The Board of Revenue, U. P. & Ors
Vs. Sardarni Vidyawati & ANR  INSC 42 (6 February 1962)
06/02/1962 WANCHOO, K.N.
AYYANGAR, N. RAJAGOPALA
CITATION: 1962 AIR 1217 1962 SCR Supl. (3) 50
RF 1966 SC 81 (5)
Stamp Duty-Impounding of document Reference
Revenue Board, if must hear the party aggrieved Indian Stamp Act, 1899 (2 of
1899), ss. 33, 56 (2).
The respondents sought permission of the
Court to with. draw certain moneys on furnishing security which was granted. A
security bond was executed by the respondents by which a house was given as
security. The Inspector of Stamps reported that the security bond was
insufficiently stamped and therefore it should be impounded and a deficit stamp
duty of Rs. 482111 /-and a penalty of Rs. 4,826/14/should be levied. Thereupon
the Deputy Commissioner) acting as Collector, called for objections. The
judicial officer before whom the security bond was filed impounded the bond and
forwarded it to the Deputy Commissioner. After further objections were filed by
the respondents before the Stamp Officer, the latter submitted a report to the
Deputy Commissioner upholding the order of the Inspector of Stamps.
Thereupon the Deputy Commissioner passed an
The respondents filed a revision petition
against the order of the Deputy Commissioner before the Board of Revenue and
while that petition was pending the Deputy Commissioner referred the matter to
the Board of Revenue under s. 56 (2) of the Stamp Act and the Board of Revenue
passed an order upholding the order of the Deputy Commissioner. The respondents
then filed a writ petition under Art. 226 of the Constitution before the High
Court. Their main contention was that they were not given a hearing either by
the Board of Revenue or the Deputy Commissioner. The petition was heard by a
Single Judge who dismissed the petition on the ground that neither the Stamp
Act nor the-Rules framed there under Provided that a hearing should be given to
the aggrieved person. Thereafter the appeal Court treated the matter as a
reference before the Revenue Board under s. 56 (2) of the Act and held that the
Act or Rules did not require that a hearing should be given by the authorities
acting under s. 56 but that although they were acting only administratively.
they were bound to give a bearing according to the principles of natural
justice. The appeal was allowed.
51 Held, that it is clear that s. 56 (2)
deals with cases where there is a doubt in the mind of the Collector in regard
to an instrument as to its construction and the provisions of the Act
applicable to it. Such doubt itself shows that the point raised for the
Collector's decisions is a difficult point of law and from the very nature of
the duty to be performed in such circumstances it appears clear that the Chief
Controlling Revenue Authority has to decide the matter judicially and would
thus be a quasi-judicial tribunal.
Where the provisions of the Act are silent,
the duty to act judicially may be inferred from the provisions of the statute
or may be gathered from the cumulative effect of the nature of the rights
affected, the mariner of the disposal provided the objective criterion to be
adopted and the phraseology used and other indicia afforded by the statute.
The questions before the Board under s. 56
(2) being one of construction of an instrument and the application of the Act
to it being a pure questions of law which may result in payment of large
amounts by the executant of the document the Board should give, for the
determination of such question, a hearing and it should act judicially in
determining a pure question of law.
CIVIL APPELLATE JURISDICTION :Civil Appeal
No. 29 of 1958.
Appeal from the judgment and order dated May
3, 1956, of the Allahabad High Court in Special Appeal No. 48 of 1954.
Veda Vyasa and C. P. Lal. for the appellant.
A. N. Goyal, for the respondents.
1962. February 6. The Judgment of the Court
was delivered by WANCHOO, J.-This is an appeal on a certificate granted by the
Allahabad High Court. The brief facts necessary for present purposes are these.
Certain decretal moneys were deposited in the then Chief Court of Oudh at
Lucknow. The respondents applied to the Chief Court for permission to withdraw
the moneys on furnishing security and were permitted to do so. Thereupon a
registered security bond was executed and registered in Simla in 1949 by which
52 a house there was given in security for withdrawal of the money. Befere,
however, the money could be withdrawn, the Inspector of Stamps reported on
March 15, 1950, that the so called security bond was in reality a mortgage deed
without possession and was insufficiently stamped. He therefore reported that
it should be impounded and the deficit stamp duty of Rs. 482/11/and a penalty
amounting to Rs.
4,826/14/should be levied with respect to
Thereupon on April 5, 1950, the Deputy
Commissioner, Kheri, acting as Collector passed the following order :"In
case the parties have any objection, they put it in writing which will be
referred to the Board of Revenue." It seems that on July 5, 1950, the
respondents objected that the document was not a mortgagedeed and that, no duty
or penalty was payable, and further that as the document had not been till then
accepted by the court,. it was only a tentative document. On August 3, 1950,
the judicial officer before whom the security bond was filed impounded it under
s. 33 of the Indian Stamp Act, No. If of 1898, (hereinafter referred to as the
Act), and apparently forwarded it to the Deputy Commissioner, Kheri, under s.
