DELL INTERNATIONAL SERVICES INDIA PRIVATE LIMITED V. THE REGIONAL COMMISSIONER

WP/896/2020

AI Insights

The case involves Dell International Services India Private Limited and NTT Date Information Processing Services Private Limited, who challenged the orders of the Deputy Commissioner (Stamps) and the Regional Commissioner demanding additional stamp duty on a property transaction. The dispute centered on the correct valuation of the property for stamp duty purposes, with the authorities claiming the property was undervalued. The petitioners argued that they had followed the correct procedure and paid the appropriate duty based on the guidance value applicable to Hoodi Industrial Area, as confirmed by the Sub-Registrar. The court found that the authorities had not adhered to the principles of natural justice in their proceedings, leading to the quashing of the demand for additional stamp duty.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 725826 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 22-11-2024
• Assessment Year: misc
• Other Referred Cases: SYED WALI PEER KHADRI v. THE CHAIRMAN, BDA, T.K. DEEPAK v. THE REGIONAL COMMISSIONER, BANGALORE DIVISION, CHAITRA D.R. v. SENIOR SUB-REGISTRAR, BABU VERGHESE v. BAR COUNCIL OF KERALA
• Laws Referred To: Karnataka Stamp Act, 1957, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: REUBEN JACOB; RAHUL CARIAPPA
• Assessee Lawyers: GANAPATHI HEGDE; THEJAS
• Keywords: Deficit stamp duty; Natural Justice; Valuation of property; Suo motu proceedings
• Section: 226; 227; 45-A(3)

Judgement Text

" 1 Reserved on : 23.08.2024 Pronounced on : 22.11.2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF NOVEMBER, 2024 BEFORE THE HON'BLE MR. JUSTICE M. NAGAPRASANNA WRIT PETITION No. 896 OF 2020 (GM-ST/RN) BETWEEN: 1 . DELL INTERNATIONAL SERVICES INDIA PRIVATE LIMITED A COMPANY UNDER THE COMPANIES ACT, 2013 HAVING ITS REGISTERED OFFICE AT DIVYASHREE GREENS, 12/1, 12/2A, 13/1A KORAMANGALA INNER RING ROAD BENGALURU, KARNATAKA REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. ABRAHAM KOSHY. 2 . NTT DATE INFORMATION PROCESSING SERVICES PRIVATE LIMITED A COMPANY UNDER THE COMANIES ACT, 2013 HAVING ITS REGISTERED OFFICE AT PLOT NO.123, EPIP 2ND PHASE WHITEFIELD INDUSTRIAL AREA BENGALURU – 560 066 KARNATAKA, REPRESENTED BY 2 ITS AUTHORISED SIGNATORY MS. DEEPA KRISHNAMURTHY ... PETITIONERS (BY SRI GANAPATHI N. HEGDE, SR. ADVOCATE FOR SRI THEJAS S.R., ADVOCATE) AND: 1 . THE REGIONAL COMMISSIONER 2ND FLOOR, BMTC BUILDING K.H.ROAD, SHANTHINAGAR BENGALURU – 560 027. 2 . DEPUTY COMMISSIONER (STAMPS) AND DISTRICT REGISTRAR SHIVAJINAGAR, 3RD FLOOR, TRIUMPH TOWERS NO.48, CHURCH STREET, BENGALURU – 560 001. ... RESPONDENTS (BY SRI REUBEN JACOB, AAG A/W., SRI RAHUL CARIAPPA K.S., AGA) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD.24.10.2019 PASSED BY THE R-1 IN CASE NO.STP(APPEAL)/12/2018-19 ANENXURE-A AND THE ORDER DTD.18.6.2018 PASSED BY THE R-2 IN CASE NO.DUS/SJN/SM/01:2018-19 VIDE ANNXURE-B AND ETC., 3 THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 23.08.2024 COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:- CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA CAV ORDER The 1st petitioner/Dell International Services India Private Limited and another are knocking at the doors of this Court calling in question an order dated 24-10-2019 passed by the 1st respondent/Regional Commissioner under the Karnataka Stamp Act, 1957 (‘the Act’ for short) confirming the order passed by the 2nd respondent/Deputy Commissioner (Stamps) and District Registrar and have sought for consequential direction to refund a sum of `1,22,94,000/- with interest from 24-09-2018 till the date of payment. 2. Heard Sri Ganapathi N. Hegde, learned senior counsel appearing for the petitioners and Sri Reuben Jacob, learned Additional Advocate General appearing for the respondents. 4 3. Facts, in brief, germane are as follows: The 1st petitioner is a Company incorporated under the Companies Act, 2013 having its registered office in Bangalore. It is said to be in the business of manufacturing and providing computer technology solutions worldwide. Petitioner No.2 is again a Company incorporated under the provisions of the Companies Act, 2013 having its registered office in Bangalore and is engaged in the business of information technology and its allied services. On 27-04-2006, the 1st petitioner and the 2nd petitioner enter into a business transfer agreement (hereinafter referred to as the ‘agreement’ for short). In terms of the agreement, the 1st petitioner agrees for a lump sum consideration to sell to the 2nd petitioner its IT services business division inter alia including the property. The petitioners also agree and acknowledge the transaction. The agreement contemplated transfer of business on a slump sale basis as obtaining under the provisions of the Income Tax Act. In terms of certain clauses of the agreement, the 1st petitioner agreed to deliver to the 2nd petitioner registered conveyance duly stamped 5 and executed requiring fully and effectively vesting the assets forming part of the agreement to the hands of the 2nd petitioner. 4. The 1st petitioner, for the purpose of payment of stamp duty, computed the guidance value of Hoodi Industrial Area (EPIP) together with registration fee at a sum of `2,93,75,250/-. This was based upon the khata certificate obtained by the 1st petitioner from the Bruhat Bengaluru Manahagara Palike (‘BBMP’) which reflected that the property of the 1st petitioner was located in Hoodi Industrial Area and that had cleared the doubt of the 1st petitioner that it was not in Whitefield Industrial Area. Accordingly, the 1st petitioner obtained a Bank draft for the aforesaid amount. The sale deed comes to be executed and registered on 04-01-2017 when the TDS challan and bank draft towards stamp duty and registration fee were produced by the 1st petitioner before the office of the Sub- Registrar. 5. The 2nd petitioner, about 15 months thereafter, receives a notice from the 2nd respondent/Deputy Commissioner (Stamps) and District Registrar invoking Section 45-A(3) of the Act, demanding 6 deficit stamp duty. The 2nd petitioner submits a reply to the notice. The 2nd respondent then rejects all the contentions and determines `2,45,87,838/- as deficit stamp duty and registration fee. Aggrieved by the order of the District Registrar, the petitioners file an appeal before the Appellate Authority. The Appellate Authority/1st respondent rejects the appeal in terms of its order dated 26-09-2019. Challenging the aforesaid orders of the Deputy Commissioner (Stamps) and the Regional Commissioner/Appellate Authority, the subject petition is preferred. 6. The learned senior counsel Sri Ganapathi N. Hegde, appearing for the petitioners contends that the location of the property is in doubt. Therefore, the petitioners sought information from the Sub-Registrar. The office of the Sub-Registrar informs that the property comes within the Hoodi Industrial area and not Whitefield Industrial Area. The 1st petitioner, accordingly calculated the market value based upon the value notified by the Government itself. The learned senior counsel would submit that the 1st petitioner inadvertently computed the guidance value by adding 40% to the subject property higher than the guidance value that 7 was required to be paid, only on the instructions of the Sub- Registrar in 2016. The 1st petitioner computes the guidance value of the property as per the rate applicable to Hoodi Industrial area after adding 40% excess charges. It is, therefore, the petitioners are not liable for payment of any deficit stamp duty, but the excess that is paid is required to be refunded by the State. He would contend that the 1st petitioner was never put to notice nor heard by both the authorities/respondents. Before the Regional Commissioner/1st respondent the 1st petitioner was not even arrayed as a party to defend his case of deficit stamp duty. It is his submission that it is not only in violation of Section 30 of the Act, but in violation of principles of natural justice. 7. The learned Additional Advocate General, per contra, would vehemently contend that the consideration paid under the agreement between 27-04-2016 and 03-08-2016 was under-valued according to the determination made by the 2nd respondent. For the property that was undervalued and conveyed, the deficit stamp duty is demanded. Suo motu case is registered under Section 8 45-A(3) of the Act to detect under-valuation and therefore, the proceedings were initiated and notice was issued. The subject property is claimed to be falling within Hoodi Industrial Area as per the information provided by the Karnataka Industrial Area Development Board to the 1st petitioner. It does not depict that it is Hoodi Industrial Area but Hoodi Village. Therefore, the deficit stamp has emerged. The relevant entry for calculating guidance value is found at Sl.No.613 of the Whitefield Industrial Area where the property is situated and not Hoodi Industrial Area. He would submit that the orders passed by the Deputy Commissioner (Stamps) and the Regional Commissioner are in accordance with law and the 1stpetitioner who had undervalued the property while executing the sale deed cannot escape deficit stamp duty. Insofar as non-issuance of notices to the petitioners is concerned, the learned Additional Advocate General would submit that it is a matter of record that they were not heard as it was a suo motu proceedings initiated under the Act. 9 8. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. 9. The afore-narrated facts are not in dispute. The issue in the subject petition is the sale between the 1st petitioner and the 2nd petitioner. The determination of stamp duty is the fulcrum of the lis. According to the learned senior counsel for the petitioners that the petitioners were informed by the Sub-Registrar that the property comes within Hoodi Industrial Area. But, according to the State Government, it is coming within the Whitefield Industrial Area, Hoodi Village. Therefore, the stamp duty according to the State ought to have been paid depicting the property to be coming under Whitefield Industrial Area – EPIP, Hoodi Village. The dispute, therefore, lies with regard to the identification of the property and the place where the property is situated for the purpose of determination of stamp duty. The sale deed takes place on 04-01-2017. Long thereafter, the 2nd petitioner-purchaser of the property from the hands of the 1st petitioner receives a notice under Section 45A of the Act. The notice reads as follows: 10 “FORM – II (See Rule 4) FORM OF NOTICE PRESCRIBED UNDER RULE 4 OF THE KARNATAKA STAMP (PREVENTION OF UNDERVALUATION OF INSTRUMENTS) RULES 1977 Case No:DUS/SJN/SM/01/2018-19 Dated: 08/05/2018 Document No: 4857/2016-17 (Sale Deed) To M/s. NTT DATA INFORMATION PROCESSING SERVICES PVT. LTD., Plot No 12, EPIP Phase II, Whitefield industrial Area Hoody Village, Bangalore – 560 066 1. Please take notice that the above mentioned case is called for Suo-Motto by the undersigned from registering Office at SHIVAJINAGAR SRO, under Sub-Section (3) of Section 45-A of the Karnataka Stamp Act, 1957, (Karnataka Act 34 of 57) of determination of (a) the Market Value, of the properties covered by the instrument of conveyance exchange/gift registered as Document No. 1597/2016-17, Dated: 01/12/2016 (Sale Deed), and (b) the stamp duty payable on the above instrument. 2. You seems to be not complied with Section 28 of K.S.A. 1957. Hence this notice. 3. You are hereby required to submit your representations if any in writing to the undersigned within 21 days from the date of service of this notice to show that the market value of the properties have been truly and correctly set forth in the instrument. You may also produce all evidence in support of your representation within the time allowed. 4. If no representations are received within the time allowed the matter will be disposed of on the basis of the facts available. 11 5. This case is posted for hearing on: 25/05/2018 at 3.00 PM. Bangalore. Sd/- District Registrar & Deputy Commissioner of Stamps, Shivajinagar Registration District, Dated: 08/05/2018. Bangalore – 560 001.” The notice is indicative of the fact that the market value of the instrument involved in the transaction has been undervalued. This is replied to by the 2nd petitioner/purchaser as he was the noticee. The reply was in detail that the petitioners have not undervalued and need not pay any deficit stamp duty. What comes about is the order dated 18-06-2018. 10. What could be gathered from the order is that, the 1st petitioner/vendor who had on certain premises determined the stamp duty and paid, is not even made a party in the proceedings. The 2nd petitioner defends the action by submitting a reply. A detailed order is passed by the 2nd respondent determining deficit stamp duty to be paid by the 2nd petitioner. The order reads as follows: 12 “………….. ಅಂ \u0007 ಮ ಆ zÉà ಶ 9. ಕ ಾ\u000eಟಕ ಮು\u0011ಾ\u0012ಂಕ \u0013ಾ\u0014\u0015 1957 ರ ಕಲಂ 45-A (2) ರಂ\u0018ೆ \u001aಾಗೂ ಕ ಾ\u000eಟಕ ಮು\u0011ಾ\u0012ಂಕ ಯಮ 1977ರ ಅ ಯಮ 7 ರಂ\u0018ೆ ಮತು! ೋಂದ$ (ಕ ಾ\u000eಟಕ \u0007ದು\u0015ಪ&) \u0013ಾ\u0014\u0015 1975 (ಕ ಾ\u000eಟಕ ಆ'( 28/1975) ರ ಕಲಂ-80-A ಪ\u0012\u0013ಾರ, ಪ\u0012²ßತ ಸ*\u0007!+ೆ ಇರುವ ಅನುಕೂಲಗಳ0 \u001aಾಗೂ ದ1ಾ!2ೇಜು ೋಂದ$ 4ನದಂದು ಇದ\u0015ಂತಹ 6ಾ7! 8ಾರುಕ9ೆ( 8ೌಲ;ವನು< \u001aಾಗೂ \u0011ಾಖ>ಾ\u0007ಗಳ7?ಯ ಅಂ@ ಅಂಶಗಳನ*ಯ ಸ*\u0007!ನ 8ಾರುಕ9ೆ( 8ೌಲ;ವನು< \u001aಾಗೂ Aಾವ\u0007ಸBೇ\u0013ಾದ ವ;\u0018ಾ;ಸ ಶುಲCಗಳನು< \u0013ೆಳDನಂ\u0018ೆ ಣ\u000eFGರು\u0018ೆ!ೕ ೆ. PÀæ.¸ÀA «ªÀgÀ ªÀiË®å gÀÆ.UÀ¼À°è 1 ಕಂ&\u0013ೆ 8 ರಂ\u0018ೆ ಸ*\u0007!ನ 8ೌಲ; TDS ಆಧರದIವಯ 331,00,68,000 2 ದ1ಾ!2ೇJನ7? ನಮೂ4Gರುವಂ\u0018ೆ 8ಾರುಕ9ೆ( 8ೌಲ; 293,75,25,000 3 ವ;\u0018ಾ;ಸKರುವ 8ಾರುಕ9ೆ( 8ೌಲ; 37,25,43,000 4 ವ;\u0018ಾ;ಸKರುವ 8ಾರುಕ9ೆ( 8ೌಲ;\u0013ೆC Aಾವ\u0007ಸBೇ\u0013ಾDರುವ \u0013ೊರ\u0018ೆ ಶುಲCಗಳ0 5 ಮು\u0011ಾ\u0012ಂಕ ಶುಲC 5.6% ರಂ\u0018ೆ gÀÆ:2,08,62,408 6 ೋಂದ$ Oೕ 1 % ರಂ\u0018ೆ gÀÆ: 37,52,430 7 Aಾವ\u0007ಸBೇ\u0013ಾದ ಒಟು( ಶುಲC : gÀÆ:2,45,87,838 10. ಈ Tೕ7ನಂ\u0018ೆ ಧ\u000eUGರುವ \u0013ೊರ\u0018ೆಯುಳV ಮು\u0011ಾ\u0012ಂಕ ಶುಲC ರೂ 2,08,62,408 /- ೋಂದ$ ಶುಲC ರೂ 37,25,430/- ಗಳನು< ಆ\u0011ೇಶ \u001aೊರ&Gದ 4 ಾಂಕ4ಂದ 90 4ನಗWೆXಳ+ಾD (The District Registrar, Shivajinagar, Bangalore) EªÀgÀ ºÉ¸ÀjUÉ AiÀiÁªÀÅzÉà gÁ¶ÖçÃPÀÈvÀ ¨ÁåAPï (Nationalised Bank).ನ7? ಮು\u0011ಾ\u0012ಂಕ ಶುಲC ಮತು! ೋಂದ$ ಶುಲCವನು< ಪ\u0012\u0018ೆ;ೕಕ2ಾD ಅಸಲು &.& : Aೇ ಆಡ\u000eZ ಪ[ೆದು, ೊ\u0018ೆ+ೆ Bಾ;ಂ@ನ IFSC code \u001aಾಗೂ ಪ\u0012\u00072ಾ4ಯ PAN ನಂಬU ೊಂ4+ೆ \u001aಾಜರು ಪ&Gದ\u00157? \u0013ಾನೂನು Uೕ\u0018ಾ; ಮುಂ4ನ ಕ\u0012ಮ \u0018ೆ+ೆದು\u0013ೊಳV>ಾಗುವ^ದು. 11. ಒಂದು 2ೇWೆ ಗ4ತ ಸಮಯದ7?, ಹಣವನು< ಜ8ಾ 8ಾಡ4ದ\u00157?. 1ಾ7_ಾನ `ೇಕಡ 12%ರ ಬ&abಂ4+ೆ \u0013ೊರ\u0018ೆ ಇರುವ ಶುಲCಗಳನು< ಕಂ\u0011ಾಯದ Bಾ@ ಎಂದು ಪUಗ$G \u0013ಾನೂನು ಪ\u0012\u0013ಾರ ವಸೂಲು 8ಾಡ>ಾಗುವ^ದು. ಈ ಆ\u0011ೇಶವನು< 4 ಾಂಕಃ 18/06/2018 ರಂದು ಬeರಂಗ2ಾD ಈ Aಾ\u0012 \u0013ಾರದ7? fೂೕgಸ>ಾFತು.” 13 It then comes to the knowledge of the 1st petitioner, as it is the 1st petitioner who had sold the property in favour of the 2nd petitioner. The petitioners then file an appeal against the order of the 2nd respondent. The Appellate Authority rejects the appeal by the following order: “ಪ\u0012ಕರಣದ Kದ;8ಾನ: TೕಲhನK\u0011ಾರರು J>ಾ? ೋಂದiಾ \u0013ಾUಗಳ0, j2ಾJನಗರ, BೆಂಗಳXರು ಇವರ ಅ\u0011ೇಶ ಸಂkೆ;: &ಯುಎl/ಎl ೆಎI/ಎl.ಎಂ/01/2018-19/364 4 ಾಂಕ 18-06- 2018ರ ಆ\u0011ೇಶದ Kರುದ\u0015 TೕಲhನKಯನು< 4 ಾಂಕ: 27-08-2018 ರಂದು ಸ7?Gದು\u0015, \u0013ೊರ\u0018ೆ ಶುಲCದ `ೇ. 50 ರಷು( nೇವ$ ಇo(ರು\u0018ಾ!pೆ. TೕಲhನKಯು BೆಂಗಳXರು ಪqವ\u000e \u0018ಾಲೂ?ಕು, ಕೃಷspಾಜಪ^ರ \u001aೋಬt, ಹೂ& +ಾ\u0012ಮದ ಸ2ೆ\u000e ನಂ:202, 203, 207 ಮತು! 208 ರ7? \u0013ೆ.ಐಎ&v ರವರು ಅwವೃ4x ಪ&ಸ>ಾDರುವ ಇ.y.ಐ.y-2 2ೈ{ Oೕ|a \u0013ೈ+ಾU\u0013ಾ ಪ\u0012\u0011ೇಶದ Aಾ?{ ನಂ:123 ರ 40,059 ಚದರ ~ೕಟZ KG!ೕಣ\u000eKರುವ ಆG!ಯ ಕ\u0012ಯ\u0013ೆC ಸಂಬಂ Gದು\u0015, ದ1ಾ!2ೇಜನು< ರೂ. 2,93,75,21,000/- ಗt+ೆ TೕಲhನK\u0011ಾರರು ೋಂದ$+ೆ \u001aಾಜರುಪ&Gರು\u0018ಾ!pೆ. ಸದU ದ1ಾ!2ೇಜು ಅಪ8ೌಲ;2ಾD\u0011ೆ ಎಂದು 2 ೇ ಪ\u0012\u00072ಾ4ಯು ಉ>ೆ?ೕ€Gದು\u0015, ಪ\u0012j<ತ ಸ*\u0007!ನ 8ಾರುಕ9ೆ( 8ೌಲ; ರೂ. 3,31,00,68,000/- ಗWೆಂದು 1 ೇ ಪ\u0012\u00072ಾ4ಗಳ0 ಧ\u000eUGರು\u0018ಾ!pೆ. TೕಲhನK\u0011ಾರರು ಸದU ಆ\u0011ೇಶವನು< ಪ\u0012jಾFತು. TೕಲhನK\u0011ಾರರ TೕಲhನK ಮತು! 7€ತ \u001aೇt\u0013ೆಯ7? \u0007tGದಂ\u0018ೆ, 1 ಮತು! 2 ೇ TೕಲhನK\u0011ಾರರು slump sale ಆ‚ಾರದ Tೕ>ೆ ಕpಾರನು< ಆ\u0011ಾಯ \u0018ೆU+ೆ \u0013ಾ\u0014\u0015 ಅ& 8ಾ&\u0013ೊಳV>ಾD\u0011ೆ \u001aಾಗೂ ಅದರಂ\u0018ೆ, ಕ\u0012ಯ ಪತ\u0012 ೋಂದ$ 8ಾ&\u0011ಾಗ ಪ\u0012j<ತ ಸ*ತು! 2ೈ{ Oೕ|aನ7? ಬರುವ^\u0011ಾD o.&.ಎl. Aಾವ\u0007ಸ>ಾD\u0011ೆ. ಆದpೆ ಸದU ಸ*ತು! ƒೌ\u0007ಕ2ಾD ಹೂ& +ಾ\u0012ಮದ7?ರುವ^ದು \u0013ೆ.ಐ.ಎ.&.v. ರವರು ೕ&ರುವ eಂಬರಹದಂ\u0018ೆ ವ;ಕ!2ಾಗುತ!\u0011ೆ ಮತು! ಹೂ& 14 +ಾ\u0012ಮದ ಸ*ತು!ಗt+ೆ 2ೈ{ Oೕ|a ಪ\u0012\u0011ೇಶದ ಸ*\u0007!Dಂತ ಕ&T 8ೌಲ;2ಾDರುತ!\u0011ೆ. ಆದpೆ, ಸದU ಅಂಶಗಳನು< ಗಣ ೆ+ೆ \u0018ೆ+ೆದು\u0013ೊಳV\u0011ೆ ಎ.J.ರವರ ಆ„ೇಪiೆಯನು< 8ಾತ\u0012 ಗಮನದ7?ಟು(\u0013ೊಂಡು ದ1ಾ!2ೇಜು ಅಪ8ೌಲ;2ಾD\u0011ೆ ಎಂದು ಆ\u0011ೇjGರುವ^ದUಂದ ಪ\u0012j<ತ ಆ\u0011ೇಶವನು< ರದು\u0015ಪ&ಸBೇ\u0013ೆಂದು TೕಲhನK\u0011ಾರರು \u0013ೋUರು\u0018ಾ!pೆ. 1 ೇ ಪ\u0012\u00072ಾ4_ಾದ J>ಾ? ೋಂದiಾ \u0013ಾUಗಳ0, j2ಾJನಗರ, BೆಂಗಳXರು ರವರು ಕಂ&\u0013ೆ2ಾರು ಉತ!ರದ7? \u0007tGದಂ\u0018ೆ, ಕ ಾ\u000eಟಕ ಮುಂ\u0011ಾ\u0012ಂಕ \u0013ಾ\u0014\u0015 ಕಲಂ 2(1)(v) ಅನ*ಯ ಪ\u0012j<ತ ಸ*ತು! ೋಂದ$ ಆದ 4 ಾಂಕ\u0013ೆC 8ೌಲ; ಧ\u000eUಸBೇ\u0013ಾDರುವ^\u0011ೇ \u001aೊರತು ವ;ವ\u001aಾರ ವ+ಾ\u000eವiೆ \u0011ಾಖ>ೆಗಳ 4 ಾಂಕ\u0013ೆC ಅಲ? `ೇ.1% ರಷು( o.&.ಎl ಕ&ತವ^ ಕ\u0012ಯ ಪತ\u0012 ೋಂದ$ ಆದ ನಂತರ ಅನ*ಯ2ಾಗ7ದು\u0015, kಾ\u0018ೆ ವ+ಾ\u000eವiೆ 8ಾನದಂಡ2ಾಗುವ^4ಲ?. ಕ ಾ\u000eಟಕ ಮುಂ\u0011ಾ\u0012ಂಕ \u0013ಾ\u0014\u0015 ಮತು! ಆ\u0011ಾಯ \u0018ೆpೆ+ೆ \u0013ಾ\u0014\u0015 ಇ2ೆpೆಡು Kwನಾ? ೋಂದiಾ \u0013ಾUಗಳ0 ಧ\u000eUಸBೇ@ದು\u0015, ಆ\u0011ಾಯ \u0018ೆರ+ೆಯು ಆ\u0011ಾಯದ Tೕ7ನ \u0018ೆU+ೆ 8ಾತ\u0012 ಆDರುತ!\u0011ೆ. TೕಲhನK\u0011ಾರರು ಖುದು\u0015 ರೂ. 3,31,00,68,000/- \u0013ೆC `ೇ.1% ರಂ\u0018ೆ o.&.ಎl ಜT 8ಾ&ರುವ^ದUಂದ \u0013ೊರ\u0018ೆ ಶುಲC Aಾವ\u0007ಸBೇ\u0013ಾD\u0011ೆ. TೕಲhನK\u0011ಾರU+ೆ K6ಾರiೆ+ೆ ಅವ\u0013ಾಶ 8ಾ&\u0013ೊಡ>ಾDದು\u0015, TೕಲhನK\u0011ಾರರ ಆ„ೇಪiೆ \u0013ಾನೂ +ೆ ಅನುಗುಣ2ಾDರದ \u0013ಾರಣ _ಾ8ಾನು1ಾರ ಸೂಕ! ಆ\u0011ೇಶ \u001aೊರ&ಸ>ಾD\u0011ೆ. ಆದ\u0015Uಂದ TೕಲhನKಯು ವ ಾ+ೊtG ಉt\u0013ೆ \u0013ೊರ\u0018ೆ ಶುಲCಗಳನು< Aಾವ\u0007ಸಲು ಆ\u0011ೇjಸBೇ\u0013ೆಂದು J>ಾ? ೋಂದiಾ \u0013ಾUಗಳ0 \u0013ೋUರು\u0018ಾ!pೆ. TೕಲhನK\u0011ಾರರ TೕಲhನK ಮತು! J>ಾ? ೋಂದiಾ \u0013ಾUಗಳ ಕಂ&\u0013ೆ2ಾರು ಉತ!ರ \u001aಾಗೂ ಲಭ; \u0011ಾಖ>ೆಗಳನು< ಪUjೕ7ಸ>ಾD, TೕಲhನK\u0011ಾರರ TೕಲhನKಯ7? ಪ\u00121ಾ!yGರುವ ಅಂಶ/\u0013ಾರಣಗಳನು< J>ಾ? ೋಂ\u0011ಾiಾ \u0013ಾUಗಳ ಮುಂ\u0011ೆಯೂ ತಂ4ದು\u0015 ಇದನು< ಪ\u0012j<ತ ಆ\u0011ೇಶ \u001aೊರ&ಸು2ಾಗ ಗಣ ೆ+ೆ \u0018ೆ+ೆದು\u0013ೊಂ&ರು\u0018ಾ!pೆ. J>ಾ? ೋಂದiಾ \u0013ಾUಗಳ ಆ\u0011ೇಶವ^ ಸೂಕ! \u0013ಾರಣಗtಂದ ಕೂ&ದು\u0015, ಸ*ಯಂ ಸ…ಷ( ಆ\u0011ೇಶ2ಾDರುತ!\u0011ೆ. TೕಲhನK\u0011ಾರರು ತಮh 2ಾದದ7? 1 ೇ TೕಲhನK\u0011ಾರರನು< K6ಾರiೆ 2ೇWೆ ಪ†+ಾರpಾD 8ಾ&ಲ?2ೆಂದು \u0007tGದು\u0015, ಕpಾUನಂ\u0018ೆ ಕ\u0012ಯ\u0011ಾರ/ಖUೕ4\u0011ಾರ ಇಬ‡ರ7? _ಾpಾದರೂ ಸಹ ಶುಲC Aಾವ\u0007ಸಬಹು\u0011ೆಂದು \u001aೇtದರೂ ಕ ಾ\u000eಟಕ ಮುಂ\u0011ಾ\u0012ಂಕ \u0013ಾ\u0014\u0015ಯ& \u0013ೊರ\u0018ೆ ಶುಲCವನು< ಖUೕ4\u0011ಾರUಂದ>ೇ ವಸೂಲು 8ಾಡBೇ\u0013ಾDರುತ!\u0011ೆ. ಆದ\u0015Uಂದ TೕಲhನK\u0011ಾರರ 2ಾದ ಒಪ…ಲು ಬರುವ^4ಲ?. ಆದ \u0013ಾರಣ ಪ\u0012j<ತ ಆ\u0011ೇಶದ7? ಮಧ; ಪ\u00122ೇjಸುವ ಅಗತ;\u0018ೆ ಕಂಡು ಬಂ4ರುವ^4ಲ?2ೆಂದು TೕಲhನK Aಾ\u0012 \u0013ಾರವ^ ಅwAಾ\u0012FG\u0011ೆ. 15 ಆದ\u0015Uಂದ ಈ \u0013ೆಳಕಂಡ ಆ \u0011ೇ ಶ TೕಲhನKಯನು< \u0007ರಸCUG\u0011ೆ. J>ಾ? ೋಂದiಾ \u0013ಾUಗಳ ಆ\u0011ೇಶ ಸಂkೆ;: &ಯುಎl/ ಎl ೆಎI/ಎl.ಎಂ/01/2018-19/364 4 ಾಂಕ 18-06-2018ರ ಆ\u0011ೇಶವನು< ಎ\u0007! e&4\u0011ೆ. ಆ\u0011ೇಶವನು< jೕಘ\u00127y+ಾರU+ೆ ಉಕ!>ೇಖನ ¤Ãr Bೆರಳಚು‰ಪ&G ಪUಷCUG 4 ಾಂಕ 26-09-2019 ರಂದು fೂೕgಸ>ಾFತು. “ The Appellate Authority does not consider any of the grounds urged by the petitioners in their appeal memorandum. The State seeks to defend the action by filing statement of objections contending that the petitioners have falsely undervalued the property by projecting it to be situated in Hoodi Industrial Area and though the sale was settled at `331,00,68,000/- but falsely valued the property at `293,75,25,000/-, on the ground that Hoodi Industrial Area guidance value is applicable, to evade stamp duty and registration fee. In fact, the market value of the property in Hoodi Industrial Area is `331,00,68,000/- and guidance value would not be applicable to this document. Therefore, there has been violation of law is the defence. Whether the 1st petitioner was at any time given opportunity to put forth its defence before the original 16 authority/Deputy Commissioner (Stamps) is answered by the respondents. 11. It is a matter of fact that the notice was issued to the 2nd petitioner and determination is made in favour of the 2nd petitioner. Both the petitioners prefer appeal before the Appellate Authority and the Appellate Authority does not consider any of the submissions made in the appeal and by a perfunctory order rejects the appeal filed against determination of deficit stamp duty. Therefore, there is violation of the principles of natural justice in the case at hand, as the determination of undervaluation of instrument is done under Rule 5 of the Karnataka Stamp (Prevention of Undervaluation of Instruments) Rules, 1977 (‘the Rules’ for short). No copy of the kind of such determination was ever served upon any of the petitioners. The purport of Rule 5 of the Rules and Section 45A of the Act need not detain this Court for long or delve deep into the matter, as the coordinate Benches of this Court have elucidated with regard to both the aforesaid provisions i.e., the Act and the Rules. Insofar as compliance with natural justice, when there is determination under rule 5 of the Rules, a coordinate Bench 17 in this Court in SYED WALI PEER KHADRI v. THE CHAIRMAN, BDA1 has held as follows: “…. …. …. 6. On perusal of the impugned orders passed by both the authorities, I find that there is no application of mind to the relevant materials. The original authority-the District Registrar has not taken into consideration principles required to be kept in mind for determining market value except making reference to the general principles to be looked into. None of the specific principles have been adopted. There is nothing to show whether any enquiry was held with regard to the market value of the adjacent lands or what was the guideline value of the land at the relevant point of time and such other relevant criteria as provided under Rule 5 of the Karnataka Stamp (Prevention of Undervaluation of Instruments) Rules, 1977.” Another coordinate Bench on the very same subject in T.K. DEEPAK v. THE REGIONAL COMMISSIONER, BANGALORE DIVISION2 has held as follows: “…. …. …. 7. Per contra, learned Additional Advocate General appearing for respondents submits that the guidelines value is only for the purpose of prima-facie determination of rate of an area concerned, it is not the final market value under the Stamp Act. ‘Market value’ is defined under Section 2 (mm) of Karnataka Stamp Act, 1957. He further submits that there is a procedure prescribed under Rule 5 of Karnataka Stamp (Prevention of Under Valuation of Instruments) Rules, 1977 ( for short ‘Rules’). As per Rule 5, the authority has 1 2015 SCC OnLine Kar 1629 2 W.P.No.26417 of 2012 decided on 07-02-2019 18 determined the market value under the above provisions and passed an order. Therefore, he submits that the impugned orders at Annexures-D series and Annexure-J are in accordance with law. Hence, he sought for dismissal of the writ petitions. 8. The first contention which is raised by the learned counsel for the petitioner is that the impugned orders vide Annexures-D series passed by the District Registrar are contrary to the principles of natural justice. He has not given any opportunity to the petitioner. As per the order sheet, it is very clear that pursuant to the notice issued by the authority, the petitioner has filed objections. Then respondent No.2 – District Registrar has issued a notice fixing the date on 02.03.2002 for conducting the spot inspection. But on that day nobody was present on behalf of the petitioner. For four years, no proceeding has taken place. Only on 25.01.2006, the matter was taken up and finally order has been passed. It is very much clear that the impugned order is passed by the District Registrar without giving any opportunity to the petitioner. The appellate authority, without application of mind and without considering the contentions raised by the petitioner has passed the impugned order vide Annexure-J which is contrary to the provisions of the Act and the Rules. Therefore, the impugned orders vide Annexures-D series and J are unsustainable in law. 9. Accordingly, writ petitions are allowed. The orders dated 25.01.2006 at Annexure-D series and the order dated 30.01.2012 at Annexure-J are quashed. The matter is remitted back to District Registrar – 2nd respondent to reconsider the matter in accordance with law as per the provisions of Karnataka Stamp Act and Rule 5 of Karnataka Stamp (Prevention of Under Valuation of Instruments ) Rules, 1977 within six months from the date of the receipt of a copy of this order.” The coordinate Benches hold that prior to the said determination, the noticee should have an opportunity to defend the action. In 19 DEEPAK’s case supra, the Registrar had issued notice fixing the date on 02-03-2002, but nobody was present on behalf of the petitioner therein and on subsequent dates. The determination of deficit stamp duty was set aside and the matter was remanded back to the hands of the Appellate Authority to afford opportunity and determine the same. Thus, the determination of stamp duty under Rule 5 of the Rules is in violation of the principles of natural justice in the case at hand and on that score alone the petition deserves to succeed. 12. The provision to determine deficit stamp duty and its claim is under Section 45A of the Act. Section 45A of the Act reads as follows: “45A. Instrument of conveyance, etc. undervalued how to be dealt with. - (1) If the registering officer appointed under the Registration Act, 1908 (Central Act XVI of 1908) while registering [any instrument of,- (a) Conveyance [Section 2(1)(d)]; (b) Gift [Article 28(a)]; (c) Exchange of property (Article 26); (d) Settlement [Article 48-A(I)]; (e) Reconstitution of Partnership [Article 40-B(a)]; 20 (f) Dissolution of Partnership [Article 40-C(a)]; (g) An agreement to sell covered under sub-clause (i) of clause (e) of Article 5; [(h) a lease covered under item [(vi)] of Article 30;] (i) A power of Attorney covered [under clause (e), clause (ea) and clause (eb)] of Article 41; (j) Release [(Article 45-(a)]; (k) Conveyance under a decree or final order of any Civil Court has reason to believe.] [(l) Agreement [Article 5(f)] (m) Award [Article 11(a)] (n) Trust [Article 54(A)(iii)] (o) Transferable development Rights (Article 20(7)).] having regard to the estimated market value published by the Committee constituted under section 45-B, if any, or otherwise, that the market value of the property which is the subject-matter of such instrument has not been truly set forth, he shall after arriving at the estimated market value, communicate the same to the parties and unless the parties pay the duty on the basis of such valuation, shall keep pending the process of registration and refer the matter along with a copy of such instrument to the Deputy Commissioner for determination of the market value of the property and the proper duty payable thereon.] (2) On receipt of a reference under sub-section (1), the Deputy Commissioner shall, after giving the parties a reasonable opportunity of being heard and after holding an inquiry in such manner as the State Government may by rules prescribe, determine by order [as for as may be within ninety days from the date of receipt of such reference] the market value of the property which is the [subject-matter of 21 instrument specified in sub-section (1) and the duty payable thereon.] The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty. [with interest at twelve per cent per annum if he does not pay within ninety days from the date of order of the Deputy Commissioner]: [Provided that the payment of interest is not applicable to instruments executed prior to 31st day of March, 2006.] (3) The Deputy Commissioner may, suo motu within two years from the date of registration of [any instrument specified in sub-section (1)] not already referred to him under sub-section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the [subject-matter of any instrument specified in sub- section (1) and the duty payable thereon] and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine by order the market value of such property and the duty payable thereon in accordance with the procedure provided for in sub-section (2). The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty [with interest at twelve percent per annum if he does not pay within ninety days from the date of order of the Deputy Commissioner]: Provided that nothing in this sub-section shall apply to any instrument registered before the commencement of the Karnataka Stamp (Amendment) Act, 1975: [Provided further that the payment of interest is not applicable to instruments executed prior to 31st day of March 2006.] (4) The order of the Deputy Commissioner under sub- section (2) or (3) shall be communicated to the person liable to pay the duty. A copy of every such order shall be sent to the registering officer concerned. 22 (5) Any person aggrieved by an order of the Deputy Commissioner under sub-section (2) or sub-section (3) may, prefer an appeal before the [Regional Commissioner] and all such appeals shall be preferred within such time and be heard and disposed off in such manner as the State Government may by rules prescribe.] [Provided that no appeal shall be admitted unless the person aggrieved has deposited, in the prescribed manner, fifty per cent of the difference in the amount of duty as determined by the Deputy Commissioner under sub-section (2) or (3): Provided further that, whereafter the determination of the market value by the Appellate Authority or determined again by the Deputy Commissioner on a remand of the case, the stamp duty borne is found to be sufficient, the amount deposited shall be returned to the person concerned: [Provided also that such person shall pay the difference in duty along with interest at twelve per cent per annum if he does not pay with in ninety days from the date of order of the Deputy Commissioner or sixty days from the date of order of the Appellate Authority, so however, the payment of interest is not applicable to instruments executed prior to eighteenth day of August, 1999].” What is invoked is Section 45-A(3). Section 45-A(3) of the Act permits the Deputy Commissioner (Stamps) who may suo moto within two years from the date of registration of any instrument and if after such examination has reason to believe that the market value of such property has not been truly set forth, determine the deficit stamp duty to be paid. There are certain other statutory 23 obligations under Section 45-A of the Act. The notice so issued and the order so passed are quoted hereinabove. 13. The demand is for deficit stamp duty. It cannot be done without compliance with the principles of natural justice is by now too well settled a principle of law. This very issue came up before this Bench in CHAITRA D.R. v. SENIOR SUB-REGISTRAR3 and this Bench set aside demand notice reserving liberty to the Competent Authority to initiate action after compliance with the principles of natural justice. In the said case, it is held as follows: “…. …. …. 9. The afore-narrate facts are not dispute and therefore, need not be reiterated. The documents brought before the office of the Sub-Registrar were all registered on 13.08.2021 as per the market value assessed and demanded by the Sub-Registrar. The petitioner in the subject petition has paid the following amount: “A) Stamp Duty: Rs.36,440/- B) Surcharge: Rs.1095/- C) Cess: Rs.3640/- D) Registration Fee: Rs.7280/- E) Scanning Fee: Rs.350/- F) SA: Rs.40/-” (Emphasis added) 3 W.P.No.24395 of 2021 and connected matters decided on 02-03-2023 24 Likewise, all the petitioners have paid the said amount. The petitioner purchases the said site property from the vendor to construct a residential house. After about a month, the impugned demand notice comes about by the Sub- Registrar demanding deficit stamp duty of Rs.47,800/- over and above what was paid as indicated hereinabove. Therefore, it becomes germane to notice the power for demand of deficit stamp duty, from whose hands it can be and the procedure to be followed prior to such demand. To consider those issues, it is germane to notice Section 45-A of the Act. Section 45-A of the Act states that registering authority has the power to refer the matter along with a copy of the instrument to respondent No.1 for determination of market value of the property and proper duty payable thereon. Section 45-A of the Act reads as follows: “45A. Instrument of conveyance, etc. undervalued how to be dealt with. - (1) If the registering officer appointed under the Registration Act, 1908 (Central Act XVI of 1908) while registering [any instrument of,- (a) Conveyance [Section 2(1)(d)]; (b) Gift [Article 28(a)]; (c) Exchange of property (Article 26); (d) Settlement [Article 48-A(I)]; (e) Reconstitution of Partnership [Article 40-B(a)]; (f) Dissolution of Partnership [Article 40-C(a)]; (g) An agreement to sell covered under sub-clause (i) of clause (e) of Article 5; [(h) a lease covered under item [(vi)] of Article 30;] (i) A power of Attorney covered [under clause (e), clause (ea) and clause (eb)] of Article 41; (j) Release [(Article 45-(a)]; (k) Conveyance under a decree or final order of any Civil Court has reason to believe.] 25 [(l) Agreement [Article 5(f)] (m) Award [Article 11(a)] (n) Trust [Article 54(A)(iii)] (o) Transferable development Rights (Article 20(7)).] having regard to the estimated market value published by the Committee constituted under section 45-B, if any, or otherwise, that the market value of the property which is the subject matter of such instrument has not been truly set forth, he shall after arriving at the estimated market value, communicate the same to the parties and unless the parties pay the duty on the basis of such valuation, shall keep pending the process of registration and refer the matter along with a copy of such instrument to the Deputy Commissioner for determination of the market value of property and the proper duty payable thereon.] (2) On receipt of a reference under sub-section (1), the Deputy Commissioner shall, after giving the parties a reasonable opportunity of being heard and after holding an inquiry in such manner as the State Government may by rules prescribe, determine by order [as for as may be within ninety days from the date of receipt of such reference] the market value of the property which is the [subject-matter of instrument specified in sub-section (1) and the duty payable thereon.] The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty. [with interest at twelve per cent per annum if he does not pay within ninety days from the date of order of the Deputy Commissioner]: [Provided that the payment of interest is not applicable to instruments executed prior to 31st day of March, 2006.] (3) The Deputy Commissioner may, suo motu within two years from the date of registration of [any instrument specified in sub-section (1)] not already referred to him under sub- section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the [subject matter of any instrument specified in sub- section (1) and the duty payable thereon] and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine by order the market value of 26 such property and the duty payable thereon in accordance with the procedure provided for in sub-section (2). The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty [with interest at twelve percent per annum if he does not pay within ninety days from the date of order of the Deputy Commissioner]: Provided that nothing in this sub-section shall apply to any instrument registered before the commencement of the Karnataka Stamp (Amendment) Act, 1975: [Provided further that the payment of interest is not applicable to instruments executed prior to 31st day of March 2006.] (4) The order of the Deputy Commissioner under sub- section (2) or (3) shall be communicated to the person liable to pay the duty. A copy of every such order shall be sent to the registering officer concerned. (5) Any person aggrieved by an order of the Deputy Commissioner under sub-section (2) or sub-section (3) may, prefer an appeal before the [Regional Commissioner] and all such appeals shall be preferred within such time and be heard and disposed off in such manner as the State Government may by rules prescribe.] [Provided that no appeal shall be admitted unless the person aggrieved has deposited, in the prescribed manner, fifty per cent of the difference in the amount of duty as determined by the Deputy Commissioner under sub-section (2) or (3): Provided further that whereafter the determination of the market value by the Appellate Authority or determined again by the Deputy Commissioner on a remand of the case the stamp duty borne is found to be sufficient, the amount deposited shall be returned to the person concerned: [Provided also that such person shall pay the difference in duty along with interest at twelve per cent per annum if he does not pay with in ninety days from the date of order of the Deputy Commissioner or sixty days from the date of order of the Appellate Authority, so however, the payment of interest is not applicable to instruments executed prior to eighteenth day of August, 1999].” 27 6. Respondent No.1 - District Registrar has power either on reference from the registering authority or suo-motu to enquire into and determine whether there is any undervaluation in the registration of any instrument and if so, what is the differential stamp fee and registering fees that is actually payable for registering such an instrument. The relevant rules namely, Rules 3 to 7 of the Rules, 1977, read as follows: “3. Furnishing of statement of market value.- (1) If an instrument relates to a number of items of properties, the market value shall be specified in respect of each item separately. For this purpose the party executing the document shall attach a separate statement to the instrument, furnishing therein information about the various items of properties involved and his own assessment of the market value of each of these items separately (in Form I). Explanation.- (1) If an instrument covers land comprising several survey numbers of sub-division numbers, the market value shall be specified for the land covered by each survey number or sub-division number as the case may be separately. (2) The registering officer shall, before registering an instrument, satisfy himself that the party has attached with the instrument a statement, giving the market value for each of the properties separately by sub-rule (1). (3) The registering officer may, for the purpose of finding out whether the market value has been correctly furnished in the instrument, make such enquiries as he may deem fit. He may elicit from the parties concerned any information bearing on the subject and call for and examine any records kept with any public officer or authority. (4) For the purpose of this rule, the statement of market value shall apply only to the instruments of conveyance, exchange or gift as mentioned in Section 45-A of the Karnataka Stamp Act, 1957 . [3-A Communication of Value-The estimated market value arrived at by the Registering Officer under section 45-A shall be communicated to the parties in Form I-A]. 