Gujarat High Court
L&T Samakhiali Gandhidham Tollway ... vs Deputy Collector & on 11 April, 2014
Author: R.M.Chhaya
Bench: R.M.Chhaya
C/SCA/8169/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 8169 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE R.M.CHHAYA
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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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L&T SAMAKHIALI GANDHIDHAM TOLLWAY LIMITED & 1....Petitioner(s)
Versus
DEPUTY COLLECTOR & 1....Respondent(s)
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Appearance:
SINGHI & CO, ADVOCATE for the Petitioner(s) No. 1 - 2
MR VISHAL PATEL, AGP for Respondent(s) No. 1
MR MAULIK G NANAVATI, ADVOCATE for the Respondent(s) No. 2
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CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA
Date : 11/04/2014
ORAL JUDGMENT
1. By way of this petition under Article 226 of the Page 1 of 30 C/SCA/8169/2013 JUDGMENT Constitution of India, the petitioners have prayed for the following relief(s):-
(A) This Hon'ble Court may be pleased to issue a writ of or in the nature of mandamus or a writ of or in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the action of the respondent No.1 in visiting /entering the Toll Plaza of the petitioner No.1 on 25.2.2013;
(B) This Hon'ble Court may be pleased to issue a writ of or in the nature of mandamus or a writ of or in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the consequential impugned notices dated 27.2.2013 (being Annexure-B to this petition), 1.4.2013 (being Annexure-D to this petition) and 08.04.2013 (being Annexure-G to this petition) issued by the respondent No.1 and that this Hon'ble Court may be further pleased to quash and set aside the action of the respondent No.1 in compelling and threatening the petitioners to produce the documents/instruments;
(C) Pending the admission, hearing and final disposal of the present petition, this Hon'ble Court may be pleased to restrain the respondent No.1 in proceedings further, in any manner whatsoever, with the impugned notices dated 27.2.2013, 1.4.2013 and 8.4.2013 issued by the respondent No.1 to the petitioner No.1; (D) Pending the admission, hearing and final disposal of the present petition, this Hon'ble Court may be pleased to stay the operation, implementation and continuance of the impugned notices dated 27.2.2013, 1.4.2013 and 08.04.2013 issued by the respondent No.1 and be further pleased to restrain the respondent No.1 from taking any steps/proceedings and/or act upon the concession agreement which is in possession of the respondent No.1 on account of compulsion and threats issued by the respondent No.1;
(E) This Hon'ble Court may be pleased to grant ex-parte ad interim reliefs in terms of prayer C and D above. (F) This Hon'ble Court may be pleased to grant such other and further reliefs as may be deemed just and expedient.
2. It appears from the record that this Court vide order dated 01.05.2013 passed the following order:-
"1.Heard Mr.Mihir Joshi, learned Senior Counsel with Mr.Sandeep Singhi, learned counsel for Singhi & Co. for the petitioner.
2. Notice to respondent Nos.1 and 2, returnable on 09.05.2013. Direct Service is permitted qua respondent No.1.
3. Mr.Maulik Nanavati, learned counsel usually appears for Page 2 of 30 C/SCA/8169/2013 JUDGMENT respondent No.2, is requested to accept the advance copy on behalf of respondent No.2. No further proceedings pursuant to the impugned Notice shall be taken by respondent No.1-Authority till the returnable date.
4. Respondent No.1-Dy.Collector shall specifically file an affidavit to the effect that as to under which provisions of the Bombay Stamps Act, 1958, he has entered into the premises of the petitioner."
3. It appears from the record that respondent No.1- Authority i.e. Deputy Collector served a copy of the order purported to have been passed on 30.04.2013 on 02.05.2013 and therefore, by way of amendment the said order came to be challenged on the grounds which was permitted to be amended and the petitioners were permitted to add the prayer Nos.17BB and 17DD as under:-
"(17BB) This Hon'ble Court may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari and/or any other appropriate writ, direction or order quashing and setting aside the impugned order dated 30.04.2013 (being Annexure-L to this petition) (17DD) Pending the admission, hearing and final disposal of the present petition, this Hon'ble Court may be pleased to stay the operation and implementation of the impugned order dated 30.04.2013."
4. It further appears that thereafter, the petitioners preferred an application being Civil Application No.5266 of 2013 and prayed for the following relief(s):-
"(A) that this Hon'ble Court be pleased to stay the operation and implementation of the impugned order dated 30.04.2013 (being Annexure-C to this civil Application) passed by the respondent No.1;
(B) that this Hon'ble Court be pleased to grant ex-parte ad interim relief in terms of prayer A above;
(C) that this Hon'ble Court be pleased to grant any other and further relief as it may deem First Information Report and necessary Page 3 of 30 C/SCA/8169/2013 JUDGMENT in the interest of justice."
5. It further reveals that in the civil application, on 06.05.2013 this Court (Coram:Rajesh H. Shukla, J.) has passed the following order :-
"Heard learned Senior Advocate Shri Mihir Joshi appearing for Singhi & CO. for the applicants.
In view of the contentions raised, Notice to the respondents, returnable on 9th May, 2013.
Learned AGP Shri Rohan Yagnik waives service of notice for Respondent No.1 and learned AGP Shri Maulik Nanavaty waives service of notice for Respondent No.2.