38 of the Act. It seems thereafter that in November 1950 the respondents filed
further objections before Stamp Officer (TreaBury Officer), Kheri, from whom
the Deputy Commissioner who acts as a Collector for the purposes of the Act had
called for a report. In December 1950, the Treasury Officer made a report to
the effect that the view of the Inspector of Stamps was correct and duty and
penalty. as reported by the latter were due. The respondents' case was that the
Treasury Officer did not give them any hearing before making the said report.
It seems that on this report the Deputy Commissioner made the order
"Realise". He also is said to have given no hearing to the respondents.
In January 1951, the respondents filed a 53 revision against the order of the
Deputy Commissioner before the Board of Revenue. It appears however that in
March 1951 the Deputy Commissioner referred the matter to the Board of Revenue
under s. 56(2) of the Act. In July 1951 the Board of Revenue disposed of the
matter and upheld the order of the Collector. But the respondents' complaint
was that the Board of Revenue also did not give them a hearing.
Consequently they filed a writ petition in
the High Court in November 1951. That petition was dismissed by the learned
Single Judge on the ground that neither the Act nor the Rules made there under
provided that any bearing should be given to the person who was liable to pay
the deficit stamp duty and the penalty. He further held that in any case the
Collector had given an opportunity to the respondents to urge their objections
in writing, and that the Board of Revenue had also considered the grounds taken
by the respondents in their revision-petition and there was no provision in the
law requiring the Board of Revenue to give a personal hearing or a hearing
through counsel in a case of this kind.
The respondents then went in appeal. The
appeal court seems to have treated the matter before the Board as if it were a
reference under s. 56(2) of the Act. As the learned Single Judge has pointed
out, though the order of the Collector of December 1950 would usually be final,
it appeared that he had chosen to make a reference to the Board of Revenue
under s. 56(2). We must therefore proceed on the assumption that this case has
been disposed of by the Board under s. 56(2) and not by the Collector under s.
40(1) or. by the Board under s. 56(1). The appeal court under ss. 40 and 56
leave the entire matter to the opinion of the person before whom the
insufficiently stamped document is produced and do not lay down any procedure
for calling upon the party concerned to show cause why the document be not held
to be 54 insufficiently stamped and there was no provision under the Act or the
Rules which required the authorities concerned to give any hearing to the
person executing the document. The appeal court therefore held that the
authorities concerned when acting either under s. 40 or s. 56 were not acting
judicially or quasi judicially. The appeal court further held that even though
the authorities were acting merely administratively under a. 40 and s. 56(2)
they were bound to give a hearing according to the principles of natural
justice, in accordance with the decision of that court in Special Appeal No.
291 of 1955, Ghanshyamdas Gupta v. The, Board of High School and Intermediate
Education, U. P. They therefore set aside the order of the Board of Revenue on
the ground that no hearing had been given to the respondents.
Thereupon on application for leave to appeal
to this Court was made to the High Court, which was allowed ; and that is how
the matter has come before us.
The main contention of the appellant before
us is that the High Court having held that the Board was acting merely administratively
when proceeding under s.56 (2) of the Act went wrong in holding that it was
bound under the principles of natural justice to give a hearing to the
respondents. In effect the appellant in this case impugned the correctness of
the view taken in Special Appeal No. 291 of 1955 (supra).
That case has come up before us in appeal (C.
A. 132 of 1959 Board of High School and Intermediate Education v. G. D. Gupta),
judgment in which is being delivered today. We have in that case held that the
examinations' committee is under a duty to act judicially when proceeding under
r.1(1) of Chap. VI of the Regulations framed under the U. P. Intermediate
Education Act, (No. 11 of 1921), and have not upheld the view taken by the High
Court that it acts administratively. A similar question arises in the present
55 appeal, viz., whether the Board of Revenue when dealing with a proceeding
under s. 56(2) of the Act acts administratively or quasi-judicially. We must
make it clear that we are proceeding in this appeal on the basis that the
matter before the Board was under s.56(2) on a reference by the Collector and
not under s.56(1) on the application filed by the respondents inviting it to
exercise its power of control there under. The contention on behalf of the
respondents is that when the Board is acting under s. 56(2) of the Act it is
Let us therefore first look to the scheme
which leads up to the reference under s. 56(2) of the Act. That sub-section
provides that if any Collector, acting under s. 31, s.40 or s.41, feels doubt
as to the amount of duty with which any instrument is chargeable, he may draw
up a statement of the case, and refer it, 'with his own opinion thereon, for
the decision of the Chief Controlling Revenue authority.
