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2017 DIGILAW 2490 (ALL)

VIMLA JAIN v. STATE OF U. P.

2017-11-01

PANKAJ NAQVI

body2017
JUDGMENT : Hon'ble Pankaj Naqvi,J. Heard Sri Vishal Khandelwal, holding brief of Sri Sanjay Kumar Dwivedi, learned counsel for the petitioner and Sri Sanjay Goswami, the learned Addl. C.S.C. This writ petition has been filed challenging the order dated 21.7.2015 & 29.6.2017, computing / levying stamp deficiency of Rs.1,70,250/- + interest and a penalty of Rs.3,40,500/- under Section 47-A of the Stamp Act. The petitioner purchased land under registered sale deed dated 13.11.2013 (Arazi No.416, area 0.227 hct), situate at village Bairwan, Pargana Kaswar, Sarkari Tehsil Sadar, Varanasi for Rs.14 lacs, on which stamp of Rs.1,03,500/- was paid. The Sub-Registrar, Gangapar, Varanasi submitted a report dated 17.12.2013 to the A.D.M (F/R) on the basis of inspection report dated 17.12.2013, that the land is in abadi, valuation is to be computed @ Rs.25,000/- per Are, i.e., Rs.56,75,000/-, reporting deficiency of Rs.1,70,250/-. The Collector acting upon the report, registered a stamp case under Section 47-A of the Act against the petitioner. The Collector under order dated 21.7.2017, after holding that despite notice to the petitioner, no objections were filed, relied upon the inspection report of the Sub-Registrar dated 17.12.2013, determined the market value of the demised property as Rs.56,75,000/-, with deficiency of Rs.1,70,250/- + interest, penalty of Rs.3,40,500/-, which is maintained under the revisional order dated 29.6.2017. It is submitted by learned counsel for the petitioner that in the absence of any fresh inspection before the Collector under Section 47-A (3) of the Stamp Act r/w Rule 7 of the 1997 Rules, he could not have only relied upon the report of the Sub-Registrar for computing the market value, which is relevant only for initiating the proceedings under the Stamp Act. Sri Goswami, the learned Addl. C.S.C counters the submission on the ground that once notice was issued by the Collector to the petitioner and the petitioner choses neither to appear nor to file any objections to the report, the Collector commits no illegality in basing his determination on the report submitted by the Sub-Registrar. Sri Goswami, the learned Addl. C.S.C counters the submission on the ground that once notice was issued by the Collector to the petitioner and the petitioner choses neither to appear nor to file any objections to the report, the Collector commits no illegality in basing his determination on the report submitted by the Sub-Registrar. Thus, the issue which the Court has been called upon to consider is, as to whether a report prepared by the Sub-Registrar, recommending determination of the market valuation of a property, prior to reference could be ipso facto relied upon by the Collector under sub-section (3) of Section 47-A or the Collector has to independently determine the market value of the demised property under the instrument, on the basis of the evidence adduced before him. To resolve the issue, it would be apposite to have a brief resume of the scheme of the relevant provision, i.e., Section 47-A of the Stamp Act and the Rules framed thereunder. A perusal of Clause 1(a) to Section 47-A, reveals that a power is conferred upon the registering authority that in the event, he finds that the duty chargeable as set forth in the instrument is less than, even the minimum value determined under the Rules, he shall notwithstanding anything contained in the Act, immediately after presentation of such instrument, but before accepting it for registration, require the person liable to pay deficient stamp, computed on the basis of minimum value as per the Rules and return the instrument for a fresh presentation. Sub-clause (b) provides that if deficiency is made good and the instrument is presented again, the Registering Officer shall make necessary endorsement thereon. Sub-clause (d) provides that if a person does not make good the deficiency under 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 the market value of the property and the duty payable thereon. Sub-clause (2) provides that on a reference under Sub-section (1), the Collector shall hold an inquiry after affording due opportunity to the parties, determine the market value of the property which is the subject matter of the instrument and the proper duty payable thereon. Sub-clause (2) provides that on a reference under Sub-section (1), the Collector shall hold an inquiry after affording due opportunity to the parties, determine the market value of the property which is the subject matter of the instrument and the proper duty payable thereon. The procedure contemplated upto sub-section (2) of Section 47-A relates to the stage prior to registration which is confined only to ensure that the the duty chargeable in the instrument is not less than the minimum fixed under the Rules. Sub-section (3) of Section 47-A is extracted hereunder:- (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 from a Deputy Commissioner of Stamps or from an Assistant Commissioner of Stamps or any officer authorized 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 an 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 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. The Collector has also been conferred with the power to initiate proceedings for determination of the market value of the property in an instrument, suo moto or upon a reference from any Court / Commissioner of Stamps / Addl. Commissioner of Stamps / Deputy Commissioner of Stamps / Assistant Commissioner of Stamps or any Officer authorized by the State Government in that behalf, within 4 years from the date of registration of any instrument. Determination under Sub-section (2) or (3) is of the market value of the property involved in the instrument, but with a difference that in the event of former, such power is to be exercised before registration of the instrument in the latter post-registration. Determination under Sub-section (2) or (3) is of the market value of the property involved in the instrument, but with a difference that in the event of former, such power is to be exercised before registration of the instrument in the