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2017 DIGILAW 2757 (ALL)

MADHU SINGH v. STATE OF Uttar Pradesh

2017-11-28

AJAY BHANOT

body2017
JUDGMENT Hon’ble Ajay Bhanot, J.—The matter relates to imposition of stamp duty on an instrument of sale executed between the parties on 3.8.2004 being House No. D-36/178 situated at Mohalla August Kund, Ward Dasasumedh, Varanasi with an area of 2686 sq.ft. The stamp duty of Rs. 1.80 lacs was paid on the aforesaid instrument and the valuation of the instrument as contained in the recital in the sale-deed is of Rs. 18 lacs. The recital in the sale-deed further discloses that the total area of the plot is 2686 sq. ft. while the covered area as per such recital is 2600 sq. ft. 2. The Revenue opined that there was deficiency in the payment of stamp duty on the said transaction. Accordingly proceedings under the Stamp Act were initiated for assessment and levy of duty. The proceedings culminated in imposition of duty to the extent of Rs. 48,500/-, interest at the rate of 1.5% on the said amount till the date of recovery of the entire amount and penalty to the tune of Rs. 26,500/-. Aggrieved by the action of Revenue, the petitioner has instituted the instant writ petition. 3. Learned counsel for the petitioner Ms. Harshita Raghuvanshi contends that proceedings under the Stamp Act for alleged deficiency in the payment of stamp duty were instituted at the behest of certain powerful political leaders. It is contention of Ms. Harshita Raghuvanshi, learned counsel that upon such complaints an enquiry was caused to be conducted by the Deputy Registrar, Sadar, District Varanasi. A report was submitted by the Deputy Registrar, Sadar, District Varanasi, in regard to the said property on 9.2.2005. The Deputy Registrar’s report returns a finding that the total covered area of the property which was comprised in the sale-deed was 4200 sq. ft. Ms. Harshita Raghuvanshi, learned counsel further contends that on the basis of the aforesaid report, proceedings were initiated under Section 47-A(3) of the Stamp Act by the Collector (Stamp). Upon institution of such proceedings the petitioner in the very first instance took an objection to the report dated 9.2.2005 submitted by the Sub Registrar. In the course of the proceeding another report was called for by the Collector (Stamps) from the Tehsildar. The Tehsildar in turn submitted the enquiry report on 17.5.2005. Upon institution of such proceedings the petitioner in the very first instance took an objection to the report dated 9.2.2005 submitted by the Sub Registrar. In the course of the proceeding another report was called for by the Collector (Stamps) from the Tehsildar. The Tehsildar in turn submitted the enquiry report on 17.5.2005. The report submitted by the Tehsildar by and large corroborated the recital contained in the sale-deed in regard to the total area as well as the covered area which was relevant for the purposes of assessing the stamp duty. A minor discrepancy though was pointed out in the report of the Tehsildar to the effect that the covered area of the property in fact was 2686 sq. ft. and not 2600 sq. ft. as provided in the recitals in the sale-deed. A third report was called by the Collector (Stamps) on receipt of two contradictory reports. This was a joint report submitted by both the Sub Registrar and Tehsildar on 1.7.2005. The joint report dated 1.7.2005 is a curious document and confirms correctness of both the earlier reports. 4. It is evident that the so called joint report is an attempt at ex-post fact rationalization of two contradictory reports submitted by the State authorities. It is clearly an attempt to supply the deficiency writ large on the face of the record. The Revenue authorities, namely the assessing as well as the appellate authority have relied on the findings of the joint report dated 1.7.2005 in so far as it confirms the validity of the first report dated 9.2.2005, to assess the duty liability. 5. Sri Sanjay Goswami, learned Additional Chief Standing Counsel, for the State, defended the actions of the Revenue. He contended that the impugned orders were speaking and based on reliable material in the records. The reports which formed the basis of the assessment were submitted by Government officials and hence reliance was rightly placed. 6. Having heard the learned counsel for the parties and upon perusal of the record, it is found that the report dated 9.2.2005 was the trigger to the proceedings under Stamp Act and formed the basis of valuation to impose the duty. 7. The objections to the first report dated 9.2.2005 are of substantial nature. The said objections raised by the petitioner before the authorities in the first instance go to the root of the issue. 