Allahabad High Court
Ram Yagya Tara Devi Chaudhary Kanya ... vs Chief Controlling Revenue Authority/ ... on 3 March, 2023
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. 07 Reserved On: 12.1.2023 Delivered on: 3.3.2023 WRIT - C No. - 43196/2018 Petitioner :- Ram Yagya Devi Chaudhary Kanya Inter Collegge Respondent :- Chief controlling Revenue Authority/Commissioner, Basti Division and Others Counsel for Petitioner:- Ganesh Datt Mishra Counsel for Respondent :- B.N. Pathak, Standing Counsel Hon'ble Chandra Kumar Rai,J.
1. Heard Ganesh Datt Mishra, learned counsel for the petitioner and Sri B.N. Pathak, learned standing counsel for the state-respondents.
2. Brief facts of the case are that petitioner is an educational institution and is run by a society duly registered under the Society Registration Act, 1860. Ram Yagya Chaudhary is the Manager of the Institution and he executed a registered gift deed of his agricultural land in favour of the petitioner's institution on 20.9.2016 for an area, 0.2020 hectare of plot no.16. Plot no.16 was the agricultural plot at the time of the execution of the aforementioned gift deed which was executed on 20.9.2016 and after execution of the gift deed, construction of the building for the purpose of establishment of the petitioner's institution was started. After completion of the building of the petitioner's institution, education to the students was started for the session 2017-2018. The Assistant Inspector General (Registration) vide letter dated 18.11.2016, reported that gift deed was undervalue and the valuation of the gift deed was not shown on the market value. The Assistant Inspector General (Registration) referred the dispute of undervaluation of the gift deed under Section 47-A of the Indian Stamp Act to the Collector, accordingly, notice was issued to the petitioner. Petitioner filed his objection before respondent no.2 to the notice issued to him. Respondent no.2 on the reference made by respondent no.3, registered the case as Stamp Case No.27/281/D-2016171404706 (State vs. Ram Yagya Tara Devi Chaudhary Inter College), under Section 47A of the Stamp Act. Respondent no.2 vide order dated 29.5.2017 has held that there is deficient of stamp duty, amounting to Rs.8,43,050/- and penalty of Rs.8,43,050/- was imposed along with 1.5 % interest per month on the deficient stamp duty. The petitioner challenged the order dated 29.5.2017 through appeal before respondent no.1 along with stay application. The appeal filed by the petitioner was treated as revision. The respondent no.1 has admitted the revision but rejected the stay application filed by the petitioner. Since stay application filed by the petitioner was rejected, hence petitioner's institution deposited Rs.2,81,000/- in pursuance of the recovery proceedings before the Tehsildar on 21.11.2017. Against the rejection of the petitioner's stay application dated 27.7.2017, petitioner filed a Writ Petition No.3447 of 2018 before this Court which was disposed of vide order dated 25.1.2018, granting interim protection to the effect that further recovery in pursuance of the impugned order shall remain stayed and the revision shall be decided by the respondent no.1 within a period of 6 months. Respondent no.1 vide judgment dated 25.5.2018, dismissed the petitioner's revision, hence this writ petition.
3. This Court vide order dated 21.12.2018 passed the following interim order:-
"Heard learned counsel for the petitioner and learned Standing Counsel, who represents all the respondents.
As prayed by learned Standing Counsel, Sri Harish Chandra Dubey, four weeks' time is allowed to file the counter affidavit. Two weeks thereafter is allowed to the petitioner to file the rejoinder affidavit.
List this petition after expiry of eight weeks before the appropriate Court.
Subject to deposit of 50% of the deficient stamp amount, which in the instant case is to the tune of Rs. 4,21,500/- and sum of Rs. 1,00,000/- towards the amount fixed under the head of penalty, within a period of one month from today, the realization of the balance deficient stamp amount shall remain stayed till the next date of listing.
Any amount already deposited by the petitioner shall be adjusted towards the amount directed to be deposited.
List in February, 2019."
