Holding

The appellate authority may delegate ancillary tasks such as inspections without violating Rule 11‑A; the three‑month period in Rule 7 is directory; the authority may revise market value under Section 47‑A(6) after due process; Section 76‑A does not curtail the power under Section 47‑A, and no statutory limitation was breached.

Summary

The Supreme Court examined appeals filed by the Inspector General of Registration, Tamil Nadu and others against K. Baskaran concerning the valuation of stamp duty under the Indian Stamp Act, 1899 and the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968. It held that Rule 11‑A authorises the appellate authority to call for information, records and inspections and that delegating such ancillary tasks to subordinate officers does not amount to an illegal delegation of essential functions. The Court declared the three‑month period prescribed in Rule 7 to be directory, not mandatory, and therefore its breach does not vitiate the proceedings. It further ruled that the Chief Controlling Revenue Authority, exercising suo motu power under Section 47‑A(6), may revise or enhance the market value of a property after giving the parties a reasonable opportunity of being heard, and that Section 76‑A does not limit this power. Consequently, the High Court’s findings of delegation and procedural invalidity were set aside and the orders of the appellate authority were restored.

Issues considered

Whether the directions for site inspection issued by the appellate authority under Rule 11‑A constitute an impermissible delegation of its essential functions.
Whether the three‑month timeline in Rule 7 of the Rules is mandatory or merely directory.
Whether the appellate authority has power under Section 47‑A of the Stamp Act to enhance the market value of a property while deciding an appeal.
Whether Section 76‑A of the Stamp Act restricts delegation of powers conferred by Section 47‑A.
Whether the limitations prescribed in Sections 47‑A(6)‑(8) were complied with in the exercise of suo motu power.

Legislation cited

Decentralization Act, 1914
Indian Stamp Act, 1899s. 47-A, s. 76-A
Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968s. Rule 11-A, s. Rule 4, s. Rule 5, s. Rule 6, s. Rule 7

Subjects

delegation of statutory powerssub‑delegationRule 11‑ARule 7directory vs mandatorySection 47‑ASection 76‑Asuo motu powerstamp duty valuationmarket value determinationnatural justiceadministrative law

Judgment

[2020] 11 S.C.R. 345 345

THE INSPECTOR GENERAL OF REGISTRATION, A
TAMIL NADU AND ORS.
v.
K. BASKARAN
(Civil Appeal No. 2586 of 2020) B
JUNE 15, 2020
[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968: r.11-A – Whether the directions issued by
C
the appellate authority namely Chief Controlling Revenue Authority
(Inspector General of Registration) in asking the Deputy Inspector
General of Registration, or any other officer, to conduct the site
inspection, amounted to delegation of his functions and violated
r.11-A of the Rules and thereby vitiated the entire proceedings –
Held: r.11A empowers the appellate authority to call for any D
information or record from any public office, officer or authority
or to examine and record statements from any member of the public
office or authority – In exercise of such power, if the appellate
authority calls for any information or calls for any record or any
inputs, that by itself, will not amount to delegation of essential
E
functions – If, in terms of such power, the appellate authority deputes
a responsible official to enquire into certain facets and calls for a
report, that would be an ordinary mode of exercise of power vested
in the appellate authority – So long as the essential function, that is
to say of considering all the necessary factors and inputs and
thereafter arriving at an informed decision is done by the appellate F
authority, the burden of performing ancillary tasks need not be
shouldered by the appellate authority – Stamp Act, 1899.
Stamp Act, 1899: s.76-A – Submission that powers that can
be delegated are specifically provided under s.76-A of the Act, and
the power under s.47-A is not one such power; and unless the power G
to sub-delegate is conferred expressly or impliedly under a statute,
the power cannot be sub-delegated – Held: Submission is completely
misplaced – s.76-A of the Principal Act enables the State Government
to delegate some of the statutory powers conferred upon it by the
Principal Act to the Chief Controlling Revenue Authority – Such
H
345
346 SUPREME COURT REPORTS [2020] 11 S.C.R.

A empowerment has nothing to do with the legislative power exercised
by the State in terms of which s.47-A was inserted, or with the Rules
promulgated to effectuate s.47-A – For interpreting and considering
the context of s.47-A or the Rules, the fact that certain other statutory
powers in favour of the State Government are delegable, has
absolutely no relation – s.47-A was inserted by the State in its
B
legislative power and the Rules framed thereunder have to be
considered on their own and without being influenced by s.76-A of
the Act – Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968.
Tamil Nadu Stamp (Prevention of Undervaluation of
C Instruments) Rules, 1968: r.7 – Whether r.7 of the Rules prescribing
3 months’ time for the Collector to pass an order determining the
market value of the properties and duty payable on the instrument
from the first notice, is directory or mandatory – Held: Under sub-
section (1) of s.47-A of the Stamp Act, if there is reason to believe
D that the market value has not been truly set forth in the Instrument
tendered for registration, a reference can be made to the Collector,
who (i) after giving the parties reasonable opportunity of being
heard; and (ii) after holding an enquiry in such manner as may be
prescribed by Rules, has to determine the correct value of the
concerned property – The Section by itself does not lay down any
E period within which the entire process is to be completed by the
Collector – It simply states that the enquiry be held in “such manner”
as may be prescribed by Rules – If the stipulation or fixation of
period of three months from the first notice in terms of r.6 or from
notice in Form II is taken to be mandatory, it would lead to a
F situation of incongruity – The fact that Form II notice had been
issued, would mean that on a prima facie view of the record and
material, the value stated in the instrument was not the correct value;
which in turn would mean that prima facie the Government Coffers
were being denied the rightful dues – If for any reason, the
proceedings are not completed within three months and, therefore,
G must be held to be vitiated, the public interest would suffer, and the
persons who were prime facie responsible for suppressing real value
would stand to gain – The amendment of r.7 incorporating the period
of three months was essentially to guide the public officials to
complete the process as early as possible but was not intended to
H create a right in favour of those who had prima facie conducted
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 347
NADU AND ORS. v. K. BASKARAN

themselves prejudicing public interest – Pertinently, the concerned A
provision has not spelt out any consequence for non-adherence to
said period of three months – The fixation of timeline of three months
in r.7 is, therefore, purely directory – Stamp Act, 1899 – s.47A.
Stamp Act, 1899: s.47A – Whether the appellate authority has
power under s.47A of the Act to enhance the market value of the B
property while deciding the appeal filed by the registrants – Held:
Sub-section (6) of s.47-A of the Act empowers the Chief Controlling
Revenue Authority, in exercise of suo motu power, to call for and
examine the correctness of an order passed under sub-section (2)
or sub-section (3) of s.47-A; and if the order is prejudicial to the
interest of Revenue, the Chief Controlling Authority may make such C
enquiry or cause such enquiry to be made and either revise, modify
or set aside such order and pass any order that it deems appropriate
– There are some limitations on the exercise of said power, since no
proceedings can be initiated against an order passed under sub-
section (2) or sub-section (3), if the time for preferring an appeal D
against that order has not expired, or if more than five years have
expired after passing of the order – The intent is clear that if there
be sufficient time to prefer a regular appeal challenging that order,
the remedy of filing an appeal ought to be taken resort to – Further,
if the period of five years has expired, no suo motu power can be
exercised – Another limitation is prescribed by sub-section (8), in E
terms of which no order in exercise of suo motu exercise of power
can be passed which may adversely impact a person, unless that
person has had reasonable opportunity of being heard – Apart from
these limitations, the statutory provisions do not impose any other
restriction, and the power is conferred principally to ensure that no F
order passed under sub-sections (2) or (3) of s.47-A is prejudicial
to the interest of the revenue – In the present case, while proposing
to enhance the market value higher than what was determined by
the Collector, the appellate authority had put the appellant-registrant
to sufficient notice and had called for response with regard to the
proposed enhancement – It was nobody’s case that as on the date G
when the proceedings were initiated in exercise of the power under
sub-section (6) of s.47-A, the period for preferring the appeal had
not expired, or that more than five years had expired after the passing
of the order under sub-section (2) or sub-section (3) – In the
circumstances, none of the limitations which the statute has imposed H
348 SUPREME COURT REPORTS [2020] 11 S.C.R.

A upon the exercise of power were present – It is not as if the
assessment made by the appellate authority was either opposed to
principles of natural justice, or was so palpably incorrect, that it
could never be sustained – The exercise of power was definitely
designed to obviate an obvious illegality and prejudice to the interest
of the revenue – The exercise was, thus, absolutely correct, and
B
there was no occasion to set aside the orders passed in pursuance
thereof.
Allowing the appeals, the Court
HELD: 1.1 Rule 11A of theTamil Nadu Stamp (Prevention
C of Undervaluation of Instruments) Rules, 1968 empowers the
appellate authority to call for any information or record from any
public office, officer or authority or to examine and record
statements from any member of the public office or authority. In
line with the principles laid down by this Court, it can therefore
be said that in exercise of such power, if the appellate authority
D calls for any information or calls for any record or any inputs, that
by itself, will not amount to delegation of essential functions.
Practical necessities and exigencies of administration demand
that the appellate authority must be able to delegate certain tasks
such as collecting information after causing inspection. So long
E as the essential function, that is to say of considering all the
necessary factors and inputs and thereafter arriving at an informed
decision is done by the appellate authority, the burden of
performing ancillary tasks need not be shouldered by the appellate
authority. [Para 15][375-F-H; 376-A]

F 1.2 The submission that powers that can be delegated are
specifically provided under Section 76-A of the Act, and the power
under Section 47-A is not one such power; and unless the power
to sub-delegate is conferred expressly or impliedly under a
statute, the power cannot be sub-delegated is completely
misplaced and does not deserve acceptance. Section 76-A was
G inserted in the Principal Act vide the Decentralization Act, 1914
(Act No. IV of 1914). The legislative head in Entry 44, namely
“Stamp duties other than duties on or fees collected by means of
judicial stamps, but not including rates of stamps” is in the
Concurrent List of Schedule VII to the Constitution. Section 47-
H A was inserted in the Principal Act by the State Legislature by
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 349
NADU AND ORS. v. K. BASKARAN

enacting the Tamil Nadu Act No.24 of 1967 which received the A
assent of the President on 29th March, 1968. The Rules including
Rule 11-A were framed to effectuate the letter and spirit of Section
47-A. Section 76-A of the Principal Act enables the State
Government to delegate some of the statutory powers conferred
upon it by the Principal Act to the Chief Controlling Revenue
B
Authority. Such empowerment has nothing to do with the
legislative power exercised by the State in terms of which Section
47-A was inserted, or with the Rules promulgated to effectuate
Section 47-A. For interpreting and considering the context of
said Section 47-A or the Rules, the fact that certain other statutory
powers in favour of the State Government are delegable, has C
absolutely no relation. Section 47-A was inserted by the State in
its legislative power and the Rules framed thereunder have to
be considered on their own and without being influenced by
Section 76-A. Therefore, in observing that the inspection ought
to have been carried out by the Inspector General of Registration
D
himself, and such function could not have been delegated, the
High Court failed to appreciate the principles laid down by this
Court. Any report that was called for was essentially in the nature
of rendering assistance to the appellate authority in discharge of
its functions. The final order passed by the appellate authority,
after considering all the necessary material, must be taken to be E
one rendered by the appellate authority on its own, and there
was no delegation of any essential functions vitiating exercise of
power. [Paras 8, 16, 17][367-B-C; 376-B, D-H; 377-A-B]
2.1 Under sub-section (1) of Section 47-A of the Act, if there
is reason to believe that the market value has not been truly set F
forth in the Instrument tendered for registration, a reference can
be made to the Collector, who (i) after giving the parties
reasonable opportunity of being heard; and (ii) after holding an
enquiry in such manner as may be prescribed by Rules, has to
determine the correct value of the concerned property. The
Section by itself does not lay down any period within which the G
entire process is to be completed by the Collector. It simply states
that the enquiry be held in “such manner” as may be prescribed
by Rules. According to the Rules, following steps are required
to be undertaken to hold the enquiry: On receipt of reference as
stated above, the Collector must issue notice in Form I to the H
350 SUPREME COURT REPORTS [2020] 11 S.C.R.

