd. Ahmedabad (supra), Hon'ble Special Bench has on examination of provisions of Section 68 with Section 33 of the Act has held and observed in para No.12 as under:

"12. There is a case raised in the reference that the Assistant Superintendent, Stamps, Ahmedabad, could not have impounded the documents and imposed any stamp duty or penalty when the documents were not produced before him for the purpose of any evidence or for any other purpose. To understand this contention, it is necessary to appreciate how these documents came before the Assistant Superintendent, Stamps, Ahmedabad. Section 63 of the Bombay Stamp Act provides that the powers exercisable by a Collector under Chap. III, Chapter IV and Chapter V and under clause

(a) of the first proviso to Sec.27 shall in all cases be subject to the control of the Chief Controlling Revenue Authority. The Chief Controlling Revenue Authority discovered on an inspection that the Collector of Mehsana had issued a certificate under Section 32 (2) in respect of a property situate within the jurisdiction of the Assistant Superintendent, Ahmedabad, and that too a certificate erroneously adjudicating on the question of Page 62 of 80 C/SCA/2064/2009 CAV JUDGMENT liability to stamp duty. Thereupon he evidently contacted the Assistant Superintendent, Stamps Ahmedabad, who was under his control. Section 33 of the Bombay Stamp Act invests, on every person having by law or consent of parties authority to receive evidence and 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 the power to impound the same if it appears to him that such instrument is not duly stamped. Therefore, if a document is produced before the Assistant Superintendent, Stamps, or comes up before him in the performance of his functions, it is his duty to impound the same if he feels that the document is not duly stamped. In fact, much larger powers are conferred upon him under the Bombay Stamp Act by Section 68 which as it stands today by Section 68 which as it stands today was substituted by Gujarat Act 19 of 1965. This provision enables the Collector "where he has reason to believe that all or any of the instruments specified in Schedule I have not been charged at all or incorrectly charged with duty leviable under this Act", to "authorize in writing any officer to enter upon any premises where he has reason to believe that any registers, books, records, papers, documents, or proceedings relating to or in connection with any such instruments are kept and to inspect them, and to take such notes and extracts as such officer deems necessary, and if necessary, to seize them and to impound them under Section 33."There is an obligation cast under Section 68 (2) on every person having custody of such records when required by an officer authorized under sub sec. (1) to produce them before such officer.

Therefore, when the Collector has "reason to believe" in the existence of instruments undervalued for the purpose of stamp duty of deficitly levied with duty, he has wide powers to authorise search, seizure and even impounding. The scope of the power under Page 63 of 80 C/SCA/2064/2009 CAV JUDGMENT Section 33 (1) has to be read in this context."

53. Again the full Bench of this Court had an occasion to examine the scope and extent of Section 33 and 68 of the Act in the case of S. T. Industries, Surat (supra), wherein, it is held and observed in para No.10 to 12 as under:

