Allahabad High Court
Smt. Bhagirathi Devi vs Commissioner Gorakhpur Division And ... on 21 April, 2023
Author: Alok Mathur
Bench: Alok Mathur
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 9 Case :- WRIT - C No. - 30078 of 2003 Petitioner :- Smt. Bhagirathi Devi Respondent :- Commissioner Gorakhpur Division And Others Counsel for Petitioner :- V.B. Khare,A.K. Shukla Counsel for Respondent :- C.S.C. Hon'ble Alok Mathur,J.
1. Heard Sri A.K. Shukla, learned counsel for the petitioner as well as learned Standing Counsel for the respondents.
2. Present matter pertains to 2003. Opportunity for filing counter affidavit has been given but no counter affidavit has been filed. Accordingly, Court is proceeding to decide the matter on the basis of writ petition filed by the petitioner.
3. By means of present writ petition the petitioner has challenged the order dated 17.01.2003, passed by the Assistant Collector (Ist Class), Gorakhpur, thereby holding that there was deficiency in the valuation on account of the fact that petitioner has falsely stated that he has not taken possession over the property in question and accordingly sought recovery of deficiency of stamp amounting to Rs.45,523/- on the agreement to sell entered into between the petitioner and Smt. Sujata Agarwal. The petitioner preferred appeal before the Commissioner, Gorakhpur, which was dismissed for want of prosecution by order dated 05.03.2003 and application for recall was also rejected on 27.05.2003. All the orders have been challenged in the writ petition.
4. In the light of the fact for more than two decades this petition is pending, this Court proceeds to examine order dated 17.01.2003 passed by the Collector, Gorakhpur.
5. Facts giving rise to the present writ petition are that the petitioner in order to purchase shop constructed on 823 square feet of land entered into agreement to sell with one Sujata Agarwal. In the agreement to sell it was stated that sale deed would be executed within a period of three years and in the meanwhile tenants who were occupying the said shops would be evicted and an advance of Rs.11000/- was paid by the petitioner and remaining amount was to be tendered at the time of execution of sale deed. Stamp duty of Rs.102/- was paid while registering the agreement to sell on 19.08.1994. The registering officer made a reference to the Collector recording that stamp duty paid by the petitioner on the agreement to sell dated 19.08.1994 was deficient. It was stated that in case it is found that petitioner is in possession of the said property which was subject matter of agreement to sell then higher stamp duty was leviable and this can be ascertained only after inspection of the said property. The agreement to sell recorded the fact that the petitioner is not in possession over the said property.
6. Admittedly, in pursuance to the reference made to the Collector, no inspection was made till 24.12.2000. Prior to the date of inspection the sale deed was executed between Sujata Agarwal and petitioner on 20.08.1996 and was duly registered.
7. It is the case of the petitioner that on execution of sale deed she entered into possession over the property in question. After lapse of long length of time i.e. 6 years from registration of sale deed that an inspection was made by the Revenue Officer and a report in this regard was submitted on 24.12.2000, stating that petitioner was found to be in possession of the said property.
8. Based on the said inspection report impugned order dated 17.01.2003 has been passed by the Assistant Collector, Gorakhpur, holding that petitioner was in possession of the said property at the time of execution of agreement to sell and consequently stamp duty on higher valuation was liable to be paid than what was paid by the petitioner at the relevant point of time.
9. Learned counsel for the petitioner has assailed said order stating that the order has been passed only on the basis of inspection report dated 24.12.2000, which admittedly was made after the sale deed had been executed and petitioner had entered into possession of the property in question, while the agreement to sell was executed on 19.08.1994, when the possession was not with the petitioner.
10. Petitioner has taken aforesaid stand before the Assistant Collector and this aspect has also been recorded in his order dated 17.01.2003. Instead of dealing with the contention of petitioner, same has been rejected only on the ground that it is the petitioner who has failed to file any document and has also failed to demonstrate that he was not in possession of the property in question on the date of agreement to sell.
11. It is on aforesaid ground that it is stated that order of Collector is illegal and arbitrary and not based on any material and apart from the same it is perverse has admittedly the inspection was made years after the execution of agreement to sell.
12. Learned Standing Counsel on the other hand that opposed the writ petition and has supported the orders impugned in the writ petition.
13. Heard learned counsel for the parties and perused the record.
14. The facts in the present case are not disputed to the extent that agreement to sell was registered by the petitioner with regard to shops on 19.08.1994. At the time of registration of agreement to sell stamp valuing Rs.102/- was paid by the petitioner. The Registering Officer after going though the contents of agreement to sell made a reference to the Collector that in case petitioner is found to be in possession of the said property then he is liable to pay stamp duty on higher rate. An specific clause was added in the agreement to sell that petitioner was not in possession of the said shops and sale deed will be executed within three years, after shops are vacated by the tenants who were occupying the said shops.
