Punjab-Haryana High Court
Rakesh Kumar And Others vs State Of Punjab And Others ... on 14 September, 2010
Author: Permod Kohli
Bench: Permod Kohli
IN THE HIGH COURT OF PUNJAB & HARYANA AT
CHANDIGARH
CWP. No. 1088 of 2009
Date of Decision: 14.9.2010.
Rakesh Kumar and others --Petitioners
Versus
State of Punjab and others --Respondents
CORAM:- HON'BLE MR.JUSTICE PERMOD KOHLI.
Present:- Mr. H.R. Bhardwaj, Advocate for the petitioners.
Ms. Kavita Arora, A.A.G., Punjab.
***
PERMOD KOHLI.J (ORAL) Punjab Urban Development Authority (hereinafter referred to as P.U.D.A) held auction of bulk of market plots including Plot No. 33, Phase XI/65 in Urban Estate, Mohali on 7.9.2001 on a reserved price. The petitioners participated in the auction and their highest bid for an amount of Rs. 12.65 lacs in respect to Plot No.33 was accepted. Allotment letter dated 29.1.2002 was issued in favour of the petitioners. Out of the total sale consideration 25% of the amount i.e. Rs. 3,16,250/- was paid at the fall of hammer and the balance amount of Rs. 9.69 lacs was payable with interest in the following manner:-
Date Amount Interest Total Amount 7.9.2002 2,37,188/- 1,42,313/- 3,79,501/- 7.9.2002 2,37,188 1,06,734/- 3,43,822/- 7.9.2004 2,37,187/- 71,156/- 3,08,343/- 7.9.2005 2,37,187/- 35,578/- 2,72,765/-
Petitioners were required to pay further amount of Rs. 1,50,566/- for grant of no objection as demanded by the Estate Officer vide CWP. No. 1088 of 2009 -2- its letter dated 1.3.2006. This amount was paid by the petitioners by 12.4.2006. The petitioners presented the deed of conveyance for registration before the Sub Registrar. The Sub Registrar, however, made a reference to the Collector for assessment of the market value of the plot under section 47-A of the Indian Stamp Act suggesting that the stamp duty paid was deficient as the petitioner was liable to pay the stamp duty on the market value of the property on the date instrument of conveyance was presented for registration. The Collector vide his order dated 6.3.2007 assessed the market value of the plot at Rs. 75 lacs on the date the document was presented for registration and a deficient stamp duty of Rs. 5,61,000/- was directed to be paid along with interest @ 12% per annum. Aggrieved of the aforesaid order of the Collector, petitioner preferred an appeal before the Commissioner (Appeals), Patiala Division, Patiala. The Appellate Authority concurred with the findings of the Collector dismissed the appeal vide his order dated 24.9.2008 holding that the value of the property is to be determined on the date document is presented for registration and not the date when the property was auctioned. Both these orders (Annexure P-5 & P-7) passed by the Collector and Appellate Authority are assailed in the present writ petition.
According to the petitioner the property having been sold by the Govt. controlled authority duly constituted under law, the price fixed by such authority alone can be construed as the market value of the property and stamp duty is payable only on such value as is actually paid and not on the value of the property at the time of presentation of instrument for registration. Learned counsel for the petitioner has further submitted that the allotment letter itself permitted the payment of amount in yearly CWP. No. 1088 of 2009 -3- installments as is evident from Annexure P-1. The Collector has no jurisdiction to ask for the stamp duty on the alleged market value on the date of registration of the document.
Reply has been filed by the Sub Registrar, who made a reference to the Collector under Section 47-A. Apart from referring to the provisions of Section 47-A, reference is also made to Rule 3-A of the Punjab Stamp (Dealing of Undervalued Instruments) Rules, 1983 as amended up to 23.8.2008 to argue that the stamp duty is payable on the market value of the document as may be determined by the Collector on the date the instrument is presented for registration. The relevant extract of Section 47-A and Rule 3-A are reproduced hereunder:-
" 47-A. Instruments under-valued how to be dealt with.
(1) If the market value of any property, which is the subject of any instrument on which duty is chargeable on market value as set forth in such instrument, is less than even the minimum value as determined in accordance with the rules made under this Act, the Registering Officer appointed under the Registration Act, 1908, shall, after registering the instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon; and (2) On receipt of reference under sub-Section (1), the Collector shall, after giving the parties reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules under this Act, determine the value or consideration and the duty as aforesaid and the deficient amount of duty, if any, along with interest at the rate of 12% per annum on such deficient amount, shall be payable by the person liable to pay the duty from the date of registration of the instrument relating to such CWP. No. 1088 of 2009 -4- property to the date of payment of deficient amount of the duty;
Provided that a person shall also be liable to pay penal interest at the rate of three per cent per annum, if there was an intentional omission or lapse on his part in not setting forth the correct market value of the property."
