Gujarat High Court
Chitvan vs Chief on 2 August, 2011
Author: S.J.Mukhopadhaya
Bench: S.J. Mukhopadhaya
Gujarat High Court Case Information System
Print
SR/1/2010 12/ 12 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
STAMP
REFERENCE No. 1 of 2010
With
STAMP
REFERENCE No. 2 of 2010
To
STAMP
REFERENCE No. 4 of 2010
For
Approval and Signature:
HONOURABLE
THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA
HONOURABLE
MR.JUSTICE AKIL KURESHI
HONOURABLE
MS.JUSTICE HARSHA DEVANI
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
CHITVAN
CO OP HOUSING SOCIETY LTD - Applicant(s)
Versus
CHIEF
CONTROLLING REVENUE AUTHORITY - Respondent(s)
=========================================================
Appearance
:
MR
ND NANAVATI,SR ADVOCATE WITH MR NIKHIL D JOSHI
for
Applicant(s):1,
MR PK JANI, GOVERNMENT PLEADER WITH MS KRINA
CALLA, AGP(SR NO.1 & 2 OF 2010) WITH MR PRANAV DAVE, AGP(SR NO.3
& 4 OF 2010) for Respondent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA
and
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS.JUSTICE HARSHA DEVANI
Date
: 2/8/2011
CAV
JUDGMENT
(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) These Stamp References involve similar questions of law and facts. They have therefore, been heard together and are being disposed of by this common judgement. Facts stated in Stamp Reference No.1/2010 can be noted for the purpose of this judgement.
This Reference is made under Section 54(1A) of the Bombay Stamp Act, 1958(here-in-after referred to as "the said Act") at the instance of one Shri Chitvan Cooperative Housing Society Ltd.(here-in-after referred to as "the purchaser"). A sale deed was executed between the erstwhile owners and the purchaser with respect to non agricultural land admeasuring 24989 sq. mtrs. bearing survey no.382/1 and 383, block no.541/B situated in Sim of village Bopal, District Ahmedabad. This sale deed was presented by the purchaser before the Sub-Registrar, Ahmedabad (Memnagar) for registration. In the sale deed dated 31.12.2005, sale consideration of the property in question was shown at Rs.19,99,120/-. Sub-Registrar on the very date i.e. 31.12.2005 informed the purchaser in writing that he has received document for registration which records sale consideration of Rs.19,99,120/-. However, as per Jantri rates for the area in question, the land would be valued at Rs.3,49,84,600/-. The document is deficiently stamped to the extent of Rs.27,70,767/- after giving credit for the stamp duty of Rs.1,67,940/- affixed. The purchaser was further put to notice that if the purchaser was prepared to pay such deficient stamp duty, same may be done within 30 days, upon which such document can be returned after registration. It was also conveyed that if no stamp duty as mentioned above was paid within 30 days, the document before registration shall be sent to the Deputy Collector for ascertaining the market value of the land in terms of Section 32A(1) of the Act.
In response to such communication, purchaser did not pay the stamp duty. The Sub-Registrar, Ahmedabad therefore, forwarded the document to the Deputy Collector, Stamp Duty Valuation for ascertaining the value of land for the purpose of collection of deficient stamp duty, if any. Deputy Collector thereupon issued notice to the purchaser on 14.10.2008 indicating that he had received document for valuation of the property; that he proposed to ascertain value on the basis of Government fixed Jantri rates. If the purchaser wished to dispute this valuation and establish that the sale consideration reflected the correct value of the property in question, the purchaser may produce necessary evidence such as order passed by the Collector for converting the land into NA use; if any construction is carried out on the land, the plans thereof; if any other charge was existing on the land, the details thereof and any other facts which may have bearing on valuation of the property. The purchaser was also given opportunity to make submissions. Deputy Collector also put the purchaser to notice that if no evidence was shown to the contrary, the tentatively assessed value of the property on basis of Jantri rates would be finally accepted and on the basis of which the purchaser shall have to pay deficient stamp duty of Rs.27,70,767/- and fine of Rs.250/-. Admittedly in response to such notice also the purchaser produced no evidence before the Deputy Collector.