Section 31 deals with the case when any
instrument is brought to the Collector, and the person bringing it applies to
have the opinion of that officer as to the duty (if any) with which it is
chargeable. It is then the duty of the Collector either to determine the duty
(if any) with which, in his judgment the instrument is chargeable or to refer
the case to the Chief Controlling Revenue-authority under s.56(2) if he has any
doubt in the matter. Section 40 deals with the case where an instrument is
impounded under s.33 or the Collector receives any instrument sent to him under
s.38(2), (subject to certain exceptions) and gives power to the Collector
either to certify that' the instrument is duly stamped or that it is not
chargeable at all, or if he is of opinion that the instrument is chargeable
with duty and is not duly stamped to require the payment of proper duty or to
make up the same together with a penalty. But if the Collector is doubtful in
the matter he has been given power under s.56(2) to 56 refer the question to
the Chief Controlling Revenue authority. Lastly under s.41, if any instrument
P.chargeable with duty and not duty stamped (subject to certain exceptions) is
produced by any person of his own motion before the Collector within one year
from the date of its execution of first execution, and such person brings to
the notice of the Collector the fact that such instrument is not duly stamped
and offers to pay to the Collector the amount of the proper duty, or the amount
to make up the same, and the Collector is satisfied that the omission to duly
stamp such instrument has been occasioned by accident, mistake or urgent
necessity, he may, instead of proceeding under ss.33 and 40, receive such
amount and under s.42 certify by endorsement thereon that the proper duty has
been paid. But even in such a case if the Collector is doubtful in the matter,
he has been given the power to make a reference to the Chief Controlling
Revenue-authority. It is clear therefore that s.56(2) deals with cases where
there is a doubt in the mind of the Collector in regard to an instrument which
comes up before him under the above provisions of the Act as to the
construction of the instrument and the provisions of the Act applicable to it.
Such doubt itself shows that the point raised
for the Collector's decision is a difficult point of law and from the very
nature of the duty to be performed in such circumstances it appears clear that
the Chief Controlling Revenue-authority has to decide the matter judicially and
would thus be a quasijudicial tribunal.
As pointed out by us in C.A. 132 of 1959, the
question whether an authority, like the Board of Revenue, acts judicially is to
be gathered from the express provisions of the Act, in the first instance.
Where however the provisions of the Act are silent, the duty to act judicially
may be inferred from the provisions of the statute or may be gathered from the cumulative
effect of the nature of the 67 rights affected, the manner of the disposal
provided, the objective criterion to be adopted, the phraseology used and other
indicia afforded by the statute. It is true that in the present case the Act
and the Rules framed there under do not provide for a hearing by the Board of
Revenue, when it is dealing with a matter under s.56(2) of the Act. But the
question that is before the Board of Revenue under s.56(2) is of the
construction of an instrument and the application of the Act to it. In many
cases the decision of the Board, if it goes against the person executing the instrument.
May result in payment of large amounts as deficit stamp duty and even larger
amounts as penalty. The question is purely a question of law' in the
circumstances. It seems to us, considering the nature of the duty cast on the
Board of Revenue under s.56(2) requiring it to construe instruments submitted
to it there under and the application of the Act to them which may result in
payment of heavy amounts of deficit duty and even heavier amounts as penalty,
that the legislature intended that the Board of Revenue should hear the person
executing the document before saddling him with large pecuniary liability. The
question before' the Board under s.56(2) being one of construction of an
instrument and the application of the Act to it being, a pure question of law
which may-result in payment of large amounts by the executants of the document,
it would not in our opinion be improper to hold that for the determination of
such a question the legislature intended that the party affected by the
decision of the Board of Revenue should be given a hearing, and that the Board
should act judicially in deciding a pure question of law. The fact that the
decision will depend upon the opinion of the Board cannot in any way make any
difference for the determination of questions of law must always depend upon
the opinion arrived at judicially of the person or authority who has to
determine it, and that will not 58 necessarily mean that the person determining
it cannot possibly be required to act judicially because be has to act upon his
opinion. Further, s.57 enforces the above conclusion. That section provides
that the Chief Controlling Revenue-authority may state any case referred to it
under s.56(2), or otherwise coming to its notice. and refer such case, with its
own opinion thereon to the High Court, and every such case shall be decided by
not less than three Judges of the High Court to which it is referred.
This provision shows that questions referred
to the Board under s.56(2) may be 'such complicated questions of law that the
Board may not be able to make up its mind and may be in doubt and in such a
case the Board has the power to refer the matter to the High Court along with
its opinion.. and the question has to be decided by a Bench of three Judges,
where undoubtedly the hearing could not but be judicial. If therefore the
hearing under s.57 is judicial it would in our opinion be proper to infer that
the hearing under s.56(2) which deals with similar questions must also be
We are therefore of opinion that, considering
the totality of circumstances and the nature of the matter to be determined by
the Board of Revenue under s.56(2), the Board has to act judicially when
proceeding under s.56(2) and must therefore on principles of natural justice
give a hearing to the other party, namely, the executants of the instrument.
The Board of Revenue therefore, acts as a
quasi-judicial body under s. 56(2) and the respondents were entitled to a
hearing. We therefore uphold the order of the high Court, though on a different
The appeal is hereby dismissed with costs.