of Rajasthan & Ors Vs. M/S Khandaka Jain Jewellers
 Insc 1153 (16
Mathur & Markandey Katju
APPEAL NO. 5273 OF 2007 [Arising out of S.L.P.(C) No.19439 of 2006] A.K.
This appeal is directed against the judgment dated 23.11.2005 passed by the
Division Bench of the High Court of Judicature for Rajasthan at Jaipur Bench, Jaipur
in SBCWP No. 133/1997 and DBCSA No. 427/2002 whereby the division bench has
affirmed the order of the learned Single Judge.
Brief facts which are necessary for the disposal of this appeal are as under:
S.B. Civil writ petition No. 133/97 was filed by M/s Khandaka Jain Jewellers,
petitioner (respondent herein) in the High Court of Judicature for Rajasthan, Jaipur
Bench, Jaipur who prayed that a direction may be issued to the respondent Nos.
2&3 to register the sale deeds sent by the Court of additional district
Judge No. 1, Jaipur city in execution application No. 15/94 and 16/94 and to
send back the same to the Court immediately after registration. It was also
prayed that the respondents may be directed to register the sale deeds on the
stamps on which it is executed by the executing court and not to charge more
stamp duty from respondent (herein). It was further prayed to quash and set
aside the proceedings taken under Section 47A(2) of the Stamps Act, 1952 in
case No. 442/95 and 443/95 on 4th March, 1997 for determination of the
valuation of the sale deed for registration.
respondent is a registered firm and it entered into two agreements for purchase
of properties with Shri Prem Chand Ajmera, resident of 2148, Haldiyon Ka Rasta Jaipur
by one agreement dated 20th
October, 1983. The
property was agreed to be purchased for a sum of Rs. 1,41,000/- out of which Rs.
20,000/- were paid at the time of the agreement. As the vendor failed to comply
with the terms of the agreement, the respondent vendee filed a suit for
specific performance of the contract in the Court of district Judge, Jaipur
city which was later on transferred to the Court of additional district Judge
No.1, Jaipur city under registration No. 216/86. The suit was decreed by the
Judgment and decree dated 2nd February,1994.
pursuance of the said decree, the respondent firm deposited an amount of Rs. 1,21,000/-
in the Court on 9th
May, 1994. Since the
vendor did not execute the sale deed, therefore, the respondent firm filed the
execution application No. 16/90 before the Court of additional district Judge
No. 1, Jaipur city.
another agreement dated 20TH
October, 1983 the
vendor Premchand agreed to sell a portion of property for a sum of Rs. 50,000/-
out of which Rs. 10,000/- was paid at the time of agreement.
respondent firm purchased the stamp papers and got the sale deed typed. In this
case also the vendor failed to fulfill the condition of agreement and to
execute the sale deed. Consequently, the respondent firm filed another suit for
specific performance of the contract in the Court of district Judge, Jaipur
city. It was also transferred to the court of additional district Judge No. 1, Jaipur
city under registration No. 151/91. The suit was decreed vide judgment and
decree dated 2nd
February, 1994 and the
respondent firm was directed to deposit the remaining amount of Rs. 40,000/-
and the judgment debtor would execute the sale deed. If the judgment debtor
fails to comply with the decree, the decree holder would be entitled to get the
sale deed registered and to get the possession. In compliance of the judgment
and decree passed by the Court, the respondent firm deposited an amount of Rs.
40,000/- in the court but the judgment debtor did not execute the sale deed.
The execution application No. 15/94 was filed before the Court of additional
district Judge No. 1, Jaipur city. Both these applications No. 15/94 and 16/94 were
taken up by the executing court and the respondent firm was directed to submit
the stamp papers for the execution of the two sale deeds. The stamp papers for
a sum of Rs.14,100/- and Rs. 5,000/- for execution of the sale deeds in respect
of properties purchased for a sum of Rs. 1,41,000/- and Rs. 50,000/-
respectively, were submitted by the respondent firm.
learned executing court executed the sale deeds and sent the same on 17th March, 1995 for registration before the Sub-
registrar, Registration Department, Collectorate Bani Park, Jaipur.
