Stamp Act, 1899: s.40(1)(b) – Imposition of maximum penaltywhen instrument not duly stamped – Propriety of – In the instantcase, a resolution was passed by the Executors/Trustees of theappellant-Trust to transfer and vest immovable properties to thebeneficiaries by executing a Deed of Transfer – However,subsequently a Deed of Assent was executed between them onpayment of stamp duty of Rs.200 whereunder the Trustees gaveassent to complete title of the Legatees and vest absolutely in favourof beneficiaries – Collector of Stamps held the Deed of Assent asGift Deed and demanded deficit duty to the extent of Rs.1.28 lakhsand also imposed ten times penalty – Board of Revenue upheld theorder of Collector – Aggrieved appellant-Trust filed writ petitionwhich was also dismissed – In the instant case, the issue is whetherthe ten times penalty was validly imposed by the Collector of Stampsunder s.40 – Held: The statutory scheme of s.40(1)(b) vest discretionto the Collector to impose the penalty amount not exceeding tentimes – When statute transfers discretion to an authority, thediscretion is to be exercised in furtherance of objects of theenactment – Imposition of penalty of ten times under s.40(1)(b) isneither automatic nor can it be mechanically imposed – Impositionof such extreme penalty cannot be based on the mere factum ofevasion of duty – The Collector while imposing ten times penalty inhis order gave reason that the party had not mentioned the actualnature of the document with the intention to escape the duty – Noother reason was given either by the Collector or by the High Courtjustifying the imposition of maximum penalty of ten times – It wasnot the case of Collector that the conduct of the appellant wasdishonest or contumacious – High Court noticed that although theresolution was passed to execute the Deed of Transfer by Trusteesbut later on they deliberately executed the deed in the name of Deedof Assent on a stamp paper of Rs.200/- - Thus, for the reason givenby the Collector as well as by the High Court that there was intentionto evade the stamp duty in describing the document as Deed ofAssent, the imposition of the penalty was called for, but in the factsand circumstances and the reasons given by the Collector, it wasnot a case of imposition of extreme penalty of ten times of deficiencyof stamp duty – In the ends of justice, penalty reduced to the extentof half i.e. five times of deficiency in the stamp duty.Penalty: Imposition of, by public authority – Held: The purposeof penalty generally is a deterrence and not retribution – Whendiscretion is given to a public authority, such public authority shouldexercise such discretion reasonably and not in oppressive manner– The responsibility to exercise discretion in reasonable mannerlies more in cases where discretion vested by the statute is unfettered– Stamp Act, 1899 – s.40(1)(b).