latter post-registration. Reverting to the phraseology of sub-section (3) of Section 47-A, the Court finds that a quasi judicial power is conferred upon the Collector to examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property involved in the instrument and the duty payable thereon. Rule 7 of the 1997 Rules relate to the procedure on receipt of a reference or when suo moto action is proposed under Section 47-A, which is extracted hereunder:- Rule-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 local authority; (b) examine and record the statement of any public officer or authority under the Government or local authority; (c) inspect the property after due notice to the parties to the instrument. (4)............... (5)............... (6)............... A perusal of the aforesaid would indicate that upon receipt of a reference or where the Collector proceeds to take action suo moto under Section 47-A, he shall issue notice to the parties to the instrument, show-cause within 30 days as to why the market value of the property as set forth in the instrument and the duty payable thereon be not determined by him. The Collector is at liberty to take oral / documentary evidence, if any, produced by the parties to the instrument, to record his satisfaction to the market value of the instrument and the duty payable thereon. Clause (3) gives 3 options to the Collector, i.e., he may call for any information or record from any such functionary specified therein; examine and record the statement of any state functionary and inspect the property after due notice to the parties to the instrument. The use of word "may" in clause (3) to Rule 7 indicates that the Collector has all the 3 options to ascertain the market value of the property involved in the instrument. But if the Collector is to base determination of the market valuation of the property on the inspection report, then such inspection has to be after notice to the parties to the instrument. The power to determine the market value of the property involved in the instrument, both under Section 47(2) & (3) of the Act, is a substantive power. Thereafter, considering the objection of the parties, if any, and after examining the record / evidence, the Collector shall proceed to determine the market value of the property involved in the instrument and the duty payable thereon. If during inquiry, market value and stamp duty payable, are found to be correct, the instrument shall be returned to the authority which made the reference with a certificate, but if the instrument is found to be undervalued, not duly stamped, necessary consequential action shall be followed. The Court finds from the original records that a notice was issued by the Collector to the petitioner, calling upon him to file his objections. The petitioner neither appeared nor filed any objections before the Collector. The Collector while computing the market value of the property, in exercise of the powers under Section 47-A (3) of the Act, r/w 7 of 1997 Rules, was obliged to independently determine the market value of the demised property. What the Collector has done is that he proceeded to rely upon the inspection report of the Sub-registrar, Gangapar, Varanasi dated 17.12.2013 which was only limited for initiating the proceedings of the stamp case and the same could not have formed a basis for determination under Section 47-A (3) of the Act r/w Rule 7? What the Collector has done is that he proceeded to rely upon the inspection report of the Sub-registrar, Gangapar, Varanasi dated 17.12.2013 which was only limited for initiating the proceedings of the stamp case and the same could not have formed a basis for determination under Section 47-A (3) of the Act r/w Rule 7? Merely because the petitioner failed to file any objections, could not be a ground for the Collector to ipso facto rely upon the report of the Sub-registrar, which as stated above, had a limited purpose. Power to determine the market value of the property, under an instrument both under Section 47-A(2) and (3) r/w Rule 7 is a quasi judicial power wherein the Collector is expected to examine the materials, provided under sub-rule (3) to Rule 7, including the objections under sub-rule (4), before he proceeds to determine the market value of the property and the duty payable thereon. The Collector while determining the market value of the property, involved in an instrument, should not place any reliance on the report / material of any authority, prior to the registration of the case, as the same is relevant only for the purpose of initiating the case. If this were to be permitted, it would not only give rise to arbitrariness but would also denude the power of the Collector to determine the market value of the property on the basis of the evidence adduced before him. The view taken by this Court is also in consonance with Paragraph- 25 of the judgement in Ram Khelawan vs. State of U.P., 2005 (2) AWC 1087. But this be not construed that in every case the Collector is bound to call for an inspection report, provided he is satisfied on the basis of evidence adduced before him under sub-rule (3) & (4) of Rule 7 as to the market value of the property involved in the instrument. However, there is no bar under law for the Collector to even place reliance, if need be, on a report/material prior to the registration of the stamp case, provided the said report/material is duly tendered/authenticated as evidence before the Collector under sub-rule (3) of Rule 7. In view of above discussion, orders dated 21.7.2015 and 29.6.2017, cannot be sustained and are liable to be quashed. The Writ Petition succeeds and is allowed. The orders dated 21.7.2015 and 29.6.2017 are quashed. In view of above discussion, orders dated 21.7.2015 and 29.6.2017, cannot be sustained and are liable to be quashed. The Writ Petition succeeds and is allowed. The orders dated 21.7.2015 and 29.6.2017 are quashed. Matter is remanded to the Collector concerned who shall decide afresh, in the light of the observations made above, in accordance with law, as expeditiously as possible, preferably within 3 months from the date of production of the certified copy of the order. The petitioner shall appear before the competent authority on 11.12.2017.