The Patna High Court has set aside a demand for deficit stamp duty and penalty raised nearly four years after a land sale deed was registered in Darbhanga district. The writ petition challenged an order passed by the Assistant Inspector General (AIG) of Registration, Darbhanga Division, in “Stamp Case No. 1 of 2019–20,” which had directed the purchaser (petitioner) to deposit ₹6,69,960 as deficit stamp duty with a penalty of ₹66,996 (total ₹7,36,956). The Court held that the statutory scheme under Section 47-A of the Indian Stamp Act, 1899 (as applicable in Bihar) does not permit a registering officer to refer a document to the Collector for valuation after registration, and even the Collector’s suo motu power is time-barred beyond two years from registration. Accordingly, the impugned order dated 14.11.2019 was quashed and the writ petition allowed.

The case concerned a registered sale deed of land located at Mauza Chatwan, Circle Kewti, District Darbhanga. The deed had been registered on 13.04.2015 after payment of stamp duty and registration charges. However, in 2019 a private complaint triggered an administrative inquiry; the District Sub-Registrar referred the matter to the AIG Registration for determination of “proper market value” and recovery of alleged deficit duty. This led to the issuance of the 14.11.2019 order directing payment of ₹7,36,956 by way of deficit duty and penalty.

Before the High Court, the petitioner’s core argument was statutory: under Section 47-A(1), a registering officer may refer an instrument to the Collector for valuation only “before registering it.” The text of Section 47-A(1) (Bihar Amendment) reproduced in the judgment clarifies that the trigger for such a reference is the officer’s satisfaction, at the time of registering, that the classification or measurement is wrong or the market value stated is lower than the guideline register. A limited proviso allows a post-registration reference by the registering officer—but only where the stated value is not less than guideline yet the officer has reasons to believe the true market value is higher—and even then, the instrument must first be registered and the officer must record proper reasons while referring it to the Collector. In the present case, the reference was admittedly made nearly four years after registration, outside the statutory design.

The State defended the order on the footing that an inquiry found the land to be commercial in nature (whereas the deed described it as “Kalambag (bhith)”), justifying a reference for re-classification and valuation and, thereafter, demand of deficit duty and penalty. Nonetheless, the Court emphasized that the chronology and statutory limits control: the Sub-Registrar’s post-registration referral, made in 2019 regarding a deed registered in 2015, could not be sustained under Section 47-A(1); and even a Collector’s independent (suo motu) intervention would have been barred beyond two years of registration under Section 47-A(3).

In reaching its conclusion, the Court relied upon prior Patna High Court precedents. First, it drew support from a Division Bench ruling in The State of Bihar v. Smt. Tetra Devi, 2018 (3) PLJR 136, which held that the Collector’s suo motu notice on stamp deficiency must be issued within two years of registration and that a Sub-Registrar cannot make a delayed recommendation long after registration if no reference was made at the time of registration. Second, the Court followed a coordinate Bench decision in Shahnaz Begam v. The State of Bihar, 2018 (2) PLJR 293, which squarely held that a registering authority can refer a document “only before registering it,” and that any suo motu action by the Collector after registration must also adhere to the two-year limit in Section 47-A(3).

Applying these principles, the High Court found the Sub-Registrar’s 2019 reference, and the AIG’s consequential demand order, to be without authority and contrary to the statutory mandate. The impugned order dated 14.11.2019 in Stamp Case No. 1 of 2019-20 was, therefore, quashed, and the writ petition allowed.

Significance or Implication of the Judgment (For general public or government)

This decision provides clear compliance guidance for Registration authorities across Bihar:

• For citizens and property buyers: once a sale deed is registered after payment of duty, the specter of fresh stamp duty demands years later is significantly curtailed. If any deficiency is suspected by the registering officer, the statute expects timely action—either before registration under Section 47-A(1) or, in limited circumstances, immediately after registration with recorded reasons. Additionally, any suo motu review by the Collector must occur within two years from registration. This promotes transactional certainty and protects bona fide purchasers from long-delayed liability.
• For the Registration Department: the ruling re-affirms that references made years after registration are ultra vires. Internal processes should ensure that doubts about classification, measurement, or market value are addressed contemporaneously with registration. Where post-registration reference under the proviso is invoked, reasons must be recorded promptly, and any Collector-led verification must honor the two-year cap. The Court’s reliance on Tetra Devi and Shahnaz Begam underscores that deviation from these timelines can lead to quashing of deficit duty orders.
• For policy and revenue administration: the judgment balances revenue interests with legal certainty. It does not foreclose scrutiny of undervaluation; it simply enforces statutory guardrails—timeliness and proper procedure—so that genuine cases are addressed swiftly and lawfully. The Department may consider training and checklists to ensure Section 47-A compliance at the point of registration, minimizing litigation and revenue disputes.

Legal Issue(s) Decided and the Court’s Decision with reasoning

• Whether a registering officer can refer an already registered document to the Collector for valuation under Section 47-A(1): No. Section 47-A(1) permits reference “before registering” an instrument; a delayed post-registration reference, as in this case (made roughly four years later), is beyond jurisdiction.
• Whether the Collector can, on his own motion, reassess stamp duty beyond two years from the date of registration under Section 47-A(3): No. The suo motu power is expressly time-barred after two years.
• Consequence for the impugned order demanding deficit duty and penalty: The order dated 14.11.2019 in Stamp Case No. 1 of 2019-20, directing payment of ₹7,36,956 (duty plus penalty), was quashed as arbitrary, perverse, and contrary to the mandate of Section 47-A.

Judgments Referred by Parties

• The State of Bihar & Ors. v. Smt. Tetra Devi, 2018 (3) PLJR 136 (Division Bench) — relied upon by the petitioner to emphasize the two-year outer limit for suo motu action and the impropriety of delayed recommendations by the Sub-Registrar.
• Shahnaz Begam v. State of Bihar & Ors., 2018 (2) PLJR 293 — cited for the proposition that reference by the registering authority must be before registration and that any Collector’s action after registration must be within two years.

Judgments Relied Upon or Cited by Court

• The Court considered and followed Shahnaz Begam v. State of Bihar & Ors., 2018 (2) PLJR 293, treating the present case as squarely covered by it.
• The Court referred to the Division Bench ruling in The State of Bihar & Ors. v. Smt. Tetra Devi, 2018 (3) PLJR 136, for the two-year ceiling on the Collector’s suo motu action and the impropriety of delayed references.

Case Title
Rahul Kumar, v. State of Bihar & Ors.

Case Number
Civil Writ Jurisdiction Case No. 902 of 2020

Citation(s)
2025 (1) PLJR 815

Coram and Names of Judges
Hon’ble Mr. Justice Mohit Kumar Shah (Oral judgment dated 08-01-2025)

Names of Advocates and who they appeared for
For the petitioner: Mr. Kedar Jha, Advocate; Mr. Maya Shankar Mishra, Advocate
For the respondents (State): Mr. Vivek Prasad, GP-7

Link to Judgment
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