Eventually, in absence of any contrary evidence or material produced by the purchaser, the Deputy Collector by an order dated 11.11.2008 finalized the proceedings under Section 32A of the Act with respect to the sale deed presented by the purchaser for registration. He eventually assessed the value of the property at Rs.3,49,84,600/- on the basis of Jantri rates and demanded deficient stamp duty of Rs.27,70,767/- and imposed fine of Rs.250/-.
Purchaser though challenged such decision of the Deputy Collector dated 11.11.2008, same was beyond the period of limitation prescribed. His appeal/application under Section 53(1) of the Act was not entertained on the ground of delay and he was communicated the decision vide communication dated 4.7.2009. The purchaser thereupon approached the High Court by filing Special Civil Application No.12344/2009. The High Court by an order dated 26.11.2009 remitted the proceedings to the Chief Controlling Revenue Authority for decision on merits under Section 53(1) of the Act. Before the Chief Controlling Revenue Authority, the purchaser in memo of the appeal/application raised following main grounds :
A) That the order of the Deputy Collector was passed without giving reasonable opportunity of being heard.
B) Valuation of property is to be ascertained as provided in Rule 8 of the Bombay Stamp(Determination of Market Value of Property) Rules1984 (here-in-after referred to as"the Rules") C) For other properties in the same region, market value of Rs.400/- per sq. mtr. is accepted whereas in case of present purchaser, much higher valuation is adopted.
D) Though the sale deed was executed on 31.12.2005, agreement to sale between the purchaser and the erstwhile owner had taken place way back on 31.1.1994 in which sale consideration to be charged at the time of execution of sale deed was reflected.
The Chief Controlling Revenue Authority passed his order on 30.6.2010 after hearing the purchaser. Before the Chief Controlling Revenue Authority , the purchaser further elaborated above contentions and submitted that the value was accepted on basis of Jantri without any notice to the purchaser. That though the document was presented for registration in the year 2005, Jantri rates of 2008 were adopted and further that documents in region have been executed showing sale consideration at the rate of Rs.400/- per sq. mtr. These contentions were repelled by the Chief Controlling Revenue Authority by recording that in the notice issued by the Deputy Collector, it was clearly indicated that for ascertaining the market value, he proposed to rely on Jantri rates. Eventually, the Deputy Collector assessed the market value at the rate of Rs.1400/- per sq. mtr. on the basis of Jantri rates and accordingly worked out the stamp duty required to be affixed. The Chief Controlling Revenue Authority also recorded that the sale instances referred to by the purchaser are under revision prima facie finding that they do not carry adequate stamp duty. He also recorded that the valuation of year 2005 as per Jantri rates was proper.
Dissatisfied by the said order passed by the Chief Controlling Revenue Authority, purchaser sought Reference before this Court under Section 54(1A) of the Act whereupon the Chief Controlling Revenue Authority has drawn statement of facts and referred the question of adequacy or otherwise of valuation and resultant demand of stamp duty before this Court.
Appearing for the purchaser, learned senior advocate Shri Nanavati vehemently contended that the the Stamp Authorities mechanically adopted Jantri rates for the land in question discarding all other factors. He submitted that for the purpose of stamp duty, valuation of the property is to be made as provided in Rule 8 of the said Rules. In the present case, without following any of the guidelines provided under Rule 8, the valuation has been made. He further contended that in the vicinity of the land in question, several documents have been executed showing sale consideration at the rate of Rs.400/- per sq. mtr. In case of purchaser society, same has been adopted at Rs.1400/- per sq. mtr. which is wholly unjustified. He submitted that authorities completely ignored the fact that though the sale deed was registered on 31.12.2005, agreement to sale was entered way back in the year 1994.
