Allahabad High Court
Kaushalya vs State Of U.P. Thru Secy. Revenue, Govt. ... on 28 February, 2020
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 32 Reserved on 9.9.2019 Delivered on 28.02.2020 Case :- MISC. SINGLE No. - 3595 of 2013 Petitioner :- Kaushalya Respondent :- State Of U.P. Thru Secy. Revenue, Govt. Of U.P. & Others Counsel for Petitioner :- Parmesh Kr. Jaiswal Counsel for Respondent :- C.S.C. Hon'ble Mohd. Faiz Alam Khan,J.
Heard learned counsel for the petitioner- Sri P.K. Jaiswal, learned C.S.C., Sri Rajesh Kumar representing respondent nos.1 to 3.
This writ petition has been filed by the petitioner praying for a writ in the nature of mandamus quashing the orders of the Additional Commissioner Judicial, Lucknow dated 04.03.2013, whereby, the petitioner has been held guilty for insufficient stamp duty to the tune of Rs.64,690/- in connection with the sale deed dated 23.04.2009 executed in respect of plot no.252 area one-third share of 0.31 hectare situated in village- Sahilamau, pargana and tehsil- Malihabad, district- Lucknow and orders dated 19.02.2010 and 10.04.2012 passed by Assistant Stamp Commissioner-II, Lucknow. The petitioner has also been held liable to pay a penalty of Rs.5,310/- and, accordingly, ordered the recovery thereof and also to pay interest to the tune of 1.5% on the sum from the date of execution of the sale deed, i.e., 23.04.2009.
The brief facts necessary for the disposal of the writ petition are that the petitioner purchased a plot khasra no.252 area one-third of 0.318 hectare along with 10 trees of mango aged about 18 years situated at village- Sahilamau, pargana and tehsil- Malihabad, district- Lucknow for consideration of Rs.80,000/- from Pannalal, Hansraj and Amritlal s/o Munnilal, which was registered as document no.869 of 2009 in the office of Sub-Registrar Malihabad, Lucknow on 23.04.2009. After the registration/execution of this sale deed, one Smt. Shabnam made a complaint to the Sub-Registrar mentioning therein that a part of the gata no.252 situated at village- Sahilamau, pargana and tehsil- Malihabad, district- Lucknow has been sold previously in plots for the purpose of residence and the sale deed pertaining to those plots have been executed in the month of March and the same set of sellers has now sold the remaining land in favour of their mother Smt. Kaushaliya Devi by describing the remaining land of this gata as agricultural land, while earlier they sold a portion of that land as residential plot. It was prayed that an enquiry be made and strong action be taken in the matter.
After making a preliminary inquiry in the matter, the Sub-Registrar concerned referred the matter to Collector and a case under Indian Stamp Act, 1899 was registered and the same was made over to Assistant Commissioner Stamp (II), Lucknow. A notice was issued to the petitioner, which was received back with the endorsement that the addressee has not been found. However, the Assistant Stamp Commissioner proceeded to decide the case on merits in absence of the petitioner and taking into consideration the fact that a plot of the gata number, i.e., 252 situated at village- Sahilamau, pargana and tehsil- Malihabad, district- Lucknow pertaining to 1020 sq. ft. had been earlier sold to Smt. Shabnam, sale deed of which has been registered as document no.636 of 2009 and the value of this plot has been made on the rates pertaining to residential land and the nature of the land sold through the impugned sale deed is also of residential character. Therefore, the Assistant Stamp Commissioner-II Lucknow calculated the value of the sold plot on the basis of residential plot and came to the conclusion that the stamp duty due on the execution of sale deed comes to Rs.68,850/- and after deducting stamp duty already paid by the petitioner, the stamp duty to the tune of Rs.64,690/- is deficient and, therefore, directed the petitioner to pay deficiency of stamp duty to the tune of Rs.64,690/- along with penalty of Rs.5,310/-, total Rs.70,000/- along with an interest @ 1.5% per annum from the date of execution of document till its actual payment.
