The
Govt. of Tamil Nadu Vs. P.V. Enter. Rep. by Scm Jamuludeen & Ors [2000] INSC
580 (21 November 2000)
U.C.Banerjee,
K.G.Balakrishna
L.I.T.J
BANERJEE,
J.
The
State Government is in appeal against the judgment of the High Court wherein
Article 5(i) of the Indian Stamp Act stands challenged together with a circular
being No.
67296/C1/88
dated 9th December, 1988 : whereas the High Court has
approved the validity of the statutory provisions but it has expressed its
negation to the validity of the circular dated 9th December, 1988 and it is in that regard that the State has come up in
appeal before this Court by the grant of special leave.
Since
the challenge is restricted to the circular as noticed above the scope of the
appeal also thus stands restricted and limited.
Before,
however, adverting to the rival contention, two basic canons of statutory
interpretation ought to be noted : firstly avoidance of redundancy by the
legislature and the second count pertains to the limitation of exercise of
jurisdiction so far as the law court is concerned since the law court ought not
to embark upon the inquiry of legislative intent.
The
learned senior advocate Mr. Mohan appearing for the State Government in support
of the appeal very strongly contended that by reason of the provisions of
Section 27 read with Section 35, question of their being any embargo in the
matter of issuance of circular directing the Inspector General of Registration
to have an inspection of building prior to registration does not and cannot
arise and there is existing appropriate legislative sanction in that regard.
The
submission on the first blush seems to be rather attractive and it is on this
score that Sections 27 and 35 ought to be noticed for ascertaining the true
scope and effect. The Sections read as below:
Section
27 Facts affecting duty to be set forth in instrument:- The consideration (if
any) and the market value and all other facts and circumstances affecting the
chargeability of any instrument with which it is chargeable shall be fully and
truly set forth therein.
Section
35 Instrument not duly stamped inadmissible in evidence, etc.- No instrument
chargeable with duty shall be admitted in Evidence for any purpose by any
person having by law or consent of parties authority to receive evidence, or
shall be acted upon, registered or authenticated by any such person or by any
public officer, unless such instrument is duly stamped:
Provided
that :- Having regard to the language of the Sections the learned senior
Advocate contented that the expression used by the legislature is
registered as such it is a step@@ JJJJJJJ before registration and thus
empowering the authority to refuse registration. On a close scrutiny of the
statute, however, we record our inability to concur with the submissions, more
so by reason of the provisions of Section 47 A, read with Rule 4 of the Tamil Nadu
Stamp (Prevention of Under-Valuation of Instruments) Rules, 1968 framed under
Sections 47A and 75 of the Indian Stamp Act. Section 47A has been engrafted in
the statute book for the State of Tamil Nadu only, obviously to meet the exigencies of the situation in the State.
Section 47 A reads as below :
Section
47 A : Instrument of conveyance etc., under-valued how to be dealt with (1) If
the registering officer appointed under the Indian Registration Act, 1908
(Central Act XVI of 1908) while registering any instrument of conveyance,
exchange, gift, release of benami right or settlement, has reason to believe
that the market value of the property which is the subject matter of
conveyance, exchange, gift, release of benami right or settlement, 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 market value of such
property and the proper duty payable thereon. (Emphasised) (2) On receipt of a
reference under sub-section (1) , the collector shall, after giving the parties
a reasonable opportunity of being heard and after holding an enquiry in such
manner as may be prescribed by rules made under this Act, determine the market
value of the property which is the subject matter of conveyance, exchange,
gift, release of benami right or settlement and the duty as aforesaid.. The
difference, if any, in the amount of duty, shall be payable by the person
liable to pay the duty.
