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CASE NO.: Appeal (civil)  8167 of 2003

PETITIONER: Raymond Ltd. & Anr

RESPONDENT: State of Chhattisgarh & Ors

DATE OF JUDGMENT: 20/02/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T  

S.B. SINHA,  J :

       Interpretation and application of Sections 31, 32 and 56 of the Indian  Stamp Act, 1899 (for short "the Act"), as amended by the State of Madhya  Pradesh, and are applicable in the State of Chhattsigarh is in question in this  appeal which arises out of a judgment and order dated 10.09.2003 passed by  a learned Single Judge of the Chhatisgarh High Court in Writ Petition No.  2451 of 2003.

       Appellant No. 1 herein is a public limited company incorporated  under the Companies Act, 1956.  It had its cement division in the State of  Madhya Pradesh in the year 1982.  It intended to sell the same in favour of  one Lafarge India Ltd. on "slump-sale" basis.  The State of Chhatisgarh was  carved out of the State of Madhya Pradesh in November, 2000.  With a view  to pre-assess the stamp duty payable on the instrument of sale and the impact  thereof, an application was filed by the appellants for adjudication of the  Collector in terms of Section 31 of the Act which occurs in Chapter III  thereof.  A report of a chartered designated valuer was enclosed with the  said application.   

       The Collector of Janjgir District, on receipt of the said application,  formed a Valuation Committee comprising of Sub-Divisional Officer  (Revenue) as Chairman, Sub-Divisional Officer (Building & Roads) PWD,  Sub-Divisional Officer (Forest) Champa, Assistant Mining Officer, Janjgir \026  Champa and District Registrar, Janjgir \026 Champa as members to inspect the  properties and submit an independent report in regard to the valuation of the  properties sought to be transferred.  The Valuation Committee assessed the  same at Rs. 42,18,31,288/-.  Pursuant to or in furtherance of the said report,  the stamp duty chargeable on the instrument under Section 31 of the Act was  assessed by the Collector at Rs. 3,74,90,300/- and registration charges of Rs.  33,75,601/-.  The said order was accepted by the appellants and the amount  of stamp duty and the registration charges was deposited.  An endorsement  on the deed of conveyance was made  by Respondent No. 2 on 16.01.2001  by way of a certificate in terms of Section 32 of the Act whereupon the  instrument was duly stamped.   

       A deed of conveyance was executed by Appellant No. 1 in favour of  the said Lafarge India Ltd. on 19.01.2001 which was registered on  21.01.2001.   

       The State appears to have filed a revision application before the Board  of Revenue seeking revision of the order dated 16.01.2001 passed by  Respondent No. 2.

       On or about 26.12.2001, however, the Board of Revenue served a  notice upon the appellants.  Appellant No. 1 filed its objections in regard to

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the jurisdiction of the Board of Revenue to entertain the revisional  application filed by the State.  Questioning the jurisdiction of the Board of  Revenue to issue the aforementioned notice, a writ petition was filed by the  appellant, which by reason of the impugned judgment has been dismissed.

       Contentions of the appellants before us are:

(i)     There exists a clear distinction between Sections 31 and 32 of the  Act.  Whereas a revision application shall be maintainable as  against an order under Section 31 of the Act, viz., at a stage where  the parties were yet to ascertain the impact of the duty whereafter  only the stamp duty which would be payable is to be determined,  the stage under Section 32 of the Act is reached, where the parties  accept the adjudication, pay the money and the document is  certified with an endorsement that the full duty has been paid in  terms whereof a legal fiction is created under Sub-section (3) of  Section 32 of the Act. (ii)    The legal fiction created under Sub-section (3) of Section 32 of the  Act must be given its full effect. (iii)   Section 56(4) of the Act would not apply to Section 32 thereof.  If  Section 56(4) of the Act, which is a residuary clause, is otherwise  construed, Section 32(3) of the Act would be rendered  meaningless. (iv)    If the intention of the legislature was to confer a power of revision  against a decision of a Collector despite an endorsement made in  this behalf in terms of Section 32 of the Act, the same could have  been made subject to Section 56 as was done by the State of  Maharashtra while amending Bombay Stamp Act by inserting  Section 53A therein.   (v)     The High Court misdirected itself in referring to the statements of  Objects and Reasons which cannot be resorted to to interpret the  plain meaning of a statute.