Learned AGP Shri Rohan Yagnik makes a statement that in view of the order passed earlier in the main matter i.e. Special Civil Application No.8169 of 2013 on 01.05.2013, though the order may have been issued no further steps will be taken since the matter kept on 09.05.2013.
Permitted to be served by speed post to Respondent no.2 over and above usual mode of service."
6. This Court while admitting the matter passed the following order on 31.07.2013 in terms of Paragraph Nos.17(D) and 17(BB) of the petition, read with order dated 07.08.2013 passed below Note for Speaking to Minutes:-
Order dated 31.07.2013
1.Heard learned Senior Counsel Mr. Mihir Joshi for the petitioners, learned Counsel Mr. Maulik G. Nanavati for the respondent No.2 and learned Assistant Government Pleader Mr. Rohan Yagnik for the respondent - State.
2. Upon submissions made by learned Senior Counsel for the petitioners, an affidavit-inreply is filed by the Deputy Collector, Stamp Duty Valuation Organization, Bhuj - Kachchh. However, no reply to the contentions based on Section 68 of the Gujarat Stamp Act, 1958 (i.e. Collector's power to authorise officer to enter premises and inspect certain documents) (hereinafter referred to in short as 'the Act') appears on record; particularly about the reason to believe by the Collector that all or any of instruments specified in Page 4 of 30 C/SCA/8169/2013 JUDGMENT Schedule I have not been charged at all or incorrectly charged with duty leviable under this Act and that the authorisation has to be in writing about powers to be conferred upon an Officer to enter into any premises and further, genuineness of exercise of powers as regards the entry of the respondent - Deputy Collector into the premises of the petitioner, contrary to Section 68 of the Act.
3.In the above circumstances, the order impugned dated 30.03.2013 passed by the Deputy Collector, Stamp Duty Valuation Department, Kachchh-Bhuj shall remain stayed till final disposal of this petition.
4.Hence, RULE. Ad-interim relief in terms of Paragraph 17.(D) and 17BB of the petition.
Direct Service is permitted.
However, it is made clear that the above order will not preclude the competent authority to take action in accordance with law.
Order in Civil Application No.5266/2013 In view of the order passed today in the main matter, i.e. Special Civil Application No.8169/2013, the Civil Application does not survive and accordingly, stands disposed of. Notice discharged.
Order dated 07.08.2013 This Note for Speaking to Minutes is filed with the following prayers :-
"The date of impugned order in Paragraph 3 of the order dated 31.07.2013 be read as 30.04.2013 instead of 30.03.2013 and; Ad-interim relief in terms of Paragraph 17(D) and 17(DD) of the petition instead of Paragraph 17(D) and 17BB of the petition."
2. In the aforesaid circumstances, this Note for Speaking to Minutes is allowed. Accordingly, the date of impugned order in Paragraph 3 of the above cited order dated 31.07.2013 be read as '30.04.2013' and in Paragraph 4 of the above order, 'Ad-interim relief in terms of Paragraph 17(D) and 17(DD) of the petition'. Order accordingly.
3. In view of the above, this Note for Speaking to Minutes stands disposed of. Direct Service is permitted.
7. The facts which can be culled out from the record of the petition are as under:-
7.1 That the petitioner company has entered into a contract with respondent No.2-National Highways Authority of India for augmenting the existing road from Page 5 of 30 C/SCA/8169/2013 JUDGMENT km 306.00 to km 362.13 on the Samakhiali-
Gandhidham section of National Highway No.8(A) in the State of Gujarat. The facts reveal that on 25.02.2013 at around 9:30 P.M (night), respondent No.1 entered/visited the toll plaza at Samakhiali at km 308.80. It is averred by the petitioners that respondent No.1 informed the officers of petitioner No.1 that he is visiting toll plaza on his way back from this Court claiming that he had attended some work of this Court.
7.2 It was further averred that respondent No.1 made inquiry from the officers of petitioner No.1 with regard to the payment of stamp duty by toll plaza without intimating as to which instrument/document has been insufficiently stamped and directed the officers of petitioner No.1 to remain present in his office on 27.02.2013 with necessary documents, which authorize petitioner No.1 to collect the toll. It appears that respondent No.1 prepared rojkam dated 25.02.2013 narrating the said facts.
7.3 It is further averred by the petitioners that under which provisions of the Bombay Stamp Act, 1958 ('the Act' for short) respondent No.1 entered the premises/toll plaza was not disclosed that too at 9:30 pm. It is further contended that it is evident from rojkam that respondent No.1 had no material or any reason to believe before his visit that any Page 6 of 30 C/SCA/8169/2013 JUDGMENT instruments/documents claimed to have been executed by petitioner No.1 is incorrectly charged with the duty leviable under the Stamp Act and during such visit neither any details were provided nor any reasons for such belief was disclosed by respondent No.1 to show as to which of the instrument/document executed by petitioner No.1 is improperly stamped.
7.4 It is the case of the petitioners that as petitioner No.1 was compelled to remain present in the office of respondent No.1 on 27.02.2013, the officers of petitioner No.1 remained present in the office of respondent No.1 accordingly on the said date. It appears from the record that on the said date, respondent No.1 issued a notice purported to have been issued under Section 68 of the Act directing petitioner No.1 to produce the documents, which he learnt from the officers of petitioner No.1 during his entry in the toll plaza on 25.02.2013. Accordingly, the officers of petitioner No.1 remained present in the office of respondent No.1 on 11.03.2013 asking for time to respond to the notice, which was granted.
