NARANBHAI SAMANTBHAI @ SAMATBHAI BHARVAD(DECEASED) vs STATE OF GUJARAT

C/SCA/4257/2022 JUDGMENT DATED: 18/06/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4257 of 2022

FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIRZAR S. DESAI
=====================================================
Approved for Reporting Yes No
Yes
=====================================================
NARANBHAI SAMANTBHAI @ SAMATBHAI BHARVAD(DECEASED) &
ORS.
Versus
STATE OF GUJARAT & ORS.
=====================================================
Appearance:
ADITYA A CHOKSI(7835) for the Petitioner(s) No.
1.1,1.2,1.3,1.4,1.5
DECEASED LITIGANT THROUGH LEGAL HEIRS/
REPRESENTATIVES for the Petitioner(s) No. 1
MR HENIL SHAH ASSISTANT GOVERNMENT PLEADER for the
Respondent(s) No. 1
=====================================================
CORAM:HONOURABLE MR. JUSTICE NIRZAR S. DESAI

Date : 18/06/2026

JUDGMENT
1. Heard learned advocate Mr. Aditya Choksi
appearing for the petitioner and learned
Assistant Government Pleader Mr. Henil Shah
appearing for the respondent-State.
2. By way of this petition, the petitioners have
prayed for quashing and setting aside the
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action/proceedings of the respondent authority
and the order dated 12.10.2020 at Annexure-E, as
well as the orders/actions dated 15.12.2020 and
17.06.2021 at Annexure-H and I. By way of the
proceedings dated 12.10.2020, the respondents
directed the petitioners to pay the deficit
stamp duty of Rs. 57,99,800/- as well as a
penalty of Rs. 4,50,000/- under Section 39(1)(b)
of the Gujarat Stamp Act, 1958 (hereinafter
referred to as “the Act”), amounting in all to a
sum of Rs. 62,49,800/-, to be recovered from the
petitioners. The order further states that, if
the petitioners are aggrieved by the aforesaid
order and if the amount of deficit stamp duty is
not paid within a period of 90 days, they shall
be liable to pay interest at the rate of 15% per
annum on the amount quantified under Section
46(2) of the Act. Further, the order also
provides that the petitioners may challenge the
aforesaid order by depositing 25% of the amount
quantified as a pre-deposit for preferring an
appeal under Section 53(1) of the Gujarat Stamp
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C/SCA/4257/2022 JUDGMENT DATED: 18/06/2026
Act, 1958 before the Chief Controlling
Authority, Revenue Department, Gujarat State,
Gandhinagar.
3. When the petitioner filed an appeal along with
an application for waiver of the deposit of 25%
of the amount quantified vide order dated
12.10.2020, the said application was rejected by
order dated 15.12.2020, which is under
challenge.
4. Vide order dated 15.12.2020, the petitioner was
further informed that, in the event of failure
to deposit 25% of the amount within 10 days from
the date of the order, the appeal preferred by
the petitioner would be rejected.
5. Vide order dated 17.06.2021, the Chief
Controlling Authority under the Bombay Stamp
Act, 1951 passed a further order stating that,
after the aforesaid order dated 15.12.2020 was
passed, the petitioner, vide application dated
01.01.2021, sought a further extension of 30
days for depositing 25% of the amount, which was
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granted vide order dated 08.01.2021. Thereafter,
vide communication dated 17.03.2021, the
petitioner was again called upon to produce the
receipt evidencing deposit of 25% of the amount
and was informed that, for every delay of 30
days, an additional non-refundable amount of
Rs.1,000/- would be payable. However, as the
petitioner failed to produce the receipt, the
appeal preferred by the petitioner was rejected.
All three orders are under challenge in the
present petition.
6. With the consent of the parties, the matter was
heard finally. Hence, RULE. Learned Assistant
Government Pleader Mr. Henil Shah waives service
of Rule on behalf of the respondent–State.
7. The brief facts giving rise to the present
petition are stated as under:
7.1 The petitioner states that he has purchased
land bearing Final Plot Nos. 19/1 and 19/2
Paikee, admeasuring 21,245 Sq. Metres of T.P.
No. 94 having Block No. 330 (Old Survey Nos.