       Mr. Ravi Shankar Prasad, learned senior counsel appearing on behalf  of the respondents, would, on the other hand, support the judgment  contending that Section 56 of the Act covers all situations and it is in fact a  stand alone clause.

       Before embarking on the rival contentions of the parties, we may  notice the relevant provisions of the Act.

       Sections 31 and 32 of the Act read as under:

"31. Adjudication as to proper stamp.\027 (1) When  any instrument, whether executed or not and  whether previously stamped or not, 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, and pays a fee of  such amount (not exceeding five rupees and not  less than fifty naye paise) as the Collector may in  each case direct, the Collector shall determine the  duty (if any) with which, in his judgment, the  instrument is chargeable.   (2) For this purpose the Collector may require to  be furnished with an abstract of the instrument,  and also with such affidavit or other evidence as he  may deem necessary to prove that all the facts and  circumstances affecting the chargeability of the  instrument with duty, or the amount of the duty  with which it is chargeable, are fully and truly set  forth therein, and may refuse to proceed upon any  such application until such abstract and evidence  have been furnished accordingly:

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 32. Certificate by Collector.\027 (1) When an  instrument brought to the Collector under section  31, is, in his opinion, one of a description  chargeable with duty, and\027   (a)     the Collector determines that it is already  fully stamped, or   (b)     the duty determined by the Collector under  section 31, or such a sum as, with the duty already  paid in respect of the instrument, is equal to the  duty so determined, has been paid,   the Collector shall certify by endorsement on such  instrument that the full duty (stating the amount)  with which it is chargeable has been paid.   (2) When such instrument is, in his opinion, not  chargeable with duty, the Collector shall certify in  manner aforesaid that such instrument is not so  chargeable.   (3) Any instrument upon which an endorsement  has been made under this section, shall be deemed  to be duly stamped or not chargeable with duty as  the case may be; and, if chargeable with duty, shall  be receivable in evidence or otherwise, and may be  acted upon and registered as if it had been  originally duly stamped"

                Section 56 of the Act, as amended by the Indian Stamp (Madhya  Pradesh Amendment) Act, 1990, reads as under:

"56. Control of, and statement of case to, Chief  Controlling Revenue-authority. \026 (1) The powers  exercisable by a Collector under Chapter IV and  Chapter V and under clause (a) of the first proviso  to section 26 shall in all cases be subject to the  control of the Chief Controlling Revenue- authority.           (2) If any Collector, acting under section 31,  section 40 or section 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.           (3) Such authority shall, after giving a  reasonable opportunity of being heard to the  parties concerned, consider the case and send a  copy of its decision to the Collector, who shall  proceed to assess and charge the duty (if any) in  conformity with such decision.  

       (4) The Chief Controlling Revenue  Authority may, on its own motion or on the  application by any party, at any time for the  purpose of satisfying itself as to the amount with  which the instrument is chargeable with duty, call  for and examine the record of any case disposed of  by the Collector and may pass such order in

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reference thereto as it thinks fit."

       It is not in dispute that Sub-section (4) of Section 56 was inserted by  the Indian Stamp (Madhya Pradesh Amendment) Act, 1990 in the year 1990.   

       Section 31 of the Act provides for a power of the Collector to  determine the duty with which the instrument would be chargeable, if an  application in this behalf is made.  The power to determine the amount of  stamp duty chargeable for the instrument is, thus, contained in Section 31.   Section 32 merely provides for the consequences flowing from such  determination.  The Collector, in the event of fulfilling either of the  conditions specified in Clauses (a) and (b) of Sub-section (1) of Section 32,  is mandated to certify by endorsement on such instrument that the full duty,  which is chargeable, has been paid.

       Sub-section (3) of Section 32 of the Act raises a legal fiction.   However, the said legal fiction is confined only to the effect that an  endorsement when made, the document shall be receivable in evidence and  may be acted upon and registered as if it had been originally duty stamped.