7.5 It further appears from the record that on the said date, respondent No.1 intimated petitioner No.1 that respondent No.1 was not available on the said date and hence, they would be intimated about the date of hearing later on. It further appears from the record that Page 7 of 30 C/SCA/8169/2013 JUDGMENT again by further notice dated 01.04.2013, respondent No.1 directed petitioner No.1 as a last chance, to produce the documents, failing which respondent No.1 threatened petitioner No.1, and its officers for prosecution under the provisions of the Act. It is averred by the petitioners that even in the notice dated 01.04.2013, it is wrongly stated that the officers of petitioner No.1 did not remain present before respondent No.1 on 11.03.2013. The petitioners have averred that in the said notice, it is also mentioned that respondent No.1 issued notice dated 13.03.2013 directing the officers of petitioner No.1 to remain present in the office of respondent No.1 on 18.03.2013 but petitioner No.1 failed to remain present.
7.6 It is the case of the petitioners that no such notice dated 13.03.2013 has been received by petitioner No.1. The petitioners have further contended that because of repeated threats given by respondent No.1, the officers of petitioner No.1, out of fear, were compelled to produce the concession agreement executed by respondent No.2 in favour of petitioner No.1 by communication dated 08.04.2013.
7.7. It is further averred that on the said date i.e. on 08.04.2013, respondent No.1 further compelled the petitioners to produce certain documents and informed petitioner No.1 that hearing would be held on Page 8 of 30 C/SCA/8169/2013 JUDGMENT 19.04.2013. The petitioners have further averred that the officers of petitioner No.1 was informed orally by the office of respondent No.1 that the date of hearing which was fixed on 19.04.2013 is now kept on 25.04.2013, however, handwritten notice was not given to the petitioners, even though request was made by petitioner No.1, which was in fact provided on 25.04.2013. On receipt of the same, the officers of petitioner No.1 asked for time to enable the petitioners to reply to the same. However, respondent No.1 granted only 4 days time i.e. till 29.04.2013.
7.8 It was further contended by the petitioners that the action of entry and consequential notices were completely illegal and without jurisdiction and on various grounds, the petitioners approached this Court with the 'original prayers' as quoted hereinabove. After passing of the order dated 01.05.2013, as mentioned above respondent No.1 served a copy of the order purported to have been passed on 30.04.2013 and therefore, the petitioners have challenged the said order by way of amendment and have prayed for amendment in the prayers as quoted hereinabove.
8. It is further averred that respondent No.1 viz. Shri K.P.Pandya, Deputy Collector, Stamp Duty Valuation Organization, Bhuj-Kutch has filed an Affidavit-in-Reply and has justified the action of entry on the ground that Page 9 of 30 C/SCA/8169/2013 JUDGMENT the Deputy Collector has given powers under Section 68(1) of the Act, wherein, if the officer has reason to believe that any person or party has not paid requisite stamp duty or paid less amount of stamp duty then in such cases the officers can carry out inspection and can make note of the same and has also power under Section 68(2) of the Act to issue notice.
9. The petitioners have filed an Affidavit-in-Rejoinder and have reiterated the stand taken in the memo of the petition and have denied the contentions raised by Shri K.P.Pandya, Deputy Collector in his reply.
10. It may further be noted that one Shri Pradipsinh L. Zankat, Deputy Collector, Stamp Duty, Bhuj-Kutch, has filed an additional affidavit, more particularly in relation to the averments made in the amended petition. It is submitted that the Deputy Collector has been authorized by Notification dated 08.09.1998 to exercise powers under Section 68 of the Act. The said affidavit further deals with the powers of the Dy.Collector under Section 68 of the Act and has averred as under:-
"11. I say and submit that the proceedings initiated from dated 25.03.2013 and then after during the course of the proceeding the copy of "concession agreement" executed between the petitioner and respondent No.2 on 17.03.2010 have produced before me on 08.04.2013. On perusal of the copy of concession agreement dated 17.03.2010, that the instrument specified in Schedule-I and duty leviable under Article-45(g) has not been paid so the answering respondent has after given sufficient opportunities to the petitioner passed an order dated 30.04.2013.
12. I say and submit that the answering responding left the office of Headquarter District Kutch-Bhuj on 25.02.2013 to attend Page 10 of 30 C/SCA/8169/2013 JUDGMENT the High Court proceeding in case of Special Civil Application No.2214 of 2012 and after attending the Hon'ble High Court he has on way of returned at his office of Headquarter at Kutch-Bhuj, so the answering respondent says to be on duty as per Rule-23(h) of the Gujarat Civil Services (Traveling Allowance) Rule 2002, and during discharging his duty on 25.02.2013 at 9:30 pm. The answering respondent said to be discharged his duty under the Act and action taken by him did not says to be arbitrary or without the jurisdiction. The copy of the relevant rule is annexed hereto and mark as Annexure:R-VI.
