Prakash Chand v. State of Uttar Pradesh — 1988 DIGILAW 574 (ALL)

JUDGMENT J. Prasad, M. - This application has been filed under Section 55 (1) of the Stamp Act (hereinafter referred to as Act) seeking revision of the order of the Collector requiring the applicant to pay the amount of deficit duty and penalty determined by him in respect of an instrument. 2. The Assistant Commissioner of Stamps, on behalf of the State has filed written objections raising some preliminary issues. The objections are reproduced verbatim below : - 1. That Section 56 of the Stamp Act gives to this Hon'ble Authority a power of control over powers exercisable by Collector under Chapters IV & V and under clause (a) to proviso (d) of Section 26 of Stamp Act. 2. That this power of control of this Authority in no way creates a right of revision against the powers exercisable by Collectors as mentioned above. 3. That the power given to this Authority under Section 56 (1) only entails the power to look into and examine in an administrative capacity the acts exercisable by the Collector as mentioned above. 4. That this authority has no power to sit as a Court under Section 56 (I) and stay proceedings of powers exercisable by Collectors as mentioned above. 5. That the only function of this Authority by acting under Section 56 (1) is to call for the relevant record of the Collectors in proceedings under Chapters IV & V and Proviso (a) to Section 26 of the Stamp Act and examine it and pass necessary orders. 6. That the power of this Hon'ble Authority under Section 56 (1) is purely administrative power and is in no way of a judicial nature. 7. That it has been held by the Hon'ble High Court of Allahabad in Civil Misc. Writ petition No. 10515 of 1983, July 30, 1984, Indu Engineering & Textiles v. Commissioner, Agra Division, Agra and others, 1984 R.D. pages 299 to 309 that the Commissioner in matters relating to realisation of arrears of land revenue acts as a revenue officer and not as a revenue Court, and that while acting as such revenue Officer, the Commissioner is an administrative authority. On the analogy of this judicial finding, this Authority is also an administrative authority while acting under Section 56 (1) and cannot act as a Court and stay realisation of revenue in proceedings before the Collector under Chapters IV & V and proviso (a) of Section 26 of the Act. 3. In almost all other similar applications under Section 56 (1) of the Act pending before Chief Controlling Revenue Authority (hereinafter referred to as CCRA), the Assistant Commissioner has filed the same objections praying that the CCRA may decide all the so-called revisions under Section 56 (1) as an administrative body and vacate all the stays granted therein. 4. As the points arising from the objections are of preliminary nature, it was considered proper to dispose them first. I, therefore, heard the counsel of various applicants who wanted to argue on these points and also the Secretary, Bar Association, who sought permission to do so. The arguments addressed by the Assistant Commissioner were also heard. The preliminary points, arising from the objections of the Asstt. Commissioner, are briefly enunciated below : - 1. Whether the power of control given to the CCRA under Section 56 (1) of the Act over the power exercisable by Collector under Chapters IV & V and under clause (a) of first proviso to Section 26 is administrative only. 2. Whether the power of control conferred on CCRA under Section 56 (1) of the Act creates the right of revision. 3. Whether CCRA has power under Section 56 (1) of the Act to stay proceedings of Collector and realisation of the amount of deficit duty and penalty. Point No. 1 : Section 56 of the Act runs as under : "56. Control of, and statement of case to, the Chief Controlling Revenue Authority. (1) The powers exercisable by a Collector under Chapter IV & Chapter V and under clause (a) of the first proviso to Section 26 shall in all cases be subject to the control of the Chief Controlling Revenue Authority. (2) If any Collector, acting under Section 31, Section 40 or Section 41, feels doubt as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case, and refer it, with his own opinion thereon, for the decision of the CCRA. (2) If any Collector, acting under Section 31, Section 40 or Section 41, feels doubt as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case, and refer it, with his own opinion thereon, for the decision of the CCRA. (3) Such Authority shall consider the case and send a copy of its decision to the Collector, who shall proceed to assess and charge the duty (if any) in conformity with such decision." 