Gujarat High Court
State Of Gujarat vs Radheshyam Developers on 10 June, 2021
Author: Vikram Nath
Bench: Vikram Nath, Biren Vaishnav
C/LPA/431/2021 ORDER DATED: 10/06/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 431 of 2021
In R/SPECIAL CIVIL APPLICATION NO. 15125 of 2017
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
In R/LETTERS PATENT APPEAL NO. 431 of 2021
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STATE OF GUJARAT
Versus
RADHESHYAM DEVELOPERS
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Appearance:
MS SHRUTI PATHAK, AGP for the Appellant(s) No. 1,2,3,4
for the Respondent(s) No. 1
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CORAM: HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
VIKRAM NATH
and
HONOURABLE MR. JUSTICE BIREN VAISHNAV
Date : 10/06/2021
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE VIKRAM NATH) 1 We have heard Ms. Shruti Pathak, learned Assistant Government Pleader for the State appellants.
2 The learned Single Judge allowed the writ petition filed by Radheshyam Developers, the sole respondent in the appeal and set aside the orders dated 19.09.2015 passed by the Collector of Stamps, Anand as also the order dated Page 1 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021 C/LPA/431/2021 ORDER DATED: 10/06/2021 18.04.2013 passed by the Deputy Collector, Stamp Duty Valuation Department, Anand whereby a demand of deficiency in stamp duty was raised against the petitioners. The learned Single Judge held that the stamp duty was payable on the auction price at which the petitioner had purchased the property in an open auction conducted by the Official Liquidator and such auction confirmed by the Company Judge. It further held that the price offered in the auction and accepted would be the fair market value of the property. On such findings the learned Single Judge allowed the writ petition.
3 Before us, Ms. Pathak, learned Assistant Government Pleader, has sought to argue that the stamp duty would be payable firstly on the market value to be determined at the time of the execution / registration of the sale deed and secondly that the proviso to Section 32A of the Gujarat Stamp Act, 1958 would not be applicable. Page 2 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021
C/LPA/431/2021 ORDER DATED: 10/06/2021 4 From the admitted facts, as recorded in para 2 and its sub-paragraphs of the judgment of the learned Single Judge what we find is that the value at which the auction was confirmed in favour of the petitioner in the year 2007 was double the jantri value at the time of purchase of the land. It was for the fault on the part of the Official Liquidator and delay caused from his office that the registration could not take place in 2007, but it took place in 2015. It is an admitted position that the High Court had confirmed the auction sale in 2007 itself. The stamp duty was paid by the petitioner at that stage on the auction purchase price fixed by the Court. Further, we find that the demand raised by the Deputy Collector, Stamp Duty, Anand was taking into consideration the jantri value which was of the subsequent year, much after the date of auction.
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C/LPA/431/2021 ORDER DATED: 10/06/2021 5 We may not go into any further detail and we may refer to the market value as defined in Section 2(na) of the Gujarat Stamp Act, 1958, which reads as follows:
"2(na) `market value', in relation to any property which is the subject matter of an instrument means the price which such property would have fetched if sold in open market on the date of execution of such instrument".
5.1 According to the above definition, the market value in relation to any property is the price which such property would have fetched if sold in open market on the date of execution of such instrument. In the present case, the open auction was held in 2007 by the Official Liquidator an extended arm of the Company Judge of the High Court of Gujarat and the auction price having been approved by the High Court. No other price could have been said to be market value of that property, but the price so approved by the High Court. It could not be said that Page 4 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021 C/LPA/431/2021 ORDER DATED: 10/06/2021 there is any kind of under-valuation. It also cannot be argued by the State that if the Official Liquidator failed to execute the sale deed or get the same registered in time, even though the petitioner or the auction purchaser had deposited the required stamp duty in time, the auction purchaser could be further harnessed with deficiency of stamp duty being calculated at the market value of a much later date after several years.
5.2 The property was purchased by the original petitioner in an inter se bidding before the Company Judge in the High Court. There was therefore no question of any intention to defraud the revenue or that there was non-disclosure of the correct price.