8.1 In support of his contention that Jantri rates fixed by the Government cannot be the sole basis for ascertaining the market value of a property for the purpose of collection of stamp duty, counsel referred to several decisions of learned Single Judges of this Court.
On the other hand, appearing for the authorities, learned Government Pleader Shri P.K. Jani opposed the Reference contending that upon presentation of the documents before the Sub-Registrar, he being prima facie of the opinion that sale deed did not carry sufficient stamp duty, permitted the purchaser to affix the deficient stamp duty within 30 days, failing which, he indicated that document would be referred to the Deputy Collector for valuation in terms of Section 32A of the Act. He further submitted that the purchaser neither paid the stamp duty nor produced any evidence before the Deputy Collector also though notice was issued and opportunity was granted. He referred to and relied on Full Bench decision of this Court in case of Gorva Vibhag Co-operative Housing Societies Association & anr. v. State of Gujarat and ors. reported in 1992(1) GLR 654 wherein constitutional validity of several provisions of the said Act was under challenge. The Full Bench while upholding the validity of statutory provisions also placed reliance on Jantri rates fixed by the Government.
Having thus heard learned counsel for the parties, we find that the purchaser was given sufficient opportunity to produce necessary evidence to show that the Jantri rates did not reflect the correct value of the property on the date of the sale. The purchaser was also given the opportunity to produce evidence to show if there were any special circumstances or peculiar facts which would diminish the value of the property compared to the current rates prevailing in the area. The Deputy Collector had also indicated that if the purchaser did not produce any such evidence, he would proceed to finalise the valuation on the basis of Jantri rates. The purchaser produced no evidence before the Deputy Collector. The Deputy Collector thereupon proceeded to finalise the assessment of valuation of property on the basis of prevailing Jantri rates.
We may recall that initially upon presentation of document before the Sub-Registrar, he was not satisfied that the document was adequately stamped. He therefore, gave an opportunity to the purchaser to affix deficient stamp duty on the basis of valuation of the property as per the Jantri rates. When the purchaser did not pay such duty, the Sub-Registrar referred the question of valuation to the Deputy Collector in terms of Section 32A of the Act. The Deputy Collector put the purchaser to notice that he proposed to accept the Jantri rates for the purpose of valuation of the property in absence of any contrary evidence. He permitted the purchaser to produce such rebuttal evidence as may be available with him. In particular, he called upon the purchaser to produce documents relating to the property such as, order passed by the Collector converting the land into non agricultural use, building plans if there was any construction carried out, evidence with respect to any charge or encumbrances if there was any over the property which would reduce the price or any other relevant material which would have the effect of diminishing the value of the property. Admittedly, the purchaser produced no evidence, whereupon, the Deputy Collector proceeded to finalise the valuation on the basis of prevailing Jantri rates.
In further appeal to the Chief Controlling Revenue Authority, initially the purchaser approached belatedly. His appeal was therefore, not entertained on merits. Upon remand from the High Court however, the Chief Controlling Authority gave an opportunity of hearing to the purchaser. Contentions were dealt with and a speaking order was passed.
We see absolutely no reason to interfere. The authorities below adopted the prevailing Jantri rates for the purpose of valuation of the property after giving opportunity to the purchaser to produce rebuttal evidence. As already noted, before the Deputy Collector no such evidence was produced. Even before the Chief Controlling Revenue Authority, except for stating that the agreement to sale reflected the correct sale consideration, no further evidence was produced. The contention that the Deputy Collector proceeded to adopt Jantri rates for valuation without notice is also not tenable. As noted, the purchaser was informed that the tentative calculation of deficient stamp is on the basis of Jantri rates. He had also given opportunity to produce any evidence to discard such valuation. Contention that in the vicinity, other documents were registered at the rate of Rs.400/- per sq. mtr. also cannot be accepted. Firstly, the Chief Controlling Revenue Authority has recorded that such documents are also under revision under Section 53A of the Act. Section 53A of the Act empowers the Chief Controlling Revenue Authority to suo-motu examine an order of the Collector with respect to stamp duty and to pass order of recovery of deficient stamp duty if he finds that any instrument carries less duty than leviable. Besides we may also notice that these documents were executed in the year 1997, 2001 and 2002 meaning several years before the present purchaser's documents were executed. It was not seriously contended before us that the Jantri rates adopted were for the year 2005 and not of year 2008. Facts in all References are similar. We have not separately noted these facts here.
