No provision entitling collector to recover deficiency in registration fee under Stamp Act: Allahabad High Court

The Allahabad High Court has held that there is no provision in the Indian Stamp Act, 1899 which authorizes the collector or other stamp authorities to recover the deficiency in registration fees.

In addition to recovery of stamp duty deficiency, recovery has been ordered against the petitioner in respect of registration fee deficiency on Document Nos. 1549/2022 and 1548/2022. Further, penalty of Rs. 10,000/- and Rs. 50,000/- were also imposed on the petitioner for insufficiency of registration fee. The petitioner challenged this order before the Additional Commissioner (Stamp), Ayodhya Division, Ayodhya, which was dismissed.

The petitioner’s counsel argued that the petitioner purchased the property through sale deeds signed by some impostors and subsequently the sale deeds were canceled through a compromise entered into between the petitioner and the real owner of the ground. It was when the petitioner requested reimbursement of the stamp duty paid on the deed of sale that the authorities highlighted the insufficiency of the stamp duty. It was argued that no satisfaction was recorded in the reviews before they were issued.

On the other hand, the State Attorney argued that the petitioner had at no time challenged the validity of the notices and therefore could not be allowed to raise it for the first time before the court. Reliance was placed on the decision of the Supreme Court in the case Deepak Tandon and others towards Rajesh Kumar Gupta.

The Court observed that in Deepak Tandon and others towards Rajesh Kumar Gupta, the Supreme Court had held that a factual plea which was not raised in a lower proceeding could not be filed in a third court, writ, review or appeal.

Justice Vidyarthi held that the vagueness of the notice is not a question of fact but constitutes an error apparent on the face of the record and can be challenged for the first time before the writ court. Observing that the notices issued to the petitioner were vague, the Court also held that there was nothing on record to prove that the inspection mentioned in the notice was carried out after duly informing the petitioner.

Referring to the Indian Stamp Act, 1899 and the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997, Justice Subhash Vidyarthi estimated that “there appears to be no provision in the Indian Stamp Act, 1899 authorizing the authorities to direct recovery of any deficiency in the payment of registration fees and in the absence of any statutory provision the authorities cannot make any order for the recovery of the deficit in registration fees in the context of a procedure. established under the Indian Stamp Act.»

Accordingly, the Court vacated the challenged opinions and orders, giving the State the liberty to issue new opinions.

Case title: Bindu Singh v. State of UP Thru. Prin. Dry. Department of Revenue. Lko. And 2 others (WRIT – C No. – 8666 of 2024)

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