Petitioner thereafter moved an application before the Additional Commissioner Stamp-II, Lucknow on 30.01.2012 stating therein that the above mentioned orders have been passed ex-parte and, therefore, the order dated 19.02.2010 be cancelled and opportunity of being heard be provided to the petitioner. However, Additional Commissioner Stamp-II Lucknow vide order dated 10.04.2012 dismissed the application of the petitioner on the ground that in view of law laid down by this court in Milap Chandra Jain Vs. State of U.P. reported in 1988 ALJ 1078, Stamp Collector cannot interfere in his order passed earlier.
Petitioner, thereafter, filed an appeal against the above mentioned orders before Assistant Commissioner Judicial, Lucknow and the same was also dismissed on merits vide order dated 04.03.2013 on the ground that the impugned land had earlier been sold to many persons in the shape of residential plot and the nature of the land is residential.
Aggrieved by the orders dated 19.02.2010 and 10.04.2012 passed by Assistant Stamp Commissioner-II, Lucknow and order dated 04.03.2013 passed by Additional Commissioner Judicial, Lucknow, instant writ petition has been preferred by the petitioner.
Learned counsel for the petitioner overwhelmingly submits that the impugned orders passed by the Assistant Commissioner Stamp and Additional Commissioner Stamp, Lucknow are per-see illegal and has been passed in utter disregard to the settled law on the subject.
It is next submitted that it is the settled position of law that the stamp duty is to be realized on the basis of nature of the property at the time of purchase as held by Hon'ble Supreme Court in the case of State of U.P. Vs. Ambrish Tandon and Another, reported (2012) 5 SCC page- 566 and in view of the same, the impugned orders could not sustain in the eyes of law and are liable to be quashed.
It is also submitted that in view of order of this court dated 26.07.2012 and 30.05.2013 the whole outstanding amount including the penalty has been deposited by the petitioner.
It is also submitted that certain persons got some sale deeds executed in their favour from Hansraj, under the influence of intoxication pertaining to above mentioned gata no. 252, on the civil suit filed the disputes were amicably compromised and except Shabnam all other persons surrender their rights pertaining to sale deed no.633 of 2009, which was got registered in favour of Shabnam. A civil suit is also pending before the court of Civil Judge, Senior Division, Malihabad as case no.740 of 2009 for cancellation of sale deed to secure all ancestral properties. Impugned sale deed has been executed by the sons in favour of their mother and also that the purchased property is a grove land, which is also registered so, in the revenue record.
It is also submitted that Smt. Shabnam with an object to harass the petitioner had moved an application before the Sub-Registrar complaining therein the insufficiency of stamp duty. The complaint is based on malafide and keeping in view the nature of the property, the petitioner has paid sufficient stamp fee to commensurate the stamp fee.
It is further submitted that the future usage of the sold property/land could not be made the basis of fixation of stamp duty and, therefore, both the courts below have materially erred in arriving at a conclusion that the petitioner has paid insufficient stamp duty and all the three orders mentioned herein before are liable to be quashed.
Learned C.S.C., while opposing the submissions of learned counsel for the petitioner, submits that all three orders passed by Assistant Stamp Commissioner-II, Lucknow and Additional Stamp Commissioner, Lucknow have been passed keeping in view the settled law pertaining to the payment of stamp duty and there is no illegality or irregularity has been committed by the courts below.
He further submits that it is apparent on record that from the same gata number, i.e. 252 certain plots have been sold by the same sellers and these plots have been sold deserving the nature of the land of gata no.252 as residential land,therefore, the petitioner could not deny that the impugned land is used for the purpose of residence and to avoid the stamp duty subsequent/impugned sale deed has been executed describing the land as agricultural land.
He further submits that both the courts below has taken into consideration the report of the Sub-Registrar dated 28.04.2009, wherein, this fact has been evidently stated that on 07.03.2009 a sale deed no.633 of 2009 has been made from the same plot no.252, wherein, the impugned land has been shown as residential plot. Therefore the orders passed by the Authorities do not suffer from any illegality and no interference is warranted therein.
