Gujarat High Court
Gokul Agri International Ltd vs State Of Gujarat on 24 April, 2026
NEUTRAL CITATION
C/SCA/14197/2016 JUDGMENT DATED: 24/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 14197 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
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Approved for Reporting Yes
No
✔
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GOKUL AGRI INTERNATIONAL LTD
Versus
STATE OF GUJARAT & ORS.
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Appearance:
ROHAN SHAH WITH AADITYA DAVE WITH BHANVI FOR NANAVATI
ASSOCIATES(1375) for the Petitioner(s) No. 1
MR NIKUNJ KANARA AGP for the Respondent(s) No. 1,2
MR HIRAN M SHROFF(3672) for the Respondent(s) No. 3
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CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
Date : 24/04/2026
ORAL JUDGMENT
1. Present petition is filed by the petitioner under Articles 226 and
227 of the Constitution of India and under the provisions of the
Gujarat Stamp Act, 1958 (hereinafter be referred to as “the Act”)
seeking the following reliefs:-
A. Your Lordship(s) may be pleased to admit and allow this petition.
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B. Your Lordship(s) may be pleased to quash and set aside the
impugned order passed by the Ld. Collector and Additional
Superintendent of Stamps, Gujarat State, Gandhinagar, on
11.07.2016 being illegal and pervasive.
C. Your Lordship(s) may be pleased to declare that the petitioner is not
liable to pay the stamp duty or any penalty thereon in pursuance to
the order passed by the Ld. Collector and Additional Superintendent
of Stamps, Gujarat State, Gandhinagar on 11.07.2016 under the
provision of law under which the order has been passed in the
interest of justice.
D. Your Lordship(s) may be pleased to grant ad-interim stay on the
order of the authority for during the hearing and till the final
disposal of the matter in the interest of justice.
E. Your Lordship(s) may be pleased to grant the cost of this litigation
and of incidental and ancillary works / tasks to the petitioner.
F. Your Lordship(s) be pleased to pass any other writ or order or
direction or any other relief as may be deemed necessary to render
justice and pass any further relief(s) that may be deemed fit and
proper in accordance to the facts and circumstances of the case.
2. Brief facts of the present case are, in nutshell that the Director
of SBI Cap Trustee Company Ltd had produced a document before the
Collector and Additional Superintendent of Stamps under Section 31
of the Act for adjudication, which was a deed of hypothecation
between Gokul Agri International Ltd i.e. present petitioner and SBI
Cap Trustee Company Ltd and the same was continued and construed
by consent of all the parties. It is also submitted that on 11.07.2016,
the Collector and Additional Superintendent of Stamps passed an
order imposing stamp duty of Rs.1,34,40,700/- on the instrument and
the said amount of adjudication of stamp duty should be paid within
90 days and in absence and/or failure of the payment within
prescribed time limit, proceedings would be taken against the
petitioner and whereby penalty along with interest at the rate of 15%
p.a. as per Section 46(2) of the Act shall be imposed.
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3. Heard Mr.Rohan L. Shah, learned counsel for the petitioner and
Mr.Nikunj Kanara, learned Assistant Government Pleader for the
respondents – authorities.
4. Mr.Shah, learned counsel for the petitioner has submitted the
same facts which are narrated in the memo of appeal and has
submitted that respondent No.2 is not empowered to pass any order
while exercising the jurisdiction under Section 31 of the Act as it was
simple process where the document was produced for registration but
the same was sent for opinion. He has submitted that while exercising
the jurisdiction under Section 31 of the Act, respondent No.2 has to
opine that whether there is any deficit stamp duty or not and if it is
there the process under Section 31(1) of the Act is to be initiated and
thereafter further proceeding is to be heard instead of giving any
opinion, however, respondent No.2 has passed an order which is
under challenge in this petition. He has emphasized and referred to
the provisions of Section 31 of the Act, which reads as under:-
“31. Adjudication as to proper stamps:
(1) When any instrument, whether executed or not and whether
previously stamped or not, it 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 the free of
such amount [not exceeding one hundred rupees and not less than
twenty-five rupees] as the collector may, in each case direct, the
collector shall determine the duty (if any) with which in his
judgement, the instrument is chargeable.
(2) For this purpose the collector may be required to be furnished with
an abstract of an instrument, and also with such affidavit or any
other evidence as he may deem necessary to prove that all fact and
circumstances affecting the chargeability of the instrument with
duty, or the amount of the duty with which its chargeable are fullyPage 3 of 24
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and truly are set forth therein, and may refuse to proceed upon any
such application until such abstract and evidence have been
furnished accordingly.