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331/2, 332/1, 333/2, 334/1+2, 335/1 and 336/1)
situated at Village Hathijan, Taluka City,
District Ahmedabad, by way of Registered Sale
Deed No. 2731 dated 16-19.12.2013, which was
registered with the office of the Sub-Registrar,
Ahmedabad-13 (City Taluka).
7.2 The petitioner further states that he had
purchased land bearing Final Plot No. 21/1,
admeasuring 6,617 sq. meters of T.P. No. 94
having Block No. 330 (Old Survey No. 337)
situated at Village Hathijan, Taluka City,
District Ahmedabad, by way of Registered Sale
Deed No. 2732 dated 16-19.12.2013, which was
registered with the office of the Sub-Registrar,
Ahmedabad-13 (City Taluka).
7.3 The petitioner also purchased land bearing
Final Plot No. 13, admeasuring 2,010 sq. metres,
of T.P. No. 94 and Block No. 325 (Old Survey No.
340/2) situated at Village Hathijan, Taluka
City, District Ahmedabad, by way of Registered
Sale Deed No. 766 dated 28.04.2014, which was
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registered with the office of the Sub-Registrar,
Ahmedabad-13 (City Taluka).
7.4 The petitioner paid the entire sale
consideration as well as stamp duty calculated on
the prevailing Jantri rate of Rs.1,750/- per sq.
metre. Upon verification, the competent authority
issued Index-II and returned the duly registered
sale deeds to the petitioner. The last of the
aforesaid transactions was completed in the year
2014.
7.5 Thereafter, after a lapse of approximately
six years, the respondent issued a notice dated
21.04.2020 under Section 39(1)(b) of the Gujarat
Stamp Act in respect of all the aforesaid
registered sale deeds, two of which were executed
in the year 2013 and one in the year 2014.
According to the petitioner, the proceedings were
barred by limitation; nevertheless, the
proceedings were continued and culminated in the
impugned order dated 12.10.2020.
7.6 By the said order, the petitioner was
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directed to pay a total amount of
Rs.62,49,800/-, comprising Rs.57,99,800/-
towards deficit stamp duty and Rs.4,50,000/-
towards penalty, within a period of 90 days. It
was further provided that, in the event of
failure to pay the said amount within the
stipulated period, interest at the rate of 15%
per annum would become payable. The petitioner
was also informed that the said order was
appealable under Section 53(1) of the Gujarat
Stamp Act, subject to deposit of 25% of the
amount determined under the impugned order.
7.7 As stated in the foregoing paragraphs, the
petitioner initially preferred an appeal along
with an application seeking waiver of the
requirement to deposit 25% of the amount
determined; however, the said application for
waiver was rejected vide order dated 15.12.2020,
and despite extensions being granted from time
to time for depositing the requisite 25% amount,
the petitioner failed to make the deposit,
whereupon the respondent authority, vide order
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dated 17.06.2021, rejected the petitioner's
appeal, which is under challenge in the present
petition.
8. Learned advocate Mr. Aditya Choksi, appearing
for the petitioner, submitted that, at this
juncture, the petitioner is relying upon only
one contention, while keeping all other rights
and contentions of the petitioner open, namely,
that at the time when the proceedings under
Section 39(1)(b) were initiated, the original
sale deed of the petitioner had not been
impounded, which is a condition precedent in
view of Sections 33 and 37(2) of the Act.
8.1 Learned advocate Mr. Aditya Choksi, relying
upon the aforesaid provisions, submitted that
unless and until the original document is taken
into the custody of the respondent authority and
is duly impounded, no proceedings under Section
39(1)(b) can be initiated against the petitioner
under the provisions of the Act.
8.2 It was further submitted that, in the
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present case, by exercising powers under Section
68(2) of the Act, the respondent authority
impounded only a photocopy of the registered
document, which was impermissible at the
relevant point of time when the Act was
unamended. Therefore, according to the learned
advocate, the action of the respondents in
impounding the document on the basis of a
photocopy was illegal and contrary to the
provisions of the Act.
8.3 It was further contended that such a
practice adopted by the respondents has not been
approved by a catena of decisions and,
therefore, all proceedings founded upon the act
of impounding a photocopy of the original
document are a nullity in the eye of law.