Having perused the record in the light of submissions of learned counsel for the parties I find that the facts so far as they relate for disposal of this writ petition are not in dispute. It is not in dispute that the petitioner had purchased the plot i.e. Khasra No. 252 area 1/3 of 0.38 Hectare along with ten trees of mango aged about 18 years situated at Village Sahilamau, Pargana and Tehsil Malihabad, District Lucknow for a consideration of Rs. 18,000/- from Panna Lal and Hans Raj and Amrit Lal son of Munni Lal and the document was registered as Document No. 869/2009 in the office of Sub Registrar, Malihabad, District Lucknow on 23.4.2009. It is also not in dispute that after the registration/ execution of the above sale deed, one Smt. Shabnam made a complaint to the Sub Registrar mentioning therein that some area of Gata No. 252 situated at Village Sahilamau, Pargana & Tehsil Malihabad, District Lucknow had been sold previously as the residential plot and the sale deed pertaining to those plots had been executed in the month of March and the same seller has now sold the remaining area of that land in favour of their mother Smt. Kaushallya Devi by describing the same as agricultural land, while earlier they have sold a portion of that land as a residential plot.
It is also not in dispute that a preliminary inquiry was made by the Sub Registrar concerned and thereafter the matter was referred to the Collector and a case pertaining to deficient of Stamp fee was registered and it was made over to Assistant Commissioner, Stamp (II) Lucknow and the same was decided on merits in absence of the petitioner taking into consideration the fact that some area of above mentioned gata number has earlier been sold to Smt. Shabnam describing the land as residential and the plot has also been valued as per the rates determined by the Collector for the residential land. It was also mentioned therein that the impugned sale deed is also of a residential nature and it was ordered that deficient stamp duty to the tune of Rs. 64,690/- is deficient and the same be recovered along with penalty of Rs. 5,310/- in total Rs. 70,000/- along with interest @ 1.5% from the date of execution of document till its actual payment.
It is also not in dispute that an application was moved before the Additional Commissioner, Stamp (II), Lucknow to recall the order which was rejected on technical ground as not maintainable and in an appeal filed before the Assistant Commissioner (Judicial), Lucknow the same was also dismissed on merits vide order dated 4.3.2013 solely on the ground that impugned land had earlier been sold in the shape of residential plot and the nature of the land is residential. Aggrieved from the above orders this writ petition has been preferred by the petitioner.
Learned counsel for the petitioner though has submitted that the sale deed executed in favour of Shabnam which has been taken as the basis for determining the nature of land as residential is void ab-initio and the dispute pertaining to its validity is also pending before Civil Court, therefore the same could not be taken into consideration for determining the nature of the land. But this fact is admitted to the parties and has not been disputed that the land in that sale deed has been described as residential land and also valued as per the rates provided for residential land.
It is also submitted on behalf of the petitioner that for the purpose of payment of stamp duty the existing nature of the land should be taken into consideration and therefore the Authorities below has materially erred in ignoring the fact that at present the land is being used as "grove" (agricultural land). It is also not in dispute that the disputed property is a revenue paying land where on some old trees of mangoes are also situated.
The question for determination thus now is that as to whether the property recorded in the revenue record as an agricultural land could be charged with stamp duty as applicable to the property purchased for residential purpose, irrespective of the potential of the property in question. The Indian Stamp Act 1889 has been enacted for the purpose of collection of revenue/ stamp fee on certain transactions. In other words this Act is a fiscal measure enacted with an object to secure revenue for the State on the execution of certain classes of instruments and documents. Therefore its applicability must be restricted within the boundaries of the scheme provided in the Act and it should not be deemed that this Act has been enacted to empower litigant to defeat the collection of revenue as desired by this Act on the basis of any technicality. The stringent provisions contained in this Act are conceived in the interest of revenue.
The whole scheme of the Indian Stamp Act has not defined anywhere the term market value pertaining to the proceedings Section 47-A (3) of the Indian Stamp Act refers to an instrument on which the stamp duty is chargeable the market value of the property.
