RAYMOND LTD. AND ANR. v. STATE OF CHHATTISGARH AND ORS

Citation: [2007] 2 S.C.R. 990

Court: Supreme Court of India

Bench: S.B. SINHA, MARKANDEY KATJU

Case summary

RAYMOND LTD. AND ANR. v. STATE OF CHHATTISGARH AND ORS.pdf

Judgment text

RAYMOND LTD. AND ANR. v. STATE OF CHHAITISGARH AND ORS. FEBRUARY 20, 2007 [S. B. SINHA AND MARKANDEY KATJU, JJ. ] Stamps Act, 1899: ss. 31 and 32(3) and 56(4) as amended by State of Madhya Pradesh and applicable in State of Chattisgarh-Assessment of stamp duty and certificate by Collector u/s 32(3) endorsed on deed ofconveyance-Revision filed by State before Board of Revenue-Maintainability-Held, revisional power contemplates a power to give final determination over order of Collector passed in terms of s. 31 irrespective of the fact as to whether an endorsement had been made thereupon or not. s. 32(3)-Legal fiction-Held is confined only in regard to receivability of i11Strument·in evidence-It does not state that endorsement by way of certificate would be final or binding on parties-Interpretation of statutes. s.

56(4)-Revision-Scope of-Held, revisional power is to be exercised by Board of Revenue either on its on motion or on an application by any party-The term "any party" implies both the parties to the /is and not the party filing an application u/s 3I alone. Words and Phrases: ) · 'any party" occurring in s. 56(4) ofStamps Act as amended by State of Madhya Pradesh-Meaning of Appellant no. I-Company intended to sell its cement division situate in the State of Madhya Pradesh which on division ofthe State came under the State ofChattisgarh. With a view to preassess the stamp duty payable on the instrument of sale, the appellant filed an application for adjudication of the Collect. or in terms ofs. 31 of the Stamp Act, 1899. The Collector formed a .. ,... valuation committee and on its report assessed u/s 31 of the Act the stamp duty chargeable on the instrument and the registration charges. An ~- RAYMOND LTD. v.

STATEOFCHHATTISGARH 991 endorsement on the deed of conveyance was made by respondent no. 1 on -) 16. 1. 2001 by way of certificate in terms of s. 32 of the Act. The instrument was accordingly stamped and registered on 21. 1. 2001. However, the State Government filed a revision application before the Board of Revenue seeking revision of the order dated 16. 1. 2001 passed by respondent no. 2. The Board of Revenue served a notice on appellant no. 1, which challenged the notice in a writ petition before the High Court questioning the jurisdiction of the Board of Revenue entertaining the revision application. After dismissal of the writ petition, the present appeal was filed. ~ -+ It was contended for the appellant, inter alia, that question of chargeability ofan instrument would arise only at the stage ofthe proceedings u/s 31 ofthe Act and not under s. 32, and thus the Board of Revenue would have no jurisdiction in the matter; that s. 56(4) would not apply to s.

32 of the Act; and that legal fiction created u/s 32(3) must be given its full effect. Dismissing the appeal, the Court HELD:l. Section 31 of the Stamps Act, 1899 provides for the power of the Collector to determine the duty with which the instrument would be ·I chargeable, ifan application in this behalf is made. The power to determine the amount ofstamp duty chargeable for the instrument is, thus, contained in Section 31. 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, that by itself cannot be held to be binding upon the State. Section 32 merely provides for the consequences flowing from such determination. (Para 13 and 19) (996-H; 998-B) \ 2. The legal fiction created in sub-section (3) of Section 32 of the Act .

_ 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 duly stamped. The legal fiction does not state that the endorsement by way of a certificate would be final or binding on the parties. (Para 14 15) [997-B-CI 1 Maruti Udyog Ltd. v. Ram Lal and Ors. , (2005) 2 SCC 638 and lshikawajma-Harima Heavy Industries Ltd. v. Director ofIncome Tax, Mumbai, (2007) 1SCALE140, relied on. I. (2005] I SCR 790. 992 SUP. REME COURT REPORTS [2007] 2 S. C. R. . , ' The ChiefControlling Revenue Authority, Board ofRevenue, MadrC! s v. Dr. K. Manjunatha Rai, AIR (1977) Madras 10, distinguished. ,\- Ashok Leyland Ltd. v. State of T. N. , (2004) 3 SCC 12; Consolidated 3 Coffee Ltd. v. Coffee Board, (1995] 1 SCC 312 ; Aswini Kumar Ghose v. Arabinda Bose, (1953) SCR 1 and State of WB. v. Union ofIndia, [1964) 1 SCR371, referred to. 3.