4.1 Mr.Shah, learned counsel has submitted that respondent No.3
has produced the document before respondent No.2 under Section 31
of the Act for adjudication and opinion and the deed for the purpose
of hypothecation between the petitioner and respondent No.3 entered
as a Security Trustee Agreement, however, respondent No.2 has
passed an order and demanded deficit stamp duty, without giving any
opportunity of hearing and explanation and without adjudicating the
stamp duty levied upon agreement, respondent No.2 directly passed
the said order which itself is not maintainable in the eyes of law and,
hence, the imposing any penalty or any fine under Section 46(2) of
the Act deserves to be quashed. He has submitted that while reading
Section 31 of the Act, respondent No.2 has to opine that document is
chargeable or deficit stamp duty and once that opinion is recorded
appropriate proceedings to be initiated under Section 32(A) of the Act
and, therefore, the Collector has no power to issue such
communication asking the petitioner to pay deficit stamp duty along
with penalty and interest also under Section 46(2) of the Act. He has
submitted that the impugned order itself is beyond the powers of
respondent No.2 and respondent No.2 is not supposed to issue such
order which is directly passed by respondent No.2 without giving any
opportunity to the petitioner and, therefore, the same is against the
settled principles annunciated way back in 1965 in the case of
Pirbhai Janubhai Shaikh Vs. B. R. Manepatil, Collector of
Ahmedabad, 1965 (6) GLR 554. Mr.Shah, learned counsel has
submitted that it is consistent view of the Court that while exercising
the jurisdiction under Section 31 of the Act, the power which is vested
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with respondent No.2 is very limited and if respondent No.2 comes to
the conclusion under Section 31 of the Act and in his opinion the
document is found improper stamp or there is any deficit in the stamp
duty then he forwards the same to the competent authority, who shall
take action under Section 32(A) of the Act and then further
proceedings under Section 33 of the Act. He has submitted that there
is no application even under Section 33 of the Act and merely under
Section 31 of the Act, respondent No.2 has passed the impugned
order, which itself is unjust and bad in law.
4.2 Over-and-above the aforesaid arguments, Mr.Shah, learned
counsel has urged that the petition deserves to be allowed and the
impugned order deserves to be quashed and set aside.
4.3 In support of his submissions, Mr.Shah, learned counsel has
relied upon the following decisions:-
(1) The Government of Uttar Pradesh and others Vs. Raja
Mohammad Amir Ahmad Khan reported in AIR 1961 SC 787;
(2) Pirbhai Janubhai Shaikh Vs. B. R. Manepatil, Collector of
Ahmedabad, 1965 (6) GLR 554;
(3) State of Kerala Vs. M. K. Kunhikannan Nambiar reported in
1996 AIR SCW 301;
(4) Ambuja Cements Limited Vs. Chief Controlling Revenue
Authority reported in 2023 JX (Guj) 0-91.
5. In the case of Raja Mohammad Amir Ahmad Khan (supra),
the Hon’ble Supreme Court has held and observed in paras 5, 6 and
12 as under:-
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5. This definition was approved by Lord Atkinson in Frome United
Breweries Co. Ltd. V/s. Bath Justices (1926) A. C. 586 as one of the
best definitions. However the definition that has now become classic
us that given by Atkin C.J. as he then was in Rex V/s. The Electricity
Commissioners (1924) 1 K. B. 171. It runs as follows:-
“Wherever any body of persons having legal authority to determine
questions affecting the rights of subjects and having the duty to act
judicially act in excess of their legal authority they are subject to the
controlling jurisdiction of the Kings Bench Division exercised in
these writs.”
6. This definition was accepted as correct in Rex V/s. London
County Council (1931) 2 K. B. 215 and has been approved in many
subsequent cases in England including the decision of the Privy
Council in Nakkuda Ali V/s. M. F. De S. Jayaratne 54 C. W. N. 886.
Even though some doubt has been cast on the refinement of this
definition made by Lord Hewart C. J. in Rex V/s. Legislative
Committee of the Church Assembly (1928)1 K. B. 411 by the latest
decision of the House of Lords in Ridge V/s. Baldwin (1964)1 A. C.
40-Lord Reid has actually called it a gloss on the definition the
definition has always been accepted as laying down the correct test
for distinguishing a quasi Judicial act from an administrative act. S.
R. Das J. also in Province of Bombay V/s. Khushaldas AIR 1953
supreme Court 222 quoted this definition with approval and after
examining various authorities pointed out what were the principles
which could be gleaned from these authorities for deciding whether
a particular act is an administrative act or a quasi judicial act. He
said:-
“……..The principles as I apprehend them are:- (i) that if a statute
empowers an authority not being a Court in the ordinary sense to
decide disputes arising out of a claim made by one party under the
statute which claim is opposed by another party and to determine
the respective rights of the contesting parties who are opposed to
each other there is a lis and prima facie and in the absence of any
thing in the statute to the contrary it is the duty of the authority to
act judicially and the decision of the authority is a quasi judicial act;
and (ii) that if a statutory authority has power to do any act which
will prejudicially affect the subject then although there are not two
parties apart from the authority and the contest is between the
authority proposing to do the act and the subject opposing it the
final determination of the authority will yet be a quasi-judicial act
provided the authority is required by the statute to act judicially.
