Allahabad High Court
Gyan Prakash vs State Of U.P Thru Secy Revenue Lko & Ors on 7 February, 2019
Author: Abdul Moin
Bench: Abdul Moin
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR Reserved Case :- MISC. SINGLE No. - 17858 of 2016 Petitioner :- Gyan Prakash Respondent :- State Of U.P Thru Secy Revenue Lko & Ors Counsel for Petitioner :- Ajay Pratap Singh,Puttan Singh Counsel for Respondent :- C.S.C Hon'ble Abdul Moin,J.
1. Heard learned counsel for the petitioner and Sri Mannu Dixit, learned Standing Counsel appearing for the respondents.
2. By means of the present writ petition, the petitioner has prayed for the following main reliefs:-
(i) To issue a writ, order or direction in the nature of certiorari quashing of the impugned order dated 11.05.2016 passed by the Commissioner, Faizabad Division, Faizabad, in revision no.19/Barabanki/ under Section 56(1) of Indian Stamp Act, 1899 and also the impugned order dated 02.01.2015 passed by the Collector/District Magistrate, District Barabanki, contained as Annexure No.1 and 2 respectively to this writ petition.
(ii) To issue a writ, order or direction in the nature of mandamus commanding the opposite parties to refund Rs.4,50,000/- along with 14% interest, which has been illegally got deposited from the petitioner by the opposite parties.
3. The case set forth by the petitioner is that he had purchased agricultural land having an area of 0.238 hectares from Gata No.1332 situated in village Chaubisi (Ati Vishist) Pargana Subeha, Tehsil Haidargarh, District Barabanki from one Sobhnath Singh alias Sonu Singh through registered sale deed on 20.11.2007. After making payment of proper stamp duty upon the land which was recorded as agricultural land according to circle rate prescribed by the Collector/District Magistrate, Barabanki, the sale deed was registered. Copy of the sale deed is enclosed as Annexure-3 to the petition. The total area of Gata No.1332 is alleged to be 2.103 hectares. It is also contended that there is no declaration of Section 143 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (for short, 'the Act of 1950').
4. On 01.12.2007, a case under Section 47-A/33 of the Indian Stamp Act, 1899 (for short, 'the Act of 1899') was initiated against the petitioner by Sub-Registrar, Haidargarh, District Barabanki in the Court of Collector/District Magistrate, Barabanki, which was registered as case No.73/61/37 (09-10) - State vs. Gyan Prakash.
5. On 24.09.2010, an order was passed by the Collector/District Magistrate, Barabanki, for recovery of an amount of Rs.3,75,520/- plus Rs.40,000/- in respect of deficiency of stamp regarding petitioner's land. It being an ex-parte order, the petitioner moved an application for restoration which application was rejected on 11.04.2012. Being aggrieved, the petitioner preferred an appeal no.48/Barabanki under Section 56 of the Act of 1899 before the Commissioner, Faizabad Division, Faizabad, who vide order dated 29.05.2013 set-aside the order of the Collector/District Magistrate, Barabanki, who was further directed to hear the case on merits.
6. In pursuance thereof, the Collector/District Magistrate, Barabanki, heard the matter and vide order dated 02.01.2015 found the deficiency of stamp duty of Rs.3,75,520/- against the petitioner and he was also imposed with a penalty of Rs.50,000/-. Copy of the order dated 02.01.2015 is Annexure-2 to the writ petition.
7. Being aggrieved with the said order, the petitioner preferred a revision under Section 56 of the Act of 1899 before the Commissioner, Faizabad Division, Faizabad, who rejected the revision vide order dated 11.05.2016, a copy of which is Annexure-1 to the writ petition.
8. Being aggrieved against the orders dated 11.05.2016 and 02.01.2015, the present petition has been filed.
9. Learned counsel for the petitioner while seeking to challenge both the impugned orders has contended that through the order dated 02.01.2015 the Collector/District Magistrate, Barabanki, has found the deficiency of stamp duty after having considered the sale deed executed in favour of one Sri Onkareshwar Dixit on 11.09.2007 with respect to part of the same Gata i.e. Gata No.1332 and a second sale deed executed on 22.09.2007 in favour of one Sri Ram Chandra Yadav again with respect to part of the same Gata whereof the stamp duty has been paid at residential/commercial land while at the same time the stamp duty paid by the petitioner was for the land indicating it as agricultural land. It is also contended that 88 mango trees were found to be present over the land purchased by the petitioner. Deficit stamp duty was alleged to have been affixed on the ground that just adjacent to the land of the petitioner, a petrol pump is also situated and that the land of the petitioner is situated adjacent to the national highway. Thus, it is contended that by taking the aforesaid grounds, the stamp duty given by the petitioner has been found to be deficit on the ground that the land has got a higher market value as would be apparent from perusal of the other sale deeds, which were executed for the same Gata as residential/commercial land and thus it is contended that the said grounds are patently misconceived being grounded on hypothesis, presumption and assumption.
10. Learned counsel for the petitioner has drawn the attention of this Court towards the inquiry report submitted with respect to the land of the petitioner by the Sub-Registrar, Tehsil Haidargarh, District Barabanki, a copy of which has been filed as Annexure-5 to the writ petition. It is also contended that the finding of the Collector/District Magistrate, Barabanki, in the impugned order dated 02.01.2015 that the land purchased by the petitioner has got 88 mango trees is also patently misconceived inasmuch as the Khasra of the said Gata No.1332 indicates the nature of the land as garden and 84 mango trees are shown in the entire Khasra. It is contended that once the petitioner has only purchased 0.238 hectares of land out of the total area of 2.103 hectares of Gata No.1332 and as per Khasra, 84 mango trees are found on the entire piece of land i.e. Gata No.1332 having area of 2.103 hectares consequently the Collector/District Magistrate, Barabanki, through the impugned order dated 02.01.2015 indicating that all the trees are situated on the land purchased by the petitioner has not considered the Khasra and consequently the order is patently vitiated. A copy of the Khasra of Gata No.1332 has been filed as Annexure-7 to the writ petition.