Explanation:- For the purpose of this section, value of any property shall be estimated to be the price which in the opinion of the Collector or the appellate authority, as the case may be, such property would have fetched, if sold in the open market on the date of execution of the instrument relating to the transfer of such property."
xxx xxx xxx 3-A. Procedure to be adopted for fixation of minimum value of land/property. The Collector of district shall in consultation with Committee of experts consisting of officers of the department of Public Works (Building & Road), Department of Revenue and Rehabilitation, Punjab Urban Development Authority, Department of Local Govt., Department of Rural Development and Panchayats Department of Horticulture/Forest/Town Planning/Industries or any other department as may be found desirable, fix the minimum market value of land/properties, located in his district, locality-wise and category wise and convey the same to the Registering Officer (s) for the purposes of levying of stamp duty on instruments of transfer of any property. The value of agricultural land will be fixed per acre/per bigha whereas for other lands/properties, it will be fixed per Marla, per square yards/per square feet/per square meter keeping in view the following factors.
CWP. No. 1088 of 2009 -5-
The rates so fixed, will be revised by the Collector, once a year as far as possible in the month of March and to be effective from first April of each year or after one month of its fixation. Copies of rates so fixed/revised shall be made available by the Collector to the Govt., Inspector General of Registration, Punjab, Commissioners of Divisions, Sub-Divisional Magistrates and the Registering Officers concerned. The Registering Officers will display the rate lists on the notice board for the information of general public. The value of land/properties so fixed/revised shall be deemed to be the price, which it would have fetched if sold in public auction."
From the conjoint reading of Section 47-A and Rule 3-A particularly the explanation appended to Section 47-A what emerges is that the value of the property is to be determined on the date of execution of the instrument and not any anterior date. It is admitted case of the petitioners that the instrument was executed on 28.2.2007 and presented for registration. Thus, the value of the property is to be seen on the said date. District Collector, Mohali had fixed the rates for the area, where the property is situated in the year 2005-06 and 2006-07 @ 30,000/- per square yard and on that basis the value of the property has been determined at Rs. 75 lacs. It is undisputed that the petitioner has purchased the property at the rate of Rs. 12.65 lacs. The sale price was fixed on the date of auction that was held on 7.9.2001, whereas the sale deed was presented for registration after a period of about 6 years. Undisputedly, the rates of the property must have gone up during this period of 6 years. The Collector's rates are not in dispute nor challenged in the writ petition. The only contention of the petitioner is that the rates prevalent at the time of auction and actually paid CWP. No. 1088 of 2009 -6- by the petitioners alone should be considered as the market value and stamp duty is chargeable on that basis. However, the explanation appended to Section 47-A clearly prescribes that the value of the property is to be estimated on the date of execution of the instrument.
In view of the clear statutory provisions, there is no escape for the petitioners but to pay the duty on the market value prevalent on the date of registration of document. This controversy is also considered by the Hon'ble Apex Court in a case reported as 2008 SC 509 titled as State of Rajasthan and others Vs. M/s Khandaka Jain Jewellers.
In the case before the Hon'ble Supreme Court an agreement to sell was executed in the year 1983 and a sale consideration was fixed at Rs. 1,41,000/- out of which 20, 000/- was paid as advance money. The vendor failed to comply with the agreement and a suit for specific performance of contract was filed. The suit was decreed in the year 1994. The vendee deposited the balance sale consideration. The Executing Court after execution of the documents forwarded the same to the Sub Registrar for registration. Sub Registrar referred the document to the Collector under Section 47-A of the Indian Stamp Act. The Collector determined the value of the property at Rs. 5,60,000/- and asked for deficient stamp duty. The order of the Collector was challenged in the writ petition. The High Court of Rajasthan set aside the order of the Collector and directed the Collector to assess the value on the date suit for specific performance was filed. Order of learned Single Judge was affirmed by the Division Bench of the High Court. The Hon'ble Supreme Court interpreting the provisions of Sections 3,17 and 27 of the Registration Act held as under:-
CWP. No. 1088 of 2009 -7-
" It may be mentioned that there is a difference between an agreement to sell and a sale. Stamp duty on a sale has to be assessed on the market value of the property at the time of the sale, and not at the time of the prior agreement to sell, nor at the time of filing of the suit.This is evident from section 17 of the Act. It is true that as per Section 3, the instrument is to be registered on the basis of the valuation disclosed therein. But Section 47-A of the Rajasthan(Amendment) Stamp Duty Act contemplates that in case it is found that properties are under valued then it is open for the Collector (Stamps) to assess the correct market value. Therefore, in the present case when the registering authority found that valuation of the property was not correct as mentioned in the instrument, it sent the document to the Collector for ascertaining the correct market value of the property. The expression "execution" read with Section 17 leaves no manner of doubt that the current valuation is to be seen when the instrument is sought to be registered. The Stamp Act is in the nature of a taxing statute, and a taxing statute is not dependant on any contingency. Since the word "execution" read with Section 17 clearly says that the instrument has to be seen at the time when it is sought to be registered and in that if it is found that the instrument has been undervalued then it is open for the registering authority to enquire into its correct market value. The learned single Judge as well as the Division Bench in the present case had taken into consideration that the agreement to sell was entered into but it was not executed. Therefore, the incumbent had to file a suit for seeking a decree for execution of the agreement and that took a long time. Therefore, the Courts below concluded that the valuation which was in the instrument should be taken into account. In our opinion this is not a correct approach. CWP. No. 1088 of 2009 -8- Even the valuation at the time of the decree is also not relevant. What is relevant in fact is the actual valuation of the property at the time of the sale. The crucial expression used in Section 17 is "at the time of execution".