(3)
The collector may, suo motu or otherwise, within five years from the date of
registration of any instrument of conveyance, exchange, gift, release of benami
right or settlement not already referred to him under sub-section (1), call for
and examine the instrument for the purpose of satisfying himself as to the
correctness of the market value of the property which is the subject matter of
conveyance, exchange, gift, release of benami right or settlement and the duty
payable thereon and if after such examination, he has reason to believe that
the market value of the property has not been truly set forth in the instrument,
he may determine the market value of such property and the duty as aforesaid in
accordance with the procedure provided for in sub-section (2). The difference,
if any, in the amount of duty, shall be payable by the person liable to pay the
duty:
Provided
that nothing in this sub- section shall apply to any instrument registered
before the date of commencement of the Indian Stamp (Madras Amendment) Act,
1967.
(4)
Every person liable to pay the difference in the amount of duty under
sub-section (2) or sub-section (3) shall, pay such duty within such period as
may be prescribed. In default of such payment, such amount of duty outstanding
on the date of default shall be a charge on the property affected in such
instrument. On any amount remaining unpaid after the date specified for its
payment, the person liable to pay the duty shall pay, in addition to the amount
due, interest at two percent per month on such amount for the entire period of
default.
- - -
- - - - - - - - - - - - - - - A plain reading of this Section (47-A) thus
categorically provides the methods to be taken recourse to in the event of
instrument of conveyance stands under valued. The heading of the Section is
very opposite with the content and indicative of the true intent of the
legislature. The heading reads as under :
Section
47-A : Instruments of conveyance etc., under- valued how to be dealt with. The
body of this@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ section in any event expressly
records a situation after registration and not at a stage prior thereto. In the
event of acceptance of submission of Mr. Mohan then it cannot but be said to be
a duplication of statutory provision which as noticed above de hors one of the
methods of interpretation of statutes. The factum of the instrument being referred
to the collector for determination of the market value of such property runs
totally counter to the submission made in support of the appeal.
The
intent of the legislature in the matter of placement of sections also needs to
be gone into since a later section will carry its effectiveness in the event of
contra intention expressed in an earlier provision of the statute. The law is
well settled on this score and we need not dilate thereon any further but the factum
of the refusal to register by reason of under valuation in terms of Section 47
A cannot stand scrutiny of acceptance having regard to the language used
therein. The legislative intent as expressed in Section 35 stands clear to the
fact that refusal to register is not permissible in terms therewith.
Section
35 is a provision to cater for the instruments not being properly stamped and
as such being inadmissible in evidence. It is not that the legislature was not
aware of the stamp duty but a special power has been conferred on to the
registrar in that regard and the collector has been empowered to impose
appropriate fees and stamp duty in terms of provision of Section 38 read with
Sections 39 and 40 of the Act. The powers of the collector as specified therein
stands in an unambiguous situation as the final authority in the matter of
assessment of the duty leviable thereon and that is precisely the reason as to
why the State legislature engrafted Section 47 A and specifically records in
the statute that steps to be taken only after registration of such an
instrument. It can thus conclusively be said that there is existing a
categorical expression of legislative intent in regard to the registration of
the document the registration is effected subject to the condition as provided
in the statute itself with proper safeguard being taken note by the legislature
and contra expression of opinion would run counter to the legislative intent
which is otherwise not permissible in law.
Incidentally,
the Tamil Nadu Stamp (Prevention of Under- Valuation of Instruments) Rules,
1968 were framed on 22nd
April, 1968 in terms
of the provision of Section 47A read with Section 75 of the Indian Stamp Act.
The Rules prescribe as to the circumstances under which the authority ought to
calculate the market value of the property as required under Section 27 of the
Act and the functions of the Registering Authority on that count. Specific
reference has, however, been made to Rule 3.3 which reads as under:
Rule
3.3: The registering officer may, for the purpose of finding out whether the
market value has been correctly furnished in the instrument, make such
enquiries as he may deem fit. He may elicit from the parties concerned any
information bearing on the subject and call for and examine any records kept
with any public officer or authority.