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12. Now it is clear from the brief resume of the provisions of the
Act which we have given above that it is for the parties who execute
an instrument to decide for themselves according to the provisions
contained in the Act as to what is the stamp duty with which the
instrument is chargeable. If the instrument is not duly stamped no
consequence flows upon it except when it is sought to be produced
before a judicial officer or other officer performing judicial functions
as evidence of any fact to be proved or comes before any other
public officer who has to perform any functions in regard to the
instrument when it comes before him e. g. registration or
authentication. It is only when a person wants to rely upon an
instrument as evidence of any fact to be proved or wants to do any
further act in regard to the instrument so as to effectuate its
operation that difficulty comes in his way if the instrument is not
duly stamped. At that stage if the instrument is not duly stamped
the person before whom it is produced is required to impound the
instrument under sec. 33 and in that case the person impounding
the instrument if he acts under sec. 34 or the Collector to whom the
instrument may be sent by the person impounding it acting under
sec. 39 would require payment of the proper duty chargeable on the
instrument as also penalty which may be as high as ten times the
amount of proper duty or the deficient portion thereof as the case
may be. The person producing the document would therefore
render himself liable not only to payment of the amount of proper
duty but also payment of a heavy penalty if the instrument is found
not to be duly stamped. Having regard to these consequences
which may flow from an instrument being found to be not duly
stamped the legislature made provision for granting a certain
measure of protection to persons wishing to execute an instrument
or even to persons who had executed an instrument. The legislature
by sec. 31 provided that an instrument whether executed or not and
whether previously stamped or not could be brought to the Collector
and the person bringing it could apply for the opinion of the
Collector as to the duty with which it was chargeable. The Collector
would thereupon determine the duty with which in his judgement
the instrument was chargeable and if the person bringing the
instrument before the Collector paid the duty determined by the
Collector sec. 32 provided that the Collector would have to certify
by endorsement on the instrument that the full duty with which it is
chargeable has been paid and on such certificate being given the
instrument would be regarded as duly stamped and no person
having by law or consent of parties authority to receive evidence
and no person in charge of a public office would thereafter be
entitled to raise any objection to the instrument on the ground that
it is not duly stamped. Sections 31 and 32 thus enable a person to
obtain protection from future scrutiny in regard to the sufficiency or
otherwise of the duty paid on the instrument by applying to thePage 7 of 24
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Collector for determining the duty with which the instrument is
chargeable and paying the amount of the duty determined by the
Collector. These sections are not intended to provide for any final or
conclusive determination of the amount of duty chargeable on an
instrument but are intended to secure protection to a person who
acting on the determination of the Collector pays the amount of
duty determined by the Collector. The determination made by the
Collector is not binding on the person obtaining it. He can very well
ignore the determination and execute the instrument after stamping
it with such duty AS he considers proper having regard to the
provisions of the Act and no adverse consequence would follow
upon it merely by reason of has having acted contrary to the
determination of the Collector. If the stamp affixed by him is
adequate the determination of the Collector would not affect him. If
the stamp affixed by him is not adequate the instrument would be
liable to be impounded and he would be liable to pay the amount of
proper duty and penalty. if any imposed upon him but that would be
not because he acted contrary to the determination of the Collector
but because the instrument was not duly stamped. He may even
decide not to execute the instrument at all. The determination of
the Collector has therefore no adverse consequence on the person
seeking the determination. The only effect which the determination
has is that if the amount of duty determined is paid by the person
obtaining the determination he would get a certificate from the
Collector which would preclude future scrutiny of the instrument in
regard to the sufficiency or otherwise of the duty paid upon it. The
instrument is brought before the Collector merely as observed by
the Supreme Court in Government of Uttar Pradesh V/s. Mohd. Amir
AIR 1961 S.C. 787 for seeking his advise as to what the proper duty
would be and to again quote the words of the Supreme Court in the
same case the scheme of the Act shows that where a person is
simply seeking the opinion of the Collector as to the proper duty in
regard to an instrument he approaches him under sec. 31 and if he
does not want to proceed any further than seeking the
determination of the duty payable then no consequence will follow.
It would therefore be seen that when the Collector determines the
duty with which in his judgement an instrument brought to him is
chargeable He does not perform an act which in any way affects the
person applying for the determination. He merely says what in his
judgement is the duty with which the instrument is chargeable it
being open to the party applying for the determination to accept the
determination and act upon it by paying the amount of duty
determined or not so to do. If he acts upon it and obtains the
certificate no further challenge can be made to the instrument on
the ground that it was unduly stamped but if he does not act upon it
has no consequence. If on an application made to him for
determination of the duty chargeable on an instrument the CollectorPage 8 of 24
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feels any doubt he is empowered by sec. 53(2) to draw up a
statement of the case and refer it with his own opinion thereon to
the Chief Controlling Revenue Authority and the Chief Controlling
Revenue Authority would then consider the case and send a copy of
his decision to the Collector who would have to assess the duty in
conformity with such decision. The Chief Controlling Revenue
Authority is thus entrusted under sec. 53(2) with the same function
with which the Collector is entrusted under sec. 31 and that function
is not for the purpose of arriving at a final and binding
determination but for the purpose of arriving at a determination
which has only this consequence namely that if the person applying
for it acts upon it by paying up the amount of duty determined he
earns immunity against any future challenge to the instrument on
the ground of insufficiency of stamp. There is here no question of
any contest between two contending parties for there are no two
parties before the Collector or Chief Controlling Revenue Authority.
It was of course contended on behalf of the petitioners that there
would be two contending parties since there are always two parties
to an instrument but this contention is wholly devoid of merit for
there is no dispute between parties to an instrument which is
required to be referred for the adjudication of the Collector under
sec. 31. The rule enunciated under the first head of the test
formulated by S. R. Das J. in Province of Bombay V/s. Khushaldas
(supra) cannot therefore have any application in the present case.
The rule enunciated under the second head has also no application
and the reasons are obvious. When the Collector or the Chief
Controlling Revenue Authority is discharging this function there is
no contest between the Collector or the Chief Controlling Revenue
Authority on the one hand and the person applying for the
determination on the other. It is not as if the person applying for the
determination puts forward a particular point of view for the
acceptance of the Collector or the Chief Controlling Revenue
Authority and the Collector or the Chief Controlling Revenue
Authority is called upon to accept that point of view or to reject it.
