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2024 DIGILAW 891 (ALL)

Chandra Pal Singh v. State of U. P.

2024-03-21

SARAL SRIVASTAVA

body2024
JUDGMENT : Hon'ble Saral Srivastava, J.-Heard Sri U.K. Sexena, learned Senior Counsel assisted by Sri Om Prakash Rai, learned counsel for the petitioners, Sri Kunal Ravi Singh, learned Chief Standing Counsel for the State and Sri Anurag Khanna, learned Senior Advocate assisted by Sri Pranjal Mehrotra, learned counsel for the National Highway Authority of India. 2. This Court proceeds to deal with the writ petition concerning the petitioner Nos. 1, 2, 7 and 8 (hereinafter referred to as 'petitioners'). 3. The petitioners have approached this Court by means of the present writ petition for the following relief : ''A. Issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 29.1.2018 and 13.11.2017 in pursuance of the Show-cause Notice dated 20.9.2017, 29.6.2017, 27.11.2017, 2.11.2017, 20.7.2017 and 21.8.2017 issued by the respondent No. 3. B. To issue a writ of certiorari quashing the order dated 27.6.2018 passed by the respondent No. 1. C. Issue a writ, order or direction in the nature of mandamus commanding and directing the respondents authority to not take any coercive action of the order dated 29.1.2018 and 13.11.2017 in pursuance of the show-cause notice 20.9.2017, 29.6.2017, 27.11.2017, 2.11.2017, 20.7.2017 and 21.8.2017. D. Issue a suitable writ, order or direction which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case. E. Award costs of this writ petition to the petitioners.'' 4. The case of the petitioners is that their land was acquired by the National Highway Authority of India (hereinafter referred to as N.H.A.I.) under the National Highway Act, 1956 for extension of the National Highway. Petitioners were paid compensation in lieu of the acquisition of their land by the N.H.A.I. 5. The further case of the petitioners is that they have purchased agricultural land within one year from the date they had received compensation for the acquisition of their land, therefore, they are entitled to the benefit of Government Order dated 2.6.2011 issued by the Principal Secretary granting exemption from payment of stamp duty to those person whose land have been acquired for public purpose and who have purchased agricultural land within one year from the date of receiving compensation. 6. 6. It is further stated that a similar benefit has been extended to the persons whose land has been acquired by the Railways for public purpose and who have purchased agricultural land within one year from the date they had received compensation for the acquisition of their land. 7. The further case of the petitioners is that in both the cases i.e. in respect to the persons covered under the Government Order dated 2.6.2011, and also in the case of acquisition of land by Railways, the purpose of the acquisition is for a public purpose, and since, the land of petitioners have been acquired for public purpose as the purpose of the acquisition was to expand the national highway, therefore, they form one class. Hence, they assert that they cannot be discriminated against and are entitled to the benefit of exemption from payment of stamp duty, as in the case of persons covered under the Government Order dated 2.6.2011 or the persons whose land has been acquired by the Railways. Thus, according to petitioners, non-extending the said benefit to them amounts to violation of Article 14 of the Constitution of India. 8. The further case of the petitioners is that proceeding under Section 47-A of the Indian Stamp Act, 1899 (hereinafter referred to as 'Act, 1899') could not be initiated against the petitioners as it is not the case of the respondent-State that petitioners have not set forth the correct market value in the instrument of sale. Further, the notices issued by the Collector (Stamp) do not reflect that the Collector (Stamp) on the basis of material on record had reason to believe that the correct market value of the property has not been set forth in the sale-deed, and since, the expression 'reason to believe' used in Section 47-A of the Act, 1899 is the sine qua non for initiating a proceeding under Section 47-A of the Act, 1899, therefore, in the absence of such essential condition for invoking power under Section 47-A of the Act, 1899, the proceeding initiated against the petitioners under Section 47-A of the Act, 1899 are bad in law and without jurisdiction. 9. 9. In rebuttal to the aforesaid submission of the petitioners, learned counsel for the respondents submits that in the Government Order dated 2.6.2011, there are four categories and if a person falls in any of the said categories, he is entitled to the benefit of Government Order dated 2.6.2011. He submits that since petitioners do not fall in any of the categories as contemplated under the Government Order dated 2.6.2011, therefore, they are not entitled to the benefit of exemption from payment of stamp duty. He further submits that in the case of Railways, there was no exemption from payment of stamp duty rather under the scheme formulated by the Railways, if a person whose land is acquired by the Railway purchases agricultural land within one year from the date he receives compensation, he shall be reimbursed to the actual stamp duty which he is supposed to pay on purchase of agricultural land. So, the petitioners cannot claim parity with the person whose land has been acquired by the Railways. 10. He further contends that though the State Government is empowered under Section 9 of the Act, 1899 to grant the exemption, the Court in the exercise of power under Article 226 of the Constitution of India cannot mandate the State Government to frame a policy and extend the fiscal benefit to a particular class of person as the same involves heavy burden on the Government expenditure, and this Court cannot assess whether the Government is in a position to bear such expenditure or not, therefore, the claim of petitioners based on parity with the persons who are eligible to the benefit under the Government Order dated 2.6.2011 is misconceived. 11. So far as the question whether the State Government could exercise the power under Section 47-A of the Act, 1899 is concerned, he has placed reliance upon Sections 17, 27, 31 and 33 of the Act, 1899 to contend that if the correct stamp duty has not been paid by the persons, the power under Section 47-A(3) of the Act, 1899 can be invoked by the Collector (Stamp), and in the instant case, as admittedly, the stamp duty has not been paid by the petitioners on misconception that they are entitled to the benefit of Government Order dated 2.6.2011, the power under Section 47-A has rightly been invoked by the Collector (Stamp). He contends that once petitioners have not paid the correct stamp duty, the case of the petitioners falls under Section 27 of the Act, 1899 as it affects the chargeability of the instrument with duty or the amount of the duty with which it is chargeable, therefore, the Collector (Stamp) has rightly invoked the power under Section 47-A of the Act, 1899, and the contention of the petitioners in this respect is misconceived. 