Allowed

Berggruen Properties Private Limited v. the Inspector General of Stamps

Karnataka HC7 Jun 2024WP/25225/2015

Case brief

AI extract

What is this about?

A suo motu revision under Section 53A of the Karnataka Stamp Act imposed deficit stamp duty on five sale agreements based on General Power of Attorney valuations. The court quashed the revisional order, holding market value must be fixed at sale deed execution and that GPAs are not conveyances.

What did the court decide?

Order dated 29-05-2015 passed by respondent 1 quashed; petitioners entitled to all consequential benefits.

Berggruen Properties Private Limited Vs the Inspector… — Property and Title | Karnataka HC (2024)

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Reserved on : 19.03.2024 Pronounced on : 07.06.2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 07^TH DAY OF JUNE, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

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WRIT PETITION No.25225 OF 2015 (GM – ST/RN)

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BETWEEN:

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1 . BERGGRUEN PROPERTIES PRIVATE LIMITED A COMPANY INCORPORATED UNDER COMPANIES ACT,1956, HAVING ITS REGISTERED OFFICE AT NOTAN PLAZA, 6^TH FLOOR, 898 TURNER ROAD, BANDRA WEST, MUMBAI (REPRESENTED BY ITS AUTHORISED SIGNATORY SHREEKRISHN SHARMA)

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2 . BHARATH HI-TECH BUILDERS PRIVATE LIMITED A COMPANY INCORPORATED UNDER COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.303, 3^RD FLOOR, GOLD TOWER, RESIDENCY ROAD, BENGALURU – 560 025. (REPRESENTED BY ITS CHAIRMAN AND MD SRI CHETAN P. TAYAL)

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... PETITIONERS

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(BY SRI D.R.RAVISHANKAR, SR.ADVOCATE A/W SRI NAVEEN G.S., ADVOCATE)

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AND:

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1 . THE INSPECTOR GENERAL OF STAMPS AND REGISTRATION AND CHIEF CONTROLLING REVENUE AUTHORITY, KARNATAKA, HAVING OFFICE AT NO.720, KANDAAYA BHAVAN, 8^TH FLOOR, M.G.ROAD, BENGALURU – 560 009.

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2 . THE DISTRICT REGISTRAR AND DEPUTY COMMISSIONER OF STAMPS AND REGISTRATION HAVING OFFICE AT VIDYANAGAR, OPP. DDPI OFFICE, K.R.ROAD, MANDYA – 571 401.

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3 . THE SUB REGISTRAR SRIRANGAPATANA HAVING OFFICE AT MINI VIDHANA SOUDHA PREMISES, SRIRANGAPATANA – 571 438 MANDYA DIST.

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... RESPONDENTS

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(BY SRI K.S.HARISH, GOVERNMENT ADVOCATE )

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THAT THE EXERCISE OF POWER BY THE R-1 UNDER SECTION 53A OF THE ACT AND THE ORDER DTD.29.5.2015 AT ANNEX-M IS ILLEGAL, NON-EST AND SET ASIDE THE SAME AND ETC.,

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THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 19.03.2024, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-

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ORDER

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The petitioners are before this Court seeking a declaration that exercise of power under Section 53A of the Karnataka Stamp Act, 1957 (hereinafter referred to as ‘the Act’ for short) by the 1^st respondent and passing of order dated 29-05-2015 to be illegal and non est .

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Facts, in brief, germane are as follows:-

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The 1^st petitioner/Berggruen Properties Private Limited (‘the Company’ for short), is a private limited Company registered under the Companies Act, 1956 and the 2^nd petitioner is the office bearer of the said Company. The Company agrees to purchase certain lands situated in Beechankuppe Village, Belagola Hobli, Srirangapatna Taluk, Mandya District (‘the property’ for short) from several vendors during the year 2008-2009 and is said to have paid necessary stamp duty for execution of agreements of sale. The 2^nd

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petitioner is a confirming party to the said agreements of sale. The sale agreements were entered in to on two dates i.e., on 11-042008 about three sale agreements and on 12-08-2009 about two sale agreements. The Company agreed to purchase converted lands mentioned in the schedules of those sale agreements and consideration that was agreed in the agreements of sale was `45/lakhs per acre subject to physical measurement of lands. The sale consideration was thus dependent upon actual physical measurement of lands after conversion, if any, and the value depicted in the sale agreements.

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The vendors then after the agreements of sale being entered into executed General Power of Attorney on 11-04-2008 in favour of one one Arif Khan authorizing him to apply for conversion and also sell the land after conversion. On 12-08-2009 the vendors also executed General Power of Attorney in favour one R. Ramaseshan and P.Gopala Krishnan for similar purpose. The consideration amount that was found in the sale agreements did not bear a mention in the General Power of Attorneys. It appears that an audit objection comes about in the form of a report that

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revenue receipt accounts relating to stamps and registration fees have not been deliberately shown in the General Power of Attorney documents which has resulted in under-valuation of the property and resultantly there is short levy of stamp duty of 3,31,16,000/and registration fee of 46,56,000/-. Based upon the said audit report, the 2^nd respondent issues a notice invoking power under Section 46A of the Act, calling upon the petitioners herein to appear before him. The petitioners/respondents therein appeared and filed their statement of objections. An order is passed on 15-07-2013 by the 2^nd respondent/Deputy Commissioner of Stamps and Registration considering the objections filed by the respondents therein/the petitioners herein dropping entire proceedings. It was clearly held that there was no deficit stamp duty or short levy.

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When things stood thus, a communication comes from the Principal Accountant General of Karnataka to the 1^st respondent/Inspector General of Stamps and Registration and Chief Controlling Revenue Authority regarding outstanding amount in local audit report being shown as settled. The reason for the said communication was a notice issued by the 1^st respondent under

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Section 53A of the Act invoking his suo motu power of revision of the order under Section 46A of the Act passed by the 2^nd respondent. The petitioners then file their objections to the notice so issued on 03-12-2013 and on completion of pleadings before the 1^st respondent, the impugned order comes about on 29-05-2015. The order that is passed under Section 53A of the Act imposes payment of huge stamp duty. It is the order dated 29-05-2015 that has driven the petitioners to this Court in the subject petition. This Court, on entertaining the petition, in terms of its order dated 23-06-2015, had granted an interim order of stay of the impugned action of the 1^st respondent. The said interim order is in operation even to this day.

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Heard Sri D.R.Ravishankar, learned senior counsel appearing for the petitioners and Sri K.S. Harish, learned Government advocate appearing for the respondents.

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The learned senior counsel Sri D.R.Ravishankar would vehemently contend that the 1^st respondent takes up suo motu proceedings based upon the audit report. It is the very audit report

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that had formed the earlier proceeding which had concluded in favour of the petitioners. The order under Section 53A of the Act is thus without jurisdiction. The learned senior counsel submits that the order under Section 53A results in setting the criminal law into motion on deficit stamp duty. The deficit stamp duty is found to be non-existent in the case at hand. It is his submission that stamp duty paid in the eventuality of execution of sale deed comes about. The valuation of land depicted in the General Power of Attorneys cannot be hypothetically assumed by comparing them with other instruments of market value as per the provisions of the Act. He would seek quashment of the order passed under Section 53A of the Act.