Equally there is no particular point of view put forward by the
Collector or the Chief Controlling Revenue Authority to which
objection may be made by the person applying for the
determination. There is nothing in the nature of a quasi lis between
the Collector or the Chief Controlling Revenue Authority and the
person seeking the determination. All that the person applying
under sec. 31 does is to seek the opinion of the Collector as to the
amount of duty chargeable on the instrument so that he may pay
the amount of duty determined by the Collector and earn protection
if he wants to do so. There is no question at that stage of two
opposing points of view of a proposition and an opposition-between
which determination has to be made by the Collector or the Chief
Controlling Revenue Authority. Moreover as pointed out above the
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determination of the Collector under sec. 31 or the decision of the
Chief Controlling Revenue Authority under sec. 53(2) does not affect
any right of the person applying for the determination nor does it
impose any liability on him and it cannot be said that it prejudicially
affects him. The requirement of a quasi judicial act which says that
the determination must affect some right of the subject or impose
some liability on him is therefore not satisfied. The rule laid down
under the second head of the test is therefore clearly not satisfied
and the determination of the Collector under sec. 31 as also the
decision of the Chief Controlling Revenue Authority under sec. 53(2)
cannot be said to be quasi judicial acts.”
5.1 In the case of Ambuja Cements Limited (supra), the Hon’ble
Supreme Court has held and observed in paras 113, 114 and 115 as
under:-
“113 The next issue which arises for our consideration is whether in
a proceedings initiated under section 31 of the Act, Collector has
any jurisdiction to impound to any instrument by invoking the
provision of Section 33. In order to adjudicate the said issue, we are
of the considered view that it would be apt and appropriate to
extract the relevant two provisions namely Section 31 and 33 of the
Gujarat Stamp Act and it reads as under : –
“31. Adjudication as to proper stamp. – (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 one
hundred rupees and not less than twenty-five rupees] as the
Collector may, in each case direct, the Collector shall determine the
duty (if any) with which in his judgement, 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 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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Provided that-
(a) no evidence furnished in pursuance of this section shall be used
against any person in any civil proceeding, except in an inquiry as
to the duty with which the instrument to which it relates is
chargeable; and
(b) every person by whom any such evidence is furnished shall, on
payment of the full duty with which the instrument to which it
relates is chargeable, be relived from any penalty which he may
have incurred under this Act by reason of the omission to state truly
in such instrument any of the facts or circumstances aforesaid.
(3) Where an officer appointed as a Collector under clause (f) of
section 2 has reason to believe that the market value of the
property, which is the subject matter of the instrument, received by
him for adjudication, has not been truly set forth therein, he shall,
before assessing the stamp duty under this section, refer the
instrument to the Collector of such district in which either the whole
or any part of the property is situate, for determining, in accordance
with the procedure laid down in section 32A, the true market value
of such property and the proper duty payable on the instrument.]
33. Examination and impounding of instruments. – (1) [Subject to
the provision of section 32A, every person] having by law or consent
of parties authority to receive evidence, and every person in charge
of a public office except an officer of police, before whom any
instrument, chargeable, in his opinion, with duty, is produced or
comes in the performance of his functions shall if it appears to him
that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every
instrument so chargeable and so produced or coming before him in
order to ascertain whether it is stamped with a stamp of the value
and description required by the law for the time being in force in the
State when such instrument was executed or first executed:
Provided that-
(a) nothing herein contained shall be deemed to require any
Magistrate or Judge of a Criminal Court to examine or impound, if he
does not think fit so to do any instrument coming before him in the
course of any proceeding other than a proceeding under Chapter XII
or Chapter XXXVI of the Code of Criminal Procedure, 1898 (V of
1898);
(b) in the case of a Judge of High Court, the duty of examining and
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impounding any instrument under this section may be delegated to
such officer as the Court may appoint in this behalf.”
114. Section 33 empowers every person having by law or consent
of parties, authority to receive evidence, and every person in charge
of a public office except an officer of police, before whom any
instrument, chargeable and in his opinion, with duty, is produced or
comes in the performance of his functions, shall, if it appears to him
that such instrument is not duty stamped, impound the same.
115. However, Section 31 would indicate the mode of adjudication
as to proper stamp. Section 31 nowhere speaks of the authority of
the Collector to impound documents. The said issue is no more res
integra, the provisions of the Stamp Act, 1899, as prevalent in the
State of Uttar Pradesh for the subject matter of the examination by
the Hon’ble Apex Court in the case of Government of Uttar Pradesh
and others versus Raja Mohammad Amir Ahmad Khan reported in
AIR 1961 SC 787 and it has been held that the Collector has no
power to impound the document. It has been further held :
“5. After an inordinately long delay, the Collector determined the
amount of duty payable and impounded the document. Power to
impound is given in s. 33 of the Act. Under that section any Person
who is a Judge or is incharge of a public office before whom an
instrument chargeable with duty is produced or comes in the
performance of his functions is required to impound the instrument
if it appears to him not to be duly stamped. The question is does
this power of impounding arise in the present case-. The instrument
in dispute was not produced as a piece of evidence nor for its being
acted upon e.g. registration, nor for endorsement as under s. 32 of
the Stamp Act but was merely brought before the Collector for
seeking his advise as to what the proper duty would be. The words
“every person………… before whom any instrument………… is
produced or comes in the performance of his functions” refer firstly
to production before judicial or other officers performing judicial
functions as evidence of any fact to be proved and secondly refer to
other officers who have to perform any function in regard to those
instruments when they come before them e.g. registration. They do
not extend to the determination of the question as to what the duty
payable is. They do not cover the acts which fall within the scope of
s. 31, because that section is complete by itself and it ends by
saying that the Collector shall determine the duty with which, in his
judgment, the instrument is chargeable, if it is chargeable at all.
