CWP NO.3420 OF 1988 :1: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. DATE OF DECISION: 20.11.2008 Harbans Singh and another ...Petitioners VERSUS State of Punjab and others …Respondents CORAM HON'BLE MR.JUSTICE PERMOD KOHLI PRESENT: Mr.Som Nath Saini, Advocate for the petitioners Mr.S.S.Sahu, A.A.G., Punjab for respondents Permod Kohli, J. (Oral) Aggrieved of the notice dated Nil issued by the Assistant Collector 2nd Grade-cum-Sub Registrar, Rajpura (Annexure P-1), asking the petitioners to deposit deficient stamp duty of Rs.5,374/- in his Office before 30.11.1987, the petitioners have filed this petition for its quashment. The petitioners purchased land measuring 12 bighas 13 biswas being one half share of land measuring 25 bighas 6 biswas from one Mangat Ram son of Mulla for a consideration of CWP NO.3420 OF 1988 :2: Rs.44,000/- vide registered sale deed dated 5.12.1983. The sale deed was presented for registration before the Sub Registrar, Rajpura. Stamp duty of Rs.5500/- was also annexed with the sale deed being the duty payable on the amount of consideration. The petitioners claim that the sale consideration amount represented the true and correct market value of the property at the relevant time. After the document was registered on 5.12.1983, the petitioners received the impugned notice (Annexure P-1) calling upon them to deposit the deficient stamp duty of Rs.5,374/- on or before 30.11.1987. The petitioners objected to the said notice by way of representation. Besides disputing the amount assessed, they also challenged the jurisdiction of the Assistant Collector 2nd Grade to recover the amount as arrears of land revenue, and thereafter filed the present writ petition challenging the same. The main grounds of challenge in the petition are that (1) Assistant Collector 2nd Grade- respondent no.3 has no jurisdiction to recover the amount as arrears of land revenue; and (2) the notice impugned has been issued without observing principles of natural justice. To the contrary, the State-respondent has justified the impugned notice on the ground that after the registration of the document, the Accountant General, Punjab, while conducting the audit of Sub Registrar, Rajpura, pointed out the deficit of the documents vide his Audit Inspection Note dated 1.6.1984. It is stated that the document was under valued and the deficient stamp duty is recoverable as arrears of land revenue under Section 70 (2) of the Indian Stamp Act. CWP NO.3420 OF 1988 :3: I have heard learned counsel for the petitioners and the State- respondents. It is common case of the parties that the document was presented for registration on 5.12.1983 wherein sale consideration for the land purchased through the instrument was shown at Rs.44,000/- and appropriate stamp duty was paid thereon. The Sub Registrar registered document without contesting the valuation of the property raising any objection regarding the stamp duty paid on the instrument. Section 47-A of the Indian Stamp Act, 1899 as amended by the Punjab Stamp Act, 1982 which came into force with effect from 4.8.1982, itself provides a complete procedure in respect of the instruments that are under valued and reads as under:- “47-A. Instrument under valued how to be dealt with:- (1) If the Registering Officer appointed under the Registration Act, 1908 (Central Act No. 16 of 1908), while registering any instrument relating to the transfer of any property, has reason to believe that the value of the property or consideration, as the case may be, has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector, for determination of the value of the property or the consideration, as the case may be, and the proper duty payable thereon. (2) On receipt of reference under sub-section (1), CWP NO.3420 OF 1988 :4: the Collector shall, after giving the parties reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules under this Act, determine the value or consideration and the duty as aforesaid and the deficient amount of duty, if any, shall be payable by the person liable to pay the duty. (3) The Collector may, suo moto, or on the receipt of a reference from the Inspector General of Registration or Registrar of a District appointed under the Registration Act, 1908 (Central Act No. 16 of 1908), in whose jurisdiction the property or any portion thereof which is the subject matter of the instrument is situated or on the receipt of a report of audit by the Comptroller and Auditor General of India or by any other authority authorized by the State Government in this behalf or otherwise, within a period of three years from the date of the registration of an instrument, call for and examine any instrument for the purposes of satisfying himself as to the correctness of the value of the property or of the consideration disclosed and of