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2014 DIGILAW 2853 (ALL)

Sumit Kumar Sharma v. State of U. P.

2014-09-12

SURYA PRAKASH KESARWANI

body2014
JUDGMENT Surya Prakash Kesarwani, J. 1. Heard Sri Santosh Kumar Srivastava, learned Counsel for the petitioner and Sri Nimai Das, learned Standing Counsel. The only controversy involved in this writ petition is as to whether the value of the vended property is to be taken as on the date of execution of the sale deed or as on the date when the deed is presented for registration. 2. Learned Counsel for the petitioner submits that the petitioner has valued the vended property as per circle rate as on the date of execution of the sale deed i.e. 9th July, 2012, but respondents took the view that the circle rate as applicable on the date of presentation of deed for registration i.e. 24th September, 2012, should be taken. For this reason the demand has been created under section 47-A of Indian Stamp Act, 1899. Case of the petitioner is that circle rate as on the date of execution of the deed is to applied for valuation. In support of his submission, he relies upon a judgment of learned Single Judge in case of Rajendra Prasad Garg v. Chief Controlling Revenue Authority, (2002) 93 RD 198 and a Full Bench judgment in the case of Ramesh Chandra Srivastava v. State of U.P. and others 2006 (101) RD 806 (Alld. H.C.-F.B.) : 2006 (8) ADJ 1 para 64. 3. On the other hand, Sri Nimai Das submits that the controversy is concluded by the judgment of Hon'ble Supreme Court in the case of State of Rajasthan and others v. Khandaka Jain Jewellers, 2008 (61) AIC 190 (SC) : (2007) 14 SCC 339 para 12 and 13 wherein it has been held that the registering authority is under an obligation to ascertain the correct market value at the time of registration. 4. I have considered the submission of learned Counsel for the parties. 5. The Indian Stamp Act, 1899 (hereinafter referred to as the 'Act') is a taxation statute. Section 3 of the Act is the charging section. With respect to instrument falling under section 3(a) of the Act, the event of taxation is the execution of instrument in India. As per definition given under section 2(12) the word "executed" and "execution", used with reference to instruments, mean "signed" and "signature". Section 3 of the Act is the charging section. With respect to instrument falling under section 3(a) of the Act, the event of taxation is the execution of instrument in India. As per definition given under section 2(12) the word "executed" and "execution", used with reference to instruments, mean "signed" and "signature". Section 17 of the Act provides that all instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution. Section 27 of the Act requires 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. 6. Section 47-A of the Act contains provision with regard to instrument under valued. Section 47-A is reproduced below "47-A If the marker value of any property, which is the subject of any instrument, on which duty is chargeable on market value of the property as set forth in such instrument is less than even the minimum value determined in accordance with the rules made under this Act, the registering officer appointed under the Registration Act, 1908, shall, notwithstanding anything contained in the said Act, immediately after presentation of such instrument, and before accepting it for registration and taking any action under section 52 of the said Act, require the person liable to pay stamp duty under section 29, to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument for presenting again in accordance with section 23 of the Registration Act, 1908. (b) When the deficit stamp duty required to be paid under clause (a), is paid in respect of any instrument and the instrument is presented again for registration, the registering officer shall certify by endorsement thereon, that the deficit stamp duty has been paid in respect thereof and the name and the residence of the person paying them and register the same. (c) Notwithstanding anything contained in any other provisions of this Act, the deficit stamp duty may be paid under clause (a) in the form of impressed stamps containing such declaration as may be prescribed. (c) Notwithstanding anything contained in any other provisions of this Act, the deficit stamp duty may be paid under clause (a) in the form of impressed stamps containing such declaration as may be prescribed. (d) If any person does not make the payment of deficit stamp duty after receiving the order referred to in clause (a) and presents the instrument again for registration, the registering officer shall, before registering the instrument, refer the same to be Collector, or determination of the market value of the property and the proper duty payable thereon. (2) On receipt of a reference under sub-section (1) the Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under this Act, determine the market value of the property which is the subject of such instrument and the proper duty payable thereon. (3) The Collector may, suo motu, or on a reference from any Court or from the Commissioner of Stamps or an Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any officer authorised by the State Government in that behalf within four years from the date of registration of any instrument on which duty is chargeable on the market value of the property, not already referred to him under sub-section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value, of the property which is the subject for such instrument, and the duty payable thereon, and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty payable thereon: Provided that, with the prior permission of the State Government, an action under this sub-section may be taken after a period of four years but before a period of eight years from the date of registration of the instrument on which duty is chargeable on the market value of the property. [Explanation.