"10. Section 31 which falls under ChapterIII of the Act enables a person to bring before the Collector any instrument whether executed or not and whether previously stamped or not and to apply to the Collector to have the Collector's opinion as to the duty with which it is chargeable. Subject to the fulfillment of certain requirements as laid down by Section 31 of the Act, the Collector is enjoined upon to determine the duty with which in his judgment, the instrument is chargeable. Section 32A enables any officer registering under the Registration Act, 1908, an instrument of conveyance, exchange, gift, partition, partnership or settlement or power of attorney as well as any person referred to in Section 33 of the Act, to refer the instrument to the Collector of such district for determining the true market value of such property and proper duty payable on the instrument if the officer or as the case may be, persons referred to in Section 32 of the Act, has reason to believe that the consideration set forth in the instrument does not approximate to the market value of the property or the market value of the property which is subject matter of such instrument, has not been truly set forth therein. Section 33 of the Act provides that subject to the provisions of Section 32A every person having by law or consent of parties, authority to receive evidence, and Page 64 of 80 C/SCA/2064/2009 CAV JUDGMENT every person in charge of a public office except an officer of police department, 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 an instrument is not duly stamped, impound the same. Section 37 of the Act enjoins duty upon the person impounding an instrument under Section 33 to 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 such person is also required to send such amount to the Collector or such person as may have been appointed in this behalf. In cases which are not covered by subsection (1) of Section 37 of the Act, the person impounding an instrument is required to send instrument in original to the Collector. Section 68 of the Act lays down that the Collector may, where he has reason to believe that all or any of the instruments specified in Schedule I have not been charged with duty leviable under this Act, authorise in writing any officer to enter upon any premises where he has reason to believe that any registers, books, records, papers, documents or proceedings relating to or in connection with any such instruments, are kept and to inspect them and to take such notes and extracts as such officers deems necessary, and if necessary, to saize them and to impound them under Section 33 of the Act. Subsection (2) of Section 68 provides that every person having in his custody or maintaining such registers, books, records, papers, documents or proceedings shall, when so required by the officer authorised under subsection (1), produce them before such officer and at all reasonable times permit such officer to inspect them and take the notes and extracts as he may deem necessary.

11. Having referred to certain provisions of Page 65 of 80 C/SCA/2064/2009 CAV JUDGMENT the Act, which have direct bearing on the issue involved in this reference, we now proceed to examine Question No. 1 posed in this Reference. The contention that the Collector, Surat should have exercised powers conferred on him under Section 33 read with Section 68 of the Act within reasonable period from December 9, 1974 i.e. the day on which the document was executed and registered with the office of SubRegistrar, Surat and in any view of the matter, within reasonable time from the date of audit report drawnup by the Accountant General, Gujarat on February 12, 1976, has no substance. The very nature of the power conferred upon the Collector under Section 33 read with Section 68 of the Act is such that no time limit can be prescribed for the exercise of powers under Section 33 of the Act of which the starting point of time would be the date of execution of document or the date of audit report. A bare reading of Section 33 makes it clear that apart from Collector of Stamps, every person having by law or consent of parties, authority to receive evidence, has power to impound an instrument, if it appears to the said authority that such instrument is not duly stamped. So also, every person in charge of a public office except an officer of police department, has also authority to impound an instrument, if on production of the instrument or coming to know about instrument in the performance of his functions, he has reason to believe that the instrument is not duly stamped. The powers conferred by Section 33 may be exercised by Court of law in which an instrument is sought to be tendered in evidence or even before an arbitrator. A document executed, say before 10 years might not have been used in evidence or produced before any authority or officer for all the time and might be produced before an authority having by law or consent of parties, authority to receive evidence after several years. At that time, the authority receiving the same in evidence, may find that Page 66 of 80 C/SCA/2064/2009 CAV JUDGMENT the instrument is not duly stamped. The question to be asked and examined is, whether power to impound the instrument has to be exercised within reasonable period from the date of execution of the instrument ? In our view, the answer is 'No'. A reference may be made to Section 34 of the Act, which inter alia provides that the instruments which are not duly stamped, are inadmissible in evidence. Proviso to Section 34 empowers the authority to admit such instruments which are not duly stamped in evidence on payment of penalty as provided therein. However, Section 57 of the Act provides that if any Court, other than the High Court, feels doubt at to the amount of duty to be paid in respect of any instrument under clause (a) of Proviso to Section 34, the Judge may draw up a statement of the case and refer it, with his own opinion thereon, for the decision of the High Court. Such reference is required to be dealt with as provided under Section 54 of the Act as if the reference is made by the C.C.R.A. Section 58 of the Act empowers the appellate Court or the High Court as the case may be, to record a declaration that the instrument in question should not have been admitted in evidence by the Court specified therein without the payment of duty and penalty under Section 34 or without the payment of a higher duty and penalty than those paid and after requiring the person in possession to produce the same to impound it when produced. Thus, the question of admissibility or otherwise of a, document in evidence or impounding it by appellate Court or High Court may arise after several years of its execution. Therefore, the contention that power to impound the deed should have been exercised by the Collector of Stamps within reasonable period from the date of execution of the document cannot lie accepted. Similarly, though Section 32A of the Act enables any officer registering a document under the provisions of the Registration Act, 1908 to refer the instrument to the Collector for determining Page 67 of 80 C/SCA/2064/2009 CAV JUDGMENT true market value of property covered by the document, if he has reason to believe that the market value of the property has not been truly set forth, failure to make reference to the Collector of Stamps by registering authority would not have any vitiating effect on the power of the Collector to impound an instrument insufficiently stamped when that fact comes to his knowledge. In view of this, the submission that the Collector of Stamps should have exercised power to impound the deed in question within reasonable time from the date on which the document was presented before SubRegistrar for registration, has also no substance.

