Punjab-Haryana High Court
Satpal And Others vs State Of Punjab And Others on 31 May, 2022
CWP-27366-2019 -1-
205
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-27366-2019
Decided on: 31.05.2022
SATPAL AND OTHERS
Petitioners
VERSUS
STATE OF PUNJAB AND OTHERS
Respondents
CORAM: HON'BLE MS. JUSTICE JAISHREE THAKUR
Present: Mr. Ravish Bansal, Advocate
for the petitioners.
Mr. Pawan Sharda, Sr. DAG, Punjab.
JAISHREE THAKUR J.
1. The instant petition has been filed seeking to challenge the order dated
28.10.2016 (Annexure P-3) passed by the Additional Deputy Commissioner-cum-
Collector, Mansa (hereinafter referred to as the Collector) whereby the petitioners
have been directed to pay an additional amount of Rs.4,35,000/- along with interest
@12% from the date of registration of the sale deed till the deposit of the amount
towards deficient stamp duty and registration fee pertaining to sale deed registered
on 17.05.2013, besides order dated 17.07.2019 (Annexure P-5) passed by the
Commissioner, Faridkot Division, Faridkot, affirming the order of the Collector, in
appeal.
2. In brief, the facts are that the petitioners purchased land measuring 1
kanal 10 marlas for a total sale consideration of Rs.6,00,000/- vide registered sale
deed No.415 dated 17.05.2013. A sum of Rs.60,000/- was paid towards stamp
duty, registration fee etc. The sale deed was registered by the Sub-Registrar,
1 of 8
Sardoolgarh and at that time, the sale deed was not impounded on account of
inadequate stamp duty. The sale deed was returned to the petitioners after
registration. The office of the Deputy Controller (Finance and Accounts), Internal
Audit Institute (Revenue), Bathinda sent an audit memo to Tehsildar-cum-Sub
Registrar, Sardoolgarh pointing out that there was a loss of Rs.4,35,000/- towards
deficiency of stamp duty and registration fee on the sale deed in question. On the
basis of the audit report, the Sub Registrar-cum-Tehsildar made a reference vide
letter No.25/R.K dated 03.05.2016 to the Collector intimating him that an amount
of Rs.4,35,000/- is to be recovered as deficient stamp duty. Thereafter, the
Additional Deputy Commissioner, while exercising the power of Collector under
Section 47-A of the Indian Stamp Act, issued a notice dated 23.05.2016 to the
petitioners regarding the deficient stamp duty detected during audit.
3. In the proceedings under Section 47-A of the Indian Stamp Act, a
reply was filed, taking a plea that the stamp duty had correctly been affixed,
however, the Collector by impugned order dated 28.10.2016 agreed with the
objection raised by the audit party and directed that deficiency of
stamp/registration fee be recovered from the vendee along with interest @12% per
annum. The appeal filed against the said order was also dismissed, which has led to
the filing of the instant writ petition.
4. Learned counsel appearing on behalf of the petitioners herein would
contend that the impugned orders are unsustainable, as the Sub-Registrar while
registering the instrument did not impound the sale deed nor was any reference
made to the Collector at his own instance. The sale deed was handed over to the
petitioners after registration of the same. It is also argued that there are judgments
2 of 8
to the effect that the reference can be made by the Sub-Registrar to the Collector
immediately after registration of an instrument or in the course of registration. It is
submitted that in the judgment rendered in Abhinav Kumar Vs. State of Haryana
2001 (1) RCR (Civil) 91, a reference had been made by the Sub Registrar to the
Collector after a period of 8 days and it was held to be not in accordance with law.
It is also argued that in the case of Iqbal Singh and others Vs. State of Haryana
and others 2011 (3) RCR (Civil) 365, it has been held that an audit party is not
authorized under any provisions of the Indian Stamp Act to assess and determine
the nature of any document or the stamp duty payable thereon.
5. Per contra, learned counsel appearing on behalf of the respondent-
State would submit that on the basis of audit report, it had been found that there
was deficient stamp duty affixed on the sale deed that was executed on 17.05.2013
and pursuant to that, notice was issued to the petitioners herein to pay the
additional amount of Rs.4,35,000/- towards deficient stamp duty and registration
charges.
6. I have heard learned counsel for the parties and have perused the
pleadings of the case as well as the case laws cited. The facts are not in dispute.