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The learned Government Advocate representing the State would vehemently refute the submissions to contend that suo motu power is the one that is conferred under the statute which can be exercised at any time when any transaction results in huge loss to the State exchequer due to acts of certain persons which are a product of misinformation or suppression. The impugned order imposing differential stamp duty is by considering two documents –

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one the sale agreement and the other General Power of Attorney. No fault can be found with the order passed by the 1^st respondent is the emphatic submission of the learned Government Advocate. Insofar as the proceedings taken up by the Deputy Commissioner/2^nd respondent are concerned, it is his submission that the proceedings and the notice issued by the Deputy Commissioner were themselves defective. Therefore, to cure the defect, the 1^st respondent has to invoke his suo motu powers. The acceptance of ad hoc report by the Deputy Commissioner cannot take away the right of the 1^st respondent in invoking the power under Section 53A of the Act.

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I have given my anxious consideration to the submissions

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made by the respective learned counsel and have perused the material on record.

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The afore-narrated facts are not in dispute. The transactions between the parties are five in number. The transactions are as follows:

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“The details of the various agreements to sell entered into are as under:-

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(i) Sale agreement dated 11-04-2008 executed by Sri Mahesh Kumar and Sri S.K. Srinivas as Vendors and Bharath Hi Tech Builders Pvt. Ltd. as Confirming Party in favour of M/s Berggruen Properties Pvt. Ltd., registered as Document No.SRP-1-00118/2008-09 stored in CD No.SRPD-37 in the office of the Sub-Registrar, Srirangapatna.

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(ii) Sale agreement dated 11-04-2008 executed by Smt. Kusum Tayal and Sri Mahesh Kumar as Vendors and Bharath Hi Tech Builders Pvt. Ltd. as Confirming Party in favour of M/s Berggruen Properties Pvt. Ltd., registered as Document No.SRP-1-00119/2008-09 stored in CD No.SRPD-37 in the office of the Sub-Registrar, Srirangapatna.

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(iii) Sale agreement dated 11-04-2008 executed by Sri Chetan P Tayal and Sri S.K. Srinivasa as Vendors and Bharath Hi Tech Builders Pvt. Ltd. as Confirming Party in favour of M/s Berggruen Properties Pvt. Ltd., registered as Document No.SRP-1-00120/2008-09 stored in CD No.SRPD-37 in the office of the Sub-Registrar, Srirangapatna.

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(iv) Sale agreement dated 12-08-2009 executed by Smt. Kusum Tayal as Vendor and Bharath Hi Tech Builders Pvt.Ltd. as Confirming Party in favour of M/s Berggruen Properties Pvt. Ltd., registered as Document No.SRP-101660/2009-10 stored in CD No.SRPD-46 in the office of the Sub-Registrar, Srirangapatna.

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(v) Sale agreement dated 12-08-2009 executed by Sri Mahesh Kumar as Vendor and Bharath Hi Tech Builders Pvt. Ltd. as Confirming Party in favour of M/s Berggruen Properties Pvt. Ltd., registered as Document No.SRP-101661/2009-10 stored in CD No.SRPD-46 in the office of the Sub-Registrar, Srirangapatna.”

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The Company enters into agreements of sale from various vendors seeking to purchase packets of lands. Five agreements of sale are entered into as quoted supra . All the agreements of sale are registered documents and consideration shown in these documents is `45/- lakhs per acre of land. The agreements of sale would fructify into sale deeds only on certain terms and conditions. Those conditions are as follows:

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“ Clause 3(a) reads: “The vendors and confirming party promise and undertake to apply for and get the status of the schedule property changed from Agriculture lands to the status of non-agricultural lands suitable for housing project development/commercial development of the purchaser within a period of 4 months from the date of this agreement.”

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Clause 3(b) reads: “The vendors and the confirming party shall thereafter make out and convey a good marketable title in regard to the converted schedule property to the purchaser.”

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Clause 4 reads: “The Vendor and the confirming party shall execute Sale Deeds in favour of the purchaser or its Nominee immediately on the status of the Scheduled Properties are converted to agricultural use as stated in Clause (a) above for the purposes of the Purchaser mentioned above by the due process of law and by order of the concerned authorities/Government”…

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Clause 6 reads: “The vendor and the confirming party shall make out and convey a good, marketable and subsisting title and vacant possession with regard to the Scheduled Property after due conversion of the status of agricultural lands to the status of non-agricultural lands suitable for housing projects

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and/or commercial projects as primarily indicated and desired by the purchaser.”

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Clause 7 reads: “The vendor and the confirming party shall execute the Sale Deed in favour of Purchaser, or its Nominee or Nominees as the purchaser may require after fulfilling the Conditions Precedents mentioned in the Clause above and thus making the Schedule Property suitable to be conveyed by the vendors in favour of the Purchaser. The cost of registration and Stamp Duty and the advocates fee shall be borne exclusively by the purchaser”.

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The conditions are that lands where conversion had not taken place from agriculture to non-agricultural purposes, the sale deeds would be executed only after such conversion and the sale deeds would be executed after actual physical measurement of lands. Therefore, the agreements of sale did not bring in absolute possession and execution of sale deeds itself was after fulfilling the conditions mentioned in the sale agreements. Clause 7 supra clearly indicates this fact. After execution of agreements, the vendors executed General Power of Attorney in favour of three individuals. The General Power of Attorneys did not create any interest on the property. It is only for the purpose of conversion and even execution of sale deeds. What comes about is a Local Audit report with regard to the revenue receipts relating to stamp duty and registration fee. What was depicted in the audit report was short

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payment of stamp duty, which resulted in a final notice being issued to the General Power of Attorney holders of the property. One of the notices reads as follows:

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“PÀ£ÁðlPÀ ¸ÀPÁðgÀ

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f¯Áè £ÉÆÃAzÀuÁ¢üPÁjUÀ¼À ªÀÄvÀÄÛ G¥À DAiÀÄÄPÀÛgÀªÀgÀ PÁAiÀiÁð®AiÀÄ, ªÀÄAqÀå f¯Éè, ªÀÄAqÀå

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PÉ.Dgï.gÀ¸ÉÛ, «zÁå£ÀUÀgÀ, ªÀÄAqÀå – 571401

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	¸ÀASÉå:46J&80J	/J¸ï.Dgï.¦/14/2012-13		¢£ÁAPÀ:19-04-2013
		“CAwªÀÄ G¥À¹ÜvÀgÀÄ: ²æÃªÀÄw f¯Áè £ ªÀÄAqÀå	£ÉÆÃnÃ¸ï” J¯ï.eÉ.ºÀA¸ÀªÉÃtÂ, ÉÆÃAzÀuÁ¢üPÁjUÀ¼ÀÄ, f¯Éè, ªÀÄAqÀå.
ªÁ¢:-			¥ÀæwªÁ¢:-
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¥Àæ¸ÁÛªÀ£É:-