Section 31 does not postulate anything further to be done by the
Collector. It was conceded that if the instrument is unexecuted i.e.
not signed, and the opinion of the Collector is sought, he has to give
his opinion and return it with his opinion to the person seeking hisPage 12 of 24
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opinion. The language in regard to exe- cuted and unstamped
documents is no different and the powers and duties of the
Collector in regard to those instruments are the same, that is, when
he is asked to give his opinion, he has to determine the duty with
which, in his judgment, the instrument is chargeable and there his
duties and powers in regard to that matter end. Then follows s. 32.
Under that section the Collector has to certify by endorsement on
the instrument brought to him under s. 31 that full duty has been
paid, if the instrument is duly stamped, or it is unstamped and the
duty is made up, or it is not chargeable to duty. Under that section
the endorsement can be made only if the instrument is presented
within a month of its execution. But what happens when the
instrument has been executed more than a month before its being
brought before the Collector- Section 31 places no limitation in
regard to the time and there is no reason why any time limit should
be imposed in regard to seeking of opinion as to the duty payable.
6. Chapter IV of the Act which deals with instruments not duly
stamped and which contains as. 33 to 48, provides for impounding
of documents, how the impounded documents are to be dealt with,
Collector’s powers to stamp instruments impounded and how the
duties and penalties are to be recovered. It would be an
extraordinary position if a person seeking the advice of the Collector
and not wanting to rely upon an instrument as evidence of any fact
to be proved nor wanting to do any further act in regard to the
instrument so as to effectuate its operation should also be liable to
the penalties which unstamped instruments used as above might
involve. The scheme of the Act shows that where a person is simply
seeking the opinion of the Collector as to the proper duty in regard
to an instrument, he approaches him under s. 31. If it is properly
stamped and the person executing the document wants to proceed
with effectuating the document or using it for the purposes of
evidence, he is to make up the duty and under s. 32 the Collector
will then make an endorsement and the instrument will be treated
as if it was duly stamped from the very beginning. But if he does not
want to proceed any further than seeking the determination of the
duty payable then no consequence will follow and an executed
document is in the same position as an instrument which is
unexecuted and unstamped and after the determination of the duty
the Collector becomes functus officio and the provisions of s. 33
have no application. The provisions of that section are a subsequent
stage when something more than mere asking of the opinion of the
Collector is to be done.”
6. Mr.Kanara, learned Assistant Government Pleader has referred
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and relied upon the affidavit-in-reply and has opposed the petition
and submitted that the petition is not required to be entertained. He
has submitted that the petitioner had made an application through
SBICAP Trustee Company Ltd for its adjudication for proper stamp
under Section 31 of the Act in the deed of hypothecation and,
therefore, the Collector and Additional Superintendent of Stamps had
given an opinion on merits as per the law and respondent – authority
has, after considering the provisions of the Act, passed the order for
proper stamp duty on the deed. He has submitted that as per circular
dated 05.07.2007 issued by the Chief Controlling Revenue Authority
and Notification dated 11.03.2002 of the Revenue Department, the
Deputy Collector, Stamp Duty can give the opinion under Section 31
of the Act for the stamp duty, in which the procedure is required to be
followed under Section 31 of the Act. He has submitted hat as per the
provisions of the Act, the stamp duty is determined on the basis of the
loan amount of Rs.1044.88 Crore reflected in the deed and even the
circular dated 05.07.2007 is not applicable in the present case and as
per Section 31 of the Act, no hearing is required. He has submitted
that since the deed is hypothecation deed, it is not compulsory under
the Indian Registration Act to be registered and the petitioner has
availed the loan facility from the bank and the petitioner has
registered the mortgage deed regarding the same loan and the
document was registered with the Sub Registrar Office and the deed
was come in force. He has submitted that on hypothecation deed, the
stamp duty is payable and the opinion of the stamp duty is given
under the provisions of the Act and even the hypothecation deed is
not impounded under Section 33 and no fine charged under Section
39 of the Act. He has submitted that the hypothecation deed came
into force and therefore the petitioner is liable to pay stamp duty as
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per the opinion of the Collector and Additional Superintendent of
Stamps under Section 32 of the Act and opinion is given to Security
Trustee and, therefore, the respondents have not committed any
breach of provisions of the Act. He has submitted that the decision
taken by the Collector is under the control of the Chief Controlling
Revenue Authority and the opinion given by the Collector and
Additional Superintendent of Stamps under Section 31 of the Act and
if the petitioner is aggrieved by the decision, the petitioner can pay
25% amount of the stamp duty and can prefer appeal under Section
53(1) of the Act.
