P.S. Poti, C.J.
1. This reference is at the instance of Kankaria Apartment Co-operative Housing Society Ltd., Ahmedabad, and the question concerns the liability to stamp duty in respect of eleven sale deeds executed in favour of the said society by a builder who conveyed under twelve separate documents of sale, a building with twelve flats built up an Sub-Plot No. 78 of T. P. Scheme -No. 4 of Manager Final Plot No. 73 admeasuring 840 Sq. yards. The price shown in each, one of those documents, which we have said earlier is for 1/12th undivided share, of the land and the superstructure thereon, was Rs. 40,500/-.
2. The question concerns the exemption claimed by the Co-operative Society from the liability to pay stamp duty on these sales as the purchasers on the basis of a notification dated 28th March, 1968 an eleven out of the twelve documents which were all executed by if same seller to the same purchaser on the same day, viz,, on 16th March, 1973. But, even before such documents were finally executed, draft of one of such documents was presented by Shri U- J. Thakore before the Assistant Superintendent of stamps, Ahmedabad, in favour of adjudication under Section 31 of the Bombay Stamp Act, 1958 (Bombay Act No. LX of 1958). It appears from the statement of facts that before this application was dealt with, another draft of the same document was Med before the Superintendent of Stamp, Ahmedabad. On the second application, the Assistant Superintendent intimated that document was a conveyance chargeable with a stamp duty of Rs. 2,430/- under Article 25 (b) of the Schedule I of the Bombay Stamp Act, 1958. Evidently, the party was not happy with this decision and he took a draft document before the Collector, Mehsana, within whose jurisdiction the property was not situate. On 22-8-1973, he made a request to the Collector, Mehsana, for adjudication under Section 31 of the Bombay Stamp Act, 1958 (Bombay Act No, LX of 1958). Evidently, it would appear that the question which had already been adjudicated upon by the Assistant Superintendent of Stamps, Ahmedabad, was not brought to the notice of the Collector, Melisana. The latter gave a certificate under Section 32(2) -to the effect that the instrument was not chargeable to any stamp duty. With this certificate, the purchaser Co-operative Society presented the document before the Sub-Registrar. Ahmedabad, and obtained registration. Evidently, citing this as a precedent, the other eleven documents were also registered by the sub-Registrar, but in those cases no opinion under Section 31 was sought nor any certificate under Section 32 of the Stamp Act obtained.
3. The Chief Controlling Revenue Authority during the course of inspection of the office of the Collector, Mehsana, noticed that a wrong certificate was issued by the Collector and that the provision relating to exemption which persuaded the Collector to issue the certificate was not applicable to the case in question. Evidently, on his initiative, the Assistant Superintendent of Stamps, Ahmedabad, took up the matter, enquired with the Sub-Registrar, Ahmedabad, and then contacted the purchaser society. It was directed to produce the relevant document of purchase, whereupon the eleven documents other than the one which had been registered on certification, were produced before the Assistant Superintendent, Stamps, Ahmedabad. He took the view that the exemption relied on would not apply and, therefore, each one of the eleven documents was liable to imposition of stamp duty of Rupees 2,430/- and besides this he imposed a penalty of Rs. 150/- in each of the cases in respect of the eleven documents. The matter was taken up in revision to the Chief Controlling Revenue Authority who found no reason to take a view different from the one taken by the Assistant Superintendent, Stamps. He further felt that the penalty imposed was inadequate and, therefore, enhanced the penalty to Rs.1,000/- in each of the cases, thus imposing a total penalty of Rs. 11,000/- .
4. Thereupon the purchaser society, feeling aggrieved by the order, sought reference and the questions have been referred under Section 54(1) of the Bombay Stamp Act, 1958).(Bombay Act no.LX of 1958).
5. The four question reference of which was though by the purchaser society arm,
(a) Can the Assistant Superintendent of Stamps, impound ' the documents produced in compliance with his illegal demand?