In case of Gorva Vibhag Co-operative Housing Societies Association & anr.(supra), Full Bench traced the background leading to fixation of Jantri rates and observed as under :
"14.
In the affidavit-in-reply, it has been pointed out that the amendment in the Bombay Stamp Act is made after due deliberation and after taking into consideration various observations made by different Committees. It is stated that Santhanam Committee constituted by the Government of India for prevention of corruption had inter alia made the following observations and recommendations :
"32 To buy and sell properties at pries much greater that those recorded in the conveyance deeds has become a common method of cheating the Central Government of Income Tax and other Taxes and the State Government of the stamp duty and a convenient method of transferring black money. If in some manner, the Central and the State Governments, or some special Corporations set up for the purpose can be empowered to step in and acquire such properties at the stated value, or even at a small premium when it is considered that the properties have been deliberately under-valued, it will strike a blow against black money."
xxx
16. It is further stated thereafter the Gujarat Taxation Inquiry Commission was constituted by the State Government in the 1978 to review all State taxes under the Chairmanship of Dr.R.J.Chelliah. That Commission submitted its report in the year 1980. The Commission suggested for levy of stamp duty on the basis of market value of the property involved in the instrument of conveyance and at the same time Statewise valuation organisation be set up for making a continuous valuation of non-agricultural properties particularly in urban areas. The valuation department would work out 'minimum values' for properties of different kinds in different localities in all the cities and towns. These 'minimum values' would in effect be conservatively estimated market values and would become the norms that would be given to registering officers. The Commission further expressed its view that insofar as the minimum values are carefully estimated, most of the parties who come for registering transactions involving properties would prefer to pay duty on the basis of the norms rather than to challenge them and resort to appeal. The Commission also recommended reduction of stamp duty.
17. The State Government thereafter constituted Stamp Duty Review Committee in 1981 to examine and to report to the Government in regard to the major recommendations of the commission pertaining to stamp duties. On the basis of the recommendation,the State Government created a Valuation Organisation Department in 1982 headed by the Superintending Engineer at State level and three Division Officers at Ahmedabad, Vadodara and Rajkot headed by the Executive Engineer, assisted by the Deputy Executive Engineer, Assistant Engineer drawn from the Building & Communication Department.
18. In the affidavit-in-reply, it is further pointed out that the Valuation Organisation Committee has started working in the month of October 1982. For the valuation of real properties it has resorted to established prevailing methods, that is,
(i) Comparative method;
(ii) Valuation based on cost known as land and building method;
(iii) Belting method; and
(iv) Abstractive method also known as residual theory or rental method or income capitalisation method.
For our purpose, further details which are given in the affidavit-in-reply how the valuation Organisation Department determines the value of the property in different zones are not required to be narrated here."
We may also notice that in para.31 of the said decision, the Bench recorded the detailed procedure to be followed as per the provisions of the Act and the Rules made thereunder in case of dispute relating to stamp duty. In the present case entire procedure has been followed.
In the result, we find no infirmity in the orders passed by the Stamp Duty authorities. These References are therefore, rejected.
(S.J.Mukhopadhaya,C.J.) (Akil Kureshi,J.) (Harsha Devani,J.) (raghu) At this stage, learned counsel for the applicant prayed for stay of this judgement for a period of eight weeks. We see no reason to accede to this request. The request is therefore, turned down.
(S.J.Mukhopadhaya,C.J.) (Akil Kureshi,J.) (Harsha Devani,J.) Top