Report No. 67
21.21. Recommendation to amend section 59(2).-
Although it can be stated that the reference to the High Court implies that the matter is at large, it is desirable to amplify section 59(2) to make the language appropriate for a situation where the principal case has been already disposed of by the lower authority. The direction in sub-section (2) to the effect that the Revenue Authority should "dispose of a case conformably to the judgment of the High Court", becomes inappropriate when no case is pending before the Revenue Authority, and the case referred by the Board relates to one already disposed of by a lower authority.
The procedure for a reference to the High Court by the Chief Controlling Revenue Authority applies equally when a case is not pending, as where it is pending1 Hence, it is desirable that section 59, sub-section (2), should be amended by using language more fitted to the case. Unless the revenue authority has still resting upon it the duty of disposing of a case, the present words are not appropriate. They are more appropriate to an actual and concrete case pending before the revenue authority. We therefore recommend that these words should be replaced by the words "shall pass such orders as are necessary for disposal of the case conformably to the judgment". In this connection, we may cite the precedent contained in the Income-tax Act,2 quoted below:
"260. (1) The High Court or the Supreme Court upon hearing any such case shall decide the questions of law raised therein, and shall deliver its judgment thereon containing the grounds on which such decision is founded, and a copy of the judgment shall be sent under the seal of the Court and the signature of the Registrar to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgment.
(2) The costs of any reference to the High Court or the Supreme Court which shall not include the fee for making the reference shall be in the discretion of the Court".
1. Section 57.
2. Section 260, Income-Tax Act, 1961.
21.22. Section 60-Introductory.-
This takes us to section 60. In the case of courts other than those mentioned in section 57, if the Court feels a doubt as to amount of duty to be paid in respect of any instrument under proviso (a) to section 35, the Judge is, by section 60, empowered to draw up a statement of the case and refer it, with his own opinion, for the decision of the High Court to which, if he were the Chief Controlling Revenue Authority, he would refer the same under section 57. This is the main proposition enacted in sub-section (1) of section 60, while sub-sections (2) and (3) deal with matters of detail.
21.22A. Points for interpretation.-
There seems to be a certain amount of obscurity as to the precise stage at which such reference could be made. Some of the points in this connection have come up for decision before the High Courts and, on those points, the relevant judicial decisions furnish some guidance. But it must be stated that the position on those points is not very apparent from the language of the section; and in order to make the section self-contained, it is desirable to insert necessary clarification on the various points, which are enumerated below.
21.23. Reference not competent after impounding a document.-
In the first place, the Judge desiring to make the reference must entertain a doubt as to the amount of duty to be paid before making the reference. It follows that he cannot do so where he already considers the document not fully stamped and impounds it. In such a case, he has to send the instrument1 under section 38 to the Collector, and it is for the Collector2 to certify that the document is duly stamped, if the Collector takes that view. Therefore, it is not competent for the Judge who impounds a document to resort to the procedure for reference under section 60. This should be made clear.
1. Section 38.
2. Section 40.
21.24. Reference under section 60 not competent at appeal stage.-
In the second place, the Appellate Court cannot resort to section 60. The Appellate Court is bound by section 36, and, therefore, cannot proceed to make a reference1 under section 60. It can, however, proceed under sub-section (2) of section 61.
1. (a) Reference, 1888 ILR 11 Mad 38.
(b) Somayya v. Anjaneyulu, AIR 1935 Mad 382.
21.25. Reference not competent after penalty.-
Thirdly, after the levy of penalty, a reference will not be competent under this section even at the instance of the trial Judge. The case is different where the Judge had already determined, to make the reference before the levy of the penalty, though the actual reference was framed after such levy.1
1. B. Majumdar v. M. Sarkar, AIR 1922 Cal 452 (453).
21.26. Recommendation.- In the result, the section should be amended on the three points mentioned above.1
1. Paras. 21.23 to 21.25, supra.
21.27. Recommendation.- We, therefore, recommend that the following sub-sections should be added in section 60.
"(4) No court shall take action under this section where the case is one to which section 36 applies; but nothing in this sub-section shall affect the provisions of section 61.
(5) No action shall be taken under this section where the instrument has already been impounded or a penalty levied in respect thereof under proviso (a), to section 35".
We may add that most replies to our questionnaire1 are in favour of such an amendment.
1. Question 64.
21.28. Section 61.-
The provisions so far discussed related to references under the Act. Powers of appellate courts are dealt with in section 61(1). It is concerned with two situations-(a) where, in the court of first instance, an order admitting an instrument in evidence is passed because the instrument is regarded as duly stamped or as not requiring a stamp„and (b) where such order is passed because there has been payment of duty and penalty under section 35.
Section 61(2), which is concerned with the powers of the Appellate Court (or Court of Reference), is also intended to deal with both these situations, namely, (a) where the Appellate Court is of opinion that such instrument should not have been admitted in evidence without the payment of duty and penalty under section 35, and (b) where the Appellate Court is of opinion that the instrument should not have been admitted without the payment of a higher duty and penalty than the duty and penalty paid in the court of first instance.
21.29. Thus, both sub-section (1) and sub-section (2) of section 61 can be divided into two parts, dealing respectively with the two situations mentioned above. In the present structure of the two sub-sections, this aspect is not brought out clearly. We are of the opinion that it would be useful if both the sub-sections are split up into clauses, so as to indicate that each part applies to one or other (but not both) of the two situations. Such re-structuring has been favoured by most replies to our QuestiOnnaire also.1
1. Question 65.
We, therefore, recommend that section 61(1) should be revised as follows:
"61(1). When any court in the exercise of its civil or revenue jurisdiction or any Criminal Court in any proceeding under Chapter IV or sections 145 to 148 of the Code of Criminal Procedure, 1973, makes any order admitting any instrument in evidence-
(a) as duly stamped or as not requiring a stamp, or
(b) upon payment of duty and a penalty under section 35, the Court to which appeals lie from, or references are made by, such first-mentioned Court may, of its own motion or on the application of the Collector, take such order into consideration for the purpose specified in sub-section (2)."
(A similar amendment to be made in sub-section (2) will be indicated at the appropriate place).