13. I say and submit that the averments made by the petitioner by way of draft amendment in para-12(c) and 12(d). The learned Assistant Government Pleader have informed the answering respondent about the order passed by this Hon'ble Court on 01.05.2013 in this matter, and answering respondent have also inform to learned Assistant Government Pleader about the final order passed on dated 30.04.2013. So the learned Assistant Government Pleader inform not to take recovery steps with regards to the final order passed on 30.04.2013, and so learned Assistant Government Pleader may possible convey this message to the advocate of the petitioner about the necessary instructions in respect of the order passed by this Hon'ble Court on 01.05.2013."
11. It may further be noted that the petitioners have filed an Affidavit-in-Rejoinder to the additional affidavit and have denied the contentions raised by Dy.Collector, Shri Pradipsinh L. Zankat in his additional affidavit and have reiterated the contentions raised in the petition.
12. Heard Mr.Mihir Joshi, learned Senior Counsel with Mr.Sandip Singhi, learned counsel for M/s. Singhi & Co., for the petitioners, Mr.Vishal Patel, learned Assistant Government Pleader for respondent No.1-Deputy Collector and Mr.Maulik Nanavati, learned counsel for respondent No.2-National Highways Authority of India.
13. Learned Senior Counsel for the petitioners has raised the following contentions:-
a) That the entry of respondent No.1 in the toll plaza of petitioner No.1 was illegal and without jurisdiction.Page 11 of 30
C/SCA/8169/2013 JUDGMENT b) That after the office hours, respondent No.1 was
not in the performance of his functions under the provisions of the Act.
c) That respondent No.1 had not shown any authority letter exhibiting authorization in favour of respondent No.1 to enter in the toll plaza of petitioner No.1.
d) That the very action of respondent No.1 for entering in the toll plaza making inquiry and compelling petitioner No.1 to produce the documents learnt during the course of inquiry is ex-facie illegal and without jurisdiction.
e) That respondent No.1 had no reason to believe to enter the premises of petitioner No.1 as provided under Section 68 of the Act.
f) That respondent No.1 had no material or belief that any of the instrument/document executed by petitioner No.1 is incorrectly charged with a duty leviable under the Act.
g) That respondent No.1 was not aware as to which type of instrument/document was executed by petitioner No.1 for its toll plaza.
h) That respondent No.1 was not even aware as to which registers, books, records, papers, documents or proceedings and was not even aware about the Page 12 of 30 C/SCA/8169/2013 JUDGMENT instrument itself.
In support of the aforesaid contentions, learned Senior Counsel for the petitioners has relied upon the following judgments.
(i) Income Tax Officer Vs. M/s.Seth Bros. & Ors. [(1969) 2 SCC 324]- para-8.
(ii) Sheo Nath Singh Vs. Appellate Asst. Commissioner of Income Tax, Calcutta [(1972) 3 SCC 234]- paras 9 and 10.
(iii)The Income Tax Officer Vs. Lakhmani Mewal Das [(1976)3 SCC 757], - Paras-7 to 12.
(iv) Ganga Saran & Sons Pvt. Ltd. Vs. The Income Tax Officer (AIR 1981 SC 1363) - Para 6.
(v) Desai Bros. Vs. Deputy Commissioner of Income Tax [(1999) 240 ITR 121]- Pages 124 and 125.
14. It was contended that the action on part of respondent No.1 in threatening the officers of petitioner No.1 to disclose details, in compelling the officers of petitioner No.1 to produce all the documents in respect of the toll plaza so as to enable respondent No.1 to make out the reasons for his belief and in subsequently issuing notices dated 27.02.2013, 01.04.2013 and 08.04.2013 are contrary to the provisions of Section 68 of the Act.
15. It was further contended that any further Page 13 of 30 C/SCA/8169/2013 JUDGMENT proceedings pursuant to the illegal entry of respondent No.1 in the premises of petitioner No.1 are liable to be quashed and set aside as the same was illegal and without jurisdiction and other proceedings are also required to be quashed and set aside. It was further contended that instrument in possession of respondent No.1 was not produced voluntarily by petitioner No.1. It was further contended that when respondent No.1 entered in the toll plaza of petitioner No.1, the concession agreement has not been inspected by respondent No.1, and respondent No.1 had no authority to act on the said concession agreement at all, which was made available based on threats and compulsion.
In support of the aforesaid contentions, learned Senior Counsel for the petitioners has relied upon the following judgments.
(i) Lala Uttam Chand Vs. Peram Nand & Ors. (AIR 1942 Lahore 265)-Page 266(g)
(ii) Narayandas Nathuram Marwadi (AIR 1943 Nagpur
97) - Page 98(f).
16. It was further contended that the impugned order dated 30.04.2013 passed by respondent No.1 is illegal, contrary to law and liable to be quashed and set aside. Further, no notice was issued to petitioner No.1 by respondent No.1 under Sections 33, 37 and 39 read with Article 45(f)(g) of the Schedule to the Act nor any Page 14 of 30 C/SCA/8169/2013 JUDGMENT opportunity of being heard has been given to the petitioners before passing the impugned order dated 30.04.2013.