4. Procedure on the receipt of reference under section 45-A- (1) On receipt of a reference under sub-section 28 45-A from a registering officer, the Deputy Commissioner shall issue a notice in Form II, - (i) to every person by whom, and (ii) to every person in whose favour the instrument has been executed, informing him of the receipt of the reference and asking him to submit to him, his representation if any, in writing to show that the market value of the property has been truly set forth in the instrument, and also to produce all evidence that he has in support of his representation, within 21 days from the date of service of the notice. (2) The Deputy Commissioner may, if he thinks, fit, record a statement from any person to whom a notice under sub-rule (1) has been issued. (3) The Deputy Commissioner may for the purpose of his enquiry, - (i) call for any information or record from any public office, officer or authority under the Government or any local authority; (ii) examine and record statements from any member of the public, officer or authority under the Government or the local authority; and (iii) inspect the property after due notice to the parties concerned. [(4) ]. Xxxxxx (Omitted.) 5. Principles for determination of market value-The Deputy Commissioner shall, as far as possible, have also regard to the following points in arriving at the [xxx] market value : - (1) In the case of lands, - (i) classification of the land as dry, garden, wet and the like; (ii) classification under various classes of soil in the survey records; (iii) the rate of revenue assessment for each classification; 29 (iv) other factors which influence the valuation of the land in question; (v) points, if any, mentioned by the parties to the instrument or any other person which require special consideration ; (vi) value of adjacent land or lands in the vicinity ; (vii) average annual yield from the land for five consecutive years till the determination and nearness to road and market, distance from village site, its location in general, level of land, transport facilities, facilities available for irrigation, such as tanks, wells and pumpsets; (viii) the nature of crops raised on the land. (2) In the case of house sites.- (i) the general value of house sites in the locality ; (ii) nearness to road, railway station, bus route ; (iii) nearness to market, shops and the like ; (iv) amenities available in the place like public offices, hospitals and educational institutions ; (v) development activities, industrial improvements in the vicinity ; (vi) land tax and valuation of sites with reference to taxation records of the local authorities concerned; (vii) any other features having a special bearing on the valuation of the site; and (viii) any special features of the case represented by the parties. (3) In the case of buildings.- (i) area of the land; 30 (ii) plinth area and built up portion in each of the storeys; (iii) year of construction; (iv) material of the wall and material of the roofing; (v) locality in which constructed; (vi) amenities provided such as water supply, electric supply (ordinary or all electric), sewerage, well and garage; (vii) rate of depreciation; (viii) fluctuation in rates; (ix) any other features that have a bearing on the value; (x) property tax with reference to taxation records of local authority concerned ; (xi) the purpose for which the building is being used and the income, if any, by way of rent per annum secured on the building; and (xii) any other special feature having bearing on the valuation. (4) Properties other than lands, house-sites and buildings, - (i) the nature and conditions of the property ; (ii) purpose for which the property is being put to use; and (iii) any other special features having a bearing on the valuation of the property. 6. Procedure after arriving at provisional market value.-xxxxx (Omitted) 7. [Order] determining the market value.-(1) The Deputy Commissioner shall after considering the representations received in writing and those urged at the time 31 of the hearing and after a careful consideration of all the relevant factors and evidence placed before him, pass an order, determining the market value of the properties and the duty payable on the instrument, communicate the order to the parties (xxx) (2) A copy of the order shall be communicated to the Registering Officer concerned [to take steps to collect the difference in the amount of stamp duty, if any and register the document].” The afore-quoted is the statutory framework under which the Registering Authorities would be required to act. What would unmistakably emerge is that, when an instrument is presented for registration, the Registering Authority would examine the instrument, come to a prima facie conclusion as to whether the market value disclosed on the instrument is genuine and if he has any reason to believe that the depiction of the market value on the instrument is improper, or likely to result in undervaluation of the property, he should keep the registration pending and refer the instrument to the District Registrar for determination of the market value and proper stamp duty payable thereon. 10. In terms of the afore-quoted mandate, the Registering Authority shall communicate to the parties, the estimated market value arrived by him qua the instrument. The Authority has power to initiate suo motu proceedings within two years from the date of registration of such instrument. The District Registrar is also required to record the statement from any person to whom notice has been issued. This is the duty cast upon the District Registrar in the aftermath of the said registration. On the bedrock of the aforesaid mandate of the statute, the impugned demand notice is required to be noticed and it reads as follows: 32 “£ÉÆÃnÃ¸ï «µÀAiÀÄ: G¥À£ÉÆÃAzÀt PÀbÉÃj, avÀæzÀÄUÀðgÀªÀgÀ°è £ÉÆÃAzÁ¬Ä¹gÀĪÀ zÀ¸ÁÛªÉÃfUÉ ¸ÀA§A¢ü¹zÀAvÉ PÉÆgÀvÉ ¸ÀPÁðj ±ÀĮ̪À£ÀÄß ¥ÁªÀw¸ÀĪÀ §UÉÎ G¯ÉèÃR: 1. ªÀĺÁ¯ÉÃR¥Á®gÀÄ, ¨ÉAUÀ¼ÀÆgÀÄgÀªÀgÀ vÀ¥Á¸ÀuÁªÀgÀ¢ ¢£ÁAPÀ: 30-08-2021 jAzÀ 07-09-2021 gÀAvÉ C£ÀĸÀj¹.. 