High Court
Case Details
Neutral Citation No. - 2023:AHC:110350 Court No. - 9 Case :- WRIT - C No. - 44790 of 2002
Legal Reasoning
It is a matter of common knowledge that in order to escape such duty by unfair practice, many a time under valuation of a property or lower consideration is mentioned in a sale deed.(Chiranji Lal (Dr.) v. Hari Das (2005) 10 SCC 746; Ramesh Chand Bansal versus District Magistrate/Collector, 4(1999) 5 SCC 62. A Stamp Act is a taxing statute and as regards a taxing statute , it is well settled that equity has no place in it. There is no presumption as to a tax, nothing is to be read in, nothing is to be implied, (Agra City Real State Development Organisation,Agra versus State of U.P & others) 2003 (2) SAC 361. Market value has not been defined under the Act, in proceedings under section 47-A (3) refers "to instrument on which duty is chargeable on the market value of the property", Article 23\provides for stamp duty payable on conveyance which refers to market value of immovable property which is subject of such conveyance. Market value as referred to in the expression conveyance is the price which a willing purchaser would pay to a willing seller for the property. The court in Vijay Kumar and another Versus Commissioner, 2008(3) AWC 299 All, explained the expression "market value": "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." Again in Ratna Shankar Dwivedi versus State of U.P., AIR 2012 ALL 100 the Court held that: "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." 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 Vs. Commissioner, Meerut Division) AIR 2008 All 176. The expression "reason to believe" is not synonymous with subjective satisfaction of the officer. The belief must be held in good faith, it cannot be merely a pretence. It is open to the court to examine the question whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not irrelevant or extraneous to the purpose of the section. " 12. In the instant case, the Collector has relied solely upon the spot inspection report while the petitioner, on the other hand, had questioned the said report and filed objection but the objections raised by the petitioner were not even dealt with by the Collector and he proceeded to ascertain the valuation of the land solely on the basis of the spot inspection report which was duly challenged by the petitioner. While assessing the stamp valuation of the land it was open in the present set of circumstances for the Collector to have exercised the powers so vested in him under Rule 7 sub clause 3 (c) of the Rules of 1997 and get the land inspected as requested by the petitioner in his application. 13. It is noticed that according to Rule 7 when reference is received by the Collector after issuance of notice to the parties be directing them to show cause as to why the stamp fee of the property cited in the instrument be not realized in exercise of the powers conferred in sub clause 3 of Rule 7 (3) and inspect the property after due notice to the parties to the instrument. Undoubtedly, as recorded in the order of the Commissioner himself such a request was made by the petitioner in the appeal preferred by him. When such a request is made then it is mandatory upon the authorities concerned to exercise the powers conferred under Section 7 (3) (c) of the Rules of 1997 and inspect the property after giving due notice to the parties and only then proceed with the matter. In case aforesaid exercise has not been conducted valuable right vested in the person who is put under notice is lost and valuable right cannot be exercised by him and the procedure as prescribed is required to be followed in letter and spirit and not inspecting the property even after the application made by the petitioner is clearly arbitrary and illegal and proceeding with the matter without exercising the power conferred under Section 7 (3) (C) the respondents have clearly proceeded in illegal and arbitrary manner while holding that the petitioner was liable to pay stamp duty even for the double story house which was standing on the said plot."