5. The contention of the Asstt. Commissioner is that CCRA is not a Court. As such it can exercise control only in administrative capacity by issuing directions to the subordinate authority. Elaborating this contention, the Asstt. Commissioner urged that CCRA should not give hearing to the parties aggrieved by the Collector's order, nor can CCRA interfere with the order of the Collector by substituting its own order in place of the Collector's. In support of this contention, reliance was placed by the Asstt. Commissioner on AIR 1975 Madhya Pradesh, 209 Chaturbhuj Das & another v. The State of Madhya Pradesh and others where it is laid down that in exercising the power of control under Section 56(1) the jurisdiction of CCRA will be limited and will not go to the extent of appellate power where it will substitute its own decision. 6. The facts of the case, briefly, are that a mortgage was executed of a factory, including some land. The mortgagee, with the consent of the mortgagors, leased out the factory to the a registered firm. Subsequently, the mortgagors executed an unfructuary mortgage of the property in favour of that firm, the mortgagors agreeing to pay, at the time of redemption, interest on the money spent by the mortgagee firm on improvements. At the time of redemption, the mortgagors realised that they were not in a position to pay that amount and they decided to sell their right, i.e. , equity of redemption in the factory to the mortgagee firm. So., a sale deed was executed. When it was presented to the Sub-Registrar for registration, he impounded it as, in his opinion, the sale deed was insufficiently stamped. He referred the matter to the Sub-Divisional Officer, who after hearing the executant, determined the amount of deficiency in duty and also of the penalty. So., a sale deed was executed. When it was presented to the Sub-Registrar for registration, he impounded it as, in his opinion, the sale deed was insufficiently stamped. He referred the matter to the Sub-Divisional Officer, who after hearing the executant, determined the amount of deficiency in duty and also of the penalty. Against this order, the party liable to pay the duty and penalty went in revision before the Board of Revenue under Section 56 (1) of the Act. The member of the Board, namely, CCRA, enhanced the amount of both the deficit duty and penalty. So the person required to pay the enhanced duty and penalty went to High Court. The High Court held that when an important and intricate question of law in respect of the construction of a document arises, it is the duty of CCRA, as a public servant to make a reference, and quashed the order of CCRA under Section 56 (1) and directed him to make a reference to High Court under Section 57 of the Act. 7. It appears to me that raison de etra of the decision is that a matter involving important and intricate questions in connection with the interpretation of documents should be referred to High Court and CCRA should not decide it himself. In that case interpretation of Section 56 (1) regarding the extent, scope and nature of the power of control of CCRA was not specifically discussed, nor did the High Court say that CCRA has no power to decide. It only held that when an important and intricate question in respect of construction of a document (which is a question of law) is involved, the CCRA should refer to it to High Court. Obviously, in that case important and intricate question of construction of document was involved. 8. The learned Asstt. Commissioner has also referred to 1958 ALJ, page 225 (Board of Revenue v. Lakshmipat Singhania). In this case certain transfer deeds filed in a Court were impounded by that Court and were sent to Collector pursuant to Section 38 (2). The Collector determined the amount of deficit duty and penalty and directed the transferee to pay. On the amount being paid, the Collector certified on the document that proper duty has been levied. In this case certain transfer deeds filed in a Court were impounded by that Court and were sent to Collector pursuant to Section 38 (2). The Collector determined the amount of deficit duty and penalty and directed the transferee to pay. On the amount being paid, the Collector certified on the document that proper duty has been levied. The matter subsequently came to the notice of the Board of Revenue which doubted that the Collector had assessed the duty on proper basis and so referred the case to the High Court, The High Court held that the certificate of the Collector being conclusive, it cannot be said that there was any case pending before CCRA which could be referred to High Court under Section 56 (1). We, thus, see that the ruling is not directly applicable to the point in question here. 9. Proceeding further with the consideration of the point in issue, it may be mentioned that the word 'Control' is not defined in the Act; nor there are any rules describing the nature and prescribing the extent of the controlling power of the CCRA. The dictionary meaning of (Control) is regulation, direction, restraint, reservation (Webstor's Dictionary); the fact of controlling or checking and directing action domination, command, away (Shorter Oxford Dictionary). It will thus appear that the grammatical meaning of 'Control' is of wide amplitude. 