7. The objections to the first report dated 9.2.2005 are of substantial nature. The said objections raised by the petitioner before the authorities in the first instance go to the root of the issue. These objections include the fact that the report was ex parte to the petitioner and there was no site inspection. It was also contended before the authorities below in the said objection that the building in question was financed through a Bank. The Bank officials who included an Engineer duly inspected the premises in general and the constructed portion which was faithfully reflected in the sale-deed. These objections if correct vitiate the report dated 9.2.2005, which is the basis of the stamp duty imposed. These objections were required to be considered by the authority below with an independent mind. However, the objections to the report dated 9.2.2005 were not considered by the authorities below. 8. It was also noteworthy that in the joint report dated 1.7.2005 or the report dated 9.2.2005 the material particulars of the portion of the house which was allegedly demolished have not been mentioned. Nor has any date of demolition been disclosed. The report is vague. This renders the joint report dated 1.7.2005 suspect in the eyes of law. 9. On these counts the joint report dated 1.7.2005 which seeks to justify the report of 9.2.2005 also needs reconsideration. The objections in regard to the report dated 9.2.2005 ought to have been considered independently by the authorities below before relying on the conclusions returned by the joint report. 10. Failure of the appellate authority to consider and return findings on the objections to the report dated 9.2.2005, is a failure to discharge the office of the appellate authority. Such action of an appellate authority would render the statutory right of appeal illusory. The appellate authority is under an obligation of law to address all germane issues raised before it. In case the appellate authority does not discharge this obligation, the judgment handed down will be vitiated and rendered unsustainable in law. 11. No finding regarding the specific parts of the property which were allegedly demolished has been returned independently by the Revenue authorities. Further no independent evidence in this regard has also been discussed or adverted to. The Revenue authorities have also not exercised their minds independently to determine the actual area for the purpose of valuation. 11. No finding regarding the specific parts of the property which were allegedly demolished has been returned independently by the Revenue authorities. Further no independent evidence in this regard has also been discussed or adverted to. The Revenue authorities have also not exercised their minds independently to determine the actual area for the purpose of valuation. On account of such facts the writ petition deserves to be allowed. 12. The Revenue authorities exercising powers under the Stamp Act, have to enter independent findings on issues engaging their attention and cannot place unquestioned or blind reliance on reports filed by subordinate authorities to assist the adjudication. Purpose of such reports by subordinate authorities is to assist the adjudication by statutory authorities. Correctness of such reports cannot be presumed, but has to be tested after adopting the proper procedure. The reports are akin to the Commissioner’s report under the Civil Procedure Code. Objections have to be called to such reports. After independent consideration of the report and the objections, findings of the report can be adopted or other appropriate findings can be returned by the Revenue authorities. Admittedly, in the instant case such procedure was not adopted, in regard to the reports dated 9.2.2005 and 1.7.2005. The action of the Revenue in resting the findings on a blind and unquestioned reliance of such reports, vitiates the proceedings under the Stamp Act. 13. The writ petition is allowed. The order dated 18.10.2005 passed by the Collector (Stamp) and order dated 18.4.2006 passed by the Commissioner/Chief Controller are hereby set aside. The matter is remitted back to the Revenue authorities commanding the Revenue authorities to undertake fresh proceedings under the Stamp Act based on a fresh investigation consistent with the observations made in the judgment and after fresh and independent consideration of the objections to the report dated 9.2.2005 and also accord fresh consideration to the report dated 1.7.2005. The deposits made by the petitioner in compliance of interim orders passed by this Court shall remain subject to the final adjudication being made by the Revenue authorities.