Allahabad High Court
Shiv Kumar vs Chief Controlling Revenue Authority ... on 24 January, 2023
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R Reserved on 02.12.2022 Delivered on 24.01.2023. Court No. - 72 Case :- WRIT - C No. - 39549 of 1998 Petitioner :- Shiv Kumar Respondent :- Chief Controlling Revenue Authority U.P./B.R. And Ors Counsel for Petitioner :- T.S. Dabas,Arpit Agarwal Counsel for Respondent :- C.S.C. Hon'ble Umesh Chandra Sharma, J.
This writ petition has been filed for quashing the order dated 24.08.1098 Annexure 5 passed by respondent no. 1 - CCRA U.P / Board of Revenue at Allahabad and the order dated 14.06.1994 annexure no. 2 passed by respondent no. 2 i.e. Additional Collector (F&R), District Saharanpur, by which both the authorities have impounded the deed and imposed penalty for Rs.16,325/- directed to make the deficit and complete the deficiency of stamp duty of Rs.16,675/-. Total Rs. 33,000/- and directed to recover the same from the petitioner.
In brief, facts of the case are that the petitioner purchased one room on the ground floor of an area 23.24 Sq. Yard situated in Mohalla Railway Saharanpur for the consideration of Rs. 35,000/- and paid the stamp duty accordingly at the time of purchase of shop. After the execution of the sale-deed in question, the Sub Registrar referred the sale deed to respondent no. 2 for correct the valuation for stamp purposes with report that after spot inspection, it appears that the property exists in a posh locality has been purchased for commercial purposes and not for residential purposes. According to him Rs. 500/- per month may be the rent of the property in question. The monthly rent of the property is Rs. 100/- per month, as the petitioner was an old tenant.
Notice was issued to the petitioner to file objection (annexure no.1) dated 21.04.1994 before the respondent no. 2 with the allegation/objection that the adequate stamp duty was not paid by him. The property in question was in his tenancy at the time of purchase. The petitioner was not provided an opportunity to file objection against the report of the Sub Registrar and to produce the evidence. The report of the Sub-Registrar does not contains the correct facts and depicts incorrect picture of the spot.
The petitioner in support of the version, has filed a copy of the assessment of the year 1991-96, in which the annual rent of the property is shown as Rs.900/-. The respondent no. 2 without going into the depth of the case, rejected the objection and valued the property showing wrongly its monthly rent at Rs.5,00/- per month and valued the property in question at Rs.1,50,000/- showing the deficit of Rs.1,15,000/- on which stamp deficiency was shown Rs.16,675/- and imposed Rs.16,325/- as penalty total Rs. 33,000/- to be paid by the petitioner to the State of U.P. The judgment dated 14.06.1994 has been annexed as annexure no. 2 to this writ petition.
In the trial court, the petitioner filed an extract of Nagar Palika Parishad showing yearly valuation of the house in question. The petitioner was shown as tenant and the annual value was Rs 9,00/- . A copy of the Khasara for the year w.e.f. 01.08.1991 to 31st March, 1997 has been filed as annexure no. 3.
The petitioner being aggrieved with the order of the respondent no. 2, filed a stamp revision Annexure No. IV under Section 56 of the Indian Stamp Act before the respondent no. 1 on 20th July, 1994.
The respondent no. 1 on 24.08.1998 passed the judgment and order (annexure no. 5), and imposed stamp deficiency of Rs.16,675/- but set aside the penalty of Rs.16,325/-. The order of the respondent no. 1 was bad in the eyes of law. He has not applied the judicial mind and has recorded the finding, which is not tenable in law, he has not followed the directions given in Rule 341 of the Indian Stamp Rules and has wrongly assessed the property on his own accord without considering the principles laid down under Rule 341 of the Indian Stamp Rules. Existing a property in commercial area is no ground to say that the property which is purchased is for commercial purposes.
Respondent no. 1 has not applied the judicial mind and has not followed the order of the Hon'ble Supreme Court that in this connection only assessment of the house be considered for determining of the stamp duty. The respondent no. 1 has also wrongly fixed the monthly rent Rs.500/- without any evidence, exemplar or any rent receipt filed by the State. In this connection a fixation of property in question of Rs.1,50,000/- of such small area is no basis for fixing the stamp duty to such a high rate. It is the clear case of the petitioner that he was an old tenant of the purchased building since before the time of its purchase and the monthly rent cannot be Rs.5,00/- per month. There is no independent inquiry either from the Tehsil authority, whatsoever has been made by the court below, thereby vitiating the impugned judgment. The judgement is based upon the report of the Sub-Registrar, which is an ex-parte, inadmissible in evidence and could not have been relied upon. Showing the said deficient stamp duty in arbitrarily manner shall cause an irreparable loss and injury to the petitioner, therefore, the Hon'ble Court be pleased to exercise it's power under Article 226 of the Constitution of India and to quash the impugned orders passed by respondent nos. 1 & 2.
The relevant orders and photo copy of the extracts of the house and water tax of Nagar Palika Parishad has been annexed, in which Rs.9,00/- yearly rent has been mentioned for the property in question.
The respondent has filed a counter affidavit and denied all the allegations of the petition and reiterated the version of the order passed by respondent nos. 1 and 2 and has said that in the said property there is an office of Shiv and Manikkoti Charted Accountant & Company and its Sale is only for commercial purposes. The valuation of the property in question cannot be less then Rs.1,50,000/-. The property is situated near Surya Hotel in first floor of the building. The market value (rent) in the year 1993, is not less then Rs.5,00/- per month and on the said rent the valuation of the property in question cannot be less than Rs.1,50,000/-, hence Rs.16,675/- was computed as stamp duty and penalty for Rs.16,325/- has been imposed.
A notice under Section 33/47-A had been issued to the petitioner and the petitioner has submitted his objection on 21.04.1994. He was provided full opportunity of hearing. Due to ill intention he showed the commercial building as a room in order to evade the stamp duty. He has purchased the said property for commercial purposes, therefore, the valuation of the property should not be less than Rs.1,50,000/- in the year 1993, in the assessment bill of Nagar Paliaka for the year 1991-96, it is mentioned that there is shop and due to mala fide intention to evade the stamp duty the said property is shown as room.
It is admitted that the petitioner has submitted the assessment bill but the penalty of the deficit stamp fee was imposed after inspecting the said plot. According to the extract of Nagar Palika Parishad, Rs. 9,00/- annual rent had been fixed in the year 1990. The property is situated at the railway station road, which is hot place and commercial area of district Saharapur and it has been sold for commercial purposes. The rent of the shop cannot be less than Rs.500/- per month and in every circumstance the present petition is devoid of merit and is liable to be dismissed with cost.
The petitioner has filed rejoinder affidavit, in which he has reiterated the facts of the petition and has denied the contents of the counter affidavit.
Heard Sri Arpit Agarwal, learned counsel for the petitioner and Sri Jitendra Narain Rai, learned Additional Chief Standing Counsel for the State-respondent and perused the material available on record.
Learned counsel for the petitioner has argued that since the sale deed was executed prior to the enforcement of the U.P. Stamp (Valuation of the Property) Rule, 1997, therefore, the provisions of U.P. Stamp Rule, 1942, are applicable to the present proceedings.
The present proceedings were initiated in the year 1994 on the basis of report of the Sub Registrar dated 21.09.1994 and the learned court below without considering the provisions of law has wrongly and illegally computed the amount deficit vide it's order dated 14.06.1994.
The provision of the Rule 341 provides the method for computation of the market value of a property for the purpose and determination of the stamp duty of an instrument.
Rule 341 is as under:-
For the purposes of payment of stamp duty, the minimum market value of immovable property forming the subject of an instrument of conveyance, exchange, gift, settlement, award or trust, referred to in Section 47-A (1) of the Act, shall be deemed to be not less than that as arrived on the basis of the multiples given below:-
(i) Where the subject is land:-
(a) in case of Bhumidari-800 times the land revenue.
(b) in case of Sirdari land-400 times the land revenue.
(c) where the land is not assessed to revenue but net profits have arisen from it during the three years immediately preceding the date of the instruments 25 times the annual average of such profits.
(d) where the land is not assessed to revenue and no profits have arisen from it during the three years immediately preceding the date of the instrument 400 times the assumed annual rent.
(e) where the land is non-agricultural and is situate within the limits of any local body referred to in clause (c) of sub-rule (i) of rule 340-equal to the value worked out on the basis of the average price per square meter, prevailing in the locality on the date of the instrument.
(ii) where the subject is grove or garden:
(a) If assessed to revenue the value of the land shall be worked out in the manner laid down in rule 341 (i) (a) and the value of the trees standing thereon shall be worked out according to the average price of the trees of the same size, and age prevailing in the locality on the date of the instruments.
(b) If not assessed to revenue or is exempted from it the value there of shall be determined at 20 times the annual rent plus the premium or 20 times of the annual average of income which has arisen during the three years immediately preceding the date of instrument and the value of the trees thereon shall be determined in accordance with rule 341 (ii) (a)
(iii) Where the subject is Building:
(a) Where the building is assessed to house tax and is occupied by the owner or is wholly or partly let out to tenants-25 times the actual or assessed annual rental value, whichever is higher as the case may be.
(b) Where the building is not assessed to house tax and is occupied by the owner or is wholly or partly let out to tenants-25 times the actual or assumed annual rental value, whichever is higher as the case may be.
It is noteworthy that in the year 1997, the U.P. Stamp Rule 1942 were repealed. Since it is a matter of 1992 and the property in question was purchased on 04.06.1992, therefore the stamp duty would be payable in accordance with the provisions of U.P. Stamp Rule, 1942.
It is undisputed that the property in question is a building which has been assessed for the purposes of House Water and other related municipal taxes, therefore, the provisions of Rule 341 (iii) (b) are applicable to the property in question.
The aforesaid provisions provide that if the market value of the property has been assessed by the municipal board, it can only be computed by multiplying 25 times of the assessed or the actual reasonable value. From the extracts of Municipal Board's Register the valuation of the property in question is Rs. 9,00/- only.