10. It is not disputed that the expression 'Power exercisable' includes 'Powers exercised'. I may also refer to judicial pronouncements on this point. In Jai Dayal Shanti Kumar v. Gajadhar, AIR 1956, Rajasthan, 155, a Full Bench of the Court held that Section 56 (1) gives power to the Board to interfere with the orders of the Collector passed under Chapter IV & V or under clause (a) of the first proviso to Section 26 whether the Collector is about to exercise those powers or has exercised those powers, subject, however, to such provisions of Stamp Act which declare the orders of the Collector conclusive. In AIR 1973 Kerala, 69, The Secretary to Govt. v. Gwalior Rayon Silk Mfg. & Wvg, Co at page 7, para 8, the High Court observed thus, "The word exercisable is wide enough to include what has been exercised in the past and also what is to be exercised in the future." 11. In AIR 1973 Kerala, 69, The Secretary to Govt. v. Gwalior Rayon Silk Mfg. & Wvg, Co at page 7, para 8, the High Court observed thus, "The word exercisable is wide enough to include what has been exercised in the past and also what is to be exercised in the future." 11. When the Collector has once passed the order, the only control that can be exercised by CCRA over the power exercised by the Collector can be to exercise its control over that order, and it appears to me that such control of CCR A implies power to examine the correctness or otherwise of the order and to interfere with it, if necessary. In the full bench case of Rajasthan High Court, referred to above, it was observed that the Authority (CCRA) can interfere with the order of the Collector under the provisions of Section 56 (I). In Bharat Bhushan v. Cinema & City Magistrate, AIR 1956 All, 99 (Paras 9 & 10), it was observed, "it appears to us that having regard to the dictionary meaning, the word 'control' is not confined to mere regulation. It is more comprehensive and includes domination or command over an inferior. No doubt the State Government can lay down general rules or instructions for the guidance of the District Magistrate in the exercise of his discretion. But the 'control' envisaged in the section is not confined to the issuing of mere general direction, it includes an interference on the part of the State Government with the individual decision of a particular case by the District Magistrate. Thus, it is clear that the power of control includes the power to interfere with the orders of the subordinate Authority. 12. In fact, this position is tacitly admitted by the Asstt. Thus, it is clear that the power of control includes the power to interfere with the orders of the subordinate Authority. 12. In fact, this position is tacitly admitted by the Asstt. Commissioner when he mentions in para 5 of his written objection that the functioning of CCRA when acting under Section 56 (I), is to call for the relevant record of Collector in proceeding under chapters IV & V and clause (a) to proviso (i) to Section 26 examine it and pass necessary orders The gravemen of his contention, however, is that while examining the record, the CCRA cannot hear the party and when CCRA after examining the records comes to some conclusion, CCRA can give directions to the Collector to pass order in the light of CCRA's decision and that CCRA cannot substitute Collector's order with his own. 13. I find it difficult to agree with this contention. A dispute is raised when the party aggrieved by Collector's order invokes CCRA's power of control by filing an application challenging Collector's order. Such a dispute should naturally be decided in a fair manner. Fairness requires that CCRA, before forming an opinion and coming to a conclusion, should hear the party. In Amma Store v. Collector of Madras, AIR 1970 Madras 148, High Court observed that the more reasonable view seems to be that after the Collector has exercised his power by levying the stamp duty and the power of CCRA is invoked by the party under Section 56(1) and thereafter that authority proceeds to exercise that power, it must be viewed a quasi-judicial function. It was also held that to act quasi-judicially carries with it the obligation to give opportunity of hearing to the party. 14. On a consideration of the provisions of Fie Act, it appears that one of the prime function of CCRA is to decide the question as to the proper stamp duty chargeable on a document. The determination of such question often involves the interpretation of a document or the construction to be put on it. This is a matter which would not be apparent on the face of the record. The determination of such question often involves the interpretation of a document or the construction to be put on it. This is a matter which would not be apparent on the face of the record. On this ground and also because the CCRA's decision regarding stamp duty and penalty may, in some cases, result in saddling the party with a heavy pecuniary liability, it seems reasonable to infer that the Legislature intended that hearing should be given to the applicant before the CCRA decides the matter. It is true that the Act does not specifically mention that opportunity of hearing is to be given to the parties. At the same