ORDER Petitioner is Managing Director of M/s. Sameera Homes Pvt. Ltd. He entered into an agreement of sale for purchase of Acs.8.12Y2 guntas in survey Nos.646/ A, 646/AA, 646/E and 646/EE situated at Rajapuram village, Balanagar Mandai in Mahabubnagar District, from Donti Atchutha Reddy under agreement of sale dated 20-5-2006 for a sale consideration of Rs.7,60,000/- per acre. Agreement of sale was entered into by and between petitioner and his vendor on a Non-Judicial Stamp (NJS) paper of RS.1 00/-. When some of the villagers expressed doubt about stamp duty paid, petitioner approached respondent for determination of stamp duty. He also submitted original agreement of sale for consideration. The Collector and District Magistrate, Mahabubnagar District, issued impugned notice/order dated 17-3-2008 directing petitioner to pay a deficit stamp duty of Rs.3,78,950/- and penalty at ten times of stamp duty in a sum of Rs.37,89,500/- (in total RsA1 ,68,450/-) within fifteen days, for impounding and validating document. Aggrieved by the same, petitioner filed present writ petition under Article 22,6 of Constitution of India seeking a writ of Certiorari to quash the said order and for consequential direction to respondent to return document with endorsement as required under Section 40 of Indian Stamp Act, 1899 (Stamp Act, for brevity). 2. This Court while issuing notice before admission passed interim orders of stay. Feeling aggrieved, respondent filed W.V.M.P.No.1476 of 2008 for vacating interim order. A counter affidavit is filed along with said application. As a short question is raised, the writ petition itself is heard finally and is being disposed of by this order. 3. The gist of counter is that document submitted by petitioner under Section 31 of Stamp Act was treated as a sale deed and hence while determining stamp duty, penalty was imposed under Section 40(1)(b) of Stamp Act. For ready reference, paragraph 2 of counter affidavit is extracted below. It is submitted that the writ petitioner has submitted a representation requesting to impound the agreement sale deed in respect of lands bearing Sy.Nos. 646/A, 646/AA, 646/E and 646/EE total extent of Acs.8.12Y2 guntas situated in the limits of Rajapur (v) of Balanagar. The document produced together with the petition filed by the writ petitioner has been examined in accordance with the provisions contained u/sA7(c) of Indian Stamp Act 1899 and the penalty has been levied u/sAO(1 )(b) of the Act and nothing is calculated wrong. The document produced together with the petition filed by the writ petitioner has been examined in accordance with the provisions contained u/sA7(c) of Indian Stamp Act 1899 and the penalty has been levied u/sAO(1 )(b) of the Act and nothing is calculated wrong. The writ petitioner himself filed an application stating that he has purchased suit lands for sale consideration of Rs.63,17,500/-. Hence, basing on the clear declaration the document (sale agreement) has been processed in accordance with the provisions of the Indian Stamp Act, 1899. The penalty levied is in accordance with the provisions of Indian Stamp Act, 1899. The deficit stamp duty and penalty is calculated to Rs.41,68,4501- and directed the writ petitioner to pay the same into appropriate Government Head of Account through challan ana to submit to this office for taking further necessary action. The details of deficit stamp duty and penalty (10 times) levied is as follows. Deficit stamp duty Rs.3,78,950.00 Penalty Rs.37,89,500.00 --------------------- Total Rs.41,68,450.00 --------------------- 4. Learned Counsel for petitioner and learned Assistant Government Pleader made their submissions. Petitioner also relies on Government of Uttar Pradesh v. Mohd. Amir in support of contention that when stamp duty is determined under Section 31 of Stamp Act, penalty cannot be imposed. 5. What is stamp duty on sale agreement? Section 10 of Stamp Act read with Schedule I-A provide stamp duties with which instruments (documents, by which rights or liabilities are created, transferred or extinguished) are chargeable. Sale agreement is dealt with differently by Schedule I-A depending on possession factor. If it is an agreement or memorandum of agreement, Article 6(A) applies and if the value exceeds Rs.50,0001- proper stamp duty is RS.1001-. Articie-A7-A deals with instruments of sale as defined in Section 54 of Transfer of Property Act, 18822. Stamp duty on instrument of sale again depends on local area like Municipal Corporation, Special Grade Municipality or other local area 1. AIR 1961 SC 787 . 