11. Thus in effect learned counsel for the petitioner argues that merely because certain portions of the aforesaid Gata were purchased at higher rates by other purchasers, a petrol pump is situated adjacent to the land of the petitioner and the land of the petitioner is situated right next to the national highway, the same would not be itself indicative of the fact that deficit stamp duty has been given inasmuch as once the stamp duty has been affixed at the circle rate for agricultural land and the land is agricultural land consequently it is this fact which had to be considered by the Collector, Barabanki and no other extenuating or extraneous facts and circumstances could have been seen by the Collector while passing the impugned order dated 02.01.2015. It is argued that merely because the petrol pump and highway are situated adjacent to the land of the petitioner would not entail that the land of the petitioner is also for commercial or residential purpose and thus the petitioner cannot be compelled to pay a higher stamp duty at the residential/commercial rates. It is also argued that there is no declaration under Section 143 of the Act of 1950 and accordingly once the land continues to be agricultural land as such the Collector, Barabanki, has patently exceeded his authority in passing the impugned order dated 02.01.2015. It is also argued that three sale deeds having numbers 2465, 3432 and 4056 were executed on 04.06.2008, 08.08.2008 and 18.07.2014 for the same Gata and the stamp duty was affixed at agricultural rate yet the said facts have not been considered by the Collector, Barabanki, while passing the impugned order.
12. In this regard, learned counsel for the petitioner has placed reliance on the judgment of this Court reported in 2014 (1) ADJ 777 in re: Ram Achhaibar vs. State of U.P. and others as well as an unreported judgment in the case of Dukhi vs. State of U.P. and others passed in Writ -C No.53337 of 2002 decided on 02.11.2012 to contend that unless a finding is recorded by the Tehsildar that the land is not used for agriculture purpose consequently holding it otherwise would vitiate the order imposing stamp duty at residential rate. It is also argued that the stamp duty cannot be imposed on the basis of presumption and it is the actual land use which is to be considered. Thus, learned counsel for the petitioner contends that the order passed by the Collector, Barabanki, imposing stamp duty at residential/commercial rates and by also finding 88 mango trees to be situated on the land of the petitioner are the findings which are totally contrary to records and consequently the impugned order merits to be set-aside. Also the order of the revisional authority being based upon the order passed by the Collector, Barabanki, is also vitiated having not considered the relevant facts as were raised before the revisional authority.
13. In the rejoinder affidavit, an argument has been taken by learned counsel for the petitioner that some portion of the land had been acquired by the State Government for which the compensation has been awarded to the petitioner at agricultural land rates. In this regard, a copy of the award has been filed as Annexure RA-1 to the rejoinder affidavit. It is thus contended that once the compensation has been awarded at agricultural rate consequently the respondents cannot be allowed to blow hot and cold in the same breath inasmuch as once the petitioner has been imposed with additional stamp duty on the ground of the land not being agricultural land then the same gets belied by their own conduct of giving compensation as agricultural land after acquisition of land and thus by their own conduct, it is apparent that the imposition of additional stamp duty is patently misconceived and the value of the land has to be ascertained and taken as agricultural land.
14. Per contra, Sri Mannu Dixit, learned Standing Counsel, has supported the impugned orders dated 02.01.2015 and 11.05.2016. Placing reliance on the averments contained in the counter affidavit, it is argued that a complaint dated 21.11.2007 was made by one Sri Achal Kumar Mishra. On the basis of the said complaint, the Sub-Registrar, Haidargarh, Barabanki made an inspection and submitted a report dated 01.12.2007. On the basis of the said report, a stamp case was referred and a notice was sent to the petitioner. In the inspection report dated 01.12.2007 it clearly came out that two sale deeds had been executed pertaining to certain portions of the land of Gata no.1332, a portion of which was also purchased by the petitioner. One sale deed no.3404 dated 11.09.2007 was executed by one Sri Anil Kumar Singh in favour of Sri Onkareshwar Dixit and another sale deed no.3583 was executed in favour of Ram Chandra Yadav on 22.09.2007. Both of them were executed at residential rate of Rs.2050/- per sq. meter. At the same time, the sale deed of the petitioner is dated 20.11.2007 upon which stamp duty has been paid at agricultural rate. Attention has been invited to two sale deed, copies of which have been filed as Annexure CA-1 and 2 for the same Gata no.1332 upon which the stamp duty has been paid at residential rate. It is also contended that despite sending of notice the petitioner failed to appear and consequently the order dated 24.09.2010 was passed by the Collector, Barabanki against which the recall application was rejected vide order dated 11.04.2012. Upon filing of the appeal, the order dated 11.04.2012 was set-aside and the Collector, Barabanki was required to hear the matter and in pursuance thereof, after considering the objections raised by the petitioner and the material evidence on record, the Collector, Barabanki passed the impugned order dated 02.01.2015 in accordance with the provisions of Section 47-A/33 of the Act of 1899 finding a deficiency of stamp duty of Rs.3,75,520/- and imposed the penalty of Rs.50,000/- along with interest at the rate 1.5% per month from the date of execution of sale deed till the date of recovery. A revision was preferred by the petitioner against the aforesaid order which too was dismissed on 11.05.2016.