Consequently, all subsequent and consequential
actions flowing therefrom are also illegal and
are, therefore, required to be quashed and set
aside.
8.4 Learned advocate Mr. Aditya Choksi, in
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support of his submissions, relied upon the
decision rendered in the case of Sakar Glazed
Tiles Pvt. Ltd. v. State of Gujarat and Others
dated 20.07.2017 passed in Special Civil
Application No. 8632 of 2008. By placing
reliance upon the observations made by the Co-
ordinate Bench of this Court in paragraphs 5.1
and 6 of the said decision, learned advocate Mr.
Aditya Choksi submitted that it is an admitted
position in the present case that the
respondents have not impounded the original
document but have impounded only a photocopy
thereof. He, therefore, submitted that the
entire proceedings initiated on the basis of
such impounding are without authority of law
and, consequently, the impugned orders are
liable to be quashed and set aside, as the
mandatory requirements of Section 33 read with
Section 37(2) of the Act have not been complied
with.
8.5 Learned advocate Mr. Aditya Choksi further
submitted that, in view of the aforesaid facts
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and the settled position of law, the present
petition deserves to be allowed by quashing and
setting aside the impugned orders.
9. Learned Assistant Government Pleader Mr. Henil
Shah appearing for the respondent–State, despite
vehemently opposing the petition, could not
point out from the record, affidavit-in-reply,
or otherwise, that the original documents in
respect of all the three sale deeds were taken
into the custody of the respondents and duly
impounded.
9.1 It is an admitted position, which could not
be disputed by learned Assistant Government
Pleader Mr. Henil Shah, that the documents
impounded were merely photocopies of the sale
deeds executed by the petitioner. It is on the
basis of such photocopies that the respondents
concluded that deficit stamp duty had not been
paid by the petitioner and, accordingly, sought
recovery of Rs.62,49,800/- vide order dated
12.10.2020.
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9.2 It is also an admitted position that the
appeal preferred by the petitioner against the
said order was not entertained on account of the
petitioner's failure to deposit 25% of the
amount quantified by the respondent authority.
10. I have heard learned advocates appearing
for the respective parties and perused the
record. I found that as the respondent authority
could not dispute the fact that the petitioner's
original documents were never impounded, and
considering the fact that, at the relevant point
of time, the amended provisions of the Act were
not in force, the judgment relied upon by
learned advocate Mr. Aditya Choksi squarely
covers the issue involved in the present case.
10.1 However, before considering the
aforesaid judgment, it would be appropriate to
refer to the relevant provisions of the Gujarat
Stamp Act, 1958. The notice initiating the
proceedings against the petitioner was issued
under Section 39(1)(b) of the Act and,
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therefore, the relevant provisions for the
purpose of adjudication of the present petition
are Sections 33, 37 and 39 of the Gujarat Stamp
Act, 1958.
10.2 The aforesaid provisions are reproduced
hereunder:
“Section 33 - Examination and impounding
of instruments
(1) [89][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 very 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
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instrument coming before him in the course
of any proceeding other than a proceeding
under Chapter XII or Chapter XXXVI of the
Code of Criminal Procedure, 1898 (V of
1898);
(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.
Section 37 - Instruments impounded how
dealt with
(1) When the person impounding as
instrument under section 33 has by law or
consent of parties authority to receive
evidence and admits such instrument in
evidence upon payment of a penalty as
provided by section 34 or of duty as
provided by section 36, he shall send to
the Collector an authenticated copy of
such instrument, together with a
certificate in writing, stating the amount
of duty and penalty levied in respect
thereof, and shall send such amount to the
collector, or to such person as he may
appoint in this behalf.
(2) In every other case, the person so
impounding an instrument shall send it in
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original to the Collector.
Section 39 - Collector's power to stamp
instruments impounded
(1) When the Collector impounds any
instrument under section 33, or receives
any instrument send to him under sub-
section (2) section 37, not being an
instrument chargeable with a duty of
twenty naye paise, or less, he shall adopt
the following procedure :-
(a) if he is of opinion that such
instrument is duly stamped or is not
chargeable with duty, he shall certify by
endorsement thereon that it is duly
stamped, or that it is not so chargeable,
as the case may be;
(b) if he is of opinion that such
instrument is chargeable with duty and is
not duly stamped he shall require the
payment of the proper duty or the amount
required to make up the same, together
with a penalty of five rupees; or, if he
thinks fit, an amount not exceeding ten
times the amount of the proper duty or of
the deficient portion therefore, whether
such amount exceeds or falls short of five
rupees.