4. On 15.2.2019, 8.3.2019 and 29.3.2019, interim order granted by this Court stand extended. In pursuance of the aforementioned interim order, state-respondent has filed his counter affidavit. Petitioner has also filed his rejoinder affidavit in reply to the counter affidavit filed by the state-respondent.
5. Counsel for the petitioner submitted that plot no. 16 was recorded as agricultural plot at the time of the execution of the gift deed, as such, the proceedings initiated for deficiency of the stamp duty was wholly illegal. It is also submitted that plot no.16 was never declared as abadi or for non-agricultural purpose as provided under Section 143 of the U.P. Z.A. & L.R. Act, as such, the demand of deficient stamp duty, treating the plot as abadi plot is wholly illegal and arbitrary. It is further submitted that at the time of the execution of the gift deed, which was executed by the Manager of the petitioner's institution in favour of the institution, no consideration passed, as such, the demand of deficient stamp duty by the respondent authorities is wholly illegal. He further submitted that according to the provisions contained under Section 47-A of the Indian Stamp Act, the gift deed will not come under the purview of the provisions. He further submitted that the value of the property as provided under Article 33 of Schedule I B of the Stamp Act, will be applicable and the deficiency determined by the respondent nos. 1 & 2 on the basis of market value is absolutely illegal. Counsel for the petitioner further submitted that the documents regarding construction of the building of the petitioner's institution were filed before respondent no.2 which completely demonstrates that construction were raised after the execution of the gift deed, as such, the imposition of deficient stamp duty as well as penalty along with the interest is wholly illegal. It is further submitted that respondent nos. 1 & 2 have illegally held that constructions is 7 month's old at the time of the inspection. Counsel for the petitioner places reliance upon the judgment of this Court, reported in 2017 (136) RD 364, Vijay Kumar vs. Chief Controller, Board of Revenue and Others, to contend that the stamp duty on a gift deed cannot be levied exercising power under Section 47-A of the Indian Stamp Act. On the basis of the ratio of law laid down by this Court, learned counsel for the petitioner submitted that the impugned orders be set aside and the writ petition be allowed.
6. In reply, Sri B.N. Pathak, learned standing counsel submitted that the impugned order has been rightly passed and at the time of the inspection of the property in question, it has been found that just 50 mtrs. from the plot in question, a residential colony is situated, as such, the rate for agricultural plot cannot be fixed for payment of stamp duty. He submitted that the orders have been rightly passed taking into consideration the future potential value of the property in dispute. He also submitted that during spot inspection, it has been found that construction has been raised 7 month's before. He further places reliance upon Sections 27 & 47-A of the Indian Stamp Act in order to demonstrate that the power has been rightly exercised by the respondents against the petitioner to pay the deficient stamp duty as well as the penalty along with the interest. He lastly submitted that no interference is required in the matter and the writ petition is liable to be dismissed.
7. I have considered the arguments advanced by learned counsel for the parties and perused the records.
8. There is no dispute about the fact that the petitioner is an educational institution and a gift deed was executed by the Manager of the institution in respect of his personal agricultural plots in favour of the institution on 20.9.2016. There is also no dispute about the fact that at the time of the execution of the gift deed, the plot was recorded as agricultural plot in the revenue records.
9. It is relevant to mention that gift deed in question was executed on 20.9.2016 and the revenue record i.e. Khasara of 1423 Fasli demonstrate that disputed plot no.16 is an agricultural plot having crops in the plots and no construction is mentioned in the same, the aforementioned fact has been mentioned in Paragraph No. 5 of the writ petition annexing the Khasara of 1423 fasli as Annexure No.-5 to the writ petition. In counter affidavit the averment made in Paragraph No.5 of the writ petition has not been denied but it has been mentioned that stamp duty has been rightly fixed under impugned order.
10. The construction in the disputed plot no.16 was raised after execution of gift deed, the averment to this effect was made in Paragraph No.6 of the writ petition annexing the copy of the bills of construction, the state has replied the averment of Paragraph No.6 of the writ petition in Paragraph No.11 of the counter affidavit stating that construction which has been raised in the plot is not possible within period of two months.