The sale deed came to be registered on 17.05.2013 by the Sub-Registrar but at that
point of time, he did not impound the sale deed nor did he send a reference to the
Collector as envisaged under Section 47-A (1) of the Indian Stamp Act, as
applicable to the State of Punjab. Section 47-A of the Indian Stamp Act is
reproduced as under:-
"47-A. Instruments under-valued how to be dealt with. - (1) If the
Registering Officer appointed under the Registration Act, 1908, while
registering. instrument transferring any property has reason to
believe that the value of property or the consideration, as the case
3 of 8
may be, has not been truly set forth in the instrument, he may, after
registering such instrument, refer the same to Collector for
determination of the value or consideration, as the case may be; the
proper duty payable thereon.
(2) On receipt of 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 consideration and the duty
as aforesaid and the deficient amount of duty, if any shall be payable
by the person liable to pay the duty.
(3) The Collector may, suo moto, or on the receipt of a reference from
the Inspector General of Registration or Registrar of a District
appointed under Registration Act, 1908 (Central Act No. 16 of 1908),
in whose jurisdiction property or any portion thereof which is the
subject matter of the instrument is situated or on the receipt of a
report of audit by the Comptroller and Auditor General of India or by
any other authority authorised by the State Government in this behalf
or otherwise within a period of three years from the date of the
registration of an instrument, call for and examine any instrument for
the purposes of satisfying himself as to the correctness of the value of
the property or of the consideration disclosed and of all other facts
and circumstances affecting the chargeability of the instrument or as
to the true character and description thereof and the amount of the
duty with which it was chargeable and if after such examination, he
has reason to believe that proper duty has not been paid, he may,
after giving the person concerned reasonable opportunity of being
heard and after holding an enquiry in the manner provided under
sub- section (2), determine the value of the property or the
consideration or the character or description of instrument and the
duty with which it was chargeable and the deficient amount of duty,
would be payable by the person liable to pay the duty.
(4) Any person aggrieved by an order of the Collector under sub
section (2) or sub-section (3) may, within thirty days from the date of
that order, prefer an appeal before the Commissioner and all such
appeals shall be heard and disposed of in such manner as may ·be
prescribed by rules made under this Act.
Explanation. - For the purpose of this section, value of any property
shall be estimated to be the price which in the opinion of the
Collector or the appellate authority, as the case may be, such
property would have fetched if sold in the open market on the date of
execution of the instrument relating to the transfer of such property."
7. As per Section 47-A, if the Registering Officer as appointed under the
Registration Act, 1908, while registering any instrument relating to the transfer of
any property, has reason to believe that the property has been under-valued, he
4 of 8
may after registration, refer the same to the Collector for determination of value of
the property or the consideration, as the case may be, and the proper duty payable
thereon. On receipt of the reference, the Collector shall give reasonable
opportunity to the parties to be heard and after holding an enquiry in such manner
as may be prescribed, determine the value and if amount of duty is found to be
deficient, it shall be payable. As per Section 47-A (3), the Collector may suo motu
or on receipt of the reference from the Inspector General of Registration or
Registrar of a District, in whose jurisdiction the property or any portion thereof,
which is subject matter of the instrument, is situated or on the receipt of a report of
audit by the Comptroller and Auditor General of India or by any other authority
authorized by the State Government in this behalf or otherwise, within a period of
three years from the date of the registration of any instrument, call for and
examine any instrument and satisfy himself whether or not, instrument had been
valued correctly. If the Collector has reason to believe that proper duty had not
been paid, he may give the person concerned reasonable opportunity of being
heard and hold an enquiry as provided under sub-section (2) and if it is found that
the instrument has not been properly valued, such person shall be liable to pay the
duty.
8. A reading of sub-section (1) of the aforesaid Section enjoins a
responsibility on the Registering Officer to refer to the Collector any such
instrument for determination of the value of the property in case he believes, while
registration of the instrument that the correct valuation of the property has not been
truly set forth. On receipt of the reference under sub-section (1), the procedure is
prescribed under sub-section (2) of Section 47-A whereas the Collector may suo
motu or on receipt of reference from the Inspector General of Registration or
5 of 8
Registrar of a District or on the receipt of a report of audit by the Comptroller and
Auditor General of India or by any other authority authorized by the State
Government in this behalf or otherwise, within a period of three years from the
date of the registration of the instrument, call for and examine said instrument for
the purposes of satisfying himself as to the correctness of the value of the property.
