Point of Law: It is now settled law that decisions on questions of land tax, income tax and rating assessments constitute an important exception to general rules as to res judicata, and that such decisions given in regard to one year’s tax or rates, or as to given rating or assessment lists, do not give rise to estoppels binding the parties in respect of another year’s tax or rates, or a later assessment list

ORDER :

1. Petitioner being the second defendant in an eviction suit in O.S.No.5192/2011 is knocking at the doors of Writ Court for assailing the order dated 01.03.2017 a copy whereof is at annexure-A whereby the learned III Additional City Civil Judge, Bengaluru, having impounded his two documents under Section 33 r/w 34 of the Karnataka Stamp Act, 1957 (hereafter ‘1957 Act’) has levied the deficit stamp duty with penalty at the rate of ten times thereof.

2. After service of notice, the respondent – plaintiff having entered appearance through his counsel resists the writ petition making submission in justification of the impugned order and the reasons on which it has been predicated.

3. I have heard the learned counsel for the parties and have perused the petition papers; the following question of law arises for consideration in this case:

If unduly stamped instruments (documents) are admitted in evidence sans reservation in a case, whether the objection as to their inadmissibility for want of stamp duty is sustainable in another case between the same parties ?

This question arises in the fact matrix that the documents which have been held to be inadmissible by the learned Judge of the court below for want of stamp duty vide impugned order in O.S.No.5192/2011 were admitted in evidence without objection in another proceeding in O.S.No.743/2011 between the same parties.

4. The answer to the above question has to be in the negative for more than one reason: Firstly, the doctrine of res judicata and the doctrine of estoppel do not apply to the fiscal legislations like the 1957 Act, regardless of its nomenclature. In “The Doctrine of Res Judicata” by George Spencer-Bower, 2nd Edn.-London Butterworths at paragraph 309, it is stated as under:

“309. It is now settled law that decisions on questions of land tax, income tax and rating assessments constitute an important exception to the general rules as to res judicata, and that such decisions given in regard to one year’s tax or rates, or as to given rating or assessment lists, do not give rise to estoppels binding the parties in respect of another year’s tax or rates, or a later assessment list …”.

To put it succinctly, ordinarily the doctrines of the kind do not apply to exclude the objection as to dutiability of instruments; it has to be so in the public interest as well since State has to generate revenue by levying taxes & duties; merely by an arrangement between two private individuals litigating before a Court, the levies should not go unlaid; a contra argument would affect the interest of the Exchequer; that is the reason de etre of the provisions in Chapter IV of the 1957 Act who impose an obligation on the Courts, Tribunals, Arbitrators and Authorities to impound unstamped or unduly stamped instruments/documents, regardless of objection from the parties to the proceedings.

5. The heavy reliance placed by the petitioner on the decision in K.AMARNATH –vs-SMT.PUTTAMMA, ILR 1999 KAR 4634 does not come to his aid; para 10 of the judgment which is stressed by the counsel reads as under:

“10. A duty is cast upon every Judge to examine every document that is sought to be marked in evidence. The nomenclature of the document is not decisive. The question of admissibility (with reference to Section 34 of Karnataka Stamp Act, or Section 35 of Indian Stamp Act and Section 49 of Registration Act) will have to be decided by reading the document and deciding its nature and classification. The tendency to mark documents without inspection and verification should be eschewed. Even while recording ex parte evidence or while recording evidence in the absence of the Counsel for the other side, the Court should be vigilant and examine and ascertain the nature of the document proposed to be marked and ensure that it is a document which is admissible. The Court should not depend on objections of the other Counsel before considering whether the document is admissible in evidence or not. Section 33 of the Sta