A persons by whom and in whose favour the Instrument is executed,
informing such persons to produce all evidence to show that the
market value has been truly set forth in said instrument. The
notice must give such persons time of twenty one days from the
receipt of notice to represent or respond. [Rule 4(1)] The
Collector may record statement of any such noticee. [Rule 4(2)].
B
For the purposes of the enquiry, the Collector may call for
information from any public office or examine and record
statements or inspect the property after due notice as stated in
detail in Rule 4(3). After considering the representations, if any,
and the record and evidence, a provisional order determining
C the market value must be passed indicating the basis for such
conclusion. [Rule 4(4)]. The provisional order must be
communicated in Form II to all the concerned persons who must
be given some time to prefer objections, if they so wish; and they
must be heard on the day fixed in the notice or on such other day
as may be fixed. [Rule 6] After considering the representations
D
in writing and those urged at the time of hearing as well as all the
relevant factors and evidence, the Collector must pass an order
determining the market value of the concerned property and
assess the element of duty payable on the instrument of transfer.
Such order is required to be passed “within three months from
E the date of first notice”. [Rule 7] [Para 20][378-G-H; 379-A-G]
2.2 The expression “within three months from the date of
first notice” is crucial. The description “first notice” is not
referable to notice in Form I issued in terms of Rule 4(1). Form
I notice itself must give 21 days to the concerned persons to
F respond. Depending upon their response, their statements would
be recorded and/or certain information may be required to be
called for, whereafter the Order in Form II is to be issued
provisionally determining the market value. The concerned
persons are entitled to raise objections in writing and must be
afforded hearing. After fulfilling these requirements, the order in
G terms of Rule 7 can be passed. All these stages may not be
completed in three months. Further, the reference in Rule 7 is to
the “first notice” and not to “notice in Form I”. Considering the
context and various stages preceding the stage of passing of the
Order under Rule 7, the reference has to be to the first “notice
H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 351
NADU AND ORS. v. K. BASKARAN

in Form II”. There could possibly be more than one notices in A
Form II, specially when the hearing is to take place on an
adjourned date and that is why the period must be reckoned from
the first notice in Form II. The expression immediately following
“first notice” in Rule 7 is “determining the market value of the
properties….” That is also indicative that the reference to the
B
notice is one in Form II in the immediately preceding Rule 6.
[Para 21][379-H; 380-A-D]
State of Mysore and others v. V. K. Kangan and others
(1976) 2 SCC 895 : [1976] 1 SCR 369; T. V. Usman v.
Food Inspector, Tellicherry Municipality, Tellicherry
(1994) 1 SCC 754; P. T. Rajan v. T.P.M. Sahir and C
others (2003) 8 SCC 498 : [2003] 4 Suppl. SCR 84;
Mackinnon Mackenzie and Company Ltd. v. Machinnon
Employees Union (2015) 4 SCC 544 : [2015] 4 SCR 45;
State of UP v. Babu Ram Upadhyay AIR 1961 C 751 :
[1961] SCR 679; Shrif Uddin v. Abdul Gani Lone D
(1980) 1 SCC 403 : [1980] 1 SCR 1177 – relied on.
2.3 Section 47-A by itself does not prescribe any timeline.
If the stipulation or fixation of period of three months from the
first notice in terms of Rule 6 or from notice in Form II is taken
to be mandatory it would lead to a situation of incongruity. The E
fact that Form II notice had been issued, would mean that on a
prima facie view of the record and material, the value stated in
the instrument was not the correct value; which in turn would
mean that prima facie the Government Coffers were being denied
the rightful dues. If for any reason the proceedings are not
completed within three months and, therefore, must be held to F
be vitiated, the public interest would suffer, and the persons who
were prime facie responsible for suppressing the real value, would
stand to gain. The amendment of Rule 7 incorporating the period
of three months was essentially to guide the public officials to
complete the process as early as possible but was not intended G
to create a right in favour of those who had prime facie conducted
themselves prejudicing public interest. Pertinently, the
concerned provision has not spelt out any consequence for non-
adherence to said period of three months. The fixation of timeline

H
352 SUPREME COURT REPORTS [2020] 11 S.C.R.

A of three months in Rule 7 is, therefore, purely directory.
[Paras 25, 26][385-D-F, G-H; 386-A]
State of Mysore and others v. V. K. Kangan and others
(1976) 2 SCC 895 : [1976] 1 SCR 369 – relied on.
3.1 Sub-section (6) of Section 47-A of the Act empowers
B the Chief Controlling Revenue Authority, in exercise of suo motu
power, to call for and examine the correctness of an order passed
under sub-section (2) or sub-section (3) of Section 47-A; and if
the order is prejudicial to the interest of Revenue, the Chief
Controlling Authority may make such enquiry or cause such
C enquiry to be made and either revise, modify or set aside such
order and pass any order that it deems appropriate. There are
some limitations on the exercise of said power, since no
proceedings can be initiated against an order passed under sub-
section (2) or sub-section (3), if the time for preferring an appeal
against that order has not expired, or if more than five years
D have expired after passing of the order. Further, if the period of
five years has expired, no suo motu power can be exercised.
Another limitation is prescribed by sub-section (8), in terms of
which no order in exercise of suo motu exercise of power can be
passed which may adversely impact a person, unless that person
E has had reasonable opportunity of being heard. Apart from these
limitations, the statutory provisions do not impose any other
restriction, and the power is conferred principally to ensure that
no order passed under sub-sections (2) or (3) of Section 47-A is
prejudicial to the interest of the revenue. [Para 30][390-D-G]

F Rajendran v. The Inspector General of Registration,
Tamil Nadu and others 2012 (3) CTC 589 – relied on.
3.2 In the present case, adequate notice was issued to the
concerned persons and, therefore, there was no infirmity on that
count. It is nobody’s case that as on the date when the
G proceedings were initiated in exercise of the power under sub-
section (6) of Section 47-A, the period for preferring the appeal
had not expired, or that more than five years had expired after
the passing of the order under sub-section (2) or sub-section (3).
In the circumstances, none of the limitations which the statute
has imposed upon the exercise of power were present. [Para
H 30][391-A-B]
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 353
NADU AND ORS. v. K. BASKARAN

M/s Ram Kanai Jamini Ranjan Pal Pvt. Ltd. v. Member, A
Board of Revenue, West Bengal (1976) 3 SCC 369 :
[1976] Suppl. SCR 110; State of Orissa and others v.
Brundaban Sharma and another (1995) 3 Suppl. SCC
249; Vijayabai and others v. Shriram Tukaram and
others (1999) 1 SCC 693 : [1998] 3 Suppl. SCR 54;
B
Sree Balaji Rice Mill, Bellary v. State of Karnataka
(2005) 4 SCC 21 : [ 2005] 3 SCR 12 – relied on.
3.3 For exercising revisional power “suo motu” or “on its
motion”, the concerned authority must be satisfied that an order
has been passed by the authority or officer subordinate to it which
may be prejudicial to the interest of the revenue. If an infirmity C
or illegality is brought to the notice or knowledge of the revisional
authority, through normal and regular process of reporting by
the subordinate officer or authority, the power of revision can
certainly be exercised. The requisite knowledge enabling the
revisional authority to exercise the power vested in it, can also D
be gathered from the appeal preferred by the registrant himself.
That may only be an occasion or a source which enables the
authority to gather information about the possible infirmity or
illegality in the process. Upon being so aware, the revisional
authority would thereafter be exercising power vested in it.
[Para 35][395-E, F-H] E

3.4 There is nothing in the scheme of the Act which purports
to restrict the exercise of suo motu power under Section 47-A,
and confines it to cases where knowledge of any illegality or
infirmity in the proceedings undertaken by the subordinate
officers must be gathered from sources other than through a F
pending appeal. Unless the statute expressly or even by
necessary implication restricts the exercise of power, there would
be no occasion to read into the power, any other limitations. The
High Court has not found the exercise of power to be invalid on
any count, nor was any such submission advanced before the High G
Court. The High Court had simply gone on the existence of power
rather than on the exercise of power. It is not as if the assessment
made by the appellate authority was either opposed to principles
of natural justice, or was so palpably incorrect, that it could never
be sustained. The High Court completely erred in setting aside
H
354 SUPREME COURT REPORTS [2020] 11 S.C.R.

A the exercise of power undertaken by the concerned authority.
The exercise of power was definitely designed to obviate an
obvious illegality and prejudice to the interest of the revenue.
The exercise was, thus, absolutely correct, and there was no
occasion to set aside the orders passed in pursuance thereof.
[Para 36][396-C-F]
B
Sahni Silk Mills (P) Ltd. and another v. Employees’ State
Insurance Corporation (1994) 5 SCC 346 : [1994] 1
Suppl. SCR 626; Pradyat Kumar Bose v. The Hon’ble
the Chief Justice of Calcutta High Court [1955] 2 SCR
1331; Union of India and Anr. v. P. K. Roy and Ors.
C [1968] 2 SCR 186; State of Bombay (Maharashtra) v.
Shivbalak Gourishanker Dube and others [1965] 1
SCR 211; Sidhartha Sarawgi v. Board of Trustees for
the Port of Kolkata and others (2014) 16 SCC 248 :
[2014] 14 SCR 1493 – referred to.
D Case Law Reference
[1994] 1 Suppl. SCR 626 referred to Para 8
[1955] 2 SCR 1331 referred to Para 9
[1968] 2 SCR 186 referred to Para 10
E
[1965] 1 SCR 211 referred to Para 11
[2014] 14 SCR 1493 referred to Para 13
[1976] 1 SCR 369 relied on Para 23 A
(1994) 1 SCC 754 relied on Para 23 B
F
[2003] 4 Suppl. SCR 84 relied on Para 23 C
[2015] 4 SCR 45 relied on Para 24
[1961] SCR 679 relied on Para 24
[1980] 1 SCR 1177 relied on Para 24
G
[1976] Suppl. SCR 110 relied on Para 32
(1995) Supp. 3 SCC 249 relied on Para 33 A
[1998] 3 Suppl. SCR 54 relied on Para 33 B

H [2005] 3 SCR 12 relied on Para 34
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 355
NADU AND ORS. v. K. BASKARAN

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2586 A
of 2020.
From the Judgment and Order dated 02.02.2018 of the High Court
of Judicature at Madras in C.M.A. No. 2666 of 2012.
With
B
C.A. Nos. 2587, 2588, 2589-2592, 2593-2597, 2598, 2599, 2600
of 2020.
Jayanth Muth Raj, AAG, S. Nagamuthu, Sr. Adv., M. Yogesh
Kanna, S. Raja Rajeshwaran, Ms. Uma Prasuna Bachu, T. Sundar
Ramanathan, Abhishek Anand, Ishaan Chakrabarti, M. P. Devanath, C
M. A. Venkata Subramanian, Rakesh K. Sharma, K. V. Mohan, K. V.
Balakrishnan, Rahul Kumar Sharma, Raghav Shankar, Prateek
K. Chadha, Ms. Arshiya Sharda, P.J. George, Madhusudan Reddy,
Najeeb Usman Khan, M.P. Srivignesh, Abinaya Kalaignan T., Jose
Abraham, Pulkit Tare, D. Kumanan, Suvendu Suvasis Dash, Ms. Misha
Rohatgi Mohta, Muthu Thangaturai, Johnson Subba, Nakul Mohta, Antony D
R. Julian, Danish Zubair Khan, Anish R. Shah, Manjunath Meled, M.V.V.
Ramana, Ganesh Kumar R., Advs. for the appearing parties.
The Judgment of the Court was delivered by
UDAY UMESH LALIT, J.
E
1. Leave granted.
2. These eight appeals raise common questions touching upon the
interpretation of Section 47A1 of the Indian Stamp Act, 1899 (‘the Act’,
for short) and the Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968 (‘the Rules’, for short) as amended from time F
to time. Said Section 47-A of the Act now stands:-
“Section 47-A. Instrument of conveyance etc., undervalued
how to be dealt with.- (1) If the Registering Officer appointed
under the Indian Registration Act, 1908 (Central Act XVI of 1908),
while registering any Instrument of conveyance, [exchange, gift, G
release of benami right or settlement] has reason to believe that
the market value of the property of which is the subject matter of

1
As inserted by the Tamil Nadu Act 24 of 1967. Later, by the Tamil Nadu Act 1 of
2000, Sub- Sections (4) to (10) in Section 47-A were substituted for Sub-Sections (4) and
(5) H
356 SUPREME COURT REPORTS [2020] 11 S.C.R.