12. He further contends that Section 33 (4) of the Act, 1899 confers power upon the Collector either suo motu or on a reference from the authorities referred to under the said section to call for the original instrument to satisfy himself as to the adequacy of the duty paid thereon, and the instrument so produced before the Collector shall be deemed to have been produced or come before him in the performance of his functions. Thus, it is contended that the State has the power to demand correct stamp duty. 13. He further submits that a reading of Section 47-A(3) of the Act, 1899 suggests that the purpose of incorporation of the said provision is to find out whether the market value of the property has been correctly set forth, and if the correct market value has been set forth, whether the correct stamp duty has been paid. He submits that the determination of stamp duty is not dependent upon the fact that the correct market value has been set forth in the instrument. He submits that even if the correct market value has been set forth in the instrument, but the proper stamp duty has not been paid, the Collector has the power to invoke Section 47-A(3) of the Act, 1899 and he may issue notices and proceed in accordance with the procedure contemplated under Section 47-A (3) to recover deficit stamp duty. 14. It is also contended that proceeding under sub-section (3) of Section 47-A of the Act, 1899 can be initiated even if there is payment of deficit stamp duty under sub-section (1) of Section 47-A of the Act, 1899. It is further submitted that the power of the Collector to analyse the stamp duty is absolute, and there can be no escape from the same. 15. I have considered the rival submissions of the parties and perused the record. 16. It is further submitted that the power of the Collector to analyse the stamp duty is absolute, and there can be no escape from the same. 15. I have considered the rival submissions of the parties and perused the record. 16. So far as the claim of petitioners in respect to benefit of exemption from payment of stamp duty based upon the Government Order dated 2.6.2011 is concerned, it is pertinent to note that under the Government Order dated 2.6.2011, four categories have been provided, and if a person falls under any of the aforesaid categories, he would be entitled to exemption from payment of registration fee and stamp duty only on the amount obtained as compensation if he had purchased agricultural land within one year from the date he received compensation. The Government Order dated 2.6.2011 which provides the exemption from payment of stamp duty is reproduced herein below : 17. The object of bringing out the Government Order dated 2.6.2011 is to provide adequate benefit to the land owners whose land is acquired for projects relating to economic and social development. In the Government Order dated 2.6.2011, four categories have been carved out. To seek the benefit of said Government Order, a person should come within the ambit of any of the aforesaid four categories. 18. Though petitioners have set up a claim that they are entitled to the benefit of exemption on the ground that a similar benefit has been extended to the land owners whose land has been acquired by the Railways for extension of Railways, this Court does not find any factual foundation in the writ petition in respect to the fact that land owners whose land have been acquired by the Railways are also getting the benefit of exemption from payment of stamp duty in case the agricultural land is purchased by them within one year from the compensation received by them on account of acquisition of their land by the Railways. 19. 19. The petitioners have placed reliance upon paragraph 2 of the letter of Additional Commissioner (Stamp), State of U.P., Lucknow dated 23.8.2017 appearing on page 146 of the paper book wherein it is stated that Dedicated Fate Corridor Corporation of India Limited is acquiring land under the Railway (Amendment) Act, 2008 and they have issued guidelines with regard to entitlement matrix in respect of farmers whose land have been acquired to contend that the benefit of exemption from payment of stamp duty has been extended to the land owners whose lands have been acquired by the Dedicated Fate Corridor Corporation of India Limited for Railways. 20. Learned Chief Standing Counsel in this respect has submitted that in the case of acquisition by the Dedicated Fate Corridor Corporation of India Limited, there was no exemption from payment of stamp duty, however, such person has been given reimbursement to the actual stamp duty which he is to pay for the purchase of agricultural land. Thus, from the aforesaid submission, it is evident that benefit of exemption from payment of stamp duty has not been extended to the land owners whose land have been acquired by the State Government rather under the policy decision taken by the Railways, amount of stamp duty paid by the land owners in purchase of agricultural land from the compensation received by them is reimbursed by the Railways, therefore, petitioners cannot claim any parity with those whose land have been acquired by the Railways. 21. Now, so far as the Government Order dated 2.6.2011 is concerned, it is not disputed that petitioners do not fall within any of the categories given in the said Government Order to claim the benefit of exemption from payment of stamp duty. 22. Now, the question which arises is whether this Court can mandate the State Government to grant exemption to the petitioners or the land owners whose land has been acquired by the N.H.A.I. 23. The law is no more res-integra that the Court in fiscal policy matters should refrain from issuing mandates to the State Government to expand the fiscal arena and coverage of legislation from one person to other person. It is the domain of the State Government to grant exemption from payment of stamp duty to a class of persons. The law is no more res-integra that the Court in fiscal policy matters should refrain from issuing mandates to the State Government to expand the fiscal arena and coverage of legislation from one person to other person. It is the domain of the State Government to grant exemption from payment of stamp duty to a class of persons. In this respect, it would be useful to have paragraphs 96, 99 and 101 of the judgment of Apex Court in the case of Brij Mohan Lal v. Union of India and others, (2012) 6 SCC 502 , which are reproduced herein below : ''96. It is a settled principle of law that matters relating to