Allahabad High Court
Mohd. Qasim Khan And Anr vs Chief Controlling Revenue Auth. Board ... on 7 April, 2022
Author: Sangeeta Chandra
Bench: Sangeeta Chandra
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR Court No. - 5 Case:- WRIT - C No. - 7909 of 2016 Petitioner :- Mohd. Qasim Khan And Anr Respondent :- Chief Controlling Revenue Auth. Board Of Revenue Alld. And Ors Counsel for Petitioner :- Uma Shankar Sahai,Deo Prakash Srivastava,Priti Saxena Counsel for Respondent :- C.S.C With Case :- WRIT - C No. - 7933 of 2016 Petitioner :- Mohd Qasim Khan And Anr. Respondent :- Chief Controlling Revenue Authority Board Of Revenue Up Andors Counsel for Petitioner :- Priti Saxena,Deo Prakash Srivastava,Uma Shankar Sahai Counsel for Respondent :- C.S.C Hon'ble Mrs. Sangeeta Chandra,J.
(Oral)
1. Heard learned counsel for the petitioner and the learned Standing Counsel appearing on behalf of the State Respondents.
2. It is the case of the petitioners that the petitioners had bought two plots of land situated in Village Obri Deeh, Pargana Sadaullah Nagar, Tehsil Utraula, District Balrampur through sale deed dated 17.03.2008 from One Shri Ahmad Rasheed. Plot No. 1697 admeasuring 0.2390 hectares was bought for total sale consideration of Rs. 1,75,000/- only, Plot No. 1696 admeasuring as 0.2390 hectares was also purchased which is adjacent land through sale deed dated 05.03.2008, for a sale consideration of Rs. 1,75,000/- from the same vendor i.e. Shri Ahmad Rasheed. No notice was ever served upon the petitioner for initiation of proceedings under Section 47A (3) of the Stamp Act till 2014. After six years from the date of the sale deed i.e. on 15.11.2014, the Assistant Commissioner (Stamp), Balrampur with reference to a letter dated 20.10.2014 sent by the District Collector carried out the spot inspection of the land in question and submitted his report. The petitioner having been issued notice for the first time after the report dated 15.11.2014 submitted his objections, but the same were not considered.
3. It has been submitted that in the impugned order mention has wrongly been made that the proceedings were initiated on the report of the Sub-Registrar, Utraula dated 18.03.2008 which was approved by the Assistant Inspector General (Registration) on 19.03.2008. Fraudulent order sheet were prepared in the Court of opposite party no.3 i.e. Collector, Balrampur showing that on 30.05.2008, the case was put up for orders and date fixed for 02.07.2008 for service of notice. Thereafter, 77 dates had been fixed from 20.08.2008 till 10.02.2014 but no report regarding service of notice on the petitioners was submitted then on 10.03.2014 an order was passed fixing 28.04.2014 for arguments. On 19.05.2014, an order was passed for issuance of notice to the petitioner again and date of 16.06.2014 was fixed. It was for the first time after such date was fixed that notice was issued to the petitioners. The petitioners put in appearance on 23.01.2014 and sought time for filing objections. Time was granted and date of 08.09.2014 was fixed for filing objections. The petitioners filed their objections on 20.09.2014 alongwith an application for spot inspection to be done. Spot inspection was not done and a fraudulent report submitted on 15.11.2014 on the basis of which the impugned order was passed.
4. Learned counsel for the petitioner had submitted that under Section 47A of the Stamp Act, if an instrument is undervalued immediately after presentation of such instrument and before accepting it for registration, the Registrar/Registering Officer shall require the person liable to pay stamp duty, to pay deficient stamp duty and on failure to do so return the instrument for presenting again. Under Section 47A (3) of the Act 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 authorised by the State Government in that behalf, initiate proceedings with respect to deficiency in payment of stamp within four years from the date of registration of any instrument, and examine the instrument with regard to correctness of the market value of the property and if, after such examination he has reason to believe that the market value of the such property has not been truly set forth in the instrument, he may determine the market value of the duty payable thereon.
