Allahabad High Court
Raj Kumar vs State Of U.P. And 2 Others on 13 April, 2023
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. - 52 Case :- WRIT - C No. - 19644 of 2016 Petitioner :- Raj Kumar Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Nipun Singh Counsel for Respondent :- C.S.C. Hon'ble Kshitij Shailendra,J.
1. Heard Shri Nipun Singh along with Shri Sumit Suri, learned counsel for the petitioner and learned Standing Counsel for the State-respondents.
2. The petitioner purchased 1.1152 hectares of agricultural land by a registered sale deed dated 27.01.2011, which recites that the land covered by the instrument is purely agricultural in nature and has been purchased for cultivation activities.
3. The proceedings under section 47-A of Indian Stamp Act, 1899 (as applicable in the State of U.P.) were registered against the petitioner pointing out deficiency in the stamp duty on the ground that in respect of the same Khasra No. 69/1 minjumla, in the past, four other sale deeds were executed, on which stamp duty was paid at residential rates. Therefore, an opinion was formed that stamp duty in respect of the petitioner's sale deed was deficient.
4. The petitioner appeared in the proceedings and filed objections dated 08.08.2011 stating that stamp duty as per the prevalent circle rate applicable for the agricultural land had been paid. It was further stated that declaration under section 143 of U.P. Zamindari Abolition & Land Reforms Act, 1950 had not been made in respect of the land covered by the instrument; that paddy crops were standing on the agricultural field; that no spot inspection was conducted by the authorities and that the Sub Registrar had submitted a report without examining the factual position of the spot.
5. By the first order impugned dated 06.05.2013, deficiency in payment of stamp duty to the tune of Rs. 2,78,600/- (Rupees two lac seventy eight thousand six hundred only) has been imposed along with four times penalty to the tune of Rs. 11,14,400/- (rupees eleven lac fourteen thousand four hundred only) with further stipulation that the petitioner shall be liable to pay an interest at the rate of 1.5 % per month from the date of execution of the instrument till recovery. The petitioner filed an appeal against the said order, which has been dismissed by the Chief Controlling Revenue Authority by second order impugned dated 07.09.2015.
6. The orders impugned are based upon stamp duty paid on one sale deed out of four, which was treated as an exemplar so as to determine the quantum of stamp duty in relation to the petitioner's sale deed. The document number of the said sale deed is 7353 of 2010, a copy whereof has been annexed as Annexure No. 8 to the writ petition. A perusal of the said deed shows that the area covered by it was 139.36 Square meters, for which purchaser had paid stamp duty at residential rates and the property was described as a residential plot. Insofar as objections taken by the petitioner in the proceedings are concerned, it has been observed by the Chief Controlling Revenue Authority that in case the petitioner was aggrieved by non-making of spot inspection, he should have moved successive applications, but he moved it only once. Regarding another application dated 06.05.2013, it was observed that in fact, it was a date fixed for passing final order by the first authority and it appears that the application was moved on the date of decision and, therefore, it may be an afterthought.
7. Shri Nipun Singh, learned counsel for the petitioner submits that the land described in the instrument was and still is purely agricultural in nature. He further submits that once no declaration under section 143 of U.P. Zamindari Abolition & Land Reforms Act, 1950 was made in respect of property covered by the instrument, the nature of land will continue to be agricultural. He further submits that the area of the land purchased by the petitioner is around 11000 Square meters, whereas the exemplar sale deed No. 7353 of 2010, relied upon by the Authorities below, is only in relation to a very small portion of the same Gata i.e., 139.36 Square meters, which was described as a residential plot. He also submits that conducting the spot inspection in such matter was necessary as per Rule 7(3)(c) of the U.P. Stamp (Valuation of Property) Rules, 1997 and, therefore, once objection with regard to spot inspection was specifically raised by the petitioner, it was incumbent for the Authorities to conduct spot inspection and then form an opinion regarding alleged deficiency and, therefore, placing reliance on mere one sale deed of a very small portion of the land and treating the same as an exemplar for deciding the matter of payment of stamp duty, is not according to law.
8. He further submits that the Authorities have placed burden of proving the case upon the petitioner, rather, since these proceedings were initiated by the State, the burden to establish alleged deficiency in payment of stamp duty was upon the State and no contrary burden could be placed upon the petitioner.
9. He has placed reliance upon a decision of this Court in the case of Varun Gopal vs State of U.P. and others reported in 2015 (2) ADJ 311, with special reference to paragraph 24 of the same, which is reproduced herein-below:
"24. The sine qua non for invoking provisions of Section 47-A(3) of the Act is that the Collector had reason to believe, that the value had not been properly set forth in the instrument as per market value of the property. Once the instrument is registered and the stamp duty as prescribed by the Collector was paid, the burden to prove that the market value was more than the minimum prescribed by the Collector under the rules, was upon the Collector. The report of the Sub-Registrar or Tehsildar was not sufficient to discharge that burden. (Vijay Kumar v. Commissioner Meerut Division, 2008(7) ADJ 293)."