all other facts and circumstances affecting the chargeability of the instrument or as to the true character and CWP NO.3420 OF 1988 :5: description thereof and the amount of the duty with which it was chargeable and if after such examination, he has reason to believe that proper duty has not been paid, he may, after giving the person concerned reasonable opportunity of being heard and after holding an enquiry in the manner provided under sub-section (2), determine the value of the property or the consideration or the character or description of instrument and the duty with which it was chargeable and the deficient amount of duty, if any, would be payable by the person liable to pay duty; and (4) Any person aggrieved by an order of the Collector under sub-section (2) or sub-section (3) may, within thirty days from the date of that order, prefer an appeal before the District Judge and all such appeals shall be heard and disposed of in such manner as may be prescribed by rules made under this Act. Explanation.-For the purpose of this section, value of any property shall be estimated to be the price which in the opinion of the Collector the appellate authority, as the case may be, such property would have fetched, if sold in the open market on the date of execution of the CWP NO.3420 OF 1988 :6: instrument relating to the transfer of such property.” A perusal of Sub Section (1) of the aforesaid Section makes it clear that if the Registering Authority has reason to believe that the value of the property or consideration reflected therein has not been truly set forth in the instrument, he may register the instrument and thereafter refer the same to the Collector for determination of the value of the property or the consideration for payment of proper duty payable thereon. Under Sub Section (2) of the aforesaid Act, on receipt of reference, the Collector shall, after giving the parties reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules under this Act, determine the value or consideration and the duty as aforesaid and the deficient amount of duty, if any, shall be payable by the person liable to pay the duty. In the present case, admittedly, when the instrument was presented for registration on 5.12.1983, the Sub Registrar neither objected to the Stamp duty payable before or after the registration of the instrument and no reference was made to the Collector for determination of the stamp duty payable on the sale deed. Sub-section (3) of Section 47-A further empowers the Collector to initiate suo moto or on receipt of reference from the Inspector General of Registration or the Registrar of District in whose jurisdiction the property subject matter of instrument is situated, initiate proceedings as to the correctness of the value of the property or consideration. He has the power to call for and CWP NO.3420 OF 1988 :7: examine the instrument for determination of the value or the consideration. However, the action under this sub-section is permissible within two years from the date of registration of the instrument. In the present case, none of the situation contemplated by sub-section (3) of Section 47-A exists. Neither the Collector has initiated suo moto action nor there is any reference from the Inspector General of Registration or the Registrar of the District in whose jurisdiction the property is situated. The action which resulted in issuance of the impugned notice is pursuant to an audit report that too after a period of two years. Further the impugned notice has been issued by the Assistant Collector and not the Collector. The impugned notice has thus not been issued by a competent authority. The action is otherwise also without jurisdiction and without following the procedure laid down under law. Since the recovery is being sought from the petitioners, it affects the civil rights of the petitioners. Otherwise also sub-section (2) of Section 47-A specifically provides for grant of reasonable opportunity of being heard and holding an enquiry to determine the value of the property or consideration. Admittedly, no enquiry has been held and even if there is any enquiry or determination by the Accountant General, the same was at the back of the petitioners and without affording them any opportunity of being heard. The impugned notice has been issued without affording any opportunity of being heard to the petitioners violating principles of natural justice. The action is totally unwarranted and without any sanction of law. Under these circumstances, the impugned notice is CWP NO.3420 OF 1988 :8: thus liable to be quashed. The writ petition is accordingly allowed. Impugned notice (Annexure P-1) is hereby quashed. No order as to costs. (PERMOD KOHLI) JUDGE 20.11 .2008 MFK NOTE:Whether to be referred to the Reporter or not:YES CWP NO.3420 OF 1988 :9: