TMI Blog1950 (5) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the Sub-Registrar for registration he impounded the same and sent it to the Stamp Office. The Assistant Superintendent of Stamps wrote to the respondent that the document was a mortgage with possession, chargeable with duty under article 40 (a) of the Schedule and inquired why it was not duly stamped before execution. The respondent's solicitors in their reply contended that the document was not, and was never intended by the parties to be, a mortgage with possession. They pointed out that no possession of the property had been given or was intended to be given, except in certain contingencies and therefore the document was properly stamped. In reply the Assistant Superintendent intimated that the document was chargeable with duty of ₹ 56,250 and a penalty of ₹ 5,000 had been imposed. The respondents were asked to pay the amount forthwith. On the 27th July, 1945, the respondent filed a suit against the Central Bank contending that the document was not a mortgage with possession. It was alleged that since a doubt had arisen as to whether the document gave effect to the common intention of the parties the Court's directions were sought for and if the Court f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in appeal to this Court. Two points have been urged on behalf of the appelant. The first is whether under section 57 of the Stamp Act there is an obligation on the appellant to state a case, and if not whether the High Court had jurisdiction to give a direction to that effect. The second point is whether having regard to the terms of section 226 (1)of the Government of India Act, 1935, the High Court had jurisdiction to order the appellant to state the case, it being a matter relating to the revenue. Under this head it is also argued that the matter had proceeded beyond the stage of assessment and,had reached the stage of recovery. Therefore, the High Court of Bombay had no jurisdiction to pass the order it did. The material part of section 57 of the Stamp Act runs as follows: 57. (1) The Chief Controlling Revenue-authority may state any case referred to it under section 56, sub-section (2), or otherwise coming to its notice, and refer such case, with its own opinion thereon * * * * (b) if it arises in the province of Bombay, to the High Court at Bombay; ........ Section 226 (1) of the Government of India Act1935, runs as follows :-- 226. (1) Until otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reading of the entries in the Schedule to the Stamp Act. As in the present case, the question under what item stamp duty is leviable may depend on the true construction of a document. It may also involve the decision of the question, as in the present case, as to what is the effect of the Court's order directing a rectification of the instrument. It does not appear, on principle, sound to hold that these difficult questions should be left under the Stamp Act to the final decision of the appellant, and if the party affected by the assessment has a grievance there is no relief at all in law for him. The construction of a document is not always an easy matter and on the ground that it is a substantial question of law, parties have been permitted to take the matter up to the highest Court. If so, it appears difficult to start with the assumption that because this is a Revenue Act the decision of the appellant should be considered final and conclusive. The provisions of section 56 (2) and section 60 giving power to the Collector and the Court to send a statement of case to the appellant and the High Court respectively, in our opinion, instead of helping the appellant, go against h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade and the proceedings went to the Commissioner of Income Tax, the assessee requested that a case may be stated for the opinion of the Court under the aforesaid section, but the Commissioner refused to do so. Thereupon, a Rule was obtained from the High Court calling upon the Chief Revenue Authority, Bombay, to show cause why a case should not be so stated. It was argued before the High Court that the Court had no jurisdiction to order the Commissioner to state a case for its opinion. When the matter reached the Privy Council the objection to the jurisdiction was put more broadly. Before the High Court the only question raised was whether the Authority had a duty, in the circumstances, to state a case. The point raised before the Judicial Committee of the Privy Council took the form of saying that even if the Authority had a duty, the Court could not require him to exercise it; and for this purpose reliance was placed upon the well-known general purview of the Indian Legislation which excludes matter of revenue from the consideration of the ordinary civil Courts, the principle being exemplified in the case of Spooner v. Juddow (1 ) and upon section 106 (2)of the Government of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upposing that there is a serious point of law to be considered, there does lie a duty upon the Chief Revenue Authority to state a case for the opinion of the Court, and if he does not appreciate that there is such a serious point, it is in the power of the Court to control him and to order him to state a case. This reasoning and conclusions, although they have not now the compelling force they had before the 26th of January, 1950, are entitled to great respect. Apart from that, we entirely agree with that line of reasoning and the conclusion. In our opinion, in 'the present case the power to make a reference under section 57 is not only for the benefit of the appellant. It is coupled with a duty cast on him, as a public officer to do the right thing and when an important and intricate question of law in respect of the construction of a document arises, as a public servant it is his duty to make the reference. If he omits to do so it is within the power of the Court to direct him to discharge that duty and make a reference to the Court. Mr. Daphtary on behalf of the appellant tried to distinguish this case on the ground that the scheme of the Income Tax Act was differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in conflict. The sections in Chapters IV, V and VI ending with section 61, deal with situations arising from such difference of opinion. Section 57 (1) falls under this heading. In our opinion, therefore, this contention of the appellant fails. The next point urged was whether the High Court has jurisdiction to order the Revenue Authority to state a case in face of the provisions of section 226 of the Government of India Act, 1935. The argument was urged in two parts: Firstly, that this being a. revenue matter, the jurisdiction of the Court was excluded. Secondly, that the matter had ceased to be in the stage of assessment but had reached the stage of collection of stamp duty. On that ground the present case was sought to be distinguished from Alcock's case(1). In our opinion this argument of the appellant must also fail. A similar argument based on the wording of the corresponding section 106 (2) of the Government of India Act, 1915, as mentioned above, was urged in Alcock's case(1). On that point their Lordships observed as follows :-- Upon the point thus broadly stated their Lordships have no difficulty in pronouncing a decision. To argue that if the legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X
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