framing and implementation of policy primarily fall in the domain of the Government. It is an established requirement of good governance that the Government should frame policies which are fair and beneficial to the public at large. The Government enjoys freedom in relation to framing of policies. It is for the Government to adopt any particular policy as it may deem fit and proper and the law gives it liberty and freedom in framing the same. Normally, the Courts would decline to exercise the power of judicial review in relation to such matters. But this general rule is not free from exceptions. The Courts have repeatedly taken the view that they would not refuse to adjudicate upon policy matters if the policy decisions are arbitrary, capricious or mala fide. 99. It is also a settled cannon of law that the Government has the authority and power to not only frame its policies, but also to change the same. The power of the Government, regarding how the policy should be shaped or implemented and what should be its scope, is very wide, subject to it not being arbitrary or unreasonable. In other words, the State may formulate or reformulate its policies to attain its obligations of governance or to achieve its objects, but the freedom so granted is subject to basic constitutional limitations and is not so absolute in its terms that it would permit even arbitrary actions. 101. Cases of this nature can be classified into two main classes: one class being the matters relating to general policy decisions of the State and the second relating to fiscal policies of the State. 101. Cases of this nature can be classified into two main classes: one class being the matters relating to general policy decisions of the State and the second relating to fiscal policies of the State. In the former class of cases, the Courts have expanded the scope of judicial review when the actions are arbitrary, mala fide or contrary to the law of the land; while in the latter class of cases, the scope of such judicial review is far narrower. Nevertheless, unreasonableness, arbitrariness, unfair actions or policies contrary to the letter, intent and philosophy of law and policies expanding beyond the permissible limits of delegated power will be instances where the Courts will be instances where the Courts will step in to interfere with Government policy.'' 24. In the case of Union of India and others v. V.K.C Footsteps India Private Limited, (2022) 2 SCC 603 , the Apex Court has held that it is not the function of the Court in the fiscal arena to compel Parliament to go further and to do more as this would constitute an impermissible judicial encroachment on legislative power. 25. It is also submitted by Sri Kunal Ravi Singh, learned Chief Standing Counsel that there can be no discrimination when the source of authority of two statutes is different. In this respect, he has placed reliance upon the judgment of the Apex Court in the case of State of Bombay and another v. F.N. Balsara, 1951 SCC 860 and in the case of Javed and others v. State of Haryana and others, (2003) SCC 369. Paragraph 49 of the judgment of F.N. Balsara (supra) is reproduced herein below : ''49. I now come to Section 39 of the Act which has been impugned on the ground that it offends against article 14 of the Constitution which states that- ''14 Equality before law.-The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India''. I now come to Section 39 of the Act which has been impugned on the ground that it offends against article 14 of the Constitution which states that- ''14 Equality before law.-The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India''. The meaning and scope of this article has been fully discussed in the case of Chiranjit Lal Chowdhury v. Union of India and others, 1950 SCC 833, and the principles laid down in that case may be summarized as follows: (1) The presumption is always in favour of the constitutionality of an enactment, since it must be assumed that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and its discriminations are based on adequate grounds. (2) The presumption may be rebutted in certain cases by showing that on the face of the statute, there is no classification at all and no difference peculiar to any individual or class and not applicable to any other individual or class, and yet the law hits only a particular individual or class. (3) The principle of equality does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstances in the same position, and the varying needs of different classes of persons often require separate treatment. (4) The principle does not take away from the State the power of classifying persons for legitimate purposes. (5) Every classification is in some degree likely to produce some inequality, and mere production of inequality is not enough. (6) If a law deals equally with members of a well-defined class, it is not obnoxious and it is not open to the charge of denial of equal protection on the ground that it has no application to other persons. (7) While reasonable classification is permissible, such classification must be based upon some real and substantial distinction bearing a reasonable and just relation to the object sought to be attained, and the classification cannot be made arbitrarily and without any substantial basis.'' 26. In the case of Javed (supra), the Apex Court in paragraphs Nos. 12 to 14 has held as under: ''12. In the case of Javed (supra), the Apex Court in paragraphs Nos. 12 to 14 has held as under: ''12. It was submitted that though the State of Haryana has introduced such a provision of disqualification by reference to elective offices in Panchayats, a similar provision is not found to have been enacted for disqualifying aspirants or holders of elective or public offices in other institutions of local self-governance and also not in State Legislatures and Parliament. So also all the States i.e. other than Haryana have not enacted similar laws, and therefore, it appears that people aspiring to participate in Panchayati Raj governance in the State of Haryana have been singled out and b meted out hostile discrimination. The submission has been stated only to be rejected. Under the constitutional scheme there is a well-defined distribution of legislative powers contained in Part XI of the Constitution. Parliament and every State Legislature has power to make laws with respect to any of the matters which fall within its field of legislation under Article 246 read with the Seventh Schedule of the Constitution. A legislation by one of the States cannot be held to be discriminatory or suffering from the vice of hostile discrimination as against its citizens simply because Parliament or the legislatures of other States have not chosen to enact similar laws. Such a submission, if accepted, would be violative of the autonomy given to the Centre and the States within their respective fields under the constitutional scheme. 