Sub-Registrar exercising its powers under Section 47A(1) of the Stamp Act sent
these two sale deeds to Collector (Stamps) Jaipur for determining the market
value and to assess the charge of the stamp duty. The Collector (stamps)
registered these two cases No. 442/95 and 443/95 of the respondent firm and
passed the order dated 5th
March, 1997. In case
No. 442/95 he assessed value of the property as Rs. 5,60,000/- and deficient
stamp duty was raised to the extent of Rs. 41,900/- and deficient registration
fees as Rs 1500/- and he also levied the penalty of Rs. 1000/-. Thus, the total
amount against the respondent firm raised was Rs. 44,400/-. In the second case
No. 443/95 he assessed value of the property as Rs. 3,87,580/- and deficient
stamp duty to the extent of Rs. 33,758/- and deficient registration fees as Rs.
1500/- and the penalty of Rs. 1000/-. Thus the total amount directed to be
recovered from the respondent firm was Rs. 36,258/-. The respondent firm filed
writ petition challenging both these orders and the contention of the
respondent firm was that the valuation of the property should be taken when the
agreement of sale deed was executed, and not at the time of the registration of
the sale deed.
learned Single Judge relying on the judgment in the case of Sub Registrat, Kodad
Town and Mandal v. Amaranaini China Venkat Rao and Others reported in AIR 1998
Andhra Pradesh 252 allowed the writ petition and observed that since the vendor
backed out and did not execute the sale deed of the property in pursuance of
the agreement on 20th October, 1983 therefore, the respondent firm filed a suit
for specific performance of contract in 1986 and the suit was decreed. The
respondent firm was ready and willing to pay the amount, and therefore, it was
not his fault. The same was the position regarding the second suit which was
filed in 1991. The learned Judge after considering the matter directed to set
aside both the orders and held that for the purpose of charging stamp duty,
etc, the relevant date for assessment of the market value shall be the date on
which the suit for specific performance of the agreement to sale was filed.
Consequently the order dated 4th March, 1997 (Annexure 5 & 6) was quashed
and the authorities were directed to pass a fresh order regarding the market
value of the property in question for the purpose of levy of the stamp duty as
on the date of filing of the suit and also directed to undertake this exercise
keeping in view the observation of the judgment within a period of one month
from the date of receipt of the certified copy of the order after notice to
Aggrieved against this order, an appeal was preferred before the Division Bench
of the Rajasthan High Court at Jaipur Bench and the Division Bench affirmed the
order of the learned single Judge.
against the order of the Division Bench, the present appeal was preferred by
the State of Rajasthan & Ors., appellants herein.
have heard learned counsel for the parties and perused the records.
question is whether the valuation should be assessed on the market rate
prevailing at the time of registration of the sale deed or when the parties
entered into agreement to sell.
counsel for the State has submitted that the Stamp Act is a taxing statute and
a taxing statute has to be construed strictly.
may have been the consideration for the vendor not to get the sale deed
executed is a matter between both the parties, but when the matter is before
the registering Authority the registering Authority has to see the valuation of
the property at the market rate at the time of the registration as per Section
17 of the Act.
a notice under Section 47A of the (Rajasthan Amendment) Stamp Duty Act was
given and proper valuation was determined for registration. As against this,
the learned counsel for the respondent submitted that Section 3 of the Act is a
charging section. The registering authority has to see the instrument and the
consideration mentioned therein for payment of duty as per Section 27 of the
Act. If he finds it undervalued then he can hold an inquiry with regard to
market value which was prevailing at the time of agreement to sell.
order to appreciate the controversy involved in the matter, it is necessary to
reproduce the relevant provisions of the Stamp Act which are as under:
2(12) of the Act reads as under:
"Executed", and "execution", used with reference to
instruments, mean "signed" and "signature"."