2. As per Section 54 of Transfer of Property Act "sale" is transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. where property is situated. It also depends on the amount of consideration for sale setforth in the instrument or the market value of the property, which is subject-matter of sale, whichever is higher. 2. As per Section 54 of Transfer of Property Act "sale" is transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. where property is situated. It also depends on the amount of consideration for sale setforth in the instrument or the market value of the property, which is subject-matter of sale, whichever is higher. If sale relates to unit of apartment/flat/portion, provisions of Andhra Pradesh Apartments (Promotion of Construction and Ownership) Act, 1987, apply. In all these cases requirement is transaction should be sale as required under Section 54 of Transfer of Property Act. In addition to this, Explanation-1 to Article 47-A creates a fiction. As per this, "agreement of sale to sell followed by or evidencing possession of the property agreed to be sold, shall be chargeable as a sale under Article 47-A." This means that any transaction in respect of immovable property followed by possession, which is not a sale as defined under Section 54 of Transfer of Property Act is still treated as a sale for the purpose of stamp duty alone. The crucial aspect of such transaction should be delivery of possession by the vendor to vendee. The legal fiction created by Explanation-1 under Article 47-A cannot be extended to all instruments even if they are agreements of sale, even if entire sale consideration is paid but possession is not delivered by vendor to vendee. 6. Petitioner has filed a Xerox copy of agreement of sale dated 20-5-2006 which as noticed supra is engrossed on NJS worth RS.1 00/-. As per Article 6{A)(i) of Stamp Act, stamp duty on agreement of sale is Rs.100/-, but petitioner submitted representation on 08-1-2008, under mistaken impression that stamp duty is not proper. In such a case respondent ought to have certified by endorsement on petitioner's agreement that it is fully stamped, in which event, under Section 32(3) of Stamp Act, the instrument with Collector's endorsement shall be deemed to be duly stamped. However, respondent treated agreement of sale without possession as a sale and determined deficit stamp duty and also imposed penalty. When a document is submitted to Collector for opinion as to duty with which it is chargeable, Collector shall determine the duty with which instrument is chargeable. There is no question of imposing penalty at that stage. However, respondent treated agreement of sale without possession as a sale and determined deficit stamp duty and also imposed penalty. When a document is submitted to Collector for opinion as to duty with which it is chargeable, Collector shall determine the duty with which instrument is chargeable. There is no question of imposing penalty at that stage. A document can be submitted duly executed without stamp duty and can be submitted for opinion of Collector. It is made clear by opening words in Stamp Act to the effect that, "when any instrument, whether executed or not and whether previously stamped or not is brought to the Collector... ... ... to have opinion ... ... ... as to the duty with which it is chargeable and pays fee not exceeding RS.15/-." This only means that an instrument even before it is executed/stamped, can be submitted only for opinion as to the duty with which such instrument is chargeable. It is not a case of executing a document with improper duty, acting upon it and impounding it for proper validation. Such situation would arise in different circumstances as noticed infra. That penalty cannot be imposed while exercising powers under Sections 31 and 32 of Stamp Act is well settled in view of decision of Supreme Court in Mohd. Amir (1 supra). In the above cited decision, Mohd. Amir questioned order of Collector of Sitapur imposing stamp duty of Rs.85,598/- and penalty of RS.5/- as being against law. He had executed a Wakf by oral recitation ,which was also written on a stamp paper sent by respondent. It was presented to Collector under Section 31 of Stamp Act as to the duty chargeable. Collector referred the matter to Board of Revenue. After about three years they gave opinion. Based on which Collector issued a notice to Mohd. Amir to pay stamp duty and penalty. He questioned the same before High Court under Article 226 of Constitution. The same was dismissed as premature. In 1954 Collector