Therefore, the valuation of the property as per Rules becomes Rs.22,500/- only. The learned court below assuming the rental value Rs.500/- per month calculated that there is deficiency in payment of stamp duty and also imposed the penalty though the penalty has been removed by the Board of Revenue (C.C.R.A, UP). It is clear from the aforesaid discussions that on the basis of accompanying report of Sub Registrar, A.D.M (F&R) accepted the rental value of the room in question Rs.5,00/- per month. For determining the rate of rent to be Rs.5,00/- the learned Sub Registrar did not collect any DATA from the nearby shop or vicinity. It is also noteworthy that the petitioner was already a tenant of the property in question since before the execution of the sale-deed. If the rental value was wrongly mentioned by the Nagar Palika Parishad, it was the duty of the respondents to raise an objection and to get it corrected, but instead of adopting the reasonable and sound method in legal way, the Sub Registrar imaginarily opined that the rent of the room in question would not be less than Rs.5,00/- per month.
This Court is of the opinion that if the property in question would not have been assessed by the Nagar Palika Parishad, there was an option to Sub Registrar and the respondent to apply the provisions of Section 341 (iii) (b).
When the property in question was assessed by the Nagar Palika, which is very much clear from the extract of the concerned Register and the U.P. Stamp Rules, 1942, was into exists, there was no opportunity to the respondents and the Sub Registrar except to act in accordance with the Rule 341 (iii) (a) according to which where the building is assessed to house tax and it is occupied by the owner or is wholly or partly, let out to the tenant, 25 times the actual or assessed annual rental value whichever is higher as the case may be, would be considered for payment of stamp duty.
In this case the Nagar Palika has assessed Rs.9,00/- annual rental value of the property in question, therefore as per the existing law in the year 1992, the petitioner was under an obligation to pay the stamp duty in accordance with Rule 341 (iii) (a). If we multiply Rs.9,00/- into 25 times, the value of the property becomes Rs. 22,500/-. The petitioner has purchased the property of Rs. 35,000/- and on this amount, he has paid the stamp duty accordingly, which is more than the market value computed in accordance with the Rule 341 (iii) (a).
Since the rules of U.P. Stamp Rules, 1997 had not come into force and the Sub Registrar had not given any DATA regarding rent of the property in question, the respondents had to act upon in accordance with the provisions of U.P. Stamp Rules, 1942.
In Vijay Kumar and Surendra Kumar Both sons of Shri Daulat Ram Vs. Commissioner, Meerut Division and Additional District Magistrate (Finance and Revenue) MANU/0682/2008 decided on 27.03.2008, it is held that the burden to prove that the market value more than the minimum as prescribed by Collector under Rule is on Collector. Report of Sub-Registrar or Tehsildar, itself is not sufficient to discharge that burden.
In Mahabir Prasad Vs. Collector, Cuttack [1987] 2 SCR 289, it is held that the ''market value' of land means a price at which both buyers and sellers are willing to do business; the market or current price.
In Ram Khelawan allias Bachchan Vs. State of U.P. through Collector, Hairpur and Anr. 2005 (98) RD 511, it has been held that report of Tahsildar may be a relevant factor for initiation of proceedings under Section 47-A of the Act but it cannot be relied upon to pass an order under the aforesaid section. In other words the said report cannot form itself basis of the order passed under Section 47-A of the Act.
In Prakashwati Vs. Chief Controlling Revenue Authority Board of Revenue, Allahabad 1996 (87) R.D 419 "Hon'ble the Apex Court has held that situation of a property in an area close to a decent colony not by it self would make it part thereof and should not be a factor for approach of the authority in determining the market value.
In Collector of Nilgiris at Ootacamund Vs. Mahavir Plantations Pvt. Ltd. MANU/TN/0285/1982, the Madras High Court while dealing with the valuation guidelines has held that the Collector under Section 47-A can not shrink his responsibility of determining the market value by adopting the guidelines nor can he fix the market value without proper materials and evidence to support it. The very idea of an inquiry contemplated by Section 47-A and the detailed procedure prescribed in the relevant rules goes to show that the Collector's finding must be verifiable by evidence. The valuation guidelines prepared by the Revenue officials at the instance of the Board of Revenue were not prepared on the basis of any open hearing of the parties concerned, or of any documents with a view to eliciting the market value of the properties concerned. They were based on data gathered broadly with reference to classification of land, grouping of land and the like. This being so, the Collector acting under Section 47-A cannot regard the guidelines valuation as the last word on the subject of market value.
From the aforesaid discussions, it is very much clear that respondents has flouted the provisions of U.P. Stamp Rules, 1942, which was prevalent at the time of execution of the sale-deed.
On the basis of aforesaid discussions, this Court is of the opinion that the respondents have not acted properly and in accordance with the existing U.P. Stamp Rules, 1942 and have passed the impugned orders in arbitrary and illegal manner, therefore the writ petition is allowed and the impugned judgement and orders dated 14.06.1994 Annexure No. 2 and the order dated 24.08.1998 Annexure No. 5 to this writ petition are hereby quashed.
Order Date :- 24.01.2023.
Vinod.