6.1 Learned Assistant Government pleader has referred to the
notification dated 05.02.1992, which reads thus:-
NOTIFICATION
Government of Gujarat
REVENUE DEPARTMENT
Sachivalaya, Gandhinagar,
Dated: 5 February 1992No.GHM-91-M-12-STP-1090-3242-H : In exercise of the powers
conferred by clause (F) of the Section – 2 of the Bombay Stamp Act
1958 (LX of 1958) and in Supersession of Government Notification
No. GHM – 91 – 33 – M – STP – 1090 / 3242 / H.1 dated 28 th March,
1991, the Government of Gujarat hereby appoints the Additional
Superintendent of Stamps, Gujarat State, Ahmedabad to be the
Collector for the purpose of chapter II, III, IV, V and VIII of the said
Act for whole State of Gujarat.
By order and in the name of the Governor of Gujarat.
Sd/-
(A. C. Shah)
Deputy Secretary to the Govt. of Gujarat
Revenue Department6.2 Learned Assistant Government Pleader has also referred to the
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notification dated 11.03.2002 which reads thus:-
NOTIFICATION
Government of Gujarat
REVENUE DEPARTMENT
Sachivalaya, Gandhinagar,
Dated: 11 / 3 / 2002No:- GHM/2002/2/M/STP-10200-1465-H.I :- In exercise of the powers
conferred by clause (f) of Section 2 of the Bombay Stamp Act, 1958
(Bom. LX of 1958) of the Government of Gujarat hereby appoints
the “Deputy Collectors”, Stamp Duty Valuation Organization as
shown in the Annexure here below to be the “Collector” in respect
of the areas allotted to them as shown in Column No.3 of the
Annexure to determine true market value and proper stamp duty
payable in respect of documents of immovable properties for the
purposes of Section 31 of the said Act.
-: A N N E X U R E :-
Sr.No Deputy Collectors with his head- Name of the Areas /
quarter of the office. Jurisdiction
(1) (2) (3)
1 Dy. Coll. S. D. Vaul. Organ, A'bad Ahmedabad City
(Div.I)
2 Dy. Coll. S. D. Vaul. Organ --"-- A'bad Distt. (Exclusive
(Div.II) A'bad City)
3 Dy. Coll. S. D. Vaul. Orgn G'nagar Distt.
Gandhinagar
4 Dy. Coll. S. D. Vaul. Organ S'nagar Distt.
Surendranagar
5 Dy. Coll. S. D. Vaul. Organ, B'nagar Distt.
Bhavnagar
6 Dy. Coll. S. D. Vaul. Organ, Rajkot Rajkot City
(Div.I)
7 Dy. Coll. S. D. Vaul. Organ, Rajkot Rajkot Distt (Exclusive
(Div.II) Rajkot City)
8 Dy. Coll. S. D. Vaul. Organ, Jamnagar Distt.
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Jamnagar
9 Dy. Coll. S. D. Vaul. Organ, Mehsana Distt.
Mehsana
10 Dy. Coll. S. D. Vaul. Organ,, Sabarkantha Distt.
Himatnagar
11 Dy. Coll. S. D. Vaul. Organ,, Junagadh Distt.
Junagadh
12 Dy. Coll. S. D. Vaul. Organ, Nadiad Kheda Distt.
13 Dy. Coll. S. D. Vaul. Organ,, Surat Surat City
(Div.I)
14 Dy. Coll. S. D. Vaul. Organ, --"-- Surat Distt (Exclusive
(Div.II) Surat City)
15 Dy. Coll. S. D. Vaul. Organ, Valsad Valsad Distt.
16 Dy. Coll. S. D. Vaul. Organ, Bharuch Distt.
Bharuch
17 Dy. Coll. S. D. Vaul. Organ, Vadodara city
Vadodara (Div.I)
18 Dy. Coll. S. D. Vaul. Organ, --"-- Vadodara Distt.
(Div.II) (Exclusive Vadodara
City)
19 Dy. Coll. S. D. Vaul. Organ, Amreli Amreli Distt.
20 Dy. Coll. S. D. Vaul. Organ, Bhuj Kutch - Bhuj Distt.
21 Dy. Coll. S. D. Vaul. Organ, Banaskantha Distt.
Palanpur
22 Dy. Coll. S. D. Vaul. Organ, Patan Patan Distt.
23 Dy. Coll. S. D. Vaul. Organ, Porbandar Distt.
Porbandar
24 Dy. Coll. S. D. Vaul. Organ, Dahod Dahod Distt.
25 Dy. Coll. S. D. Vaul. Organ, Panchmahal Distt.
Godhara
26 Dy. Coll. S. D. Vaul. Organ, Anand Anand Distt.
27 Dy. Coll. S. D. Vaul. Organ, Navsari Navsari Distt.
28 Dy. Coll. S. D. Vaul. Organ, Narmada Distt.
Rajpipla
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By order and in the name of the Governor of Gujarat.