13. Similarly, legislations referable to different organs of local self-Government, that is, Panchayats, Municipalities and so on may be, rather are, different. Many a time they are referable to different entries of Lists I, II and III of the Seventh Schedule. All such laws need not necessarily be identical. So is the case with the laws governing legislators and parliamentarians. 14. It is not permissible to compare a piece of legislation enacted by a State in exercise of its own legislative power with the provisions of another law, though pari materia it may be, but enacted by Parliament or by another State Legislature within its own power to legislate. The sources of power are different and so do differ those who exercise the power. The sources of power are different and so do differ those who exercise the power. The Constitution Bench in State of M.P. v. G.C. Mandawar, AIR 1954 SC 493 , held that the power of the Court to declare a law void under Article 13 has to be exercised with reference to the specific legislation which is impugned. Two laws enacted by two different Governments and by two different legislatures can be read neither in conjunction nor by comparison for the purpose of finding out if they are discriminatory. Article 14 does not authorize the striking down of a law of one State on the ground that in contrast with a law of another State on the same subject, its provisions are discriminatory. When the sources of authority for the two statutes are different, Article 14 can have no application. So is the view taken in Bar Council of U.P. v. State of U.P., State of T.N. v. Ananthi Ammal and Prabhakaran Nair v. State of T.N.'' 27. In the present case, the State Government in exercise of power under Section 9 of the Act, 1899 has provided the exemption from payment of stamp duty in respect of four categories contemplated in the Government Order dated 2.6.2011. 28. In the four categories defined in the Government Order dated 2.6.2011, the acquisition of land by the State Government is under a different statute i.e. under the Land Acquisition Act, 1894 whereas in the case in hand, the acquisition is done by the N.H.A.I. under the National Highway Act, 1956. The source of authority for acquisition under the Government Order dated 2.6.2011 and in the case of N.H.A.I. is different, therefore, applying the principles laid down by the Apex Court in the two cases namely, Javed (supra) and State of F.N. Balsara (supra), the submission of learned counsel for the petitioners that since the petitioners' land have been acquired by the N.H.A.I. for extension of national highways which is a public purpose and land acquired by the State Government for the development of State is also public purpose, therefore, they form one class and thus, the action of the State Government in not extending the benefit of Government Order dated 2.6.2011 is arbitrary and discriminatory lacks substance and deserves rejection by this Court. 29. 29. Given the aforesaid discussion, this Court is of the view that the State Government has not acted arbitrarily or discriminatory in not extending the benefit of exemption from payment of stamp duty to the petitioners whose land has been acquired by the N.H.A.I. under the National Highways Act, 1956 for extension of national highways nor the Court can compel the State Government to extend the benefit of exemption to the petitioners and other like persons as that would amount to encroaching upon the legislative function of the State Government. 30. The Apex Court in the case of Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar v. Commissioner of Central Excise and Service Tax, Alwar, AIR 2022 SC 1234 , in paragraph 8.1 has held that to claim the benefit of exemption, a person has to fulfill all the conditions laid down in the notification, and if he does not fulfill any of the conditions, he cannot claim the benefit of exemption under the notification. The Apex Court also held that an exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the Court to ignore the conditions prescribed in the relevant policy and the exemption notification issued in that regard. Since the petitioners admittedly do not fall in any of the four categories defined in the Government Order dated 2.6.2011, therefore, the petitioners for this reason also are not entitled to the exemption provided by the Government Order dated 2.6.2011. 31. Now, coming to the second submission that the proceeding initiated by the respondents under Section 47-A of the Act, 1899 is without jurisdiction since the pre-requisite to invoke Section 47-A of the Act, 1899 is lacking in the instant case. 32. 31. Now, coming to the second submission that the proceeding initiated by the respondents under Section 47-A of the Act, 1899 is without jurisdiction since the pre-requisite to invoke Section 47-A of the Act, 1899 is lacking in the instant case. 32. To appreciate the aforesaid argument, it would be relevant to have a glance at Section 47-A of the Stamp Act, 1899 which is reproduced herein below : ''Section 47-A Under-valuation of the instrument-[(1) (a) If the market 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. (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 the Collector, for determination of the market value of the property and the proper duty payable thereon]. (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 the Collector, for 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 inquiry 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 such 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 on 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 realization 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).]'' 33. Section 17 of the Act, 1899 provides that all instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution. Thus, the stamp duty on an instrument is payable at the time of execution of the instrument which means that the relevant date for determination of stamp duty on the sale-deed would be the correct market value on the date of its execution. 34. Under Section 27(1) of the Act, 1899, the consideration and all other facts and circumstances which may affect the chargeability with duty or the amount of duty with which it is chargeable shall be fully and truly set forth therein. In other words, if the consideration (if any) and all other facts and circumstances which may affect the chargeability of any instrument with duty or the amount of duty with which it is chargeable is not fully and truly set forth therein and if a doubt arises in the mind of the Registering Authority that the instrument is undervalued, then he can send the instrument to the Collector for determination of correct market value. 