GARDEN SILK MILLS PRIVATE LIMITED vs THE DEPUTY COLLECTOR, SURAT
- Court
- Gujarat High Court
C/SCA/11657/2026 (GJHC240611502026) JUDGMENT DATED: 25/08/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11657 of 2026
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIRZAR S. DESAI
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Approved for Reporting Yes No
✔
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GARDEN SILK MILLS PRIVATE LIMITED
Versus
THE DEPUTY COLLECTOR, SURAT
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Appearance:
MS MEGHA JANI, SR ADV WITH MR DIGANT POPAT, ADV, MR SHRINIL
SHAH, ADV FOR KHAITAN & CO LLP(21770) for the Petitioner(s) No. 1
MR HENIL SHAH, AGP for the Respondent(s) No. 1
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CORAM: HONOURABLE MR. JUSTICE NIRZAR S. DESAI
Date : 25/08/2026
JUDGMENT
1. Rule . Learned AGP Mr. Henil Shah waives service of
rule for respondent- State.
2. With the consent of the parties, the matter was taken
up for final hearing, as the petition involves two very
short points, namely, whether the principles of natural
justice were followed before passing the impugned
order and whether, without following the procedure
prescribed under Section 33(4) of the Gujarat Stamp
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Act, 1958, the authority was justified in impounding
the photocopies of the instrument by exercising powers
under Section 33(5) of the Act.
3. By way of this petition, the petitioner has challenged
the order dated 06.05.2026 passed by Deputy
Collector, Surat - Stamp Duty Valuation Department,
Division 2, by which the petitioner was directed to pay
a deficit stamp duty of Rs. 8,00,000/- along with a
penalty of Rs. 13,92,000/-, totaling Rs. 21,92,000/-
within a period of 90 days from the date of the order,
failing which an interest at the rate of 12% would be
charged from the petitioner and a surcharge of 5%
would also be levied upon the petitioner.
4. Learned Sr. Advocate Ms. Megha Jani submitted that
the impugned order is suffering from the violation of
principles of natural justice as the impugned order
refers to the four different notices allegedly issued to
the present petitioner, but in view of the fact that the
petitioner has already changed the corporate office, the
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petitioner never received any of the notices which can
be termed as valid service to the petitioner and
therefore, the entire proceedings initiated against the
petitioner were proceeded ex-parte , the petitioner was
never heard and therefore, the impugned order having
been passed without affording an opportunity of
hearing to the petitioner, can be said to be in violation
of the principles of natural justice.
5. Learned Sr. Advocate Ms. Megha Jani further
submitted that in view of amended Section 33 of the
Gujarat Stamp Act, 1958 which has come into force
from 07.04.2025 and by way of the aforesaid
amendment, though the authority is empowered to
impound the photocopy of the instrument, such
powers cannot be exercised independently, but such
powers are required to be exercised only after
exercising the powers under section 33(4) of the Stamp
Act, which provides for giving an opportunity to the
concerned person to provide the original instrument
within the time limit prescribed in the notice and only
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upon failing to act in accordance with such notice by
providing the original instrument within the time limit
specified, in that case only, the authority can exercise
the powers under section 33(5), which empowers the
authority to impound the photocopy of the instrument
in question.
6. Learned Sr. Advocate Ms. Jani submitted that the
impugned order was passed by impounding the
photocopies of the original document, but as the
respondent had never issued any notice under section
33(4) of the Gujarat Stamp Act, 1958, the aforesaid
action of the respondent of impounding the
photocopies of the instrument cannot be said to have
been validly impounded. Therefore, the impugned
order is required to be quashed and set aside on the
ground that the document cannot be said to have been
properly impounded and therefore, when the
instrument is not impounded properly as per section
33, the order based on the aforesaid impoundment of
document also would go.
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7. Learned Sr. Advocate Ms. Jani also tried to address the
Court on merit by stating that the instrument which is
sought to be impounded was a mortgage deed which
carries a reference about the sanction letter which was
executed in West Bengal between the bank and the
present petitioner. Until and unless that sanction
letter comes before the authority in natural course as
per section 19 of the Act, the authority could not have
asked for deficit stamp duty in respect of the aforesaid
instrument. Learned Sr. Advocate Ms. Jani also
submitted that the mortgage deed itself is a document
which is sufficiently stamped as the maximum stamp
duty of Rs. 8,00,000/- has already been paid and
therefore, the authority was not justified in seeking to
recover the additional stamp duty by terming this as
deficit stamp duty and by imposing the penalty upon
the said stamp duty, as the aforesaid document is a
separate individual document and for which, as the
petitioner has already paid the adequate stamp duty,
the authority ought not to have demanded for
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additional stamp duty and the entire proceedings
initiated against the petitioner were void ab initio and
therefore, such proceedings were non est in the eyes of
law and are required to be quashed and set aside
entirely.
8. Learned Sr. Advocate Ms. Jani further submitted that
the petitioner's entire case is based on the fact that the
original instrument i.e., mortgage deed has never been
impounded. It is only during the course of the
argument, a disclosure had come from the Government
indicating that the photocopies of the instrument was
impounded and therefore, she relied upon the
language of Section 33(4) of the Act and her
submissions were based on the disclosure which had
come from the State Government that the photocopies
of the document had impounded and therefore, these
submissions may be considered in light of the
aforesaid disclosure made by learned AGP Mr. Henil
Shah. Learned Sr. Advocate Ms. Jani, by making above
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submissions, prayed for quashing and setting aside of
the impugned order.