Sd/-
(I. A. Gajjar)
Deputy Secretary to the Govt. of Gujarat
Revenue Department6.3 Learned Assistant Government Pleader has also referred to the
circular dated 04.07.2007 which reads thus:-
No.STAMP-APPEAL-F. No. 20-07/4603 The Chief Controlling Revenue
Authority
Office of the Superintendent of
Stamps,
Stamp and Registration
Bhavan,
Sector-13-C, KH-Road,
Gandhinagar,
Dated: 05/07/07Read: (1) Circular of this office No: STAMP/KYD/522/2006/8586
Dated: 25/09/2006
(2) Government Revenue Department Notification No:
GHM/2002/22/M/STP/10200-1465-H.1
Dated: 11/03/02CIRCULAR:
In accordance with the circular dated 25/09/06 referenced
above, detailed instructions were provided to the Deputy Collector,
Stamp Duty Valuation Department, regarding the procedure to be
followed in cases under Section 32-A, taking into account the
instructions from the judgments of the Honorable High Court. The
state government, through the notification mentioned in reference
(2), has declared the Deputy Collector, Stamp Duty Valuation
Department, as “Collector” under Section 2(g) for the purposes of
Section 31 of the Bombay Stamp Act. When a document containing
details as mentioned in Section 32-A(1) of the Act is presented
before the Deputy Collector under Section 31 for adjudication of
stamp duty, proceedings has to be carried out as per Section 32-Page 18 of 24
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A(2) of the Act to determine the true market value of the property
that is the subject of the document. In order to maintain uniformity
in proceedings under Section 31 across the state, ensure
compliance with the principles of natural justice, and provide the
applicant with a sufficient opportunity, the Deputy Collector shall
provide an opinion to the party regarding the appropriate stamp
duty by following the detailed guidance and instructions provided in
the aforementioned circular dated 25/09/2006 when documents
described in Section 32-A(1) are presented for stamp duty
adjudication. Furthermore, it is explicitly clarified that since the
powers of the Collector under Section 32 of the Act have not been
delegated to the Deputy Collector, Stamp Duty Valuation
Department, they shall only provide an opinion regarding
documents submitted under Section 31 and shall not be authorized
to issue a certificate under Section 32. All Deputy Collectors of the
Stamp Duty Valuation Department are hereby directed to strictly
implement these instructions.
Please acknowledge receipt of this circular.
Sd/-
Superintendent of Stamps and
Inspector General of Registration,
Gujarat State, Gandhinagar.
6.4 Mr.Kanara, learned Assistant Government Pleader has
submitted that the petition being meritless deserves to be dismissed.
7. The petitioner has also filed affidavit-in-rejoinder and the further
affidavit-in-rejoinder in support of their case.
8. Considering the facts and circumstances of the case, the issue
involved in the present petition is very limited that while exercising
the jurisdiction under Section 31 of the Act, whether respondent No.2
can pass an order, which is also without issuing any notice and giving
any opportunity of hearing to the petitioner or not.
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9. Now, it is well settled by this Court and the Hon’ble Supreme
Court that Section 31 of the Act is merely a formality to form an
opinion since the document is referred for opinion to respondent No.2
that whether there is proper document in deficit stamp duty or not
and whether there is any stamp duty is leviable or not and respondent
No.2 has to give only opinion then the mechanism is provided to
demand the deficit stamp duty by issuing notice under Section
32(A(2) of the Act and, thereafter, the proceedings to be initiated for
payment of deficit stamp duty. The decision of respondent No.2 is not
supported by any reasons as respondent No.2 has acted as a quasi-
judicial. The determination being a quasi-judicial decision it is
incumbent on respondent No.2 to give reasons for the determination
and in the absence of reasons, the determination could not be
regarded as a valid determination and it is a reference for the purpose
of opinion when it form opinion that whether the document is properly
stamped or not, further proceeding is required to be followed by
subsequent provisions of the Act. It is an admitted fact that without
hearing the petitioner and giving an opportunity of hearing and
without considering the submissions and only on the basis of the
opinion of respondent No.2, the impugned order was passed and
therefore after considering the settled principles annunciated by this
Court as well as Hon’ble Supreme Court, this Court is of the opinion
that the petition deserves to be allowed.
10. It is beneficiary to refer to the decision of this Court in the case
of Jayant Shantilal Sanghvi Vs. State of Gujarat reported in
2019 (2) GLR 1622 wherein this Court has held and observed in
paras 8, 9, 10 and 22 as under:-
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8. In the aforesaid factual matrix of the case, the provisions
contained in Section 39 of the Act are required to be considered.
Section 39 of the Act provides as under:
“39. Collector’s power to stamp instruments impounded.- (1) When
the Collector impounds any instrument under section 33, or receives
any instrument sent to him under sub-section (2) section 37, not
being an instrument chargeable with a duty of twenty naye paise, or
less, he shall adopt the following procedure :-
(a) if he is of the opinion that such instrument is duly stamped or is
not chargeable with duty, he shall certify by endorsement thereon
that it is duly stamped, or that it is not so chargeable, as the case
may be;
(b) if he is of opinion that such instrument is chargeable with duty
and is not duly stamped he shall require the payment of the proper
duty or the amount required to make up the same, together with a
penalty of five rupees; or, if he thinks fit, an amount not exceeding
ten times the amount of the proper duty or of the deficient portion
thereof, whether such amount exceeds or falls short of five rupees.
Provided that, when such instrument has been impounded only
because it has been written in contravention of section 13 or section
14, the Collector may, if he thinks fit, remit the whole penalty
prescribed by this section.
(2) every certificate under clause (a), of sub-section (1) shall, for the
purposes of this Act, be conclusive evidence of the matters stated
therein.
(3) Where an instrument has been sent to the Collector under sub-
section (2) of section 37 the Collector shall, when he has dealt with
it as provided by this section, return it to the impounding officer.”