       Legal fiction created under Sub-section (3) of Section 32 of the Act,  therefore, does not state that the endorsement by way of a certificate would   be final or binding on the parties.         It is true that Sub-section (2) of Section 56 of the Act does not refer to  Section 32 but the same, in our opinion, was not necessary.  Sub-section (4)  of Section 56 was inserted by way of a State Amendment.  The intention of  the legislature in inserting the said provision is clear and explicit as by  reason thereof a power of revision has been conferred upon the highest  authority of Revenue in the State, viz., Board of Revenue.  The revisional  power is to be exercised by the Board of Revenue either on its own motion  or on an application by any party.  The term "any party" used in the said  provision is of some significance.  By reason of the said provision, not only  the State but also the person who had filed an application under Section 31  of the Act, thus, may file a revision application before the Board of  Revenue.  The terms "any party", therefore, implies both the parties to the lis  and not the party filing an application under Section 31 of the Act alone.   The revisional power is to be exercised by the Board so as to enable it to  satisfy itself in regard to the amount with which the instrument is chargeable  with duty.  The revisional proceeding has a direct nexus with determination  of an instrument being charged with duty and not the endorsement made  thereupon at a subsequent stage.   

                Submission of Mr. Ashok Desai, learned senior counsel appearing on  behalf of the appellants, that the question of chargeability of an instrument  with duty arises only at the stage of Section 31 of the Act and not under  Section 32 thereof, and thus, the Board of Revenue would have no  jurisdiction in the matter, cannot be accepted.  Determination by the  Collector is under Section 31 of the Act.  Thus, it is only that order which  can be the subject matter of revisional application.

       Section 31 of the Act contemplates two situations viz. where the  Collector determines that the instrument brought before him was already  fully stamped or an additional amount of stamp duty is required to be paid.   The question of issuance of a certificate by way of an endorsement in either  of the cases would arise when the additional stamp duty, if any, is paid.

       If the applicant intends to challenge the said order before the  revisional authority, evidently it would not deposit the amount.  However,  only because the determination by the Collector has been accepted pursuant  whereto a certificate has been issued, by itself cannot be held to be binding  upon the State.

       The Act deals with a fiscal matter.  It was indisputably enacted  keeping in mind the revenue of the State,  The amendment has been carried

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out to see that no evasion in regard to collection of actual stamp duty  payable on instruments takes place.  The Act provides for determination of  such amount at different stages.

       If an application under Section 31 of the Act is not filed, it would be  for the Registrar to do so at the time when the document is presented for  registration in which event the matter would be referred to the Collector.

       We have noticed hereinbefore that Section 32 does not provide for a  finality clause.

       In absence of any finality clause, it is difficult to comprehend that the  right of the parties to approach the revisional authority in terms of Sub- section (4) of Section 56 of the Act shall stand denuded.  The said provision  also must be given full effect to.  It cannot be said that the revisional  authority although is conferred with a power to satisfy itself as to the  correctness or otherwise of the order of the Collector determining the  quantum of stamp duty payable to an instrument, it would not have any  jurisdiction to do so only because the order was accepted by one party to the  dispute.

       The revisional power contemplates a power to give final  determination over the order of the Collector, i.e., an order passed in terms  of Section 31 of the Act irrespective of the fact as to whether an  endorsement had been made thereupon or not.   

       Strong reliance has been placed by Mr. Desai on The Chief  Controlling Revenue Authority, Board of Revenue, Madras v. Dr. K.  Manjunatha Rai [AIR 1977 Madras 10], wherein a Special Bench of the  Madras High Court has read finality and conclusiveness in an order passed  under Section 32 of the Act.  In absence of power of revision, the  determination made under Section 31 of the Act and consequent certificate  granted in terms of Section 32 of the Act was to be final.  But, when a  judicial or quasi judicial order is subject to revision, the same cannot be said  to be final.

       Strong reliance has also been placed by Mr. Desai on a decision of  this Court in Ashok Leyland Ltd. v. State of T.N. [(2004) 3 SCC 1], wherein  inter alia it was noticed:

"69. The Court went further to quote the position  taken in St. Aubyn v. Attorney General, [(1951) 2  All ER 473] wherein Lord Radcliffe observed thus, "The word ’deemed’ is used a great deal in modern  legislation. Sometimes it is used to impose for the  purposes of a statute an artificial construction of a  word or phrase that would not otherwise prevail.  Sometimes it is used to put beyond doubt a  particular construction that might otherwise be  uncertain. Sometimes it is used to give a  comprehensive description that includes what is  obvious, what is uncertain and what is, in the  ordinary sense impossible."

