Allahabad High Court
State Of U P vs The Deputy Commissioner And 2 Others on 1 August, 2024
Author: Piyush Agrawal
Bench: Piyush Agrawal
HIGH COURT OF JUDICATURE AT ALLAHABAD Neutral Citation No. - 2024:AHC:123884 Court No. - 02 Case :- WRIT - C No. - 30805 of 2018 Petitioner :- State Of U P Respondent :- The Deputy Commissioner And 2 Others Counsel for Petitioner :- Sanjay Goswami Counsel for Respondent :- Harindra Prasad HON'BLE PIYUSH AGRAWAL,J.
1. Heard learned ACSC for the State - petitioner and Shri Harindra Prasad, learned counsel for the private respondents.
2. The instant writ petition has been filed against the impugned order dated 01.06.2017 passed by the Deputy Commissioner of Stamp, Kanpur/CCRA in Stamp Revision No. 221/Stamp/2017.
3. Learned ACSC submits that a gift deed in respect of a land measuring 236.06 square meters was executed on 06.11.2015 by the father of the respondent no. 2, Ram Prakash Gupta, in favour of his daughter-in-law, Smt. Nelu Gupta, wife of the respondent no. 2 after paying requisite stamp duty. The gift deed was valued as Rs. 25,96,655/- and a sum of Rs. 1,72,000/- was paid as stamp duty. On 16.02.2016, a reference was made by the Sub Divisional Officer stating that the land in question falls on a segment in the circle rate list and therefore, there is a deficiency of stamp duty. On the basis of the reference, the Collector, Stamps registered a case under section 47-A/33 of the Indian Stamp Act and thereafter, vide order dated 04.03.2017, imposed deficiency of stamp duty, together with interest and penalty. Aggrieved by the said order, the respondent no. 2 filed revision, which has been allowed by the impugned order dated 01.06.2017. Hence, this writ petition.
4. Learned ACSC further submits that the respondent no. 1 has erred in holding that the release of a property by co-owner in favour of another would not fall within the definition of conveyance. He further submits that by giving a nomenclature as 'gift deed', the property in question was transferred/sold to the private respondents. He prays for allowing the writ petition.
5. Learned counsel for the private respondents submits that it was a gift deed which was gifted by the father-in-law to his daughter-in-law and the same was valued properly and the stamp duty was rightly paid. He further submits that the impugned order has been passed considering the materials available on record. He prays for dismissal of the writ petition.
6. After hearing learned counsel for the parties, the Court has perused the record.
7. It is not in dispute that the gift deed was executed on 06.11.2015 in favour of the private respondent by his father-in-law. Once the gift deed is not in dispute, the authorities below were not justified in initiating the proceedings under section 47-A of the Indian Stamp Act.
8. This Court in Santosh Gupta Vs. State of U.P. & 4 Others [Writ C No. 22313/2023, decided on 24.07.2024] has held as under:-
"The issue in hand is not res integra as this Court in the case of Sumit Gupta (supra) has already decided the present controversy.
The relevant part of the judgement passed in the case of Sumit Gupta (supra) is quoted hereunder:
A Gift-deed is chargeable to stamp duty under under Article 33 of Schedule 1-B of the Act, which is reproduced as under:
Description of instrument Proper Stamp-duty
33.
Gift - Instrument of, not being a Settlement (No.58), or Will or Transfer (No.62) Hiring Agreement or Agreement of Service - See "Agreement" (No.5) The same duty as a Conveyance No.23 clause (a) for a consideration equal to the value of the property.
Note: Emphasis supplied
8. It provides that a gift is chargeable to stamp duty as a conveyance provided under Article 23 clause (a) for a consideration equal to the value of the property.
9. It may be noted that in the above Article words used are "value of the property" as distinguished from the "market value", meaning thereby that for the purposes of determining stamp duty on a gift-deed market value is not required to be mentioned/determined. The disclosure of the value of the property in the gift is sufficient for the purposes of payment of stamp duty.
10. A perusal of Section 47-A of the Act indicates that it comes into play only where the market value of the property in the instrument is disclosed to be lesser than that determined in accordance with the Rules made under the Act. So disclosure of market value of the property is mandatory for the applicability of Section 47-A of the Act and it should be less than the market value determined under the Rules ie. the circle rate prescribed/notified under the Act/Rules.
11. Thus, there is a clear departure in the language used in Article 33 of the Schedule I-B of the Act and Section 47-A of the Act. Section 47-A of the Act uses the expression in "market value" whereas for levying stamp duty on a gift-deed Article 33 of Schedule 1-B of the Act uses the expression "value of the property".