35. Sub-Section (2) of Section 27 of the Act, 1899 is not relevant in the present case, therefore, the applicability of Section 27(2) of the Act, 1899 is not deliberated. 36. In the present case, the proceeding had been initiated for recovery of stamp duty on the letter dated 16.6.2017 of Deputy Inspector of General Registration, Meerut Division, Meerut. The relevant extract of the letter dated 16.6.2017 is reproduced herein below : 37. In compliance with the letter dated 16.6.2017, notices were issued to the petitioners under Section 47-A of the Act, 1899. In some of the cases, Assistant Collector (Finance & Revenue), Hapur exercised the power under Section 47-A of the Act, 1899 and determined the deficit stamp duty. 38. In compliance with the letter dated 16.6.2017, notices were issued to the petitioners under Section 47-A of the Act, 1899. In some of the cases, Assistant Collector (Finance & Revenue), Hapur exercised the power under Section 47-A of the Act, 1899 and determined the deficit stamp duty. 38. It would also be apt to reproduce herein-below the show-cause notice issued by the Additional Collector (Finance & Revenue), Hapur dated 29.6.2017, under Section 47-A of the Act, 1899 in Case No. D201711730498 which is the basis of initiation of proceeding under Section 47-A of the Act, 1899 : 39. Notice issued under Section 47-A of the Act, 1899 does not disclose that any satisfaction has been recorded by the Assistant Collector (Finance & Revenue), Hapur that from the assessment of material on record, he has reason to believe that correct market value has not been set forth in the instrument of sale. 40. The perusal of the impugned order passed by the Assistant Collector (Finance & Revenue), Hapur discloses that the proceedings had been initiated on the report of Sub-Registrar dated 7.6.2017 and order of Collector (Stamp), Hapur dated 28.6.2017 on the ground that petitioners are not entitled to exemption under the Government Order dated 2.6.2011. The deficiency has been determined only on the ground that petitioners are not entitled to exemption from payment of stamp duty under the Government Order dated 2.6.2011. It has not been initiated against the petitioners under Section 47-A of the Act, 1899 on the ground that they have not set forth the correct market value of the property in the instrument. The relevant extract of the impugned order dated 29.1.2018 passed by the Assistant Collector (Finance & Revenue), Hapur in Case No. D201711730498 is reproduced herein below : 41. Under Section 47-A(1) of the Act, 1899, the Registering Officer appointed under the Registration Act, 1908 on presentation of an 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 rules and return the instrument for presenting again in accordance with Section 23 of the Registration Act, 1908. 42. 42. So under sub-section (1) of Section 47-A of the Act, 1899, the Registering Officer is to find out whether the minimum value set forth in the instrument has been determined in accordance with rules and in case, he finds that the minimum value is not set forth in the instrument as per the rules, he may calculate the same as per the rules and require the person concerned to pay deficit stamp duty computed on the basis of minimum value of the property and return the documents to be presented again in accordance with Section 23 of the Registration Act, 1908. 43. If in case, the deficit stamp duty determined under clause (a) of Section 47-A(1) is paid and the instrument is presented again for registration, the Registering Officer under Clause (b) of Section 47-A(1) shall certify by endorsement thereon that the deficit stamp duty has been paid in respect thereof, and the name and residence of the person paying them and register the same. Clause (c) of Section 47-A(1) provides how the deficit stamp duty may be paid. 44. In case the person does not pay deficit stamp duty after receiving the order referred to in clause (a) of Section 47-A(1) of the Act, 1899 and presents the instrument again for registration, the Registering Officer under Clause (d) of Section 47-A(1) before registering the instrument, refer the same to the Collector for determination of the market value of the property and proper duty payable thereon. 45. Under sub-section (2) of Section 47-A, the Collector on receiving the reference under sub-section (1) of Section 47-A shall give reasonable opportunity of hearing to the concerned person and also hold an enquiry in the manner as prescribed by rules and determine the market value of the property which is the subject-matter of the instrument and proper duty payable thereon. 46. 46. Under Section 47-A (3) of the Act, 1899, the Collector may suo motu or on reference from any Court or authority referred to in the said sub-section may call for in cases where a reference is not already referred to him under sub-section (1) 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-matter for such instrument, and the duty payable thereon, and if after such examination, he has reason to believe that the market value of the such property has not been truly set forth in the instrument, he may determine the market value of such property and duty payable thereon. 47. The language of Section 47-A (3) of the Act, 1899 is clear and unambiguous. The reading of the language employed in Section 47-A(3) of the Act, 1899 reveals that the Collector on reference shall examine the instrument to satisfy himself regarding the correctness of the market value of the property and duty payable thereon, and if on enquiry or examination, he has reason to believe that true and correct market value of such property has not been set forth in the instrument, he shall determine the market value of such property and duty payable thereon. So, it is manifest from the language employed in Section 47-A(3) of the Act, 1899 that an enquiry or examination is to be done by the Collector to satisfy himself about the fact whether true and correct market value has been set forth in the instrument, and if on enquiry, he has reason to believe that true and correct market value is not set forth, only then he shall determine the market value of the property and duty payable thereon. The 'belief ' of the Collector about the non-setting up of the correct market value in the instrument should be in good faith and should be based upon tangible materials on record and should not be based upon conjectures or on flimsy grounds. 48. The 'belief ' of the Collector about the non-setting up of the correct market value in the instrument should be in good faith and should be based upon tangible materials on record and should not be based upon conjectures or on flimsy grounds. 