time, there is no provision in the Act to prohibit it. Therefore considering the nature of CCRA's function, there cannot be any doubt that CCRA must act on principles of natural justice and fair play, which require that hearing must be given to the party and also to the Stamp Department of the State and that function is quasi-judicial and not purely administrative 15. In Ajai Pal Singh v. Board of Revenue & Others, 1979 AWC 658 , our High Court held as under : - "The principles of natural justice apply to quasi-judicial as well as administrative bodies. From a reading of Sections 38, 39 and 40 of the Stamp Act it would be found that the power which is exercised by the Collector in adjudicating upon a document is a judicial one. The adjudication involves determination of right in as much as he (Collector) determines the liabilities of the parties to pay stamp duty. As rights are involved, it is necessary that the person affected be given an opportunity of being heard." 16. When the party aggrieved by the order of Collector applies to invoke the controlling powers of CCRA seeking modification of the order in his favour in redress of his grievance, it is, in a way, in extension of those proceedings and as such the CCRA in my view, must also act judicially, because CCRA has also to adjudicate and determine if the amount imposed by the Collector is correct. 17. It may be mentioned that when an administrative authority in any matter has to act judicially, the exercise of such jurisdiction has been termed in judicial pronouncements of various High Courts and Supreme Court as 'Quasi Judicial'. 17. It may be mentioned that when an administrative authority in any matter has to act judicially, the exercise of such jurisdiction has been termed in judicial pronouncements of various High Courts and Supreme Court as 'Quasi Judicial'. It is, therefore, held that the power of control given under Section 56 (1) of the Act is quasi-judicial and in the exercise of that power CCRA must act judicially. 18. Regarding the contention of the learned Assistant Commissioner that if in the exercise of its controlling power CCRA comes to a conclusion different from the Collector's decision, CCRA should only give direction to the Collector to pass another order in accordance with the CCRA's decision and CCRA himself should not substitute the Collector's decision with its own. 19. I see no merit in this contention. It is not disputed that the Collector, on receipt of such directions from CCRA, will have to modify his orders in accordance with the decision of CCRA conveyed in those directions. Thus, the result will be the same. The procedure envisaged in Asstt. Commissioner's contention, far from having any merit, has a definite demerit in as much as it will involve waste of time of the Collector who is a public servant. Apart from this, the word,'Control'in the amplitude of its meaning, embraces in its fold the power of the higher authority to substitute its order in place of the order of inferior authority. Point No. 2 : 20. We have seen above that Section 56 (1) of the Act confers on CCRA control over the 'power exercised', i.e., the order passed by the Collector. One of the ways to bring into action that power of control of CCRA is that some one may file an application to invoke its exercise by CCRA. The person interested to file such an application will naturally be one who is aggrieved by the Collector's order and the only meaningful purpose of filing such an application cant be to seek modification of Collector's order in applicant's favour by pointing the mistake and infirmities in the order. It is, therefore, clear that an application under Section 56(1) invoking power of control of CCRA and challenging the correctness of the order passed by the Collector, can be filed, whatever be the appellation we may gave to such an application. It is, therefore, clear that an application under Section 56(1) invoking power of control of CCRA and challenging the correctness of the order passed by the Collector, can be filed, whatever be the appellation we may gave to such an application. The dictionary meaning of word 'revise' is to 'review and amend' to 'examine with a view to correction'. (Chamber's Twentieth Century Dictionary). Hence, such an application can appropriately be termed as revision and particularly so when that expression has been used in the heading of the Chapter in which Section 56 falls. That heading is 'Reference & Revision'. The applicant aggrieved by the Collector's order is entitled to file such an application for revision. 21. In this connection reference may also be made to some judicial decisions. In AIR 1956 Rajasthan 155 ; which has been referred to above, the court at page 156 observed : "Section 56 (1), in our opinion, gives revisionary jurisdiction to CCRA over those powers which the Collector can exercise under Chapter IV & V and under clause (a) of the first proviso to Section 26. The CCRA may interfere before the Collector exercises those powers or may revise them after they have been exercised, subject always to there being nothing in other parts of the Stamp Act which prohibits such interference." 