5.3 The Supreme Court in the case of V.N.Devadoss vs. Chief Revenue Control Officer- cum-Inspector and Others reported in (2009)7 SCC Page 5 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021 C/LPA/431/2021 ORDER DATED: 10/06/2021 438, in para 16 has held as under:
"16 It is settled law under the Transfer of Property Act, 1882 that a purchaser cannot have a better title than what his vendor had. The possession which is claimed by Defendant 3 Ramdas (the appellant herein) in respect of the entire land bearing Gat No.19 area admeasuring 2.56 H of Mouza Padoli was also illegal and without proper sanction of law. So long as the property is joint and not partitioned, Defendant No.3 Ramdas (the appellant herein) is not entitled to get possession of the said land. Even otherwise, the appellant herein having purchased the land from Defendant No.1 Sudam could be entitled to be declared at the most to the extent of half-share of the said piece of land having stepped into the shoes of his vendor and could not have asked for and claimed ownership and possession over the entire land of Gat No.19 admeasuring 2.56 H."
5.4 The Division Bench of this Court in the case of Bileshwar Industrial Estate Developers Private Limited vs. State of Gujarat (2013)2 GLR 1435 referring to the case of V.N.Devadoss (Supra) and considering the same held that the market value of the property has to be considered on the date of the auction. Paras 11 and 12 of Page 6 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021 C/LPA/431/2021 ORDER DATED: 10/06/2021 Bileshwar Industrial Estate Developers (supra) read as under:
"11 In the present case, at the cost of repetition it is to be recollected that the appellant has purchased the property in the auction from the DRT and even after issuance of sale certificate by DRT mentioning the sale price as Rs.4.51 crore, the appellant has paid stamp duty on the market value being Rs.5.49 crore as determined by the Competent Authority and present respondents themselves. Therefore, at later stage, after four years, the respondents are not permitted to reopen the issue only by making reference of some internal audit. It is also necessary to consider here that by passage of time, value of immovable property increases and, therefore, the value of the property at the time of audit cannot be considered, but market value and price of the property is to be considered as on the date of the auction and sale. Therefore, we are of the considered opinion that the Deputy Collector, Stamp Duty Valuation, has no power to issue impugned notice under section 39 [1][b] of the Act, and the notice issued by him is without jurisdiction.
12 The appellant has relied upon the judgment rendered in Special Civil Application No. 18319/2007 dated 23/2/2010 as well as reported judgment in the case of Nandadevi Dineshkumar Sharma v. Chief Controlling Revenue Authority reported in 2006 [2] GLH 775. Both the judgments are Page 7 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021 C/LPA/431/2021 ORDER DATED: 10/06/2021 though of the Ld. Single Judge, specifically confirmed that the respondents have no authority either to impound the document or to reopen the valuation only upon the report of the auditor, under section 39 and that burden of proof to determine the market value is upon the Stamp Duty Valuation Authority and they have to justify fixation of higher market value. Therefore, in the present case, once certificate under section 31 was issued by the respondents, they should not be allowed to reopen their own valuation after four years to say that valuation of the property is higher, relying only upon the Auditor's report. Whereas the judgment rendered by the Hon'ble Apex Court in V N Devadoss v. Chief Revenue Control Officer reported in 2009 GLHEL SC 43655 [Civil Appeal No. 3411/2009 decided on 8/5/2009] specifically confirmed and held that when any property has been purchased as per open offer, question of undervaluation does not arise. In the given case, when property was purchased under the directions of BIFR and AAIFR, the Hon'ble Apex Court has held that the market value is price of the property which can be fetched if sold in open market on the date of execution of instrument and, therefore, stamp duty is payable on such sale price when the Stamping Authority had issued a notice to the purchaser in that case, to pay the stamp duty as per market value."
5.5 The case law relied upon by Ms. Pathak, learned Assistant Government Pleader viz [1] Order dated 29.09.2010 passed in Letters Patent Page 8 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021 C/LPA/431/2021 ORDER DATED: 10/06/2021 Appeal No.2012 of 2010 between Babubhai Lakhubhai Jebalia & Anr. vs. the State of Gujarat through Chief Controlling Revenue Authority & Anr. and [2] Judgment dated 30.09.2019 passed in a bunch of Letters Patent Appeal led by Letters Patent Appeal No.919 of 2019 matters between Mit Housing Association through Rajeshbhai N. Patel vs. Chief Controlling Revenue Authority & Ors., would have no application to the facts and circumstances of the present case as recorded above and as such are of no help to the State appellant. 6 For all the reasons recorded above, we do not find any merit in this appeal and accordingly it is dismissed. Consequently, connected Civil Application stands disposed of.
(VIKRAM NATH, CJ) (BIREN VAISHNAV, J) P. SUBRAHMANYAM Page 9 of 9 Downloaded on : Mon Sep 06 07:25:28 IST 2021