5. It has been submitted that under the Proviso of Section 47A(3), an action can be initiated even after a lapse of four years from the date of registration of instrument, but prior permission of the State Government is required. No prior permission has been taken, but the sale deed executed in March, 2008 have been questioned by means of notice issued in November, 2014.
6. It has also been argued that under Section 47-A of the Stamp Act the Collector must first find out the correct market value of the property and to determine the same he must carrt out an inquiry, which should be in accordance with Rule 7 of the U. P. Stamp (Valuation of Property) Rules, 1997, which requires that on receipt of reference, or where the action is proposed to be taken Suo Motu under Section 47-A, the Collector shall issue notice to the parties to the instrument to show cause within thirty days of the receipt of such notice and he may admit oral and documentary evidence, if any, produced by the parties to the instrument and to satisfy himself as to the correctness of the market value of the property call for any information from any public office or authority or may inspect the property after due notice to the parties, and after considering the representation of the parties, he shall determine the market value of the property and the duty payable thereon. If such market value is found to be undervalued and the instrument not duly stamped, necessary action can be taken in respect of the same according to the relevant provisions of the Act.
7. It has been submitted on the basis of the pleadings on record that two agricultural plots No. 1696 and 1697 admeasuing .02390 hectares each, were bought by the petitioners, for agricultural purposes at the rate of Rs. 1,75,000/- each as sale consideration. On the date of sale deed, the Collector's Circle Rate list of 2008 was applicable. The petitioners paid 25% extra because the land in question was in the vicinity of Abadi and 25% more also because the land is question was situated on a Link road. The total valuation having been calculated by the petitioners on the basis of Collectors Circle Rate list of 2008, the stamp duty at the rate of 8% on total valuation was paid and also Registration fee. The petitioners having paid additional stamp duty to the extent of 25% + 25 %, there was no deliberate under valuation of the instrument. The petitioners' objections regarding the land being agricultural in nature were ignored only because the land was situated adjacent to the Link road and commercial establishments for example a mobile talkies, which was disfunctional was found to be existing on an adjacent plot of land. The inspection having been done after six years of the date of sale deed was vitiated. Initially Circle Rate of Rs. 3,500/- for commercial land was proposed to be levied, but later on land having been determined as residential, Rs.2,200/- per sqare meter was determined as the market value/circle rate on the basis of which deficiency in stamp duty of Rs. 3,94,640/- + a 10% penalty thereon of Rs. 39,464/- was determined with liability to pay simple interest at the Rate of 1.5% per month till the date of actual payment. Aggrieved by the order dated 27.04.2015, the petitioner filed Stamp Appeal No. 72 of 2015-16 and also Stamp Appeal No. 73 of 2015-16. The petitioners raised all grounds regarding delayed initiation of proceedings as also wrong determination of value of land, but the Chief Controller Revenue Authority, Board of Revenue decided the Appeal on irrelevant considerations, holding that the land in question had been surrounded by Commercial premises for example a road, a playground, a girls school and a mobile talkies.
8. It has been submitted by the petitioners that after the Appeal was rejected on 17.02.2016, this Court pleased to pass an Interim Order on 02.05.2016 that in case, the petitioners deposited a further sum of Rs. 1,00,000/- in addition to the 1/3 statutory amount already deposited for admission of Appeal, the recovery proceedings against the petitioners shall remained stayed. The petitioners have complied with such order and have deposited the amount as a result, further recovery proceedings have remained stayed.
