Research › Search › Judgment

Allahabad High Court · body

2018 DIGILAW 1930 (ALL)

Mahmudul Haq Khan v. State of U. P.

2018-09-06

SALIL KUMAR RAI

body2018
JUDGMENT : SALIL KUMAR RAI, J. 1. A sale-deed dated 15.6.2004 was executed in favour of the petitioner for an area of 800 square feet in Plot No 90/2. Stamp duty was paid by the petitioner on the said sale-deed representing that the plot was vacant and no construction existed on it. Subsequently, a report dated 1.10.2004 was submitted by the Sub-Registrar, Itwa stating that a commercial building existed on the plot and the market value of the plot was approximately Rs. 6,000/-per square feet, and therefore, the property in the sale-deed dated 15.6.2004 was under valued by the petitioner and there was a deliberate attempt by the petitioner to evade payment of stamp duty. On the aforesaid report dated 1.10.2004 submitted by the Sub-Registrar, Case No. 13/2006 was registered under Section 47-A of the Indian Stamp Act, 1899 (hereinafter referred to as, 'Act, 1899') before the Additional Collector, Siddharthnagar, i.e., respondent No. 3 (hereinafter referred to as, 'Additional Collector') and show cause notice was issued to the petitioner in the aforesaid case. The petitioner submitted his reply to the show cause notice stating that no constructions existed on the plot. However, it appears from the records that after submitting his reply, the petitioner did not appear in the proceedings before the Additional Collector and consequently the Additional Collector vide his order dated 5.5.2006, relying on the report of the Sub-Registrar held that the property in the sale-deed dated 15.6.2004 was under valued and there was a deficiency of Rs. 43,200/-in payment of stamp duty. The deficiency in payment of stamp duty was calculated by the Collector on the market value of the property calculated according to the method prescribed in Rule 5(c)(ii) of the Rules, 1997, i.e., the method applied for calculating the minimum value of a commercial building. In his aforesaid order, the Additional Collector also imposed a penalty of Rs. 43,200/-on the petitioner and directed that the aforesaid amount alongwith an interest at the rate of 1.5% per month be recovered from the petitioner. Subsequently, the petitioner filed an application before the Additional Collector to recall the order dated 5.5.2006, but the same was dismissed by the Additional Collector vide his order dated 28.8.2006. 43,200/-on the petitioner and directed that the aforesaid amount alongwith an interest at the rate of 1.5% per month be recovered from the petitioner. Subsequently, the petitioner filed an application before the Additional Collector to recall the order dated 5.5.2006, but the same was dismissed by the Additional Collector vide his order dated 28.8.2006. Against the orders dated 5.5.2006 and 28.8.2006 passed by the Additional Collector, petitioner filed Appeal No. 178/2006 before the Commissioner, Basti Division, Basti, i.e., respondent No. 2 (hereinafter referred to as, 'Commissioner'), which was dismissed by the Commissioner vide his order dated 1.12.2006. The orders dated 5.5.2006 passed by the Additional Collector and 1.12.2006 passed by the Commissioner have been challenged in the present writ petition. 2. It has been argued by the counsel for the petitioner that the order dated 5.5.2006 passed by the Additional Collector and consequently the order dated 1.12.2006 passed by the appellate authority are contrary to law inasmuch as the Additional Collector was liable under Rule 7(3) of Uttar Pradesh Stamp (Valuation of Property), Rules 1997 (hereinafter referred to as, 'Rules, 1997') to himself inspect the property after the petitioner had submitted his reply denying the correctness of the report of the Sub-Registrar. It has been further argued by counsel for the petitioner that the report of the Sub-Registrar was vague and no reliance could have been placed on the same by respondent No. 3 inasmuch as in his report dated 1.10.2004, the Sub-Registrar had not stated the incidents necessary to conclude that the construction existing on the plot was within the definition of a commercial building, and therefore, the Additional Collector had erred in law in relying on the report of the Sub-Registrar while determining the market value of the property treating the alleged construction existing on the plot as a commercial establishment. It has been contended by the counsel for the petitioner that for the aforesaid reasons, the orders dated 5.5.2006 passed by the Additional Collector and 1.12.2006 passed by the Commissioner are liable to be set aside. 3. It has been contended by the counsel for the petitioner that for the aforesaid reasons, the orders dated 5.5.2006 passed by the Additional Collector and 1.12.2006 passed by the Commissioner are liable to be set aside. 3. A perusal of the records annexed with the writ petition and the order dated 5.5.2006 passed by the Additional Collector show that even though the petitioner had submitted his reply before the Additional Collector in response to the show cause notice denying the correctness of the report of the Sub-Registrar, the petitioner failed to appear before the Additional Collector to contest his case and also did not file any application before the Additional Collector praying for an inspection of the plot or to take steps as prescribed in Rule 7(3) of the Rules, 1997, to ascertain the situation of the plot or the nature of the building existing on the same. In view of the aforesaid, the proceedings before the Additional Collector cannot be held to be vitiated merely on the ground that the Additional Collector had not himself inspected the plot to ascertain the correctness of the report of the Sub-Registrar. The argument of the counsel for the petitioner to that extent is not acceptable and is rejected. 