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Annexure - 1

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Annexure - 2
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ªÀiÁgÁl ºÁUÀÆ CzÀPÉÌ ¸ÀA§A¢ü¹zÀ EvÀgÉ PÉ®¸ÀUÀ¼À£ÀÄß ¤ªÀð»¸À®Ä 1]. ªÀÄºÉÃ±ï PÀÄªÀiÁgï. £ÀA.39/1-1, 10£ÉÃ PÁæ¸ï, ¥ÉÊ¥ï ¯ÉÊ£ï gÉÆÃqï, ZÉÆÃ¼ÀgÀ¥Á¼Àå, ¨ÉAUÀ¼ÀÆgÀÄ, 2]. J¸ï.PÉ.²æÃ¤ªÁ¸À, £ÀA.84, JA.L.f.J & © ¨ÁèPï, gÁªÀÄPÀÈµÀÚ£ÀUÀgÀ, ªÉÄÊ¸ÀÆgÀÄ EªÀjAzÀ BERGGRUEN PROPERTIES PRIVATE LIMITED gÀªÀgÀ Arifkhan gÁzÀ ¤ÃªÀÅ ºÁUÀÆ BHARATH HI-TECH BUILDERS PRIVATE LIMITED, gÀªÀgÀ Chetan P.Tayal gÁzÀ ¤ÃªÀÅUÀ½§âgÀÄ PÀæAiÀÄzÀ PÀgÁgÀÄ ¥ÀvÀæªÀ£ÀÄß §gÉzÀÄ ªÀiÁr¹PÉÆArgÀÄwÛÃj. ¸ÀzÀj ¥ÀvÀæªÀ£ÀÄß ²æÃgÀAUÀ¥Àl×t G¥À£ÉÆÃzÀtÂ PÀbÉÃjAiÀÄ°è ¢£ÁAPÀ:1104-2008 gÀAzÀÄ ¹.r.£ÀA. SRPD37 £ÉÆÃAzÀtÂ ¸ÀASÉå: SRP-I-00118/2008-09 £ÉÃ £ÀA§gÁV £ÉÆÃAzÀtÂ ªÀiÁqÀ¯ÁVgÀÄvÀÛzÉ.

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²æÃgÀAUÀ¥ÀlÖt G¥À£ÉÆÃAzÀtÂ PÀbÉÃjAiÀÄ 2004-10 £ÉÃ ¸Á°£À ªÀÄºÁ¯ÉÃSÁ¥Á®gÀ Drmï [¥ÁågÁ IV/IIA/2004-10] ªÀgÀ¢AiÀÄ£ÀéAiÀÄ ¥Àæ²ßvÀ ¥ÀæPÀgÀtªÀ£ÀÄß PÉÆgÀvÉ ªÀÄÄzÁæAPÀ ±ÀÄ®Ì gÀÆ:39,36,563/- ªÀÄvÀÄÛ ¥ÀæPÁgÀ PÉÆgÀvÉ £ÉÆÃAzÀtÂ ±ÀÄ®Ì gÀÆ:5,24,875/- MlÄÖ gÀÆ:44,61,438/- UÀ¼À£ÀÄß PÀ£ÁðlPÀ ªÀÄÄzÁæAPÀ PÁAiÉÄÝ 1957gÀ PÀ®A 46-J gÀ ¥ÀæPÁgÀ ºÁUÀÆ £ÉÆÃAzÀtÂ PÁAiÉÄÝ 1908 gÀ PÀ®A 80J gÀ°è F ¥ÀæPÀgÀtªÀ£ÀÄß zÁR°¸ÀPÉÆ¼Àî®Ä ªÀiÁ£Àå £ÉÆÃAzÀtÂ ªÀÄºÁ¥Àj«ÃPÀëPÀgÀÄ ªÀÄvÀÄÛ ªÀÄÄzÁæAPÀUÀ¼À DAiÀÄÄPÀÛgÀÄ, ¨ÉAUÀ¼ÀÆgÀÄ gÀªÀgÀÄ eÁÕ¥À£Á ¥ÀvÀæ ¸ÀASÉå:JAiÀÄÄr/29/2011-12 ¢£ÁAPÀ:26-09-2011 gÀ°è ¸ÀÆa¹gÀÄªÀÅzÀjAzÀ ²æÃgÀAUÀ¥ÀlÖt G¥À £ÉÆÃAzÀtÂ PÀbÉÃjAiÀÄ £ÉÆÃAzÀtÂ ¸ÀASÉå: SRP-

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I-00118/2008-09 zÀ¸ÁÛªÉÃd£ÀÄß PÀ£ÁðlPÀ ªÀÄÄzÁæAPÀ PÁAiÉÄÝ 1957gÀ PÀ®A 46-J ªÀÄvÀÄÛ £ÉÆÃAzÀtÂ PÁAiÉÄÝ 1908 gÀ PÀ®A 80J gÀAvÉ ¥ÀæPÀgÀtªÀ£ÀÄß zÁR°¹PÉÆ¼Àî¯ÁVzÉ.

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¢£ÁAPÀ: 30-08-2012, 25-09-2012, ªÀÄvÀÄÛ 27-12-2012 gÀAzÀÄ £ÉÆÃnÃ¸ï C£ÀÄß eÁj ªÀiÁr, ªÀÄºÁ¯ÉÃR¥Á®gÀ Drmï PÀArPÉAiÀÄ §UÉÎ DPÉëÃ¥ÀuÉUÀ¼ÀÄ K£ÁzÀgÀÆ EzÀÝ°è ¸À°è¸À®Ä ¸ÀÆa¸À¯Á¬ÄvÀÄ. DzÀgÉ ¤ÃªÁUÀ° CxÀªÁ ¤ªÀÄä ¥ÀgÀªÁV ªÀQÃ®gÁUÀ° FªÀgÉ«UÀÆ «ZÁgÀuÉUÉ ºÁdgÁVgÀÄªÀÅ¢®è. ºÁUÀÆ AiÀiÁªÀÅzÉÃ DPÉëÃ¥ÀuÉ ¸À°è¹gÀÄªÀÅ¢®è. DzÀÄzÀjAzÀ ¥ÀæPÀgÀtzÀ°ègÀÄªÀ zÁR¯ÉUÀ¼À£ÀéAiÀÄ EvÀåxÀð ¥Àr¸À®Ä EzÀÄ CAwªÀÄ £ÉÆÃnÃ¸ï DVgÀÄvÀÛzÉ. F £ÉÆÃnÃ¸ï vÀ®Ä¦zÀ 20 ¢£ÀUÀ¼ÉÆ¼ÀUÉ F PÀbÉÃjUÉ vÁªÀÅ ºÁdgÁV K£ÁzÀgÀÆ DPÉëÃ¥ÀuÉ EzÀÝ° vÁªÀÅ °TvÀ ºÉÃ½PÉAiÀÄ£ÀÄß ¤ÃqÀvÀPÀÌzÀÄÝ. CxÀªÁ vÀªÀÄä ªÀQÃ®gÀ ªÀÄÆ®PÀ F PÀbÉÃjUÉ ºÁdgÁV ºÉÃ½PÉAiÀÄ£ÀÄß ¤ÃqÀvÀPÀÌzÀÄÝ JAzÀÄ w½AiÀÄ¥Àr¹zÉ. ¤ÃªÀÅ F CAwªÀÄ £ÉÆÃnÃ¸ïUÀÆ ¸ÀºÀ DPÉëÃ¥ÀuÉUÀ¼À£ÀÄß ¸À°è¸À¢zÀÝgÉ PÀ£ÁðlPÀ ªÀÄÄzÁæAPÀ PÁAiÉÄÝ 1957gÀ PÀ®A 46-J ªÀÄvÀÄÛ £ÉÆÃAzÀtÂ PÁAiÉÄÝ 1908 gÀ PÀ®A 80J gÀAvÉ JgÀqÀgÀ®Æè zÀAqÀ ¸À»vÀ ªÀ¸ÀÆ¯ÁwUÉ DzÉÃ±ÀªÀ£ÀÄß ¤ÃqÀ¯ÁUÀÄªÀÅzÉAzÀÄ F ªÀÄÆ®PÀ w½AiÀÄ¥Àr¹zÉ.