11. Considering the averment made in the writ petition as well as in the counter affidavit alongwith revenue entry and construction bills relating to construction annexed with writ petition, it is established that plot in dispute i.e. plot no.16 was agricultural plot and no construction was lying in the plot no. 16.
12. Full bench of this Court in case of Smt. Pushpa Sareen vs. State of U.P., reported in 2015 (3) AWC 2856 has held that on the ground of future potential of the property, the stamp duty cannot be imposed in respect to the property in dispute. Paragraph nos. 28 to 30 of the aforesaid judgment will be relevant for consideration which are as follows:-
"28. 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.
29. 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.
30. 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 another11. 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."
13. The case law cited by the counsel for the petitioner in Vijay Kumar (supra) will be applicable in the present case wherein it has been held that the market value is not at all relevant for levying stamp duty on gift deed. The provision of Section 47-A of the Indian Stamp Act does not come into pay which necessitate the determination of the market value. Paragraph nos. 5 & 6 of the aforesaid judgment are relevant for perusal.
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.
6. The next judgment relied upon by the learned counsel for the petitioner is also of a learned Single Judge reported in 2005 (2) AWC 1087, Ram Khelawan alias Bachcha Vs State of U.P. and another wherein the facts of the case are similar to that of the present case and in that case also the land on the date of inspection was found to be vacant but deficiency of stamp duty was calculated treating the land in question to be of abadi use on the basis of its potential to be used as abadi and therefore, the court held that the land in question would have to be determined on the basis of its nature and status at the time of execution of the sale deed and not on the basis of the potential use to which the land can be put in future."
14. In recent judgment delivered on 27.1.2023 in Writ C No.- 2130 of 2020 Shiva Dutt Mishra Vs. Commissioner Gorakhpur Division and 2 Others, this court has followed the earlier judgment of this court in Vijai Kumar (Supra), Sumit Gupta (Supra) and Ram Khelawan (Supra) on the point of imposition of stamp duty on the gift deed in respect to agricultural plot. Paragraph No. 5,6 and 7 of the judgment rendered in Shiva Dutt Mishra (supra) is relevant which is as under:-
5. Above referred judgments are incorporated in latest judgment passed in Vijay Kumar (supra) and relevant paragraphs of judgment are mentioned hereinafter:
"6. The next judgment relied upon by the learned counsel for the petitioner is also of a learned Single Judge reported in 2005 (2) AWC 1087, Ram Khelawan alias Bachcha Vs State of U.P. and another wherein the facts of the case are similar to that of the present case and in that case also the land on the date of inspection was found to be vacant but deficiency of stamp duty was calculated treating the land in question to be of abadi use on the basis of its potential to be used as abadi and therefore, the court held that the land in question would have to be determined on the basis of its nature and status at the time of execution of the sale deed and not on the basis of the potential use to which the land can be put in future.
7. In my opinion, both the judgments referred to above squarely apply to the facts of the present case. In the present case also on the date of inspection, the land in question was agricultural land though lying vacant. There was no declaration under Section 143 of ZA & LR Act, 1950 changing the nature of the land from agricultural to non-agricultural and therefore, the stamp duty could not have been determined in respect of the said land on the basis of construction of colonies by builders in the nearby area."
15. Considering the ratio of law laid down by the Full Bench of this Court in Smt. Pushpa Sareen (supra) as well as by a Single Bench decision of this Court in Vijay Kumar (supra), the impugned orders passed on 29.5.2017 passed by respondent no.2 on 22.5.2018, passed by respondent no.2 are liable to be set aside and the same are hereby set aside.
16. The writ petition stands allowed. The amount deposited by the petitioner in pursuance to the order dated 29.5.2017 shall be refunded to the petitioner within a period of 2 months, from the date of production of the certified copy of the order of this Court, failing which, the respondent shall pay interest on the amount in question @ 6 % per annum, from the date, falling due for its payment.
Order Date :- 3.3.2023 C.Prakash (Chandra Kumar Rai, J.)