2003(1) ALL MR 18
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

R.J. KOCHAR, J.

Bharat Bijlee Ltd. Vs. State Of Maharashtra

Writ Petition No.1512 of 1998

28th August, 2002

Petitioner Counsel: Mr. N.H. SEERVAEE, M/s. Malvi Ranchoddas & Company
Respondent Counsel: Mr. K.R. BELOSAY

Bombay Stamp Act (1958), S.46 - Bombay Stamp (Determination of True Market Value of Property) Rules (1995), R.4(6), Proviso - Certificate issued by Income Tax Authority indicating market value of property - Superintendent of Stamps bound to accept the certificate and to assess Stamp duty payable on basis of market value indicated in the certificate.

The value of the price stated in the certificate issued by the income tax authorities and other authorities prescribed therein has to be taken as true market value. The above proviso to the said rule is very clear and it mandates the stamp duty authority to accept the value stated in the certificate as true market value. The Superintendent of Stamps cannot disagree with the market value clearly indicated by the appropriate authority under the Income Tax Act. There is no provision in the Act or the Rules to challenge the certificate issued by the Income Tax Authority indicating the market value of the property. The superintendent of Stamps, therefore, was bound to accept the certificate issued by the appropriate authority under the Income Tax Act and was bound to assess the stamp duty payable on the basis of the market value indicated in the certificate. Furthermore, the Stamp authority has nowhere indicated any reason for not accepting the certificate issued by the income tax authority under the Act. In fact the rule is clear that such certificate has to be taken as correct market value stated therein and the same to be accepted as true market value. [Para 4]

JUDGMENT

Judgment :- The petitioner company is aggrieved by the impugned order dated 10th August 1998 passed by the Superintendent of Stamps, Mumbai impounding the instrument submitted by it on the ground that it was not duly stamped and the petitioner was ordered to pay an amount of Rs.8,16,000/- leviable as stamp duty on the instrument under question. The authority had also directed the petitioner to pay penalty specified in the order. Further threat was also issued to the petitioner that on their failing to pay the said amount with penalty, the same would be recovered as arrears of land revenue under section 46 of the Bombay Stamps Act, 1958.

2. The facts in the present case are in a very narrow compass. The petitioner company purchased the immovable property described in the petition at the auction purchase price of Rs.17,75,000/-. The office of the Tax Recovery, Ward No.22 had also issued an order of confirmation of auction sale of the said property certifying that the aforesaid immovable property was auctioned on 26th December 1996 in execution of certificate No.673 to 676 A/92-93 dated 28th December 1992. It was further certified that the full amount of purchase money was paid on 9th January 1997. It was also stated in the said certificate that an application under Rule 61 of the Second Schedule to the Income Tax Act by the defaulter Shri Parekh for setting aside the sale was disallowed. By the said certificate the sale was confirmed in favour of the present petitioners. It appears that by its letter dated 31st July 1997, caused through the attorneys, the Collector of Stamps was informed by the petitioner about the certificate of sale dated 6th May 1997 granted by the Tax Recovery Officer for the purpose of payment of stamp duty. The said authority was requested to make assessment of stamp duty payable. An adjudication fee of Rs.50/- was also remitted. It appears that the petitioners were the tenants of the premises which was auctioned for recovery of tax and was finally purchased by petitioner as tenants. It further appears that the authority had required the petitioner to furnish a copy of the agreement dated 29th December 1978, though not relevant for the purpose but the Petitioner furnished that also not to give any scope to the Authority to find fault with the Petitioner. Even then, it appears, that by the impugned order, the Superintendent of Stamps had passed the aforesaid order without hearing the petitioner without disclosing its reason for dissatisfaction.