17. It was further contended that the petitioners have never been intimated that the document in question has been impounded by respondent No.1 under Section 33 of the Act and the impugned order dated 30.04.2013 has passed on the twisted facts, which are contrary to the record. It was also contended that no reasons have been given by respondent No.1 in the order dated 30.04.2013 for rejecting the contentions raised by petitioner No.1 by letter dated 27.04.2013. It was further contended that no reasons have been assigned by respondent No.1 for coming to the conclusion that the concession agreement is a power of attorney falling under Article 45 of the Schedule to the Act and no reasons have been given for levying penalty and that too nine times of the alleged deficit stamp duty.
18. It was further contended that respondent No.1 has not intimated petitioner no.1 that he had impounded the concession agreement and any claim now made by respondent No.1 suggesting that he had made the endorsement of compounding would not cure the fatal error of respondent No.1 in not intimating petitioner No.1 that he had impounded the document in his possession without there being any reference to it in Page 15 of 30 C/SCA/8169/2013 JUDGMENT the notice or the order dated 30.04.2013.
In support of the aforesaid contentions, learned Senior Counsel for the petitioners has relied upon the following judgments.
(i) Board of Revenue, Chepuak, Madras Vs. Poorsala China Appalanarasimhulu (AIR 1957 AP 237)- Para 9.
(ii) Diwan Kalusha Ahmedsha & Ors. Vs. Mr.Vanikar, Collector of Kaira [(1970) 11 GLR 1009]- Paras 6, 9, 10 and
11.
(iii) Smt.Chandrawati Devi Vs. Additional Commissioner (Stamps), Meerut & Ors. - Paras 9 and 11.
19. Per contra, learned Assistant Government Pleader for respondent No.1 has supported the impugned order and has contended that respondent No.1 viz. Shri K.P.Pandya, Deputy Collector has been given powers under Section 68(A) of the Act and therefore, Mr.Pandya was authorized to carry out inspection and can make note of the same. It was further contended that due notices have been given and after considering all the material, which were produced by petitioner No.1, impugned order dated 30.04.2013 is passed.
20. It is further contended that a copy of the order dated 30.04.2013 has been faxed to the Legal Manager of petitioner No.1-Company at Chennai office on 01.05.2013 and was sent by E-mail to the Project Head and Legal Manager on 02.05.2013. It is alleged that Page 16 of 30 C/SCA/8169/2013 JUDGMENT petitioner No.1-Company has caused huge loss to the public exchequer and that the petitioner has not come with clean hands before this Court. Relying upon the additional affidavit, it is contended that the action against the petitioners is in accordance with the provisions of Section 68 of the Act and the order impugned is legal and proper.
21. Mr.Maulik Nanavati, learned counsel for respondent No.2 has candidly submitted that time and again, respondent No.1, more particularly Mr.K.P.Pandya, in his capacity as Deputy Collector has raised demands for the documents in question. It appears that respondent No.2 refused to accept such oral request and hence, actions under Section 68(1) of the Act. He further candidly submitted that actions taken by the Deputy Collector is without any authority and jurisdiction and the impugned order dated 30.04.2013 is passed without any prior notice. He therefore, submitted that the petition be allowed as prayed for.
22. The learned AGP made available the original file of the proceedings, which was perused in the open Court in presence of the learned counsel for the parties by the Court only. On perusal of the same, it is found that no notice dated 13.03.2013 was sent to the petitioners. The statement made in the affidavit that the order Page 17 of 30 C/SCA/8169/2013 JUDGMENT dated 30.04.2013 was faxed is not found in the original file, except handwritten note which shows that the fax was sent between 10:00 to 10:20 hours, however, there is neither any report of the same nor any copy of the same. It is also noticed that respondent No.1-Authority prepared a draft order with a printed date of 30.04.2013.
No other and further submissions are made by learned counsel for the parties.
23. Before reverting to the submissions made by the learned counsel for the parties, it would be appropriate to refer to the relevant Sections of the Act i.e. Sections 33, 37, 39 and 68 thereof.
Section 33 of the Act read as under;
Section 33(1): "Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office except an officer of police, before whom any instrument chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall if it appears to him that such instrument is not duly stamped, impound the same. (2)...
(3)...
Section 37 of the Act reads as under:
Section 37: "(1) When the person impounding an instrument u 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 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.
Section 39 of the Act reads as under:
Page 18 of 30C/SCA/8169/2013 JUDGMENT Section 39: "(1) When the Collector impounds any instrument under Section 33, or receives any instrument sent to him under Sub-section (2) of Section 37, not being an instrument chargeable with a duty of twenty naye paise, or less, he shall adopt the following procedure:
(a) if he is of opinion that such instrument is duly stamped or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be; (b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees: or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees; provided that, when such instrument has been impounded only because it has been written in contravention or 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 Sub-section (2) of Section 37 the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
Section 68 of the Act reads as under;
Collector's power to authorize 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, authorize in writing any officer to enter upon any premises 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 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.
24. Bare reading of the provisions of Section 68 of the Act, clearly provides 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 at all or Page 19 of 30 C/SCA/8169/2013 JUDGMENT incorrectly charged with duty leviable under this Act, then he can 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 note and extracts as such officer deems necessary, and if necessary, to seize them and to impound them under Section 33 of the Act.