--The payment of deficit stamp duty by any person under any order of registering officer under sub-section (1) shall not prevent the Collector from initiating proceedings on any instrument under sub-section (3)] (4) If an enquiry under sub-section (2) and examination under sub-section (3) the Collector finds the market value of the property-- (i) truly set forth and the instrument duly stamped, he shall certify by endorsement that it is duly stamped and return it to the person who made the reference; (ii) not truly set forth and the instrument not duly stamped, he shall require the payment of proper duty or the amount required to make up the deficiency in the same together with a penalty of an amount not exceeding four times the amount of the proper duty or the deficient portion thereof. [(4-A) The Collector shall also require alongwith the deficit stamp duty or penalty required to be paid under clause (ii) of sub-section (4), the payment of a simple interest at the rate of one and half per cent per mensem on the amount of deficit stamp duty calculated from the date of the execution of the instrument till the date of actual payment: Provided that the amount of interest under this sub-section shall be recalculated if the amount of deficit stamp duty is varied on appeal or revision or by any order of a competent Court or authority. (4-B) The amount of interest payable under sub-section (4-A) shall be added to the amount due and be also deemed for all purposes to be part of the amount required to be paid. (4-C) Where realisation of the deficit stamp duty remained stayed by any order of any Court or authority and such order of stay is subsequently vacated, the interest referred to in sub-section (4-A) shall be payable also for any period during which such order of stay remained in operation. (4-D) Any amount paid or deposited by, or recovered from, or refundable to, a person under the provision of this Act, shall first be adjusted towards the deficit stamp duty or penalty outstanding against him and the excess, if any, shall then be adjusted towards the interest, if any, due from him.] (5) The instrument produced before the Collector under sub-section (2) or under sub-section (3) shall be deemed to have come before him in the performance of his functions. (6) In case the instrument is not produced within the period specified by the Collector, he may require payment of deficit stamp duty, if any, together with penalty on the copy of the instrument in accordance with the procedure laid down in sub-sections (2) and (4).] 7. Section 80 of the Registration Act 1908, provides that all fees for the registration of documents under this Act shall be payable on the presentation of such documents. 8. Section 80-A as added by U.P. Act No. 48 of 1975 (w.e.f. 1.11.1975) puts a duty on the Collector, that during the proceedings, if any, under section 47-A of the Indian Stamp Act, 1899, the fee for registration paid under the Act in respect of a document is found in deficit, he shall determine in the course of such proceedings the deficient amount of fee and send a copy of the order made in the proceedings to the registering officer for the recovery of the said amount from the person liable to pay the deficient amount of fees under the said section. Sub-section (2) provides that the order of the Collector shall be deemed to be an order made under section 47-A of the Indian Stamp Act, 1899 and shall be final. 9. In the case of Ramesh Chandra Srivastava v. State of U.P., 2006 (101) RD 806 (Alld.-F.B.) : 2006 (8) ADJ (Para-28A) a Full Bench of this Court held as under: "28-A. From a conjoint reading of words "instrument", "executed" as defined under section 2(14) and 2(12) with section 17, it is clear that the stamp duty payable on instrument refers to, at the time of execution occurring in section 17, leaves no room of doubt that the duty on the instrument is to be paid at the time of execution. It does not refer to any other thing which have preceded prior to the execution of the instrument. On plain reading of section 17 with charging section 3 it is clear that relevant point for determining the stamp duty on instrument is the date of execution of the instrument i.e. not the date of registration as such". 10. It does not refer to any other thing which have preceded prior to the execution of the instrument. On plain reading of section 17 with charging section 3 it is clear that relevant point for determining the stamp duty on instrument is the date of execution of the instrument i.e. not the date of registration as such". 10. The above view taken by the Full Bench of this Court appears to be in conflict with the view taken by the Hon'ble Supreme Court in the case of State of Rajasthan and others v. Khandaka Jain Jewellers, (2007) 14 SCC 339 (Para Nos. 20, 22, 23 and 26) : 2008 (61) AIC 190 (SC) as under 20. The expression "execution" read with section 17 leaves no manner of doubt that the current valuation is to be seen when the instrument is sought to be registered. The Stamp Act is in the nature of a taxing statute, and a taxing statute is not dependant on any contingency. Since the word "execution" read with section 17 clearly says that the instrument has to be seen at the time when it is sought to be registered and in that if it is found that the instrument has been undervalued then it is open for the registering authority to enquire into its correct market value. The learned Single Judge as well as the Division Bench in the present case had taken into consideration that the agreement to sell was entered into but it was not executed. Therefore, the incumbent had to file a suit for seeking a decree for execution of the agreement and that took a long time. Therefore, the Courts below concluded that the valuation which was in the instrument should be taken into account. In our opinion this is not a correct approach. Even the valuation at the time of the decree is also not relevant. What is relevant in fact is the actual valuation of the property at the time of the sale. The crucial expression used in section 17is "at the time of execution". Therefore, the market value of the instrument has to be seen at the time of the execution of the sale deed, and not at the time when agreement to sale was entered into. An agreement to sell is not a sale. An agreement to sell becomes a sale after both the parties signed the sale deed. Therefore, the market value of the instrument has to be seen at the time of the execution of the sale deed, and not at the time when agreement to sale was entered into. An agreement to sell is not a sale. An agreement to sell becomes a sale after both the parties signed the sale deed. A taxing statute is not contingent on the inconvenience of the parties. It is needless to emphasize that a taxing statute has to be construed strictly and considerations of hardship or equity have no role to play in its construction. VISCOUNT SIMON quoted with approval a passage from ROWLATT, J. expressing the principle in the following words: "In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." 