22. In Union of India v. Swaroop Singh, AIR 1968 Delhi, 219 at page 222, para (10), the Court held as under : - "Section 56(1) in (sic) revisional power upon CCRA and provides for the control over the powers exercisable by Collector under Chapters IV & V and under clause (a) of the first proviso to Section 26 of the Act by the CCRA." 23. It was pointed out by the Asstt. Commissioner that in almost all the cases which are pending here before the CCRA under Section 56 (1), the application have been filed after the Collector assessed the deficit stamp duty and penalty, but before it was paid by the person required by the Collector's order to pay it. The Asstt. Commissioner urges that the remedy open to the aggrieved party in such cases is first to pay the amount he is called upon to pay and then move CCRA under Section 45 of the Act for refund of the excess amount. In this connection the Asstt. Commissioner referred to Rule 333 of the Rules framed under the Act. The Asstt. Commissioner urges that the remedy open to the aggrieved party in such cases is first to pay the amount he is called upon to pay and then move CCRA under Section 45 of the Act for refund of the excess amount. In this connection the Asstt. Commissioner referred to Rule 333 of the Rules framed under the Act. That rule lays down that if the executant of the document or any other person from whom the amount of duty or deficit duty and penalty is demanded, is not satisfied, he may proceed under Section 45 of the Stamp Act. And Section 45 provides for refund of excess duty or penalty which has been already paid. 24. Stamp Act, like Income Tax Act and Sales Tax Act, is a taxing statute. It is well settled that taxing laws should be interpreted and applied in a manner that may not cause hardship to subject and make the availability of remedy difficult and onerous. When duty and penalty have been imposed on a person and he is saddled with liability to pay and that person challenges the amount so imposed as excessive but can seek relief only after paying that amount, it certainly makes the remedy of seeking relief onerous particularly when the duty and penalty imposed be a large amount. In actual practise, there is normally an interval of sufficient time between passing of the Collector's order and the initiation of actual, recovery proceedings. Recovery proceedings start with a notice of demand to the person required to pay the amount. It is also well known (and, therefore, notice can be taken of it) that disposal of cases pending before CCRA takes a longtime. If the party aggrieved by the Collector's order assessing the amount comes before the Board, i.e., CCRA at a late stage i.e., after a sufficient time has lapsed since the passing of Collector's order, and obtains stay order, it results in realisation to Government revenue being unduly delayed. It appears to me that perhaps the purpose of Rule 333 is to guard against undue delay in realisation by providing that when the amount is demanded, i.e., a notice of demand is issued, the person dissatisfied should proceed under Section 45, namely, first pay the amount and then apply for refund. It appears to me that perhaps the purpose of Rule 333 is to guard against undue delay in realisation by providing that when the amount is demanded, i.e., a notice of demand is issued, the person dissatisfied should proceed under Section 45, namely, first pay the amount and then apply for refund. Rule 333 does not appear, to me, to deny the opportunity of invoking CCRA's power under Section 56 (1) to a vigilant aggrieved party who is not guilty of laches in seeking his redress. Point No. 3 : 25. It was argued by the learned Asstt. Commissioner that the Act does not contain any provision giving power of stay to CCRA and so he cannot exercise that power. 26. We have seen above that under Section 56(1), CCRA can revise and amend the order of the Collector. In Ram Prasad Agnihotri v. State of U.P. & Others, 1970 ALO 11, which was a case under U.P. (Temporary) Control of Rent & Eviction Act, the landlord obtained permission from the Rent Control & Eviction Officer to file a suit for ejectment of a tenant. A revision application filed by the tenant against this order was dismissed by the Commissioner. The tenant then made an application to the State Government which passed an order staying the operation of Commissioner's permission to the landlord to file a suit for ejectment of the tenant. The landlord, however, in spite of the stay order of the Govt, instituted a suit for ejectment. The Rent Control & Eviction Officer made a report to the State Government that the landlord has already filed a suit. Thereupon the State Government passed an order dismissing the tenant's application. The tenant then moved a writ petition before the High Court. The High Court held that the State Government under Section 7-F of Rent Control & Eviction Act could revoke the order of the Commissioner and for