3 of the Act reads as under:
Instruments chargeable with duty - Subject to the provisions of this Act and
the exemptions contained in Schedule I, the following instruments shall be
chargeable with duty of the amount indicated in that Schedule as the proper
duty therefore, respectively, that is to say
instrument mentioned in that Schedule which, not having been previously
executed by any person, is executed in (India) on or after the first day of July, 1899;
every bill of exchange payable otherwise than on demand or promissory note
drawn or made out of India on or after that day and accepted or paid, or
presented for acceptance or payment, or endorsed, transferred or otherwise
negotiated, in India; and
every instrument (other than a bill exchange or promissory note) mentioned in
that Schedule, which, not having been previously executed by any person, is
executed out of India on or after that day relates to any property situate, or
to any matter or thing done or to be done, in India and is received in India:
that no duty shall be chargeable in respect of-
instrument executed by, or on behalf of, or in favour of, the Government in
cases where, but for this exemption, the Government would be liable to pay the
duty chargeable in respect of such instrument;
any instrument for the sale, transfer or other disposition, either absolutely
or by way of mortgage or otherwise, of any ship or vessel, or any part,
interest, share or property of or in any ship or vessel, registered under the
Merchant Shipping Act, 1894, or under Act 19 of 1938, or the Indian
Registration of Ships Act, 1841 (10 of 1841) as amended by subsequent Acts.
Any instrument executed, by or on behalf of, or in favour of the Developer, or
Unit or in connection with the carrying out of purposes of the Special Economic
17 of the Act reads as under:
Instruments executed in India All instrument chargeable with
duty and executed by any person in India shall be stamped before or at the time of execution."
27 of the Act reads as under:
affecting duty to be set forth in instrument.- The consideration (if any) and
all other facts and circumstances affecting the chargeability of any instrument
with duty, or the amount of the duty with which it is chargeable, shall be
fully and truly set forth therein."
47-A inserted by Rajasthan(Amendment) State Stamp Act reads as under:
Instruments under-valued, how to be valued
Notwithstanding anything contained in the Registration Act, 1908 (Central Act
XVI of 1908) and the rules made thereunder as in force in Rajasthan where in
the case of any instrument relating to an immovable property chargeable with an
ad valorem duty on the market value of the property as set forth in the
instrument, the registering officer has, while registering the instruments,
reason to believe that the market value of the property has not been truly set
forth in the instrument, he may either before or after registering the
instrument, send it in original to the Collector for determination of the
market-value and to assess and charge the duty in conformity with such
determination together with a penalty not exceeding ten-times the deficient stamp
duty chargeable and surcharge, if any, payable on such instrument.
receipt of the instrument under sub- section(1), the Collector shall, after
giving the parties a reasonable opportunity of being heard and after holding an
enquiry in the prescribed manner determine the market-value and the duty
including penalty and surcharge, if any, payable thereon; and if the amount of
duty including penalty and surcharge, if any, already paid, is deficient, the
deficient amount shall be payable by the person liable to pay the duty
including penalty and surcharge, if any.
Where it appears to a person having by law or consent of parties authority to
receive evidence or a person in charge of a public office, during the course of
inspection or otherwise, except an officer of a police, that an instrument is
undervalued, such person shall forthwith make a reference to the Collector in
Collector may, suo motu, or on a reference made under sub-section (2-A) call
for and examine any instrument not referred to him under sub- section (1), from
any person referred to in sub- section (2-A) or the executant or any other
person for the purpose of satisfying himself as to the correctness of the
market-value of such property has not been truly set forth in the instrument,
he may determine in accordance with the procedure provided in sub-section(2),
the market-value and the amount of stamp duty together with a penalty not
exceeding ten times the deficient stamp duty chargeable on it, which shall be payable
by the person liable to pay the stamp duty and penalty.
for any reason the original document called for by the Collector under
sub-section(3) is not produced or cannot be produced, the Collector may after
recording the reasons for its non-production call for a certified copy of the
entries of the document from the registering officer concerned and exercise the
powers conferred on him under sub-section (3).