22. In this back-ground, if we construe section 17 read with section 2(12) then there is no manner of doubt that at the time of registration, the Registering Authority is under an obligation to ascertain the correct market value at that time, and should not go by the value mentioned in the instrument. 23. Learned Counsel for the respondent submitted that if we construe section 3 read with section 27 of the Act then the Registering Authority is under an obligation to only see the value mentioned in the instrument. In our opinion section 3 which is the charging section cannot be read in isolation but has to be read along with section 17 of the Act. From a composite reading of sections 3, 17 and 27, it becomes abundantly clear that the valuation given in an instrument is not conclusive. If any doubt arises in the mind of the Registering Authority that the instrument is under-valued then as per section 47-A of the Rajasthan (Amendment) the instrument can be sent to the Collector for determination of the correct market value. Under section 47-A read with sections 3, 17 and 27, it becomes clear that the Registering Authority has to ascertain the correct valuation given in the instrument regarding market value of the property at the time of the sale. 26. Under section 47-A read with sections 3, 17 and 27, it becomes clear that the Registering Authority has to ascertain the correct valuation given in the instrument regarding market value of the property at the time of the sale. 26. Accordingly, we are of the opinion that the view taken by the learned Single Judge as well as by the Division Bench cannot be sustained and the same is set aside. The Collector shall determine was the valuation of the instrument on the basis of the market value of the property at the date when the document was tendered by the respondent for registration, and the respondent shall pay the stamp duty charges and surcharge, if any, as assessed by the Collector as per the provisions of the Act. The appeal of the State is allowed. No order as to costs." 11. In the case of Residents Welfare Association, Noida v. State of U.P. and others, 2009 (108) RD 744 : 2009 (14) SCC 716 (Para Nos. 18, 55 and 56) Hon'ble Supreme Court held as under: "18. Pursuant to Himalaya House Col. Ltd., several States amended the Stamp Act. The State of U.P. also introduced an amendment by way of section 47-A, which has been quoted herein above. Thus, the object underlying section 47-A of the Indian Stamp Act is to neutralize the effect of under valuation of immovable property under registered instrument of sale or exchange or gift or partition or settlement. 55. We have heard the argument of the parties and referred to various cases dealing with this matter. In this regard, we would like to observe that there cannot be a straightjacket formula devised for determining the same. It would depend on the various facts and circumstances of a particular case. In situations where the delay is caused on the part of a party intentionally while executing a deed after entering into an agreement of sale or lease as the case may be, the market value should be determined on the date when the deed is executed and not when an agreement to sale the property or lease the property had been registered. But in cases where a person is not at fault and the delay is caused due to the lessor as in this case, the market value should be determined on the date when the agreement to lease the property was entered. But in cases where a person is not at fault and the delay is caused due to the lessor as in this case, the market value should be determined on the date when the agreement to lease the property was entered. The lessee or the sub lessee should not suffer due to the inability of the lessor in handing over transfer memorandums as is required under the lease. 56. For this, a reference can be made to the case of S.P. Padmavati v. State of Tamil Nadu which is similar to the present case and to which we are in respectful agreement where the property could not be registered due to no fault of the transferee and where the consideration was frozen earlier, as in the current case. The Madras High Court held that the relevant date for calculation of market value and the stamp duty is the date on which the consideration was frozen." 12. In the case of Shanti Bhushan and others v. State of U.P. and others, 2013 (118) RD 756 (Para Nos. 26 and 29) another Bench of this Court considered similar question and after referred to the judgment of Hon'ble Supreme Court in the case of State of Rajasthan and others v. Khandaka Jain Jewellers (supra) and followed the judgment in the case of Ramesh Chandra Srivastava (supra). 13. The Full Bench of this Court in the case of Ramesh Chandra Srivastava (supra) has laid down the law that the point for determination of stamp duty on instrument is the date of execution of the instrument and not the date of registration. 14. In the case of State of Rajasthan and others v. Khandaka Jain Jewellers (supra), Hon'ble Supreme Court held that the current valuation is to be seen when the instrument is sought to be registered and the Collector shall determine the valuation of the instrument on the basis of the market value of the property on the date when the instrument was tendered for registration. 15. 15. Since, there appears to be some conflict between the Full Bench judgment of this Court in the case of Ramesh Chandra Srivastava (supra) and the judgment of Hon'ble Supreme Court in the case of State of Rajasthan and others v. Khandaka Jain Jewellers (supra) on the question as to whether market value of the property is to be taken for valuation of instrument as on the date of execution of the instrument or on the date of its presentation for registration, which is the only issue involved in the present writ petition and as such it appears appropriate for this Court to refer the matter to a larger Bench for authoritative pronouncement on the said question. Let the records of this case be placed before Hon'ble the Chief Justice for constitution of an appropriate Bench for authoritative pronouncement on the above noted question.