A conveyance, exchange, gift, release of benami right or settlement,
has not been truly set forth in the instrument, he may, after
registering such instrument, refer the same to the Collector, for
determination of the market value of such property and the proper
duty payable thereon.
B (2) On receipt of reference under sub-section (1), the Collector
shall, after giving the parties reasonable opportunity of being heard
and after holding an enquiry in such manner as may be prescribed
by Rules made under this Act, determine the market value of the
property which is the subject matter of conveyance, exchange,
gift, release of benami right or settlement, and the duty as aforesaid.
C The difference, if any, in the amount of duty, shall be payable by
the person liable to pay the duty.
(3) The Collector may, suo motu, or otherwise, within five years
from the date of registration of any instrument of conveyance,
exchange, gift, release of benami right or settlement, not already
D referred to him under sub-section (1), call for and examine the
instrument for the purpose of satisfying himself as to the correctness
of the market value of the property which is the subject matter of
conveyance, exchange, gift, release of benami right or settlement,
and the duty payable thereon and if after such examination, he
E has reason to believe that the market value of the property has
not been truly set forth in the instrument, he may determine the
market value of such property and the duty as aforesaid in
accordance with the procedure provided for in sub-section (2).
The difference, if any, in the amount of duty, shall be payable by
the persons liable to pay the duty;
F
Provided that nothing in this sub-section shall apply to any
instrument registered before the date of commencement of the
Indian Stamp (Tamil Nadu Amendment) Act, 1967.
(4) Every person liable to pay the difference in the amount of
G duty under sub-section (2) or sub-section (3) shall, payable such
duty within such period as may be prescribed. In default of such
payment, such amount of duty outstanding on the date of default
shall be a charge on the property affected in such instrument.
On any amount remaining unpaid after the date specified for its
payment, the person liable to pay the duty shall pay, in addition to
H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 357
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

the amount due, interest at one per cent per month on such amount A
for the entire period of default.
… … …
(5) Any person aggrieved by an order of the Collector under sub-
section (2) or sub-section (3), may appeal to such Authority as
may be prescribed in this behalf. All such appeals shall be preferred B
within such time, and shall be heard and disposed of in such
manner, as may be prescribed by rules made under this Act.
… … …
(6) The Chief Controlling Revenue Authority may, suo motu, call C
for and examine an order passed under sub-section (2) or sub-
section (3) and if such order is prejudicial to the interests of revenue,
he may make such inquiry or cause such inquiry to be made and,
subject to the provisions of this Act, may initiate proceedings to
revise, modify or set aside such order and may pass such order
thereon as he thinks fit. D
(7) The Chief Controlling Revenue Authority shall not initiate
proceedings against any order passed under sub-section (2) or
sub-section (3) if, -
(a) the time for appeal against that order has not expired; or
E
(b) more than five years have expired after the passing of such
order.
(8) No order under sub-section (6) adversely affecting a person
shall be passed unless that person has had a reasonable opportunity
of being heard. F
(9) In computing the period referred to in clause (b) of sub-section
(7), the time during which the proceedings before the Chief
Controlling Revenue Authority remained stayed under the order
of Court shall be excluded.
(10) Any person aggrieved by an order of the Authority prescribed G
under sub-section (5) of the Chief Controlling Revenue Authority
under sub- section (6) may, within such time and in such manner,
as may be prescribed by rules made under this Act, appeal to the
High Court.
H
358 SUPREME COURT REPORTS [2020] 11 S.C.R.

A Explanation.- For the purpose of this Act, market value of any
property shall be estimated to be price which, in the opinion of the
Controller or the Chief Controlling Revenue Authority or the High
Court, as the case may be, such property would have fetched or
would fetch, if sold in the open market on the date of execution of
the instrument of conveyance, exchange, gift, release or benami
B
right or settlement.”
3. The appeal arising out of Special Leave Petition (Civil) No.15790
of 2019 is taken as the lead matter and facts pertaining to said appeal
are set out in detail for facility. The facts involved in other appeals are
almost identical except for details such as the case numbers, dates of
C orders and the details of properties in question.
4. The appeal from Special Leave Petition (Civil) No.15790 of
2019 arises out of the final judgment and order dated 02.02.2018 passed
by the High Court2 in CMA No. 2666 of 2012 in following circumstances:-
D A. The Respondent purchased two properties comprised in R.S.
No.372/2A – Sidharavuthanpalayam Village, Tiruppur Taluk, Erode
District, (i) admeasuring about 46216 sq.ft. through Sale Deed dated
21.02.2000 registered as Doct. No.2647 of 2000 of Book 1 valued at
Rs.4,78,000/- and (ii) admeasuring about 47960 sq. ft through Sale Deed
dated 18.02.2000 registered as Doct. No.2648 of 2000 of Book 1 valued
E at Rs.4,96,000/- (i.e. Rs.10.34 per sq.ft.).
B. As the value in said Sale Deeds was less than the Guideline
Value of Rs.58.30 per sq.ft., the Sub-Registrar, Dharapuram, Appellant
No.5 herein, referred the matter to the Special Deputy Collector
(Stamps), Coimbatore i.e. Appellant No.2 herein, under Section 47-A of
F the Act.
C. On 13.9.2000 Appellant No. 2 issued Form No. 1 notices in
Mu.Pa. (S.R.) No.3667 of 2000 D and Mu.Pa. (S.R.) No. 3668/2000 D
seeking explanation from the Respondent why the deficit stamp duty of
Rs.2,66,088/- and Rs.2,76,132/- respectively should not be collected.
G Thereafter, Appellant No. 2 issued Form No. II notices on 04.02.2003 to
the Respondent, whereby the provisional value of the property was
determined at the rate of Rs.58.30/- per sq.ft. as against the value of
Rs.10.34/- per sq.ft. set forth in the Sale Deeds in question.

2
H The High Court of Judicature at Madras
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 359
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

D. Appellant No.2 issued Final Orders on 30.04.2003 in Mu.Pa. A
(S.R.) Nos. 3667 and 3668 of 2000 D. In Mu.Pa. (S.R.) No.3667 of
2000 D, it was observed: -
“With reference to the Form I notice no representations received
from the registrant and he never turned for hearing in spite of
several reminders and notices issued and no objections filed. B
Hence, provisional order in Form II was issued. Neither the
objections received from the purchaser nor appeared for the
hearing. It is learnt that the registrant has no objection regarding
the valuation of the document. It is hereby ordered confirming
the provisionally determined value as noted in the Form II cited C
in the reference 3.
It is hereby ordered that the open market value is finally determined
at Rs.26,95,400/- purchased through the document as per details
noted in the pre page.
With reference to the above value the stamp duty leviable at D
Rs.3,23,448/- excluding the stamp duty already paid Rs.57,360/-
the deficit stamp duty to be paid Rs.2,66,088/- (Rupees Two Lakhs
Sixty Six Thousand Eighty Eight Only).
The registrant is requested to remit the deficit stamp duty
Rs.2,66,088/- under the head of account 0030 stamps Registration E
030G Fee deficit stamp duty ABAA0202 in the State Bank of
India or in the Sub Treasury office and the original Challan shall
be sent to this office within 2 weeks from the date of this order.”
In Mu.Pa. (S.R.) No.3668 of 2000 D, the market value was
assessed at Rs.27,97,100/- and similar consequential directions were F
passed.
E. The Respondent filed statutory appeal which was rejected by
the Inspector General of Registration i.e. Appellant No. 1 vide order
dated 05.08.2005. At the appellate stage, a report was called for from
District Registrar, Erode, which was referred to in the order dated G
05.08.2005 as under:-
“…This Appeal was admitted and the Deputy Inspector General
Kovai appointed as the enquiry officer and to inspect the document
property premises and to recommend determination of the true
market value of the document property as per enquiry. The original H
360 SUPREME COURT REPORTS [2020] 11 S.C.R.

A file was also required from the District Revenue Officer (Stamps).
On perusal of the original file of the District Revenue Officer
(Stamps) office and it was found that, since the appellant not
turned for enquiry and considered that there are no objections, the
guideline value was confirmed.
B In the report of the District Registrar Erode enclosed with the
letter received from the Deputy Inspector General Kovai he has
recommended that while conducting the spot Inspection of the
Survey field the properties lying in the village on the date of
registration on 21.02.2002 were not incorporated with the
municipality and it was incorporated with the municipality only on
C 01.04.2003, since the document properties were incorporated in
the Municipality area at present value is fixed at Rs.200/- per
sq.ft. and it is apt to determine the value at Rs.58.30/- per sq.ft.,
on the date of registration.”
F. The Respondent, being aggrieved, filed CMA No. 2666 of 2012
D in the High Court challenging the said order dated 05.08.2005 which
was allowed by the High Court by its judgment and order dated 02.02.2018.
The High Court observed that Appellant No.1 had delegated his duty to
the Deputy Inspector General of Registration, which was against the
decision of the High Court in the case of S. Santhi vs. Chief Revenue
E Controlling Authority (CMA No. 2820 of 2012) decided on 05.06.2015.
It was also observed that Rule 6 was not followed. The High Court thus
concluded:-
“8. Therefore, the first Respondent is not empowered to delegate
the powers conferred on him. Similarly, the procedure contemplated
F under Rule 6 of the Rules is also not followed by the authorities
while determining the market value of the property. As such, the
entire proceedings are vitiated, in view of violation of Rules 6 and
11-A of the Rules. Accordingly, the impugned order passed by the
first Respondent is not sustainable in law and the same is set
aside. The authorities are directed to release the document to the
G Appellant.”
It was, however, not stated how the procedure contemplated by
Rule 6 was not followed.
G. The decision in S. Santhi (supra) which was relied upon, had
H observed as under:-
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 361
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

“17. The Authority conferred with certain functions under a statute A
has to carry out the same on its own such function and cannot
delegate the same to another in the absence any contemplation
for such delegation under the Act. In the present case, under rule
4(3)(c) and rule 11-A of the rules, 2nd respondent-Collector and
the 1st respondent-Inspector General of Registration respectively,
B
have to inspect the property and there is no enabling provision
under the rules or under the Act to delegate such power. Therefore,
inspections by other officers at the behest of the respondents vitiate
the entire proceedings.
18. The failure on the part of the 2nd respondent to pass a final
order within 3 months from the date of Form-I notice as mandated C
under rule 7 of the rules vitiates the entire proceedings. Form-I
notice was issued on 17.05.2005 and the final order was passed
on 05.12.2006, after 11/2 years, i.e., after 3 months and hence the
entire proceedings are vitiated.
19. The impugned order has been passed by the 1st respondent D
purely based on inspection reports of the District registrar /Deputy
Thasildar, who are not authorised under the Act and hence the
said inspection reports are not materials collected by the authorities,
entitled under the Act. Hence the proceedings of the 2nd respondent
and 1st respondent are vitiated.” E
5. Similar orders were passed by the High Court in other matters
which orders are presently under appeal in companion matters. Since
the matters arise in the backdrop of provisions contained in the Rules,
Rules 4 to 7 and 11A of the Rules are quoted hereunder: -
“4. Procedure on receipt of reference under Section 47-A. F
(1) On receipt of a reference under sub-Section (1) of Section
47-A, from a registering officer, the Collector shall issue a notice
in Form I.
(a) to every person by whom, and
G
(b) to every person in whose favour the instrument has been
executed.
Informing him of the receipt of the reference and asking him to
submit to him his representations, if any, in writing to show that
the market value of the property has been truly set forth in the
H
362 SUPREME COURT REPORTS [2020] 11 S.C.R.

A instrument, and also to produce all evidence that he has in support
of his representation, within 21 days from the date of service of
the notice.
(2) The Collector may, if he thinks fit, record a statement from
any person to whom a notice under sub-rule (1) has been issued.
B (3) The Collector may for the purpose of his enquiry –
(a) call for any information or record from any public office,
officer or authority under the government or any local authority;
(b) examine and record statements from any member of the
C public, officer or authority under the Government or the local
authority; and
(c) inspect the property after due notice to the parties
concerned.
(4) After considering the representations, if any, received from
D the person to whom notice under sub- rule (1) has been issued,
and after examining the records and evidence before him, the
Collector shall pass an order in writing provisionally determining
the market value of the properties and the duty payable. The basis
on which the provisional market value was arrived at shall be
clearly indicated in the order.
E
5. Principles for determination of market value.- The Collector
shall, as far as possible, have also regard to the following points in
arriving, at the provisional market value,
(a) In the case of lands –
F (i) classification of the land as dry, manavari, wet and the
like;
(ii) classification under various tarams in the settlement
register and accounts;

G (iii) the rate of revenue assessment for each classification;
(iv) other factors which influence the valuation of the land
in question;
(v) points if any, mentioned by the parties to the Instrument
or any other person which requires special
H consideration.;
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 363
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

(vi) value of adjacent lands or lands in the vicinity; A
(vii) average yield from the land, nearness to road and market,
distance from village site, level of land, transport facilities,
facilities available for irrigation such as tank, wells and
pumpsets.
(viii) The nature of crops raised on the land; and B

(ix) The use of land, domestic, commercial, industrial or
agricultural purposes and also the appreciation in value
when an agricultural land in being converted to a
residential, commercial or an industrial land.
C
(b) In the case of house sites –
(i) the general value of house sites in the locality;
(ii) nearness to roads, railway station, bus route;
(iii) nearness to market, shops and the like;
D
(iv) amenities available in the place like public offices,
hospitals and educational institutions;
(v) development activities, industrial improvements in the
vicinity;
(vi) land tax valuation of sites with reference to taxation E
records of the local authorities concerned;
(vii) any other features having a special bearing on the
valuation of the site; and
(viii) any special feature of the case represented by the parties. F
(c) In the case of buildings –
(i) type and structure;
(ii) locality in which constructed;
(iii) plinth area; G
(iv) year of construction;
(v) kind of materials used;
(vi) rate of depreciation;
(vii) fluctuation in rates; H
364 SUPREME COURT REPORTS [2020] 11 S.C.R.