(b) Can he impound the documents which were not called for by him7
(c) Can the Chief Controlling Revenue Authority reject to accept the meaning of word 'land' given in the dictionary other than the Oxford Dictionary?
(d) Can the Chief Controlling Revenue Authority exercise the powers which are not vested in him by law?
Having heard counsel on both sides, we do not think that these questions do re-fleet the real controversy between t he, parties. In fact, it is easy to answer the questions, as for example, there can be only one answer to question (d), that the Chief Controlling Revenue Authority cannot exercise the powers which are no, vested in him by law. That shows the slipshod fashion in which questions were framed and more than that, non application of mind by the Chief Controlling Revenue Authority in properly framing questions before making reference to this Court.
6. After discussion at the bar, it was agreed that the questions which really arise for decision in this case can be formulated thus:
A. Whether, in the facts and circumstances, the 'Collector and tile Assistant Superintendent of Stamps' was competent to levy duty and penalty on 'the impugned eleven sale deeds which came up before him and which he impounded under the provisions of the Bombay Stamp Act, 1958.
B. Whether the eleven sale deeds in respect of which stamp duty and penalty have been directed to be paid are liable to stamp duty in view of the notification dated 28th March 1968.
C. Whether in the -light of tile fact that the Collector, Mehsana, had purported to act under Section 32(2) in issuing a certificate of non-liability to stamp duty in respect of one of the sale deeds, the stamp duty could have been imposed in respect of the other eleven sale deeds.
D. Whether in the facts and circumstances the penalty could have been enhanced by the Chief Controlling Revenue Authority.
7. It is now necessary to refer to the terms of the notification of exemption in force at the relevant time. That has been subsequently - amended in 1974 but it is not necessary to refer to that amendment for the purpose of this case. As it stood at the relevant time, the instruments specified in the Schedule to that notification dated 28th March 1968 were exempt from stamp duty. The Schedule read:
'Instruments, relating to purchase of land, executed by or on behalf of or in favour of, a co-operative housing society registered or deemed to be registered under the Gujarat Co-operative Society Act, 1961 (Guj, X of 1962) the value or consideration of which does not exceed Rs. 50,000/- (fifty thousand), and in respect of which such society would be liable to pay the duty but for the remission granted hereunder.'
Evidently, a sale was taken by the Co-operative Society. The purchaser was no doubt a Co-operative Housing Society. The sale was taken from a contractor who was a builder. He sold 840 Sq yards of land together with a superstructure thereon which consisted of 12 Flats. The consideration, therefore, was naturally 40500 x 12, amounting to Rupees 4,86,000/- Had this been a simple sale deed so executed by the builder to tile Co-operative Society, there would have been no question of exemption, for it is only sale of land for a consideration not above Rs. 50,000/-. That would stand exempted by operation of tile notification. The device conceived to get out' of the liability to pay duty was evidently the execution on the same day of twelve independent documents for 1/12th undivided share in the land and building for Rs. 40,500/- each and claiming that by reason of the fact that each one is sale of land to a Co-operative Housing Society for a consideration of less than Rs. 50,000/-, the exemption attracted in respect of each one of these documents and, therefore, no fee was leviable.
8. The first question that we have to consider Is whether the above plea should succeed, Of course, we will also consider the question , 'weather 'here would be any difference in this case by reason of the fact that the Collector, Mehsana, had issued a certificate under Section 32(2); out, before that. it is necessary to understand real purport and nature of the instrument. , It is not as if different persons executed a sale deed in favour of a co-operative Society, either for independent - rights possessed by them, over different portions of the, property, or in' dependent rights to any undivided share in -the property. It is not as if the saledeed was executed on several occasions. The same, purchaser took twelve sale deeds executed on the same day by the same seller of a property which belong a total consideration of Rs- 4,86,00 but, evidently camouflaged the transaction by taking twelve independent documents, each for 1/12th undivided share.-in respect of those same property. Should the exemption apply in such a case? There is another reason urged, as to why the exemption- sought would not, apply, The notification relating to exemption contemplates where sale is of land and not of A building the consideration is below Its, 50,000/- and the sale is of land, then the exemption would be attracted. But, what should happen if the sale is of land as well as of building and consideration for such -sale of land and building , together is, below Rs.- 50,000/- is another question.