Arguments
Petitioner :- State of U.P. Respondent :- Smt. Mamta Agrawal And Another Counsel for Petitioner :- Standing Counsel Counsel for Respondent :- Kailash Nath Kesharwani Hon'ble Alok Mathur,J. 1. Heard learned Standing counsel for the petitioner while no one has appeared on behalf of respondent No.1. 2.By means of the present writ petition the petitioner has challenged the order dated 31.8.2000 passed by Chief Controlling Revenue Authority, Uttar Pradesh, Allahabad in exercise of the appellate powers contained under Section 47 A (1) of the Stamps Act thereby allowing the revision preferred by respondent No.1 and setting aside the order passed by Collector (Stamps) dated 29.5.1997 and returned a finding that the disputed property is valued at Rs.50,000/- per acres as prayed by respondent No.1. 3. The brief facts of the case leading to filing of the present petition is that respondent No.1 Smt. Mamta Agarwal had purchased the land of Gata No.111 area 0.34 acres, gata No.113 area 0.86 acres and plot No.115 area 0.34 acres situated in village Kokpura and the land of plot NO.252 area 1.03 acres of village Panchawali through registered sale deed on 17.8.1996 showing the sale consideration of Rs.1,28,500/- and paid stamp duty of Rs.1,30,000/- and the same instrument was presented for registration before Sub Registrar Etawah. The Sub-Registrar referred the matter to the Collector Stamp as he was of the view that the instrument was undervalued and after obtaining report from the Tehsildar notices were issued to respondent No.1 to show cause as to why deficiency in stamps fee be not recovered along with penalty according to the provisions contained in Uttar Pradesh Stamps Act. 4. The respondent appeared before the Collector (Stamp) and filed its objections, who also considered the report submitted by the Tehsildar according to which the land was in use for agricultural purposes and was outside the municipal area and was at least one kilometer away from Etawah - Kumbhawar road and abadi. It was further stated that circle rates of the developed area would not be applicable to the said property. The Collector (Stamps) considered the provisions contained in Circle rate issued by the District Magistrate for the year 1996 according to which the circle rate was Rs.2 lacs for the land situated within 400 meters and Rs.1 lacs per acre for the land situated beyond 400 meters and as the said land falls beyond the distance of 400 meters he was of the view that rate of Rs.1 lac per acre would be applicable and accordingly determined the deficiency in the stamp fee to be Rs.40595/- and after adding penalty a total of Rs.83590- was sought to be recovered from respondent No.1 as penalty. 5.The respondent being aggrieved of the said order had preferred a revision before the Chief Controlling Revenue Authority, who considered the same facts and was of the view that the Collector fixed the circle rate of Rs.50,000/- per acre and accordingly set aside the order of Collector (Stamps) and was of the view that stamp duty paid by respondent No.1 were adequate and no recovery was due from her. Being aggrieved of the said order dated 31.8.2000 the present writ petition has been filed by the State. 6. Learned counsel for the petitioner has submitted that the disputed properties fall within two separate villages where valuation of both the lands has been determined differently and as per the circle rate the said land was valued at Rs.1 lac per acre by the Chief Controlling Revenue Authority who has wrongly decided the said case treating the value of the said land at the rate of Rs.50,000/- per acre. It is further noticed that the precise dispute is with regard to location of the land. The inspection report of the Tehsildar was also disbelieved by them. 7. It is in aforesaid circumstances that there is specific provision laid down under Section 47-A of U.P. Stamp Act as well as Uttar Pradesh Stamp (Valuation of Properties), Rules, 1997 (hereinafter referred to as the Rules of 1997) where as per Rule 7 sub clause (3) there is duty of inspection of the said land after giving notice to the authorities. The said provisions is a substantial piece of procedure for determining the valuation of the land for the purpose of stamp duty and there are several judgments of this Court stating that the said provision is mandatory. This Court in Writ - C No. - 45294 of 2010 (Anil Kumar Gupta @ Rajendra Gupta And Others) has held as under:- "This Court in WRIT - C No. - 47533 of 2010 (Wasi Ur Rehman And Another Vs. Commissioner Moradabad Division And Others) decided on 26.2.2015 has held as under:- "The Indian Stamp Act, 1899 is a law relating to revenue/stamps. Its applicability thus stands restricted to the scheme of the Act. The Stamp Act is a fiscal measure enacted with an object to secure revenue for the State on certain classes of instrument. It is not enacted to arm a litigant with a weapon of technicality to defect the case of the Revenue. The stringent provisions of the Act are conceived in the interest of the Revenue.
Decision
8. In the present case , it is noticed that the provision of Rule 7 (3) (c) were not followed and had the said provision been followed the dispute which has arisen in the present case would not have arisen as the dispute is with regard to location of the land and market value of the land but in the present case without making the spot inspection the land has been determined as Rs.50,000/-. 9. In view of the above, it is clear that the authorities below have not followed the provisions contained in Section 7 (3) (c) of the Rules of 1997, as such, this Court is of the view that both the orders dated 31.8.2000 passed by Chief Controlling Revenue Authority, Uttar Pradesh, Allahabad in exercise of the appellate powers contained under Section 47 A (1) of the Stamps Act and the order passed by Collector (Stamps) dated 29.5.1997 deserve to be set aside and the matter should be re-determined by the Collector concerned after following the procedure prescribed therein. The orders are accordingly set aside and the matter is remitted back to the Collector (Stamps) for adjudication afresh in accordance with law as observed by this Court hereinabove. 10. Let the said exercise be completed expeditiously, say within a period of two months from the date a certified copy of this order is placed before him. 11. The writ petition thus stands allowed. Order Date :- 19.5.2023 (Alok Mathur, J.) RKM. Digitally signed by :- RAKESH KUMAR MAURYA High Court of Judicature at Allahabad