the purpose of enquiries under this section, the Collector shall have power to summon
and enforce the attendance of witnesses including the parties to the instrument
or any of them, and to complete the production of documents by the same means,
and so far as may be in the same manner, as is provided in the case of Civil
Court under Code of Civil Procedure, 1908 (Central Act V of 1908)"
contention of the learned counsel for the State that as per Section 17 of the
Act, the market value has to be taken into consideration because Section 17
stipulates that all the instruments chargeable with duty and executed by person
of India shall be stamped before or "at
the time of execution". The word "execution" has been defined in
Section 2(12) of the Act which says that "Execution" used with
reference to the instruments, mean "signed" and "signature".
Therefore, it shows that the document which is sought to be registered has to
be signed by both the parties. Till that time the document does not become an
instrument for registration. A reading of Section 2(12) with Section 17 clearly
contemplates that the document should be complete in all respects when both the
parties should have signed it with regard to the transfer of the immovable
property. It is irrelevant whether the matter had gone in for litigation.
may be mentioned that there is a difference between an agreement to sell and a
sale. Stamp duty on a sale has to be assessed on the market value of the
property at the time of the sale, and not at the time of the prior agreement to
sell, nor at the time of filing of the suit. This is evident from section 17 of
the Act. It is true that as per Section 3, the instrument is to be registered
on the basis of the valuation disclosed therein. But Section 47-A of the
Rajasthan(Amendment) Stamp Duty Act contemplates that in case it is found that
properties are under valued then it is open for the Collector (Stamps) to
assess the correct market value. Therefore, in the present case when the
registering authority found that valuation of the property was not correct as
mentioned in the instrument, it sent the document to the Collector for
ascertaining the correct market value of the property. The expression
"execution" read with Section 17 leaves no manner of doubt that the
current valuation is to be seen when the instrument is sought to be registered.
The Stamp Act is in the nature of a taxing statute, and a taxing statute is not
dependant on any contingency. Since the word "execution" read with
Section 17 clearly says that the instrument has to be seen at the time when it
is sought to be registered and in that if it is found that the instrument has
been undervalued then it is open for the registering authority to enquire into
its correct market value. The learned single Judge as well as the Division
Bench in the present case had taken into consideration that the agreement to
sell was entered into but it was not executed.
the incumbent had to file a suit for seeking a decree for execution of the
agreement and that took a long time. Therefore, the Courts below concluded that
the valuation which was in the instrument should be taken into account. In our
opinion this is not a correct approach. Even the valuation at the time of the
decree is also not relevant. What is relevant in fact is the actual valuation
of the property at the time of the sale. The crucial expression used in Section
17 is "at the time of execution". Therefore, the market value of the
instrument has to be seen at the time of the execution of the sale deed, and
not at the time when agreement to sale was entered into. An agreement to sell
is not a sale. An agreement to sell becomes a sale after both the parties
signed the sale deed. A taxing statute is not contingent on the inconvenience
of the parties. It is needless to emphasize that a taxing statute has to be
construed strictly and considerations of hardship or equity have no role to
play in its construction. VISCOUNT SIMON quoted with approval a passage from
ROWLATT, J. expressing the principle in the following words " In a taxing
Act one has to look merely at what is clearly said. There is no room for any
intendment. There is no equity about a tax.
is no presumption as to tax. Nothing is to be read in, nothing is to be
implied. One can only look fairly at the language used."
The same view was expressed by Hon'ble Bhagwati J. in the case of A.V.
Fernandez v. State of Kerala reported in AIR 1957 SC 657. The principle is as
construing fiscal statutes and in determining the liability of a subject to tax
one must have regard to the strict letter of the law. If the revenue satisfies
the court that the case falls strictly within the provisions of the law, the
subject can be taxed. If on the other hand, the case is not covered within the
four corners of the provisions of the taxing statute, no tax can be imposed by
inference or by analogy or by trying to probe into the intention of the
Legislature and by considering what was the substance of the matter."