9. Whatever may be the, from in which the purchaser -society has couched the sale deeds and whatever might it be the devise adopted, it is too plain and needs no argument to conclude that the land of 840 sq. yards with the superstructure thereon was sold to the Co-operative Society for a consideration far exceeding Rs. 5000/- though this was I done by the device of 12 documents executed on one And the same day. , If this be the case, it would be outside the scope of exemption contemplated: by the notification. In , this view, we need not go into the further question whether since the sale is not only of -the land but of the building also, the notification would apply. It may not be necessary, for the purpose of this case to decide this question and if not necessary., it is advisable for us to leave it open.
10. The next question would be whether there would be any difference by reason of the fact that the Collector of Mehsana had made an adjudication. It is apparent, from the facts stated that the land which is situate within the jurisdiction of the Assistant Superintendent, Stamps, Ahmedabad which has been designated 'Collector' within whose jurisdiction the property is situate, was the proper authority to adjudicate under section 31 of the Stamp Act. He, was properly approached and he adjudicated But, finding the decision unpalatable, the society approached the Collector, mehsana, within whose jurisdiction the property did not lie and the Collector obliged by a decision in favour of the society. It is surprising how the Collector could have acted in respect of a matter of jurisdiction as to payment of stamp duty on a conveyance outside his own jurisdiction. It may not be necessary to go into that question further for the simple reason that the certificate issued by him under Section 32(2) is not in question here and that has not been sought to be reopened. Unlike a certificate issued under Section 39(2) which is conclusive evidence of the matter stated therein, a certificate issued under Section 32(2) serves a limited purpose. It will not bar an adjudication of the question in regard to other documents, though of similar nature, by a competent authority and, therefore, there is no question of any bar to the impounding by the Assistant Superintendent, Stamps, Ahmedabad of the eleven documents and directing the payment of duty and penalty.
11. What we have answered above would be answer to Questions B and C the answer to Question B being in the affirmative and. the answer to Question C also being. in the affirmative both in favour of the Revenue.
12. There is a case raised in the reference -that the Assistant Superintendent, Stamps, Ahmedabad, could not have impounded the documents, and imposed any stamp duty or penalty when the documents were not produced before him for any other purpose. To understand this contention, it is necessary to appreciate how these, documents come before the Assistant Superintendent, stamps, Ahmedabad. Section 63 of the Bombay Stamp Act provides that the powers exercisable by a Collector under Chap. III, Chapter IV and Chapter V and under clause (a.) of the first proviso to See. 27 shall in all cases be subject to the control of the Chief Controlling Revenue Authority. The Chief Controlling Revenue authority discovered or, an inspection that the Collector of Mehasana had issued a. certificate under Section 32: M in respect, of Property situate the jurisdiction of the Assistant Superintendent, Ahmedabad, and that towns for the purpose of, any evidence or certificate erroneously adjudicating on the question of liability to stamp , duty. Thereupon he evidently contacted the Assistant Superintendent, Stamps Ahmedabad, who was under his control. Section 63 of the Bombay Stamp Act invests, on every person having by law or consent of parties authority to receive evidence and 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 the power to impound the same if it appears to him that such instrument is not duly stamped, Therefore, if a document is produced before the Assistant Superintendent, Stamps, or comes up before him in the performance of his functions, it is his duty to impound the same if he feels that the document is not duly stamped. In fact much larger powers are conferred upon him under the. Bombay Stamp Act by Section 68 which as it stand B today was substituted by Gujarat Act 19 of 1965. This provision enables the Collector 'where he has reason to believe that all or any of the instruments specified in Schedule I have not been charged at all or incorrectly charged with duty leviable under this Act', to 'authorize in writing any officer to enter upon any premises where he has reason to believe that any registers, books records, papers, documents, or proceedings relating to or in connection with any such instruments are kept and to inspect them, and to take such notes and extracts as such officer deems necessary, and if necessary, to seize them and to impound them under Section 33.' There is an obligation cast under Section 68(2) on every person having custody of such records when required by an officer authorized under sub-sec, (1)to produce them before such officer. Therefore, w1lun. the Collector has 'reason to believe' in the existence of instruments under valued for the purpose of stamp duty deficitly levied with duty, he has wide powers to authorise search, seizure and even impounding. The scope ,ever under Section 33(l) has to be read in this context.