10. He has further placed reliance upon another judgment of this Court in the case of The Institute of the Franciscan Clarist Sisters vs State of U.P. and others, reported in AIR 2020 All 189, wherein the property purchased was agricultural in nature and there was no declaration under section 143 of the U.P. Zamindari Abolition & Land Reforms Act, 1950.
11. Shri Nipun Singh has further argued that, even otherwise, sale deed No. 7353 of 2010 could not have been treated as an exemplar, inasmuch as under the order dated 27.09.2014 passed by the Tehsildar, in mutation proceedings, the said sale deed has been treated as invalid for the reason that it was executed by a minor and, therefore, no rights were transferred or conferred by the same.
12. A counter affidavit has been filed by the State, in paragraph no. 10 whereof it is stated that the provisions of section 143 of U.P. Zamindari Abolition & Land Reforms Act, 1950 are irrelevant for the purposes of deciding the chargeability of stamp duty. In paragraph 17 of the counter affidavit, it is stated the spot inspection was not required in the present case as the property was earlier transferred by applying non-agricultural rates. Learned Standing Counsel, therefore, submits that the orders impugned do not require any interference.
13. Rejoinder affidavit has been filed reiterating the version contained in the writ petition, and further evidence has been brought on record to establish that nature of land not only on the date of execution of sale deed, but also as on today is purely agricultural in nature and different crops are standing on the spot.
14. Having heard the learned counsel for the parties, I find that non-declaration of land as Abadi under section 143 of U.P. Zamindari Abolition & Land Reforms Act, 1950 is an admitted fact. The contention of the State to the effect that the said non-declaration is not relevant in the proceedings under the Indian Stamp Act cannot be accepted for the reason that in exercise of statutory powers under the Indian Stamp Act, as applicable in the State of U.P., Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 have been framed. Rule 3(1)(a) of the Rules, provide as follows:
"Facts to be set forth in an instrument.-In case of an instrument relating to immovable property chargeable with an ad valorem duty, the following particulars shall also be fully and truly stated in the instrument in addition to the market value of the property-
(1) In case of land-
(a) included in the holding of a tenure-holder, as defined in the law relating to land tenures-
(i) the Khasra number and area of each plot forming part of the subject-matter of the instrument;
(ii) whether irrigated or unirrigated and if irrigated, the source of irrigation;
(iii) if under cultivation whether do-fasali or otherwise;
(iv) land revenue or rent whether exempted or not and payable by such tenure-holder;
(v) classification of soil, supported in case of instruments exceeding twenty thousand rupees in value, by the certified copies, or extracts from the relevant revenue records issued in accordance with law;
(vi) location (whether lies in an urban area, semi-urban area, or countryside); and
(vii) minimum value fixed by the Collector of the district."
15. Admittedly, on the date of execution of the sale deed, the provisions of U.P. Zamindari Abolition & Land Reforms Act, 1950 were applicable. The definition of "land" as contained under section 3(14) of the U.P. Zamindari Abolition & Land Reforms Act, 1950, reads as follows:
(14) "Land"[except in Sections 109, 143 and 144 and Chapter VII] means land held or occupied for purposes connected with agriculture, hoticulture or animal husbandry which includes pisciculture and poultry farming;
16. In view of the definition of land contained in the law relating to land tenures, i.e. U.P. Zamindari Abolition & Land Reforms Act, 1950, the fact that the land was not declared as Abadi under section 143 of U.P. Zamindari Abolition & Land Reforms Act, 1950 as explained under section 3(14) of the said Act, in itself becomes a relevant factor for determining the nature of land that was subject matter of instrument. This Court in various authorities has held that when the land is purchased for agricultural purposes and declaration under section 143 of the U.P. Z.A. & L.R.Act, 1950 has not been made and merely because the land is situated in close vicinity of the non-agricultural land, the same would not loose its character as the agricultural land for the purposes of levy of stamp duty. Reference can be made to few authorities of this Court in the case of Aniruddha Kumar and Ashwini Kumar vs Chief Controlling Revenue Authority, U.P. Allahabad and another, reported in 2000 (3) AWC 2587; Smt. Sushila Verma vs State of U.P. and others reported in 2006 (2) AWC 1492 and Sudama vs Chief Controlling Authority and others, reported in 2013 (4) AWC 3571.
17. Moreover, had the allegation of the State been to the effect that though the land was purchased for agricultural purposes, but its user was immediately changed and on the date of sale deed, it was being used for any other purpose like, industrial, commercial or even residential, the situation would have been different. Even in those situations, spot inspection at the relevant point of time was a necessity, but, admittedly, in the present case, no spot inspection has been carried out. Necessity of spot inspection and its mandatory nature, with reference to Rule 7 (3) (c) of the aforesaid Rules of 1997, has been reiterated, time and again by this Court in various authorities including Ajay Agarwal and others vs Commissioner Lucknow and others, reported in 2023 (2) ADJ 561 (LB), and Ram Khelawan alias Bachcha vs State of U.P. and another, reported in 2005 (2) AWC 1087.