48. In this regard, it would be useful to have a glance at the judgment of the Apex Court in the case of Residents Welfare Association, Noida v. State of Uttar Pradesh and others, (2009) 14 SCC 716 , wherein Apex Court has considered the scope of Section 47-A of the Act, 1899 as amended by the State of U.P., and the conditions precedent for invocation of Section 47-A of the Act, 1899 as applicable to the State of U.P. In this respect, paragraphs Nos. 18 to 22 of the said judgment are reproduced herein below : ''18. Pursuant to Himalaya House Company v. Chief Controlling Authority and another, AIR 1972 SC 899 , 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 hereinabove. Thus, the object underlying Section 47-A of the Stamp Act is to neutralize the effect of undervaluation of immovable property under registered instrument of sale or exchange or gift or partition or settlement. 19. From a bare perusal of sub-section (1) of Section 47-A of the Act, it is clear that if the market value of any property, which is the subject-matter of an instrument on which stamp duty is chargeable, as set forth in the instrument, is less than even the minimum value determined in accordance with the Rules made under this Act, the registering officer shall request the person to pay the deficit stamp duty and present the instrument again for registration. At the same time, it should be kept in mind that it is not enough for the authorities for the purpose of invoking Section 47-A that the consideration amount stated in the instrument of sale is less than the prevailing market value but they must be satisfied that there is an attempt of undervaluation. 20. At the same time, it should be kept in mind that it is not enough for the authorities for the purpose of invoking Section 47-A that the consideration amount stated in the instrument of sale is less than the prevailing market value but they must be satisfied that there is an attempt of undervaluation. 20. It is pertinent to mention that if the registering authority finds that the market value of the property presented for registration is higher than the one shown in the document, in that case, the registering authority after presentation of such instrument and before accepting the document for registration would ask the person liable to pay the required stamp duty, to pay the deficit amount as computed on the basis of the minimum value determined in accordance with the Rules and return the instrument for presenting the document again in accordance with Section 23 of the Registration Act. 21. Again a close look at sub-section (2) of Section 47-A reveals that in case such an officer has reason to believe that the market value of the property has been undervalued, he shall refer the same to the Collector but only after registering the same. 22. Even for the sake of argument, if we assume that Section 47-A is applicable in the present case, then also it is apparent that in the current scenario, the registering authority could not register the said instrument before referring it to the Collector which has been mandated under the Act. For the further illustration of this point, we may refer to the decision of this Court in State of Punjab v. Mohabir Singh, (1996) 1 SCC 609 , where this Court has categorically held that whenever a document is presented for registration, the Sub-Registrar is required first to register the document and then make a reference under Section 47-A if he deems fit and proper.'' 49. It would also be relevant to reproduce paragraphs Nos. 7 to 12 of the judgment of this Court in the case of Vijay Kumar and another v. Commissioner, Meerut Division and another, 2008(7) ADJ 293 : ''7. The Stamp Act is a fiscal statute and it has to be interpreted strictly and construction of hardship or equity has no role to play in its construction. It is a taxing statute and has to be read as it is. The Stamp Act is a fiscal statute and it has to be interpreted strictly and construction of hardship or equity has no role to play in its construction. It is a taxing statute and has to be read as it is. In other words, the literal rule of interpretation applies to it. See-State of Rajasthan v. Khandaka Jain Jewellers, AIR 2008 SC 509 . In this case the Supreme Court has referred its earlier judgment in the case of A.V. Fernandez v. State of Kerala, AIR 1957 SC 657 . Also Government of A.P. and others v. Smt. P. Laxmi Devi, 2008 AIR SCW 1826 8. In the above background the phrase 'reason to believe' occurring in sub-section (3) of Section 47-A has to be considered. Identical phrases have been placed in almost every fiscal statutes such as Income-Tax Act, Sales Tax Act etc. With reference to the expression 'reason to believe' used in Section 34 of the Old Income-Tax Act it has been held that they do not mean purely subjective satisfaction on the part of the Income Tax Officer. The 'belief' must have been held in good faith, it cannot be merely a pretence. To put it differently it is open to Court to examine the question whether the reasons to believe have a rational connection or a relevant bearing to the formation of belief and are not extraneous or irrelevant to the purpose of Section, as held in S. Narayanappa and others v. CIT Bangalore, AIR 1967 SC 523 . The words 'reason to believe' are stronger than the expression 'for satisfaction' Belief must not be arbitrary or irrational. It must be reasonable or must be based on reasons which are relevant and material. 9. In view of the fact that expression 'reason to believe' has been used in sub-section (3) of Section 47-A of the Act, the power conferred under this Section though is wide but they are not plenary. The power cannot be exercised when the Collector has reason to suspect that there is evasion of proper stamp duty. 10. A Division Bench of this Court in Kishore Chandra Agarwal v. State of U. P. and others, 2007(10) ADJ 607 (DB)(LB), has held as follows : ''25. Every wide power, the exercise of which has far reaching repercussion, has inherent limitation on it. It should be exercised to effectuate the purpose of the Act. 10. A Division Bench of this Court in Kishore Chandra Agarwal v. State of U. P. and others, 2007(10) ADJ 607 (DB)(LB), has held as follows : ''25. Every wide power, the exercise of which has far reaching repercussion, has inherent limitation on it. It should be exercised to effectuate the purpose of the Act. In legislations enacted for general benefits and common good the responsibility is far graver. It demands purposeful approach. The exercise of discretion should be objective. Test of reasonableness is more strict. The public functionaries should be duty conscious rather than power charged. It actions and decisions, which touch the common man, have to be tested on the touchstone of fairness and justice. An arbitrary action is ultra vires.'' 