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Allahabad High Court · body

2021 DIGILAW 1411 (ALL)

Virendra v. State of U. P.

2021-11-25

JAYANT BANERJI

body2021
ORDER : 1. Heard Sri Santosh Kumar Srivastava, learned counsel for the petitioner and Sri Shashi Kant Upadhyaya, learned Standing Counsel appearing for the respondents. 2. By means of this writ petition, the order dated 28.8.2017 passed by Additional Collector (Finance & Revenue), Hapur in Case No. D201711730338 imposing deficiency of stamp duty etc. has been challenged. Also under challenge is the order dated 22.5.2018, passed by the Additional Commissioner (Administration) IIIrd, Meerut Division, Meerut in Stamp Revision No. 00705 of 2018. 3. The issue is with regard to instrument No. 2570 dated 18.3.2016 pertaining to sale of a land situate at Khasra No. 265 having an area 0.225 hectare in village Gandu Nagla, Tehsil Garh Mukteshwar, District Hapur. 4. It is stated that the land in question is an agricultural land, however, the Sub-Registrar, Garh Mukteshwar submitted a report dated 30.4.2016 alleging deficiency of stamp duty, whereafter, proceedings under Section 47-A(3) of the Indian Stamp Act, 1899 [The Act] were initiated. It is stated that though a show cause notice was reported to be sent, but it was never served on the petitioner nor any report of service was placed on record. The ex-parte order dated 28.8.2017 was passed imposing deficiency of stamp duty etc. The revision filed by the petitioner met with failure by means of impugned order dated 22.5.2018. 5. It is the contention of the learned counsel for the petitioner that firstly, no notice was served on the petitioner and the order passed by the Additional Collector is against the principles of natural justice. Secondly, it is contended that the land in question is not residential, but agricultural as is reflected in the revenue record. The contention is that the ex-parte report dated 30.4.2016 has been relied upon by the Additional Collector without considering the mandate of Rule 7(3)(c) of the U.P. Stamp (Valuation of Property) Rules, 1997. [1997 Rules] It is further contended that the assessment of valuation under the provisions of Section 47-A(3) are required to be done as per the market value, however, the valuation has been done on the basis of minimum rate fixed by the Collector of the district under the provisions of 1997 Rules. 6. Learned Standing Counsel has strongly opposed the writ petition and has stated that there is a minimum rate fixed by the authority which at the relevant point of time was Rs. 2200/- per sq. 6. Learned Standing Counsel has strongly opposed the writ petition and has stated that there is a minimum rate fixed by the authority which at the relevant point of time was Rs. 2200/- per sq. meter as is reflected from page 10 of the counter affidavit. It is also contended that the report of the Sub-Registrar clearly reflected the land in question as residential and, therefore, the averment in the petition to the contrary is incorrect. 7. Having heard the learned counsel for the parties and perused the record of the writ petition, it appears from the order sheet of proceedings under Section 47A of the Act, that on several dates the proof of notice was stated to be unavailable. From the order passed on 27.7.2017, it appears that the petitioner was stated to have appeared in another case and he was informed regarding the proceedings under Section 47A of the Act. From the order of the Additional Collector, it appears that this information so given to the petitioner itself was taken to be deemed service of the show cause notice. 8. It has been held in the case of Smt. Vijaya Jain Vs. State of U.P. and others (dated 1.9.2015) passed in Special Appeal Defective No. 598 of 2015 as follows: “In our opinion a notice of this nature must necessarily disclose to the person concerned the basis and the reasons upon which the Collector has come to form an opinion that the market value of the property has not been truly set forth. In the absence of a disclosure of even rudimentary details on the basis of which the Collector came to form this opinion, the person concerned has no inkling of the case that he has to meet. A notice in order to be legally valid and be in compliance with the principles of natural justice must necessarily disclose, though not in great details, the case and the basis on which action is proposed to be taken against the person concerned. Not only this and as is evident from a bare reading of rule 7, at the stage of issuance of notice, the collector has to proceed on the basis of material which may tend to indicate that the market value of the property has not been truly and faithfully disclosed in the instrument. Not only this and as is evident from a bare reading of rule 7, at the stage of issuance of notice, the collector has to proceed on the basis of material which may tend to indicate that the market value of the property has not been truly and faithfully disclosed in the instrument. The stage of computation of market value comes only after the provisions of sub rules (2), (3) and (4) of rule 7 come into play. At the stage of issuance of notices, the Collector calls upon the person concerned to show cause “as to why the market value of the property... be not determined by him.” 9. As far as reliance placed by the Additional Collector on the report of Sub-Registrar, it is evident that no spot inspection was made by the Collector/his nominee after due notice to the petitioner and after initiation of the proceeding, as is warranted under the provisions of Rule 7(3)(c) of the Rules 1997. It has been held in the judgment of a coordinate Bench of this Court in the case of Ram Khelawan alias Bachcha Vs. State of U.P. 2005 (2) AWC 1087 that an exparte report prepared prior to initiation of proceedings under Section 47A of the Act cannot be taken to be evidence. It is only after proceedings are initiated and due effort is made by the Collector after putting the parties proceeded against on due notice, that the inspection is required to be done in presence of the parties of the site in question. This has clearly not been done inasmuch as it is not reflected from any of the orders impugned. The valuation too has been done on the basis of minimum rate fixed, whereas, the provisions of Section 47-A(3) of the Act mandatorily provide for making valuation on the basis of market value. In the case of Smt. Pushpa Sareen vs. State of U.P. 2015 (3) ADJ 136 (FB), a three Judge Bench of this Court has held as follows: “26. The true test for determination by the Collector is the market value of the property on the date of the instrument because, under the provisions of the Act, every instrument is required to be stamped before or at the time of execution. The true test for determination by the Collector is the market value of the property on the date of the instrument because, under the provisions of the Act, every instrument is required to be stamped before or at the time of execution. In making that determination, the Collector has to be mindful of the fact that the market value of the property may vary from location to location and is dependent upon a large number of circumstances having a bearing on the comparative advantages or disadvantages of the land as well as the use to which the land can be put on the date of the execution of the instrument. 27. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land. This potential has to be assessed with reference to the date of the execution of the instrument. In other words, the power of the Collector cannot be unduly circumscribed by ruling out the potential to which the land can be advantageously deployed at the time of the execution of the instrument or a period reasonably proximate thereto. Again the use to which land in the area had been put is a material consideration. If the land surrounding the property in question has been put to commercial use, it would be improper to hold that this is a circumstance which should not weigh with the Collector as a factor which influences the market value of the land. 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 relateable 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.” (Emphasis supplied) 10. For the reasons aforesaid, neither the order dated 28.8.2017 passed by the Additional Collector (Finance and Revenue) nor the order dated 22.5.2018 passed by the Additional Commissioner (Administration)-IIIrd, Meerut Division, Meerut can stand the test of having fulfilled the conditions enumerated above and as such the same are quashed. However, in the interest of revenue, the Collector is directed to take a decision afresh with regard to valuation etc. of the property in question. This exercise shall be completed within a period of six months from today. Any amount deposited by the petitioner at the revisional stage shall be refunded to him within two months. 11. Since the petitioner is represented in the Court, no separate notice is required to be sent by the Collector to him for his appearance. However, it is directed that the petitioner shall present himself before the Collector or the competent authority alongwith a certified copy of the order passed today on 13.12.2021, on which date, a future date for further proceedings shall be given/communicated. 12. Subject to the aforesaid observations, this writ petition is allowed.