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2017 DIGILAW 1767 (ALL)

Vishun Dei Devi v. State of U. P.

2017-07-31

B.AMIT STHALEKAR

body2017
JUDGMENT : B. Amit Sthalekar, J. Rejoinder affidavit filed today is taken on record. 2. Heard Sri B.K. Tripathi, learned counsel for the petitioner and learned Standing Counsel for the respondents. 3. The petitioner is seeking quashing of the order dated 28.2.2006 passed by the Deputy Commissioner (Stamps), Gorakhpur in proceedings under section 33/47 of the Stamp Act, 1899 as well as the order dated 10.7.2007 of the Commissioner, Gorakhpur Region, Gorakhpur. 4. The petitioner purchased the land in question for Rs. 9,90,000/- and paid stamp duty. On an apprehension that there was deficiency of stamp duty proceedings under Section 47A were initiated against the petitioner. A report was called from the Sub-Registrar, Chauri Chaura who has stated that the stamp duty has been at the rate of Rs. 4000 per decimal for agricultural land and the valuation of the land is Rs 4,95,000/- and because the land is situated near the main road, therefore, increasing 100% the market value of the land which would be 9,90,000/- stamp duty and registration charges have been paid which is absolutely correct. Subsequently, it appears that a report was submitted by the Lekhpal before the S.D.M. Chauri Chaura to which objection was also filed by the petitioner. The stamp authority in the proceedings has computed market value of the property treating the land in question to be for residential use, at Rs. 900 per sq. metre thereby determining the value of the land to be Rs. 45,12,915/- on which stamp duty has been determined at Rs. 3,61,040/-. The petitioner has already paid Rs. 79,200 as stamp duty, therefore, deficiency of stamp duty has been worked out at Rs. 2,91,840/-. Aggrieved the petitioner preferred an appeal which has also been rejected. 5. It is rather surprising that when the Sub-Registrar (Registration) has himself held that the market value of the property at Rs. 9,90,000/- is absolutely correct and stamp duty paid thereof is also correct, how could the Collector imagine that there was deficiency of stamp duty. The impugned order of the stamp authority does not show what was the material before him to come to the conclusion that the market value of the property should have been Rs. 45,12,915/-. The impugned order also does not show the nature of the land as to whether it was agricultural or residential or commercial. The impugned order of the stamp authority does not show what was the material before him to come to the conclusion that the market value of the property should have been Rs. 45,12,915/-. The impugned order also does not show the nature of the land as to whether it was agricultural or residential or commercial. What is stated is that the stamp duty has been paid at rates applicable to agricultural land but because there is abadi, therefore the land has been purchased for commercial purposes. Such an order on the face of it is absolutely illegal and arbitrary, more so when the authority himself is not sure as to whether the land in question is agricultural or residential or abadi. Merely because the petitioner is not a local resident it cannot lead to a presumption that he has purchased the land only for residential or commercial purposes. Aggrieved by the order of the stamp authority, the petitioner preferred an appeal before the Commissioner, Gorakhpur Region, Gorakhpur which has also been rejected. 6. The Commissioner in his order has noted that the petitioner has paid stamp duty at the circle rate as applicable to agricultural land and from spot inspection also it was found that the land was agricultural land on which agricultural activity was going on and wheat crop was growing on the said land. On these findings, the market value of the land in question could not have been determined at rate applicable to residential or commercial plots. The value of the land for purposes of stamp duty has to be determined on the basis of nature of the land on the date of execution of the document in question and not on the potential use to which it may be put at a future date. 7. In (2012) 5 SCC 566 , State of U.P. v. Ambrish Tandon and others, the Supreme Court has held that merely because the property is being used for commercial purposes at the later point of time may not be a relevant criterian for assessing the value for the purpose of the nature of user is relatable to the date of purchase and it is relevant for the purpose of calculation of stamp duty. 8. 