In Vijay Kumar and another Versus Commissioner reported in 2008 (3) AWC page 299 Alld. (High Court) the term market value was explained to mean what a willing purchaser would pay to a willing seller for the property having regard to the advantages available to the land and the development activities which may be going in the vicinity and potentiality of the land.
In Ratna Shankar Dwivedi Vs. State of U.P. reported in AIR 2012, Alld. Page 100 the term marketing value has been defined as under:-
"The term "market value" has not been defined under the Act. However there are some precedents laying down certain guidelines as to how and in what manner a market value would be determined. The consensus opinion is that the market value of any property is the price which the property would fetch or would have fetched if sold in the open market."
It is also required to be taken into consideration that for invoking provision of Section 47-A (3) of the Indian Stamp Act the Collector should have reason to believe that market value of the property in question had not been properly set forth in the instrument and once instrument is registered and the stamp duty as prescribed by the Collector has been paid the burden to prove that the market value of this property was actually more than minimum prescribed by the Collector under the Rules, is upon the Collector and the report of the Sub Registrar alone, is not sufficient to discharge that burden. Reference in this regard may be taken of Vijay Kumar Vs. Commissioner, Meerut Division reported in AIR 2008 Allahabad page 176.
It is also worthwhile to recall that the reasons which have persuaded the Collector to believe that the market value of the impugned property was more than minimum prescribed by him, under the Rules, should not be merely a pretense and the same should be based on bonafide and good faith as it shall always be open to the court to question/ assess whether the reasons for such belief has a rational connection or a relevant bearing for the formation of such belief and irrelevant or extraneous consideration have not been taken into account. Reference in this regard may be taken of Pratap Singh Vs. Director of Enforcement Foreign Exchange Regulation Act AIR 1985 Supreme Court 989 and ITO Vs. Lakhmani Mewal Das reported in AIR 1976 page 1753.
It is also to be reminded that an application, keeping in view the object of the Act to collect proper stamp duty, is caste on the Authorities to properly ascertain its true market value. The market value of a property may vary from village to village or location to location and in the case of land the size in which the land is being sold will also be a relevant fact to be considered for ascertaining its true market value. Entry in the revenue record though is relevant but could not be the soldedetermining factor for ascertaining the market value of the land under the Act. The submissions of learned counsel for the petitioner that as the property is recorded as an agricultural property in the revenue record and the same could not be valued as a property having residential potential could not be accepted. As stated earlier the market value of a property is dependent on many factors and not only on the nature of the property as described in the revenue record.
In D.P.R. Foods (P) Ltd. Vs. Commissioner Meerut and others reported in 2010 (4) Alld. Law Journal Page 95, it was emphasized that market value of the property is to be seen irrespective of the fact whether it is residential, commercial or agriculture. Nature of the land and its current use may not be relevant if around the land in question properties were being sold and bought at commercial rates.
A Full Bench of this Court in Smt. Pushpa Sareen Vs. State of U.P., reported in 2015(3) ADJ 136 with regard to determination of the market value of the property as set forth in the instrument held as under:-
"19. Now insofar as the second question is concerned, the issue posed for consideration before the Court is whether the Collector has the power to fix the valuation of a plot on the assumption that it 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. The Collector, while exercising his jurisdiction under Section 47-A, is required to determine the market value of the property on the date of the instrument. It is a well-settled principle of law that stamp duty is a levy which is imposed not on the transaction but on the instrument.
20. The attention of the Court has been drawn to certain judgments of the learned Single Judges of this Court which had taken the view that the market value of the land could not be determined with reference to the use of the land to which the buyer intends to put it in future.
21. Section 17 of the Stamp Act provides that all instruments chargeable to duty and executed by any person in India shall be stamped before or at the time of execution.
22. In certain judgments of the learned Single Judges of this Court, a view had been taken that the authorities are required to determine the value of the land on the date on which the sale was made and cannot consider the potential value of the land to which it could be put to use in future. Smt. Kusum Lata Jaiswal v. State of U.P. and others, MANU/UP/1096/2009 : 2010(2) ADJ 274. Similarly in Dinesh Tiwari v.Commissioner, Gorakhpur and others, MANU/UP/4014/2011: 2012(3) AWC 2343 :2011(10) ADJ 1 (NOC), it was held that the Collector had no power to assess the market value of the property on the basis of a future value which the property may acquire.