The Apex Court in the case of Income Tax Officer (supra) has observed thus:-
"8. The section does not confer any arbitrary authority upon the Revenue Officer. The Commissioner or the Director of Inspection must have, in consequence of information, reason to believe that the statutory conditions for the exercise of the power to order search exist. He must record reasons for the belief and he must issue an authorization in favour of a designated officer to search the premises and exercise the powers set Out therein. The condition for entry into and making search of any building or place is the reason to believe that any books of account or other documents which will be useful for, or relevant to, any proceeding under the. Act may be found. If the Officer has reason to believe that any books of account or other documents would be useful for, 0rrelevant to, any proceedings under the Act, he is authorised by law to seize those books of account or other documents, and to Place marks of identification therein, to make extracts or copies therefrom and also to make a note or an inventory of any articles or other things found in the course of the search. Since by the exercise of the power a serious invasion is made upon the rights, privacy and freedom of the tax-payer, the power must be exercised strictly in accordance with the law and only for the purposes for which the law authorizes it to. be exercised. If the action of the Officer issuing the authorization, or of the designated 609 Officer is challenged the Officer concerned must satisfy the Court about the regularity of his action. If the action is maliciously taken or power under the section is exercised for a collateral purpose, it is liable to be struck down by the Court. If the conditions for exercise of the power are' not satisfied the proceeding is liable to be quashed. But where power is exercised bona fide, and in furtherance of the statutory duties of the tax officers any error of judgment on the part of the Officers will not vitiate the exercise of the power. Where the Commissioner entertains the requisite belief and for reasons recorded by him authorises a designated Officer to enter and Page 20 of 30 C/SCA/8169/2013 JUDGMENT search premises for books of account and documents relevant to or useful for any proceeding under the Act, the Court in a petition by an aggrieved person cannot be asked to substitute its own opinion whether an order authorising search should have been issued. Again, any irregularity in the course of entry, search and seizure committed by the Officer acting in pursuance of the authorisation will not be sufficient to vitiate the action taken, provided the Officer has in executing the authorisation acted bona fide."
Similar view is expressed by the Apex Court in the cases of the Income Tax Officer Vs. Lakhmani Mewal Das, reported in 1976 (3) SCC 757 and Ganga Saran and Sons Pvt. Ltd. Vs. The Income Tax Officer, reported in AIR 1981 SC 1363 and the Division Bench of this Court in the case of Desai Bros. Vs. Deputy Commissioner of Income Tax, reported in 1999 240 ITR 121 while dealing with similar provisions under the Income Tax Act.
25. In the case on hand, the Deputy Collector himself who is deemed to be Collector, entered the premises of petitioner No.1. There is nothing on record to show that he had any reason to believe that all or any instrument specified in Schedule-I have not been charged at all or incorrectly charged with duty leviable under this Court. The rojkam clearly establishes the fact that while he was returning from Ahmedabad on reaching the toll plaza, he entered the premises of petitioner No.1 and inquired and hence, the question of Dy.Collector authorizing anybody does not arise in the instant case. The record of the petition as well the original record Page 21 of 30 C/SCA/8169/2013 JUDGMENT indicate that the Dy.Collector entered the premises of the petitioner No.1 at the wee hours at 9:30 P.M and was not even aware about a particular document. Therefore, the very entry of respondent No.1 was de hors the provisions of Section 68 of the Act and the action taken by respondent No.1 is arbitrary and without recording any reasons whatsoever.
26. Similar view is expressed by the Apex Court in the case of Sheo Nath Singh (supra), wherein it was held that the belief must be that of an honest and reasonable person based upon reasonable ground. There is no material on record to show that before entering the toll plaza, in exercise of powers under Section 68 of the Act, the Deputy Collector had any material on fact.
27. Thus, very exercise of powers under Section 68 of the Act by the Deputy Collector is without jurisdiction and such powers are erroneously exercised. Description in the Rojkam clearly bornes out the fact that the said powers under Section 68 of the Act are exercised by the Deputy Collector in most casual manner. The facts of the case clearly indicate that the said officer was not even aware about all or any particular document/s and therefore, question whether he had formed any reason to believe cannot be presumed. It may also be noted Page 22 of 30 C/SCA/8169/2013 JUDGMENT that the manner in which the Deputy Collector has exercised power and had entered into the toll plaza after the office hours, amounts to arbitrary exercise of powers and all subsequent proceedings would stand vitiated.
The Division Bench of this Court in the case of Diwan Kalusha Ahmedsha and others (supra) has observed thus:-
"4. It may be convenient at this stage to very briefly examine the relevant provisions of the Act. Section 33 of the Act reads as under:
Section 33(1): "Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office except an officer of police, before whom any instrument chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall if it appears to him that such instrument is not duly stamped, impound the same. (2)...
(3)...
Section 37 of the Act reads as under:
Section 37: "(1) When the person impounding an instrument u 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 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.
