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1. We are here concerned with a reference made by the Board of Revenue under Section 57, Stamp Act II [2] of 1899 on a question of the stamp duty payable on a settlement deed.

2. It is conceded that the document contains terms which make it a settlement deed and that for purposes of stamp duty it should be treated as such. Under Article 58, Stamp Act (Schedule 1), the duty is to be the same as for a bond for a sum equal to the amount or "value of the property settled as set forth in such settlement." The real value of the property is admitted by the settlor to be Rs. 2 lakhs; and since it is subject to a mortgage of one lakh of rupees, the value of the equity of redemption would be at least one lakh of rupees. The revenue authorities value it at Rs. 1,59,300, The settlor did not in so many terms purport to give the real value of the property; because if he gave a false value, he would be liable to prosecution. So he tried to guard himself by saying, "Value for purposes of stamp and registration, Rs. 3000". He argued before the Revenue authorities, as he did here, that he was entitled to put any notional value on the property. Since however it was clear from the document itself that the property was worth a great deal more than Rs. 3000, the matter was referred by the Registrar to the Collector and by the Collector to the Board of Revenue, which body, we are told, directed that the instrument should be registered and that proceedings should be taken against the settlor. The Board of Revenue thereupon referred to this Court the question as to, "the effect of Section 27 on the words 'value of the property as set forth in the settlement' occurring in Article 58, Schedule 1, Stamp Act, as the term 'value' may be interpreted in different ways, namely, (1) the market value at the time of execution, (2) the value to the executant when he acquired it, i. e., purchase price, and (3) A nominal or fictitious value."

5. The more Important question is as to the effect of Section 27, Stamp Act on this matter. That section runs, "The consideration (if any) and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it is chargeable shall be fully and truly set forth therein."

In order to properly calculate the amount of duty payable on a settlement, the value of the property settled must be known, as Article 58 itself makes clear. Since the Registrar is not empowered to conduct an enquiry himself as to the market-value, the value must be set out in the document itself; and Section 27 requires that that fact (the value) should be truly set forth. It seems to as that the principle underlying the provisions of the Stamp Act with regard to valuation and estimation of the duty payable is that the value of the property should be taken from the face of the document, and that the revenue of the Government is protected by requiring the parties to make a true and full disclosure of all facts and circumstances having any bearing on the duty payable, failing which they must suffer the consequences of their false or defective statements. In many of the cases cited above, the learned Judges have had to consider what protection revenue authorities have against false recitals in documents. The judgment in Reference under Stamp Act, Section 46, 3 Mad. 453, for example, concludes by saying:

"There ate provisions which appear sufficiently to protect the revenue, if we adopt this construction (that the stamp duty should be collected on the valuation given in the document itself." In In the matter of Mohamed Muzafar Ali, 44 ALL. 339 : (A. I. R. (9) 1922 ALL. 82 F. B.) no value was given at all; but nevertheless the Registrar registered the document. The learned Judges held that the words "as set forth in such instrument" refer back to the word "value" and not to the word "property". Then they went on to say :
"In the present instance there is no 'value' set forth in the said instrument. No doubt this is a contravention of Section 27, Stamp Act, and, if it be found that the omission to state the value of the property conveyed was done with intent to defraud the Government, a prosecution will lie against the person who executed the instrument under Section 64, Stamp Act." With regard to undervaluation they later on added, "If there was an intentional undervaluation, then a prosecution would protect the Government against the attempted fraud."