Research › Browse › Judgment

Kerala High Court · body

1987 DIGILAW 434 (KER)

Ramachandra Shambogue v. District Collector

1987-09-01

SHAMSUDDIN

body1987
Judgment :- 1. This revision petition is directed against the judgment of the Court of the District Judge, Tellicherry in CMA No. 30 of 1982. The matter arises out of a reference made by the Sub-Registrar, Manjeswar under S.45(A) of the Kerala Stamp Act regarding undervaluation in Document No. 979 of 1974 executed by the revision petitioner in favour of his daughter. 2. The petitioner valued the property gifted by him in favour of his daughter at Rs. 10,600/- and paid a stamp duty of Rs. 265/-. The Sub Registrar found that the property was undervalued and it is in these circumstances, he referred the matter to the Collector as provided under S.45(A) of the Kerala Stamp Act. The Deputy Collector obtained valuation of property from the Tahsildar, Kasaragod and on the basis thereof, fixed the value of property covered by the document provisionally at Rs. 34,600/- and the deficit stamp duty payable by the petitioner at Rs. 600/-. The petitioner was given an opportunity to file objection against the provisional order. Pursuant to this, the petitioner appeared on 31-7-1977 through an advocate and filed his objections contending that the value of the property provisionally fixed was exorbitant and was without any basis and be was not given an opportunity to go through the various reports filed by the Tahsildar. It was also contended that no notice was issued about inspection of the property by the Tahsildar, that the properties covered by the document are barren lands without any yield, that they are uneven hilly tracts without any road access and that the value shown in the document was quite reasonable. It was also the petitioner's case that the property which was gifted to his daughter was outstanding in the possession of one Ramachandra Naik as cultivating tenant and that the petitioner was only entitled to receive the compensation to be fixed under S.72 of the Kerala Land Reforms Act. On the basis of the above contentions the petitioner prayed to drop the proceedings taken against him under S.45A of the Stamp Act. After considering the objections, the Deputy Collector confirmed the provisional order directing the petitioner to remit the deficit stamp duty of Rs. 600/- within 30 days of the receipt of the order. On the basis of the above contentions the petitioner prayed to drop the proceedings taken against him under S.45A of the Stamp Act. After considering the objections, the Deputy Collector confirmed the provisional order directing the petitioner to remit the deficit stamp duty of Rs. 600/- within 30 days of the receipt of the order. Aggrieved by the order passed by the Deputy Collector the appellant preferred CMA No. 30 of 1982 before the District Court, Tellicherry and the learned District Judge after considering the points raised in the appeal confirmed the order passed by the Deputy Collector directing the petitioner to pay deficit stamp duty of Rs. 600/-. Challenging this order the above revision petition is filed. 3. In this revision petition, the learned counsel for the petitioner strenuously argued that me order passed by the Deputy Collector as well as the order passed in appeal by the District Judge are illegal and unsustainable. 4. The contention raised by the learned counsel is mainly based on the decision of a Division Bench of this Court in District Collector, Trivandrum v. Ittiavira John and another (1975 KLT 486). In that case the deed of conveyance executed by the respondent for a consideration of Rs. 3500/- was stamped for the purpose of stamp duty under Art.21 of the Kerala Stamp Act on the amount for value of the consideration shown in the document at the rate specified in the article. On reference to the Collector he held that the stamp duty bad to be levied on the market value of the property as assessed by the Tahsildar in his report viz. Rs. 48,000/-. The respondent preferred an appeal to the District Court under Clause (4) of S.45 of the Act. The District Court took the view that the Collector's action was unjustified and the order of the Collector was unsustainable having regard to the provisions of the Stamp Act. This view of the District Court was challenged in the revision petition before the Division Bench. The Division Bench held that having regard to the language of Art.21, stamp duty had to be paid on the amount of the value of consideration for such conveyance and it was not open to the Collector to direct payment of stamp duty on the market value of the property assessed by the Tahsildar in his report. The Division Bench held that having regard to the language of Art.21, stamp duty had to be paid on the amount of the value of consideration for such conveyance and it was not open to the Collector to direct payment of stamp duty on the market value of the property assessed by the Tahsildar in his report. The Division Bench also held that it might have been open to the Collector to find that the consideration bad not been duly and correctly stated as required by S.28 and to direct an investigation under S.45A(2) and to take action accordingly. Since no such enquiry was conducted the court held that the order of the Collector was unsustainable. In this connection the Division Bench also noticed and followed the ruling of the Supreme Court in Himalaya House Co. Ltd. v. The Chief Controlling Revenue Authority and Another (AIR 1972 SC 899). In that case the Supreme Court had occasion to consider the scope of Art.23 of the Central Stamp Act which corresponds to Art.21 of the Kerala Act. In Para.10 of the judgment, the Supreme Court made the following observation: "It was urged that in view of S.27 of the Stamp Act, it was permissible for the revenue to look into the terms and conditions of the agreements entered into by Uttamchand with the various persons to whom he had assigned flats offices and shop, particularly in view of the fact that the impounded document makes reference to those agreements. We are not able to accept that contention. S.27 prescribes 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" It is true that in view of this provision, the parties to a document are required to set forth in the document fully and truly the consideration (if any) and all other facts and circumstances affecting the changeability of that document with the duty or the amount of the duty with which it is chargeable. But a failure to comply with the requirements of that section is merely punishable under S.64 of the Stamp Act. No provision in the Stamp Act empowers the revenue to make an independent inquiry of the value of the property conveyed for determining the duty chargeable". 5. But a failure to comply with the requirements of that section is merely punishable under S.64 of the Stamp Act. No provision in the Stamp Act empowers the revenue to make an independent inquiry of the value of the property conveyed for determining the duty chargeable". 5. The Supreme Court has referred to a series of decisions which took the view that in order to find whether a document has been sufficiently stamped, the document itself as it stands had to be looked at and not any collateral (acts or circumstances. Their Lordships agreed with the view expressed in those decisions. 6. Under S.45A it is open to the Collector to make an enquiry as to whether the consideration has been correctly stated or not. In other words the enquiry has to be directed to the question whether the amount shown as consideration in the document represents the real consideration paid for the conveyance or a lesser amount is shown as consideration to defraud revenue. In this case, the consideration is only love and affection towards the daughter and therefore there is no scope for such an enquiry. A reading of the order of the Deputy Collector indicates that the only aspect considered by the Deputy Collector was whether the value shown for the purpose of stamp duty in the document really represents the market value. Such an enquiry is beyond the scope of S.45A as pointed out by the Division Bench of this Court in the above ruling in the absence of appropriate legislative amendment. 7. In the result the CRP is allowed and the order of the Deputy Collector directing payment of additional stamp duty of Rs. 600/- and the judgment of the learned District Judge confirming the same are set aside. The parties will bear their respective costs.