8. The judgment of the Supreme Court in the case of Ambrish Tandon (supra) has been followed by the Full Bench of this Court reported in 2015 (3) ADJ 136 (Smt. Pushpa Sareen v. State of U.P.) wherein the Full Bench has also held that the nature of the user is relatabe to the date of purchase which is relevant for the purposes of computing the stamp duty. Where however the potential of the land can be assessed on the date of execution of the instrument itself by referring to exemplar or comparable sale instances that is clearly a circumstances which is relevant and germane to determine the true market value. Paragraph 27 of the said judgment reads as under: "27. The fact that the land was put to a particular use, say for instance a commercial purpose at a later point in time, may not be a relevant criterion for deciding the value for the purpose of stamp duty, as held by the Supreme Court in State of U.P. and others v. Ambrish Tandon and another, 2012 (5) SCC 566 . This is because the nature of the user is relatable to the date of purchase which is relevant for the purpose of computing the stamp duty. Where, however, the potential of the land can be assessed on the date of the execution of the instrument itself, that is clearly a circumstance which is relevant and germane to the determination of the true market value. At the same time, the exercise before the Collector has to be based on adequate material and cannot be a matter of hypothesis or surmise. The Collector must have material on the record to the effect that there has been a change of use or other contemporaneous sale deeds in respect of the adjacent areas that would have a bearing on the market value of the property which is under consideration. The Collector, therefore, would be within jurisdiction in referring to exemplars or comparable sale instances which have a bearing on the true market value of the property which is required to be assessed. If the sale instances are comparable, they would also reflect the potentiality of the land which would be taken into consideration in a price agreed upon between a vendor and a purchaser." 9. If the sale instances are comparable, they would also reflect the potentiality of the land which would be taken into consideration in a price agreed upon between a vendor and a purchaser." 9. A Division Bench of this Court in 2016 (2) ADJ 533 (DB) Sumati Nath Jain v. State of U.P. and another has held in paragraphs 18 and 19 as under: "18. We may note that on the date of execution of the instrument the land was admittedly recorded as agricultural. In fact the Khasra of the property remained unchanged throughout and continued to represent the land as recorded for agricultural purposes. The respondents were in our opinion wholly unjustified in initiating proceedings based on an unsubstantiated assumption that the property in future was likely to be put to non-agricultural use. 19. The perceived or presumed use to which a buyer may put the property in the future can never be the basis for adjudging its value or determining the stamp duty payable. The Act, we may note is a fiscal statute. The taxable event with which it concerns itself is the execution of an instrument which is chargeable to duty. The levy under the statute gets attracted the moment an instrument is executed. These propositions clearly flow from a plain reading of the definition of the words "chargeable", "executed" and "instrument" as carried in the Act. In the case of an instrument which creates rights in respect of property and upon which duty is payable on the market value of the property comprised therein, since the tax liability gets fastened immediately upon execution it must necessarily be quantified on the date of execution. The levy of tax or its quantum cannot be left to depend upon hypothetical or imponderable facets or factors. The value of the property comprised in an instrument has to be adjudged bearing in mind its character and potentiality as on the date of execution of the instrument. For all the aforesaid reasons we fail to find the existence of the essential jurisdictional facts which may have warranted the invocation of the powers conferred by section 47A (3). We are therefore of the firm opinion that the initiation of proceedings as well as the impugned order based upon a presumed future use of the property for residential purposes was wholly without jurisdiction and clearly unsustainable. We are therefore of the firm opinion that the initiation of proceedings as well as the impugned order based upon a presumed future use of the property for residential purposes was wholly without jurisdiction and clearly unsustainable. Dealing with this aspect of the matter and after noticing the consistent line of precedent on the subject the Division Bench in Smt Vijaya Jain observed:- "This Court on more than one occasion has held that the market value of the land is not liable to be determined with reference to the use to which a buyer intends to put it in future. The market value of the property is to be determined with reference to its character on the date of execution of the instrument and its potentiality as on that date. xxx xxx xxx The above principles of law enunciated in the aforementioned judgments have been consistently followed by this Court. We however find that the order of the Collector relies upon no evidence which would support imposition of residential rates on a property which was stated to be agricultural on the date of execution of the instrument." 10. On the facts of the case and the law laid down by the Supreme Court as well as this Court the impugned orders dated 28.2.2006 and 10.7.2007 cannot survive and are accordingly, quashed. 11. The writ petition stands allowed. 12. In case any amount has been deposited by the petitioner towards deficiency of stamp duty under the interim order of this Court, the same shall be refunded to the petitioner by the respondents within a period of two months from the date of receipt of a certified copy of this order in his office.