15. On merits, it has been contended that once the competent authority has proceeded to go through the two exemplars of sale deeds and upon which the stamp duty had been affixed at residential/commercial rates while at the same time the petitioner has affixed the stamp duty at agricultural rate and hence the order levying the stamp duty at residential/commercial rates by the Collector, Barabanki, does not call for any interference. It is also contended that there was specific attempt on the part of the petitioner to evade payment of stamp duty as such penalty has also been correctly imposed. It is also contended that on the east side of the property of the petitioner there is garden of Ram Naresh, on the west side there is a petrol pump, on the north side is the land of Parideen Maurya while on the south side, the Lucknow-Sultanpur national highway is existing. As such, the land of the petitioner is situated on the Lucknow-Sultanpur national highway.
16. As regards 88 trees that have been found existing over the land of the petitioner, it is contended that in the inspection report dated 01.12.2007, it clearly came out that the land purchased by the petitioner has got 88 mango trees situated upon the same which are aged about 5 to 10 years. In a subsequent report dated 13.08.2010, the earlier report dated 01.12.2007 has been found to be correct and thus it is contended that the petitioner has correctly been imposed the stamp duty with respect to 88 trees also.
17. Reliance has been placed upon an unreported judgment passed by this Court in Writ -C No.47533 of 2010 in re: Wasi Ur Rehman and another vs. Commissioner, Moradabad Division and another decided on 26.02.2015, to contend that though the entry in the revenue records may be relevant but cannot be the sole factor in determining the market value as the market value would be dependent upon other factors like change of use in adjacent area or if the properties were either sold or bought at commercial rates. In such circumstances, for the purpose of stamp duty, the value of the property would be the same as that of the property bought at commercial rate irrespective of the entry in the revenue records. Thus, it is contended that once the aforesaid factors have been considered by the Collector, Barabanki, and the order dated 02.01.2015 has been passed, as such, there is no illegality or infirmity in the said order and the order merits to be upheld. Likewise, it is contended that the order passed by the revisional authority has been passed after considering the entire grounds taken by the petitioner in the revision filed by him and thus even the said order does not require any interference by this Court.
18. Heard learned counsel for the contesting parties and perused the records.
19. The petitioner claims to have purchased a certain portion of land of Gata No.1332 through a registered sale deed on 20.11.2007. The stamp duty has been paid at the circle rate prescribed by the Collector, Barabanki, for agricultural land and the land itself being recorded in revenue records as agricultural land. It is contended that two other sale deeds, which were executed for the same piece of land on 11.09.2007 and 22.09.2007 in favour of Sri Onkareshwar Dixit and Sri Ram Chandra Yadav, had been executed by paying the stamp duty at residential/commercial rates i.e. at higher rates. At the same time, it has also been contended that with respect to the same piece of land three deeds had been executed on 04.06.2008, 08.08.2008 and 18.07.2014 wherein the stamp duty had been affixed by treating the land as agricultural land and at the circle rate prescribed for the agricultural land. It is also admitted that one side of the land of the petitioner has got an existing petrol pump, which was already existing at the time of sale deed and the other side consists Lucknow-Sultanpur highway. The entire controversy started upon a complaint having been made against the petitioner of under valuation of the stamp duty. The said complaint was made on 21.11.2007 in pursuance to which an inspection was conducted and a report was submitted on 01.12.2007. After issue of notice to the petitioner and after repeated opportunities, the Collector, Barabanki passed the ex-parte order dated 24.09.2010 against which the recall application was rejected on 11.04.2012. The said order was set-aside in an appeal preferred by the petitioner whereafter the Collector, Barabanki, proceeded to pass the order dated 02.01.2015, a copy of which is Annexure-2 to the petition. The order dated 02.01.2015 indicates that all the grounds taken by the petitioner have been considered. The Collector, Barabanki has also considered the fact of two sale deeds having been executed on 11.09.2007 and 22.09.2007 pertaining to part of the same Gata i.e. Gata No.1332 of which a part had been purchased by the petitioner on 20.11.2007. The aforesaid two sale deeds dated 11.09.2007 and 22.09.2007 have got the stamp duty affixed at residential/commercial rates. The Collector, Barabanki, has also referred to the two reports dated 01.12.2007 and the report of Tehsildar dated 13.08.2010 whereby the existence of 88 mango trees upon the land of the petitioner has been found to be correct. Consequently, after considering all the aforesaid facts, the Collector, Barabanki, proceeded to impose the stamp duty at commercial/residential rates and after giving a finding of there being a deliberate act on the part of the petitioner to evade stamp duty proceeded to impose the penalty of Rs.50,000/- also. Upon a challenge being raised by the petitioner by means of a revision, the revisional authority i.e. the Commissioner, Faizabad Division, Faizabad also upheld the order passed by the Collector, Barabanki and dismissed the revision through the impugned order dated 11.05.2016, a copy of which is Annexure-1 to the petition.
20. The valuation of the property in the State of U.P. is governed by the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 (for short, 'the Rules of 1997'). For the sake of convenience, Rule 4, 5, 6 and 7 of the Rules of 1997, which have a bearing on this case, are reproduced as under:-
"4. Fixation of minimum rate for valuation of land, construction value of non-commercial building and minimum rate of rent of commercial building. - (1) The Collector of the district shall yearly, as far as possible in the month of August, fix the minimum value per hectare/per square metre of agriculture/non- agriculture land, the minimum value per square metre of construction of non commercial building and single unit shops and commercial establishments and the minimum value of carpet area per square metre for shops and commercial establishment situated in building, other than single unit commercial buildings, situated in different parts of the district taking into consideration the following facts:
(a) in case of agriculture land -
(i) Classification of soil;
(ii) availability of irrigation facility;
(iii) proximity to road, market, bus station, railway station, factories, educational institutions, hospitals and Government offices;
(iv) location with reference to its situation in urban area, semi-urban area or country-side; and
(v) potentiality as distance from developed area;
(b) ......
