Case: Banarsi Das Ahluwalia Vs. The Chief Controlling Revenue Authority, Delhi

and in which the question about the amount of stamp duty is yet to be decided. It also held that once the Authority has decided the case the fact that proceedings for realisation of duty remain pending would not make the case a pending case. At page 321 of the report the High Court observed that the language of section 57, viz., that "the authority may state any case referred to it under section 56 (2) or otherwise coming to its notice," and " refer such case with its own opinion thereon" made it clear that the reference has to be made at the stage when the case is still pending before it. When the High Courts attention was drawn to the decision in Maharashtra Sugar Mills case, AIR 1950 SC 218 (supra) and AIR 1952 Mad 811 (supra) and ILR (1955) Mad 1037 = (AIR 1955 Mad 304 ) (supra) the High Court distinguished the Maharashtra Sugar Mills case, AIR 1950 SC 218 on the ground that the application for reference made under Sec. 56 (2) to the Collector had not been decided when the Authority was asked to state the case under section 57 (1) and that therefore it was possible to say that the case was still pending. As regards the two Madras decisions the High Court agreed that the reference applied there was after the cases were concluded but observed that the Madras High Court had not examined the question whether reference under section 57 (1) was in such cases competent and that it relied on the decision in Maharashtra Sugar Mills Case, AIR 1950 SC 218 without noticing that in that case reference we applied for while the application asking the Collector to refer the case under Section 56 (2) to the Authority had not been disposed of. In Eastern Manganese and Minerals v. State of West Bengal, AIR 1960 Cal 340 the Calcutta High Court following In re, Cook and Kelvey, ILR 59 Cal 1171 = (AIR 1932 Cal 736) (supra) refused to direct reference on the ground that when an adjudication as to proper stamp has been made under section 31 and the duty is paid without the document having been impounded or when the document is not sent to the Collector under Section 38 (2) there is no case pending before the Authority and the Authority cannot state a case or cannot similarly be asked to state the case. With respect, the reasons given in these two decisions for distinguishing the Maharashtra Sugar Mills Case, AIR 1950 SC 218 (supra) do not seem to be correct. As aforesaid, it is clear from the facts of that case that there was no case pending before the Authority or any other revenue authority and yet mandamus granted by the High Court was confirmed by this Court. Therefore that decision was binding on both the High Courts.9. Whatever may have been the view in the past on the scope of section 57 (1) the position, after the decision in Maharashtra Sugar Mills Case, AIR 1950 SC 218 (supra), is settled that Section 57 (1) imposes a duty on the Authority to state a case when it raises a substantial question of law. As the Privy Council stated in 50 Ind App 227 =(AIR 1923 PC 138) (supra at p. 33 (of Ind App) = (at p. 142 of AIR): "To argue that if the legislature says that a public officer, even a revenue officer, shall do a thing and he without cause or justification refuses to do that thing yet the Specific Relief Act would not be applicable, and there would be no power in the Court to give relief to the subject, is to state a proposition to which their Lordships must refuse assent. It also must now be taken as settled that that duty is not affected by the question whether the case is pending before the Authority or not.The principle underlying the decision is that section 57 affords a remedy to the citizen to have his case referred to the High Court against an order of a revenue authority imposing stamp duty and/or penalty provided the application involves a substantial question of law and imposes a corresponding obligation on the authority to refer it to the High Court for its opinion. Such a right and obligation cannot be construed to depend upon any subsidiary circumstance such as the pendency of the case before the Authority.If the position is as held in (1902) ILR 25 Mad 752 the mere fact that the Collector has determined the duty and closed the case would render nugatory not only the controlling jurisdiction of the Authority but the remedy which sec. 57 (1) gives to the citizen as also the obligation of the Authority to state the case. The difficulty which the learned judges felt in (1902) ILR 25 Mad 752 and repeated in subsequent decisions is not, in our view, a rear one because as soon as a reference is made and the High Court pronounces its judgment the decision of the Authority is at large and the Authority, as required by section 59 (2) would have to dispose of the case in conformity with such judgment. The position therefore is that when a reference has been made to the Authority or the case has otherwise come to his notice, if an application is made under Sec. 57 (1) and it involves a substantial question of law, whether the case is pending or not, the Authority is bound to state the case in compliance with its obligation. The Authority is in a similar position as the Income-tax Tribunal under analogous provisions in the Income-tax Act.10. In our view, the Authority was in error in refusing to state the case and the High Court was equally in error in summarily dismissing the writ petition as the question whether the document was a declaration of trust or was a deed of settlement is a substantial question of law.