Bharat Petroleum Corporation Ltd. v. District Revenue Officer (Stamps) & Anr.

 2026 INSC 963                                                                NON-REPORTABLE











                                         IN THE SUPREME COURT OF INDIA


                                          CIVIL APPELLATE JURISDICTION








                                        CIVIL APPEAL NO.______ OF 2026


                                   [Arising out of SLP (C) NO. 37096 OF 2025]











                      BHARAT PETROLEUM CORPORATION LIMITED                         … APPELLANT








                                                           VS.








                      THE DISTRICT REVENUE OFFICER


                      (STAMPS) & ANR.                                          … RESPONDENTS











                                                    JUDGMENT











                      DIPANKAR DATTA, J.














                          1. Leave granted.





                          2. This appeal, by special leave, is at the instance of the vendee in the





                             relevant sale deed. Such vendee1 assails the correctness of the final





                             judgment and order dated 4th September, 20252 of a Division Bench





                             of the High Court of Judicature at Madras3 allowing an intra-court


Signature Not Verified





Digitally signed by


JATINDER KAUR


Date: 2026.09.07


17:17:56 IST


Reason:








                      1


                        appellant


                      2


                        impugned judgment


                      3


                        High Court





                                                            1


       appeal4 preferred by the respondents. The impugned judgment set





       aside the order dated 8th September, 2022 of a Single Judge of the





       High Court allowing the writ petition5 of the appellants, thereby





       resulting in its dismissal, in effect.





    3. The facts are simple and undisputed. Appellant purchased a parcel of





       land from the Government of India for a fixed sale consideration,





       which was fully discharged through cheques issued on different dates





       in the year 2014. Upon receipt of the entire consideration, possession





       of the land was delivered to the appellant on 21st January, 2014.





       Thereafter, a deed of transfer in respect of the said land was executed





       by the Government of India in favour of the appellant on 24th June,





       2016. At the time of execution and presentation of the instrument for





       registration, the appellant paid stamp duty and registration charges





       on the full sale consideration reflected therein. However, instead of





       releasing the registered instrument, the registering authority, who is





       the second respondent in the appeal, made a reference under Section





       47-A of the Indian Stamp Act, 1899 6 to the District Revenue Officer,





       the first respondent. Consequent thereto, the appellant was served





       with a show cause notice in Form-I dated 22nd August, 2016 calling





       upon it to pay an additional sum towards the alleged deficit stamp





       duty.   Questioning      the   legality   of   such   reference   and   the





       consequential notice, the appellant invoked the writ jurisdiction of the








4


  Writ Appeal No. 2540 of 2023


5


  Writ Petition No. 16834 of 2017


6


  the Stamp Act





                                          2


        High Court contending, inter alia, that in the absence of any material





        suggesting want of bona fides on the part of the appellant or the





        TRANSFEROR, recourse to Section 47-A of the Stamp Act was wholly





        unwarranted.





     4. The Single Judge by an order dated 8th September, 2022 allowed the





        challenge to the show cause notice. According to the Single Judge,





        the proceedings under Section 47-A of the Stamp Act had been





        initiated solely on the premise that the guideline value of the property





        was ₹500 per square foot, whereas the instrument had been





        presented for registration on the basis of a value of ₹168.30 per





        square foot, leading to a demand for differential stamp duty. Placing





        reliance on the decision of this Court in V.N. Devadoss v. Chief





        Revenue Control Officer-cum-Inspector of Stamps7, the Single





        Judge held that the jurisdiction under Section 47-A can be invoked





        only where the registering authority has reason to believe that the





        property has been deliberately undervalued with a fraudulent intent





        to evade payment of the requisite stamp duty. It was further noticed





        that the entire sale consideration stipulated under the transfer deed





        had admittedly been paid and that no material existed to indicate





        payment of any amount over and above the consideration reflected





        in the instrument. The Single Judge also observed that the guideline





        value, prepared by the revenue authorities for administrative





        purposes, furnishes only a prima facie indication of value and cannot,








7


    (2009) 7 SCC 438





                                        3


         by itself, constitute conclusive evidence of the market value of the





         property. On such reasoning, it was held that in the absence of any





         material suggestive of deliberate undervaluation, recourse to Section





         47-A could not be taken as a matter of course. Consequently, the





         show cause notice issued by the first respondent was quashed and





         the second respondent directed to release the transfer deed within





         two months from the date of receipt of the order.





     5. Aggrieved by the order of the Single Judge, the respondents carried





         the same in appeal before the Division Bench. The Division Bench





         allowed the writ appeal, set aside the order under challenge, and





         restored the proceedings to the file of the first respondent for





         adjudication in accordance with law. While doing so, the Division





         Bench examined the scheme of the Stamp Act and the provisions of





         the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments)





         Rules, 19688. It observed that once the registering authority, namely





         the second respondent, entertained a doubt regarding undervaluation





         of the instrument, it was competent to make a reference under





         Section 47-A, whereupon the matter was required to be adjudicated





         by the Collector, i.e., the first respondent. The Division Bench further





         noticed that Section 47-A provides a complete statutory mechanism





         for determination of market value and levy of stamp duty. Particular





         emphasis was placed on sub-section (5) thereof, which confers a right





         of appeal upon any person aggrieved by an order of the Collector, to








8


    the Stamp Rules





                                         4


  be preferred within the prescribed period before the competent





  appellate authority. Reference was also made to Rule 9 of the Stamp





  Rules, under which the Inspector General of Registration functions as





  the appellate authority. The Division Bench additionally noted that





  the statutory scheme envisages an appeal before the High Court





  against the order of the appellate authority.





6. Upon applying the aforesaid statutory framework to the facts in hand,





  the Division Bench found that the appellant had elected not to





  participate in the proceedings initiated pursuant to the reference





  under Section 47-A of the Stamp Act and had instead challenged the





  show cause notice at the threshold. In the view of the Division Bench,





  a writ petition directed merely against a show cause notice was





  ordinarily not maintainable, particularly when the appellant had an





  adequate opportunity to place its defence before the competent





  authority. It was further observed that in exercise of jurisdiction





  under Article 226 of the Constitution, the High Court ought not to





  embark upon an enquiry into disputed questions bearing upon the





  merits of the proceedings at a stage when the statutory authority was





  yet to render its determination. Holding that the appellant had





  bypassed the statutory procedure and that the efficacious alternative





  remedy available under the Stamp Act ought to have been exhausted





  before invoking the writ jurisdiction of the High Court, the Division





  Bench restored the proceedings to the file of the first respondent and














                                  5


   granted liberty to the appellant to file its defence statement together





   with such documents as it might seek to rely upon.





7. Aggrieved by reversal of the order of the Single Judge by the Division





   Bench, the appellant has questioned its correctness before this Court.





8. Having noticed the factual panorama engendering the present lis, the





   extant controversy before us, at this stage, is not as to what is the





   true market value of the property in question or the merits of the





   procedure adopted in the valuation. That is an enquiry which is





   entrusted to the competent authority by the statute itself. Nor is it





   for us, in these proceedings, to determine whether the appellant is





   ultimately liable to pay any additional stamp duty. The question





   behoving our consideration is, whether the statutory machinery





   under Section 47-A of the Stamp Act could validly have been set in





   motion at all and, if so, what is the consequence of a challenge to the





   (non)-existence of the condition precedent for exercise of that power?





9. As an exordial note for the discussion, we consider it appropriate to





   set out Section 47A which reads:





         47-A. Instruments under-valued, how to be dealt with.-


         (1) If the Registering Officer, appointed under the Registration Act,


         1908 (16 of 1908) while registering any instrument relating to the


         transfer of any property, has reason to believe that the market value


         of the property or the consideration, as the case 1. Subs. by Act 5 of


         1927, s. 5, for “promissory note or cheque”. 2. Subs. by Act 19 of


         1958, s. 7, for “with the duty of one anna” (w.e.f. 1-10-1958). 3.


         Subs. by Act 5 of 1927, s. 5, for “note or cheque”. 45 may be, has


         not been truly set forth in the instrument, he may, after registering


         such instrument, refer the same to the Collector for determination of


         the market value or consideration, as the case may be, and the


         proper duty payable thereon.


         (2) On receipt of reference under sub-section (1), the Collector shall,


         after giving the parties a reasonable opportunity of being heard and


         after holding an enquiry in such manner, as may be prescribed by





                                     6


         rules, made under this Act, determine the market value or


         consideration and the duty, as aforesaid, and the deficient amount


         of duty, if any, shall be payable by the person liable to pay the duty.


         (3) The Collector may, suo moto or on receipt of reference from the


         Inspector General of Registration or the Registrar of a District, in


         whose jurisdiction the property, or any portion thereof, which is the


         subject-matter of the instrument, is situated, appointed under the


         Registration Act, 1908 (16 of 1908) shall, within three years from the


         date of registration of any instrument, 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 its market value


         or consideration, as the case may be, and the duty payable thereon


         and if, after such examination, he has reason to believe that the


         market value or consideration has not been truely set forth in the


         instrument, he may determine the market value or consideration and


         the duty, as aforesaid, in accordance with procedure provided for in


         sub-section (2), and the deficient amount of duty, if any, shall be


         payable by the person liable to pay the duty: Provided that nothing


         in this sub-section shall apply to any instrument registered before


         the date of the commencement of the Indian Stamp (Himachal


         Pradesh Amendment) Act, 1988.


         (4) Where for any reason the original document called for by the


         Collector under sub-section (3) is not produced or cannot be


         produced, the Collector may, after recording the reasons for its


         nonproduction, call for a certified copy of the entries of the document


         from the registering officer concerned and exercise the powers


         conferred on him under sub-section (3).


         (5) Any person, aggrieved by an order of the Collector, under


         subsection (2) or sub-section (3), may, within thirty days from the


         date of the order, prefer an appeal before the District Judge and all


         such appeals shall be heard and disposed off in such manner as may


         be prescribed by rules made under this Act.


         (6) For the purpose of this section “market value” of any property


         shall be estimated to be the price which, in the opinion of the


         Collector or the appellate authority, as the case may be, such


         property would have fetched, if sold in the open market on the date


         of execution of the instrument relating to the transfer of such


         property.








10. In the present case, the Single Judge arrested the entirety of the





   proceedings at its inception only, thereby pronouncing upon a





   controversy which has been statutorily entrusted, in the first





   instance, to another forum. Nonetheless, despite such a statutory





   relegation, two narrow doors do exist through which a writ court may





   entertain a challenge to a show cause notice: i) want of jurisdiction


                                     7


        and ii) abuse of jurisdiction (i.e., mala fide exercise of jurisdiction).





        Where the authority is vested with no power in law to embark upon





        an enquiry in the first place, the notice issued by such authority is





        non est. Also, in cases where the power is exercised mala fide or as





        an abuse of the process of law, the constitutional court may interdict





        it even at the threshold. However, these are engrafted as exceptions





        and not as routine measures to litigate every show cause notice under





        Article 226.





     11. Ms.   Haripriya    Padmanabhan,     learned   senior   counsel   for    the





        respondents, relying on the decisions of this Court in Special





        Director v. Mohd. Ghulam Ghouse9, Union of India v. Kunisetty





        Satyanarayana10 and Union of India v. VICCO Laboratories11





        has contended that the enquiry that ordinarily follows consequent





        upon issuance of a show cause notice should not have been





        interdicted by the Single Judge. It was neither a case of lack of





        jurisdiction to issue the show cause notice nor a case of mala fides.





        According to her, absolutely no case for interference had been set up





        and the Single Judge grossly erred in entertaining and allowing the





        writ petition at the stage of show cause, which was duly rectified by





        the Division       Bench in   judicious exercise   of   discretion.     She,





        accordingly, prayed for dismissal of the appeal.














9


   (2004) 3 SCC 440


10


   (2006) 12 SCC 28


11


   2023 SCC Online SC 489





                                         8


12. Adverting to the factual milieu at hand, the present case does not fall





   within the first category. The District Revenue Officer (Stamps), the





   first respondent, is the authority who issued the impugned notice. He





   is no stranger to the statute, nor is the present controversy relatable





   to a subject matter beyond the field entrusted to it. The notice,





   therefore, is not one issued by an authority possessing no jurisdiction





   whatsoever. What is assailed is the way an existing jurisdiction has





   been set in motion. That distinction, though apparently fine, is in law





   rudimentary. Arguendo, even assuming that the manner in which the





   existing jurisdiction was set in motion was beset by an improper





   exercise of jurisdiction, could the Single Judge have quashed the





   proceedings in its entirety, thereby rendering any prospective





   exercise of power by the authority a nullity, sans relegating the liberty





   to the authority to issue a fresh notice in accordance with law?





13. Mr. N. Venkataraman, learned Additional Solicitor General appearing





   on behalf of the appellant has forcefully argued that there was a





   jurisdictional error at the inception of the proceedings for which the





   show cause notice was rightly interdicted by the Single Judge.





   According to him, the “reason to believe” that is supposed to kickstart





   the proceedings under Section 47-A of the Stamp Act was absent in





   the first place. Referring to the Single Judge’s order, he contended





   that the court proceeded to quash the show cause notice on the





   ground that no satisfaction was reached of there being a “fraudulent





   intent” for the purported undervaluation to cause harm to the





                                   9


   revenue. Such an exercise of reading the requirement of “fraudulent





   intent” into Section 47-A of the Stamp Act, though there is no express





   stipulation to that effect therein, was justified by the Single Judge on





   the anvil of V.N. Devadoss (supra). Reliance in this behalf was





   placed on the relevant passages from the said decision, which are





   extracted below:





         13. Sub-sections (1) and (3) of Section 47-A clearly reveal the


         intention of the legislature that there must be a reason to believe


         that the market value of the property which is the subject-matter of


         the conveyance has not been truly set out in the instrument. It is not


         a routine procedure to be followed in respect of each and every


         document of conveyance presented for registration without any


         evidence to show lack of bona fides of the parties to the document


         by attempting fraudulently to undervalue the subject of conveyance


         with a view to evade payment of proper stamp duty and thereby


         cause loss to the revenue. Therefore, the basis for exercise of power


         under Section 47-A of the Act is wilful undervaluation of the subject


         of transfer with fraudulent intention to evade payment of proper


         stamp duty.


         ***


         18. On the facts of the case it cannot be said that Section 47-A has


         any application because there is no scope for entertaining a doubt


         that there was any undervaluation. That being so, the High Court's


         order is clearly unsustainable and is set aside. The registration shall


         be done at the price disclosed in the document of conveyance. There


         is no scope for exercising power under Section 47-A of the Act as


         there is no basis for even entertaining a belief that the market value


         of the property which is the subject-matter of conveyance has not


         been truly set forth with a view to fraudulently evade payment of


         proper stamp duty.


                                               (emphasis supplied by the ASG)








14. Mr. Venkatraman submitted that the Single Judge faithfully followed





   the precedent which was binding and, therefore, the Division Bench





   clearly erred in taking a contrary view without due consideration of





   the decision in V.N. Devadoss (supra).














                                    10


15. Mr. Venkataraman further contended that the instrument in question





   was executed between the President of India and the appellant and





   that, in such a transaction, the element of fraudulent intention or





   mens rea, as contemplated in V.N. Devadoss (supra), could not





   legitimately emanate. We are unable to accede to the submission in





   the manner canvassed. The reference in the instrument to the





   President of India as the TRANSFEROR does not indicate that the





   President personally executes the instrument or participates in the





   transaction in his individual capacity. The constitutional and statutory





   scheme necessarily contemplates that contracts and instruments





   entered into, in the exercise of the executive power of the Union, are





   expressed in the name of the President and are executed on his





   behalf by persons authorised in that behalf. In the present case, the





   instrument itself records the President of India as represented by the





   Deputy/Assistant Salt Commissioner. The mere fact that the





   constitutional nomenclature of the President of India figuring in the





   instrument as the TRANSFEROR, therefore, cannot by itself preclude an





   enquiry into whether the consideration or market value has been truly





   set forth in the instrument, nor can it render the question of





   fraudulent intention incapable of arising as a matter of law.





16. We have read V.N. Devadoss (supra) in between the lines. The





   afore-mentioned decision by a Bench of three Judges declares the





   law that while exercising the power under Section 47-A of the Stamp





   Act, there must exist material evincing lack of bona fides and a





                                  11


fraudulent attempt to undervalue the subject of conveyance in a bid





to evade stamp duty. The basis, therefore, per the ratio of the said





decision, is “wilful undervaluation with fraudulent intention to evade





proper    stamp     duty”.    However,      the    expressions     “wilful





undervaluation” and/or “fraudulent intention” is/are conspicuously





absent in the plain phraseology of sub-section (1) of the said





provision. On its own terms, Section 47-A does not require the





registering authority to issue notice having “reason to believe” of a





culpable mindset being the motive behind the transaction; it merely





requires reason to believe that the market value of the property has





not been truly set forth in the instrument presented before him for





consideration. It is one thing to require that the authority should have





relevant material preceding the formulation of reasons, followed by





exercise of power under Section 47-A of the Stamp Act; and, it is





totally another thing to require that, in addition to the explicitly spelt





out statutory requirement, the officer must also have material





demonstrating wilful or fraudulent intent to evade stamp duty. The





latter proposition, if sought to be pressed as an independent





ingredient for the invocation of power under the said provision, would





be tantamount to judicial legislation under a provision, de hors the





precincts of the plain text of the statute. The language is plain and





the symmetry is straightforward, which should not be distorted in its





purpose, through legal lexicalism.














                                12


     17. We may also notice that the view expressed in V.N. Devadoss





         (supra), was subsequently noticed by a three-Judge Bench of this





         Court in Registrar of Assurances v. ASL Vyapar (P) Ltd12. In this





         decision, the three-Judge Bench, while referring to V.N. Devadoss





         (supra), observed that there has to be wilful undervaluation of the





         subject of transfer with fraudulent intention to evade payment of





         proper stamp duty. The three-Judge Bench, however, did not enter





         into the nitty-gritty of the statutory provision and, on that aspect,





         expressed its disagreement with the view earlier taken in the context





         of court-monitored public auction. We are, with respect, unable to





         agree with the approach adopted in V.N. Devadoss (supra) as well





         as in ASL Vyapar (P) Ltd. (supra), insofar as both decisions proceed





         on the footing of reading an element of fraudulent intention into the





         plain statutory provision without examining the provision in its full





         statutory milieu and the scheme underpinning the power conferred





         upon the registering/revenue authority. The question before us,





         therefore, requires to be canvassed independently on the plain





         language of the provision, its legislative purpose, operational remit





         and the statutory mechanism contemplated thereunder.





     18. The    decision   in   Ramesh      Chand     Bansal    v.   District





         Magistrate/Collector13, is apposite as far as the raison d’ etre of














12


     (2024) 17 SCC 572


13


     (1999) 5 SCC 62





                                       13


   Section 47-A of the Stamp Act is concerned. Relevant passages





   therefrom are extracted below:





         5. The object of the Indian Stamp Act is to collect proper stamp duty


         on an instrument or conveyance on which such duty is payable. This


         is to protect the State revenue. It is a matter of common knowledge


         that in order to escape such duty by unfair practice, many a time


         undervaluation of a property or lower consideration is mentioned in


         a sale deed. The imposition of stamp duty on sale deeds is on the


         actual market value of such property and not the value described in


         the instrument. Thus, an obligation is cast on the authority to


         properly ascertain its true value for which he is not bound by the


         apparent tenor of the instrument. He has to truly decide the real


         nature of the transaction and value of such property. For this, the


         Act empowers an authority to charge stamp duty on the instrument


         presented before it for registration. The market value of a property


         may vary from village to village, from location to location and even


         may differ from the sizes of area and other relevant factors. This


         apart there has to be some material before such authority as to what


         is the likely value of such property in that area. In its absence it


         would be very difficult for such registering authority to assess the


         valuation of such instrument. It is to give such support to the


         registering authority that Rule 340-A is introduced. Under this the


         Collector has to satisfy himself based on various factors mentioned


         therein before recording the circle rate, which would at best be the


         prima facie rate of that area concerned. This is merely a guideline


         which helps the registering authority to assess the true valuation of


         a transaction in an instrument. This gives him material to test prima


         facie whether the description of valuation in an instrument is proper


         or not.


         ***


                                                               (emphasis ours)








19. Furthermore, in our considered opinion, “wilful undervaluation”





   and/or “fraudulent intention” cannot be read as an intra-sentential





   component into Section 47-A of the Stamp Act for its invocation, and





   any distinction, if purportedly demarcated between bona fide





   undervaluation and wilful undervaluation, is alien to the plain





   phraseology of the provision as well as the spirit of the statute. The








                                   14


         following passage from the decision in Shanti Bhushan v. State of





         U.P.14, lends credence to the afore-mentioned proposition:





               20. At this stage, we may note that the Stamp Act is a taxing statute.


               In interpreting such a statute, equitable considerations cannot be


               applied. A taxing statute has to be interpreted in accordance with


               what is clearly expressed therein. While interpreting such a statute


               and determining the liability to pay tax, the provisions are required


               to be construed strictly. In other words, the rule of literal construction


               must be applied while interpreting a taxing statute. It must be


               interpreted in terms of the natural construction of the words used.


               There is no scope to imply anything which is not expressly provided.








     20. The afore-canvassed decision affords a close parallel to the extant





         controversy qua the interpretation of Section 47-A.





     21. However, we hasten to add that Ramesh Chand Bansal (supra) and





         Shanti Bhushan (supra) are coordinate Bench decisions whereas





         V.N. Devadoss (supra), since followed in ASL Vyapar (P) Ltd.





         (supra), is a decision of a three-Judge Bench. Thus, in these





         proceedings, we are not empowered to pronounce upon the





         correctness of V.N. Devadoss (supra) for whatever our prima facie





         impression may be, about the textual interplay between Section 47-





         A and the additional requirement of “wilful undervaluation” and/or





         “fraudulent intention” articulated in V.N. Devadoss (supra). Judicial





         propriety and discipline require us to follow a binding decision of a





         larger Bench. Nonetheless, if the proposition in V.N. Devadoss





         (supra) does not commend our acceptance and we strongly feel that














14


     2023 SCC OnLine SC 489





                                           15


   it requires reconsideration, the appropriate course is to leave the





   question for consideration by a Bench of appropriate strength.





22. It would be profitable to consider two situations of an honest and a





   dishonest sale, delineated below, to consider the effect of V.N.





   Devadoss (supra).





   a. The honest sale:





   S owns a property, the circle rate whereof is ₹2 cr. However, it is a





   tenanted property and the tenants enjoy protection of the relevant





   Rent Control Act. Additionally, the road access to such property is not





   too wide and a litigation is also pending between S and one of his





   tenants. These facts are sufficient for any valuer to confirm true





   depressed market value as ₹1.5 cr. After due diligence, P agrees to





   purchase the property and offers ₹1.5 cr. The offer of P is accepted





   by S who sells the property to P for ₹1.5 cr. Being the entire sale





   consideration, ₹1.5 cr. is shown in the instrument. There is not an





   iota of fraud, no cash dealing. As is customary, P as the purchaser





   bears stamp duty assessed on ₹1.5 cr.





   Two courses are possible on such instrument.