A (viii) any other features that have bearing on the value;
(ix) property tax with reference to taxation records of local
authority concerned;
(x) the purpose for which the building is being used and the
income if any, by way of rent per annum secured on the
B building; and
(xi) any special feature of the case represented by the parties.
(d) Properties other than lands, house sites and buildings –
(i) The nature and condition of the property;
C
(ii) Purpose for which the property is being put to use; and
(iii) Any other special features having a bearing on the
valuation of the property.
6. Procedure after arriving at provisional market value.-
D The Collector shall communicate a copy of his order provisionally
determining the market value of the properties and the duty payable,
to all the persons who are liable to pay the duty along with the
notice in Form II and call upon the parties to lodge their objections,
if any, to such determination of the market value within the time
specified in the notice. The Collector shall also hear the parties on
E the date specified in the notice or on such other day as may be
fixed by him.
7. Final Order determining the market value.-
(1) The Collector shall, after considering the representations
F received in writing and those urged at the time of hearing or in the
absence of any representation from the parties concerned or their
failure to appear in person at the time of hearing in any case after
careful consideration of all the relevant factors and evidence
available with him pass an order within three months from the
date of first notice determining the market value of the properties
G and the duty payable on the instrument, and communicate the
order so passed to the parties and take steps to collect the difference
in the amount of stamp duty, if any.
(2) A copy of the order shall be communicated to the registering
officer concerned for his record.
H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 365
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

(3) The difference in the amount of duty determined by the Collector A
shall be paid within two months from the date of final order passed
under sub-Section (2) or sub-Section(3) of Section 47-A
(4) The Collector shall, after collecting the difference in amount
of stamp duty and interest, if any, under Section 47-A, give a
certificate in Form III by endorsement on the instrument. B

… … …
11-A. Decision of the appellate authority. The appellate
authority may, for the purpose of deciding an appeal, -
(a) call for any information or record from any public office, C
officer or authority under the government or any local
authority;
(b) examine and record statements from any member of the
public officer of authority under the government or the
local authority3 ; and D
(c) inspect the property after due notice to the parties
concerned.”
6. We heard Mr. Jayanth Muth Raj, learned Additional Advocate
General for the Appellants in all the appeals and M/s. T. Sundar
E
Ramanathan, M.A. Venkata Subramanian, K.V. Mohan, Raghav Shankar,
P.J. George and Pulkit Tare, learned Advocates for the concerned
Respondents. Following questions arise for our consideration: -
1. Whether the directions issued by the appellate authority
namely Chief Controlling Revenue Authority (Inspector
General of Registration) in asking the Deputy Inspector F
General of Registration, or any other officer, to conduct the
site inspection, amounted to delegation of his functions and
violated Rule 11-A of the Rules and thereby vitiated the
entire proceedings?
This question arises in all the appeals. G

2. Whether Rule 7 of the Rules prescribing 3 months’ time
for the Collector to pass an order determining the market
3
The text is as per the Gazette published on 09.03.2001. The language is, however, not
similar to that of Rule 4(3)(b). H
366 SUPREME COURT REPORTS [2020] 11 S.C.R.

A value of the properties and duty payable on the instrument
from the first notice, is directory or mandatory?
This issue arises in all the appeals, except the one arising
out of Special Leave Petition (Civil)No. 17103 of 2019.
3. Whether the appellate authority has power under Section
B 47A of the Act to enhance the market value of the property
while deciding the appeal filed by the registrants?
The issue arises only in the appeal from Special Leave
Petition (Civil) Nos. 31633-31637 of 2018.

C 7. Before we deal with these questions, an issue regarding alleged
violation of Rule 6 may be addressed first. In the petition of appeal in the
lead matter, the following grounds are taken: -
“L. Because the Hon’ble High Court failed to appreciate that
Form II provisional notices were issued by the 2nd Petitioner
D determining the provisional market value of the subject properties
in consonance with Rule 6 of the Rules. The Hon’ble High Court
erred in passing an order in the favour of the Respondent without
appreciating the facts of the instant matter wherein no violation
of Rule 6 occurred and the procedure laid down under Rule 6 was
duly followed.
E
M. Because the Hon’ble High Court failed to appreciate that as
no objections were received from the Respondent against the
notices issued in Form I or Form II, the 2nd Petitioner accordingly
proceeded with passing the final orders. The procedure for arriving
at the final market value was suitably followed in accordance to
F the Rules.”
The order of the appellate authority does not disclose any ground
of such violation being raised. We, therefore, find that there was no
violation of the procedure prescribed under Rule 6. Similar situation
obtains in appeals arising of Special Leave Petition (Civil) Nos.17103 of
G 2019 and 31633-31637 of 2018.
8. With regard to question no.1, it is submitted on behalf of the
Appellants that under Rule 11-A the appellate authority can call for any
information from any officer or authority, and can direct any officer or
authority under the government, or any public authority, to inspect the
H property, collect information and send the report; and that causing such
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 367
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

inspection of the property or collection of evidence and calling for a A
report, does not amount to delegation of his core function. It is emphasized
that causing personal inspection of properties in every appeal would be
humanly impossible. In response, it is submitted on behalf of the
Respondents: -
a) Powers that can be delegated are specifically provided under B
Section 76-A of the Act, and the power under Section 47-A is not
one such power; and
b) Unless the power to sub-delegate is conferred expressly or
impliedly under a statute, the power cannot be sub-delegated
(Reliance is placed on the decision of this Court in Sahni Silk C
Mills (P) Ltd. and another vs. Employees’ State Insurance
Corporation4 in support of the proposition).
9. In Pradyat Kumar Bose vs. The Hon’ble the Chief Justice
of Calcutta High Court5, a Judge of the High Court was deputed by
the Chief Justice of the High Court to make an enquiry into the charges D
against the Registrar of the High Court and submit a report. After
considering the report and grant of hearing, the Registrar was dismissed
from service. While dealing with the submission that the Chief Justice
could not have delegated the enquiry into the charges to another Judge,
the Constitution Bench of this Court stated the principles as under:-
E
“… …It is well-recognised that a statutory functionary exercising
such a power cannot be said to have delegated his functions merely
by deputing a responsible and competent official to enquire and
report. That is the ordinary mode of exercise of any administrative
power. What cannot be delegated except where the law
specifically so provides — is the ultimate responsibility for the F
exercise of such power. As pointed out by the House of Lords in
Board of Education v. Rice6, a functionary who has to decide an
administrative matter, of the nature involved in this case, can obtain
the material on which he is to act in such manner as may be
feasible and convenient, provided only the affected party “has a G
fair opportunity to correct or contradict any relevant and prejudicial
material”. The following passage from the speech of Lord

4
(1994) 5 SCC 346
5
(1955) 2 SCR 1331
6
[1911] A.C. 179, 182 H
368 SUPREME COURT REPORTS [2020] 11 S.C.R.

A Chancellor in Local Government Board v. Arlidge7 is apposite
and instructive:
“My Lords, I concur in this view of the position of an
administrative body to which the decision of a question in dispute
between parties has been entrusted. The result of its inquiry
B must, as I have said, be taken, in the absence of directions in
the statute to the contrary, to be intended to be reached by its
ordinary procedure. In the case of the Local Government Board
it is not doubtful what this procedure is. The Minister at the
head of the Board is directly responsible to Parliament like other
Ministers. He is responsible not only for what he himself does
C but for all that is done in his department. The volume of work
entrusted to him is very great and he cannot do the great bulk
of it himself. He is expected to obtain his materials vicariously
through his officials, and he has discharged his duty if he sees
that they obtain these materials for him properly. To try to
D extend his duty beyond this and to insist that he and other
members of the Board should do everything personally would
be to impair his efficiency. Unlike a Judge in a Court he is not
only at liberty but is compelled to rely on the assistance of his
staff.”
E 10. In Union of India and anr. vs. P.K. Roy and ors.8, another
Constitution Bench of this Court ruled as under: -
“… …In other words, if a statutory authority empowers a delegate
to undertake preparatory work and to take an initial decision in
matters entrusted to it but retains in its own hands the power to
F approve or disapprove the decision after it has been taken, the
decision will be held to have been validly made if the degree of
control maintained by the authority is close enough for the decision
to be regarded as the authority’s own. In the context of the facts
found in the present case we are of opinion that the High Court
was in error in holding that there has been an improper delegation
G of its statutory powers and duties by the Central Government and
that the final gradation list dated April 6, 1962 was therefore ultra
vires and illegal. Even on the assumption that the task of integration

7
[1915] A.C. 120, 133
8
H (1968) 2 SCR 186
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 369
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

was exclusively entrusted to the Central Government, we are of A
the opinion that the steps taken by the Central Government in the
present case in the matter of integration did not amount to any
delegation of its essential statutory functions. There is nothing in
Sections 115 or 117 of the said Act which prohibits the Central
Government in any way from taking the aid and assistance of the
B
State Government in the matter of effecting the integration of the
services. So long as the act of ultimate integration is done with
the sanction and approval of the Central Government and so long
as the Central Government exercises general control over the
activities of the State Government in the matter it cannot be held
that there has been any violation of the principle “delegatus non C
potest delegare”. For instance, it was observed by this Court in
Pradvat Kumar Bose v. Hon’ble the Chief Justice of Calcutta
High Court5:”
11. In State of Bombay (Maharashtra) vs. Shivbalak
Gourishanker Dube and others9, the decision of the High Court holding D
that the State Government could not have delegated its duty to make an
enquiry under Section 65(1) of the Bombay Tenancy and Agricultural
Lands Act, 1948, was under challenge. While setting aside said decision
of the High Court, it was observed: -
“Realising the infirmity in the view taken by the High Court, Mr E
Pathak attempted to support the decision of the High Court on
another ground. He argued that since the enquiry was made by
the Talathi and the Mamlatdar under Section 65 and not by the
Deputy Collector, the declaration made by the Deputy Collector
was invalid. In other words, the argument is that the State
Government may have validly delegated its powers under Section F
65(1) to the Deputy Collector, but the Deputy Collector who is a
delegate of the State Government cannot, in turn, delegate a part
of his power or authority to a subordinate of his own, and that is
what he has done in the present case. This argument proceeds on
the basis that in exercising his powers under Section 65(1), the G
Deputy Collector must himself hold the enquiry and cannot
delegate the function of holding such an enquiry to any other
subordinate re venue officer. There is no doubt that a delegate
who has received the authority from the principal cannot, in turn,
9
(1965) 1 SCR 211 H
370 SUPREME COURT REPORTS [2020] 11 S.C.R.