4. However, a perusal of the report dated 1.10.2004 submitted by the Sub-Registrar shows that in his report the Sub-Registrar had merely stated that a commercial building existed on the plot. The details of the activities in the building which could help in deciding whether the building was within the definition of a commercial building as defined in Section 2(d) of the Rules, 1997 were not stated in the report of the Sub-Registrar. Section 2(d) of the Rules, 1997 is reproduced below : "2(d) 'Commercial building' means commercial establishment or shop as defined respectively in clause (4) and clause (16) of Section 2 of the Uttar Pradesh Dookan Aur Vanijya Adhisthan Adhiniyam, 1962." 5. It would also be appropriate to reproduce the definition of a commercial establishment or shop as given in Section 2(4) and Section 2(16) of the Uttar Pradesh Dookan Aur Vanijya Adhisthan Adhiniyam, 1962 (hereinafter referred to as, 'Adhiniyam, 1962). Section 2(4) and Section 2(16) of the Adhiniyam, 1962 are reproduced below :- "2. It would also be appropriate to reproduce the definition of a commercial establishment or shop as given in Section 2(4) and Section 2(16) of the Uttar Pradesh Dookan Aur Vanijya Adhisthan Adhiniyam, 1962 (hereinafter referred to as, 'Adhiniyam, 1962). Section 2(4) and Section 2(16) of the Adhiniyam, 1962 are reproduced below :- "2. Definitions.-In this Act, unless there is anything repugnant in the subject or context- (4) 'Commercial establishment' means any premises, not being the premises of a factory, or a shop, wherein any trade, business, manufacture, or any work in connection with, or incidental or ancillary thereto, is carried on for profit and includes a premises wherein, journalistic or printing work, business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on, or which is used as theatre, cinema, for any other public amusement or entertainment or where the clerical and other establishment of a factory, to whom the provisions of the Factories Act, 1948, do not apply, work; (16) 'shop' means any premises where any wholesale or retail trade or business is carried on, or where services are rendered to customers, and includes, all offices, godowns or warehouses whether in the same premises, or not, which are used in connection with such trade or business." 6. The market value of a building can be calculated treating it to be a commercial building only if it was covered by Section 2(d) of Rules, 1997. It is also evident that before any building existing on the plot is held to be a commercial building as defined in Section 2(d) of the Rules, 1997, the particulars as narrated in Section 2(4) and Section 2(16) of the Adhiniyam, 1962 should be established. Further, the noticee in any case registered under Section 47-A of the Act, 1899 should have an opportunity to rebut the details narrated in the report of the Sub-Registrar which in the opinion of the Collector could lead to the conclusion that the building existing on the plot was a commercial building as defined in Section 2(d) of Rules, 1997. To give the noticee an opportunity to rebut the details as stated above, the show cause notice should state the details which could lead to the conclusion that the building was a commercial building under Rule 2(d) of Rules, 1997. 7. To give the noticee an opportunity to rebut the details as stated above, the show cause notice should state the details which could lead to the conclusion that the building was a commercial building under Rule 2(d) of Rules, 1997. 7. In the present case, as held earlier, it is evident that the report of the Sub-Registrar did not state the details necessary to include the building within the definition of a commercial building as defined in Rule 2(d) of Rules, 1997 read with Section 2(4) and Section 2(16) of the Adhiniyam, 1962, which could lead the Collector to hold that the building existing on the plot was a commercial building. Obviously, the petitioner did not have any opportunity to contest the report of the Sub-Registrar or the charge in the show cause notice that the building was a commercial building. 8. Further, a perusal of the order dated 5.5.2006 passed by the Additional Collector also shows that that no details have been given in the aforesaid order regarding the nature of activities in the building on the basis of which the Additional Collector could conclude that the building was a commercial building. In view of the aforesaid, the findings of the Additional Collector as recorded in his order dated 5.5.2006 that the building was a commercial building is evidently without any evidence. 9. In view of the aforesaid, the order dated 5.5.2006 passed by the Collector so far as it determines the market value of the property treating the building existing on the same to be a commercial building, is contrary to law and is liable to be set aside. Consequently, the appellate order dated 1.12.2006 passed in Appeal No. 178/2006 is also liable to be set aside. The orders dated 5.5.2006 passed by the Additional Collector and 1.12.2006 passed by the Commissioner are hereby set aside. The matter is remanded back to the Additional Collector, i.e., respondent No. 3 to pass fresh orders in Case No. 13/2006 registered under Section 47-A(2) of the Act, 1899 in accordance with law and in the light of the observations made in the judgment. If, necessary the Additional Collector may also exercise his powers as prescribed under Rule 7(3) of the Rules, 1997 and seek assistance of technical experts to ascertain the age of the building existing on the plot. If, necessary the Additional Collector may also exercise his powers as prescribed under Rule 7(3) of the Rules, 1997 and seek assistance of technical experts to ascertain the age of the building existing on the plot. The amount deposited by the petitioner in pursuance to the order dated 21.2.2007 passed by this Court shall remain deposited and the refund of the same will be dependent on the final orders passed by the courts below. 10. With the aforesaid direction, the writ petition is allowed.