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Consequently, where a serious question of law was involved there was a duty cast on the Authority to state the case and the citizen had a right to have such a case determined by the High Court. There would be a breach of duty if the Authority failed to appreciate that there was a serious point of law involved and such breach of duty could be enforced by an order under Section 45 of the Specific Reliefrespect, the reasons given in these two decisions for distinguishing the Maharashtra Sugar Mills Case, AIR 1950 SC 218   (supra) do not seem to be correct. As aforesaid, it is clear from the facts of that case that there was no case pending before the Authority or any other revenue authority and yet mandamus granted by the High Court was confirmed by this Court. Therefore that decision was binding on both the High Courts.9. Whatever may have been the view in the past on the scope of section 57 (1) the position, after the decision in Maharashtra Sugar Mills Case, AIR 1950 SC 218   (supra), is settled that Section 57 (1) imposes a duty on the Authority to state a case when it raises a substantial question of law.It will be noticed that when the Assistant Superintendent decided on July 19, 1945 that the document was a mortgage chargeable with the duty of Rs. 56,250 and ordered the Mills to pay the deficit and the penalty the case before him was concluded. In fact he wrote to the Registrar of Companies returning the document that it would be certified by him on payment of the said amounts. The Collector thereafter was requested to recover the two amounts and a demand was also made on the Mills. It is true that the application of the Mills dated February 1, 1945 to the Collector under Section 56 (2) was not decided when the Mills on February 5, 1946 asked the Authority to state the case. But unlike section 57 (1) the Collector under Section 56 (2) may refer the case if he is in doubt. The duty of the Collector not being obligatory, the case was concluded long before the Mills application dated February 5, 1946. In any event as the Collector did not refer the case under Section 56 (2) to the Authority it cannot be said that there was any pending case either before him or the Authority and yet the High Court ordered the Authority to state thealso must now be taken as settled that that duty is not affected by the question whether the case is pending before the Authority or not.The principle underlying the decision is that section 57 affords a remedy to the citizen to have his case referred to the High Court against an order of a revenue authority imposing stamp duty and/or penalty provided the application involves a substantial question of law and imposes a corresponding obligation on the authority to refer it to the High Court for its opinion. Such a right and obligation cannot be construed to depend upon any subsidiary circumstance such as the pendency of the case before the Authority.If the position is as held in (1902) ILR 25 Mad 752 the mere fact that the Collector has determined the duty and closed the case would render nugatory not only the controlling jurisdiction of the Authority but the remedy which sec. 57 (1) gives to the citizen as also the obligation of the Authority to state the case. The difficulty which the learned judges felt in (1902) ILR 25 Mad 752 and repeated in subsequent decisions is not, in our view, a rear one because as soon as a reference is made and the High Court pronounces its judgment the decision of the Authority is at large and the Authority, as required by section 59 (2) would have to dispose of the case in conformity with such judgment. The position therefore is that when a reference has been made to the Authority or the case has otherwise come to his notice, if an application is made under Sec. 57 (1) and it involves a substantial question of law, whether the case is pending or not, the Authority is bound to state the case in compliance with its obligation. The Authority is in a similar position as the Income-tax Tribunal under analogous provisions in the Income-tax Act.10. In our view, the Authority was in error in refusing to state the case and the High Court was equally in error in summarily dismissing the writ petition as the question whether the document was a declaration of trust or was a deed of settlement is a substantial question of