The
Rule noted above authorises the registering officer for the purpose of the
assessment of the market value but the rule by itself does not suggest that the
registration of a document is dependent on the recording of satisfaction
pertaining to the evidence received in terms therewith. As a matter of fact the
rule cannot possibly be read to provide the same, since that would be contra to
the statute and it is in this perspective that the circular was stated to be
beyond the executive power and for true appreciation of the submissions it
would be convenient to note relevant extracts of the circular at this juncture.
The
circular reads as below:- .Article 5(I) was inserted enabling levy of 13% on
the cost of the proposed construction in respect of properties situated in
Chennai, Madurai, Coimbatore, Sale and Trichirapalli Municipal towns and 12% in
respect of other areas. In view of this amendment levy of 13% stamp duty on the
value of undivided share of the land and another 13% stamp duty on the value of
construction affected in the agreement will replace the practice of levy of 13%
on the value of the undivided share of land and Rs.2.5 for agreement. The large
scale registration of such documents in Chennai was brought to the notice of
documents in Chennai was brought to the notice of the I.G.R. In order to
prevent loss of revenue by way of stamp duty to the Government the following
instructions are issued.
In all
cases of documents presented for registration involving undivided share of
lands relating to multi storeyed buildings, such documents shall be kept
pending and reference made to the D.I.G.s with the copy of the documents. The
D.I.G. shall inspect the property and find whether such documents come under
the purview of the amended Act 38/87 or the facts relating to the building has
been suppressed against Section 27 and instruct the sub-registrar to register
the document accordingly. In case of short levy of stamp duty such document
shall be registered only after collecting the duty.
This
circular comes to effect immediately. The sub-registrars are instructed to
function without allowing room for complaint. The receipt of the circular shall
be acknowledged immediately.
The
circular, thus, in no uncertain terms provides registration only upon collection
of duty and it is this circular which stands challenged as in excess of the
powers conferred in terms of the provisions of Section 47A read with Section
75. The circular itself records ..such document shall be registered only after
collecting the duty. This particular insertion has prompted the parties, the
writ petitioner being the appellants herein to move the court as the same is violative
of Section 47(A).
The
High Court while dealing with the matter expressly dealt with the issue rather
elaborately and came to the conclusion that the circular cannot be possibly
said to be within the powers conferred in terms of the provisions of Section
47A.
The
High Court also came to the conclusion that Article 5(i) by itself does not authorise
issuance of the circular to the effect of having an embargo in the matter of
registration.
The
learned senior Advocate, however, impressed upon the Court the large scale
activities in the matter of avoidance of stamp duty is now being practiced in
the State and the circular has been introduced only to avoid such avoidance of
stamp duty. While it is true that the Government revenue should be protected
and there cannot be any exception provided, however, the same is otherwise in
consonance with the principles of law and not de hors the same. The statute
itself expressly provides that it is only after registration that the Registrar
or an officer authorised in that behalf can take certain steps and on the wake
of such a statutory provision question taking steps before the registration
does not and cannot arise and it is this conclusion which has prompted the High
Court to decry the validity of the circular. We also think it fit to lend our
concurrence therewith. The judgment decrying the validity of the circular
cannot possibly be faulted in any way whatsoever.
Mr.
Mohan next contended that the conclusions as recorded in paragraph 97 of the
judgment in M/s. Park View Enterprises & Ors. v. State of Tamilnadu & Ors. [AIR 1990 Madras 251 at 301] however, cannot in any
event be sustained since they tantamount to the issuance of a mandamus. While
it is true that the direction of the nature as contained in sub paragraphs 1-16
under paragraph 97 may be with a bit of stretch can be termed to be so but they
themselves do not pose any difficulty in the matter of their implementation.
In any
event, however, since, some contentions have been raised in that regard and to
avoid all future confusions we would clarify the same by recording that the
concerned authority ought to act in accordance with the provisions of law and
the same thus stands substituted for paragraphs noted above. With that
clarification, the appeals are dismissed with however no order as to costs.
Civil Appeal Nos. 5914 A-E/1990 and 4597/1990 In view of the above judgment,
these appeals are also dismissed with no order as to costs.
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