Dismissed

State of Gujarat v. Manishkumar K Shah

Gujarat HC20 Nov 2018LPA/1413/2018

Case brief

AI extract

What is this about?

The High Court dismissed an appeal seeking to set aside an order quashing the recovery of deficit stamp duty. The Single Judge had quashed the recovery order, holding that the notice to examine the instrument was issued beyond the two-year statutory limit for jurisdiction under Section 32A(4) of the Bombay Stamp Act, 1958. The High Court found no error, holding the authority lacked jurisdiction ab

What did the court decide?

Letters Patent Appeal and Civil Application for stay dismissed.

State of Gujarat Vs Manishkumar K Shah — Property and Title | Gujarat HC (2018)

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C/LPA/1413/2018 ORDER

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/LETTERS PATENT APPEAL NO. 1413 of 2018 With

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CIVIL APPLICATION NO. 2 of 2018

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STATE OF GUJARAT

Versus

MANISHKUMAR K SHAH

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Appearance:

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MR CHINTAN DAVE, ASSTT. GOVERNMENT PLEADER(1) for the APPELLANTS

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CORAM: HONOURABLE THE ACTING CHIEF JUSTICE ANANT S. DAVE and HONOURABLE MR.JUSTICE BIREN VAISHNAV

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Date : 20/11/2018

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ORAL ORDER

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(PER : HONOURABLE THE ACTING CHIEF JUSTICE ANANT S. DAVE)

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The challenge in this appeal under Clause 15 of the Letters Patent is to oral order dated 13.09.2017 passed by the learned Single Judge in Special Civil Application No.7678 of 2008, whereby, the order dated 15.03.2008, passed by the Chief Controlling Revenue Authority (original respondent No.1), in partial modification to the order passed by the Deputy Collector, Stamp Duty Valuation Department, Rajkot, directing recovery of the deficit stamp duty of Rs.9375 + Rs.1000 towards penalty aggregating to Rs.10,375/- from the original petitioners, is set aside.

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Page 1 of 6

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C/LPA/1413/2018 ORDER

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The fact about execution of Deed on 18.01.1991 and presenting the same for registration before the Sub Registrar's office at Nadiad, with regard to financial transaction to the tune of rupees two lakhs secured from Mercantile Cooperative Bank remained undisputed. By the above conveyance, the property mentioned in the Deed, namely, Bungalow situated at Plot No.194, Ward No.3, Survey No.3086, College Road, Nadiad, came to be mortgaged.

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In the context of the above facts, it is not in dispute that notice was issued by the Deputy Collector on 30.01.1996, admittedly after the statutory period for exercising the powers by the Deputy Collector expired since before the amendment by the Gujarat Act No.13 of 1994, such powers were to be exercised within two years of registration of the document and later on the words “two years” came to be substituted by the words “six years”. Thus, exercise of the power by the Deputy Collector under Section 32A(4) of the Bombay Stamp Act, 1958, was beyond the statutory period of two years.

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The learned Single Judge has considered Section 32A of the Act which basically deals with determination of market value of the property which is subject-matter of conveyance

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Page 2 of 6

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C/LPA/1413/2018 ORDER

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and accordingly found that the Deputy Collector had no such power beyond the statutory period of two years and accordingly the order dated 15.03.2008 passed by the Chief Controlling Revenue Authority whereby it was directed to recover the deficit stamp duty of Rs.9375 + Rs.1000 towards penalty aggregating to Rs.10,375/- from the original petitioners, was quashed and set aside.

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Mr.Chintan Dave, learned Assistant Government Pleader, made vehement efforts to assail such an order passed by the learned Single Judge by relying on Article 36 of the Bombay Stamp Act and also Article 13 whereby certain rate of stamp duty and surcharge etc. are prescribed and submitted that learned Single Judge failed to appreciate the fact that order passed by the State authorities was in exercise of Section 33 of the Act and not under Section 32C(4) and hence, interference is required, as prayed for.