9. Thus, in the aforesaid Section 39 of the Act, there is a
reference of Section 33 as well as Section 37 of the Act. Therefore,
at this stage, this Court would like to refer and reproduce the
provisions of Sections 33 and 37 of the Act, which read as under:
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“33. Examination and impounding of instruments.-(1)[Subject to the
provisions of Section 32-A, every person] having bylaw or consent of
parties authority to receive evidence, and every person in charge of
a public office except an officer of police, before whom any
instrument, chargeable, in his opinion, with duty, is produced or
comes in the performance of his functions shall if it appears to him
that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every
instrument so chargeable and so produced or coming before him in
order to ascertain whether it is stamped with a stamp of the value
and description required by the law for the time being in force in the
State when such instrument was executed or first executed :
Provided that,-
(a) nothing herein contained shall be deemed to require any
Magistrate or Judge of a Criminal Court to examine or impound, if he
does not think fit so to do any instrument coming before him in the
course of any proceeding other than a proceeding under Chapter XII
or Chapter XXXVI of the Code of Criminal Procedure, 1898 (V of
1898);
(b) in the case of a Judge of High Court, the duty of examining and
impounding any instrument under this Section may be delegated to
such officer as the Court may appoint in this behalf.”
37. Instruments impounded how to be dealt with.- (1) When the
person impounding as instrument under Section 33 has by law or
consent of parties authority to receive evidence and admits such
instrument in evidence upon payment of a penalty as provided by
Section 34 or of duty as provided by Section 36, he shall send to the
Collector an authenticated copy of such instrument, together with a
certificate in writing, stating the amount of duty and penalty levied
in respect thereof, and shall send such amount to the Collector, or
to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument
shall send it in original to the Collector.”
10. If the aforesaid provisions are read together, it can be said
that under Section 39 of the Act any instrument which has been
impounded by the Collector under Section 33 or has received any
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instrument under Section 37(2) of the Act and if he is of the opinion
that such instrument is not duly stamped, he shall require the
payment of proper duty together with penalty and in case of
document received under Section 37(2) of the Act, return the same
to the impounding officer after its examination is completed. Thus,
it is clear that powers under Section 39 of the Act can be exercised
with respect to such instruments which are either impounded by the
Collector himself or by any other authority referred in the aforesaid
provisions. Admittedly, in the present case, as observed
hereinabove, document/sale deed in question was never
impounded. Thus, the respondent No.2 – Deputy Collector had no
authority to follow the procedure under Section 39 of the Act and
demand deficit stamp duty and penalty from the petitioners. Thus,
exercise of powers by the respondent No.2 under Section 39 of the
Act was without jurisdiction in the facts of the present case. Thus,
when the respondent No.2 has selected wrong provision to initiate
any proceedings, such act cannot be considered as legal and within
powers and jurisdiction of the respondent No.2.
22. Keeping in view the aforesaid decisions rendered by the
Hon’ble Supreme Court and Division Bench as well as learned Single
Judge of this Court, if the facts of the present case, as discussed
hereinabove are considered, it can be said that this Court can
exercise powers under Articles 226 and 227 of the Constitution of
India though alternative remedy is available under certain
circumstances viz. when the order passed by the authority is
without jurisdiction or in violation of principles of natural justice. In
the facts of the present case as discussed hereinabove, the
respondent No.2 was not having power to proceed under Section 39
of the Act when the instrument in question has not been
impounded. Thus, the order passed by the respondent No.2 is
without jurisdiction. Further, reasonable opportunity of being heard
is not provided to the petitioners and while passing the order even
reply given to the show cause notice is not considered. Further,
while determining the market value of the properties in question,
procedure prescribed under Rule 4 of the Rules has not been
followed and no opportunity of hearing was given to the petitioners
before determining the market value of the properties in question.
Thus, in the facts of the present case, this Court is inclined to
exercise the powers under Articles 226 and 227 of the Constitution
of India and therefore petitioners are not relegated to the Appellate
Authority.”
11. This Court has considered overall facts of the case and the
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averments made in the petition and the submissions canvassed by
the learned counsel appearing for the respective parties and perused
the impugned order passed by the respondent – authority. This Court
has also perused the material placed on record and the decisions
cited at the Bar. This Court is of the opinion that the petition deserves
to be allowed and the matter deserves to be remanded back to
respondent No.2 for taking appropriate recourse.
12. For the foregoing reasons, the petition is allowed. The
impugned order dated 11.07.2016 passed by the respondent –
authority is hereby quashed and set aside and the matter is
remanded back to respondent No.2. The respondent No.2 shall
reconsider the case and decide the same in accordance with law and
after giving reasonable opportunity of hearing to the petitioner as
early as possible and without being influenced by the earlier order
passed by respondent No.2. It is observed that in the meantime, the
amount deposited by the petitioner before the Registry of this Court
shall be refunded to the petitioner along with the interest accrued on
it, and ultimately, if respondent No.2 comes to the conclusion that the
document is not properly stamped, respondent No.2 may pass
appropriate order for deficit stamp duty after giving reasonable
opportunity of hearing to the petitioner. Rule is made absolute to the
aforesaid extent. There shall be no order as to costs.
(HEMANT M. PRACHCHHAK,J)
V.R. PANCHAL
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