issued further notice to deposit stamp duty and penalty. He again filed another writ petition. A Full Bench of Allahabad High Court quashed the order of Collector. Before Supreme Court, State submitted that when improperly stamped document is presented to District Collector and on determination of stamp duty the consequences should follow and stamp duty should be collected. Mohd. He again filed another writ petition. A Full Bench of Allahabad High Court quashed the order of Collector. Before Supreme Court, State submitted that when improperly stamped document is presented to District Collector and on determination of stamp duty the consequences should follow and stamp duty should be collected. Mohd. Amir argued that when once the Collector determines stamp duty, it becomes functus officio and no action can be taken under Section 33 of Stamp Act for impounding document. Supreme Court while observing that when instrument is brought to Collector under Section 31 of Stamp Act, he has to determfine stamp duty and if it is fully stamped, he has to make endorsement under Section 35 of Stamp Act, laid down as under. It would be an extraordinary position if a person seeking the advice of the Collector and not wanting to rely upon an instrufment as evidence of any fact to be proved nor wanting to do any further act in regard to the instrument so as to effectuate its operation should also be liable to the penalties which unstamped instruments used as above might involve. The scheme of the Act shows that where a person is simply seeking the opinion of the Collector as to the proper duty in regard to an instrument, he approaches him under Section 31. If it is not properly stamped and the person executing the document wants to proceed with effectuating the document or using it for the purposes of evidence, he is to make up the duty and under Section 32 the Collector will then make an endorsement and the instrument will be treated as if it was duly stamped from the very beginning. But if he does not want to proceed any further than seeking the determination of the duty payable then no consequence will follow and an executed document is in the same position as an instrument which is unexecuted and unstamped and after the determination of the duty the Collector becomes functus officio and the provisions of Section 33 have no application. The provisions of that section are a subsequent stage when something more than mere asking of the opinion of the Collector is to be done. 7. The contention of respondent that document can be impounded under Section 40(1 )(b) of Stamp Act, is wholly misconceived. The provisions of that section are a subsequent stage when something more than mere asking of the opinion of the Collector is to be done. 7. The contention of respondent that document can be impounded under Section 40(1 )(b) of Stamp Act, is wholly misconceived. Under this provision, when Collector impounds instrument under Section 33 or received instrument under Section 38(2) of Stamp Act, he may certify by endorsement that instrufment is duly stamped and is not chargeable to the duty or require the payment of proper duty and may also impose penalty not exceeding ten times the amount of proper duty. Section 40 of Stamp Act has no application when a document whether executed or not whether stamped or not, is presented for opinion of Collector with regard to stamp duty. In such an event only Section 32 of Stamp Act applies and Section 40 of Stamp Act has no application. The observations of Supreme Court extracted herein above would support such a view. In the case on hand, the agreement submitted by petitioner has already been duly stamped and in such an event Collector as already mentioned above ought to have returned the same with certificate under Section 32(1 )(a) of Stamp Act. In issuing impugned notice for payment of alleged deficit stamp duty and penalty, the District Collector ex facie acted illegally and beyond powers under Sections 31, and 32 of Stamp Act. The order is vitiated by grave error apparent on the face of record and is liable to be quashed. 8. Accordingly the impugned notice/order No.F3/688.08, dated 17-3-2008 of respondent is quashed and a direction shall issue to respondent to return original agreement of sale dated 20-5-2006 executed by and between Donti Atchutha Reddy, s/o. Butchi Reddy, and Satya Murthy Sivalenka, s/o. Ramalingam, to petitioner, with a certificate duly endorsing under Section 32(1 )(a) of Stamp Act that sale agreement is duly stamped. 9. The writ petition is accordingly disposed of. No costs.