Petitioner is Managing Director of M/s. Sameera Homes Pvt. Ltd. He entered into an agreement of sale for purchase of Acs.8.12Y2 guntas in survey Nos.646/ A, 646/AA, 646/E and 646/EE situated at Rajapuram village, Balanagar Mandai in Mahabubnagar District, from Donti Atchutha Reddy under agreement of sale dated 20-5-2006 for a sale consideration of Rs.7,60,000/- per acre. Agreement of sale was entered into by and between petitioner and his vendor on a Non-Judicial Stamp (NJS) paper of RS.1 00/-. When some of the villagers expressed doubt about stamp duty paid, petitioner approached respondent for determination of stamp duty. He also submitted original agreement of sale for consideration. The Collector and District Magistrate, Mahabubnagar District, issued impugned notice/order dated 17-3-2008 directing petitioner to pay a deficit stamp duty of Rs.3,78,950/- and penalty at ten times of stamp duty in a sum of Rs.37,89,500/- (in total RsA1 ,68,450/-) within fifteen days, for impounding and validating document. Aggrieved by the same, petitioner filed present writ petition under Article 22,6 of Constitution of India seeking a writ of Certiorari to quash the said order and for consequential direction to respondent to return document with endorsement as required under Section 40 of Indian Stamp Act, 1899 (Stamp Act, for brevity).

2. This Court while issuing notice before admission passed interim orders of stay.

Feeling aggrieved, respondent filed W.V.M.P.No.1476 of 2008 for vacating interim order. A counter affidavit is filed along with said application. As a short question is raised, the writ petition itself is heard finally and is being disposed of by this order.

3. The gist of counter is that document submitted by petitioner under Section 31 of Stamp Act was treated as a sale deed and hence while determining stamp duty, penalty was imposed under Section 40(1)(b) of Stamp Act. For ready reference, paragraph 2 of counter affidavit is extracted below.

It is submitted that the writ petitioner has submitted a representation requesting to impound the agreement sale deed in respect of lands bearing Sy.Nos. 646/A, 646/AA, 646/E and 646/EE total extent of Acs.8.12Y2 guntas situated in the limits of Rajapur (v) of Balanagar. The document produced together with the petition filed by the writ petitioner has been examined in accordance with the provisions contained u/sA7(c) of Indian Stamp Act 1899 and the penalty has been levied u/sAO(1 )(b) of the Act and nothing is calculated wrong. The writ petitioner himself filed an application stating that he has purchased suit lands for sale consideration of Rs.63,17,500/-. Hence, basing on the clear declaration the document (sale agreement) has been processed in accordance with the provisions of the Indian Stamp Act, 1899. The penalty levied is in accordance with the provisions of Indian Stamp Act, 1899.

The deficit stamp duty and penalty is calculated to Rs.41,68,4501- and directed the writ petitioner to pay the same into appropriate Government Head of Account through challan ana to submit to this office for taking further necessary action. The details of deficit stamp duty and penalty (10 times) levied is as follows.

Deficit stamp duty Rs.3,78,950.00

Penalty Rs.37,89,500.00

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Total Rs.41,68,450.00

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4. Learned Counsel for petitioner and learned Assistant Government Pleader made their submissions. Petitioner also relies on Government of Uttar Pradesh v. Mohd. Amir in support of contention that when stamp duty is determined under Section 31 of Stamp Act, penalty cannot be imposed.

5. What is stamp duty on sale agreement? Section 10 of Stamp Act read with Schedule I-A provide stamp duties with which instruments (documents, by which rights or liabilities are created, transferred or extinguished) are chargeable. Sale agreement is dealt with differently by Schedule I-A depending on possession factor. If it is an agreement or memorandum of agreeme