Allahabad High Court
Smt. Vandana Agrawal vs State Of U.P. And 2 Ors. on 16 July, 2022
Author: Saumitra Dayal Singh
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 38 Case :- WRIT - C No. - 30671 of 2013 Petitioner :- Smt. Vandana Agrawal Respondent :- State Of U.P. And 2 Ors. Counsel for Petitioner :- Anupam Kulshrestha,Anil Kumar Mehrotra,Ashish Pandey,Pragya Pandey,Tripathi B.G. Bhai Counsel for Respondent :- C.S.C. Hon'ble Saumitra Dayal Singh,J.
Heard Sri Anil Mehrotra alongwith Ms. Pragya Pandey learned counsel for the petitioner and the learned Standing Counsel for the State respondents.
Present writ petition has been filed against the order dated 19.2.2013 passed by the CCRA in Stamp Appeal No. 39/2012-13 (Smt. Vandana Agrawal Vs. State). Thereby, the CCRA has confirmed the order dated 12.9.2012 passed by the Stamp Collector in Stamp Case No. 52/2011-12 determining stamp deficiency Rs. 14,18,476/- and penalty Rs. 50,000/-.
Having heard learned counsel for parties and having perused the record, it is difficult to sustain the order passed by the CCRA and to confirm the demand of stamp deficiency and penalty.
The petitioner purchased the property bearing municipal No. 123/303 C&D Factory Area, Fazalganj, Kanpur Nagar together with structures standing thereon, vide subject sale deed dated 31.7.2010 valued at Rs. 78,97,042/- for the purpose of payment of stamp duty. Accordingly, the deed was registered upon payment of stamp duty Rs. 5,43,000/-. Under report dated 04.10.2010 reference was proposed to be made under Section 47A of the Indian Stamp Act, 1899 proposing stamp deficiency Rs. 26,00,576/-. Upon a reference being drawn, an inspection report was prepared and submitted by the ADM, Kanpur Nagar dated 22.3.2011, proposing stamp deficiency Rs. 17,28,753/-. The petitioner objected and filed his reply. Thereupon, vide order dated 11.5.2011, the Stamp Collector determined stamp deficiency Rs. 17,28,753/- and imposed penalty Rs. 8,64,400/-. In reaching that conclusion, an opinion was formed that through the subject sale deed the petitioner had purchased a commercial property by only describing it as residential. In that, it was alleged that the petitioner herself disclosed and valued portion of ground floor at commercial rates. However, the constructions on the first, second and third floor, that were commercial having been used to run a hotel, had been wrongly described as residential.
Upon appeal filed by the petitioner, the CCRA vide its order dated 25.8.2011 found that the reports relied upon by the Stamp Collector were inadequate to reach the conclusion that the property had been used as a hotel or that it was commercial. It set aside the order dated 11.5.2011 and remitted the matter to the Stamp Collector with a stipulation to first call for reports from the Kanpur Development Authority and the Kanpur Nagar Nigam as to the use of the building purchased by the petitioner.
It cannot be disputed that in the proceedings thus remanded, separate reports were submitted by the Kanpur Development Authority (dated 02.11.2011) and by the Kanpur Nagar Nigam (dated 25.10.2011). The report submitted by the Kanpur Development Authority clearly indicated that the construction of the ground floor had been sanctioned for commercial purpose whereas that on the first floor had been sanctioned for residential purpose only. That report further reveals that later an application had been made to seek compounding of certain other constructions on the ground floor, first floor and second floor. The constructions on the first and second floor were again described as residential in that application. Further the report of the Kanpur Nagar Nigam did not bring out, to any extent, that the property had been put to use for commercial purpose.
Under Rule 2(d) of the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997, a commercial building has been defined as under:
2(d). "Commercial building" means commercial establishment or shop as defined respectively in Clause (4) and Clause (16) of Section 2 of the Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam, 1962.
Section 2(4) and 2(16) of the Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam, 1962, read as below:
2(4). 'Commercial establishment' means any premises, not being the premises of a factory, or a shop, wherein any trade, business, manufacture, or any work in connection with, or incidental or ancillary thereto, is carried on for profit and includes a premises wherein journalistic or printing work, or business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on, or which is used as theatre, cinema, or for any other public amusement or entertainment or where the clerical and other establishment of a factory, to whom the provisions of the Factories Act, 1948, do not apply, work;
(16) 'shop' means any premises where any wholesale or retail trade or business is carried on, or where services are rendered to customers, and includes, all offices, godowns or warehouses, whether in the same premises or not, which are used in connection with such trade or business;
Therefore, if any property is to be valued as a commercial building, it is sine qua non that on the date of the subject sale deed being executed, the building in question must have been put to commercial use. The stamp duty liability is referable to that occurrence (of use as commercial building), in the present time. Unless such use is established, as a fact, mere potentiality or possibility of such use would be of no consequence. In the present case, despite specific opportunity given by the CCRA vide its order dated 25.8.2011, no such material came on record. The report of the Kanpur Development Authority and the Kanpur Nagar Nigam are of no benefit to the revenue authorities. What survives by way of material and on which the Stamp Collector and the CCRA have relied is the spot inspection report. That report also does not make any observation of the building having been put to commercial use on the date of the spot inspection being made. It only makes a conjectural observation of the building having been used as a hotel, in the past. Surprisingly, that observation also is founded not on any hard evidence but on a purely subjective opinion formed by the ADM upon inspecting the rooms. That material by very nature, is unreliable, if not wholly extraneous.
Consequently, no material is found to exist to establish the fact allegation levelled against the petitioner that the construction of the first, second and third floor of the building were commercial. In absence of any cogent material, the deficiency of stamp duty determined and the penalty imposed are found to be wholly without basis.
Accordingly, the impugned orders dated 19.2.2013 and 12.9.2012 are quashed.
Writ petition stands allowed.
Any amount deposited by the petitioner, may be returned, alongwith the statutory rate of interest.
No order as to costs.
Order Date :- 16.7.2022 Faraz