13. As soon as the Collector had reason to believe that had the obtained registration of documents in regard to purchase of property without payment of stamp duty .he addressed the society for production of document and followed it up by another letter. There Upon the society produced the eleven documents. It was then that theft documents, which, according to the Collector, were not duly stamped, were impounded, and further proceedings taken had certainly jurisdiction to call for the instruments and perhaps, had there be a non-compliance, he could have very well invoked Section 68 of the Stamp Act, The society did not evidently desire that such a situation should develop but produced the documents. Such production falls within Section 53. If it comes to the officer in the course of the performance of his functions, then again the case falls within Section 53. That is the case here and, therefore, there is no reason to feel that there is any illegality in impounding the documents.
14. The learned counsel for the Cooperative Society has drawn our attention to the decision in Uttam Chand v. Perman Nand, AIR 1942 Lah 265, in support of the plea that the Collector cannot compel the production of the documents. Apart from the fact that that case there was one which arose under Stamp Act, 1899, where there is no provision corresponding to, Section 68 of the Bombay Stamp Act, 1958, that case does not lay down any rule that the Collector cannot require the production of documents. The question there was whether the Court can compel any party to produce a document against his wishes and in that context, the Court said that it is open to the party's counsel to refuse to obey the order of the Court an the Court would not be competent to compel production. The power under Section 68 enables the officer in this caw to get at the document if the party did not comply with the requisition made by the Collector; the party chose to comply with the requisition and further avoided the further consequence. Therefore, the documents were not compelled to be produced but voluntarily produced and the documents came to the office in the course of discharge of his functions.
15. The decision in Hanuman Prasad v. State of Rajasthan also is of no application because the question that arose for decision there was entirely different. In the absence of a document which was said to be insufficiently stamped, there was no occasion for impounding and that is what the Court said in that case. That also was a case which arose under the Indian Stamp Act and not under the Bombay Stamp Act.
16. In this view, we answer Question A in the affirmative and in favour of the Revenue,
17. The Chief Controlling Revenue Authority while dealing with the, revision filed by a Co-operative Society before it confirmed the view taken by the Collector and, therefore, upheld the levy of the stamp duty. But, in regard to the penalty, it made enhancement from Rs. 150- on each of the documents to R& 1,000/- each. It is seen from the facts referred to us and the papers before us that no notice was issued by the Chief controlling Revenue Authority to show cause against enhancement of penalty. We are not concerned here with Ale question whether, in exorcise of power under Section 53, the Controlling Authority could enhance the penalty imposed by the Collector. We will assume for the purpose of this case that he has suet), power. But, even so, when a party approaches him for a relief and be, in exercise of his powers seeks to enhance the penalty imposed, with the 'suit that consequences which are more adverse to the party result from the decision, it is fundamental as a requirement of natural justice that he should have issued a notice to the party concerned, given an opportunity to explain and then only adjudicated on the imposition of additional penalty. Inasmuch as that has not been done the order enhancing the penalty is void and the penalty should necessarily be limited to Rs. 150/- for each one of the documents. To that extent, Question D is to be answered in favour of a Cc-operative Society, that is, it must be answered in the negative and against the Revenue.
19. The reference is disposed of as above. The parties shall suffer the costs of this Reference
20. Order accordingly.