Notice under Section 33(4) is mandatory before impounding photocopies for deficit stamp duty, Gujarat High Court rules; ₹22.49-crore demands quashed

The petitioner, a partnership firm constituted in 1975, underwent several reconstitutions involving admission and retirement of partners between 1975 and 2010.

The firm’s subject property remained with it throughout and was ultimately conveyed to M/s Godrej Properties Ltd. by a registered deed dated 18 October 2024.

During adjudication of the conveyance, the purchaser supplied copies of the petitioner’s earlier partnership and reconstitution deeds pursuant to a notice under Section 68(2) of the Gujarat Stamp Act, 1958.

The respondents subsequently impounded the photocopies of 19 such documents on 05 June 2025 and issued notices dated 09 June 2025 and 20 March 2026 under Section 39(1)(b), demanding deficit stamp duty of Rs.22,49,01,851/-.

Whether, after the amendment introducing Sections 33(4) and 33(5) of the Gujarat Stamp Act, 1958, issuance of a notice under Section 33(4) was a condition precedent to impounding photocopies under Section 33(5).

Whether photocopies obtained before the amendment through proceedings under Section 68(2) could subsequently be impounded, without following Section 33(4), and form the basis of notices under Section 39(1)(b).

Whether the notices dated 09 June 2025 and 20 March 2026, founded upon such impoundment, were legally sustainable.

Section 33(1)–(2) of the Gujarat Stamp Act requires the competent authority, when an instrument comes before it and appears insufficiently stamped, to examine and impound it.

Sections 33(4) and 33(5), inserted with effect from 07 April 2025, establish a specific procedure where deficiency is noticed from a copy—first, the Collector must call for the original instrument under Section 33(4), and only if it is not produced within the specified period may the Collector impound the copy under Section 33(5) and require payment of duty and penalty.

Section 68 is a supplemental provision empowering the Collector to authorise inspection, seizure and impounding of instruments found at premises, including under Section 33.

The Court held that Section 33 is the specific statutory provision governing examination and impounding, and that notice under Section 33(4) is a condition precedent to action under Section 33(5).

The decision in G.M. Shahul Hameed v. Jayanthi R. Hegde, 2024 (o) AIJEL SC 73782, concerning admissibility and exhibiting of insufficiently stamped documents, was held inapplicable to the present statutory issue.

The respondents possessed the photocopies before the amendment and later purported to impound them on 05 June 2025, after Sections 33(4) and 33(5) had come into force.

The Court held that the earlier notice under Section 68(2), which merely required production or inspection of documents, could not be treated as a substitute for the specific notice contemplated by Section 33(4).

Section 33(4) serves an independent statutory purpose: it informs the person that the authority is examining the instrument for stamp deficiency and gives an opportunity to produce the original; failure to do so then activates the power under Section 33(5) to impound the copy.

Since the respondents admittedly issued no notice under Section 33(4), they could not directly invoke Section 33(5) merely because the photocopies had earlier been supplied under Section 68(2).

The resulting impoundment was therefore invalid, and the Section 39(1)(b) notices, being founded on that invalid impoundment, could not survive.

It held that compliance with Section 33(4), including issuance of a notice calling for the original instrument, was mandatory before photocopies could be impounded under Section 33(5).

The prior Section 68(2) notice did not satisfy this statutory requirement.

Consequently, the impoundment of the photocopies on 05 June 2025 was declared illegal and invalid, and the notices dated 09 June 2025 and 20 March 2026 issued under Section 39(1)(b) were quashed and set aside.

The petition was allowed and the Rule was made absolute.