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Allahabad High Court · body

2015 DIGILAW 396 (ALL)

KIRAN LATA v. STATE OF U. P.

2015-02-26

SUNEET KUMAR

body2015
JUDGMENT Hon’ble Suneet Kumar, J.—The petitioners purchased 1.106 hectare and 3.242 hectare (total area 4.348 hectare) in Village Karhada, Pargana and Tehsil Sadar, District Allahabad, vide instrument dated 12.8.2009 for Rs. 8,00,000/-, Rs. 48,000/- was paid towards stamp duty. On reference by the Sub-Registrar, a case was instituted under Section 47-A(1) of the Indian Stamp Act 1899 (Act) for the reason that in the rate list there is no reference of agricultural land in the village, being a developed area. The Sub-Registrar valued 500 sq. m. and 41490 sq. m. of the property at the minimum value fixed by the Collector @ Rs. 2600/- per sq. m., the remaining 1500 sq. m. land was valued @ Rs. 900 per sq. m., thus proposing the market value of the property in question at Rs. 2,33,95,000/-, accordingly, assessing the stamp duty at Rs. 16,27,550/- 2. The petitioners, in their objection before the Collector, stated that they had correctly disclosed the market value, accordingly, paid the stamp duty thereon, the Collector has not correctly determined the circle rate, further the petitioner purchased large area of agricultural land i.e. 4.348 hectare, the value of which could not have been determined on square meter, as has been done by the Sub-Registrar. The Collector rejected the plea of the petitioners and determined the value of the property as proposed by the Sub-Registrar. 3. The petitioners aggrieved, approached the appellate authority, the Chief Controlling Revenue Authority, Allahabad, who vide order dated 13.11.2009 rejected the appeal. Aggrieved by the order, the petitioners preferred a petition (Writ Petition No. 1414 of 2010), this Court vide order dated 25.5.2010, set aside the orders passed by the Collector and the appellate authority and remanded the matter for re-determination of the market value of the property in question, in the light of the observations made in the judgment and order dated 25.5.2010. 4. The Additional Collector (Finance and Revenue) Allahabad, vide order dated 3.10.2010, re-determined the market value of the property in question after taking notice of the exemplars of sale-deeds of similar land in the area from 2006 to 2010. The instrument is of 2009, the exemplars of 2009 would clearly show that the properties were being sold in the vicinity, were in square meters, accordingly, the value determined earlier by the Collector was re-affirmed by the order dated 3.11.2010. The instrument is of 2009, the exemplars of 2009 would clearly show that the properties were being sold in the vicinity, were in square meters, accordingly, the value determined earlier by the Collector was re-affirmed by the order dated 3.11.2010. Aggrieved, the petitioners preferred an appeal before the Chief Controlling Revenue Authority, Allahabad, who affirmed the order passed by the Additional Collector by order dated 22.2.2011. 5. The petitioners are assailing the orders passed by the Additional Collector and Chief Controlling Revenue Authority under Article 226 of the Constitution. 6. This Court vide order dated 3.9.2012 directed the respondent No. 3, Additional Collector (Finance and Revenue) Allahabad, to again determine the market value on the basis of the rates of the exemplars which was referred to in the order dated 3.11.2010 vis-a-vis the circle rate. The order dated 3.9.2012 is as follows : “In this matter, the case was remanded once by this Court for the authority to determine the market value of the land purchased by the petitioner vide instrument dated 12.8.2009. The authority concerned has examined the matter and has even relied on a chart which shows four exemplars of the year 2009 but has ultimately calculated the market value on the basis of circle rate provided. The respondent No. 3 is directed to assess the market value on the basis of the exemplars which have been referred to in the order dated 3.11.2010 as well as the circle rate. He will fix a date in the matter to hear the petitioner and re-fix the market value. He shall do so within a period of one month from the date of production of a certified copy of this order being placed before him by the petitioner. Certified copy of this order will be given free of charge to learned standing counsel Sri Nimai Das who shall place it before the respondent No. 3 within two weeks from today. Learned standing counsel shall place before this Court orders passed by the authority concerned by way of an affidavit. List this matter on 8.10.2012. Interim order already granted earlier is extended till then.” 7. Pursuant thereof, the Additional Collector (Finance and Revenue), Allahabad, determined the market value of the concerned property, both on the average price set forth in the exemplars and on the minimum rate fixed by the Collector for the area. The price of land per sq. mt. Interim order already granted earlier is extended till then.” 7. Pursuant thereof, the Additional Collector (Finance and Revenue), Allahabad, determined the market value of the concerned property, both on the average price set forth in the exemplars and on the minimum rate fixed by the Collector for the area. The price of land per sq. mt. in the sale-deeds of 2009 were ranging between Rs. 490.03/- sq.m. to Rs. 2500/- sq.m. The Collector assessed value of the concerned property at Rs. 4,28,87,337/- on the average price as set out in the exemplars, whereas, the market value of the concerned property, calculated on the minimum value (circle rate), was almost half the value determined on the average price set forth in the exemplars i.e. at Rs. 2,33,95,000/-. The Collector determined the market value at Rs. 2,33,95,000/-. 