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Though served, no one appears for the respondents, but having regard to the facts and circumstances and grounds of challenge to the orders passed by the authorities below, more particularly, the nature of conveyance, namely, the mortgage Deed executed on 18.01.1991 and presented for seeking

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Page 3 of 6

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C/LPA/1413/2018 ORDER

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financial assistance of rupees two lakhs from Mercantile Cooperative Bank, Nadiad, and also the fact that the mortgaged property was a bungalow to which we have made reference in earlier paragraph, it cannot be said that powers were correctly exercised by the authority under Section 32A of the Bombay Stamp Act. Reference is made by the learned Single Judge to Section 32A of the Act, in Paragraph-5 of the order, which is reproduced hereinbelow:

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“5. Section 32A of the Act deals with the determination of market value of property which is subject matter of conveyance. Sub-section (4) thereof which is relevant for the purpose of issue raised, reads as under.

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32A. Determination of market value of property which is the subject matter of conveyance, etc.:

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1. …. 2. …. 3. ….

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4. The Collector of the district, may, suo motu or in receipt of information from any source, within two years from the date of registration of any instrument referred to in sub-section(1), (not being the instrument upon which an endorsement has been made under section 32 or the instrument in respect of which the proper duty has been determined by him under subsection (3) or an instrument executed before the date of the commencement of the Bombay Stamp (Gujarat Amendment) Act, 1982) (Guj. 21 of 1982) call for examine the instrument for the purpose of satisfying himself as to the correctness of the consideration or of the market value of the property which is the subject

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Page 4 of 6

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C/LPA/1413/2018 ORDER

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matter of such instrument and the duty payable thereon; and if on such examination, he has reason to believe that the consideration does not approximate to the market value of such property or, as the case may be, market value of such property has not been truly and fully set forth in the instrument, he shall proceed as provided in sub-sections (2) and (3).

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5.1 The aforesaid section was amended by Gujarat Act No. 13 of 1994 and the words “two years” came to be substituted by the words “six years”. In other words, prior to 1994, provision contemplated period of two years within which, it was competent for the authority concerned to act under subsection (4) of section 32A to issue notice in respect of instrument for satisfying himself as to the correctness of the consideration or of the market value of the property conveyed through such instrument. The Collector could have issued notice within two years from the date of registration of the instrument. In the present case, the document in question was executed on 18.01.1991. The Deputy Collector, Stamp Duty Valuation Department, issued notice for recovery of deficit stamp duty under section 32A(4) on 30.01.1996. The notice was evidently beyond the period of two years.

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5.2 When sub-section (4) of section 32A of the Act in terms provides that the Collector has to issue notice acting suo motu it taking action within period of two years from the date of registration of the document, the notice dated 30.01.1996 issued after the said statutory period was clearly beyond the powers of the Deputy Collector. The Deputy Collector was divested of jurisdiction under section 32 of the Act after expiry of two years. Learned advocate for the petitioners could point out that when notice dated 31.01.1996 was issued, further four years had also elapsed. When such is the position clearly obtaining in law showing that the authority did not have the power and jurisdiction to proceed under the Act, the initiation of the proceedings itself was rendered

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Page 5 of 6

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C/LPA/1413/2018 ORDER

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without jurisdiction and consequentially the whole proceedings including the impugned order are is liable to be quashed and set aside.”

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In view of the above, it cannot be said that the learned Single Judge was unmindful of relevance of Section 33 or any other Section or Articles in view of the fact that admittedly, the show cause notice was issued beyond the statutory period, at the relevant period of time, of two years, and therefore, we do not find any error in the order passed by the learned Single Judge so as to warrant interference.

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The Letters Patent Appeal is dismissed. Consequently, Civil Application for stay also stands dismissed.

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(ANANT S. DAVE, ACJ)

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(BIREN VAISHNAV, J)

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sunil

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Page 6 of 6

State of Gujarat v. Manishkumar K Shah

Case brief

What is this about?

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State of Gujarat v. Manishkumar K Shah

Case brief

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