2008 Supreme(SC) 340

2008(2) Supreme 472
Supreme Court of india
(From Andhra Pradesh High Court)
H.K. Sema & Markandey Katju, JJ.
Government of Andhra Pradesh & Ors. — Petitioners
versus
Smt. P. Laxmi Devi — Respondent
Appeal (civil) 8270 of 2001
Decided on : 25-02-2008

important Points
Taxing statutes are to be construed strictly and hardship is not relevant in construing taxing statutes.
A statute can be declared invalid only if it clearly violates some provision of the Constitution in so evident a manner as to leave no manner of doubt. Courts should follow the Thayer’s doctrine of self restraint.
Section 47A(1) of the Indian Stamp Act, 1899 as introduced by A.P Amendment Act 8 of 1998 is not unconstitutional.

Headnote:(a)Indian Stamp Act, 1899 – Section 33(1) – The registering authority is duty bound to impound a document if it is not duly stamped – Hence High Court erred in ruling that the document can be returned if the party does not want to get it stamped. (Para 16)

       (b)Indian Stamp Act, 1899 – Section 47A(1) – A.P Amendment Act 8 of 1998 was only for plugging the loopholes and for quick realization of the stamp duty – Hence it is well within the power of the State legislature vide Entry 63 of List II read with Entry 44 of List III of the Seventh Schedule to the Constitution. (Para 18)

       (c)Interpretation of statutes – Taxing statutes are to be construed strictly and hardship is not relevant in construing taxing statutes – There is no equity in a tax – If the words used in a taxing statute are clear, one cannot try to find out the intention and the object of the statute – Hence stamp duty being a tax, the High Court fell in error in trying to go by the supposed object and intendment of the Stamp Act, and by seeking to find out the hardship which will be caused to a party by the impugned amendment of 1998. (Para 19)

       AIR 1965 SC 1216; AIR 1955 SC 661; AIR 1968 SC 623 – Relied upon.

       (1969) LR 4 HL 100 – Quoted with approval.

       (d)Indian Stamp Act, 1899 – Section 47A(1) – Just as the reference under Section 47A has been made subject to deposit of 50% of the deficit duty, there are provisions in various statutes in which the right to appeal has been given subject to similar conditions – These provisions had been held intra vires – Section 47A is therefore constitutionally valid and the judgment of the High Court declaring it unconstitutional is not correct. (Paras 22, 27, 57 and 95)

       (1999) 4 SCC 468; (1968)4 SCC 402; (1975)2 SCC 175; (1993)1 SCC 22 – Relied upon.

       (d)Indian Stamp Act, 1899 – Section 47, Proviso – If arbitrary and exorbitant demand is made u/s 47A(1), it is always open to a party to file a writ petition challenging the same – In that case it is always open to the High Court to set aside such exorbitant demand because arbitrariness violates Article 14 of the Constitution. (Para 29)

       AIR 1978 SC 597 – Relied upon.

       (e)Indian Stamp Act, 1899 – Section 47 – There is always a difference between a statute and the action taken under it – Hence, merely because it is possible that the order of the registering authority under the proviso to Section 47A is arbitrary and illegal, that does not mean that the proviso to Section 47A is also unconstitutional. (Para 30)

       (f)Judicial Review of Statutes – Theory of judicial review of statutes discussed to for guidance to the High Courts. (Paras 31 to 34 and 40)

       5 U.S. (1Cranch) 137 (1803); 4 Binn. 117 – Relied upon – Relied upon.

       (g)Judicial Review of Statutes – Invalidating a statute is a grave step, and must therefore be taken in very rare and exceptional circumstances – A statute can be declared invalid only if it clearly violates some provision of the Constitution in so evident a manner as to leave no manner of doubt – Courts should follow the Thayer’s doctrine of self restraint. (Paras 38, 44, 47 and 55)

       AIR 1979 SC 83; 262 US 404 412(1923); 319 U.S. 624 (1943); 285 U.S. 262; AIR 1973 SC 1461; AIR 1952, SC 252; AIR 1958 SC 731 – Relied upon.

       (h)Judicial Review of Statutes – Thayer’s doctrine of self restraint – There is a presumption in favour of the constitutionality of Statute – The burden is always upon the person who attacks it to show that there has been a clear transgression of a constitutional provision – The Court must make every effort to uphold the constitutional validity of a Statute, even if that requires giving the statutory provision a strained meaning, or narrower or wider meaning – It is only when all efforts to do so fail should the Court declare a statute to be unconstitutional. (Paras 58 and 65)

       AIR 1951 SC 41; AIR 1999 SC 1867; 1991 (Supp) 1 SCC 600: AIR 1991 SC 101; AIR 2001 SC 724; AIR 1997 SC 1511; AIR 1960 SC 554; (1931) AC 275; AIR 1962 SC 955; AIR 1941 FC 72 – Relied upon.

       (i)Judicial Review of Statutes – Constitutional validity – About some statutes one cannot be absolutely sure about their constitutional validity, and difficulties would then arise in this connection – Some broad principles to resolve these difficulties stated. (Para 68 to 82 and 84)

       (1981)4 SCC 675; 335 U.S. 538 (1949); 285 U.S. 262 (1932); (1949) 338 U.S. 604 (617): 94 Law Ed. 381-292; 198 U.S. 45(1903); 249 U.S. 47 (1919); 250 U.S. 616-624 (1919); 304 U.S. 144 – Relied upon.

       (j)Judicial Review – While a statute is made by the peoples’ elected representatives, the Constitution too is a document which has been created by the people – The Courts being guardians of the rights and liberties of the citizens will be failing in their responsibility if they abdicate this solemn duty towards the citizens – It is the solemn duty of the Courts to uphold the civil rights and liberties of the citizens against executive or legislative invasion – For this, they may sometimes have to declare the act of the executive or legislature as unconstitutional. (Paras 86 and 93)

       337 US 1 (1949); 314 US 252 (1941); 370 U.S. 375(1962); (1970) 1 Q.B. 693 (709); AIR 1978 SC 597; AIR 1994 SC 1349; AIR 1997 SC 610 – Relied upon.

       Facts of the case:

       1.The respondent herein had entered into an agreement of sale for purchase of land but as there was breach of performance of the contract on the part of the prospective vendor, a suit was filed before the II Additional Senior Civil Judge, Hyderabad and the same was decreed.

       2.When the sale deed was not executed pursuant to the decree, Execution Petition was filed. An officer of the Court was deputed to present the sale deed, which was stamped according to the directions of the Senior Civil Judge.

       3.The registering authority raised objection with regard to the quantum of non-judicial stamp on which the sale deed was engrossed. The registering authority, the Sub-Registrar, Malkajigiri, Ranga Reddy District, conveyed to the Second Senior Civil Judge, City Civil Court, Hyderabad that the document has to be referred under Section 47A and as a condition precedent for such reference, called upon the party i.e. the respondent herein, to pay duty on 50% of the differential amount according to the estimate made by him.

       4.Against this demand the respondent filed a writ petition in the High Court praying for a declaration that Section 47A of the Indian Stamp Act as amended by A.P. Act 8 of 1998 which requires a party to deposit 50% deficit stamp duty as a condition precedent for a reference to the Collector under Section 47A is unconstitutional.

       5.By the impugned judgment the High Court has declared it unconstitutional.

       Findings of the Court :

       Section 47A(1) of the Indian Stamp Act, 1899 as introduced by A.P Amendment Act 8 of 1998 is not unconstitutional.

       Result : Appeal allowed.

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