9. Learned counsel for the State Respondents has pointed out from the order impugned that the sale deed were executed with respect to two plots of land in March, 2008 and on 18 March, 2018 itself, an on the Spot Inspection was carried out by the Assistant Commissioner and a Report submitted regarding under valuation of the property. On the said Report a Reference was made to the Collector. Notices were issued to the petitioners and after such notices were served the petitioners' appeared and filed objections saying that the property in question was inspected without associating them with such inspection. On the basis of such objections, the Collector issued a letter on 20.10.2014 to the Assistant Commissioner (Stamp), Balrampur for carrying out on the spot inspection alongwith family members of the petitioners and in their presence. Consequently, the Assistant Commissioner(Stamp) carried out the spot inspection on 13.11.2014 and submitted his report on 15.11.2014 which was filed as Annexure-4 to the petition. With respect to Plot No. 1696 admeasuring 0.239 hectares, the sale had been carried out showing agricultural rates of Rs.9,00,000/- per hectares, the Circle Rate at the time of such sale for commercial land was Rs.3,500/- per square meter. In the Circle Rate list at serial no.16 mention was made of location of land near either a State or District or painted Link road or Kharanja Marg and accordingly, 70% or 50% or 25 % or 15% respectively of additional value was to be fixed. The land in question i.e. Plot No. 1696 was situated adjacent to a painted road and also near Abadi and just adjacent to such land was a touring Talkies, though disfunctional. The land being discovered to be commercial in nature in the initial on the spot inspection carried out on 08.07.2008 reference of which has been made in the Report dated 15.04.2008 it had correctly been valued it on commercial rate of Rs.3,500/- per square meter.
10. Similarly, Plot No. 1697 was situated next to the same painted Link road and a playground was situated towards south and west of the plot, and a Stage was also constructed for holding of public functions towards south of such plot, and towards north was the building of the old touring Talkies, which was now disfunctional. The land being situated in the midst of Abadi and no agricultural activities having been carried out either on the said plots of land or on adjacent and surroundings plots of land, and a girl school situated next to it, it could not be said that the land in question was agricultural, therefore, the agricultural rate of Rs.9,00,000/- per hectare was wrongly mentioned in the sale deed. The commercial rate of 2008 circle list was Rs.3,500/- per square meter and residential rate was Rs.2,200/- per square meter. It was proposed to impose residential rate of Rs. 2,200/- per square meter instead of the initial proposal of imposing commercial rate of Rs.3,500/- per square meter in the report dated 15.11.2014.
11. Learned counsel for the petitioner has placed reliance upon judgment rendered by a Coordinate Bench of this Court in the case of Sudama vs. Chief Controlling Revenue Authority U.P. Allahabad & Others in Writ C No.-19334 of 1998 where this Court relied upon a Division Bench judgement in Rakesh Chandra Mittal and Others Vs. State of U.P. and Another, 2004 (5) AWC 3952 that where no finding had been returned with regard to the exact situation of land and the inspection was done by the Tehsildar after more than three and a half year for the execution of sale deed the market value determination much later on, on the basis of any subsequent improvement or change in nature or user of land resulting in enhanced market value cannot be taken into account. Value of the property on the date of the execution of the documents alone can be considered for the purpose of determination of proper stamp duty.
12. The Coordinate Bench has also placed reliance upon the judgment render in Smt. Sushila Verma Vs. State of U.P. and Others, 2006 (2) AWC 1492 and Nar Singh Das Agrawal Vs. Chief Controlling Revenue Authority, Board of Revenue, Allahabad and Others , 2007 (1) AWC 727 where market value of agricultural land was held to be on the basis of per hectare and not on basis of Circle Rates for residential plots determined on per square meter basis. Just because the land in question was situated next to a road, it could not be inferred that it was commercial in nature. The Court observed on the basis of the facts of the particular case in Sudama (Supra) that merely because the land in dispute was 20 meters distant from the residential area will not convert the land from agricultural to residential or commercial land. The Court had set aside the order passed by the Additional District Magistrate (Finance & Revenue) and had remitted the matter for fresh consideration.