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¸À»/-

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[J¯ï.eÉ.ºÀA¸ÀªÉÃtÂ] f¯Áè £ÉÆÃAzÀuÁ¢üPÁjUÀ¼ÀÄ ªÀÄAqÀå f¯Éè, ªÀÄAqÀå.”

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The notice indicates that it was the proceeding initiated under Section 46A of the Act for the purpose of difference of stamp duty on the ground that it was deficit stamp duty. It becomes germane to notice Section 46A of the Act, which reads as follows:

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“46A. Recovery of stamp duty not levied or short levied.- (1) Where any instrument chargeable with duty has not been duly stamped, the Chief Controlling Revenue Authority or any other officer authorised by the State Government (hereinafter referred to as the authorised officer) may, within five years from the date of commencement of the Karnataka Stamp (Amendment) Act, 1980 or the date on which the duty became payable whichever is later, serve notice on the person by whom the duty was payable requiring him to show cause why the proper duty or the amount required to make up the same should not be collected from him:

¶83

¶84

Provided that where the non-payment was by reason of fraud, collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the provisions of this sub-section shall have effect, as if for the words five years the words ten years were substituted:

¶85

Provided further that nothing in this sub-section shall apply to instruments executed prior to first day of April, 1972.

¶86

Explanation.— Where the service of a notice, under this sub-section is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of five years or ten years, as the case may be.

¶87

(2) The Chief Controlling Revenue Authority or the authorised officer shall, after considering the representation, if any, made by the person on whom notice is served under subsection (1), determine the amount of duty due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined.

¶88

(3) Any person aggrieved by an order under sub-section (2), may prefer an appeal before the Karnataka Appellate Tribunal within three months from the date of such order.

¶89

(4) All duties payable under this section shall be recovered in accordance with provisions of section 46.”

¶90

(Emphasis supplied)

¶91

Section 46A deals with recovery of stamp duty not levied or short levied. And the Authority to initiate proceedings is the Deputy Commissioner of Stamps. Accordingly, the notice supra was issued. What happens before the Deputy Commissioner is, after analyzing entire objections and the case of the Department of Stamps, it

¶92

¶93

comes to conclude that there has been no deficit stamp duty paid or stamp duty short paid in terms of its order dated 15-07-2013. The order passed under Section 46A reads as follows:

¶94

“DzÉÃ±À

¶95

J¯ï.eÉ.ºÀA¸ÀªÉÃtÂ, f¯Áè £ÉÆÃAzÀuÁ¢üPÁjUÀ¼ÀÄ, ªÀÄvÀÄÛ PÀ£ÁðlPÀ gÁdå gÁd¸Àé ªÀÄÄRå ¤AiÀÄAvÀæPÀgÀ C¢üPÁgÀªÀ£ÀÄß ZÀ¯Á¬Ä¸ÀÄwÛgÀÄªÀ ¸ÁÖA¥ÀÄUÀ¼À qÉ¥ÀÆån PÀ«ÄÃ±À£Àgï ªÀÄAqÀå f¯Éè, ªÀÄAqÀå DzÀ £Á£ÀÄ PÀ£ÁðlPÀ ªÀÄÄzÁæAPÀ C¢ü¤AiÀÄªÀÄ 1957gÀ ¥ÀæPÀgÀt 46J ªÀÄvÀÄÛ £ÉÆÃAzÀtÂ C¢ü¤AiÀÄªÀÄ 1908gÀ ¥ÀæPÀgÀt 80J PÉ¼ÀUÉ ¥ÀæPÀgÀtªÀ£ÀÄß £ÀqÉ¹zÉÝÃ£É. ªÁ¢ ªÀÄvÀÄÛ ¥ÀæwªÁ¢AiÀÄªÀgÀ ªÁzÀ ¥ÀæwªÁzÀUÀ¼À£ÀÄß D°¹, ¸ÀA¨sÀA¢ü¹zÀ C¢ü¤AiÀÄªÀÄUÀ¼ÀÄ ªÀÄvÀÄÛ £ÁåAiÀiÁ®AiÀÄUÀ¼À wÃ¥ÀÄðUÀ¼À£ÀÄß CzsÀåAiÀÄ£À ªÀiÁqÀ¯ÁV AiÀiÁªÀÅzÉÃ ªÀÄÄzÁæAPÀ ±ÀÄ®Ì ªÀÄvÀÄÛ £ÉÆÃAzÀtÂ ±ÀÄ®ÌzÀ PÉÆgÀvÉAiÀiÁV®è. ¥Àæ²ßvÀ zÀ¸ÁÛªÉÃdÄUÀ½UÉ ¸ÀjAiÀiÁzÀ ªÀÄÄzÁæAPÀ ±ÀÄ®Ì ªÀÄvÀÄÛ £ÉÆÃAzÀtÂ ±ÀÄ®ÌªÀ£ÀÄß £ÉÆÃAzÀtÂ ¸ÀªÀÄAiÀÄzÀ°è ¥ÁªÀw ªÀiÁqÀ¯ÁVzÉAiÉÄAzÀÄ ªÀÄvÀÄÛ AiÀiÁªÀÅzÉÃ C¥ÀgÁzsÀ ªÀiÁrzÀÄÝ PÀAqÀÄ§gÀÄªÀÅ¢®èªÉAzÀÄ F ¥ÀæPÀgÀtªÀ£ÀÄß «ZÁgÀuÉ¬ÄAzÀ PÉÊ ©qÀ¯ÁVzÉ.

