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

2. The facts leading to the said petition may be briefly stated: On December 20, 1961 the appellant executed a deed of trust in respect of certain properties on a stamp paper of Rs. 30 on the footing that the said deed was a declaration of trust. The Sub-Registrar to whom it was presented for registration, impounded it and forwarded it to the Collector for action under Section 38 (2). The Collector served a notice on the appellant to show cause why he should not be charged with deficient stamp duty of Rs. 3,365 and a penalty of Rs. 33,650. After hearing Counsel the Collector directed the appellant to deposit the aggregate amount of Rs. 36,685. The appellant filed a revision before the Chief Controlling Revenue Authority, Delhi who reduced the amount of deficit duty and penalty to Rs. 630 and Rs. 3150 respectively. On December 9, 1962 the appellant applied to the said Authority to state the case to the High Court under section 57 (1). That was rejected and the appellant filed a writ petition but the High Court dismissed it in limine.

Court's reasoning:
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