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53. Section 2 of U.P. Act No. XI of 1969 (which came into force on 1st October, 1969), incorporated Section 47-A in the Principal Act. Sub-section (1) of new Section 47-A 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 is 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 subsection (3) of this Section, Collector has been empowered to determine the market value of the property which is the subject matter of an 'instrument' and the duty payable thereon. It further provides that the differences, if any, in the amount of duty disclosed in the instrument vis-a-vis the amount determined under Section 47-A(3) read with Section 47-A(1) shall be payable by the person liable to pay duty. Sub-section (4) of Section 47-A refers to a case and empowers 'Collector' on reference being made by a Registering Authority under Section 47-A(2) of the Act to examine the instrument for the purpose of correctness of the market value of the property and after examination if he finds that the market value was not truly set forth, he may determine the market value and duty payable thereon in accordance with procedure provided in subsection (3).

9. From the above, we find that Sub-sections (1) and (2) of Section 47-A apply to two different situations. In the instant case, the Registering Officer was since of the opinion that the market value as set forth in the sale deed was less than even the minimum value determined in accordance with the rules, he referred the same to the Collector. Before the Collector, the petitioner had filed evidence but by applying the Rule 341, the Additional Collector found that the market value set forth in the conveyance was less and, thereafter, by applying the rule of calculation or computation of the market value stated in Rule 341, he determined the market value of the two sale deeds and found the stamp duty payable thereon.

60. Interestingly, before U. P. Act 38 of 2001 had come into force, Section 47-A as such in State of U.P. - did not deal differently with the two situations- (1) where property has been valued bona fide without intention to evade stamp duty and (2) when market value of the property in question has not been truly set forth in such instrument with a view to evade payment of proper stamp duty in other words - instrument is deliberately undervalued for the purpose of deceitful gain.

61. It is, therefore, clear that in view of the aforesaid decision of this Court and to make the provisions more stringent, the State of U.P. enacted U.P. Act 38 of 2001 and vide Sub-section (4) of Section 47-A of the Stamp Act made provision for 'penalty'. Sub-section (4) (as mended by U.P. Act 38 of 2001) provides that if on enquiry under Sub-section (2) and examination under subsection (3), the Collector finds that the market value of the property has been truly set forth and the instrument duly stamped, he shall certify by endorsement that it is duly stamped and return it to the person who made the reference. However, in case where market value is not truly set forth and the instrument not duly stamped, he shall require the payment of proper duty or the amount required to make up the deficiency in the same, together with a penalty of an amount not exceeding four times the amount of the proper duty.

62. It is interesting to note that vide Section (4-A) (as inserted by U.P. Act 38 of 2001), provision for payment of 'simple interest' has been made only in a case where 'market value is not truly set forth' whereas 'interest' accrues or payable in a case where market value is truly set forth. A conjoint reading of aforesaid provisions clearly indicates that Section 47-A has differently treated a case where market value has been truly set forth and, on the other hand, a case where market value is not truly set forth.