The provision of section 47a of the Indian Stamp Act, 1899 as amended by the State of West Bengal is intra vires.

( 1 ) IN this appeal the vires of section 47a of Indian Stamp Act, 1899 as amended by the State of West Bengal is in question.

( 2 ) THE petitioners are landholders. They intended to convey same properties which required registration, the consideration wherefor was fixed at Rs. 1,80,000/ -. However, in view of the provisions of section 47a of the Indian Stamp Act and the Rules framed thereunder, the market value of the property was fixed at Rs. 5,65,000/- and the Registering authority directed them to pay the deficit stamp duty calculated on the basis thereof.

( 3 ) THEREAFTER these writ applications have been filed.

( 4 ) MR. P. K. Roy, the learned senior counsel appearing on behalf of the appellant, inter alia, has drawn this Court's attention to Entry 44 of List III, Entry 63 of List II and Entry 91 of List I of the 7th Schedule appended to the Constitution of India and submitted that keeping in view the aforementioned entries it is absolutely clear that whereas; Entry 91 List I and Entry 63 of List II refer to the rate of Stamp duty, Entry 44 of List III does not refer to the rate. The learned counsel, therefore, contends that the Constitution of India recognised the distinction between the rates of stamp duty and mechanism of collection or management therefore. According to Mr. Roy, Stamp Duty by its nature is necessarily referable to and based on an instrument and not a bare incident or transaction. In support of the said contention strong reliance has been placed on IRC v. G. Angers and Co. reported in 1889 (23) QBD 579 and Minister of Stamps v. Towned reported in (1909) A. C. 633.

( 5 ) MR. Roy would urge that in terms of Clause (2) of Article 248 of the Constitution of India, the Parliament is vested with an exclusive residuary power to make law including imposition of tax with respect to any matter and thus, such residuary power being referable to Entry 97 of List-I of Constitution of India, the State had no legislate competence to make the aforementioned amendment.

( 6 ) IT was further submitted that upon introduction of Chapter XX-C of the Income-tax Act, 1961 it must be held that as Union of India is competent to deal with the question of under valuation of an instrument as has been held by the Apex Court in C. B. Gautam v. Union of India reported in 1993 (1) SCC 78, the said subject matter cannot be said to be covered by Entry 44 of the concurrent list. It has further been submitted that in any event two parallel proceedings, one governed under the Income-tax Act, 1961 and another governed under the State amendment of the Indian Stamp Act as a result whereof the assessee may be rendered liable to pay enhanced stamp duty in respect of a transaction which had not taken effect is impermissible. The learned counsel submits that as even in relation to an agreement of sale or a settlement which would include a family settlement, stamp duty has to be paid on the basis of a market value fixed by the State, the same is arbitrary.

( 7 ) REFERENCES have also been made to Rule 4 of the West Bengal Stamp (Provision of Under-valuation of Instruments) Rule 1994 hereinafter called and referred to for the sake of brevity as the said rules) as also the forms appended thereto and it was submitted that from a perusal thereof it would appear that no provision has been made for giving an opportunity of hearing to the person executing the instrument at the first instance and evidence can be adduced by him only at the appellate stage and, thus, the person executing deed is deprived of the principles of natural justice.

( 8 ) MR. Anindya Mitra, the learned senior counsel appearing on behalf of the respondents, on the other hand, submitted that the word 'rate' employed in Entry 91 of List I, Entry 44 of List III. Entry 63 of List II refers only to measure of tax. Reliance in this connection has been placed on Federation of Hotel and Restaurant v. Union of India reported in 1989 (3) SCC 634 and Goodricke Group Ltd. v