12. From the Scheme of the Act it cannot be said that the powers conferred under Section 33 read with Section 68 of the Act should be exercised within a particular time limit only from a specified date because one is not sure as to when an instrument insufficiently stamped, will be produced before any person having authority to receive the same in evidence. The scheme of the Act indicates that the powers may be exercised by the Collector under Section 33 read with Section 68 of the Act as and when occasion arises as provided under different provisions of the Act. Such occasion may arise any time after the execution of the document and it may be even after several years. Whether powers conferred under Section 33 read with Section 68 of the Act have been exercised within reasonable time or not, would depend upon facts of each case. If the Collector or for that reason any of the persons mentioned in Section 33 of the Act does not initiate any action within reasonable time or sits tight over the matter after coming to know that the document is insufficiently stamped, then in a given case, it may be argued that the power to impound an instrument, has not been exercised within a reasonable time. However, one thing is very clear that while Page 68 of 80 C/SCA/2064/2009 CAV JUDGMENT considering the question whether the Collector of Stamps has exercised powers within a reasonable period or not, date of execution of the document is not material at all and what is material is the date on which the document was produced before the Collector or the date on which the Collector came to know that the instrument was not duly stamped. There is no provision either under the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971 or Bombay Stamp Act, 1958 enjoining upon the Auditor General to send a copy of audit report to the Collector of Stamps. Under the circumstances, the date of the report of Auditor General would also not be relevant for deciding the question as to whether the Collector of Stamps has exercised powers conferred on him by Section 33 read with Section 68 of the Act within reasonable period."

54. From the decision in the case of District Registrar and Collector, Hyderabad (supra), following observation of Hon'ble Supreme Court in para No.12 are relevant:

"12. The provisions of Section 29 providing for the persons by whom duties are payable have been left untouched. So is with Section 31 dealing with 'adjudication as to proper stamp' which confers power on the Collector to adjudicate upon the duty with which a document shall be chargeable, though such document may or may not have been executed. The scheme of Section 31 involves an element of voluntariness. The person seeking adjudication must have brought the document to Collector and also applied for such adjudication. The document cannot be compelled to be brought before him by the Page 69 of 80 C/SCA/2064/2009 CAV JUDGMENT Collector. Section 33 confers power of impounding a document not duly stamped subject to the document being produced before an authority competent to receive evidence or a person incharge of a public office. It is necessary that the document must have been produced or come before such authority or person incharge in performance of its functions. The document should have been voluntarily produced. At the same time, Section 36 imposes an embargo on the power to impound, vesting in the authority competent to receive evidence, by providing that it cannot question the admission of document in evidence once it has been admitted. None of these provisions have been amended by the State of Andhra Pradesh."