(c) .......
(2) .......
(3) The Collector of the district shall after fixing the minimum value per hectare/per square metre of agriculture/non-agriculture land and the minimum rate of construction per square metre of non-commercial buildings and single unit shops and commercial establishments and per square metre rate of carpet area of shops and commercial establishments situated in buildings other than single unit commercial building under sub-rule (1) send a statement in three parts to the Registrar, the first part of such statement shall contain the division of district under his jurisdiction, into urban area, semi urban area and the country side, second part shall specify the minimum value of land situated in different parts of the sub-district and the third part shall contain, in the case of non-commercial building and single unit shops and commercial establishments situated in commercial buildings, the minimum value of construction and in case of shop and commercial establishment situated in the building other than single unit commercial building the minimum rate of carpet area per square metre.".
5. Calculation of minimum value of land, grove and building. - For the purposes of payment of stamp duty, the minimum value of immovable property forming the subject of an instrument shall be deemed to be such as may be arrived at as follows:
(a) In case of land Minimum value Whether agricultural or non-agricultural Area of land multiplied by minimum value fixed by Collector of the district under Rule 4.
(b) In case of grove or garden
(i) if assessed to revenue Minimum value of the land as worked out in the manner laid down in clause (a) plus the value of the trees standing thereon worked out on the basis of the average price of the trees of the same nature, size and age prevailing in the locality on the date of the instrument;
(ii) if not assessed to revenue or is exempted from it and is rented Twenty times the annual rent plus the premium, if any, plus the value of trees standing thereon determined in accordance with sub clause (i);
(iii) if not assessed to revenue or is exempted from it and profit has arisen during three years immediately preceding the date of the instrument twenty times the average annual profit plus the value of the trees standing thereon determined in accordance with sub-clause(i);
(iv) if not assessed to revenue or is exempted from it and no profit has arisen during the three years immediately preceding the date of the instrument twenty times the assumed annual profit plus the value of the trees standing thereon determined in accordance with sub-clause(i);
(c) In case of building
(i) Non-commercial building.
Minimum value of land whether covered by the construction or not, which is subject-matter of instrument as worked out under clause (a) plus the value of the construction of building arrived at by multiplying the constructed area of each floor of the building by the minimum value fixed by the Collector of the district under Rule 4.
(ii) Commercial building.
(i) In case of single unit shop and commercial establishment, value shall be detgermined by adding minimum value of land whether covered by construction or not, and the value of the constructed area of each floor of the building calculated on the basis of rate fixed by the Collector under Rule 4.
(ii) In case of shop and commercial establishment situated in buildings, other than single unit commercial building, value shall be determined by multiplying the minimum rate of carpet area fixed by the Collector under Rule 4 with the actual carpet area of the shop and commercial establishment.
6. Statement of market value to be furnished to the Registering Officer.- (1) The party presenting an instrument relating to immovable property chargeable with an ad valorem duty, shall submit along with the instrument a statement in duplicate in the form appended to these rules.
(2) The Registering Officer may call for any additional information from the parties concerned or call for and examine any record maintained by a public officer or authority.
(3) The Registering Officer shall forward one copy of the form received by him under sub-rule (1) to the Deputy Commissioner of Stamps or Assistant Commissioner of Stamps concerned, as the case may be.
7. Procedure on receipt of a reference or when suo motu action is proposed under Section 47-A. - (1) On receipt of a reference or where action is proposed to be taken suo motu under Section 47-A, the Collector shall issue notice to parties to the instrument to show cause within thirty days of the receipt of such notice as to why the market value of the property set forth in the instrument and the duty payable thereon be not determined by him.
(2) The Collector may admit oral or documentary evidence, if any, produced by the parties to the instrument and call for and examine the original instrument to satisfy himself as to the correctness of the market value of the subject-matter of the instrument and for determining the duty payable thereon.
(3) The Collector may -
(a) call for any information or record from any public office, officer or authority under the Government or a local authority;
(b) examine and record the statement of any public officer or authority under the Government or the local authority; and
(c) inspect the property after due notice to parties to the instrument.
(4) After considering the representation of the parties, if any and examining for records and other evidence, the Collector shall determine the market value of the subject-matter of the instrument and the duty payable thereon.
(5) If, as a result of such inquiry, the market value is found to be fully and truly set forth and the instrument duly stamped according to such value, it shall be returned to the person who made the reference with a certificate to that effect. A copy of such certificate shall also be sent to the Registering Officer concerned.
(6) If, as a result of inquiry, the instrument is found to be undervalued and not duly stamped, necessary action shall be taken in respect of it according to relevant provisions of the Act."
21. From perusal of the aforesaid rules, it clearly comes out that Rule 4 of 1997 Rules governs the fixation of minimum rate for value of land, which is to be done by the Collector of the district yearly in order to fix the minimum value per hectare/per square meter of agricultural/non-agricultural land. Rule 5 governs the calculation of minimum value of land, grove, garden and building. Rule 6 prescribes statement of market value to be furnished to the Registering Officer while Rule 7 prescribes the procedure on receipt of a reference or when suo motu action is proposed under Section 47-A. Section 47-A of the Act of 1899, which is a U.P. amendment, deals with under valuation of the instrument. Rule 7 of 1997 Rules further provides that upon receipt of a reference or where action is proposed to be taken suo motu under Section 47-A, the Collector shall issue notice to parties to the instrument to show cause as to why the market value of the property set forth in the instrument and the duty payable thereon be not determined by him. For such determination, Rule 7(2) of 1997 Rules clearly provides that the Collector may admit oral or documentary evidence and examine the original instrument to satisfy himself as to the correctness of the market value of the subject-matter of the instrument and for determining the duty payable thereon. Rule 7 (3) of 1997 Rules further provides that the Collector may call for any information or record from any public office, examine and record the statement of any public officer and inspect the property after due notice to parties to the instrument. It is after considering the representation of the parties and examining the records that the Collector shall determine the market value of the subject-matter of the instrument and the duty payable thereon as prescribed under Rule 7 (4) of 1997 Rules. Rule 7 (6) of 1997 Rules further provides that if, as a result of inquiry, the instrument is found to be undervalued and not duly stamped, necessary action shall be taken in respect of it according to relevant provisions of the Act.