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 'r ... _ upon lhe highest authority of Revenue in the State, viz. , Board of Revenue. The n:visional power is to be exercised by the Board of Revenue either . _.. 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" 11. 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, ChiefControlling Revenueauthority.

(I) 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) Ifany 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 ofthe ChiefControlling 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 reference thereto as it thinks fit. " 12. It is not in dispute that Sub-section (4) of Section 56 was inserted by the Indiari Stamp (Madhya Pradesh Amendment) Act, 1990 in the year 1990. 13. 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 ~· RAYMOND LTD. v. STATEOFCHHATTISGARH [S. B. SINHA,J. ] 997 -. ""! "" determination.

The Collector, in the event of fulfilling either ofthe 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. 14. 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. ~' ~ 15. Legal fiction created under Sub-section (3) of Section 32 ofthe Act, therefore, does not state that the endorsement by way of a certificate would be final or binding on the parties. 16. 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 ! is and not the party filing an application under Section 31 ofthe 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 subsequent stage. 17. Submission of Mr. Ashok Desai, learned senior counsel appearing on behalf ofthe 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. t· ..... 18. 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. 19. 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. "" 20. The Act deals with a fiscal matter. It was indisputably enacted keeping in mind the revenue of the State, The amendment has been carried out to see that no evasion in regard to collection ofactual stamp duty payable --. on instruments takes place. The Act provides for determination of such amount at different stages. 21.

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. 22. We have noticed hereinbefore that Section 32 does not provide for a finality clause. 23. In absence of any finality clause, it is difficult to comprehend that the right oft. he parties to approach the revisional authority in terms of Subsection (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 ofthe order ofthe Collector determining the quantum ofstamp 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. ' 24.

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. ~ 25. Strong reliance has been placed by Mr. Desai on The Chief Controlling Revenue Authority, Board of Revenue, Madras v. Dr. K. "-1· RAYMOND LTD. v. STATE OF CHHATTISGARH [S. B. SJNHA,J. ] 999 Manjunatha Rai AIR (1977) Madras I0, wherein a Special Bench of the -J Madras High Court has read finality and conclusiveness in an order passed under Section 32 ofthe Act. In absence of power of revision, the detennination made under Section 31 ofthe 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. 26. Strong reliance has also been placed by Mr. Desai on a decision of this Court in Ashok Leyland Ltd. v.

State o/T. N. [2004) 3 SCC I, 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 modem legislation. Sometimes it is used to impose for the purposes of 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. Pc. litana 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 consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One ofthese in this case is emancipation from the 1939 level ofrents. The statute says that you must. imagine a certain state of affairs; it does not say that having done so, you must cause or pennit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. " ,, 27. It must, however, be noticed that therein the court has also noticed a decision of this Court in Consolidated Coffee Ltd. v. Coffee Board [1995J I SCC 312 wherein it has been held that mere use of the word "deemed" is itself not sufficient to set up a legal fiction. f' ~: 28. Furthermore, it is not the law that the court, irrespective of the )_..

nature, purp'ort 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 ofthe 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 ifthe additional duty determined by the Collector, if any, has been deposited. .. ,__ -I 29. In Maruti Udyog Ltd v. Ram Lal and Ors, [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 lshikawajma-Harima Heavy Industries Ltd v. Director of Income Tax, Mumbai, (2007) I SCALE 140. 30. We, however, accept that ifthe meaning ofthe 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 I and State ofW. B. v. Union ofIndia (1964) I 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 Subsection (3) of Section 32 of the Act which is not contemplated under the statute. 31. Reliance placed by Mr. Desai on Section 53A ofthe 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 RAYMOND LTD. v. STATEOFCHHATTISGARH [S. B. SINHA, J. ] 1001 order passed by a lower authority, whether the tenn "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. 32. 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 Ors (Ill) v. Atul Grover and Anr. , [2005) 5 SCC 404. 33. 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. 50,00G/-. RP. Appeal dismissed