9. Learned AGP Mr. Henil Shah vehemently opposed the
petition. However, even upon taking instructions from
the concerned officer, learned AGP could not dispute
that the petitioner was never served with any notice at
its corporate office mentioned in the cause title of the
petition, which are subject matter of impugned order
and which are referred into impugned order and the
petitioner was served at a location which is mentioned
in the mortgage deed which according to learned Sr.
Advocate Ms. Jani is not the corporate office of the
petitioner and therefore, the petitioner was required to
be served at its corporate office and the respondent
could not serve the petitioner at its corporate office is a
question which could not be answered by the learned
AGP by showing any documentary evidence to indicate
that the petitioner was ever served at an address which
is mentioned in the cause title of the petition.
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10. The aforesaid failure on the part of respondent no. 2 -
Authority to serve the petitioner at its changed address
has resulted into passing of impugned order without
hearing the petitioner as the petitioner was never
aware about the notices issued to the petitioner, and it
is only when the petitioner was served with the
impugned order, the petitioner came to know about the
such proceedings having been initiated.
11. Further, as far as the impoundment of instrument is
concerned, learned AGP Mr. Henil Shah, upon
instructions, could not point out from the records that
at any point of time, a notice under section 33(4) was
issued to the petitioner. In view of above, the matter
was heard in light of above submission only.
12. I have heard learned advocates for the parties and
perused the record. Section 33 of the Gujarat Stamp
Act, 1958, which was amended on 07.04.2025, reads
as under:
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Section 33 - Examination and impounding of
instruments
(1)[Subject to the provision of section 32A, every
person] having by law or consent of parties authority
to receive evidence, and every person in charge of a
public office except an officer of police, before whom
any instrument, chargeable, in his opinion, with duty,
is produced or comes in the performance of his
functions shall if it appears to him that such
instrument is not duly stamped, impound the same.
(2)For that purpose every such person shall examine
every instrument so chargeable and so produced or
coming before him in order to ascertain whether it is
stamped with a stamp of the value and description
required be the law for the time being in force in the
State when such instrument was executed or first
executed:
Provided that-
(a)nothing herein contained shall be deemed to
require any Magistrate or Judge of a Criminal
Court to examine or impound, if he does not think
fit so to do any instrument coming before him in
the course of any proceeding other than a
proceeding under Chapter XI or Chapter X of the
Bharatiya Nagarik Suraksha Sanhita, 2023 (46
of 2023);
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(b)in the case of a Judge of High Court, the duty
of examining and impounding any instrument
under this section may be delegated to such
officer as the Court may appoint in this behalf.
(3)For the purpose of this section, in cases of doubt,-
(a) the State Government may determine what
offices shall be deemed to be public offices; and
(b)the State Government may determine who
shall be deemed to be persons in charge of public
offices.
(4) Where deficiency in stamp duty is noticed from the
copy of an instrument, the Collector may suo motu or
on a reference from any Court or any Authority or by
any person in that behalf, the collector shall call for the
original instrument for the purpose of satisfying
himself as to the adequacy of the duty paid thereon,
and the instrument so produced before the Collector
shall be deemed to have been produced, or come
before him in the performance of his functions.
(5) In case the instrument is not produced within the
period specified by the Collector, collector shall
impound the copy of instrument, he shall require the
payment of the proper duty or the amount required to
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make up the same, together with penalty under
Section 39(1)(b) on the copy of the instrument.”
13. Section 33(4) makes it mandatory for the authority to
issue notice and to provide a time limit for providing
the original copy of the instrument and the concerned
person is required to produce the original instrument
before the authority within the time limit specified. It is
only upon the failure of the concerned person to
produce or to comply with the requirement of section
33(4), which would empower the respondent authority
to exercise the powers under section 33(5) of the Act
and it is only after a notice is issued under section
33(4) to the concerned person or the legal entity, as the
case may be, the authority can exercise powers under
section 33(5) and not independently without following
procedure prescribed under section 33(4) of the Act.
14. In the instant case, it is the stand of the respondent
authorities that the authorities have impounded the
photocopies of the instrument in question. However,
when the notice under section 33(4) is not issued to
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the petitioner, the impounding of the instrument on
the basis of impounding the photocopies cannot be
said to be legal or proper impoundment of the
document as prescribed under Section 33 of the Act as
the photocopies can be impounded only once the
authority fails to obtain the original instrument, and
not otherwise. Therefore, the action of respondents of
impounding the photocopies instrument also cannot
be said to be legal or proper impoundment and
therefore, entire proceedings based upon such
impoundment, which cannot be termed as legal or
proper impoundment, is required to be quashed and
set aside.
15. Further, as there is an admitted position that the
petitioner was never heard before passing of the
impugned order, there is a clear violation of principles
of natural justice as well, and therefore, the impugned
order is required to be quashed and set aside on that
ground as well.
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16. In view of above, the impugned order dated 06.05.2026
passed by the Deputy Collector, Surat, Stamp Duty
Valuation Department, Division – 2, is hereby
quashed and set aside on the ground of violation of
principles of natural justice and improper
impoundment of the photocopies of the original
instrument. However, the authorities are at liberty to
initiate fresh proceedings by following due procedure of
law. All the rights and contentions of the parties are
kept open
17. Accordingly, the present petition is disposed of . It is
clarified that this Court has not gone into the merits of
the matter. Rule is made absolute.
(NIRZAR S. DESAI,J)
Anuj
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