55. Thus for instruments chargeable with duty and not stamped, the powers to charge them with duty are generated in the provisions of Section 33 read with Section 68 of the Act. Any instrument chargeable with duty and found not duly stamped shall be required to be impounded only when it is sought to be relied for enforcement of the rights under the instrument by either producing before the person, having by law or consent of the parties, authority to receive evidence or comes before the person in charge of the public office in performance of his functions. Corollary of such provision for impounding would be that unless a person seeks to enforce his rights by producing Page 70 of 80 C/SCA/2064/2009 CAV JUDGMENT instrument as evidence in any proceedings before the person authorised in law or by consent of parties to receive evidence or unless such instrument comes before the public officer in performance of his functions, it can not inspected or examined to find out whether it is duly stamped or not and cannot be charged with duty. Thus, though Section 17 of the Act mandates that every instrument chargeable with duty and executed in the State shall be stamped, however, if any instrument is not duly stamped, the duty thereon cannot be levied and collected without impounding as required by Section 33 of the Act and the only option with the authorities is to levy penalty or launch prosecution under ChapterVII of the Act.

56. What is not in dispute in the case of the petitioners is that there is no impounding of original instruments under Section 33 of the Act. On a single photocopy of the customer application form and on the basis of subscribers' data, the authorities have ordered to levy and collect the stamp duties.

57. As stated above, impounding of original instrument is must for subjecting it to stamp duty Page 71 of 80 C/SCA/2064/2009 CAV JUDGMENT under the Act. Law requires the instrument executed in the State to be charged with duty. Therefore, it is only the original instrument which could be stamped.

58. In the case of Som Dutt Builders Limited (supra), the Allahabad High Court while examining the provisions of the Indian Stamp Act has held and observed in para No.9 as under:

"9. As regards the second issue that the Additional District Magistrate had no jurisdiction to initiate proceedings on a photo copy of the document by summoning the original document for the purposes of ascertaining the liability of stamp duty under the Act, even if the notice dated 31 101994 and the action taken by the respondents in pursuance thereof could be said to be covered under Section 33(1) of the Act (although the petitioner disputes the same), still the said action would also be illegal and without jurisdiction. In response to the letter dated 31101994 written by the Additional District Magistrate to the Kanpur Development Authority, the Kanpur Development Authority on 1111994 is said to have sent the document in question to the Respondent No.

3. According to the petitioner the document so sent was only a copy of the original and not the original, which was and still remains in the possession of the petitioner. Specific assertion to that effect has been made in paragraph 31 of the writ petition that the original agreement is with the petitioner and the same has not been denied by Kanpur Development Authority or the State of U. P. in their counter affidavits. The learned Standing Counsel had also placed the original records of the case before me and Page 72 of 80 C/SCA/2064/2009 CAV JUDGMENT the original agreement was not found there. The learned Standing Counsel could also not justify as to on what basis it has been claimed by him that the original document had been placed before the Additional District Magistrate on which action has been taken. At the time of hearing, the original document was actually placed before me by the learned counsel for the petitioner to show that the same was and still is in the possession of the petitioner. As per Section 33(1) of the Act, once the document or instrument appears to be understamped, the officer concerned shall impound the same. In the present case, the original document had never been impounded. The procedure for impounding a document has been laid down in Section 40 of the Act and it is no one's case that the same had been followed in the present case. Further, the said document was never produced nor came before the Additional District Magistrate in the performance of his official functions and hence the provisions of Section 33(1) of the Act could not have been attracted. In the case of R. A. Remington v. Deputy Commissioner and Collector, Pithoragarh, 1966 All LJ 514 the Apex Court has held that the authorities have no power under Section 33(1) of the Act to summon the document for the purposes of finding out whether it had been properly stamped or not. Thus the submission of the petitioner, that the case of the respondents for imposing penalty on the document would also not be covered under the provisions of Section 33(1) of the Act, has force."

59. In the case of Hariom Agrawal (supra), Hon'ble Supreme Court while examining the issue as to whether photocopy of the instrument could be validated by impounding, has held and observed, on examining the Page 73 of 80 C/SCA/2064/2009 CAV JUDGMENT provisions of Section 2(14) of the Indian Stamp Act, in paragraphs No.7 to 13 as under:

"7. Section 33 gives power to the authority to check whether the instrument has been duly stamped and in case it is not duly stamped, to take steps to impound the same by proper stamp duty on the said document. This power can be exercised in regard to an 'instrument'. Section 2(14) of the Act defines "instrument" as:

"2. (14) Instrument.'Instrument' includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded."