15. Where it is found that an instrument is undervalued, the procedure has been set forth under Section 47-A of the Act for assessing the correct stamp duty on the instrument. Section 47-A of the Act reads as under:-
"47-A. Under-valuation of the instrument.--- "(1) (a) If the market value of any property which is the subject of any instrument, on which duty is chargeable on the market value of the property as set forth in such instrument, is less than even the minimum value determined in accordance with the rules made under this Act, the registering officer appointed under the Registration Act, 1908 shall, notwithstanding anything contained in the said Act, immediately after presentation of such instrument and before accepting it for registration and taking any action under section 52 of the said Act, require the person liable to pay stamp duty under section 29, to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument for presenting again in accordance with section 23 of the Registration Act, 1908.
(b) When the deficit stamp duty required to be paid under clause (a), is paid in respect of any instrument and the instrument is presented again for registration, the registering officer shall certify by endorsement thereon, that the deficit stamp duty has been paid in respect thereof and the name and the residence of the person paying them and register the same.
(c) Notwithstanding anything contained in any other provisions of this Act, the deficit stamp duty may be paid under clause (a) in the form of impressed stamps containing such declaration as may be prescribed.
(d) If any person does not make the payment of deficit stamp duty after receiving the order referred to in clause (a) and presents the instrument again for registration, the registering officer shall, before registering the instrument, refer the same to the Collector, for determination of the market value of the property and the proper duty payable thereon."
(2) On receipt of a reference under sub-section (1) the Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an inquiry in such manner as many be prescribed by rules made under this Act, determine the market value of the property which is the subject of such instrument and the proper duty payable thereon.
(3) The Collector may, suo motu, or on a reference from any court or from the Commissioner of Stamps or an Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any officer authorized by the State Government in that behalf, within four years from the date of registration of any instrument on which duty is chargeable on the market value of the property not already 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 for of such instrument, and the duty payable thereon and if after such examination he has reason to believe that market value of such property has not been truly set forth in such instrument he may determine the market value of such property and the duty payable thereon:
Provided that, with the prior permission of the State Government, an action under this sub-section may be taken after a period of four years but before a period of eight years from the date of registration of the instrument on which duty is chargeable on the market value of the properly.
........"
16. From the reading of Section 47-A of the Act, it is evident that what has to be seen is the market value of the property and, if it is found that value of the property mentioned in the instrument is less than even the minimum value determined in accordance with the rules made under this Act, the registering officer is empowered to impound the instrument when it is presented for registration and require the person liable to pay stamp duty with deficit stamp duty as computed on the basis of the minimum value determined in accordance with the rules and return the instrument for presenting again for registration.
17. The Collector (Stamp) is empowered to determine the correct stamp duty on receipt of reference or by suo motu. If on inquiry and examination, the Collector finds that the market value of the property has not been truly set forth and the instrument is not properly stamped, he is empowered to order for payment of proper duty and also for making the deficiency good together with a penalty on an amount not exceeding four times the amount of deficit duty besides statutory interest 1.8% per month.
18. The State Government in exercise of powers under Sections 27, 47-A and 75 of the Act has framed Rules, 1997. Rule 3 of the aforesaid Rules prescribes the facts to be set forth in an instrument relating to immovable property chargeable with an ad valorem duty.
19. Under Rule 4 of the Rules, 1997, the Collector is empowered to fix minimum rate for value of land, construction value of non-commercial building and minimum rate of rent of commercial building. This minimum value is to be fixed biennially after taking into consideration the facts as mentioned in the Rules.
20. Rule 5 of the Rules, 1997 provides for calculation of minimum value of land, grove, garden and building for the purposes of payment of the stamp duty as may be prescribed under the said Rule.
21. A Full Bench of this Court in the case of Smt. Pushpa Sareen Vs. State of U.P. and others, 2015 (2) ESC 819 (All) (FB) has held that the power of Collector to determine the market value either on a reference under Sub-section (1) or (2) of Section 47-A or acting suo motu under sub-section (4) was to determine the correct market value of the property. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The Collector would be within jurisdiction in referring to exemplars which have a bearing on the true market value of property which is required to be assessed. The Full Bench considered the following questions in the said judgement:-
"(1) Whether the registering officer can refer a document even if he does not find that the market value of the property as set forth in the instrument is less than even the market value determined in accordance with the rules made under this Act;
(2) Whether the Collector Stamps has power to fix the valuation of a plot on the assumption that the same is likely to be used for commercial purposes, and whether the presumed future prospective use of the land can be a criterion for valuation by the Collector;
(3) What should be the norms for fixing the valuation of a free-hold land viz-a-vis lease land;
(4) Whether the Collector can demand stamp duty under Section 47-A of the Stamp Act without a finding of fact that the market value as stated in the document is less than that which was actually agreed upon between the parties;
(5) Whether the orders passed by the Chief Controlling Revenue Authority can be reviewed if it is shown that the known norms of valuation have not been followed in the case."