22. The power and jurisdiction of the Collector, as contained in Section 47-A, is to determine the actual 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 on the basis of the rules.
24. In Ramesh Chand Bansal and others v. District Magistrate/Collector, Ghaziabad and others, MANU/SC/0369/1999 : AIR 1999 SC 2126, para 5, the Supreme Court held as follows:
"The object of the Indian Stamp Act is to collect proper stamp duty on an instrument or conveyance on which such duty is payable. This is to protect the State revenue. It is matter for common knowledge in order to escape such duty by unfair practice, many a time under valuation of a property or lower consideration is mentioned in a sale-deed. The imposition of stamp duty on sale-deeds are on the actual market value of such property and not the value described in the instrument. Thus, an obligation is cast on authority to properly ascertain its true value for which he is not bound by the apparent tenor of the instrument. He has to truly decide the real nature of the transaction and value of such property. For this, Act empowers an authority to charge stamp duty on the instrument presented before it for registration. The market value of a property may vary from village to village; from location to location and even may differ from the sizes of area and other relevant factors. This apart there has to be some material before such authority as to what is likely value of such property in that area. In its absence it would be very difficult for such Registering Authority to assess the valuation of such instrument. It is to give such support to the Registering Authority the Rule 340-A is introduced. Under this Collector has to satisfy himself based on various factors mentioned therein before recording the circle rate, which would at best be the prima facie rate of that area concerned. This is merely a guideline which helps the Registering Authority to assess the true valuation of a transaction in an instrument. This gives him material to test prima facie whether description of valuation in an instrument is proper or not.... Reading Section 47-A with the aforesaid Rule 340-A it is clear that the circle rate fixed by the Collector is not final but is only a prima facie determination of rate of an area concerned only to give guidance to the Registering Authority to test prima facie whether the instrument has properly described the value of the property. The circle rate under this Rule is neither final for the authority nor to one subjected to pay the stamp duty. So far sub-sections (1) and (2) it is very limited in its application as it only directs the Registering Authority to refer to the Collector for determination in case property is under valued in such instrument. The circle rate does not take away the right of such 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. This also marks the dividing line for the exercise of power between the Registering Authority and the Collector. In case the valuation in the instrument is same as recorded in the circle rate or is truly described it could be registered by Registering Authority but in case it is under valued in terms of sub-section (1) or sub-section (2), it has to be referred and decided by the Collector. Thus, the circle rate, as aforesaid, is merely a guideline and is also indicative of division of exercise of power between the Registering Authority and the Collector."
25. 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.
26. 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.
27. 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. Ambush Tandon and another, MANU /SC /0049 /2012 : (2012) 5 SCC 566. This is because the nature of the user is relatable 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.
28. In the circumstances, we answer the second question as referred in the aforesaid terms."
Having regard to the above position of law and the facts of the present case that a portion of the Gata No. 252 has earlier been sold for the residential purpose and stamp duty has also been paid with regard to the rates applicable to the residential property and in absence of any evidence led or any sale deed filed with this petition to show that the agricultural activity is predominant around the impugned land, merely on the basis of the fact that the land in question is recorded as agricultural property and there being no declaration under Section 143 of the U.P. Zamindari Abolition & Land Reforms Act 1950 the impugned property could not be said of not having residential potential on the date of execution of the sale deed. There is no reason to believe that the property is not having residential potential in view of the fact that a portion of the same land has earlier been sold describing the same as residential land by the same set of sellers and in this view of the matter the entry of the impugned land in the revenue record that property is agricultural would not have any bearing in determination of its market value and in my considered opinion no illegality or irregularity appears to have been committed by all the Authorities below in passing the impugned orders.
Thus for the reasons and law stated above, this writ petition fails and is accordingly dismissed.
There is no order for the costs.
Order Date :- .28.02.2020 Muk