Case Note & Summary
The dispute arose when the Collector of Sitapur impounded an instrument and demanded stamp duty and penalty after the respondent had presented the instrument for an opinion on duty under Section 31 of the Indian Stamp Act, 1899. The respondent had executed a wakf by oral recitation of Sigha on September 12, 1948, which was then written on a stamped paper, signed, and attested. On September 15, 1948, the instrument was presented to the Collector for his opinion as to the duty chargeable. The Collector referred the matter to the Board of Revenue, which after a substantial delay held that the document was liable to duty under Article 58 of the Stamp Act. On October 29, 1951, the Collector determined that Rs. 85,598/7/- was payable as stamp duty and ordered its deposit within fifteen days, with notice served on November 10, 1951. The respondent challenged this action by filing a writ petition under Article 226 of the Constitution, but the High Court dismissed it on November 3, 1952, as premature. Subsequently, on February 2, 1954, a further notice demanded deposit of the duty plus a penalty of Rs. 5/- within one month, failing which proceedings under Section 48 would be initiated. The respondent then filed a second writ petition, which was allowed by a Full Bench of the Allahabad High Court, quashing the Collector's order. The State of Uttar Pradesh appealed to the Supreme Court. The core legal issue was the interpretation of Sections 31, 32, and 33 of the Indian Stamp Act, 1899, particularly whether the Collector, after giving his opinion on duty under Section 31, retained the power to impound the instrument and demand duty and penalty under Section 33. The State argued that if an executed document, whether stamped or not, was submitted for opinion and found not duly stamped, the Collector was obliged to impound it under Section 33. The respondent contended that once the Collector gave his opinion, he became functus officio and could not take further action. The Supreme Court analysed the statutory scheme. Section 31 requires the Collector to determine the duty when an instrument is brought for opinion and the prescribed fee is paid. Section 32 provides for endorsement of full duty paid only after payment is made. Section 33 empowers every person in charge of a public office to impound an instrument not duly stamped if it is produced or comes before him in the performance of his functions. The Court held that the words 'produced or comes in the performance of his functions' refer to production before judicial or other officers as evidence or for functions such as registration, not to the determination of duty under Section 31. Section 31 is complete by itself, and the Collector's duty ends with his determination. Therefore, after giving his opinion, the Collector became functus officio and had no authority to impound the instrument or demand duty and penalty. The Court referred to prior decisions in In Re Cooke and Kelly, Collector, Ahmednagar v. Rambhau Tukaram Nirhali, Paiku v. Gaya, and Chunduri Panakala Rao v. Penugonda Kumaraswami. Accordingly, the Supreme Court dismissed the appeal and upheld the High Court's order quashing the Collector's demand.
Headnote
A) Indian Stamp Act, 1899 - Collector's Power Under Section 31 - Section 31 - Collector's function limited to determining duty when instrument brought for opinion; no further power to impound or demand duty - The instrument was presented for opinion under Section 31, and Collector determined duty after reference to Board of Revenue; Held that Collector became functus officio after giving opinion (Paras Not mentioned). B) Indian Stamp Act, 1899 - Impounding Under Section 33 - Section 33 - Power to impound arises only when instrument is produced or comes in performance of functions, such as evidence or registration, not for seeking opinion under Section 31 - The instrument was not produced as evidence or for being acted upon, so Section 33 did not apply; Held that impounding and demand of duty and penalty were illegal (Paras Not mentioned).
Issue of Consideration
Whether the Collector, after determining the stamp duty under Section 31 of Indian Stamp Act, 1899, could impound the instrument and demand duty and penalty under Section 33. Whether the words 'produced or comes in the performance of his functions' in Section 33 encompass presentation of an instrument to the Collector merely for seeking opinion under Section 31.
Final Decision
Appeal dismissed; Supreme Court upheld the High Court's decision quashing the Collector's order. The Collector had no power to impound the instrument or demand duty and penalty after giving opinion under Section 31.
Law Points
- Collector under Section 31 functions limited to determining stamp duty
- becomes functus officio after opinion
- Section 33 impounding applies only when instrument produced or comes in performance of functions
- production for opinion under Section 31 not covered by Section 33
- endorsement under Section 32 requires payment before Collector can certify
- demand of duty and penalty after opinion invalid