13. The learned counsel for the petitioners has also placed reliance upon the judgement passed by the Coordinate Bench of this Court in the case of Aniruddha Kumar and Ashwini Kumar Vs. Chief Controlling Revenue Authority, 2000 (3) AWC 2587 and Paragraph 19, 20 and 21 thereof, wherein the Court had observed that market value is to be determined on the basis of value that would satisfy the vendor, therefore, the question of future potential cannot be a factor for determining the market value of such land for the purpose of stamp duty payable under the Stamp Act. The vendee pays the price that satisfying the vendor and on the utility of the land as on the date of transfer by the vendor and as such the land was an agricultural land, it has to be treated as such and the valuation has to be done accordingly. Whether in future the purchaser puts to the land into residential use or changes the character is immaterial for the payment of stamp duty.
14. The Court had placed reliance upon Prakashwati Vs. Chief Controlling Revenue Authority, Board of Revenue, Allahabad, 1996 AWC 1331 whether the Supreme Court had held that situation of a property in an area close to a decent colony could not by itself make it a part thereof, and it should not be a factor for approach of the authority in determining the market value.
15. The learned counsel for the petitioner has also placed reliance judgment rendered by the Division Bench of this Court in Neelu Chopra & Others vs. State of U.P. and Others, 2008 (6) ALJ 507 and paragraph 9, 10 and 11 thereof which refers to limitation under Section 47-A (3) of the Act for impounding an instrument or initiation of proceedings of recovery of deficiency in stamp duty saying that four years period has to be completed from the date of registration of the instrument. In the said case, notice was issued on 26.03.1991 though sale deed was registered on 31.12.1984 i.e. after more than six years from the date of execution of the instrument. The Court did not find the explanation given by the opposite parties in the counter affidavit for initiation of proceedings beyond the limitation of four years as sufficient and had quashed the proceedings.
16. Learned Standing Counsel on the other hand, on the basis of judgment rendered by the Full Bench of this Court in Smt. Pushpa Sareen Vs. State of U. P. and Others, 2015 (33) LCD 1575 has argued that the question with regard to correct valuation of property only on the assumption that the same is likely to be used for commercial purpose or presumed future prospective use of the land, was considered including the question of declaration under Section 143 of the U.P.Z.A.L.R. Act and in the absence thereof a presumption arising in favour of the party that the land was used for agricultural purposes. The Full Bench observed that the power under Section 47-A was to be used by the Collector to determine the correct "market value" of the property and the Collector has the power to fix valuation of the plot taking into account the future prospective use of the land. It held that stamp duty is a levy which is imposed not on the transaction but on the instrument. The Court observed that its attention had been drawn to certain judgements of Single Judges of the Court which had taken the view that the market value of the land could not be determined with reference of the land to which the buyers intends to put it in the future. However, the Court observed that the power under Section 47-A is for the Collector to determine the actual market value of the property, he 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 observed in paragraphs 27, 28 and 29 thus:-
"27. 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 I on 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.
28. 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.
29. 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 v. 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."
17. Learned counsel for the State Respondents has also placed reliance upon judgement rendered by Coordinate Bench of this Court in Shakeel Ahmad Vs. Additional Commissioner, Judicial, Faizabad, 2019 (37) LCD 2423 whether this Court had considered the judgement rendered by the Full Bench in Smt. Pushpa Sareen(Supra) and observed in paragraphs 11, 12 and 13 thus:
"11. It is no doubt true that several Division Benches of this Court before the Full Bench decision in the case of Pushpa Sareen (supra) was rendered on 12.2.2015, had held that future potential for residential or commercial use of the property cannot lead to a presumption that the sale deed has been deliberately undervalued, if the land in question continues to be recorded as agricultural land and no declaration under Section 143 of U.P.Z.A. and L.R. Act for change of land user has been made by the competent authority. However, even from a perusal of the Full Bench rendered by this Court on several questions referred by the Chief Controlling Revenue Authority to it, it is apparent that the Full Bench while answering the second question i.e. 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?, has observed in Paragraph nos.20 to 29 of the decision that a Collector under the second clause of Section 47-A of the Act is empowered to determine the 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 (circle rate), as an obligation is cast upon the Collector to properly ascertain the true value of the property for which, conveyance has been registered and he is not bound by the apparent tenor of the instrument. He can even decide the real nature of the transaction and value of such property, ignoring apparent mention therein of its nature either as a lease deed, sale deed or a partnership deed. The Collector can look into the material placed before him and even conduct an enquiry to ascertain what is the likely value of such property in the area surrounding the property in question. If such enquiry gives him material to test, prima facie, whether the description of valuation in an instrument is proper or not, he may issue notice and thereafter, hear the parties and then pass appropriate orders. The Collector while determining the true value of an instrument may also look into the circle rate, but the circle rate does not take away the right of a person to show that the property in question is correctly valued as he gets an opportunity in case of under valuation to prove it before the Collector after reference is made.