2. ZÉÊvÁæ.r.Dgï PÉÆÃA UÉÆÃ¥Á®PÀȵÀÚ J£ï vÁªÀÅ ¢£ÁAPÀ: 13-08-2021 gÀAzÀÄ avÀæzÀÄUÀð G¥À£ÉÆÃAzÀt PÀbÉÃjAiÀÄ°è ºÁdgÀàr¹zÀ zÀ¸ÁÛªÉÃdÄ ¸ÀASÉå:CDG-1-03451-2021- 22 gÀAvÉ £ÉÆÃAzÁ¬Ä¸À®ànÖgÀĪ .zÀ¸ÁÛªÉÃf£À §UÉÎ. **-**-** ¢£ÁAPÀ: 13-08-2021 gÀAzÀÄ £ÉÆÃAzÁ¬Ä¹gÀĪÀ zÀ¸ÁÛªÉÃdÄ ¸ÀASÉå: CDG-1-03451-2021-22 UÉ ¸ÀA§A¢ü¹zÀAvÉ F PɼÀPÀAqÀ ««zsÀ ¯ÉPÀÌ ²Ã¶ðPÉUÉ ¸ÀPÁðj ±ÀÄ®Ì PÉÆgÀvÉ GAmÁVgÀÄvÀÛzÉ DzÀÝjAzÀ ¸ÀzÀj PÉÆgÀvÉAiÀiÁVgÀĪÀ MlÄÖ ±ÀÄ®Ì gÀÆ.47800/- UÀ¼À£ÀÄß PÉ-2 ZÀ£À¯ï ªÀÄÆ®PÀ ¸ÀPÁðgÀPÉÌ ¥ÁªÀw¸À®Ä F ªÀÄÆ®PÀ ¸ÀÆa¹zÉ. ªÀÄÄAzÁæPÀ ±ÀÄ®Ì (0030-02-103-0- 01-000) 36000/- C¢ü¨sÁgÀ ±ÀÄ®Ì (Surcharge) (0030-02-103-0-01-000) 1000/- ¸É¸ï (Cess) (0030-02-103-0- 01-000) 3600/- £ÉÆÃAzÀt ±ÀÄ®Ì ((0030-02-103-0- 01-000) 7200/- MlÄÖ ±ÀÄ®Ì 47800/- “ The demand is payment of deficit stamp duty at Rs.47,800/-. Identical demand notices are issued in all these cases. A perusal at the impugned demand notice does not indicate any procedure being followed prior to raising the said demand. What is referred to is an audit/inspection report dated 30.08.2021 and 07.09.2021. Therefore, it becomes ostensible that the action of issuance of the impugned demand is on the 33 strength of audit or inspection reports on the aforesaid dates. 11. The State has filed its elaborate statement of objections admitting that no procedure was followed, defending the action taking recourse to a audit enquiry conducted on 03.09.2021. The audit enquiry points at alleged fraud played by one Deed Writer C.Manjunath Yadav and the said alleged fraud played has resulted in short remittance of close to Rs.1,68,16,875/- for all the registrations that took place where he was the Deed writer and on the said dates. Original register was also placed for a perusal for this Court. The original register indicates that the stamp duty as contended in the writ petition has been paid and the same has been remitted. If the Deed Writer has only written it and has not remitted the amount, the petitioners cannot prima facie be held guilty of undervaluing the property and resulting in demand of deficit stamp duty. 12. The learned Additional Government Advocate would also contend that a crime is registered against the Deed Writer Sri.C.Manjunath Yadav in Crime No.173 of 2021 and the investigation is underway. Several communications are also appended to the statement of objections, all seeking to demonstrate that there is payment of deficit stamp duty on account of typographical error or fraud played by Sri.C.Manjunath Yadav. The officers of the office of the Sub-Registrar have all been placed under suspension pending departmental enquiry. These factors brought before the Court by way of statement of objections can hardly be a justification for not following the procedure mandated under the Act. If a statute prescribes a particular mode of performance of action; such action shall be performed only in accordance with the statute. Courts have time and again repeated that the prescription under the statute for performance of a duty cannot be deviated, come what may. 34 13. The Apex Court in the case of BABU VERGHESE v. BAR COUNCIL OF KERALA4 after extracting the celebrated judgment in the case of TAYLOR V. TAYLOR has held as follows: “31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor [(1875) 1 Ch D 426 : 45 LJCh 373] which was followed by Lord Roche in Nazir Ahmad v. King Emperor [(1936) 63 IA 372 : AIR 1936 PC 253] who stated as under: “[W]here a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.” 32. This rule has since been approved by this Court in Rao Shiv Bahadur Singh v. State of V.P. [AIR 1954 SC 322 : 1954 SCR 1098] and again in Deep Chand v. State of Rajasthan [AIR 1961 SC 1527 : (1962) 1 SCR 662] . These cases were considered by a three-Judge Bench of this Court in State of U.P. v. Singhara Singh [AIR 1964 SC 358 : (1964) 1 SCWR 57] and the rule laid down in Nazir Ahmad case [(1936) 63 IA 372 : AIR 1936 PC 253] was again upheld. This rule has since been applied to the exercise of jurisdiction by courts and has also been recognised as a salutary principle of administrative law.” (Emphasis supplied) The Apex Court in the judgment afore-extracted holds that if a statute prescribes a particular mode of action, the action shall be in that mode and by no other method. Therefore, if deficit stamp duty had to be demanded from the petitioner or the petitioners, in all 4 AIR 1999 SC 1281 35 these cases, action ought to have been taken in terms of the procedure prescribed in the statute. The Competent Authority has a duty to satisfy itself with regard to the document being registered as undervalued. The satisfaction will form into an opinion; an opinion into a demand. The opinion or the satisfaction cannot be left at the mercy of an audit report. The audit report cannot mean that the Competent Authority has applied its mind in terms of the statute. It is an external document. Therefore, the action taken on the basis of the audit report resulting in the impugned demand, is thus, rendered unsustainable and its unsustainability would result in its obliteration as admittedly no procedure stipulated under the statute, is followed. 14. For the aforesaid reasons, the following: ORDER (i) Writ Petitions are allowed. (ii) Impugned demand notice dated 13.09.2021 issued by the respondent stands quashed. (iii) Liberty is reserved to the competent authority to initiate action if necessary, if available in law, after following due process of law, bearing in mind the observations made in the course of the order.” What is projected in the case at hand is an identical issue. Therefore, on both the counts of Section 45A and Rule 5 of the Rules, the issue stands answered as aforesaid, in the afore-quoted judgments. 36 14. The determination by the State is that it is Whitefield Industrial Area, Hoodi Village. The defence is that it is Hoodi Industrial Area-EPIP. Therefore, when the issue was shrouded with seriously disputed questions of fact, an inquiry ought to have been conducted by the 2nd respondent/Deputy Commissioner (Stamps) prior to determination. The vendor of the property/1st petitioner was not even heard in the matter and plethora of defences are projected in the subject petition before this Court. Therefore, all these needs to be thrashed out by the authority who suo motu determined the deficit stamp duty, which is contrary to law. 15. For the aforesaid reasons, the following: O R D E R (i) Writ Petition is allowed. (ii) Both the orders – order dated 18-06-2018 passed by the 2nd respondent/Original Authority in Case No. DUS/SJN/SM/01:2018-19 and order dated 24-10-2019 passed by the 1st respondent/Appellate Authority in case No.STP(Appeal)/12/2018-19 stand quashed. 37 (iii) The matter is remitted back to the Deputy Commissioner (Stamps)/2nd respondent to hear the petitioners and then determine deficit stamp duty, if any to be paid by the petitioners, bearing in mind the observations made in the course of the order. Sd- (M. NAGAPRASANNA) JUDGE bkp CT:MJ "