22. Thus, a perusal of 1997 Rules clearly reveals that the circle rate is not the determining value of the property as is sought to be argued by learned counsel for the petitioner, rather it is market value which is to be determined by the Collector in terms of the provisions of Rule 7 of 1997 Rules.
23. Further the action against the petitioner started after a complaint was submitted against him for affixing less stamp duty. Such action is contemplated under the provisions of Section 47-A of the Act of 1899, which for the sake of convenience is reproduced as under:-
"47-A. Under-Valuation of the instrument. - (1) (a) If the market value of any property which is subject of any instrument, on which duty is chargeable on the market value of the property as set forth in such instrument, is less than even the minimum value determined in accordance with the rules made under this Act, the registering officer appointed under the Registration Act, 1908, shall, notwithstanding anything contained in the said Act, immediately after presentation of such instrument, and before accepting it for registration and taking any action under Section 52, of the said Act, require the person liable to pay stamp duty under Section 29, to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument for presenting again in accordance with Section 23 of the Registration Act, 1908.
(b) When the deficit stamp duty required to be paid under clause (a), is paid in respect of any instrument and the instrument is presented again for registration, the registering officer shall certify by endorsement thereon, that the deficit stamp duty has been paid in respect thereof and the name and the residence of the person paying them and register the same.
(c) Notwithstanding anything contained in any other provisions of this Act, the deficit stamp duty may be paid under clause (a) in the form of impressed stamps containing such declaration as may be prescribed.
(d) If any person does not make the payment of deficit stamp duty after receiving the order referred to in clause (a) and presents the instrument again for registration, the registering officer shall, before registering the instrument refer the same to the Collector for determination of market value of the property and the proper duty payable thereon.] (2) On receipt of reference under sub-section (1), the Collector shall, after giving the parties a reasonable opportunity of being heard, and after holding an inquiry in such manner as may be prescribed by rules made under this Act, determine the market value of the property which is the subject of such instrument, and the proper duty payable thereon.
(3) The Collector may, suo motu, or on a reference from any Court or from the Commissioner of Stamps or an Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any officer authorised by the State Government in that behalf, within four years from the date of registration of any instrument on which duty is chargeable on the market value of the property, not already referred to him under Sub-Section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value, of the property, which is the subject of such instrument and the duty payable thereon, and if after such examination he has reason to believe that the market value of such property has not been truly set forth in such instrument, he may determine the market value of such property and the duty payable thereon:
Provided that with the prior permission of the State Government an action under this sub-section may be taken after a period of four years but before a period of eight years from the date of registration of the instrument on which duty is chargeable on the market value of the property.
[Explanation - The payment of the deficit stamp duty by any person under any order of the registering officer under sub-section(1) shall not prevent the Collector from initiating proceedings on any instrument under sub-section(3).] (4) If on enquiry under sub-section(2) and examination under sub-section(3), the Collector finds the market value of the property -
i. truly set forth and instrument duly stamped, he shall certify by endorsement that it is duly stamped and return it to the person who made the reference:
ii. not truly set forth and instrument not duly stamped, he shall require the payment of proper duty or the amount required to make up the deficiency in the same, together with a penalty of the amount not exceeding four times the amount of the proper duty or the deficient portion thereof.
[(4-A) The Collector shall also require along with the deficit stamp duty or penalty required to be paid under clause(ii) of Sub-Section(4), the payment of a simple interest at the rate of one and half percent per mensem on the amount of deficit stamp duty calculated from the date of execution of the instrument till the date of actual payment:
Provided that the amount of interest under this sub-section shall be recalculated if the amount of deficit stamp duty is varied on appeal or revision or by any order of a competent Court or authority.
(4-B) The amount of interest payable under sub-section (4-A) shall be added to the amount due and be also deemed for all purposed to be part of the amount required to be paid.
(4-C) Where realisation of the deficit stamp duty remained stayed by any order of any court of authority and such order of stay is subsequently vacated, the interest referred to in sub-section (4-A) shall be payable also for any period during which such order of stay remained in operation.
(4-D) Any amount paid or deposited by or recovered from, or refundable to, a person under the provision of this Act, shall first be adjusted towards the deficit stamp duty or penalty outstanding against him and the excess, if any, shall then be adjusted towards the interest, if any, due from him.] (5) The instrument produced before the collector under sub-Section(2) or under sub-Section(3) shall be deemed to have come before him in the performance of his functions.
(6) In case the instrument is not produced within the period specified by the Collector, he may require payment of deficit stamp duty, if any, together with penalty on the copy of the instrument in accordance with the procedure laid down in sub-section(2) and (4)."
24. A perusal of Section 47-A of the Act of 1899 indicates that Section 47-A also speaks about the market value and not the circle rates upon which the stamp duty is payable. Thus, in effect, as per the aforesaid provisions of the 1899 Act and 1997 Rules, it is the market value which would govern the duty chargeable upon the instrument i.e. the sale deed.
25. A perusal of the procedure which has been followed by the Collector clearly indicates that the Collector, Barabanki, has proceeded to consider the evidence on record which included two sale deeds which were executed in close proximity to the sale deed of the petitioner, both in terms of the time period and for the same piece of land and which were executed at the commercial/residential rates and thereafter the Collector has arrived at the market value of the property in question and subsequent thereto proceeded to hold that the sale deed did not set forth the market value of such property and the duty payable thereon and has imposed the stamp duty and penalty upon the petitioner.
