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2017 DIGILAW 1781 (ALL)

Sarfaraz @ Safai v. State of U. P.

2017-08-01

B.AMIT STHALEKAR

body2017
JUDGMENT : B. Amit Sthalekar, J. Heard Sri Ashok Tripathi holding brief of Sri Uma Nath Pandey, learned counsel for the petitioner and the learned standing counsel for the State-Respondents. 2. The petitioner is seeking quashing of the order dated 29.10.2004 passed by the Additional Commissioner, Stamps, Basti passed in proceedings under section 47-A of the Indian Stamp Act, 1899 (the Act, 1899) as well as the revisional order dated 15.10.2007 passed by the Commissioner, Basti Division, Basti. 3. Briefly stated the facts of the case are that the petitioner purchased the Plot No.294 through sale deed dated 20.07.2001 for a consideration of Rs. 25,000/- and paid stamp duty of Rs. 2,000/-. However, proceedings under section 47-A of the Act, 1899 were initiated against the petitioner alleging deficiency of stamp duty. A report was called for from the Tehsildar, who submitted his report on 18.08.2004. The finding of fact recorded by the Additional Collector is that the Tehsildar in his report has mentioned that the land is agricultural land and on this land wheat crop is growing and it is used for agricultural purposes but because the land in question is only 100 meters from the west abadi and is situated near the Khadanja (brick road) therefore, it has been purchased for residential purposes. On these findings treating the land to have been purchased for residential purposes the Additional Collector has assessed the market value of the property at Rs. 2,73,320/- on which the stamp duty has been assessed at Rs. 19,920/- with penalty of a like amount and registration charges at Rs. 4,500/- total Rs. 56,292/-. 4. The learned counsel for the petitioner submits that the plot in question was purchased as agricultural land and that there has been no change of usage and the Tehsildar also in his report has noted that the land is agricultural land on which the wheat crop is growing. Undisputedly, the sale deed is dated 20.07.2001 whereas the report of the Tehsildar is dated 18.08.2004, i.e. more than 3 years later when the undisputed facts of the case are that the even after 3 years of purchase the land was an agricultural land and on which wheat crop is still growing. 5. Undisputedly, the sale deed is dated 20.07.2001 whereas the report of the Tehsildar is dated 18.08.2004, i.e. more than 3 years later when the undisputed facts of the case are that the even after 3 years of purchase the land was an agricultural land and on which wheat crop is still growing. 5. The submission of the learned counsel for the petitioner, however, is that the market value of the land and the stamp duty payable thereon has to be determined having regard to the nature of the land as existing on the date of the sale deed. Reference has been made to a decision of the Supreme Court reported in (1996) 4 SCC 657 , Prakash Wati v. Chief Controlling Revenue Authority Board of Revenue U.P. at Allahabad. The Supreme Court in the aforesaid decision has held that mere proximity of the land to Abadi or to a residential colony inhabited by people belonging to high income group itself would not be a factor for determining the market value of the property for the purposes of stamp duty for proceedings under the Act, 1899. The Supreme Court has held as under: "........Secondly, its being situated in an area which is close to Samrat Vikram Colony, said to be a decent locality, where people of high income group reside, does not by itself make it a part thereof. We are doubtful whether the said factum of closeness by itself would cast any reflection on the price of the property in question. ..........." 6. 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. 7. 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 relatable 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 28 of the said judgment reads as under: "28. 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." 8. 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. 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. 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. " 9. Considering the law laid down by the Supreme Court as well as the Full Bench and Division Bench of this Court it is quite clear that the stamp authority has gravely erred in computing the market value of the property treating the said property to be having a future potential for residential purposes although the findings of fact that the respondents have themselves admitted is that the land in question on the date of sale deed was being used for agricultural purposes. 10. It is not disputed that the petitioner has paid stamp duty on the basis of the market value as applicable to agricultural land and this fact has not been disputed by the respondents either. 11. In this view of the matter the impugned order dated 29.10.2004 passed by the Additional Commissioner, Stamps, Basti as well as the revisional order dated 15.10.2007 passed by the Commissioner, Basti Division, Basti cannot survive and are accordingly quashed. 12. The writ petition stands allowed. 13. Any amount which has been paid by the petitioner under the interim order of this Court shall be refunded to him within a period of two months from the date of receipt of the certified copy of this order.