8. This Court in Ratna Shanker Dwivedi v. State of U.P. and others, 2012(5) ADJ 414 , explained the objects of the Stamp Act as follows : “The Stamp Act is a fiscal measure enacted with an object to secure revenue for the State on certain classes of instruments. It is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. The stringent provisions of the Act are conceived in the interest of the revenue. Once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of initial defect in the instrument. The sole object of Stamp Act under its various provisions is to require the parties concerned to set forth correct market value of the property at which the transaction has taken place so that appropriate duty in accordance with the Act is paid by them to avoid large scale evasion of stamp duty. It also mandates that while setting forth the correct market value of the property in dispute the competent authority must not apply their mind in a fact fashion and in a haphazard way.” 9. The Court in Vijay Kumar and another v. Commissioner, 2008(7) ADJ 293 , explained “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.” 10. The Court in Vijay Kumar and another v. Commissioner, 2008(7) ADJ 293 , explained “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.” 10. In Ratna Shankar Dwivedi (supra) the Court again explained, the meaning of ‘market value’ under the Act. Normally the consideration stated as the market value in a given instrument should be taken to be correct unless circumstances exist which suggest fraudulent evasion, as follows : “13. 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.” 11. Market value of the property has to be seen irrespective of the fact whether the property is residential, commercial or agricultural. 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, then for determination of stamp duty, market value of the property would be the same as that of property bought for commercial use. (D.P.R. Foods (P) Ltd. v. State of Uttar Pradesh, 2010(4) All LJ 95 (All)). 12. 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. (Dr. Pratap Singh v. Director of Enforcement Foreign Exchange Regulation Act, AIR 1985 SC 989 ) 13. 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. (Dr. Pratap Singh v. Director of Enforcement Foreign Exchange Regulation Act, AIR 1985 SC 989 ) 13. The term “reason to believe”occurring in sub-section (3) of Section 47-A spells out that the 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. (Duncans Industries Ltd. v. State of U.P., AIR 1998 All 72 (75) (affirmed by Supreme Court in appeal, AIR 2000 SC 355 ). 14. Learned counsel for the petitioners has failed to show as to how the market value determined by the Collector, on several occasions, and on the directions of this Court is arbitrary, or illegal or not based on direct, circumstantial or on intrinsic evidence. 15. The minimum value of the property in the concerned area, was determined by the Collector, under the U.P. Stamp (Valuation of Property) Rules, 1997 (1997 Rules) in 2009, 2010 and 2012 but the petitioners had not objected before the Collector. The property in the concerned area were being valued per sq. mt. by the Collector. The exemplars also indicate that the property were being sold and purchased on sq.m. in the area where the property in question is located. 16. Sub-section (4) of Rule 7 of 1997 Rules is as follows: “(4) After considering the representation of the parties, if any, and examining the records and other evidence, the Collector shall determine the market value of the subject-matter of the instrument and the duty payable thereon.” 17. The exemplars referred to by the petitioners was taken into consideration, it has not been disputed by learned counsel for the petitioners that the minimum market value fixed by the Collector, under the 1997 Rules, was not prevalent in the area, rather the exemplars clearly demonstrate that the property were being sold at an average price ranging between Rs. 500 to Rs. 500 to Rs. 1500 per sq.m., whereas, the property has been valued on the minimum value (circle rate) fixed by the Collector, which rate is almost half the value as compared to the value determined on the average price set forth in the exemplars. The Collector has recorded a finding of fact, on both the occasions, on the directions of the Court, in this view of the matter, this Court is not inclined to interfere with the impugned orders. 18. The writ petition being devoid of merit is accordingly dismissed. 19. It will be open for the respondents to recover the deficient stamp duty as per law. 20. No order as to cost.