Provided that, when such instrument has
been impounded only because it has been
written in contravention of section 13 or
section 14, the Collector may, if he
thinks fit, remit the whole penalty
prescribed by this section.
(2) Every certificate under clause (a) of
sub-section (1) shall, for the purposes of
this Act, be conclusive evidence of the
matters stated therein.
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(3) Where an instrument has been send to
the Collector under sub-section (2) of
section 37 the Collector shall, when he
has dealt with it is a provided by this
section, return it to the impounding
officer.”
10.3. While considering the language of all
the three provisions, viz. Sections 33, 37 and
39 of the Act, what is worth noticing is the
language employed in Section 37(2), which
specifically emphasizes the requirement of
forwarding the original document to the
Collector for the purpose of impounding the
same.
10.4 In the present case, it is an admitted
position that the original documents were never
taken into custody by the Collector and that the
documents were purportedly impounded only on the
basis of photocopies thereof.
10.5 Therefore, in view of the aforesaid
legal contention raised by learned advocate Mr.
Aditya Choksi, the observations made by the Co-
ordinate Bench of this Court while deciding the
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case of Sakar Glazed Tiles Pvt. Ltd. (supra),
particularly in paragraphs 4.1, 5, 6 and 7,
deserve consideration and are reproduced
hereunder:-
“4.1 Two main submissions were
canvassed on behalf of the petitioner for
questioning the impugned order. The first
was that the document in question was not
a deed of mortgage, but it was a document
whereby only the title deeds relating to
the property were deposited with the bank.
It was submitted that it was a document
confined to the transaction of deposit of
title deeds. On the basis of these
aspects, it was submitted that stamp duty
as required to be paid for the agreement
or memorandum of agreement relating to the
deposit of title deeds, pawn, pledge or
hypothication under Article 6 of the
Schedule I of the Bombay Stamp Act was
payable and was accordingly paid. The
second plank of submission was that the
authorities had acted to pass the order
regarding stamp duty without impounding
the document in question, rendering the
action without jurisdiction.
5. On both the aforesaid counts, the
case of the petitioner could be
countenanced. On going through the
document, dated 24.10.2005, which is
titled as “Memorandum of Deposit of Title
Deeds”, it could be gathered that it
provided for handing over to and deposit
with the bank the title deeds of the
property mentioned in the second schedule
of the memorandum. The deposit was in
connection with credit facility granted to
a partnership firm namely Navdeep
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Enterprise and Uday Chemicals of which the
petitioner was a partner. The stand of the
authorities in the impugned order and
sought to be reiterated by filing the
affidavit-in-reply that the document was
liable to be considered as mortgaged deed
cannot be accepted.
5.1 This being the position emerging,
learned advocate for the petitioner could
successfully rely on decision of this
court in Sumesh Prahladbhai Bakshi vs.
State of Gujarat being Special Civil
Application No. 15388 of 2013 decided on
4th July, 2016 in which the similar issue
was dealt with and it was held that for
attracting stamp duty in respect of
document in the nature of Memorandum of
Deposit of Title Deeds, Article 6 of
Schedule I of Bombay Stamp Act, 1951 would
apply. The authorities could not have
adverted to Article 36 of Schedule 1 for
the purpose of levying stamp duty treating
the documents to be a mortgaged deed. In
the facts of this case, the decision of
this court in Sumesh Prahladbhai Bakshi
(supra) is required to be followed.
5.2 Equally meritorious was the second
limb of submission that the authority
under the Stamp Act, could not have
exercised his powers unless there was an
impounding of the document. A valid
exercise of the powers under section 33
read with section 39 of the Act can be
only after the instrument is impounded.
Mere securing copy of the instrument is no
impounding but original document has to be
taken into custody to make it an act of
impounding. It is well settled that it is
only after the instrument is lawfully
impounded, the jurisdiction would vest in
the stamp authorities to proceed under
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section 33 and section 39 of the Act for
the purpose of charging document and
assessing the same to stamp duty.