22. The Full Bench in Smt. Pushpa Sareen (supra) while answering Question No.2 has held that power and jurisdiction of the Collector under Section 47-A of the Act is to determine the actual market value of the property. The Collector in making that determination is not bound either by the value as described in the instrument or for that matter, the value as discernible on the basis of the Rules. It has been further held that the market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land. Paragraphs 26, 27 and 28 of the said judgement which are relevant, are extracted herein below:-
"26.The true test for determination by the Collector is the market value of the property on the date of the instrument because, under the provisions of the Act, every instrument is required to be stamped before or at the time of execution. In making that determination, the Collector has to be mindful of the fact that the market value of the property may vary from location to location and is dependent upon a large number of circumstances having a bearing on the comparative advantages or disadvantages of the land as well as the use to which the land can be put on the date of the execution of the instrument.
27. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land. This potential has to be assessed with reference to the date of the execution of the instrument. In other words, the power of the Collector cannot be unduly circumscribed by ruling out the potential to which the land can be advantageously deployed at the time of the execution of the instrument or a period reasonably proximate thereto. Again the use to which land in the area had been put is a material consideration. If the land surrounding the property in question has been put to commercial use, it would be improper to hold that this is a circumstance which should not weigh with the Collector as a factor which influences the market value of the land.
28. The fact that the land was put to a particular use, say for instance a commercial purpose at a later point in time, may not be a relevant criterion for deciding the value for the purpose of stamp duty, as held by the Supreme Court in State of U.P. and others Vs. Ambrish Tandon and another, (2012) 5 SCC 566. This is because the nature of the user is relateable to the date of purchase which is relevant for the purpose of computing the stamp duty. Where, however, the potential of the land can be assessed on the date of the execution of the instrument itself, that is clearly a circumstance which is relevant and germane to the determination of the true market value. At the same time, the exercise before the Collector has to be based on adequate material and cannot be a matter of hypothesis or surmise. The Collector must have material on the record to the effect that there has been a change of use or other contemporaneous sale deeds in respect of the adjacent areas that would have a bearing on the market value of the property which is under consideration. The Collector, therefore, would be within jurisdiction in referring to exemplars or comparable sale instances which have a bearing on the true market value of the property which is required to be assessed. If the sale instances are comparable, they would also reflect the potentiality of the land which would be taken into consideration in a price agreed upon between a vendor and a purchaser."
23. Sale deed was executed on 20.08.1996. The sale deed also demonstrates that petitioner had taken possession over the shops on execution of sale deed. It is only after six years of the registration of sale deed that inspection was conducted in pursuance to the order passed in 1994 where it was found that petitioner was in possession over the said property.
24. The findings recorded by the respondent authorities are clearly arbitrary and absurd inasmuch as the petitioner has been found to be in possession of the said property in the year 2000, cannot mean that he was in possession of the said property in the year 1994 when the agreement to sell was executed.
25. As discussed above, it is the duty of the Collector to ascertain correct facts and to realize deficit Court fee. There was no material on record to indicate that the petitioner was in possession of the said property in the year 1994 and the only material available on record in the present case is the Inspection Report dated 24.12.2000. As already recorded by this Court that the inspection report dated 24.12.2000 cannot be presumed to demonstrate that petitioner was in possession of the said property on 18.04.1994 and therefore relying upon the said report the respondents have acted in the most illegal and arbitrary manner.
26. Delay in conducting inspection has become fatal in the present proceedings. In case it was to be ascertained that averments in the agreement to sell was false then it was incumbent upon the authorities to make inspection immediately thereafter and not to wait for a period of six years to ascertain as to whether petitioner is in possession over the property in question.
27. Admittedly, sale deed was executed on 20.08.1996 and the petitioner took over possession of the property and hence any inspection made thereafter in pursuance to the order passed at the time of registration of agreement to sell on 19.08.1994, is of no consequence. There was no material with regard to the fact as to whether petitioner was in possession over the property at the time of execution of sale deed and burden to prove this aspect cannot be left upon petitioner to adduce evidence in this regard as it was the duty of the authorities to demonstrate that petitioner was in over the said property at the time of entering into agreement to sell.
28. In the light of above, order passed by the Collector dated 17.01.2003 is set aside accordingly orders dated 05.03.2003 and 17.06.2003 are also set aside.
29. The writ petition is allowed.
Order Date :- 21.4.2023/A. Verma (Alok Mathur, J.)