12. The determination may be made on the basis of the market value of the property on the date of the instrument and the Collector should 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 of the land to which, the land can be put on the date of execution of the instrument. However, the Collector cannot launch upon a speculative enquiry about the prospective use to which, the land may be put to use at an uncertain future date, but the market value of the property can be determined with reference to the use to which the land is capable reasonably of being put to use 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 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."
13. In Para-28 of the judgment, the Hon'ble Full Bench has referred to the judgment rendered by the Supreme Court in the case of State of U.P. and others v. Ambrish Tandon and another, (2012) 5 SCC 566, and has observed that 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."
18. Learned counsel for the State Respondent has pointed out from the counter affidavit, a judgement rendered by a Coordinate Bench of this Court in Wassi Ur Rehman and another Vs. Commissioner Moradabad Division and Others in Writ C. No. 47533 of 2010 decided on 26.02.2015 wherein the Coordinate Bench had considered earlier judgements rendered by the Coordinate Bench and had observed that the person presenting the instrument is required to disclose the nature of economic activity, industrial development, if any, prevailing in the locality where the property is situated and and to mention any other special feature affecting the value of the property as per Rule 3 and Rule 6 of the Stamp Rules, 1997. The Court observed that the land being only 720 square meter (in the instant case land is around 2,093 square meter) it was highly unlikely that such land was to be used for agricultural purposes the petitioner had not filed any exemplar to show that agricultural activity is the predominant activity in the vicinity where the property was situated. Merely, because the property was recorded as agricultural property and no declaration under Section 143 of the U.P.Z.A.L.R. Act was made, it could not be said that the property did not have commercial potential on the date of execution of sale deed.
19. In some and substance the view that has now been crystallized after the decision of the Full Bench of this Court is that it is for the Collector to determine the correct market value of the land not on the basis of any declaration under Section 143 of the U.P.Z.A.L.R. Act but on the basis of nature and use of the property as actually determined on the spot, coupled with the predominant activity in the locality where the property is situated.
20. This Court having considered the judgements rendered by the Coordinate Bench and also by the Full Bench of this Court finds from a perusal of this sale deed filed as Annexure to the petitions that the land in question was not bought for the purpose of carrying out agricultural activity, it had been bought for commercial purposes. With regard to the specific plea raised by the petitioner that no notice was ever served upon him and therefore it can be presumed that proceedings were initiated only in 2014 and thus barred by limitation, this Court has found, perusal of pleadings on record including the orders impugned, and the report dated 15.11.2014, that the proceedings were initiated on the basis of an on spot inspection carried out on 08.04.2008, the reference itself was made on 15.04.2008. Just because the petitioner avoided service till 2014, it cannot be said that the proceedings were initiated in 2014.
21. The petitioner has not disputed in his petitions the actual location of the plots in question and on the spot inspection report which was carried out in his presence on 15.11.2014. The land being commercial in nature. This Court found no good ground to show interference in the orders impugned.
22. These petitions stand dismissed.
23. No order as to costs.
Order Date :- 7.4.2022 Darpan Sharma