6. The principle in respect of impounding
of the document to be a condition
precedent for exercise of powers is
propounded in decision of this court in
Bileshwar Industrial Estate Developers
Private Limited Vs State of Gujarat [2013
(2) GLR 1435], as also in decision of
special bench of this court in the Chief
Controlling Revenue Authority, Ahmedabad
Vs Nutan Mills Limited. Further in the
decision of the Full Bench of this court
in Narendra D. Mapara Vs Chief Controlling
Authority [1994 (1) GLR 908 (FB) and in
Tata Tele Services Limited Vs State of
Gujarat being Special Civil Application
th
No. 2064 of 2009 decided on 12
September, 2014, it was reiterated that
impounding of the instrument is sine qua
non for exercise of powers.
6.1 Following were also the observations
on the same lines in Panchal Trikamlal
Khemchanddas vs. State of Gujarat being
Special Civil Application No. 6931 of 2008
and connected petitions decided as per
judgment dated 25.02.2016.
“It was the submission of learned
advocate for the petitioner, which could
not be brushed aside lightly, that the
loan was repaid and the Title Deeds were
returned to the petitioners. While
returning the Title Deeds also, a
document was executed, copy of which is
placed on record. In the said agreement
dated 25th September, 2003 whereunder
physical possession of the Title Deeds
were handed over back to the
petitioners, it becomes evident that at
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the time when the stamp authorities
sought to demand the deficit stamp duty,
there was no possibility of physical
availability of documents with the stamp
authorities, much less taking custody
thereof, which was an essential for
valid impounding of the documents. It
was submitted that unless there was an
impounding in law, and the impounding
pre-supposes taking physical custody of
the document, the entire exercise of
issuing notice and assessing the
document for deficit stamp duty was an
illegal exercise. On this ground also,
the petition deserves to be allowed.”
7. In view of the foregoing reasons,
discussion and position of law emerging,
the petitioner is entitled to succeed. The
order passed by the Deputy Collector,
Stamp Duty Valuation Administration,
Nadiad, dated 14.05.2008 is hereby set
aside. Rule is made absolute.“
10.6 As can be seen from the aforesaid
observations made by the Co-ordinate Bench of
this Court, and in view of the submissions
advanced by learned advocate Mr. Aditya Choksi
that the original documents were never
impounded, which fact could not be disputed by
learned Assistant Government Pleader Mr. Henil
Shah, the action of the respondents in
initiating proceedings against the present
petitioner under Section 39(1)(b) of the Act can
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be said to be without authority of law and
without jurisdiction, as the original documents
were not impounded. Accordingly, the impugned
orders dated 12.10.2020, 15.12.2020 and
17.06.2021 are hereby quashed and set aside.
10.7 At this stage, however, learned
Assistant Government Pleader Mr. Henil Shah
placed reliance upon the decision of the Full
Bench of this Court in Shailesh Textiles
Industries v. Chief Controlling Revenue
Authority, Stamp Reference No. 1 of 1982,
decided on 15.09.1993 and reported in AIR 1994
Gujarat 153. By relying upon the observations
made in paragraph 12 of the said decision, it
was submitted that the exercise of powers under
Section 33 read with Section 68 of the Act is
not circumscribed by any specific period of
limitation and that the exercise of such powers
would depend upon the facts and circumstances of
each case. It was, therefore, prayed that
liberty be reserved in favour of the respondents
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to initiate fresh proceedings, if so required.
11. The aforesaid submission was opposed by
learned advocate Mr. Aditya Choksi. However,
having regard to the observations made in
paragraph 12 of the aforesaid judgment in
Shailesh Textiles Industries (supra), the
liberty as prayed for is reserved in favour of
the respondent–State.
12. It is, however, clarified that, in the
event any fresh proceedings are initiated by the
respondent–State, all rights and contentions of
the respective parties shall remain open.
13. With the aforesaid observations and
directions, the present petition is allowed.
Rule is made absolute to the aforesaid extent.
No order as to costs.
(NIRZAR S. DESAI,J)
Pallavi
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