26. In the instant case what this Court also finds is that the aforesaid two sale deeds pertaining to portion of the same Gata in question i.e. Gata No.1332 upon which stamp duty has been affixed at commercial/residential rates have not been disputed by the petitioner. It has also not been disputed that a petrol pump is situated and is running adjacent to the land of the petitioner. The land of the petitioner is also situated on Lucknow-Sultanpur highway. Thus, the Collector after examining these aspects of the matter has arrived at the market value to be the commercial/residential rates as affixed in other two sale deeds executed in the close proximity to the sale deed of the petitioner pertaining to the piece of land belonging to the same Gata.
27 In this regard, apt would be to place reliance on the judgment of this Court in the case of Vijay Kumar and another vs. Commissioner AIR 2008 All. 176, wherein this Court has explained the expression "market value" as under:-
"The 'market value' means 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."
"The 'market value' of land means a price at which both buyers and sellers are willing to do business; the market or current price"
28. Likewise this Court in the case of Ratna Shankar Dwivedi vs. State of U.P. AIR 2012 ALL 100 has held as under with regard to "market value"
"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, if sold by a willing seller, unaffected by the special need of a particular purchaser. It is interesting to note that the Act provides first for determination of minimum value of the property and further says that if the market value of the property set forth in the instrument is less than the minimum value determined under the Act, in such case before registering the instrument the registering authority shall refer the instrument to Collector for determination of market value of the property and the proper duty payable thereon and when the Collector determines market value of the property thereafter the parties shall proceed accordingly."
29. That from the aforesaid discussions, it thus clearly comes out that it is the 'market value' which would be the value at which the stamp duty would have to be affixed on the sale deed.
30. The next question that arises is as to how the authority concerned would adjudicate the matter pertaining to the 'market value' and the stamp duty which in fact has been paid on the sale deed. This question may also not detain this Court inasmuch as Section 47-A (3) of the 1899 Act clearly gives the said power to the Collector to call for an examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property and if he has reason to believe that the market value of such property has not been truly set forth in the instrument he may determine the 'market value' of the said property and the duty payable thereon. Thus, reason to believe is vested with the Collector and upon which the determination of the market value is to follow. The term "reason to believe" used in Section 47-A (3) of the 1899 Act clearly spells out that the authority must have some material, with a direct, circumstantial or even intrinsic evidence on the basis of which he may come to a reasonable belief that the market value of the property has not been correctly indicated in the instrument/sale deed. Thus, there has to be some material before the authority in order to arrive at the said conclusion. This aspect of the matter is also no longer res-integra keeping in view the judgment of this Court in the case of Duncans Industries Limited vs. State of U.P. 1997 SCC On line All 423, wherein this Court after placing reliance on the judgment of Hon'ble the Supreme Court in the case of Ganga Saran and sons vs. Income Tax Officer (1981) 3 SCC 143 and State of Punjab vs. Mahavir Singh (1996) 1 SCC 609 has held as under:-
"Section 47A (2) of the Act postulates that if the Registering Authority while registering the instrument on which duty is chargeable on the market-value of the property, has "reason to believe" that the market-value of the property which is the subject-matter of such instrument has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the market value, of such property and proper duty payable thereon. The term 'reason to believe' occurring in Sub-section (2) of Section 47A spells out that Registering Officer, must have some material-direct, circumstantial or even intrinsic evidence on the basis of which, he may come to a reasonable belief that the market value of the property has not been truly set forth in the instrument. In other words, the belief must be that of the honest and reasonable person based upon reasonable grounds. In Ganga Saran and Sons v. Income Tax Officer (1981) 3 SCC 143: AIR 1981 SC 1363, the Supreme Court while dwelling on the expression 'reason to believe' occurring in Section 147(a) of the Income Tax Act, 1961 was pleased to hold as under:
"The important words under Section 147(a) are 'has reason to believe' and these words are stronger than the words 'is satisfied'. The belief entertained by the Income Tax Officer must not be arbitrary or irrational. It must be reasonable or in other words it must be based on reasons which are relevant and material. The court, of course, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the Income Tax Officer in coming to the belief, but court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under Section 147(a). If there is no rational or intelligible nexus between the reasons and the belief so that on such reasons no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income Tax Officer could not have reason to believe that any part of the income of the Assessee, had escaped assessment and such escapement was by reason of the omission or failure on the part of the Assessee to disclose fully and properly all material facts and the notice issued by him would be liable to be struck down as invalid."
Formulation of the requisite belief under Section 47A of the Stamp Act is not a matter of purely subjective satisfaction. In State of Punjab v. Mahavir Singh (1996) 1 SCC 609 : (1996) 1 SCC 609, the Supreme Court while considering identical Section 47A as inserted in the Act by Punjab Stamp (Amendment) Act, 1992 held that the Registering Authority has to satisfy himself that the value of the property or the consideration of it has not been truly set forth in the instrument and further that it will be "only an objective satisfaction" that the authority has to reach a reasonable belief that the value or consideration of the property conveyed has not been truly set forth in the instrument relating to the transfer of property. It is thus patent that it would be matter of objective satisfaction of the Registering Authority to reach a reasonable belief that the value or consideration of the property which is the subject-matter of transfer, has not been truly set forth."