   First, if Section 47-A is taken on its own terms and the registering





   authority has reason to believe that market value has not been truly





   set forth, the enquiry would be a pure valuation-based enquiry, i.e.,





   whether ₹1.5 cr. is the true market value given the encumbrances,





   though circle rate is ₹2 cr.? The burden would be on P to prove the





   market value of the property sold as ₹1.5 cr., not to disprove fraud.





                                  16


However, if the test in V. N. Devadoss (supra) is applied to such a





situation, a fraudulent intention has to be the sine qua non for





issuance of notice and the enquiry would shift from valuation to





culpable mindset. P, who has been entirely honest, will now be called





upon   to prove    absence    of     fraudulent   intention.   The   honest





undervaluation, even when fully explained by objective market





factors, could be presumptively treated as dishonest, unless P





disproves culpable mindset.





This, in our opinion, gives rise to a cause for injustice. In a valuation-





centric proceeding, an honest purchaser has only to show what the





property is actually worth. Under a fraud-centric test, the same





honest purchaser has to defend his character, i.e., merely because





he bought an encumbered property at its true, albeit low price, he





did not intend to cheat the exchequer. The ratio of V. N. Devadoss





(supra), by importing culpable mindset into a provision which, on its





own terms, is about true market value, converts a market value





enquiry into a quasi-criminal enquiry.





b. The fraudulent sale:





Conversely, take an illustration where S sells his property worth ₹2





cr. to P. However, the sale price of the property is shown as ₹1.5 cr.





in the instrument. S receives such amount by cheque, and the





balance ₹50 lakh in cash, which happens to be P’s unaccounted





money; all these, inter alia, to evade stamp duty. Though culpable





mindset undoubtedly exists, yet, the registering authority may have





                                17


   no access to material to form a reason to believe that the transaction





   is tainted by fraudulent intent to evade stamp duty. If a demonstrable





   wilful undervaluation and/or fraudulent intention were made the





   jurisdictional pre-condition for issuing notice, the enquiry would be





   still-born. Notice, in such a case, can never be issued. Would that not





   defeat the very object of the provision which is to protect government





   revenue?





23. The test propounded in V.N. Devadoss (supra) fails to do justice in





   either situation. In a genuine sale of encumbered property, it exposes





   an honest purchaser to a roving enquiry for no fault of his; in a case





   of a clandestine cash consideration, it disables the registering





   authority from even initiating an enquiry for want of material which,





   by its very nature, lies within the exclusive knowledge of the parties.





   In the former, it is too harsh; in the latter, too lax.





24. Having bestowed our anxious thoughts and in the circumstances





   discussed above, we have serious doubt regarding the efficacy of the





   law declared in V.N. Devadoss (supra) as a binding precedent and





   find ourselves unable to accept the proposition laid down therein as





   correct law. V.N. Devadoss (supra) being a larger Bench decision,





   the only option now open to us is to refer the following questions for





   consideration by a Bench larger than the present Bench:





   a.    Whether, V.N. Devadoss (supra), since followed in ASL





   Vyapar (P) Ltd. (supra), correctly interprets and declares that the





   basis for exercise of power under Section 47-A of the Stamp Act is





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    wilful undervaluation of the subject of transfer with fraudulent





    intention to evade payment of proper stamp duty? Or, whether on





    the very terms of Section 47-A, power thereunder can be and ought





    to be exercised by the registering authority, irrespective of absence





    of any culpable mindset of the parties to the sale, by truly deciding





    the real nature of the transaction and value of the subject property,





    without being bound by the apparent tenor of the instrument?





    b.    Whether the decisions in Ramesh Chand Bansal (supra) and





    Shanti Bhushan (supra) do not lay down correct law?





 25. Let the referred questions and the papers be placed before the





    Hon’ble the Chief Justice for an appropriate order.





 26. Needless to observe, if V.N. Devadoss (supra) is upheld as laying





    down correct law, the decision of the Single Judge quashing the





    notice would be entirely justified; otherwise not.














                                               ………………………………J.


                                                 (DIPANKAR DATTA)














                                               ………………………………J.


                                                  (SHEEL NAGU)


NEW DELHI;


SEPTEMBER 07, 2026.














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