Section 39 of the Act reads as under:
Section 39: "(1) When the Collector impounds any instrument under Section 33, or receives any instrument sent to him under Sub-section (2) of Section 37, not being an instrument chargeable with a duty of twenty naye paise, or less, he shall adopt the following procedure:
(a) if he is of opinion that such instrument is duly stamped or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be; (b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees: or, if he thinks fit, an amount not Page 23 of 30 C/SCA/8169/2013 JUDGMENT exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees; provided that, when such instrument has been impounded only because it has been written in contravention or 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 Sub-section (2) of Section 37 the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
5. On the submissions made on behalf of the petitioners, the first question which arises for our consideration is whether the proceedings before the Collector under Section 39 of the Act are quasi judicial proceedings. In Province of Bombay v. Khushaldas S. Advani, Das J., formulated the following tests for deciding whether a particular act is an administrative act or a quasi judicial act: (i) that if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty to the authority to act judicially and the decision of the authority is a quasi judicial act; and (ii) that if a statutory authority has power to do any act which will prejudicially affect the subject, then although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi judicial act provided the authority is required by the statute to act judicially. The case before us falls in the second category of cases indicated in the aforesaid tests.
6. It is true that Section 39 does not in terms cast a duty upon the Collector to act judicially. However, it is by now well established that the duty to act judicially is not required to be super added or superimposed by the statute. Such a duty may be inferred or spelt out from the nature of the power conferred upon the authority. If the nature of the power is such that it empowers the authority to determine question which will prejudicially affect the subject, the judicial character of the duty has to be inferred from the very nature of the power conferred upon the authority. We will, therefore, examine Section 39 of the Act to find out whether it empowers the Collector to do any act which will prejudicially affect the subject.
7. Section 39 empowers the Collector to determine in the first instance whether an instrument impounded by him under Section 33 or sent to him under Section 37(2) of the Act is chargeable with duty and if so, whether it is duly stamped or not. The section empowers the Collector in cases where he is of the opinion that the Page 24 of 30 C/SCA/8169/2013 JUDGMENT instrument is chargeable with duty and is not duly stamped to require the payment of the proper duty or the amount required to make up the same together with a penalty of Rs. 5/- or if he thinks fit an amount not exceeding 10 times the amount of the proper duty or of the deficient portion thereof whether such amount exceeds or falls short of Rs. 5/-. It is thus clear that Section 39 of the Act confers upon the respondent a wide power which includes the power to adjudicate the proper stamp duty and to impose a penalty and it cannot be gainsaid that an order made in exercise of the power conferred under such a section would prejudicially affect the person against whom the order is made. The requirement of quasi judicial act which postulates that the determination must affect some right of the subject or impose some liability on him is, therefore, satisfied. The duty to act judicially musts therefore, be inferred from the nature of the power conferred upon the Collector under Section 39 of the Act.
8. In the view which we are taking we are fortified by a decision of the Andhra Pradesh High Court in Board of Revenue, Chepauk, Madras, (Now Andhra) at Madras Referring Officer v. Poosarla China Appallanarasimhulu A.I.R. 1957 Andhra Pradesh 237 (Full Bench.) In that case, Section 40 of the Stamp Act, 1899, came up for consideration before a Full Bench of the Andhra Pradesh High Court. The Court examined the scheme of that Act with particular reference to Sections 40, 56(2) and 59(2) of the Act and Subba Rao, C.J., with whom Krishna Rao J. concurred, observed as follows:
These sections are part of an integral scheme for ascertaining the quantum of stamp duty and penalty payable on a document which depend upon the interpretation of the document and the provisions of the Stamp Act and which sometimes raise complicated questions thereof. The duty of the Collector is, therefore, a judicial one and the fact that the higher tribunal is provided for emphasised that fact. Though the Section 40 does not, in term, say that the opinion of the Collector should be expressed and implemented after giving notice to the parties, principles of natural justice require that it should be done so. We may mention that the provisions of Sections 40, 56(2) and 59(2) of the Stamp Act, 1899, and the provisions of Sections 39, 53, 54 and 56 of the Act with which we are concerned are substantially the same.
9. We are, therefore, of the opinion that the power conferred upon the respondent under Section 39 of the Act is a quasi judicial power and before exercising the power conferred upon him under the said section, the Collector should consider the questions arising before him in a judicial spirit. In exercising the power, the Collector must act justly and fairly and not arbitrarily or capriciously: he must act in accordance with the principles of natural justice. Before taking any action under the said section, the Collector should give to the person likely to be affected by the order proposed to be made a notice of the action intended to be taken, make available to him the material on the basis of which the Collector proposes to take action under the said section and give a fair and reasonable opportunity to such person to represent his case and to correct or controvert the material sought to be relied against him.
Page 25 of 30C/SCA/8169/2013 JUDGMENT
10. Since the impugned order is undisputedly made in the instant case without complying with these essential principles of natural justice, the petitioners are entitled to succeed and the order is liable to be quashed and set aside. But there is yet another infirmity in the impugned order and that infirmity is that the impugned order is not a speaking order, i.e. an order which, on the face of it, discloses the reasons in support of the findings given in the said order. It is now well settled that every administra tive Officer exercising quasi judicial functions is bound to give reasons in support of the order he makes. (Vide The Testeels Limited v. N.M. Desai (1969) 10 G.L.R. 622). In the impugned order, the respondent has recorded the finding that the value of the property gifted to the petitioners is Rs. 30,000/- and not Rs. 20,000/- as recited in the instrument of gift. Now, surely the respondent ought to have given reasons in support of this basic finding on the strength of which he has given a further finding to the effect that the document in question was insufficiently stamped and conse quently imposed a penalty on the petitioners. The respondent ought to have indicated in his order the grounds and materials on the basis of which he disagreed with the valuation of the gifted property as made in the instrument of gift and valued the property in respect of which the instrument of gift was made at Rs. 30,000/-. The respondent ought also to have given reasons for imposing penalty at three times the deficient portion of the proper stamp duty and indicated why a lesser or higher penalty was not imposed on the petitioners in the circumstances of the case. The order, therefore, is vitiated also on account of this infirmity."