effective exercise of its jurisdiction may stay the order of the Commissioner, because the power of granting interim relief was ancillary to the jurisdiction though there was no specific provision in the Rent Control & Eviction Act to grant such interim relief. In coming to this decision the Court, relying on decisions of two other High Courts, observed in para 6 at page 15 as under : - "In Swarn Amlika Motor Service v. White Motor Service, (1956 2 MLO, Short Notes, page 12) and Thimmalapuram Bus Transport v. R.T.O., Malabar, (AIR 1957 Kerala 142) it was held that an interim order of stay could be passed under Section 64 (2) of Motor Vehicles Act although it did not confer a power on the authority to pass such an order. It was held in these cases the power to entertain an appeal or Revision." 27. It may be noticed that in the case under Rent Control & Eviction Act the State Government and in the cases under Motor Vehicles Act the transport authority concerned were not Courts ; nor was the power of granting stay expressly conferred to them under the respective Acts. But as they had jurisdiction to entertain revision, it was held that the power of granting stay was a necessary corollary to that jurisdiction. 28. We have seen above, while discussing point No. 2, that in the exercise of the power of control given to the CCRA under Section 56 (1) of the Act, it can entertain a revision and in disposing the revision the CCRA exercises quasi-judicial jurisdiction. It, therefore, necessarily follows that CCRA in the exercise of that jurisdiction can pass stay orders though the power to pass stay order is not expressly given to it under the Act. The word 'Control' is of very wide amplitude and does include the power of passing stay order. 29. The learned Asstt. Commissioner, in support of his contention, cited the case of ' Indu Engineering & Textile v. Commissioner of Agra, 1984 RD 299 . That case seems to be quite different and distinguishable. It was not a case under Stamp Act. It relates to recovery of certain loan. No enquiry or adjudication was involved in it. On the other hand, under Section 56 (1), CCRA has to interpret document, determine the market value of property and also to examine the legality or otherwise of the proceedings before the Collector. 30. There is yet another aspect of the matter. Indian Stamp Act came into force in 1899. No enquiry or adjudication was involved in it. On the other hand, under Section 56 (1), CCRA has to interpret document, determine the market value of property and also to examine the legality or otherwise of the proceedings before the Collector. 30. There is yet another aspect of the matter. Indian Stamp Act came into force in 1899. It is said that since then CCRA has been entertaining, hearing and deciding revisions under Section 56 (I) of the Act and also passing stay orders. It may not be easy to ascertain the exact date since when this is being done, but it is not questioned that the practise has been prevailing from a long time and may be perhaps since the inception of the Act. Thus, this practise is of long standing. 31. In National & Grindlay's Bank Ltd. v. Municipal Corporation, AIR 1969 SC 1048 , it was noticed that there was a long standing practise that the property tax under an Act of 1888 was being realised by the Municipal Corporation from the owner of the land and not from the lessee who had constructed a building on the land. Section 146(2) of that Act could possibly be interpreted to mean that the primary liability for payment of property tax was upon the lessee who had constructed the building on the land. In view of the fact that the long standing practise of tax being realised by the municipal corporation from the owner of the land, it was held by the Supreme Court that resort may be had to contemporary construction i.e., the construction which the authorities have put upon the section by their usage and conduct for a long period of time and the Supreme Court, applying the principle of "optime lequm interpres est consuetudo" held that the tax was chargeable from the owner of the land. 32. It appears that the Asstt. Commissioner of Stamps has filed these objections mainly because of undue delay in realisation of stamp revenue on account of stay orders. It, therefore, seems proper and desirable to observe that stay orders may not be granted as a matter of routine at the very time when an application under Section 56 (1) is filed and may usually be granted after hearing the State representative on receipt of record, unless special circumstances warrant otherwise. 33. It, therefore, seems proper and desirable to observe that stay orders may not be granted as a matter of routine at the very time when an application under Section 56 (1) is filed and may usually be granted after hearing the State representative on receipt of record, unless special circumstances warrant otherwise. 33. In view of the above discussion of the entire matter, I find no force in the objections filed by the Asstt. Commissioner of Stamps, which are hereby rejected.