8. The instrument as per definition under Section 2(14) has a reference to the original instrument. In State of Bihar v. M/s. Karam Chand Thapar & Brothers Ltd., this Court in para 6 of the judgment held as under: (AIR p. 113) "6. It is next contended that as the copy of the award in court was unstamped, no decree could have been passed thereon. The facts are that the arbitrator sent to each of the parties a copy of the award signed by him and a third copy also signed by him was sent to the court. The copy of the award which was sent to the Government would appear to have been insufficiently stamped. If that had been produced in court, it could have been validated on payment of the deficiency and penalty under S.35 of the Indian Stamp Act, 1899. But the Government has failed to produce the same. The copy of the award which was sent to the respondents is said to have been seized by the police along with other papers and is not now available. When the third copy was received in court, the respondents paid the requisite stamp duty Page 74 of 80 C/SCA/2064/2009 CAV JUDGMENT under S.35 of the Stamp Act and had it validated. Now the contention of the appellant is that the instrument actually before the court is, what it purports to be, 'a certified copy', and that under S.35 of the Stamp Act there can be validation only of the original, when it is unstamped or insufficiently stamped, that the document in court which is a copy cannot be validated and 'acted upon' and that in consequence no decree could be passed thereon. The law is no doubt well settled that the copy of an instrument cannot be validated. That was held in Rajah of Bobbili v. Inuganti China Sitaramasami Garu, where it was observed :

'The provisions of this section (section 35) which allow a document to be admitted in evidence on payment of penalty, have no application when the original document, which was unstamped or was insufficiently stamped, has not been produced; and, accordingly, secondary evidence of its contents cannot be given. To hold otherwise would be to add to the Act a provision which it does not contain. Payment of penalty will not render secondary evidence admissible, for under the stamp law penalty is leviable only on an unstamped or insufficiently stamped document actually produced in Court and that law does not provide for the levy of any penalty on lost documents.'"

9. This Court had an occasion again to consider the scope and ambit of Sections 33(1), 35 and 36 of the Act and Section 63 of the Indian Evidence Act in Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao and held that: "13. The first limb of Section 35 clearly shuts out from evidence any instrument chargeable with duty unless it Page 75 of 80 C/SCA/2064/2009 CAV JUDGMENT is duly stamped. The second limb of it which relates to acting upon the instrument will obviously shut out any secondary evidence of such instrument, for allowing such evidence to be let in when the original admittedly chargeable with duty was not stamped or insufficiently stamped, would be tantamount to the document being acted upon by the person having by law or authority to receive evidence. Proviso (a) is only applicable when the original instrument is actually before the Court of law and the deficiency in stamp with penalty is paid by the party seeking to rely upon the document. Clearly secondary evidence either by way of oral evidence of the contents of the unstamped document or the copy of it covered by Section 63 of the Indian Evidence Act would not fulfil the requirements of the proviso which enjoins upon the authority to receive nothing in evidence except the instrument itself. Section 35 is not concerned with any copy of an instrument and a party can only be allowed to rely on a document which is an instrument for the purpose of Section 35. 'Instrument' is defined in Section 2(14) as including every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. There is no scope for inclusion of a copy of a document as an instrument for the purpose of the Stamp Act.

14. If Section 35 only deals with original instruments and not copies Section 36 cannot be so interpreted as to allow secondary evidence of an instrument to have its benefit. The words 'an instrument' in Section 36 must have the same meaning as that in Section 35. The legislature only relented from the strict provisions of Section 35 in cases where the original instrument was admitted in evidence without objection at the initial stage of a suit or proceeding. In other Page 76 of 80 C/SCA/2064/2009 CAV JUDGMENT words, although the objection is based on the insufficiency of the stamp affixed to the document, a party who has a right to object to the reception of it must do so when the document is first tendered. Once the time for raising objection to the admission of the documentary evidence is passed, no objection based on the same ground can be raised at a later stage. But this in no way extends the applicability of Sec.36 to secondary evidence adduced or sought to be adduced in proof of the contents of a document which is unstamped or insufficiently stamped."

