Market-value stamp duty on court-executed sale deeds is determined at execution date; penalty under section 47-A needs statutory authority.

Stamp duty on a conveyance executed by court pursuant to a decree for specific performance is chargeable on the market value of the property conveyed, not on the consideration stated in the earlier agreement to sell, because duty attaches to the instrument of conveyance and title passes only on execution. For valuation under the Stamp Act, the relevant date is the date of execution of the sale deed by the court, as the taxable event occurs when the instrument is executed. Penalty under section 47-A was held unauthorized on these facts, because the provision, as it then stood, did not empower imposition of penalty and was confined to determination of market value and duty.

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Issues: (i) Whether stamp duty on a conveyance executed by court in pursuance of a decree for specific performance is chargeable on the sale consideration stated in the agreement or on the market value of the property conveyed; (ii) Whether, for determining market value under the Stamp Act, the relevant date is the date of the agreement, the decree for specific performance, or the date on which the sale deed is executed by the court; (iii) Whether penalty could be imposed in proceedings under section 47-A of the Indian Stamp Act, 1899 on the facts of the case.

Issue (i): Whether stamp duty on a conveyance executed by court in pursuance of a decree for specific performance is chargeable on the sale consideration stated in the agreement or on the market value of the property conveyed.

Analysis: The charging provisions of the Stamp Act were read with the definition of "chargeable", "conveyance", "executed", and "instrument", together with Article 23 of Schedule I-B. The Court held that stamp duty is levied on the instrument of conveyance itself and, for an instrument chargeable ad valorem, the duty is to be determined by the market value of the property conveyed. A decree for specific performance does not transfer title or create an interest in the property; title passes only when the sale deed is executed.

Conclusion: Stamp duty is payable on the market value of the property conveyed, not on the consideration stated in the earlier agreement to sell, and the fact that the conveyance is executed by the court is irrelevant for that purpose.

Issue (ii): Whether, for determining market value under the Stamp Act, the relevant date is the date of the agreement, the decree for specific performance, or the date on which the sale deed is executed by the court.

Analysis: Reading sections 3, 17 and 47-A with Rules 340 and 341, the Court held that the taxable event occurs on execution of the instrument and the market value must be ascertained with reference to the date of the instrument. The agreement to sell does not create any present interest in the property, and the decree for specific performance merely enables execution of the conveyance. The Court declined to follow the contrary view taken in the Madras decision and held that the U.P. rules specifically point to the prevailing value on the date of the instrument.

Conclusion: The relevant date for determining market value is the date on which the sale deed is executed by the court on behalf of the vendors.

Issue (iii): Whether penalty could be imposed in proceedings under section 47-A of the Indian Stamp Act, 1899 on the facts of the case.

Analysis: The Court noted that, prior to the 2001 amendment, section 47-A did not contain any provision authorising penalty. The scheme of the provision was confined to determination of market value and duty. In the absence of statutory authority, and in view of the earlier decisions of the Court, the penalty imposed by the Assistant Commissioner was held to be without jurisdiction.

Conclusion: Penalty could not be imposed on the facts of the case and the penalty component was unsustainable.

Final Conclusion: The reference was answered by upholding market-value based stamp duty on the date of execution of the court-conveyed sale deed, while rejecting the penalty imposed under section 47-A as unauthorized.

Ratio Decidendi: For a conveyance executed pursuant to a decree for specific performance, stamp duty is determined by the market value prevailing on the date of execution of the instrument, and penalty cannot be imposed under section 47-A unless the statute expressly provides for it.

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