1970 (12) TMI 82 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the documents in question, namely, "pattis" are affidavits chargeable to stamp duty as provided under article 4 of Schedule I-A of the Indian Stamp Act.
2. Whether the Commercial Tax Officer, having finalized the assessments, is now competent to take action under the provisions of the Indian Stamp Act to collect the stamp duty and penalty.

Issue-wise Detailed Analysis:

1. Affidavits Chargeable to Stamp Duty:
The court examined whether the "pattis" issued by the petitioners, which were in the form of affidavits, are chargeable to stamp duty under article 4 of Schedule I-A of the Indian Stamp Act. The petitioners argued that the rules under the Andhra Pradesh General Sales Tax Act, 1957, required only a certificate from the agents, not affidavits. However, the court noted that the documents were indeed given in the form of affidavits, solemnly affirmed and duly attested by authorized persons. The court emphasized that for the purposes of the Stamp Act, the nature of the document is determined by its contents, not the necessity of its form under other laws. Therefore, since the documents were affidavits, they were liable to stamp duty of Rs. 3 as provided under article 4 of Schedule I-A of the Stamp Act.

2. Competence of the Commercial Tax Officer:
The court considered whether the Commercial Tax Officer could take action to collect stamp duty and penalty after finalizing the assessments. The court referred to section 33 of the Stamp Act, which mandates that instruments not duly stamped must be impounded by every person authorized to receive evidence. Section 35 provides that upon payment of the stamp duty and penalty, the document shall be admitted in evidence. The court highlighted that once an insufficiently stamped document is admitted in evidence and acted upon, the officer becomes functus officio, meaning he has no further jurisdiction to collect the stamp duty and penalty or to impound the document. This principle was supported by various precedents, including decisions from the Madras, Calcutta, Lahore, Nagpur, Madhya Pradesh, and Bombay High Courts. The court concluded that since the Commercial Tax Officer had already completed the assessments and acted upon the documents without collecting the stamp duty and penalty, he had no authority to take further action.

Conclusion:
The court allowed the writ petition and issued a writ of prohibition, forbidding the respondents from recovering the stamp duty and penalty from the petitioners. The petitioners were entitled to their costs in the writ petition. The judgment emphasized that once an officer admits an insufficiently stamped document in evidence and acts upon it, he loses the jurisdiction to later collect the stamp duty and penalty or to impound the document.