10. It is clear from the decisions of this Court and a plain reading of Sections 33, 35 and 2(14) of the Act that an instrument which is not duly stamped can be impounded and when the required fee and penalty has been paid for such instrument it can be taken in evidence under Section 35 of the Stamp Act. Sections 33 or 35 are not concerned with any copy of the instrument and party can only be allowed to rely on the document which is an instrument within the meaning of Section 2(14). There is no scope for the inclusion of the copy of the document for the purposes of the Indian Stamp Act. Law is now no doubt well settled that copy of the instrument cannot be validated by impounding and this cannot be admitted as secondary evidence under the Indian Stamp Act, 1899.

11. The learned counsel for the appellant submitted that the High Court was guided by the decisions rendered by this Court while deciding the question involved in the case whether original document was unstamped or not properly stamped and not in regard to a document which was although stamped but was improperly stamped. As per the learned counsel, the case in hand shall be governed by Section 37 of the Act and not by Section Page 77 of 80 C/SCA/2064/2009 CAV JUDGMENT 33 read with Section 35 of the Act.

12. The learned counsel further urged that the High Court has committed an error in overlooking Section 48B inserted by Indian Stamp (Madhya Pradesh Amendment) Act, 1990 (24 of 1990], which received assent of the President and was published in the Madhya Pradesh Gazette (Extraordinary) dated 27.11.1990, applicable in the State of Madhya Pradesh whereby the Collector is authorized even to impound copy of the instrument.

13. Section 33 refers to the power of the authority to impound the instrument not duly stamped, and by virtue of Section 35 any document which is not duly stamped shall not be admitted in evidence."

60. However, the question still arises that as per the explanation below the definition of instrument, the term "document" also includes any electronic record as defined in clause (t) of Sub Section 1 of Section 2 of the Information Technology Act, 2000 and therefore, the subscribers' data since available with the respondents as supplied by the petitioners could be said to be document in respect of which whether powers of impounding could be said to have been exercised. But, such subscribers' data since do not fall in Article 48A the same could not be construed as instruments. Even if the same are construed to be documents, no powers of impounding under Section 33 Page 78 of 80 C/SCA/2064/2009 CAV JUDGMENT read with Section 68 are exercised in relation to the original instruments of customer application forms. Thus, relying on such subscribers' data without the availability of the original instruments, no order or demand for stamp duty could have been made against the petitioners.

61. In all these petitions, what is not in dispute is that the authorities initially exercised powers under Section 68, calling upon the petitioners to submit informations as regards their subscribers' base. They were asked to produce the copy of the customer application form. Such application forms were treated as an agreement, falling under Article 5(h) of ScheduleI and in exercise of powers under Section 39 of the Act, they are asked to pay stamp duties on subscribers' base. Such exercise of powers were not in consonance with Section 33 of the Act as there was no impounding of original instruments. The powers under Section 39(1)(b) could be exercised by the Collector only when the original instruments are impounded under Section 33 of the Act or received by the Collector under Sub Section 2 of Section 37 of the Act. Such events did not take place in the case of Page 79 of 80 C/SCA/2064/2009 CAV JUDGMENT the petitioners. Therefore, the impugned orders and the demand notices issued to the petitioners under the Act could be said to be without jurisdiction or authority of law. Such impugned orders in the demand notices therefore cannot stand scrutiny of law and they are required to be quashed and set aside.

62. For the reasons stated above, the petitions are allowed. Impugned orders and impugned demand notices are quashed and set aside.

63. Since, the impugned orders are set aside, it is directed that if the petitioners have paid any amount under the impugned orders, they shall be refunded such amounts within a period of 3 months from the date of receipt of this order.

(C.L.SONI, J.) ANKIT Page 80 of 80

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