70. In Bhavnagar University v. Palitana Sugar Mill  (P) Ltd. it was stated that the purpose and object of  creating a legal fiction in the statute is well known.  But when a legal fiction is created it must be given  its full effect. It was held in East End Dwellings  Co. Ltd. v. Finsbury Borough Council [(1951) 2  All ER 587]:

"If you are bidden to treat an imaginary state of  affairs as real, you must surely, unless prohibited  from doing so, also imagine as real the

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consequences and incidents which, if the putative  state of affairs had in fact existed, must inevitably  have flowed from or accompanied it. One of these  in this case is emancipation from the 1939 level of  rents. The statute says that you must imagine a  certain state of affairs; it does not say that having  done so, you must cause or permit your  imagination to boggle when it comes to the  inevitable corollaries of that state of affairs."

       It must, however, be noticed that therein the court has also noticed a  decision of this Court in Consolidated Coffee Ltd. v. Coffee Board [(1995) 1  SCC 312] wherein it has been held that mere use of the word "deemed" is  itself not sufficient to set up a legal fiction.

       Furthermore, it is not the law that the court, irrespective of the nature,  purport and object of the statute, shall assign a meaning which was not  intended to be given by the Legislature.  Legal fiction created in terms of  Sub-section (3) of Section 32 of the Act was only in regard to the  receivability of instrument in evidence.  The legal fiction for the  aforementioned purpose is raised only to the extent that for the said purposes  it shall be deemed to have been originally duly stamped, viz., the  determination of chargeability of additional duty would be no significance if  the additional duty determined by the Collector, if any, has been deposited.

       In Maruti Udyog Ltd. v. Ram Lal and Others, [(2005) 2 SCC 638],  this Court held:

"35. In construing a legal fiction the purpose for  which it is created should be kept in mind and  should not be extended beyond the scope thereof  or beyond the language by which it is created.  Furthermore, it is well-known that a deeming  provision cannot be pushed too tar so as to result in  an anomalous or absurd position. The Court must  remind itself that the expressions like "as if is  adopted in law for a limited purpose and there  cannot be any justification to extend the same  beyond the purpose for which the legislature  adopted it."

[See also Ishikawajma-Harima Heavy Industries Ltd. v. Director of Income  Tax,  Mumbai, 2007 (1) SCALE 140]

       We, however, accept that if the meaning of the provision of a statute  is clear and explicit, it is not necessary to advert to the objects and reasons  thereof in view of the decisions of this Court in Aswini Kumar Ghose v.  Arabinda Bose [1953 SCR 1] and State of W.B. v. Union of India [(1964) 1  SCR 371],  as by taking recourse to the statements of Objects and Reasons,  the generality of the words used in the statute cannot be cut down.  It is  axiomatic that an extended meaning thereof also cannot be given.  If the  contention of Mr. Desai is accepted, an extended meaning will have to be  assigned to Sub-section (3) of Section 32 of the Act which is not  contemplated under the statute.

       Reliance placed by Mr. Desai on Section 53A of the Act, as amended  by the Bombay Stamp Act, is again of no assistance inasmuch as an object  can be achieved by different legislature by using different terms.  Section  53A of the Bombay Stamp Act makes Section 32 subject to Section 53A.  It  was probably done by way of abundant caution.  If a higher forum is  provided, an order passed by a lower authority, whether the term "subject  to" is used or not, shall be subservient thereto.  When determination made by  a statutory authority is capable of being challenged by way of revision, it is  axiomatic that only the revisional order shall be final and not the order of the  original authority.  

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       It is trite that no court can direct a matter to be governed by a statute  other than that which is really applicable. [See Neeraj Munjal and Others  (III) v. Atul Grover and Another, (2005) 5 SCC 404]

       For the reasons aforementioned, we do not find any merit in this  appeal which is dismissed accordingly with costs.  Counsel’s fee assessed at  Rs. 50,000/-.