Shah J has formulated the principle thus:
interpreting a taxing statute, equitable considerations are entirely out of
place. Nor can taxing statutes be interpreted on any presumptions or
assumptions. The court must look squarely at the words of the statute and
interpret them. It must interpret a taxing statute in the light of what is
clearly expressed; it cannot imply anything which is not expressed; it cannot
import provisions in the statute so as to supply any assumed deficiency."
a taxing statute has to be read as it is. In other words, the literal rule of
interpretation applies to it.
this back-ground, if we construe Section 17 read with Section 2(12) then there
is no manner of doubt that at the time of registration, the Registering
Authority is under an obligation to ascertain the correct market value at that
time, and should not go by the value mentioned in the instrument.
Learned counsel for the respondent submitted that if we construe Section 3 read
with Section 27 of the Act then the Registering Authority is under an
obligation to only see the value mentioned in the instrument. In our opinion
Section 3 which is the charging section cannot be read in isolation but has to
be read along with Section 17 of the Act. From a composite reading of Sections
3,17 and 27, it becomes abundantly clear that the valuation given in an
instrument is not conclusive. If any doubt arises in the mind of the
Registering Authority that the instrument is under- valued then as per Section
47-A of the Rajasthan (Amendment) the instrument can be sent to the Collector
for determination of the correct market value. Under Section 47-A read with
Sections 3,17 and 27, it becomes clear that the Registering Authority has to
ascertain the correct valuation given in the instrument regarding market value
of the property at the time of the sale.
Learned Counsel for the respondent strenuously urged before us that in fact
when the agreement to sell was not executed by the vendor, the respondent had
no option but to file a suit and a long time was taken for obtaining a decree
for execution of the agreement. He was not at fault and as such the valuation
given in the instrument should be taken into consideration because during the
litigation the valuation of the property has shot up. In this connection,
learned counsel has invited our attention to the principle "Actus curie neminem
gravabit" meaning thereby that no person shall suffer on account of
litigation. Hence learned counsel submitted that since the matter had been in
the litigation for a long time, the respondent cannot be made to suffer. He
invited our attention to the decision of the Andhra Pradesh High Court Sub-
Registrar, Kodad Town and Mandal (supra). It is true that no one should suffer
on account of the pendency of the matter but this consideration does not affect
the Principles of interpretation of a taxing statute. A taxing statute has to
be construed as it is all these contingencies that the matter was under
litigation and the value of the propeprty by that time shot up cannot be taken
into account for interpreting the provisions of a taxing statute. As already
mentioned above a taxing statute has to be construed strictly and if it is
construed strictly then the plea that the incumbent took a long time to get a
decree for execution against the vendor that consideration cannot weigh with
the Court for interpreting the provisions of the taxing statutes. Therefore,
simply because the matter have been in the litigation for a long time that
cannot be a consideration to accept the market value of the instrument when the
agreement to sale was entered. As per Section 17, it clearly says at the time
when registration is made, the valuation is to be seen on that basis.
the case of Sub-Registrar, Kodad Town and Mandal (Supra), the learned single
Judge of the Andhra Pradesh High Court felt persuaded on account of 30 years'
long litigation and therefore, declined to send the papers back to the
Collector for valuation at the market value. With great respect, the view taken
by the learned single Judge is against the principles of interpretation of a taxing
statute. Therefore, we are of the opinion that the view taken by the learned
single Judge of the Andhra Pradesh High Court is not correct.
Accordingly, we are of the opinion that the view taken by the learned single
Judge as well as by the Division Bench cannot be sustained and the same is set
aside. The Collector shall determine was the valuation of the instrument on the
basis of the market value of the property at the date when the document was
tendered by the respondent for registration, and the respondent shall pay the
stamp duty charges and surcharge, if any, as assessed by the Collector as per
the provisions of the Act. The appeal of the State is allowed. No order as to
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