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289. However, the said judgment of the Apex Court does not lay down any such preposition to the effect that imposition of ten times penalty is mandatory or automatic.

6. He submits that Section 40 of the Indian Stamp Act, 1899 empowers the Collector of Stamps to levy penalty upto ten times the deficit NEUTRAL CITATION NO. 2026:MPHC-GWL:2565 4 WP-3680-2012 stamp duty. However, mechanically, ten times penalty cannot be permitted to be imposed. In support thereof, he places reliance on the judgment of the Apex Court in the case of Trustees of H. Dhanda Trust vs. State of M.P. and Others, 2020 Legal Eagle (SC) 560. He further submits that the stamp duty and penalty as ascertained by the Collector of Stamps vide initial order dated 26.02.2011 has been deposited by the petitioner No.2 vide treasury receipt dated 18.03.2011 (Annexure P/8).

9. He further submits that as per the averments made in the return filed by the State, the power has been exercised by the Collector of Stamps in terms of Section 40 of the Act and in terms whereof, proper penalty has been levied.

10. No other point has been pressed by the learned counsel appearing for the parties.

11. Heard learned counsel for the parties and perused the record.

13. When the scheme of Sections 33, 38 & Section 40 of the Indian Stamp Act, 1899 is examined, it is evident that Section 33 deals with the impounding of an instrument whereas, Section 38 provides as to how the instrument impounded is to be dealt with whereas, Section 40 of the Act empowers the Collector of Stamps to ascertain the deficit stamp duty and to impose penalty thereon when he himself impounds any instrument under Section 33 or receives any instrument sent to him under Section 38 (2) of the Act.

15. Thus, when the Collector of Stamps was in receipt of an impounded document in terms of Section 38(2) of the Act of 1899, the determination of deficit stamp duty and the levy of penalty thereon were NEUTRAL CITATION NO. 2026:MPHC-GWL:2565 6 WP-3680-2012 required to be done in terms of Section 40 of the Indian Stamp Act, 1899. The return of the State also states that the Collector of Stamps has exercised power under Section 40 of the Act of 1899. The issue as to whether, the Collector of Stamps has discretion to impose a penalty not exceeding ten times the amount of proper duty or whether the maximum penalty of ten times the deficit stamp duty is required to be imposed came up for consideration before the Hon'ble Supreme Court in the case of Trustees of H.C. Dhanda Trust Vs. State of Madhya Pradesh and others , reported in (2020) 9 SCC 510.