¶96

F DzÉÃ±ÀªÀ£ÀÄß ¢:15-07-2013 gÀAzÀÄ F ¢ªÀ¸À vÉgÉzÀ £ÁåAiÀiÁ®AiÀÄzÀ°è WÉÆÃ¶¸À¯ÁVzÉ. F DzÉÃ±ÀªÀ£ÀÄß ²ÃWÀæ°¦UÁgÀjUÉ GvÀÛ¯ÉÃR£À ¤Ãr, UÀtPÀ AiÀÄAvÀæzÀ°è ¥ÀjµÀÌj¹ vÀ¥ÀÄàUÀ¼À£ÀÄß w¢Ý UÀtPÀ AiÀÄAvÀæzÀ°è ¨ÉgÀ¼ÀZÀÄÑ ªÀiÁr¹ £À£Àß ¸ÀéºÀ¸ÁÛPÀëgÀzÀ°è gÀÄdÄ ªÀiÁrgÀÄvÉÛÃ£É.

¶97

¸À»/-

¶98

(J¯ï.eÉ.ºÀA¸ÀªÉÃtÂ) f¯Áè£ÉÆÃAzÀuÁ¢üPÁjUÀ¼ÀÄ ºÁUÀÆ ªÀÄÄzÁæAPÀUÀ¼À G¥À DAiÀÄÄPÀÛgÀÄ, ªÀÄAqÀå f¯Éè, ªÀÄAqÀå.”

¶99

Identical orders are passed in all the proceedings initiated by the 2^nd respondent. It is an admitted fact that proceedings under Section 46A were in favour of the petitioners holding that there was no deficit stamp duty or short payment of stamp duty. Thus ends the proceedings under Section 46A of the Act. When things stood

¶100

¶101

thus, it appears there was certain local audit report which was the subject matter earlier but not properly looked into. What becomes of the said action is initiation of suo motu proceedings by the 1^st respondent invoking Section 53A of the Act. Section 53A of the Act reads as follows:

¶102

“53A. Revision of order passed by Deputy Commissioner or Authorised officers.- (1) The Chief Controlling Revenue Authority may except where the matter is pending before an appellate authority under this Act, suo-motu, within a period of five years from the date of the order passed under this Act by the Deputy Commissioner or such other officer authorised by the State Government in this behalf, call for and examine the records relating to such order or proceedings taken under this Act by the Deputy Commissioner or the authorised officer, and if after such examination it has reason to believe that the order so made or proceedings so taken is erroneous or are not in accordance with the provisions of this Act or prejudicial to the interest of the revenue, it may after giving the parties interested an opportunity of being heard, pass an order in writing confirming, modifying or setting aside such order and direct the Deputy Commissioner or the authorised officer, as the case may be to collect the difference of duty, if any payable in accordance with the provisions of section 46:

¶103

Provided that in appropriate cases, the Chief Controlling Revenue Authority may order stay of operation of the order under revision, pending hearing of the case.

¶104

(2) The Chief Controlling Revenue Authority may for the purpose of sub-section (1), require the concerned person to produce before it, the instrument and examine such instrument to determine whether any duty is chargeable or the duty is short levied or improperly levied on account of any

¶105

¶106

willful mis-statement or suppression of facts made or of contravention of any of the provisions of this Act or rules made thereunder by such person with intent to evade payment of duty.”

¶107

(Emphasis supplied)

¶108

Section 53A is the power of revision conferred on the Revisional Authority against an order passed by the Deputy Commissioner or any authorized officer suo motu, within a period of 5 years from the date of the order passed under the Act by the Deputy Commissioner. It is within 5 years the impugned action is initiated is a matter of record. The said provision deals with examination of records relating to proceedings initiated by the Deputy Commissioner under Section 46 of the Act. Section 46 reads as follows:

¶109

“46. Recovery of duties and penalties.- (1) All duties, penalties and other sums required to be paid under this Chapter may be recovered along with simple interest at such rate as may be specified by the State Government by notification by the Deputy Commissioner by distress and sale of the moveable property of the person from whom the same are due, or by any other process for the time being in force for the recovery of arrears of land revenue.

¶110

(2) All duties, penalties and other sums required to be paid under this Chapter shall be a charge on the property which is t he subject matter of the Instrument:

¶111

Provided that the provisions of sub-section (2) shall be deemed to apply to all cases of which are pending recovery and

¶112

¶113

to proceedings under sub-section (1) which have already been initiated.

¶114

(3) Notwithstanding anything contained in the Registration Act, 1908 (Central Act XVI of 1908), a note of such charge and its extinguishments shall be made in the indices prescribed therein and shall be deemed to be a notice under the said Act.”

¶115

(Emphasis supplied)

¶116

Section 46 deals with recovery of duties and penalties. All the acts under Section 46, 46A and 53A point at one solitary act of recovery of deficit stamp duty that was payable to the State on the instrument. The petitioners would file their objections before the 1^st respondent. This results in the impugned order on 29-05-2015. The impugned order reads as follows:

¶117

“DzÃ±É À

¶118

¸ÀASÉå: Aud/Sec 53A/43/2013-14 PÀgÀqÀÄ 29.05.2015

¶119

¥Àæ¸ÀÄÛvÀ ¥ÀæPÀgÀtzÀ°è£À ªÁ¸ÀÛªÁA±ÀUÀ¼À ºÁUÀÆ EªÀÅUÀ½UÉ C£ÀéAiÀÄªÁUÀÄªÀ PÁ£ÀÆ£ÀÄ CA±ÀUÀ¼À «ªÀÄ±ÉðAiÀÄ »£Éß¯ÉAiÀÄ°è PÀ£ÁðlPÀ ªÀÄÄzÁæAPÀ PÁAiÉÄÝ, 1957gÀ PÀ®A53J gÀrAiÀÄ°è£À ¥ÀæzÀvÀÛªÁzÀ C¢üPÁgÀzÀ ªÉÄÃgÉUÉ, 3£ÉÃ ¥ÀæwªÁ¢UÀ¼ÀÄ ¥ÀæPÀgÀtPÉÌ ¸ÀA§A¢ü¹zÀAvÉ ºÉÆgÀr¹gÀÄªÀ ¢£ÁAPÀ: 15.07.2013 gÀ LzÀÄ DzÉÃ±ÀUÀ¼À£ÀÄß C£ÀÄfðvÀUÉÆ½¹, PÀ£ÁðlPÀ ªÀÄÄzÁæAPÀ PÁAiÉÄÝ 1957gÀ PÀ®A 2(1)(mm) gÀAvÉ £ÉÆÃAzÀtÂAiÀiÁzÀ 5 C¢üPÁgÀ ¥ÀvÀæUÀ¼À ¸ÀASÉå: ¥ÀÄ¸ÀÛPÀ- IV 7/08-09, ¥ÀÄ¸ÀÛPÀ- IV-8/08-09, ¥ÀÄ¸ÀÛPÀ- IV-9/08-09, ¥ÀÄ¸ÀÛPÀ- IV-45/09-10 ªÀÄvÀÄÛ ¥ÀÄ¸ÀÛPÀ- IV-46/09-10 zÀ¸ÁÛªÉÃf£À°è£À µÉqÀÆå¯ï ¸ÀéwÛ£À ªÀiÁgÀÄPÀmÉÖ ªÀiË®åªÀ£ÀÄß MAzÀÄ JPÀgÉUÉ gÀÆ¥Á¬Ä £À®ªÀvÉÊzÀÄ ®PÀë JAzÀÄ ¤UÀ¢ü¥Àr¸À¯ÁVzÉ. ¸ÀzÀj µÉqÀÆå¯ï ¸ÀéwÛUÉ ¸ÀA§AzsÀ¥ÀlÖAvÉ PÀrªÉÄAiÀiÁVgÀÄªÀ ªÀåvÁå¸ÀzÀ ªÀiÁgÀÄPÀmÉÖ ªÀiË®åUÀ½UÉ ¥ÀæwªÁ¢UÀ¼ÀÄ FUÁUÀ¯ÉÃ ¥ÁªÀw¸À¯ÁVgÀÄªÀ ªÀÄÄzÁæAPÀ ±ÀÄ®ÌªÀ£ÀÄß ºÁUÀÆ £ÉÆÃAzÀtÂ ±ÀÄ®ÌªÀ£ÀÄß ºÉÆgÀvÀÄ¥Àr¹, G½PÉ PÉÆgÀvÉ ªÀÄÄzÁæAPÀ ±ÀÄ®ÌªÀ£ÀÄß ºÁUÀÆ £ÉÆÃAzÀtÂ ±ÀÄ®ÌªÀ£ÀÄß F PÉ¼ÀUÉ «ªÀj¹gÀÄªÀ PÉÆµÀ×PÀzÀAvÉ ¸ÀA§AzsÀ¥ÀlÖ zÀ¸ÁÛªÉÃfUÉ ¥ÁªÀw¸À®Ä DzÉÃ²¹zÉ. ¸ÀzÀj PÉÆgÀvÉ ±ÀÄ®ÌUÀ¼À ªÉÆvÀÛªÀ£ÀÄß 4£ÉÃ ¥ÀæwªÁ¢UÀ¼À PÀbÉÃjAiÀÄ°è DD/PO ªÀÄÆ®PÀ 30 ¢£ÀUÀ¼À M¼ÀUÁV ¥ÁªÀw¹¸À®Ä ¤zÉÃð²¹zÉ.

¶120

¶121

PÀæªÀÄ ¸ÀASÉå	PÀæAiÀÄ PÀgÁgÀÄ ¸ÀASÉå ¥ÀÄ¸ÀÛPÀ-I	C¢üPÁgÀ ¥ÀvÀæ ¸ÀASÉå ¥ÀÄ¸ÀÛPÀ- IV	µÉqÀÆå¯ï ¸ÀéwÛ£À C¼ÀvÉ	PÀgÁgÀÄ ¥ÀvÀæzÀAvÉ ªÀ»ªÁn£À ªÉÆvÀÛ ºÁUÀÆ ¤UÀ¢üÃ¥Àr¹gÀÄªÀ ªÉÆvÀÛ	C¢üPÁgÀ ¥ÀvÀæzÀ°è ªÀiÁgÀÄPÀmÉÖ ªÀiË®å	PÉÆgÀvÉ ªÀiÁgÀÄPÀmÉÖ ªÀiË®å	PÉÆgÀvÉ ªÀÄÄzÁæAPÀ ±ÀÄ®Ì	PÉÆgÀvÉ £ÉÆÃAzÀtÂ ±ÀÄ®Ì
1	118/08-19	7/08-09	12 JPÀgÉ 14 UÀÄAmÉ	5,55,75,000	30,87,500	5,24,87,500	39,36,563	5,24,875
2	119/08-09	8/08-09	10 JPÀgÉ 39 UÀÄAmÉ	4,39,00,000	27,44,000	4,11,56,000	30,86,700	4,11,560
3	120/08-09	9/08- 09	59 JPÀgÉ 10 UÀÄAmÉ	26,66,25,000	1,48,12,500	25,18,12,500	1,88,85,938	25,18,125
4	1660/09- 10	45/09- 10	16 JPÀgÉ 28 UÀÄAmÉ	7,52,06,250	41,80,000	7,10,26,250	42,61,575	7,10,262
5	1661/09- 10	46/09- 10	11 JPÀgÉ 22 UÀÄAmÉ	5,19,75,000	28,57,500	4,90,87,500	29,45,250	4,90,875
	MlÄÖ			49,32,81,250	2,77,11,500	46,55,69,750	3,31,16,026	46,55,697

¶122

C®èzÉ, ¸ÀPÁðgÀzÀ gÁd¸ÀéPÉÌ £ÀµÀÖªÀ£ÀÄß GAlÄªÀiÁqÀÄªÀ zÀÄgÀÄzÉÝÃ±À¢AzÀ µÉqÀÆå¯ï ¸ÀéwÛ£À ªÀiÁgÀÄPÀmÉÖ ªÀiË®åªÀ£ÀÄß F jÃwAiÀiÁV C¥ÀªÀiË®å ªÀiÁrgÀÄªÀÅzÀÄ “ªÉÄÃ¯ÉÆßÃlPÉÌ ¸ÀªÀÄävÀªÁzÀ ¸ÁPÀëöå ( Prima facie Proof)” DVgÀÄªÀÅzÀÄ PÀAqÀÄ §A¢gÀÄvÀÛzÉ. ¸ÀzÀj ¸ÁPÀëöåªÀ£ÀÄß ¸ÁÜ¥À£É ( Establish) ªÀiÁr £ÀAvÀgÀ ¸ÀzÀj PÁAiÉÄÝAiÀÄ PÀ®A 64jAzÀ PÀ®A66gÀ CrAiÀÄ°è ¸ÀA§AzsÀ¥ÀlÖ ¥ÀPÀëPÁgÀgÀ «gÀÄzÀÞ C©üAiÉÆÃd£É ( Prosecution) £ÀqÉ¹, ¸ÀzÀj PÀ®A-61( c ) gÀr F jÃw zÀAqÀªÀ£ÀÄß «¢ü¸À®Ä ¤AiÀÄªÀiÁ£ÀÄ¸ÁgÀ ¸ÀÆPÀÛ PÀæªÀÄ PÉÊUÉÆ¼Àî®Ä, ªÀÄAqÀå f¯Áè£ÉÆÃAzÀuÁ¢üPÁjUÀ¼ÀÄ ºÁUÀÆ ªÀÄÄzÁæAPÀUÀ¼À G¥À DAiÀÄÄPÀÛgÀªÀjUÉ F ªÀÄÆ®PÀ DzÉÃ²¹zÉ.