11. In Hajari Lal Sahu v. State of U. P. and others, 2004 (1) AWC 899 , a learned Single Judge of this Court has taken the similar view. 12. The other phrase used in sub-section (3) of Section 47-A is 'market value'. The 'market value' means what a willing purchaser would pay to a willing seller for the property having regard to the advantages available the land and the development activities which may be going in the vicinity and potentiality of the land and as such, an offer of sale of land to an industrialist on concessional rate with a view to induce him to set up industry in a particular area is not market value. See Mahabir Prasad v. Collector, Cuttack, AIR 1987 SC 720 .'' 50. In the present case, it is evident from the notice issued under Section 47-A, extracted above, and also from the impugned order that the sale-deed has been registered, however, the stamp duty has been paid claiming exemption from the Government Order dated 2.6.2011. It is also evident from the notice and order that the proceedings had been initiated against the petitioners under Section 47-A of the Act, 1899. 51. The contents of the notice, extracted above, reveal that the proceeding had been initiated on the basis of the inspection report of the Sub-Registrar and not on a reference of Registering Authority under clause (c) of Section 47-A(1). 51. The contents of the notice, extracted above, reveal that the proceeding had been initiated on the basis of the inspection report of the Sub-Registrar and not on a reference of Registering Authority under clause (c) of Section 47-A(1). Further, under Section 47-A (1) of the Act, 1899, the Registering Officer before registering the instrument determines the minimum value of the property as per rules and the duty payable thereon whereas in the present case, the sale-deeds have already been registered. Therefore, the proceedings have not been drawn against the petitioners under Section 47-A(1) of the Act, 1899. In such view of the fact, this Court is of the view that the proceedings drawn against the petitioners are under Section 47-A (3) of the Act, 1899. 52. In the instant case, the notice as well as the impugned order reveals that proceedings had been initiated only on the ground that correct stamp duty has not been paid inasmuch as the petitioners are not entitled to exemption under the Government Order dated 2.6.2011, but notice as well as impugned order are not based upon pre-requisite of invoking power under Section 47-A (3) of the Act, 1899 that any enquiry or examination of instrument was done by the Collector to satisfy himself that correct market value has not been set forth in the instrument and based upon such enquiry, he has reason to believe on the basis of tangible materials on record that the correct market value of the property has not been set forth in the instrument. 53. It is no more res-integra that taxing statute has to be interpreted in strict manner, and in respect of said proposition, learned counsel for the respondents has placed reliance upon the judgment of the Apex Court in the cases of State of Rajasthan and others v. Khandaka Jain Jewellersm, (2007) 14 SCC 339 and Duncans Industries Ltd. v. State of U.P. and others, (2000) 1 SCC 633 . 54. The same proposition has been reiterated by this Court in the case of Vijay Kumar (supra) which has also been relied upon by the learned counsel for the respondents. 55. 54. The same proposition has been reiterated by this Court in the case of Vijay Kumar (supra) which has also been relied upon by the learned counsel for the respondents. 55. Applying the aforesaid principles, it is manifest from the notice under Section 47-A and order passed by the Collector that sine qua non to invoke the power under Section 47-A of the Act, 1899 by the Collector that an enquiry was held by the Collector in respect of instrument to satisfy himself that correct market value is not set forth in the instrument, and on enquiry, he has reason to believe that correct market value has not been disclosed in the instrument is lacking, therefore, proceedings initiated against the petitioners are without jurisdiction. 56. The contention of the learned Chief Standing Counsel that the Collector has powers under Sections 31 & 33 of the Act, 1899 to recover the deficit stamp duty lacks substance because it is evident from the notice as well as the impugned order dated 29.1.2018, extracted above, that proceeding has been drawn against the petitioners under Section 47-A of the Act, 1899 and not in any other provisions of the Act, 1899. 57. So far as the contention of learned counsel for the respondents that the power under Section 47-A of the Act, 1899 can be invoked to recover the deficit stamp duty is concerned, it would be relevant to have a Full Bench judgment of this Court in the case of Smt. Pushpa Sareen v. State of U.P., 2015(3) ADJ 136 (FB), wherein the question No. 4 referred to the Full Bench was identical as has been raised by the learned counsel for the respondents. The question No. 4 referred in the Full Bench judgment is reproduced herein-below : ''4. Whether the Collector can demand stamp duty under Section 47-A of the Stamp Act without a finding of fact that the market value as stated in the document is less than that which was actually agreed upon between the parties.'' 58. The question No. 4 has been answered by the Full Bench in paragraph No. 22 of the judgment. Paragraphs No. 16 to 22 of the judgment are reproduced herein-below : ''16. In exercise of the powers conferred by the provisions of the Stamp Act, the Stamp Rules were made. Chapter XV contains provisions for the determination of the market value on certain instruments. Paragraphs No. 16 to 22 of the judgment are reproduced herein-below : ''16. In exercise of the powers conferred by the provisions of the Stamp Act, the Stamp Rules were made. Chapter XV contains provisions for the determination of the market value on certain instruments. 17. Sub-section (3) of Section 47-A provided that on receipt of a reference under sub-section (1) or sub-section (2), the Collector after furnishing a reasonable opportunity of being heard and upon holding an enquiry as prescribed by the rules was required to determine the market value of the property which is the subject-matter of the instrument as well as the duty. The question as framed for reference is whether the Collector should demand stamp duty under Section 47-A without a finding of fact that the market value as stated in the document is less than that which was agreed upon between the parties. The Collector, as we have already noted, could be moved on a reference by the registering officer under sub-section (1) or sub-section (2) or could even exercise his powers suo motu under sub-section (4). When he received a reference under sub-sections (1) and (2), the Collector was required to follow the provisions of sub-section (3). Similarly, even when the Collector acted suo motu under sub-section (4), he was required to follow the procedure provided in sub-section (3). In other words, once the Collector was seized with the proceedings either on a reference under sub-section (1) or sub-section (2) or suo motu under sub-section (4), what he was required to determine is the market value of the property in accordance with the provisions of sub-section (3). Whether the market value, as stated in the document, is less than that which was actually agreed upon between the parties, to our mind, begs the basic question. The jurisdiction of the Collector was to determine the correct market value. These provisions of Section 47-A were introduced in order to curb the evasion of stamp duty and to enable the Collector to determine what is the correct market value of the property in a situation where the instrument was not reflective of the correct market value. 