A delegate his own authority to a delegate of his own, but there is
hardly any question of delegation by a delegate in the present
case. All that Section 65(1) requires is that the State Government
and therefore its delegate may after making such enquiry as it
thinks fit, declare that the management of the land shall be resumed.
In other words, in what form the enquiry should be held is a matter
B
left entirely in the discretion of the State Government or its delegate.
All that the Deputy Collector has done in the present case is to
direct his subordinate officers to collect material relevant to the
purpose of the enquiry. The Talathi went on the spot and
ascertained as to whether the respondent’s lands were lying fallow
C for the requisite period. He submitted his report to the Mamlatdar.
The Mamlatdar in turn made his report to the Deputy Collector.
In other words, all that the Deputy Collector has done is to collect
the relevant material, so that he can enquire into the question as
to whether the lands are lying fallow or not. This procedure does
not, in our opinion, involve the question of any delegation at all.
D
The form of the enquiry and its mode are entirely in the discretion
of the Deputy Collector. Section 65(1) does not require that the
Deputy Collector must himself go to the agricultural fields and
enquire on the spot whether they are lying fallow. He may, if he so
desires, record evidence himself, or the recording of the evidence
E and the actual inspection on the spot can be left to some
subordinate officer. The report of such local inspection and the
record of the evidence collected in that behalf would be forwarded
to the Deputy Collector, and that would be the material on which
he would hold the enquiry himself. The enquiry is thus held by the
Deputy Collector, though the mechanical work of collecting material
F
has been entrusted to a subordinate revenue officer. In such a
case, we do not see how the principle that a delegate cannot
delegate comes into operation.”
12. In Sahni Silk Mills4 Case, The Issue Was Whether An Officer
Or Authority As A Delegate Of Certain Powers By The Corporation,
G Could Further Sub-delegate Said Powers. It Was Observed By This
Court:-
“5. The courts are normally rigorous in requiring the power to be
exercised by the persons or the bodies authorised by the statutes.
It is essential that the delegated power should be exercised by the
H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 371
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

authority upon whom it is conferred and by no one else. At the A
same time, in the present administrative set-up extreme judicial
aversion to delegation cannot be carried to an extreme. A public
authority is at liberty to employ agents to exercise its powers.
That is why in many statutes, delegation is authorised either
expressly or impliedly. Due to the enormous rise in the nature of
B
the activities to be handled by statutory authorities, the maxim
delegatus non potest delegare is not being applied specially
when there is question of exercise of administrative discretionary
power.
6. By now it is almost settled that the legislature can permit any
statutory authority to delegate its power to any other authority, of C
course, after the policy has been indicated in the statute itself
within the framework of which such delegatee is to exercise the
power. The real problem or the controversy arises when there is a
sub-delegation. It is said that when Parliament has specifically
appointed authority to discharge a function, it cannot be readily D
presumed that it had intended that its delegate should be free to
empower another person or body to act in its place. In Barium
Chemicals Ltd. v. Company Law Board10, this Court said in
respect of sub-delegation:
“Bearing in mind that the maxim delegatus non potest delegare E
sets out what is merely a rule of construction, sub-delegation
can be sustained if permitted by express provision or by
necessary implication.”
7. Again in Mangulal Chunilal v. Manilal Maganlal11, while
considering the scope of Section 481(1)(a) of the Bombay F
Provincial Municipal Corporation Act (59 of 1949) this Court said
that Commissioner of the Ahmedabad Municipal Corporation had
delegated his power and function under the aforesaid section to a
Municipal Officer to launch proceedings against a person charged
with offences under the Act or the rules and that officer to whom
such functions were delegated could not further delegate the same G
to another.

10
AIR 1967 SC 295 : 1966 Supp SCR 311
11
AIR 1968 SC 822 : (1968) 2 SCR 401 H
372 SUPREME COURT REPORTS [2020] 11 S.C.R.

A 8. In Halsbury’s Laws of England, 4th Edn., Vol. I, in respect of
sub-delegation of powers it has been said:
“In accordance with the maxim delegatus non potest delegare,
a statutory power must be exercised only by the body or officer
in whom it has been confided, (H. Lavender & Son Ltd. v.
B Minister of Housing and Local Government12) unless sub-
delegation of the power is authorised by express words or
necessary implication (Customs and Excise Comrs. v. Cure
and Deeley Ltd. 13 and Mungoni v. Attorney General of
Northern Rhodesia14). There is a strong presumption against
construing a grant of legislative, judicial, or disciplinary power
C as impliedly authorising sub-delegation; and the same may be
said of any power to the exercise of which the designated
body should address its own mind. Allam & Co. v. Europa
Poster Services Ltd.15 …”
9. In the case of Harishankar Bagla v. State of M.P.16, while
D examining the scope of Section 4 of the Essential Supplies
(Temporary Powers) Act, 1946 it was said:
“Section 4 of the Act was attacked on the ground that it
empowers the Central Government to delegate its own power
to make orders under Section 3 to any officer or authority
E subordinate to it or the Provincial Government or to any officer
or authority subordinate to the Provincial Government as
specified in the direction given by the Central Government. In
other words, the delegate has been authorized to further
delegate its power in respect of the exercise of the powers of
F Section 3. Mr Umrigar contended that it was for the Legislature
itself to specify the particular authorities or officers who could
exercise power under Section 3 and it was not open to the
Legislature to empower the Central Government to say what
officer or authority could exercise the power.

G Reference in this connection was made to two decisions of
the Supreme Court of the United States of America — Panama
12
(1970) 3 All ER 871 : (1970) 1 WLR 1231
13
(1962) 1 QB 340 : (1961) 3 All ER 641 : (1961) 3 WLR 798
14
(1960) 1 All ER 446 : (1960) 2 WLR 389 : 1960 AC 336, PC
15
(1968) 1 All ER 826 : (1968) 1 WLR 638
H 16
AIR 1954 SC 465, 468 ; (1955) 1 SCR 380
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 373
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

Refining Co. v. Ryan17 and Schechter v. United States18. In A
both these cases it was held that so long as the policy is laid
down and a standard established by a statute, no unconstitutional
delegation of legislative power is involved in leaving to selected
instrumentalities the making of subordinate rules within
prescribed limits and the determination of facts to which the
B
policy as declared by the legislature is to apply. These decisions
in our judgment do not help the contention of Mr Umrigar as
we think that Section 4 enumerates the classes of persons to
whom the power could be delegated or sub-delegated by the
Central Government and it is not correct to say that the
instrumentalities have not been selected by the Legislature C
itself.”
In the aforesaid case, the sub-delegation was upheld because
Section 4 itself enumerated the classes of persons to whom the
power could be delegated or sub-delegated by the Central
Government. D
10. So far as the present Section 94-A is concerned, it says that
the Corporation subject to any regulation made by the Corporation
in that behalf, may direct that particular or any of the powers and
functions which may be exercised or performed by the
Corporation, may, in relation to such matters and subject to such E
conditions, if any, as may be specified “be also exercisable by any
officer or authority subordinate to the Corporation”. Section 94-A
does not specifically provide that any officer or authority
subordinate to the Corporation to whom the power has been
delegated by the Corporation, may in his turn authorise any other
officer to exercise or perform that power or function. But by the F
resolution dated 28-2-1976 the Corporation has not only delegated
its power under Section 85- B(1) of the Act to the Director General,
but has also empowered the Director General to authorise any
other officer to exercise the said power. Unless it is held that
Section 94-A of the Act, enables the Corporation to delegate any G
of its powers and functions to any officer or authority subordinate
to the Corporation, and he in his turn can sub-delegate the exercise
of the said power to any other officer, the last part of the resolution

17
(1934) 293 US 388 : 79 L Ed 446
18
(1934) 295 US 495 : 79 L Ed 1570 H
374 SUPREME COURT REPORTS [2020] 11 S.C.R.

A dated 28-2-1976 cannot be held to be within the framework of
Section 94-A. According to us, Parliament while introducing
Section 94-A in the Act, only conceived direct delegation by the
Corporation to different officers or authorities, subordinate to the
Corporation, and there is no scope for such delegate to sub-delegate
that power, by authorising any other officer to exercise or perform
B
the power so delegated.”
13. In Sidhartha Sarawgi vs. Board of Trustees for the Port
of Kolkata and others19, the matter was dealt with by this Court as
under:-
“5. Regarding delegation of non-legislative/ administrative powers
C on a person or a body to do certain things, whether the delegate
himself is to perform such functions or whether after taking
decision as per the terms of the delegation, the said agency can
authorise the implementation of the same on somebody else, is
the question to be considered. Once the power is conferred, after
D exercising the said power, how to implement the decision taken in
the process, is a matter of procedure. The legislature may, after
laying down the legislative policy, confer discretion on an
administrative agency as to the execution of the policy and leave
it to the agency to work out the details within the framework of
that policy20. So long as the essential function of decision making
E is performed by the delegate, the burden of performing the ancillary
and clerical task need not be shouldered by the primary delegate.
It is not necessary that the primary delegate himself should perform
the ministerial acts as well. In furtherance of the implementation
of the decision already taken by the primary delegate as per the
F delegation, ministerial or clerical tasks may be performed by
authorised officers. The complexity of modern day administration
and the expansion of functions of the State to the economic and
social spheres have made it necessary that the legislature gives
wide powers to various authorities when the situation requires it.
Today’s governmental functions are a lot more complex and the
G need for delegation of powers has become more compelling. It
cannot be expected that the head of the administrative body
performs each and every task himself.
… … …
19
(2014) 16 SCC 248
H 20
Khambhalia Municipality vs. State of Gujarat, AIR 1967 SC 1048 at p. 1051, para 7
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 375
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

7. Practical necessities or exigencies of administration require A
that the decision-making authority who has been conferred with
statutory power, be able to delegate tasks when the situation so
requires. Thus, the maxim delegatus non potest delegare, gives
way in the performance of administrative or ministerial tasks by
subordinate authorities in furtherance of the exercise of the
B
delegated power by an authority.”
14. The following principles can thus be culled out from the
decisions of this Court: (i) A statutory functionary exercising a power
cannot be said to have delegated his functions merely by deputing a
responsible and competent official to enquire and report, as that is the
ordinary mode of exercise of any administrative power; (ii) If a statutory C
authority empowers a delegate to undertake preparatory work, and to
take an initial decision in matters entrusted to it, but retains in its own
hands the power to approve or disapprove the decision after it has been
taken, the decision will be held to have been validly made if the degree
of control maintained by the authority is close enough for the decision to D
be regarded as the authority’s own; (iii) Even in cases of sub-delegation,
so long as the essential function of decision making is performed by the
delegate, the burden of performing the ancillary and clerical task need
not be shouldered by the primary delegate and it is not necessary that
the primary delegate himself should perform the ministerial acts as well;
and (iv) Practical necessities or exigencies of administration require that E
the decision-making authority who has been conferred with statutory
power, be able to delegate tasks when the situation so requires.
15. Rule 11A of the Rules empowers the appellate authority to
call for any information or record from any public office, officer or
authority or to examine and record statements from any member of the F
public office or authority. In line with the principles laid down by this
Court, it can therefore be said that in exercise of such power, if the
appellate authority calls for any information or calls for any record or
any inputs, that by itself, will not amount to delegation of essential
functions. If, in terms of such power, the appellate authority deputes a G
responsible official to enquire into certain facets and calls for a report,
that would be an ordinary mode of exercise of the power vested in the
appellate authority. Practical necessities and exigencies of administration
demand that the appellate authority must be able to delegate certain
tasks such as collecting information after causing inspection. So long as
H
376 SUPREME COURT REPORTS [2020] 11 S.C.R.

A the essential function, that is to say of considering all the necessary
factors and inputs and thereafter arriving at an informed decision is done
by the appellate authority, the burden of performing ancillary tasks need
not be shouldered by the appellate authority.
16. The submission based on Section 76-A of the Act is completely
B misplaced and does not deserve acceptance. Section 76-A is quoted
hereunder for facility:
“76-A. Delegation of certain powers- The State Government
may, by notification in the Official Gazette delegate-
(a) all or any of the powers conferred on it by sections 2(9), 33(3)(b),
C 70(1), 74 and 78 to the Chief Controlling Revenue Authority; and
(b) all or any of the powers conferred on the Chief Controlling
Revenue-Authority by sections 45(1), (2), 56(1) and 70(2) to such
subordinate Revenue Authority as may be specified in the
notification.”
D
Section 76-A was inserted in the Principal Act vide the
Decentralization Act, 1914 (Act No. IV of 1914). The legislative head in
Entry 44, namely “Stamp duties other than duties on or fees collected by
means of judicial stamps, but not including rates of stamps” is in the
Concurrent List of Schedule VII to the Constitution. Section 47-A was
E inserted in the Principal Act by the State Legislature by enacting the
Tamil Nadu Act No.24 of 1967 which received the assent of the President
on 29th March, 1968. The Rules including Rule 11-A were framed to
effectuate the letter and spirit of Section 47-A.
Section 76-A of the Principal Act enables the State Government
F to delegate some of the statutory powers conferred upon it by the
Principal Act to the Chief Controlling Revenue Authority. Such
empowerment has nothing to do with the legislative power exercised by
the State in terms of which Section 47-A was inserted, or with the Rules
promulgated to effectuate Section 47-A. For interpreting and considering
the context of said Section 47-A or the Rules, the fact that certain other
G
statutory powers in favour of the State Government are delegable, has
absolutely no relation. Section 47-A was inserted by the State in its
legislative power and the Rules framed thereunder have to be considered
on their own and without being influenced by Section 76-A.