3. Shri Seervai, the learned Counsel appearing for the petitioners has vehemently attacked the impugned order being totally illegal and malafide. Shri Seervai submitted that the petitioners were liable to pay the stamp duty on the basis of the sale certificate issued by the income tax office which certainly reflects the correct market value of the property sold in auction by the income tax authorities for recovery of the tax from the owner of the property. Shri Seervai submitted that the stamp authorities had no business and no authority to go behind and beyond the said certificate. He further submitted that the stamp authority cannot sit in appeal over the said sale certificate issued by the competent authority under the Income Tax Act certifying the true value of the property. Shri Seervai further submitted that proviso to Rule 4(6) of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995 is absolutely clear in respect of the market value of the property. It would be convenient to reproduce the entire rule with the proviso as under:-

"Rule 4(6)- Every registering officer shall, when the instrument is produced before him for registration, verify in each case the market value of land and building, etc. as the case may be, from the above statement and if he finds the market value as stated in the instrument, less than the minimum value, prescribed by the statement, he shall refer the same to the Collector of the District for determination of the true market value of the property which is the subject matter of the instrument and the proper duty payable thereon.

Provided that, whenever a certificate about market value of a particular property is issued by an Appropriate Authority under provisions of Income Tax Act, or if a property is sold or allotted by Government or Semi-Government body or a Government Undertaking or a Local Authority on the basis of Predetermined price, then value stated in such certificate issued by an Appropriate Authority or determined by the bodies referred to above, shall be true market value of the subject matter property."

4. From the reading of the proviso it would be crystal clear that the value or the price stated in the certificate issued by the income tax authorities and other authorities prescribed therein has to be taken as true market value. In my opinion, the above proviso to the said rule is very clear and it mandates the stamp duty authority to accept the value stated in the certificate as true market value. I fail to understand on what basis the Superintendent of Stamps had disagreed with the market value clearly indicated by the appropriate authority under the Income Tax Act. There is no provision in the Act or the Rules to challenge the certificate issued by the Income Tax Authority indicating the market value of the property. The superintendent of Stamps, therefore, was bound to accept the certificate issued by the appropriate authority under the Income Tax Act and was bound to assess the stamp duty payable on the basis of the market value indicated in the certificate. Furthermore, the Stamp authority has nowhere indicated any reason for not accepting the certificate issued by the income tax authority under the Act. In fact the rule is clear that such certificate has to be taken as correct market value stated therein and the same to be accepted as true market value.

5. Shri Belosay, the learned A.G.P. has relied upon the next following proviso to Rule 4(6) of the Bombay Stamp (Determination of true Market Value of Property) Rules 1995 in support of his contention as under:-

"Provided further that where the market value has been stated in accordance with or more than that prescribed in the statement issued by the Chief Controlling Revenue Authority, but the Registering Officer has reason to believe that the true valuation of the immoveable property cannot be arrived at without having recourse to local enquiry or extraneous evidence, he may, before registering such instrument, refer the same to the Collector of the District for determination of true market value of property and the proper duty payable thereon."

At the outset, the reliance by the A.G.P. on the said proviso is totally misplaced and irrelevant for the present purpose. We are concerned with the sale certificate issued by the appropriate authority which has to be taken as showing correct or true market value. The proviso relied upon by the A.G.P. does not anywhere say that the amount shown in the certificate cannot be accepted as true market value. There is absolutely no substance in the contention of Shri Belosay. In my opinion, the order issued by the Superintendent of Stamps is malafide. He had no authority or business to travel beyond the above referred proviso. He was bound to accept as conclusive the sale price indicated in the sale certificate issued by the appropriate authority under the Income tax Act. The Superintendent of Stamps has disregarded with impunity the mandate issued under the said rule. I have, therefore, no doubt in my mind that the said authority has acted maliciously and malafide. The petitioner company was required to approach this court under Article 227 of the Constitution of India against the said order. Shri Seervai submits that the entire amount of Rs.1,77,500/- has already been deposited with the stamp authority.

6. In the aforesaid circumstances, rule is made absolute in terms of prayer clauses (a) and (b)(ii) with cost of Rs.25,000/- to be paid by the Superintendent of Stamp, who passed the impugned order from his pocket.

All parties to act on an ordinary copy of this order duly authenticated by the Associate of this Court.

Petition allowed.