18. The law on the subject was duly formulated in several decisions of this Court. 19. 18. The law on the subject was duly formulated in several decisions of this Court. 19. In Kaka Singh v. The Additional Collector and District Magistrate (Finance and Revenue) and another, 1986 All LJ 49 : ( AIR 1986 All 107 ) a Division Bench of this Court noted that Section 47-A filled in a lacuna because prior to the insertion of the provision, there was no enabling provision under the Act empowering the revenue authority to make an enquiry into the value of the property conveyed for determining the duty payable thereon. Section 27 of the Act laid down 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 truly and fully set forth therein. However, prior to the insertion of Section 27, if the instrument did not set forth the true market value of the property, the revenue was not empowered to adjudicate upon the correct market value. This lacuna which was noticed in a judgment of the Supreme Court in Himalaya House Co. Ltd., Bombay v. The Chief Controlling Revenue Authority, (1972) 1 SCC 726 : AIR 1972 SC 899 , was remedied by the insertion of Section 47-A. After the insertion of Section 47-A, this Court had taken the consistent position that the power of the Collector was not only confined to the minimum value which was prescribed in the rules framed under the Act. Rule 341 of Chapter XV of the Stamp Rules provided that for the purposes of the payment of stamp duty, the minimum market value of immovable property forming the subject inter alia of a conveyance referred to in Section 47-A (1) would not be less than what was arrived at on the basis of the provisions of the rules. But it was well-settled that the power of the Collector was not confined to the minimum as prescribed in Rule 341. But it was well-settled that the power of the Collector was not confined to the minimum as prescribed in Rule 341. In other words, the value computed under Rule 341 was not conclusive of what should be the correct market value when the Collector had to make a determination in pursuance of an inquiry under sub-section (3) of Section 47-A. Under sub-section (1) of Section 47-A, the registering officer could make a reference to the Collector, if he found that the market value as reflected in the instrument was less than even the minimum prescribed in the Rules. However, the minimum which was prescribed in the rules was at best a guiding factor for the Collector and was not conclusive of his power to determine the market value. For that matter, the value under Rule 341 was not binding either on the person who produced the instrument for registration or on the State Government. 20. Subsequently, the provisions of the Stamp Rules in regard to valuation were replaced by the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 which have been made in exercise of the powers conferred by Sections 27, 47A and 75 of the Stamp Act. However, it is not necessary for the Court to express any view on the scheme or provisions of those rules since the period of dispute in the present reference is prior to the enforcement of those rules. 21. We may also note at this stage that the decision of the Division Bench in Kaka Singh (supra) was followed by another Division Bench of this Court in Agra City Real Estate Development Organisation v. State of U.P. and others, 2003 (4) AWC 3342 , para 21, where it was held as follows: ''Section 47A (1) does not say that the valuation of the property for the purpose of stamp duty has to be the minimum value determined under the Rules. All it says is that if the valuation set forth in the instrument is less than the minimum value determined in accordance with the rules, then a reference has to be made to the Collector. Thus, the minimum value fixed under the rules is only for the purpose of getting a reference made to the Collector. When the reference comes before the Collector, he has to make an enquiry and determine the correct market value of the property. Thus, the minimum value fixed under the rules is only for the purpose of getting a reference made to the Collector. When the reference comes before the Collector, he has to make an enquiry and determine the correct market value of the property. After such enquiry, the Collector can even hold that the correct market value of the property is less than the minimum fixed under the Rules.'' 22. In this view of the matter, we answer question 4 by holding that the power of Collector to determine the market value either on a reference under sub-section (1) or (2) of Section 47-A or acting suo motu under sub-section (4) was to determine the correct market value of the property.'' 59. In the view of the Full Bench judgment of this Court in the case of Smt. Pushpa Sareen (supra), the aforesaid contention of learned counsel for the respondents is also misconceived. 60. So far as the contention of the learned counsel for the respondents that proceeding under sub-section (3) of Section 47-A of the Act, 1899 can be initiated even when there is payment of deficit stamp duty under sub-section (1) of Section 47-A of the Act, 1899 is concerned, this Court may note that under the Scheme of the Act, the power under sub-section (1) of Section 47-A of the Act, 1899 is independent of the power of sub-section (3) of Section 47-A of the Act, 1899, but power under sub-section (3) of Section 47-A of the Act, 1899 can only be invoked if pre-requisite to invoke the power under Section 47-A (3) of the Act, 1899 are present. 61. In the present case, this Court has already detailed the reason that prerequisites to invoke power under Section 47-A (3) of the Act, 1899 are lacking. 62. In such view of the fact, the impugned notices as well as the impugned order passed by the Additional Collector (Finance & Revenue), Hapur under Section 47-A of the Act, 1899 are illegal and set aside with liberty to the respondents to recover the deficit stamp duty by initiating appropriate legal proceedings, if it is permissible under the law. 63. Consequently, for the reasons given above, the writ petition is allowed with no order as to costs.