H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 377
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

17. Therefore, in observing that the inspection ought to have been A
carried out by the Inspector General of Registration himself, and such
function could not have been delegated, the High Court failed to
appreciate the principles laid down by this Court. Any report that was
called for was essentially in the nature of rendering assistance to the
appellate authority in discharge of its functions. The final order passed
B
by the appellate authority, after considering all the necessary material,
must be taken to be one rendered by the appellate authority on its own,
and there was no delegation of any essential functions vitiating exercise
of power. We do not, therefore, find any impropriety or invalidity touching
upon the exercise of power by the appellate authority. We, thus, accept
the contentions raised by the learned counsel for the Appellants, and set C
aside the view taken by the High Court in that behalf.
18. The ground with respect to delegation of power under Rule
11-A was taken in all these matters, on the basis of which the High
Court set aside the determination made by the appellate authority. The
conclusions of the High Court in that behalf being erroneous, we set D
aside said conclusions in each of the matters, and restore the findings
arrived at by the appellate authority on the basis of the report called for
in exercise of power under Rule 11-A in all the matters.
19. We now turn to question no. 2, in respect of which the High
Court in six of these appeals, had concluded that the stipulation of period E
of three months in Rule 7 being mandatory, the orders passed after the
expiry of said period would be invalid.
19.1 It is submitted on behalf of the Appellants that sub-sections
(1) and (2) of Section 47-A do not prescribe any time limit and the
stipulation in Rule 7 ought to be seen in the context and setting of various F
stages in the proceedings. It is submitted: -
“…Rules 4-7 of Rules 1968 require the collector/authority to
perform various tasks namely issuance of Form I notice by granting
21 days time to the parties to represent his case with evidence,
consider the representations sent by the parties, verify the records, G
call for information or record from the public office, officer or
authority, inspect the property after due notice and recording
statements of the parties etc. Thereafter, the collector is required
to provisionally determine the market value by taking into
consideration of various factors mentioned in Rules and the same
H
378 SUPREME COURT REPORTS [2020] 11 S.C.R.

A has to be communicated to the parties with Form II notice calling
upon them to lodge their objections if any. Thereafter he has to
consider the representations and points urged at the time of hearing
and pass an order determining the market value of the properties
and the duty payable on the instrument and communicate the said
order. The entire exercise is time consuming and the same cannot
B
be completed within 3 months time.”
19.2 In response, it is submitted by the Respondents :-
“Rule 7 of the Rules also mandates that the Collector shall after
considering the representations and after careful consideration of
C all relevant factors and evidence available with him pass an order
within 3 months from the date of first notice. Rule 7 also has to be
read in the light of Rule 4 (1) of the Rules which provides for a
timeline of 21 days from the date of service of the notice for
parties to provide their representations on whether the market
value has been truthfully set forth. Therefore, Rule 7 read in the
D light of Rules 4 and Section 47-A (2) provides for a mandatory
requirement to complete the inquiry and pass an order within the
timelines set forth. It would also be pertinent to note that the
timeline to pass an order within 3 months was introduced vide an
amendment indicating the intention to have a mandatory timeline
E to pass orders.
… … …
Rule 7 as originally enacted did not prescribe a time period for the
Collector to pass an order determining the market value of the
properties. Rule 7 was amended vide G.O.Ms.No. 69 dated
F 26.02.1997 on suggestion of the Inspector General of Registration
(the “1997 Amendment) to introduce a month time period.”
20. Under sub-section (1) of Section 47-A of the Act, if there is
reason to believe that the market value has not been truly set forth in the
Instrument tendered for registration, a reference can be made to the
G Collector, who (i) after giving the parties reasonable opportunity of being
heard; and (ii) after holding an enquiry in such manner as may be
prescribed by Rules, has to determine the correct value of the concerned
property. The Section by itself does not lay down any period within which
the entire process is to be completed by the Collector. It simply states
that the enquiry be held in “such manner” as may be prescribed by
H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 379
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

Rules. In this backdrop the manner in which the enquiry must be held as A
set out in the Rules, is required to be considered.
According to the Rules, following steps are required to be
undertaken:
A) On receipt of reference as stated above, the Collector must
issue notice in Form I to the persons by whom and in whose B
favour the Instrument is executed, informing such persons to
produce all evidence to show that the market value has been truly
set forth in said instrument. The notice must give such persons
time of twenty one days from the receipt of notice to represent or
respond. [Rule 4(1)] C
B) The Collector may record statement of any such noticee.
[Rule 4(2)].
C) For the purposes of the enquiry, the Collector may call for
information from any public office or examine and record
statements or inspect the property after due notice as stated in D
detail in Rule 4(3).
D) After considering the representations, if any, and the record
and evidence, a provisional order determining the market value
must be passed indicating the basis for such conclusion. [Rule
4(4)]. For arriving at the provisional market value, regard must be E
had to the principles set out in Rule 5.
E) The provisional order must be communicated in Form II to all
the concerned persons who must be given some time to prefer
objections, if they so wish; and they must be heard on the day
fixed in the notice or on such other day as may be fixed. [Rule 6] F
F) After considering the representations in writing and those urged
at the time of hearing as well as all the relevant factors and
evidence, the Collector must pass an order determining the market
value of the concerned property and assess the element of duty
payable on the instrument of transfer. Such order is required to be G
passed “within three months from the date of first notice”.
[Rule 7]
21. The expression “within three months from the date of first
notice” is crucial. Is the description “first notice” referable to notice in
Form I issued in terms of Rule 4(1)? The answer would obviously be in H
380 SUPREME COURT REPORTS [2020] 11 S.C.R.

A the negative. Form I notice itself must give twenty-one days to the
concerned persons to respond. Depending upon their response, their
statements would be recorded and/or certain information may be required
to be called for, whereafter the Order in Form II is to be issued
provisionally determining the market value. The concerned persons are
entitled to raise objections in writing and must be afforded hearing. After
B
fulfilling these requirements, the order in terms of Rule 7 can be passed.
All these stages may not be completed in three months.
Further, the reference in Rule 7 is to the “first notice” and not to
“notice in Form I”. Considering the context and various stages preceding
the stage of passing of the Order under Rule 7, the reference has to be
C to the first “notice in Form II”. There could possibly be more than one
notices in Form II, specially when the hearing is to take place on an
adjourned date and that is why the period must be reckoned from the
first notice in Form II. The expression immediately following “first notice”
in Rule 7 is “determining the market value of the properties….” That is
D also indicative that the reference to the notice is one in Form II in the
immediately preceding Rule 6.
22. We now deal with the question whether the stipulation of period
of three months in Rule 7 is mandatory or directory.
23. Some of the decisions of this Court dealing with question as to
E in what circumstances and context a statutory provision can be
considered to be mandatory or directory may first be noted.
A) In State of Mysore and others v. V.K. Kangan and others21
a bench of three Judges of this Court observed: -

F “10. In determining the question whether a provision is mandatory
or directory, one must look into the subject- matter and consider
the importance of the provision disregarded and the relation of
that provision to the general object intended to be secured. No
doubt, all laws are mandatory in the sense they impose the duty
to obey on those who come within its purview. But it does not
G follow that every departure from it shall taint the proceedings
with a fatal blemish. The determination of the question whether a
provision is mandatory or directory would, in the ultimate analysis,
depend upon the intent of the law-maker. And that has to be
gathered not only from the phraseology of the provision but also
21
H (1976) 2 SCC 895
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 381
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

by considering its nature, its design and the consequences which A
would follow from construing it in one way or the other. … …”
B) In T.V. Usman vs. Food Inspector, Tellicherry Municipality,
Tellicherry22, this Court was called upon to consider whether
stipulation of period in Rule 7(3) of the Prevention of Food
Adulteration Rules, 1955 within which time the report of the B
analysis of the sample must be delivered, would be mandatory or
directory. This Court quoted the following passage from the
decision of the Constitution Bench of this Court:-
“10. In Dattatraya Moreshwar v. State of Bombay23 it was
held as under: C
“[G]enerally speaking the provisions of a statute creating
public duties are directory and those conferring private rights
are imperative. When the provisions of a statute relate to
the performance of a public duty and the case is such that
to hold null and void acts done in neglect of this duty would D
work serious general inconvenience or injustice to persons
who have no control over those entrusted with the duty and
at the same time would not promote the main object of the
legislature, it has been the practice of the Courts to hold
such provisions to be directory only, the neglect of them not
affecting the validity of the acts done.” E

B. 1) Thereafter, this Court considered the effect of stipulation in
Rule 7(3):
“11. In Rule 7(3) no doubt the expression “shall” is used but it
must be borne in mind that the rule deals with stages prior to F
launching the prosecution and it is also clear that by the date of
receipt of the report of the Public Analyst the case is not yet
instituted in the court and it is only on the basis of this report of
the Public Analyst that the authority concerned has to take a
decision whether to institute a prosecution or not. There is no
time-limit prescribed within which the prosecution has to be G
instituted and when there is no such limit prescribed then there
is no valid reason for holding the period of 45 days as mandatory.
Of course that does not mean that the Public Analyst can ignore
22
(1994) 1 SCC 754
23
AIR 1952 SC 181 H
382 SUPREME COURT REPORTS [2020] 11 S.C.R.

A the time-limit prescribed under the rules. He must in all cases
try to comply with the time-limit. But if there is some delay, in
a given case, there is no reason to hold that the very report is
void and on that basis to hold that even prosecution cannot be
launched. May be, in a given case, if there is inordinate delay,
the court may not attach any value to the report but merely
B
because the time-limit is prescribed, it cannot be said that even
a slight delay would render the report void or inadmissible in
law. In this context it must be noted that Rule 7(3) is only a
procedural provision meant to speed up the process of
investigation on the basis of which the prosecution has to be
C launched. No doubt, sub-section (2) of Section 13 of the Act
confers valuable right on the accused under which provision
the accused can make an application to the court within a period
of 10 days from the receipt of copy of the report of Public
Analyst to get the samples of food analysed in the Central
Food Laboratory and in case the sample is found by the said
D
Central Food Laboratory unfit for analysis due to decomposition
by passage of time or for any other reason attributable to the
lapses on the side of prosecution, that valuable right would
stand denied. This would constitute prejudice to the accused
entitling him to acquittal but mere delay as such will not per se
E be fatal to the prosecution case even in cases where the sample
continues to remain fit for analysis in spite of the delay because
the accused is in no way prejudiced on the merits of the case
in respect of such delay. Therefore it must be shown that the
delay has led to the denial of right conferred under Section
13(2) and that depends on the facts of each case and violation
F
of the time-limit given in sub-rule (3) of Rule 7 by itself cannot
be a ground for the prosecution case being thrown out.”
C) In P.T. Rajan vs. T.P.M. Sahir and others24 the principles
were summed up as follows: -
G “48. Furthermore, even if the statute specifies a time for
publication of the electoral roll, the same by itself could not
have been held to be mandatory. Such a provision would be
directory in nature. It is a well- settled principle of law that
where a statutory functionary is asked to perform a statutory
24
H (2003) 8 SCC 498
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 383
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

duty within the time prescribed therefor, the same would be A
directory and not mandatory. (See Shiveshwar Prasad Sinha
v. District Magistrate of Monghyr25, Nomita Chowdhury v.
State of W.B. 26 and Garbari Union Coop. Agricultural
Credit Society Ltd. v. Swapan Kumar Jana27.)
49. Furthermore, a provision in a statute which is procedural in B
nature although employs the word “shall” may not be held to
be mandatory if thereby no prejudice is caused. (See Raza
Buland Sugar Co. Ltd. v. Municipal Board, Rampur28, State
Bank of Patiala v. S.K. Sharma 29, Venkataswamappa v.
Special Dy. Commr. (Revenue)30 and Rai Vimal Krishna v.
State of Bihar31.)” C

24. Reliance is, however, placed by the learned Counsel for the
Respondents on the decision of this Court in Mackinnon Mackenzie
and Company Ltd. vs. Machinnon Employees Union32. One of the
issues that arose for consideration in that case was whether the provisions
of Section 25FFA of the Industrial Disputes Act, 1947 contemplating D
issuance of notice of closure are mandatory or directory and the submission
advanced on behalf of the Union of Workmen was noted as under:
“37. The contention urged by Mr C.U. Singh, the learned Senior
Counsel for the respondent Union is that if the interpretation of
the provision under Section 25-FFA of the ID Act as contended E
by the learned counsel on behalf of the appellant Company is
accepted to be directory and not mandatory as it would attract the
penal provision against the appellant Company under Section 30-
A of the ID Act, then the purpose and intendment of the
amendment in the year 1972 made to Section 25-FFA of the ID F
Act, will be defeated and would nullify the Objects and Reasons
for amending the provisions of the ID Act and it would be contrary
to the legislative wisdom of Parliament. The statutory protection

25
AIR 1966 Pat 144 : ILR 45 Pat 436 (FB)
26
(1992) 2 Cal LJ 21 G
27
(1997) 1 CHN 189
28
AIR 1965 SC 895 : (1965) 1 SCR 970
29
(1996) 3 SCC 364 : 1996 SCC (L&S) 717
30
(1997) 9 SCC 128
31
(2003) 6 SCC 401
32
(2015) 4 SCC 544 H
384 SUPREME COURT REPORTS [2020] 11 S.C.R.