9. In the instant case, it is on the objection raised by an audit party that
the reference was made by the Sub Registrar to the Collector regarding deficiency
in stamp duty on the sale deed executed on 17.05.2013. In a catena of judgments it
has been held that the Sub-Registrar would become functus officio after registration
of the sale deed and in case he is to make reference, it has to be done immediately
after registration of the instrument, as has been held in the case of Abhinav
Kumar's case (supra). It would be pertinent to add here that in case of Abhinav
Kumar, reference had been made by the Sub-Registrar to the Collector within a
period of 8 days, which was held to be invalid. Therefore, by relying upon the said
judgment, this Court can hold that there was a delay in sending the reference to the
Collector. However, this Court is also aware of a judgment rendered by a
Coordinate Bench rendered in Seema Vs. State of Haryana and others in CWP
No.27881 of 2017 decided on 10.12.2019, where the question posed was if the
Sub-Registrar maintains silence by inaction on the date of registration and accepts
the stamp duty and after the registration of sale deed still does not make any
reference, would the Collector have the power to initiate suo motu action and
determine the proper stamp duty by calling for and examining the record and upon
hearing the vendee and the likely to be affected parties, pass an order. The
Coordinate Bench came to hold that the act of the Sub-Registrar in registering a
sale deed is an administrative act and not judicial or quasi- judicial. His quasi-
6 of 8
judicial jurisdiction starts with notice of under-valuation by party avoiding
payment of proper stamp duty. In Seema's case (supra), the sale deed was
registered on 19.07.2012 and the Sub Registrar made reference to the Revenue
Officer-cum-Collector, Karnal on 21.09.2012 i.e. within a period of less than three
months. But in the instant case, reference was made by the Sub-Registrar to the
Collector on receipt of the audit report on 03.05.2016. Pursuant to the said
reference, the petitioners herein vide notice dated 23.05.2016 were called upon to
appear in proceedings before the Additional Deputy Commissioner-cum-Collector,
Mansa, which notice was well beyond the period of three years. Even if the
argument of the respondent-State is taken into consideration, that the registering
authority does not become functus officio as has been held in Seema's case, this
Court cannot lose sight of the fact that the Collector took cognizance of reference
received well beyond the period of three years. Even if Section 47-A (3) of the
Indian Stamp Act permits Collector to issue notice suo motu, it has to be done
within a period of three years from the date of registration of the instrument. It is
settled law that communication of the order alone confers on a paper the status of
an order as has been postulated by Article 166 of the Constitution (see Vikas Vs.
State of Haryana and others, 2008(2) RCR (Civil) 526). The Division Bench in
Vikas's case (supra) has held as under:-
"The only argument raised by the respondents is that an audit
objection was raised vide Audit Note dated 12.6.2002 and on the
basis of the audit objection it was sought to be contended that within
the period of three years objections have been taken (R-1). Therefore,
the period of three years would not come in the way of the
respondents as audit objection was raised on 12.6.2002. We find that
the argument is totally absurd because there was no communication
of the audit objection to the petitioner so as to constitute a basis for
argument that the action was taken within period of three years. The
real action was initiated only on the issuance of show cause notice,
which admittedly was issued on 7.12.2005. It is well settled that the
7 of 8
communication of the order alone confer on a paper the status of an
order as has been postulated by Article 166 of the Constitution. The
aforementioned provision was interpreted by a Constitution Bench of
Hon'ble the Supreme Court in the case of Bachhitar Singh v. State of
Punjab, AIR 1963 Supreme Court 395. In that case the Constitution
Bench had held that till an order is communicated it would not
assume the character of executive action. A similar view has been
taken by Hon'ble the Supreme Court in the case of Laxminarayan R.
Bhattad v. State of Maharashtra, (2003) 5 SCC 413. Therefore, we
have no hesitation to reject the argument."
10. The argument raised by the petitioners while relying upon the
judgment rendered in Iqbal Singh's case that the audit party is not authorized to
assess and determine the nature of any document or the stamp duty payable thereon
has no force, as in that case the document executed in respect of the property was
the relinquishment deed on which stamp duty was not payable and not the sale
deed as in the instant case. Therefore, the ratio decidendi culled out in Iqbal Singh
is not applicable to the present case.
11. Therefore, in view of the finding rendered above, the impugned orders
dated 28.10.2016 (Annexure P-3) passed by the Additional Deputy Commissioner-
cum-Collector, Mansa and dated 17.07.2019 (Annexure P-5) passed by the
Commissioner, Faridkot Division, Faridkot are quashed and the instant writ
petition stands allowed.
(JAISHREE THAKUR)
JUDGE
31.05.2022
Chetan Thakur
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
8 of 8