18. Insofar as reliance placed upon the exemplar is concerned, comparing the area purchased by the petitioner, i.e. around 11000 square meters, a sale deed covering a very small area of about 139.36 square meters cannot be said to be a rational approach.
19. The observations/findings recorded in the orders impugned are also contrary to principles of burden of proof particularly, in a case where proceedings arise out of a fiscal statute. Once the State was proceeding to impose deficient stamp duty upon the petitioner, the entire burden lay upon the State to establish beyond reasonable doubt that the petitioner made some concealment at the time of getting the sale deed executed in his favour or that within a close proximity of dates, the user of the land in dispute was changed so as to levy additional stamp duty. Nothing to this effect has been brought on record, rather, not only the findings recorded in the orders impugned are contrary to the provisions of the Indian Stamp Act, 1899, as applicable in the State of U.P. as well as U.P. Stamp (Valuation of Property) Rules, 1997, but certainly contrary to the law consistently laid down by this Court.
20. Insofar as the imposing four times penalty is concerned, it is well settled that unless "mens rea" is established on the part of the purchaser, no penalty can be imposed, even if the provision of penalty is a creation of statute. Regarding imposition of penalty, reference can be made to a judgment of this Court in the case of Smt. Asha Kapoor vs Additional Collector (Finance & Revenue), Ghaziabad and others, reported in 2008 (72) ALR 125, where this Court has held that penalty can be imposed if there is an attempt to evade the stamp duty and penalty presupposes culpability and an intention to conceal or to play fraud with the authorities. I do not find any finding on record, whereunder any opinion has been formed by the respondent-Authorities that the petitioner defrauded the Government having mens rea at the time of getting the sale deed executed. Even the annexures to the writ petition disclosing the nature of land have not been disputed by the State in the counter affidavit. I also find that the sale deed in question conforms to the statutory requirements of disclosure of necessary particulars as per rule 3(1)(a) of the Rules of 1997. Therefore, imposition of penalty is also contrary to law of the land.
21. Insofar as the contention of Shri Nipun Singh to the effect that since the sale deed was declared as void or invalid, no deficient stamp duty could be levied upon the petitioner, the Court it is not impressed by the said submission in view of the definition of "Instrument" as contained under section 2 (14) of the Indian Stamp Act, 1899, which reads as follows:
14. Instrument.- "instrument" includes-
(a) every document, by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; ..........
22. As per the aforesaid definition, it is clear that even if, no rights are created by an Instrument, but they are purported to be created, the document shall fall within the definition of "instrument" so as to invoke the provisions of Indian Stamp Act, 1899. This Court in the case of Om Prakash Umar vs State of U.P. and others, reported in 2014 (1) AWC 120, has held that the validity of the transfer made in favour of the transferee is not a relevant criteria so as to grant exemption from payment of stamp duty. Therefore, merely because the sale deed has been declared as invalid in any subsequent proceedings, the same would be of no consequence insofar as the present case under the Indian Stamp Act is concerned. The argument advanced by the petitioner to this effect is hereby discarded.
23. Learned Standing Counsel submits that in case, non-conduct of the spot inspection is treated as an illegality behind passing of the orders impugned, the matter may be remanded to the authorities for conducting or getting conducted spot inspection and then pass a fresh order.
24. However I find that no fruitful purpose would be served in remanding the matter to the Authorities and infact remand in this case would be a futile exercise for the reason that the instrument in question was executed on 27.01.2011 and it is well settled that chargeability of the stamp duty has to be examined with reference to the date of execution of instrument. Proposition to this effect has been consistently laid down by this Court in various authorities including Shahid Ali vs Commissioner Bareilly Division Bareilly and others, reported in 2013 (6) ADJ 425 and Har Charan Lal Ice & Cold Storage Pvt. Ltd. Vs State of U.P. and others, reported in 2013 (2) AWC 1731. Therefore, the insistence of learned Standing Counsel regarding remand is liable to be rejected, also for the reason that if inspection is carried out today, i.e. in the year 2023 that would be wholly irrelevant for the purposes of determination of stamp duty on the date of execution of sale deed i.e. 2011. Therefore, such spot inspection would neither be of any significance nor relevant for the purposes of deciding the matter.
25. In view of above, the writ petition succeeds and is allowed.
26. The order dated 06.05.2013 passed by respondent No. 3, Collector/District Magistrate, Gautam Budh Nagar in Case No. 14/2011-12 (State vs Rajkumar) as well as order dated 07.09.2015 passed by respondent No. 2, Chief Controlling Authority/Board of Revenue, U.P. Circuit Road, Meerut in Appeal No. 107/M/2013-14 (Rajkumar Bhati vs State of U.P.) are hereby quashed by issuing a writ of Certiorari.
27. A writ of Mandamus is also issued to the effect that any amount deposited by the petitioner either prior to filing of this writ petition or in pursuance of any interim order passed in the present case, shall be refunded to the petitioner along with simple interest at the rate of 6% per anum from the date of its deposit till the date of actual payment,within a period of three months, on moving appropriate application by the petitioner along with certified copy of this order before the authority concerned.
Order Date :- 13.4.2023 Sazia