¶123

C®èzÉ ¨sÀÆ ªÀiÁ°ÃPÀgÀÄ ºÁUÀÆ Confirming Party UÀ¼À £ÀqÀÄªÉ DVgÀÄªÀ PÀgÁgÀÄ ¥ÀvÀæzÀ §UÉÎ ¥Àj²Ã°¹ ¸ÀzÀj ¥ÀvÀæPÉÌ ªÀÄÄzÁæAPÀ ±ÀÄ®ÌªÀ£ÀÄß ¥ÁªÀw¸ÀzÉ EzÀÝ°è ¤AiÀÄªÀiÁ£ÀÄ¸ÁgÀ ¸ÀzÀj ¥ÀvÀæPÉÌ PÉÆgÀvÉ ±ÀÄ®ÌªÀ£ÀÄß ªÀ¸ÀÆ®Ä ªÀiÁqÀ®Ä DzÉÃ²¹zÉ. F DzÉÃ±ÀªÀ£ÀÄß GPÀÛ¯ÉÃR£À ªÀiÁr¹ ¥ÀjµÀÌj¹zÀ £ÀAvÀgÀ ¢£ÁAPÀ: 29.05.2015 gÀAzÀÄ ªÀÄÄPÀÛ £ÁåAiÀiÁ®AiÀÄzÀ°è ¥ÀæZÀÄgÀ¥Àr¹zÉ.”

¶124

The impugned order directs payment of deficit stamp duty at several amounts as indicated in the chart found in the order. It is not in dispute that the determination is on the basis of the market

¶125

¶126

value. The market value is defined under Section 2(1)(mm) of the Act. It reads as follows:

¶127

“2. Definitions. - (1) In this Act, unless the context otherwise requires,—

¶128

(mm) "market value" in relation to any property, which is the subject matter of an instrument, means the price which such property would have fetched, in the opinion of the Deputy Commissioner or the Appellate Authority or the Chief Controlling Revenue Authority if sold in open market on the date of execution of such instrument or the consideration stated in the instrument whichever is higher:

¶129

Provided that notwithstanding anything contained in this Act or in the Articles, in respect of an instrument executed by or on behalf of or in favour of the State Government or the Central Government or a Local Authority or other Authority constituted by or under any law for the time being in force or a Body incorporate wholly owned or controlled by the Central Government or the State Government, the market value of the property shall be the value of consideration for such conveyance as set forth in the instrument.”

¶130

(Emphasis supplied)

¶131

It defines that market value means the price which such property would have fetched, in the opinion of the Deputy Commissioner, if sold in the open market on the date of execution of such instrument or the consideration in the said instrument, whichever is higher. The afore-quoted provision of law clearly indicates that the market value is to be determined on the date of the sale and not on any

¶132

¶133

other day on which any instrument would be executed i.e, agreement to sell or GPA is executed, as the case would be. This is the settled principle of law as is laid down by the Apex Court in plethora of cases.

¶134

The Apex Court in the case of SURAJ LAMP AND INDUSTRIES PRIVATE LIMITED v. STATE OF HARYANA¹ has held as follows:

¶135

Scope of power of attorney

¶136

20. A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorises the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see Section 1-A and Section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee.

¶137

21. In State of Rajasthan v. Basant Nahata [(2005) 12 SCC 77] this Court held: (SCC pp. 90 & 101, paras 13 & 52)

¶138

“13. A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal

¶139

1 (2012) 1 SCC 656

¶140

¶141

generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience.

¶142

***

¶143

52. Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers of Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee.”

¶144

An attorney-holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor.”

¶145

(Emphasis supplied)

¶146

The Apex Court holds that transfer of title of a property can only happen by way of registered sale deed or deed of conveyance and not through an agreement of sale or General Power of Attorney.

¶147

The Apex Court was considering a General Power of Attorney becoming a subject matter of stamp duty. It holds that it is only an instrument of conveyance. The said judgment is followed in

¶148

¶149

SHAKEEL AHMED v. SYED AKHLAQ HUSSAIN² , wherein the Apex Court holds as follows:

¶150

“…. …. ….

¶151

9. It was also submitted that there was a prohibition of registration of documents of transfer/conveyance with respect to the area where the property in question is situate and, therefore, the transfers affected under the customary documents was sufficient to confer title on the respondent. It was also submitted that the judgment in the case of Suraj Lamps & Industries Pvt. Ltd. v. State of Haryan a¹ , which was of the year 2011, had prospective application and would not have any bearing on the title of the respondents which came to him under the customary documents executed in the year 2008 much prior to the judgment in the case of Suraj Lamps & Industries (supra).

¶152

10. Having considered the submissions at the outset, it is to be emphasized that irrespective of what was decided in the case of Suraj Lamps and Industries (supra) the fact remains that no title could be transferred with respect to immovable properties on the basis of an unregistered Agreement to Sell or on the basis of an unregistered General Power of Attorney. The Registration Act, 1908 clearly provides that a document which requires compulsory registration under the Act, would not confer any right, much less a legally enforceable right to approach a Court of Law on its basis. Even if these documents i.e. the Agreement to Sell and the Power of Attorney were registered, still it could not be said that the respondent would have acquired title over the property in question. At best, on the basis of the registered agreement to sell, he could have claimed relief of specific performance in appropriate proceedings. In this regard, reference may be made to sections 17 and 49 of the

¶153

2 2023 SCC OnLine SC 1526

¶154

¶155

Registration Act and section 54 of the Transfer of Property Act, 1882.

¶156

11. Law is well settled that no right, title or interest in immovable property can be conferred without a registered document. Even the judgment of this Court in the case of Suraj Lamps & Industries (supra) lays down the same proposition. Reference may also be made to the following judgments of this Court:

¶157

(i). Ameer Minhaj v. Deirdre Elizabeth (Wright) Issar

¶158

(ii). Balram Singh v. Kelo Devi³

¶159

(iii). Paul Rubber Industries Private Limited v. Amit Chand Mitra

¶160

12. The embargo put on registration of documents would not override the statutory provision so as to confer title on the basis of unregistered documents with respect to immovable property. Once this is the settled position, the respondent could not have maintained the suit for possession and mesne profits against the appellant, who was admittedly in possession of the property in question whether as an owner or a licensee.

¶161

13. The argument advanced on behalf of the respondent that the judgment in Suraj Lamps & Industries (supra) would be prospective is also misplaced. The requirement of compulsory registration and effect on non-registration emanates from the statutes, in particular the Registration Act and the Transfer of Property Act. The ratio in Suraj Lamps & Industries (supra) only approves the provisions in the two enactments. Earlier judgments of this Court have taken the same view.

¶162

14. In case the respondent wanted to evict the appellant treating him to be a licensee, he could have maintained a suit on behalf of the true owner or the landlord under specific

¶163

¶164

instructions of Power of Attorney as landlord claiming to have been receiving rent from the appellant or as Attorney of the true owner to institute the suit on his behalf for eviction and possession. That being not the contents of the plaint, we are unable to agree with the reasoning given by the High Court in the impugned order.”

¶165

(Emphasis supplied)

¶166

The Apex Court holds that it is settled principle of law that no right, title or interest of a property can be conferred without a registered document. Registered document, the Apex Court holds was a deed of sale or conveyance.

