BAGAWAN JUMANI Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS writ petition has been filed by the petitioner challenging the notice issued by the third respondent in Tha.Ka.No.322/2002, dated 20.12.2002, issued under Section 47-A of the Indian Stamp Act, calling for an explanation from the petitioner as to why the additional stamp duty should not be levied in respect of the instrument, dated 22.11.2002, relating to the property situated at No.18, (Old No.58), Monteith Lane, Egmore, Chennai, which was conveyed to the petitioner by the Central Board of Direct Taxes, under Chapter 20(C) of the Income Tax Act.

(2.) THE learned counsel appearing for the petitioner had contended that the letter issued by the third respondent, calling upon the petitioner to submit his explanation as to why he should not be charged with the deficit stamp duty, under Section 47-A of the Indian Stamp Act, as applicable to the State of Tamil Nadu, on the ground that the value declared in the sale deed is not the true and correct market value of the property, is arbitrary and illegal.

(3.) IT has also been contended that the execution and registration of the sale deed, is only a formality, when the sale of the property had been confirmed in favour of the petitioner and three other persons and when the possession of the said property had also been handed over to them. The delay in execution of the sale deed would not, ipso facto, be sufficient to invoke the proviso to Section 47-A of the Indian Stamp Act, as applicable to the State of Tamil Nadu, unless there is a fraudulent attempt on the part of the petitioner to under value of the property with a view to evade the stamp duty. The delay in execution and registration of the sale deed cannot be the sole determining factor for holding an enquiry, under Section 47-A of the Indian Stamp Act. The third respondent had failed to appreciate that there was no reason for the petitioner to have any wrongful intention of committing fraud by evading the payment of stamp duty. The third respondent had failed to apply his mind to the facts of the case and to appreciate that the authority seeking to conduct the enquiry, under Section 47-A of the Indian Stamp Act, must be prima facie satisfied that there is a reason to believe that the instrument has been undervalued, intentionally. There is nothing in the impugned notice to show that such an enquiry had taken place on application of mind, by the third respondent, to the facts and circumstances of the matter, before the impugned notice had been issued.