Relevant judgment for Stamp Act as applicable in Uttar Pradesh

Relevant judgment for Stamp Act as applicable in Uttar Pradesh

1.    Stamp Act, 1899 - Section 47A (4)--Stamp duty--Deficiency--Penalty--Penalty imposed equivalent to amount of deficient duty--Merely because stamp duty paid by petitioner found to be deficient--Cannot by itself be ground for imposing penalty--Particularly in absence of any finding that there was intention to evade proper stamp duty--No reason assigned for imposing penalty of that quantum--No reflection of acting judicially--Penalty order quashed held in MANU/UP/2446/2011 Equivalent Citation: 2011 4 AWC3865 IN THE HIGH COURT OF ALLAHABAD: C.M.W.P. No. 20357 of 2011 Decided On: 07.04.2011

Appellants: Smt. Sonia Jindal Vs. Respondent: State of U.P. and others Hon'ble Judges:  Pankaj Mithal, J.

Subject: Civil Subject: Property        Acts/Rules/Orders:  Indian Stamp Act - Section 47A(4),   Indian Stamp Act - Section 47A(4A) Disposition:  Petition allowed

2.    Single judge of  Hon'ble Allahabad ad High court has ruled

"The sine qua non for invoking the provisions of Section 47-A(3) of the Act is that the Collector has reason to believe that the stamp duty has not been properly set forth in the instrument as per market value of the property. Once the instrument is registered and the prescribed stamp duty as prescribed by the Collector as has been paid, the burden to prove that the market value is more than the minimum as prescribed by the Collector under the rules, is upon the Collector. The report of the Sub Register or Tahsildar itself is not sufficient to discharge that burden."

Reference may also be taken of judicial pronouncement of Division Bench of  Hon'ble Allahabad  High Court 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."

3.    The same question was again considered by another Division Bench in Jugul Kishore v. State of U. P., AIR 1992 All 194 which after expressing agreement with the view taken in Kaka Singh (supra) held as follows in Paras 4 and 5 of the report :

"From a mere glance at sub-section (4) of Section 47A it is apparent that the Collector (A.D.M. Finance in the present case) does not have any power to Impose penalty in these proceedings.....

It is worthy of note that while enacting Section 47A, the Legislature did not authorise the Collector to impose any penalty. Under this provision the only power vested in the Collector was to determine the market value of the property and if he finds that the duty paid on the instrument in question is less than that payable on the correct market value of the property, he may order that the difference may be realised from the party to the Instrument."

4.    A bench of three judges of the Allahabad High Court answered the specific question having discussed various judgments

1) Whether in proceedings under sub-section (4) of Section 47A of the Act, penalty can also be imposed if the Collector holds that the market value of the property has not been truly set forth in the instrument and consequently, there is deficiency in stamp duty? in Girjesh Kumar Srivastava And ... vs State Of U.P. And Others on 8 December, 1997 Equivalent citations: 1998 (1) AWC 403, (1998) 1 UPLBEC 437 http://www.indiankanoon.org/doc/1989748/ says at Para 9:

"The law regarding fiscal matters being well settled, power to impose penalty must be conferred by the Statute itself. The language of Section 47A alone can be seen and such a power cannot be inferred by implication or by reference to some general words contained in the Rules. In absence of a specific provision to that effect the Collector is not empowered to impose penalty. The question is, therefore, answered in favour of the applicants and against the State."

5. The relevant part of the judgment of AIR 2001 SC 600 (Dr. Vijay Laxmi Sadho Vs. Jagdish) which is also reported in 2001 (2) SCC 247, being paragraph-33 is extracted below:

“33.   As   the   learned   Single   Judge   was   not   in agreement with the view expressed in Devilal case it would have been proper, to maintain judicial discipline, to refer the matter to a larger Bench rather than to take a different view.  We  note  it  with   regret  and  distress  that  the  said course was not followed. It is well-settled that if a Bench of coordinate   jurisdiction   disagrees   with   another   Bench   of coordinate jurisdiction whether on the basis of “different arguments”   or   otherwise,   on   a   question   of   law,   it   is appropriate that the matter be referred to a larger Bench for resolution of the issue rather than to leave two conflicting  judgments to operate, creating confusion. It is not proper to sacrifice certainty of law. Judicial decorum, no less than legal propriety forms the basis of judicial procedure and it must be respected at all costs.”