12. The legislature in its wisdom has differently used the words "value of the property"' and "market value" in the Act. It is not without purpose. "Market value" refers to the value of the property prevailing in the market on which the prospective purchaser is ready and willing to purchase and seller is ready and willing to sell the property in the ordinary course of business. Therefore, market value is a bilateral transaction depended upon the will of two persons. On the other hand, 'value' simply connotes the estimated monetary worth of the property in the eyes of the seller and is in the nature of a unilateral act.
13. In conveyance, such as sale of property, generally two parties, ie. seller and purchaser are involved and the market value of the property is determined on the basis of the market forces ie., demand and supply of the commodity. In a deed of gift it is only the person making the gift who is relevant. It is up to him how he values his property. The value of the property in the eyes of the person receiving the gift is not material. This being the situation, the legislature has deliberately used the word "value of the property" in Article 33 while subjecting the gift to stamp duty and has refrained from using the term "market value".
14. Accordingly, when market value is not at all relevant for levying stamp duty on a gift deed the provisions of Section 47-A of the Act does not come into play which necessitate determination of market value.
Similar view has been taken in the case of Vijay Kumar (supra) of which the relevant part is quoted hereunder:-
5. Reliance has been placed upon a judgment of a learned Single Judge of this Court in Writ petition (C) no. 66621 of 2010, Sumit Gupta vs State of U.P. and others. Relevant extract of the judgement read as under:-
Thus, there is a clear departure in the language used in Article 33 of the Schedule I-B of the Act and Section 47-A of the Act. Section 47-A of the Act uses the expression in "market value" whereas for levying stamp duty on a gift-deed Article 33 of Schedule 1-B of the Act uses the expression "value of the property".
The legislature in its wisdom has differently used the words "value of the property"' and "market value" in the Act. It is not without purpose. "Market value" refers to the value of the property prevailing in the market on which the prospective purchaser is ready and willing to purchase and seller is ready and willing to sell the property in the ordinary course of business. Therefore, market value is a bilateral transaction depended upon the will of two persons. On the other hand, 'value' simply connotes the estimated monetary worth of the property in the eyes of the seller and is in the nature of a unilateral act.
In conveyance, such as sale of property, generally two parties, ie. seller and purchaser are involved and the market value of the property is determined on the basis of the market forces ie., demand and supply of the commodity. In a deed of gift it is only the person making the gift who is relevant. It is up to him how he values his property. The value of the property in the eyes of the person receiving the gift is not material. This being the situation, the legislature has deliberately used the word "value of the property" in Article 33 while subjecting the gift to stamp duty and has refrained from using the term "market value".
Accordingly, when market value is not at all relevant for levying stamp duty on a gift deed the provisions of Section 47-A of the Act does not come into play which necessitate determination of market value."
10. Recently this Court in the case of Sheel Mohan Bansal (supra) has held as under :-
6. In light of the above judgement, it is patently clear that for levying stamp duty on a gift deed, the provisions of Section 47-A of the Act do not come into play. Furthermore, there is no requirement of determination of market value in case of gift deeds. This judgement was accepted by the authorities and has attained finality. The aforesaid judgment was thereafter cited in Vijay Kumar (Supra) and a coordinate Bench has held that Section 47-A of the Act would have no application whatsoever. The said principle was thereafter, reiterated by a coordinate Bench of this Court in Sai Janseva And Another (Supra).
7. Upon a perusal of the judgements provided above, it is clear that in case of a gift deed that has been accepted and registered, the authorities cannot take reference to Sub-section (3) of Section 47-A of the Act and suo moto seek additional stamp duty based on the market value of the property. However, the question arises that in the case of under valuation that may have been done by the executor of the instrument what recourse is available to the authorities.
8. In my view, the Indian Stamp Act, 1899 provides for various provisions that may be acted upon that are provided in Sections 27, 33, 62, 62-A, 64 and 64-B, wherein, if adequate stamp duty has not been affixed, the authorities can proceed against the executor for prosecution and collection of deficit stamp duty. However, the authorities cannot proceed under Section 47-A of the Act which is what has been done in the present case. It is also seen, that the respondents have not taken into account the judgements cited by the petitioner and proceeded to adjudicate upon their whims and fancies. It was incumbent upon the authorities to have taken note of the judgements cited by the petitioner and pass a reasoned order on the same, which has clearly not been done in the present case. The authorities are directed to be far more cautious in their approach in quasi judicial activities being carried out by them"
9. In view of the aforesaid facts & circumstances of the case, no interference is called for by this Court.
10. The writ petition lacks merit and is, accordingly, dismissed.
Order Date:-01/08/2024 Amit Mishra