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5. Section 27(1) of the Act provides that 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. This provision came up for consideration before the Supreme Court in Himalaya House Company v. Chief Controlling Revenue Authority. AIR 1972 SC 899 and it was held that a failure to comply with the requirements of the section is merely punishable under Section 65 of the Act and that there was no provision in the Stamp Act which empowered the authorities to make an independent enquiry of the value of the property conveyed for determining the duty chargeable. It was further held that for the purpose of Article 23, the value of consideration must be taken to be one as set forth in the conveyance deed. The effect of this decision was that in case a person did not set forth the true amount for which the transaction had taken place, the authorities had no power to recover the requisite stamp duty which was payable on the real market value. In order to meet this difficulty, large number of States in India amended the Stamp Act. By Section 2 of U. P. Act No. XI of 1969 which came Into force on 1st October, 1969, Section 47A was Inserted after Section 47 in the parent act. Sub-section (I) of this section provides that if the market value of any property which is the subject of any instrument on which duty is chargeable on the market value of the property, as set forth in such Instrument is less than even the minimum value determined in accordance with any rules made under this Act the registering officer appointed under the Indian Registration Act, 1908, shall refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. Sub-section (2) provides that if the registering officer while registering any instrument on which duty is chargeable on the market value of the property has reason to believe that the market value of the property which ts the subject of such instrument, has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. Under sub-section (3) of this section, the Collector is required to determine the market value of the property which is the subject of the instrument and the duty payable thereon. This sub-section further provides that the difference, if any, in the amount of duty shall be payable by the person liable to pay duty. Sub-section (4) of Section 47 A which deals with the situation in hand reads as follows :

Section 47A (4) The Collector may. suo motu, or on a reference from any Court or from the Commissioner of Stamps or an Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any officer authorised by the Board of Revenue in that behalf within four years from the date of registration of any instrument on which duty is chargeable on the market value of the property not already referred to him under sub-section (1) or sub-section (2), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the subject of such instrument and duty payable thereon, and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty payable thereon in accordance with the procedure provided for in subsection (3). The difference, if any. In the amount of duty, shall be payable by the person liable to pay the duty."

6. This very question has been considered by a Division Bench in Kaka Singh v. Addl. Collector, AIR 1986 All 107 and it was held as follows in Para 17 of the report:

"We find force also in the argument of the petitioner's learned counsel that since Section 47A does not empower the Collector to Impose penalty in the event of his finding that the market value was not truly set forth in the instrument, such an order imposing the same would be beyond Section 47A. For imposing penalty in a case like the present, power was specifically to be conferred. In the absence of a specific provision made in that respect. It is not possible to uphold the contention of the standing counsel that penalty could be imposed whenever and wherever the Collector under Section 47A finds that the value set forth was not true. Section 47A as stated above, was brought in recently to cover a case of evasion. While enacting Section 47A, the Legislature although empowered the Collector to determine the market value of the property, which is the subject of conveyance and the duty payable thereon, it did not make any provision empowering the Collector to impose penalty."

18. A plain reading of sub-section (4) of Section 47A makes it clear that the Collector may. suo motu or on a reference from any Court or other authorities as mentioned in the said sub-section, call for and examine the instrument for the purposes of satisfying himself as to the correctness of the market value of the property which is subject of such instrument and duty payable thereon and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty payable thereon in accordance with the procedure provided for in sub-section (3) and then the difference, if any. In the amount of duty shall be payable by the person liable to pay the duty. What procedure is to be adopted by the Collector for determining the market value of the property Involved and the duty payable thereon is laid down in sub-section (3) of Section 47A. Sub-section (3) embodies in itself a right of hearing based on the principle of natural justice and an Inquiry is then to be held in the manner prescribed under the rules made under the Act. This enactment thus provides for framing of rules only for the purposes of the manner of holding the inquiry. Neither sub-section (3) nor sub-section (4) makes any reference to the imposition of penalty or any other penal consequence, even if it is ultimately found that the market value of the property was not truly set forth in the instrument. It merely speaks of the liability of the person concerned to pay the difference, if any, in the amount of duty payable on the correct market value of the property involved.