29. The aforesaid judgment of the Division Bench would squarely apply to the facts of the present case and therefore also, the impugned order dated 30.04.2013 deserves to be quashed and set aside as prayed for. It may further be noted that having taken such actions, which are ex-facie arbitrary, respondent No.1 i.e. Deputy Collector has made an attempt to justify his action by stating on oath that all reasonable opportunities have been provided to the petitioners. However, nobody has remained present before the authority on 18.03.2013 and other averments made in para-9 of the affidavit, there is nothing on record to Page 26 of 30 C/SCA/8169/2013 JUDGMENT show that any notice before impounding has been issued before taking action under Sections 33, 37 and 39 of the Act and therefore, the stand taken by the respondent-authority in its affidavits deserves to be negatived.
30. Apart from other aspects, the impugned order purported to have been passed under Sections 33, 37 and 39 of the Act is admittedly passed without there being any prior notice and, in fact no opportunity of being heard is granted to the petitioners. Therefore, on this ground alone, the impugned order deserves to be quashed and set aside.
31. Before parting, it may be noted that this Court issued notice and passed the order of status quo on 01.05.2013. Mr.Maulik Nanavati, learned counsel who usually appears for respondent No.2, appeared for respondent No.2. Learned Assistant Government Pleader also appeared on behalf of respondent No.1 on advance copy and was informed about the order.
32. On perusal of the original file of the proceedings, which was provided by learned Assistant Government Pleader for respondent No.1, it appears that on 30.04.2013 a draft order was prepared by respondent No.1 and there is noting to that effect. The inspector was present on the date of final hearing of this petition Page 27 of 30 C/SCA/8169/2013 JUDGMENT and on inquiry, the learned Assistant Government Pleader pointed out that no further opinion of the inspector was given. It is pertinent to note that on 30.04.2013, there is further noting about the impugned order having been passed.
33. It may be further be noted that as averred in the Affidavit-in-Reply at paragraph No.11, respondent No.1 has stated as under:-
"11. I respectfully say and submit that, a copy of the order dated 30.04.2013 has been faxed to the Legal Manager of the petitioner Company at Chennai on 01.05.2013 on fax No.044- 22528724 and petitioner Company's Ahmedabad Office on Fax No.079-660667070 and it was further e-mailed to the Project Head and Legal Manager on 02.05.2013. A copy of the said order dated 30.04.2013 was served to the Gandhidha/Adipur office on 02.05.2013 and due receipt was issued to the representative of the respondents office. A copy of the said detailed sending the order on fax as well as e-mail and serving at the Gandhidha/adipur office are annexed herewith and marked as Annexure:R-V(Colly) to this Affidavit-in-Reply."
34. On further examination of the original record, it clearly shows that the draft order with a date - 30.04.2013 was kept ready and the same has been passed after the notice was issued and the order of status quo was granted by this Court on 01.05.2013. The learned Assistant Government Pleader who appeared on 01.05.2013 also communicated the order passed by this Court to respondent No.1, which was pointed out to this Court even at the time of final hearing.
35. The Deputy Collector may exercise powers of the Page 28 of 30 C/SCA/8169/2013 JUDGMENT Collector, however, rule of law prevails in our country and therefore, any authority enshrined with power is supposed to act within four corners of law and the manner in which the same is prescribed as known to canons of law. This Court therefore, on basis of the original record has formed an opinion that respondent No.1 out of zeal and/or otherwise has tried to overreach the process of the Court. The conduct of respondent No.1 in particular calls for further investigation, however, as the petition is allowed and the impugned action and order dated 30.04.2013 are quashed, this Court deems it fit to direct the State of Gujarat to examine the conduct of respondent No.1 and take appropriate decision at their level as this Court deems it fit to leave the same to the wisdom of the State Government. Conduct of respondent No.1 right from his entry into toll plaza at 9:30 P.M., and the manner in which the order is passed speaks volume of it. This Court therefore, finds it necessary that such conduct of respondent No.1 be looked into by the concerned head of the department. Learned Assistant Government Pleader for respondent No.1 shall send a copy of this judgment to the Chief Secretary, State of Gujarat as well as the Secretary, Revenue Department, State of Gujarat. The Secretary (Revenue) shall call for the original records and proceedings from the office of respondent No.1 and examine the same, including the Page 29 of 30 C/SCA/8169/2013 JUDGMENT conduct of respondent No.1 in overreaching the process of the Court in particular and take appropriate decision.
36. In light of the aforesaid observations, the petition is allowed. The action of respondent No.1 in entering the toll plaza in purported exercise of Section 68 of the Act is declared to be arbitrary and hence, all consequential proceedings undertaken by respondent No.1 are hereby quashed and set aside. The impugned order dated 30.04.2013 is hereby quashed. In facts of the case however, there shall be no order as to costs.
(R.M.CHHAYA, J.) Suchit Page 30 of 30