A has been given to the workmen under the provision of Section 25-
FFA of the ID Act, with an avowed object to protect workmen
being retrenched due to closing down of a department/unit of
the undertaking as the livelihood of such workmen and their family
members will be adversely affected on account of their
retrenchment from their service. To avert such dastardly situation
B
to be faced by the workmen concerned in the company/
establishment, the statutory obligation is cast upon the employer
to serve at least 60 days’ notice on the State Government before
such intended closure of the department/unit to be served upon
the State Government informing the reasons as to why it intends
C to close down its department/unit.”
This Court accepted the afore-stated submission. It relied upon
the decisions of this Court in State of UP v. Babu Ram Upadhyay33,
State of Mysore v. V.K. Kangan21 and Shrif Uddin v. Abdul Gani
Lone34 and other decisions and held the concerned provisions to be
D mandatory. It was observed:
“44. The statutory provisions contained in Section 25- FFA of the
ID Act mandate that the Company should have issued the intended
closure notice to the appropriate Government should be served
notice at least 60 days before the date on which it intended to
E close down the department/unit concerned of the Company. As
could be seen from the pleadings and the findings recorded by the
Industrial Court, there is a categorical finding of fact recorded
that there is no such mandatory notice served on the State
Government by the appellant Company. The object of serving of
such notice on the State Government is to see that it can find out
F whether or not it is feasible for the company to close down a
department/unit of the company and whether the workmen
concerned ought to be retrenched from their service, made
unemployed and to mitigate the hardship of the workmen and their
family members. Further, the said provision of the ID Act is the
G statutory protection given to the workmen concerned which
prevents the appellant Company from retrenching the workmen
arbitrarily and unreasonably and in an unfair manner.

33
AIR 1961 C 751
34
H (1980) 1 SCC 403
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 385
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

45. The cumulative reading of the Statement of Reasons, the A
retrenchment notice served on the workmen concerned, the
pleadings of the appellant Company and in the absence of evidence
on record to justify the action of retrenchment of workmen
concerned on the alleged closure of the department/unit of the
appellant Company is shown as bona fide. However, the concurrent
B
finding of fact recorded by the High Court on this aspect of the
case cannot be held to be bad in law by this Court in exercise of its
appellate jurisdiction in this appeal.”
While concluding so, this Court also relied upon the Objects and
Reasons of the Amending Act 32 of 1972 inserting Section 25FFA in the
Industrial Disputes Act, and the fact that the legislation provided penalty C
for closing down any undertaking without serving requisite notice.
25. As noted above, Section 47-A by itself does not prescribe any
timeline. If the stipulation or fixation of period of three months from the
first notice in terms of Rule 6 or from notice in Form II is taken to be
mandatory it would lead to a situation of incongruity. The fact that Form D
II notice had been issued, would mean that on a prima facie view of the
record and material, the value stated in the instrument was not the correct
value; which in turn would mean that prima facie the Government Coffers
were being denied the rightful dues. If for any reason the proceedings
are not completed within three months and, therefore, must be held to E
be vitiated, the public interest would suffer, and the persons who were
prime facie responsible for suppressing the real value, would stand to
gain. The amendment of Rule 7 incorporating the period of three months
was essentially to guide the public officials to complete the process as
early as possible but was not intended to create a right in favour of those
who had prime facie conducted themselves prejudicing public interest. F

In keeping with the principles laid down in State of Mysore and
others v. V.K. Kangan and others21, if the subject matter of the provision
as well as the inter-relation of the period of three months to the general
object of the provision are considered, the fixation of period has to be
taken to be directory. Otherwise, the very object of sub-serving public G
interest and securing public revenue would get defeated. Pertinently,
the concerned provision has not spelt out any consequence for non-
adherence to said period of three months.

H
386 SUPREME COURT REPORTS [2020] 11 S.C.R.

A 26. We, therefore, hold the fixation of timeline of three months in
Rule 7 to be purely directory. In the premises, the conclusion by the
High Court holding the said provision to be mandatory is set aside, and
no benefit on that ground can accrue to the Respondents.
27. We now turn to question No.3, which incidentally arises only
B in one appeal viz. one arising from SLP(C) Nos.31633-31637 of 2018.
At this stage, the relevant portions from the order of the appellate
authority may be extracted hereunder:-
“District Registrar has recommended a value of Rs.480/- per sq.ft.,
for the documents registered in 2005 and Rs.544/- per sq.ft., for
C the documents registered in 2007. He has stated that the lands
are located in WIMCO Nagar opposite to WIMCO Nagar Railway
Station and lies between Thiruvottriyur High Road and Ennore
Express Road. Further he has stated that as per local enquiry, at
the time of registration the value of the lands ranged between
Rs.11.5 to 12 Lakhs per ground for 2005 documents and Rs.13
D to 14 Lakhs per ground for the documents registered in 2007.
Perusal of Sales Statistics reveals registration of documents upto
2006 adopting a value of Rs.204/- per sq.ft., and referred under
46A and are still pending. Again, from 25-09-2006 onwards large
number of documents (nearly 40) have been registered adopting
E a value of Rs.544/- per sq.ft. However, extents involved in all
these cases ranges from 1 ground to 2 grounds except in few
cases were extend involved in1200 sq.ft. All these are sanctioned
layouts. One Doct. No.10084/2007 has been registered in S.No.168/
7, 9, 9 adopting a value of Rs.625/- per sq.ft. Further vide Doct.
F No.10675/07 an extent of 4.957 acres was registered adopting a
value of Rs.485/- per sq.ft. and the same was referred under 47A
for which District Revenue Offricer (Stamps) fixed a value of
Rs.920/- per sq.ft. This property is adjoining the subject property
as it shares one of the boundaries with the subject document
properties similarly, for another Doct. No.10676/07, involving an
G extent of 16290/- sq.ft. document value adopted was Rs.841/-
per sq.ft. for which District Revenue Officer (Stamps) fixed a
value of Rs.920/- per sq.ft. Both the values were accepted by the
registrants and they paid the deficit Stamp Duty. The Guideline
value of those properties was Rs.1200/- per sq. ft. with effect
H from 01.08.2000.
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 387
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

The present Guideline value of the subject properties with effect A
from 01.04.2012 is Rs.3500/- per sq.ft.
The sale deed in Doc. Nos.10675/2007 and 10676/2007 involve
large extent of industrial land and, hence, are similar to the lands
involved in subject documents. Therefore, for the 5 documents
registered in 2005, it is proposed to adopt the value of Rs.544/- B
per sq.ft since, there seems no reason to believe that the guideline
values are abnormal in light of registration adopting a value of
Rs.920/- per sq.ft. in 2007. Similarly, for the three documents
registered in 2007, it is proposed to fix a value of Rs.920/- per
sq.ft. aking to the value fixed and accepted by the registrants in
Doct.Nos.10675/2007 and 10676/2007. C

Hence issue shows cause Notice to the Petitioner accordingly for
all the 8 cases. Hence a new show cause notice was issued in
continuation of the personal enquiry to the Appellant and to his
Advocate with reference to the 9 cited why the value at
Rs.544/- per sq.ft. for the 5 document properties registered during D
2005 and at Rs.920/- per sq.ft in respect of 3 document registered
in 2007 and to furnish fresh objections if any within 10 days in
continuation of this with reference to the 10 th cited the Advocate
requested to furnish on which basis the provisional value was
determined and the sales statistics of documents and to send the E
copies of document Nos.10675, 10676/2007 and whether there is
any ways and means to give show cause notice under Section
47A5 of the Indian Stamps Act and to give details of the
documentary basis in continuation of that with reference to the 11
cited the details requested by the Petitioner the report of spot
Inspection of the District Revenue Officer and the copies of F
Document Nos.10675, 10676/2007 where despatched.”
Thus, while proposing to enhance the market value higher than
what was determined by the Collector, the appellate authority had put
the appellant-registrant to sufficient notice and had called for response
with regard to the proposed enhancement. It was only thereafter that G
the exercise was undertaken to determine the true market value at
Rs.544/- per sq.ft. and Rs.920/- per sq.ft for documents registered in
the year 2005 and 2007 respectively.

H
388 SUPREME COURT REPORTS [2020] 11 S.C.R.

A 28. In the challenge arising therefrom, the High Court vide its
order dated 19.03.2018 in CMA Nos.2449 to 2453 of 2014 observed:-
“13. It is seen that the first respondent, while deciding the appeal,
had enhanced the market value determined by the second
respondent and fixed a higher value. As per Section 47-A(5) of
B the Indian Stamp Act, the first respondent shall only scrutinize the
correctness of the order passed by the second respondent, as an
appeal has been preferred by the presentant concerned. In the
appeal preferred by the presentant, the Inspector General of
Registration, has no power to enhance the market value.
C 14. This Court, in its judgment in Rajendran v. The Inspector
General of Registration and others35 has held that while deciding
the appeal preferred by the presentant, unlike the suo motu revision
under Section 47-A(6) of the Indian Stamp Act, the appellate
authority is not empowered to enhance the market value of the
property and he can only decide on the correctness of the order
D passed by the District Collector or District Revenue Officer.
Therefore, it is clearly seen that the order passed by the first
respondent is in total violation of Rules 6, 7 and 11-A of the above
said rules and in excess of powers conferred under Section 47-
A(5) of the Indian Stamp Act. In such circumstances, I have no
E hesitation to set aside the impugned order passed by the first
respondent.”
29. In Rajendran v. The Inspector General of Registration,
Tamil Nadu and others (supra) the High Court had observed: -
“33. Perusal of the impugned orders in all these appeals does not
F indicate that the Chief Controlling Revenue Authority cum Inspector
General of Registration, Chennai, has arrived at the subjective
satisfaction that the order passed under sub-section 2 of Section
47, by the Collector of Stamps, is prejudicial to the interest of the
revenue and that the abovesaid appellate authority has not made
G any inquiry or cause such inquiry to be conducted, before enhancing
the market value of the property in each of these appeals. Reading
of the Section 47-A(6) of the Act makes it clear that the primary
object behind, engrafting suo-motu exercise of power is that the
order passed under sub-Sections (2) and (3) of Section 47 of the
35
H 2012(3) CTC 589
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 389
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

Act, should be first examined and found that it is prejudicial to the A
interests of revenue. There should be a categorical finding to that
effect. Therefore, when a provision in the statute, enjoins a duty
on the authority, to arrive at a conclusion, form a subjective
satisfaction, with a specific objective to protect the revenue, if the
orders passed under Section 47-A(2) and/or 47-A(3) is prejudicial
B
to the revenue, then the order of the Chief Controlling Revenue
Authority-cum-Inspector General of Registration, Chennai, should
advert to the said objective on the facts and circumstances of
each case and arrive at a satisfaction, before proceeding further,
under the provisions of the Act.
34. Further, even assuming that the Chief Controlling Revenue C
Authority cum Inspector General of Registration, Chennai, arrives
at a provisional conclusion that an order passed by the Collector
(Stamps) is prejudicial to the interest of the revenue, no order
under sub-section 6 of section 47-A of the Act can be passed
adversely, without a reasonable opportunity of being heard. First D
of all, in the cases on hand, as stated supra, no such exercise as
contemplated under sub-section 6 of Section 47-A of the Act, has
been done by the Chief Controlling Revenue Authority cum
Inspector General of Registration, Chennai. Therefore, this Court
is of the view that the impugned orders in all these appeals do not
fall within the ambit of sub-section (6) of Section 47 of the Act. E

35. The jurisdiction of the Chief Controlling Revenue Authority in
exercise of his suo motu power has its own limitations, as provided
for, in sub-sections (6) and (7) of section 47-A and from the language
employed in the section. It could be construed that it is only
supervisory, as he has all the authority to call for and examine any F
order passed under sub-section 2 or sub-section 3 suo motu, if
such an order is prejudicial to the interests of the revenue. Before
passing an order under Section 47(6) of the Act, after making an
inquiry or causing any such enquiry to be made, the materials
collected, the report if any, should be provided to the person against G
whom proceedings are initiated, to satisfy the requirements of the
principles of natural justice, otherwise, the parties would be deprived
of their right to offer their explanation, if any.
36. Enhancement of market value of the property on the appeals
preferred by the land owners under Section 47(5) is not H
390 SUPREME COURT REPORTS [2020] 11 S.C.R.