Therefore, the market value of the instrument has to be seen at the time of the execution of the sale deed, and not at the time when agreement to sale was entered into. An agreement to sell is not a sale. An agreement to sell becomes a sale after both the parties signed the sale deed. A taxing statute is not contingent on the inconvenience of the parties. It is needless to emphasize that a taxing statute has to be construed strictly and considerations of hardship or equity have no role to play in its construction.
12. In this back-ground, if we construe Section 17 read with Section 2(12) then there is no manner of doubt that at the time of registration, the Registering Authority is under an obligation to ascertain the correct market value at that time, and should not go by the value mentioned in the instrument."
In the backdrop of above legal position the orders impugned do not suffer from any illegality.
As a proposition of law the Collector has rightly determined the value of the property for purpose of levy of stamp duty. However, the present case there is an intervening circumstance. The property is situated at Mohali i.e. within G.M.A.D.A. The State Govt. in exercise of its powers conveyed under Sections 47-A and 75 of the Indian Stamp Act issued Notification dated 28.5.2009 amending the Punjab Stamp (dealing of undervalued instruments) (Second Amendment) Rules, 2009. Rule 3-A of 1983 Rules was further amended by adding following explanation:- CWP. No. 1088 of 2009 -9-
"1. These rules may be called the Punjab Stamp (dealing of under-valued instruments) (Second Amendment) Rules, 2009.
2. In the Punjab Stamp (dealing of under-valued Instruments)Rules, 1983 in Rule 3-A for the existing explanation inserted- vide notification No.16/1/2009-S.T.II/1772 dated 2nd March, 2009, the following explanation shall be deemed to have been substituted with effect from 2nd March, 2009:-
"Explanation:- The consideration amount fixed at the time of allotment of immovable property by any Govt./Semi Govt. Organization shall be deemed to be the Collector's rate and the stamp duty shall be charged for registration of document upon the consideration amount fixed by the Govt./Semi Govt. Organization, provided that document is got registered by the original allottee up to 2nd September, 2009 from issue of this notification or within three months from the payment of last regular installment as per schedule of payment of such allotment."
ROMILA DUBEY, Financial Commissioner, Revenue & Secretary to Govt. of Punjab, Department of Revenue and Rehabilitation."
The above explanation provides that where the allotment of property is made by any Govt./Semi Govt. organization, the amount of consideration fixed at the time of allotment of immovable property shall be deemed to be the Collector's rate and stamp duty shall be charged on the amount fixed by the Govt./Semi Govt. organization, if, the document is registered by original allottee up to 2.9.2009. The date fixed in the aforesaid notification has been further extended by a subsequent notification dated 11.11.2009 up to 31.3.2010 as is evident from the subsequent public notice published in "The Tribune" on 16.1.2010. The public notice reads as CWP. No. 1088 of 2009 -10- under:-
"PUBLIC NOTICE Govt. of Punjab, Department of Revenue and Rehabilitation vide its Notification No.16/01/09-ST-11/8674 dated 11.11.2009 has given relief to the allottees that the stamp duty shall be charged for registration of document upon the consideration amount fixed by the Govt./Semi-Govt. Organization, provided that document is got registered up to 31.12.2009 by the original allottee. The relief has also been allowed to the persons whom such property is transferred by the original allottee through a Govt./Sem- Govt. Organization who are yet to pay full & final installment or legal heirs of the original allottees."
Based upon the aforesaid notification, it is contended on behalf of the petitioners that in view of the amendment to Rule 3-A of 1983 rules, the allottees who have purchased the property from Govt./Semi-Govt. Organizations are entitled to obtain the sale deed up to 31.3.2010 and in such cases the rate fixed by the organization shall be deemed to be the Collector's rate.
I have carefully gone through above notification. In para 2 of the notification the amendment has been introduced w.e.f. 2.3.2009. Thus, the explanation appended becomes operative from the said date and by subsequent extensions it remains operative up to 31.3.2010. The petitioners are not entitled to the benefit of the aforesaid amendment of Rule 3-A for the simple reason that the document was executed on 6.3.2007 when amendment to the rule was not in existence.
Thus, there is no substance in the contention of the petitioner that under the amended rules the sale consideration fixed by the authorities CWP. No. 1088 of 2009 -11- at the time of auction alone to be construed as Collector's rate for the property in question. There is another important aspect. It is not basically Rule 3-A of 1983 rules which requires that the rate should be determined on the date of execution, it is the explanation appended to Section 47-A which prescribes that the rates should be determined on the date of execution and no rule framed under the Act can nullify the principle provision contained in the Act, rule being subservient to the Act.
In view of the above, I do not find any merit in this petition, which is accordingly dismissed.
(PERMOD KOHLI) JUDGE 14.9.2010.
lucky Whether to be reported?Yes.