31. In the instant case the Collector vide impugned order dated 02.01.2015 had issued notice to the petitioner and after hearing the respective parties and after examining the material available on record, which also included two sale deeds executed for part of the same plot namely Gata No.1332 on 11.09.2007 and 22.09.2007, the petitioner's sale deed having been executed on 20.11.2007, had a reason to believe that the market value of the property purchased by the petitioner had not been truly set forth in the sale deed and consequently he determined the market value of such property to be the residential/commercial rates that had been paid with respect to two other sale deed. While doing so the Collector also considered the plot of land of the petitioner to be situated adjacent to the national highway and also having a running petrol pump on the other side of the petitioner's land. Thus, reasons and documents were available on record with the Collector to arrive at the said finding of market value through the order dated 02.01.2015.
32. Even otherwise, a perusal of the sale deed, a copy of which has been filed as Annexure-3 to the petition, also mentions the land of the petitioner being adjacent to the national highway on the southern side and having a petrol pump on the western side of the petitioner's land.
33. As regards the argument of learned counsel for the petitioner that at the time of acquisition of part of petitioner's land the compensation was given at agricultural rates, suffice is to record that determination of market value of the land by the Collector is provided under Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as the Act of 2013) which provides three criteria for assessing and determining the market value of the land. Moreover, in case the compensation was given by determining the market value at agricultural rates which consequently resulted into an award in terms of Section 30 of the Act of 2013, as such, a person being aggrieved with the said award can always challenge the said award by way of a reference under Section 64 of the Act of 2013 before the Authority but merely because the award gives the compensation at agricultural rates cannot be considered to be a valid ground so as to justify the payment of stamp duty at agricultural rates by the petitioner as the market value under the provisions of Indian Stamp Act, 1899, has got a different connotation. Accordingly, this argument is rejected.
34. As regards the argument of learned counsel for the petitioner that the land continues to be recorded as agricultural land and there is no declaration under Section 143 of the Act of 1950 as such the impugned order imposing stamp duty at commercial/residential rates is bad, suffice to state that keeping in view the aforesaid discussions the market value of the property has to be seen irrespective of the fact whether it is residential, commercial or agricultural. The nature of the land and its current use may not be relevant if around the plot in question, properties were being sold and bought at commercial rates and accordingly for determination of the stamp duty the market value of the property would not be the agricultural rates. In this regard, this Court may refer to the judgment of this Court in the case of D.P.R. Foods Pvt. Ltd. vs. State of U.P. and others (2010) 4 All LJ 95, wherein this Court has held as under:-
"12. Under these circumstances, I do not see how the petitioner would fortify his claim that the said property is residential and not commercial. The property in question has 30 feet high wall and huge gates which is normally not the case with residential properties. Besides, it is also not denied that on the gate "Tata Khad and Beej Godam" was mentioned. It is unlikely that such writing would be made on the gates of residential properties. It appears that the property in question is in the middle of a commercial hub and the property in question would be put to use as per the sole discretion of the owner but so far as determination of stamp duty is concerned market value of the property has to be seen irrespective of the fact whether it is residential, commercial or agricultural. Since no procedure has been prescribed for determination of the fair market value of any property, the same principle is to be adopted which is normally undertaken for determination of compensation to be paid to the owners in the land acquisition proceedings under the Land Acquisition Act.
13. This view has also been taken by this Court in the case of Ram Khelawan @ Bachcha v. State of U.P. and others. 2005 (2) A.W.C. 1087. Therefore, once market value is to be determined as stated above then the nature of the land or its current use may not be very relevant if all around the plot in question properties are being sold and bought at the commercial rate then for determination of stamp duty the market value of the property would be the same as that of the property bought for commercial use."
Consequently, once the payment of stamp duty is to be made as per the market rate then irrespective of the land being recorded as agricultural, the stamp duty would have to be paid after ascertaining of the market value and thus the said argument of learned counsel for the petitioner is also rejected.
35. As regards the reliance placed by the learned counsel for the petitioner over the judgment of Ram Achhaibar (supra), the same is clearly distinguishable inasmuch as the prescribed authority had assessed the value of the land at residential rates by considering the potential of the land as being situated in the vicinity of a residential area and consequently valued the land at residential rates. Likewise the judgment of Dukhi (supra) over which reliance has been placed by the learned counsel for the petitioner is also clearly distinguishable inasmuch as in the said case also the stamp duty was ascertained on the basis of presumption which was drawn that the land could be used in future for residential purpose. This is not the case in the instant matter inasmuch as the prescribed authority has not proceeded to impose the stamp duty by seeing the potential of the land or on the basis of presumption rather has seen the factual situation of the petitioner's land being situated on the national highway and having a running petrol pump situated adjacent to it as set forth in the sale deed itself and other two sale deeds of the same piece of land having been executed at residential/commercial rates. Consequently, both the judgments as cited by learned counsel for the petitioner are clearly distinguishable and are not applicable in the facts of the instant case.
36. Accordingly keeping in view the aforesaid discussions, the order dated 02.01.2015 so far as it ascertains the market value of the property and requiring the petitioner of affixing the stamp duty at higher rates/market value calls for no interference.
37. The next aspect of the matter is the legality of the penalty which has been imposed upon the petitioner of Rs.50,000/-. In this regard, suffice would be to refer the judgment of this Court in the case of Varun Gopal vs. State of U.P. and others 2015 (2) ADJ 311, wherein this Court has held as under:-
"29. Penalty can be imposed, if there is an attempt to evade stamp duty. Penalty presupposes culpability and an intention to conceal or to play fraud with authorities. Before imposing penalty, authorities must record finding based on relevant material that the purchaser or the person liable to pay stamp duty had concealed relevant facts in execution of sale deed and had intention to evade payment of stamp duty. (Asha Kapoor (Smt.) v. Additional Collector (Finance and Revenue), Ghaziabad16)."