A contemplated under the scheme of the Act, without recourse to
sub-section 6 of section 47, wherein the statute has contemplated
a procedure of conducting an inquiry and reasonable opportunity.
No doubt, the statute empowers the Chief Controlling Revenue
Authority-cum-Inspector General of Registration, Chennai, to
exercise suo- motu powers under Section 47(6) of the Act, within
B
five years, from the date of passing of an order, under Section
47(2) and (3) of the Act, as the case may be, but the Statute
mandates, consideration of the records, in terms of the objective,
specifically incorporated in the Section and that he should arrive
at a subjective satisfaction, as to whether, the order passed under
C sub-Sections (2) and (3) of Section 47-A of the Act, is prejudicial
to the interests of Revenue. He must record reasons for arriving
at the satisfaction.”
30. Sub-section (6) of Section 47-A of the Act empowers the
Chief Controlling Revenue Authority, in exercise of suo motu power, to
D call for and examine the correctness of an order passed under sub-
section (2) or sub-section (3) of Section 47-A; and if the order is prejudicial
to the interest of Revenue, the Chief Controlling Authority may make
such enquiry or cause such enquiry to be made and either revise, modify
or set aside such order and pass any order that it deems appropriate.
There are some limitations on the exercise of said power, since no
E proceedings can be initiated against an order passed under sub-section
(2) or sub-section (3), if the time for preferring an appeal against that
order has not expired, or if more than five years have expired after
passing of the order. The intent is clear that if there be sufficient time to
prefer a regular appeal challenging that order, the remedy of filing an
F appeal ought to be taken resort to. Further, if the period of five years has
expired, no suo motu power can be exercised. Another limitation is
prescribed by sub-section (8), in terms of which no order in exercise of
suo motu exercise of power can be passed which may adversely impact
a person, unless that person has had reasonable opportunity of being
heard. Apart from these limitations, the statutory provisions do not impose
G any other restriction, and the power is conferred principally to ensure
that no order passed under sub-sections (2) or (3) of Section 47-A is
prejudicial to the interest of the revenue.
The limitation in sub-section (8) of Section 47-A, was high-lighted
in paragraphs 33 to 36 of the judgment of the High Court in Rajendran
H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 391
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

v. The Inspector General of Registration, Tamil Nadu and others A
(supra). In the present case, adequate notice was issued to the concerned
persons and, therefore, there was no infirmity on that count. It is nobody’s
case that as on the date when the proceedings were initiated in exercise
of the power under sub-section (6) of Section 47-A, the period for
preferring the appeal had not expired, or that more than five years had
B
expired after the passing of the order under sub-section (2) or sub-section
(3). In the circumstances, none of the limitations which the statute has
imposed upon the exercise of power were present.
31. The observations of the High Court in the instant case indicate
that while dealing with an appeal preferred by the registrant against an
order passed under Section 47-A(2), no suo motu exercise of power C
could be initiated. It is the correctness of that view which is now in
issue.
32. While considering the nature of power conferred by Section
20(3) of the Bengal Finance (Sales Tax) Act, 1941 where the
Commissioner “upon application or of his own motion” could revise D
any assessment or order, this Court in M/s Ram Kanai Jamini Ranjan
Pal Pvt. Ltd. v. Member, Board of Revenue, West Bengal36 quoted
with approval following passage from the judgment of the High Court of
Madras:
13. The following observations made by Ramaswami, J. in East E
Asiatic Co. (India) Ltd. v. State of Madras37 are also relevant
“The purposes of this Act are twofold viz. the levy of a general
tax on the sale of goods to supplement the lost revenues and for
promoting the general public good; and secondly, to see that this is
done under the provisions of the Act and not by carrying out in a F
capricious or arbitrary manner. Therefore, a revisional authority
has to be created. What is revision? The essence of revisional
jurisdiction lies in the duty of the superior tribunal or officer
entrusted with such jurisdiction to see that the subordinate tribunals
or officers keep themselves within the bounds prescribed by law G
and that they do what their duty requires them to do and that
they do it in a legal manner. This jurisdiction being one of
superintendence and correction in appropriate cases, it is

36
(1976) 3 SCC 369
37
(1956) 7 STC 299 (Mad) H
392 SUPREME COURT REPORTS [2020] 11 S.C.R.

A exercisable even suo motu as is clear from the numerous statutory
provisions relating to revision found in various Acts and Regulations
such as the Civil Procedure Code, Criminal Procedure Code,
Income Tax Act, etc. The jurisdiction of suo motu revision is not
cribbed and cabined or confined by conditions and qualifications.
The purpose of such an amplitude being given suo motu revisions
B
appears to be as much to safeguard the interests of the exchequer
as in the interests of the assessee. The State can never be the
appellant and if there is an order against the State to its prejudice,
and naturally the assessee in whose favour the order is passed
does not prefer an appeal, the State would suffer unless its interests
C are safeguarded by the exercise of such supervisory jurisdiction
as the one given to the authorities abovementioned.”
33. The essence of revisional jurisdiction is thus accepted to be in
the duty of the superior tribunal or officer to ensure that the subordinate
tribunal or officers remain within the bounds prescribed by law and
D discharge their functions in accordance with law. The nature of such
power to be exercised “suo motu”, or “on its own motion”, has also
been dealt with in following decisions:
A) While considering Section 38-B of the Orissa Estates Abolition
Act, 1951, which did not impose any restriction akin to those found in
E sub- section (7) of Section 47-A of the Act, this Court in State of Orissa
and others v. Brundaban Sharma and another38 observed:-
“12. ..…. When and under what circumstances the suo motu
inquiry would be initiated and orders passed is left to the discretion
of the Board of Revenue depending on the facts and circumstances
F of each case.”
After considering some of the decisions of this Court, it was
observed:-
“16. It is, therefore, settled law that when the revisional power
was conferred to effectuate a purpose, it is to be exercised in a
G reasonable manner which inheres the concept of its exercise within
a reasonable time. Absence of limitation is an assurance to exercise
the power with caution or circumspection to effectuate the purpose
of the Act, or to prevent miscarriage of justice or violation of the
provisions of the Act or misuse or abuse of the power by the
38
H (1995) Supp. 3 SCC 249
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 393
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

lower authorities or fraud or suppression. Length of time depends A
on the factual scenario in a given case. Take a case that patta was
obtained fraudulently in collusion with the officers and it comes to
the notice of the authorities after a long lapse of time. Does it lie
in the mouth of the party to the fraud to plead limitation to get
away with the order? Does lapse of time an excuse to refrain
B
from exercising the revisional power to unravel fraud and to set it
right? The answers would be no.”
B) In Vijayabai and others V. Shriram Tukaram and others39
this Court expressed caution as under: -
“9. The Tahsildar while exercising his suo motu power under C
Section 49-B has to initiate on the basis of the materials before
him not arbitrarily. Every exercise of suo motu power explicitly or
implicitly reveals to correct an error crept in under a statute, what
ought to have been done was not done or which escaped the
attention of any statutory authority, or error or deliberate omission
or commission by the subject concerned requires correction, of D
course, within the limitation of any such statute. This has to be
based on some relevant material on record, it is not an omnipower
to be exercised on the likes and dislikes of such an authority. Though
such a power is a wide power but it has to be exercised with
circumspection within the limitations of such statute. Wider the E
power, the greater circumspection has to be exercised.”
34. In Sree Balaji Rice Mill, Bellary v. State of Karnataka40
the basic facts were stated in the decision rendered by a Bench of
three Judges of this Court as under:-
“3. The Additional Commissioner of Commercial Taxes, F
Devangere Zone, Devangere issued notices dated 16-2-1994 and
21-3-1994 under Section 22-A of the Act proposing to revise the
order of assessment dated 12-7-1990 passed by the assessing
authority on the ground that the assessment order was erroneous
and prejudicial to the interest of the Revenue. In the notices, the G
revisional authority had made observations to the effect that the
books of accounts have not been properly maintained. In response
to the notices, the appellant filed reply on 4-4-1994 denying the
39
(1999) 1 SCC 693
40
(2005) 4 SCC 21 H
394 SUPREME COURT REPORTS [2020] 11 S.C.R.

A observations made by the revisional authority and had requested
the said authority to drop the proceedings initiated under Section
22-A of the Act. The revisional authority on 8-4-1994 issued a
further notice under Section 22-A(1) of the Act making the same
proposal as made in the earlier notices and further proposed to
levy penalty under Section 18-A of the Act. The revisional authority
B
confirmed the proposals made in the notices issued under Section
22-A of the Act vide order dated 2-6-1994 and modified the set-
off granted by the assessing authority.”
One of the questions that came up for consideration was set out in
paragraph 11 as under:-
C
“11. The following questions of law arise for consideration by this
Court:
(a) ……
(b) ……
D
(c) While purporting to revise an order under Section 12-A which
neither expressly nor impliedly refers to any proceeding under
Section 18-A and was thus not within the contemplation of the
assessing authority while passing the order under Section 12(3),
is it open for the Commissioner, while purporting to act under
E Section 22-A in respect of the order under Section 12(3) to pass
an order under Section 18-A either as a part of the order under
Section 22-A or separately as such under Section 18-A?
(d) ……”

F
The question was considered as under:
“14. Section 18-A of the Act prohibits excess collection of tax
by an assessee. If any person contravenes Section 18, penalty
is provided under Section 18-A of the Act. The question is
G when at the time of assessment, if no penalty is imposed by the
assessing authority, can the revisional authority, by invoking his
suo motu powers under Section 22-A of the Act impose penalty
for the first time on the ground that the order of assessment is
prejudicial to the interests of the Revenue?

H
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL 395
NADU AND ORS. v. K. BASKARAN [UDAY UMESH LALIT, J.]

17. It must be noted that there is a difference between exercise A
of revisional powers over orders passed by lower authority
and exercise of revisional powers in the assessment proceeding
itself. A revision of an order may be confined to what the order
contains or dealt with. But when the assessment proceedings
themselves are before the revisional authority it can go beyond
B
the order of the assessing authority and pass such orders as
the assessing authority could or should have passed.
22. The argument of the learned counsel for the appellant that
the revising authority or the appellate authority higher than the
assessing authority is not competent to levy a penalty for the
first time when no penalty has been levied by the assessing C
authority is wholly untenable, without statutory basis and
unreasonable from any point of view. The said plea is liable to
be rejected. The necessity for there to be an order under
Section 18-A for the exercise of revisionary jurisdiction under
Section 22-A is once again fallacious. The non-levy of penalty D
is itself an illegality caused by a failure to exercise the jurisdiction
by the assessing authority and therefore, prejudicial to the
interests of the Revenue.”
35. For exercising revisional power “suo motu” or “on its motion”,
the concerned authority must be satisfied that an order has been passed E
by the authority or officer subordinate to it. which may be prejudicial to
the interest of the revenue. As indicated in some of the hypothetical
instances noted in the decisions quoted hereinabove, the error may have
crept in unknowingly, or there may be a genuine mistake, or in some
cases there could be a deliberate attempt to prejudice the interest of
revenue. If an infirmity or illegality is brought to the notice or knowledge F
of the revisional authority, through normal and regular process of reporting
by the subordinate officer or authority, the power of revision can certainly
be exercised. The requisite knowledge enabling the revisional authority
to exercise the power vested in it, can also be gathered from the appeal
preferred by the registrant himself. That may only be an occasion or a G
source which enables the authority to gather information about the
possible infirmity or illegality in the process. Upon being so aware, the
revisional authority would thereafter be exercising power vested in it.
Qualitatively, it makes no difference as to what was the source of the
information or knowledge, so long as the power is exercised within the
H
396 SUPREME COURT REPORTS [2020] 11 S.C.R.

A confines of the limitations or restrictions imposed by the statute, and is in
accordance with law. Apart from the restrictions imposed by the statute,
none can be read into the exercise of power on the ground as to the
nature or source of information.
While entertaining an appeal, if an obvious illegality is noticed by
B the revisional authority, it can certainly exercise suo motu power to undo
the mistake, or rectify an error committed by the subordinate officer or
authority, subject to such restrictions as are imposed on the exercise of
the power by the statute.
36. There is nothing in the scheme of the Act which purports to
C restrict the exercise of suo motu power under Section 47-A, and confines
it to cases where knowledge of any illegality or infirmity in the proceedings
undertaken by the subordinate officers must be gathered from sources
other than through a pending appeal. Unless the statute expressly or
even by necessary implication restricts the exercise of power, there would
be no occasion to read into the power, any other limitations. The High
D Court has not found the exercise of power to be invalid on any count, nor
was any such submission advanced before the High Court. The High
Court had simply gone on the existence of power rather than on the
exercise of power. It is not as if the assessment made by the appellate
authority was either opposed to principles of natural justice, or was so
E palpably incorrect, that it could never be sustained. In our view, the High
Court completely erred in setting aside the exercise of power undertaken
by the concerned authority. The exercise of power was definitely
designed to obviate an obvious illegality and prejudice to the interest of
the revenue. The exercise was, thus, absolutely correct, and there was
no occasion to set aside the orders passed in pursuance thereof. We,
F therefore, answer question No.3 accordingly.
37. Having thus considered and answered all the questions which
have arisen for our consideration, all these appeals deserve to be allowed.
We order accordingly, and set aside the decisions of the High Court
under appeal and restore the orders passed by the appellate authority.
G No costs.

Devika Gujral Appeals allowed.

H