¶167

The aforesaid proceeding initiated against the petitioners is under Section 53A of the Act. They are penal statutes arising out of fiscal deficit, which are to be considered strictly and cannot be left at the whim of the Authorities. The Apex Court in the case of

¶168

SHANTI BHUSHAN v. STATE OF U.P.³ , has held as follows:

¶169

“…. …. ….

¶170

30. The Assistant Collector, the Appellate Authority, and the High Court have not decided the issue in terms of what we have held above. Even if the guidance value of Rs. 24,000/- per sq. meter is to be taken as the market value of the sale deed land, necessary deductions will have to be made from the

¶171

3 2023 SCC Online SC 489

¶172

¶173

market value as the appellants were already in possession of the sale deed land as tenants. The extent to which deduction can be made will depend upon the nature of the tenancy and other material factors. Some tenancies may be protected under the relevant rent control legislation, whereas some may not be protected. That is all a matter of evidence.

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31. The issue regarding the market value of the sale deed land on the date of execution of the sale deed is required to be decided by permitting the parties to adduce oral and documentary evidence. The Assistant Collector will have to ascertain whether a comparable sale instance of a property in possession of tenants is available. If it is not available, the Assistant Collector will have to ascertain the market value of the sale deed property on the relevant date again by comparison method by taking market value of a comparable property which does not have encumbrance of tenancy. Thereafter, he will have to determine the percentage of the deduction which should be made from the market value in the facts of this case. These questions are to be decided by the Assistant Collector on the basis of the evidence on record. Therefore, subject to what we have held in the judgment, we propose to send back the case to the Assistant Stamp Collector for determination of the market value of the sale deed land on the date of execution of the sale deed.

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32. The appellants have already deposited a sum of Rs. 1 crore towards the amount made payable by them. The sum amount will be subject to the final adjudication by the Assistant Stamp Collector. If the Assistant Stamp Collector comes to the conclusion that the market value of the land and structures is lesser than what was determined earlier by the Assistant Stamp Collector, the appellants will be entitled to a refund of the excess amount paid with interest at the rate of 8% per annum from the date on which the amount was paid till the date on which the refund is made. If it is found that the deficit stamp duty exceeds Rs. 1 crore, the appellants will have to make good the said amount. Sub-section 4A of Section 47A is in mandatory terms. The use of the word ‘shall’ make it clear that the Collector has no choice but to impose interest at the rate of 1.5% per month on the deficit amount. We are not disturbing the judgment of the High Court insofar as it relates to penalty as the State Government has not challenged that part.

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33. Hence, we set aside the impugned judgment of the High Court as well as the judgment of the Assistant Stamp Collector and the Appellate Authority and remand the case for fresh consideration to the Assistant Stamp Collector. However, we confirm that part of the impugned judgment of the High Court, by which it was held that the appellants are not liable to pay penalty. The Assistant Stamp Collector shall permit the appellants to lead evidence on the issue of valuation. The Assistant Stamp Collector is directed to conclude the proceedings as early as possible and preferably within a period of six months from today.”

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The issue before the Apex Court was determination of market value of the property for the purpose of registration and penalty had been imposed upon the Appellant before the Apex Court. The Apex Court holds that while considering fiscal statutes strict interpretation is what is necessary to be done.

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All the aforesaid actions of the 1^st respondent have sprung even before the execution of the sale deeds. Section 2(1)(mm) of the Act supra clearly holds that market value has to be determined only on the date of execution of the sale deed and not at the time of execution of agreements of sale. The Apex Court in the case of STATE OF RAJASTHAN v. KHANDAKA JAIN

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JEWELLERS⁴ has held as follows:

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4 (2007)14 SCC 339

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“….

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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 dependent 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 17 is “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 sign the sale deed. A taxing statute is not contingent on the inconvenience of the parties. It is needless to emphasise 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:

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“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.” [ Ed. : In Justice G.P. Singh's Principles of Statutory Interpretation (8th Edn., Reprint 2002) at p. 635.]

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21. The same view was expressed by Hon'ble Bhagwati, J. in A.V. Fernandez v. State of Kerala [AIR 1957 SC 657] . The principle is as follows : (AIR p. 661, para 29)

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“29. … in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.”

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Hon'ble Shah, J. has formulated the principle thus [ Ed. : In CST v. Modi Sugar Mills Ltd., AIR 1961 SC 1047, p. 1051, para 11.] :

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“11. … In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed : it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency.”

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Therefore, a taxing statute has to be read as it is. In other words, the literal rule of interpretation applies to it.

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22. In this background, 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.

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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

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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 undervalued then as per Section 47-A of the Rajasthan (Amendment) Act 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.

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24. Learned counsel for the respondent strenuously urged before us that in fact when the agreement to sell was not executed by the vendor, the respondent had no option but to file a suit and a long time was taken for obtaining a decree for execution of the agreement. He was not at fault and as such the valuation given in the instrument should be taken into consideration because during the litigation the valuation of the property has shot up. In this connection, learned counsel has invited our attention to the principle “actus curiae neminem gravabit” meaning thereby that no person shall suffer on account of litigation. Hence learned counsel submitted that since the matter had been in the litigation for a long time, the respondent cannot be made to suffer. He invited our attention to the decision of the Andhra Pradesh High Court Sub-Registrar, Kodad Town and Mandal [AIR 1998 AP 252] . It is true that no one should suffer on account of the pendency of the matter but this consideration does not affect the principles of interpretation of a taxing statute. A taxing statute has to be construed as it is; all these contingencies that the matter was under litigation and the value of the property by that time shot up cannot be taken into account for interpreting the provisions of a taxing statute. As already mentioned above a taxing statute has to be construed strictly and if it is construed strictly then the plea that the incumbent took a long time to get a decree for execution against the vendor that consideration cannot weigh with the court for interpreting the provisions of the taxing statutes. Therefore, simply because the matter has been in the litigation for a long time that cannot be a consideration to accept the market value of the instrument when the agreement to sale was entered. As per Section 17, it clearly says at the time when registration is made, the valuation is to be seen on that basis.

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25. In Sub-Registrar, Kodad Town and Mandal [AIR 1998 AP 252] the learned Single Judge of the Andhra Pradesh High Court felt persuaded on account of 30 years' long litigation and, therefore, declined to send the papers back to the Collector for valuation at the market value. With great respect, the view taken by the learned Single Judge is against the principles of interpretation of a taxing statute. Therefore, we are of the opinion that the view taken by the learned Single Judge of the Andhra Pradesh High Court is not correct.”

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(Emphasis supplied)

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What would unmistakably emerge from the facts narrated hereinabove and the law laid down by the Apex court in the aforequoted judgments would be that, the Authority exercising his power under Section 53A has grossly erred in considering the General Power of Attorney to be a piece of deed of conveyance and determined the value on the said General Power of Attorney and found huge deficit of stamp duty. This was the very proceeding initiated by the Deputy Commissioner/2^nd respondent. The Deputy Commissioner holds that there is no short levy of stamp duty. In a suo motu proceeding, the 1^st respondent holding it to be erroneous, is on the face of it, unsustainable.

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14. For the aforesaid reasons, the following:

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O R D E R

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