Quasi-judicial stamp duty reference requires hearing to executant where instrument construction is disputed

A reference under section 56(2) of the Indian Stamp Act, 1899 requires the Chief Controlling Revenue authority to act judicially when determining disputed questions about the construction of an instrument and the duty chargeable on it. Because the decision can impose substantial deficit duty and penalty, the absence of an express hearing provision does not exclude natural justice. The executant of the instrument must therefore be given an opportunity of hearing, and the function is quasi-judicial in nature.

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Issues: Whether the Chief Controlling Revenue authority, acting on a reference under section 56(2) of the Indian Stamp Act, 1899, is required to act judicially and afford a hearing to the executant of the instrument.

Analysis: The statutory scheme showed that the reference under section 56(2) arose where the Collector entertained doubt as to the duty chargeable on an instrument. The question before the authority concerned the construction of the instrument and the application of the Act to it, and could result in substantial liability for deficit duty and penalty. The absence of an express hearing provision did not conclude the matter. From the nature of the power, the rights affected, and the provision for reference under section 57 to the High Court on difficult questions, the legislative intent was that the Board should determine the matter judicially. In such a setting, the affected party had to be heard in accordance with natural justice.

Conclusion: The authority acting under section 56(2) performs a quasi-judicial function and must give the executant of the instrument a hearing.

Ratio Decidendi: Where a statutory authority is required to decide a disputed question of construction of an instrument carrying serious pecuniary consequences, the function is quasi-judicial and the principles of natural justice require a hearing even if the statute is silent.

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