Likewise this Court in the case of Smt. Sonia Jindal vs. State of U.P. and others, in Writ C No.20357 of 2011 decided on 07.04.2011 has held as under:-
"There is no dispute with regard to power of the authorities under the Stamp Act to impose penalty to the extent of four times the deficiency in stamp duty. However, the question is as to what is the criteria for imposing penalty.
The purpose for imposing penalty in exercise of power under Section 47-A (4) of the Act is to dissuade persons from deliberately under valuing the instrument and from payment of insufficient stamp duty. The purpose is not to make good the loss caused due to non-payment/delay in payment of proper court fees, as the loss so caused to the exchequer has been taken ample care under Section 47-A (4-A) by requiring the person concern to pay simple interest @ 1.5% per month on the deficient stamp duty.
In the instant case, the petitioner is one time petty purchaser of immovable property and is not in business of real estate. She is not a property dealer and is not regularly purchasing or selling immovable properties. Thus, imposition of penalty upon her may not act as a deterrent to her as she is not likely to enter into any such transaction in future.
The authorities below have not recorded any finding that the petitioner has deliberately not set-forth the market value of the property in the instrument and knowingly under valued the instrument to avoid payment of proper stamp duty. Merely for the reason that the stamp duty paid by her is found to be deficient can not by itself be a ground for imposing penalty, particularly, in the absence of any finding that there was intention to evade proper stamp duty.
Moreover, the power to impose penalty of an amount not exceeding four time the amount of the proper duty or the deficiency portion thereof is dependent upon the judicial discretion and can not be exercised in an arbitrary fashion. The authorities below have not assigned any reason for imposing penalty equivalent to the deficiency portion of the stamp duty. Therefore it can not be said to have been acted judicially.
In view of the above, the imposition of penalty can not be sustained."
38. From the aforesaid judgments, it clearly comes out that the sine qua non for imposition of the penalty is a finding to be recorded by the Collector based on the relevant material that the purchaser or the person liable to pay stamp duty had concealed the relevant facts in execution of the sale deed and had the intention to evade payment of the stamp duty.
39. In the instant case, a perusal of the impugned order dated 02.01.2015 indicates that no facts have been concealed by the petitioner while executing the sale deed. The fact of land being situated adjacent to national highway and a running petrol pump have duly been disclosed in the sale deed. Admittedly, the stamp duty has been affixed/paid at the agricultural rate for the said piece of land. In the entire order, there is no finding by the Collector as to how the petitioner concealed the relevant facts in execution of the sale deed and consequently in the absence of any such finding the imposition of penalty could not validly have been imposed and as such the imposition of penalty of Rs.50,000/- through the order dated 02.01.2015 is liable to be set-aside and accordingly is set-aside.
40. The only question that now remains, is the finding given by the authority pertaining to 88 trees standing on the land purchased by the petitioner. A perusal of the order impugned indicates that the authority concerned has not considered the Khasra which has been filed by the petitioner along with written arguments. A perusal of the Khasra, a copy of which is Annexure-7 to the petition, reveals that the same pertains to the entire plot namely Gata No.1332 having an area of 2.103 hectares. Admittedly, the petitioner has only purchased part of Gata no.1332 measuring an area of 0.238 hectares. The Khasra indicates that 84 trees of mango are existing over the entire plot of Gata No.1332 measuring 2.103 hectares of land and not only over the part of area of 0.238 hectares of land of the petitioner. In this regard, reliance has been placed by the authority over the ex-parte report of the Tehsil authorities indicating existence of 88 trees. The said report being ex-parte, no reliance could validly have been placed upon the same inasmuch as though the said ex-parte report may be relevant for initiating the proceedings under the provisions of Section 47-A of the Act of 1899 yet for deciding the case no reliance can be placed upon the said report inasmuch as Rule 7(3)(c) of the Rules, 1997, categorically provides that an inspection is to be made by the Collector after due notice to the parties to the instrument. Consequently, once the finding of 88 trees being situated on the land of the petitioner has been arrived at on the basis of ex-parte report of the Tehsil authorities, no cognizance can validly be given to the said findings. The law in this regard has been laid down by this Court in the case of Ram Khelawan vs. State of U.P. 2005 SCC On Line All. 2247, wherein this Court has held as under:-
"Ex-parte inspection report may be relevant for initiating the proceedings under section 47-A of Stamp Act. However, for deciding the case no reliance can be placed upon the said report. After initiation of the case inspection is to be made by the Collector or authority hearing the case after due notice to the parties to the instrument as provided under Rule-7(3)(c) of the Rules of 1997."
41. Even otherwise, the Khasra had been filed by the petitioner indicating the existence of trees over the entire piece of land and thus before finding the said trees to be existing on the purchased portion of the petitioner, an inspection of the land of the petitioner after associating the petitioner had to be conducted which has not been done and even the Khasra filed by the petitioner has been ignored. As such, the finding of the Collector of 88 trees standing over the land of the petitioner and he having been assessed the value of all trees to be payable by the petitioner thus cannot stand and be held valid, as such, this finding pertaining to the trees and ascertaining the value towards the stamp duty is set-aside.
42. Accordingly, keeping in view the aforesaid discussions, the writ petition is partly allowed to the extent that the penalty imposed against the petitioner vide order dated 02.01.2015 is set-aside. The finding pertaining to valuation of trees in the impugned order dated 02.01.2015 as affirmed vide order dated 11.05.2016 is quashed and set-aside. However, the stamp duty imposed against the petitioner at residential rates is upheld. The matter is remanded to the Collector concerned to decide the question pertaining to the valuation of trees over the petitioner's land strictly in accordance with law and the procedure prescribed after due opportunity of hearing to the petitioner and to decide the same within a period of 3 months from the date of receipt of a certified copy of this order. Consequences to follow.
Order Date :- 07.02.2019
A. Katiyar (Abdul Moin, J.)