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2023 DIGILAW 406 (ALL)

Pawan Kumar v. Commissioner Devi Patan

2023-02-09

MANISH MATHUR

body2023
JUDGMENT Manish Mathur, J. Heard Mr. R.S. Pandey, Senior Advocate assisted by Mr. Virendra Bhatt, learned counsel for petitioners and learned State Counsel appearing on behalf of opposite parties. 2. Petition has been filed assailing order dated 12.07.2002 passed under section 47A(3) of Indian Stamp Act 1899 (hereinafter referred to as the Act of 1899) whereby property which is subject matter of instrument of transfer was treated to be residential instead of agricultural and deficiency of stamp duty has been indicated thereupon along with penalty and interest. Appellate order dated 30.09.2002 dismissing Appeal under Section 56 of the Act of 1899 is also under challenge. 3. Learned counsel for petitioners submits that a portion of plot no.582, area 0.15 acre miljumla in the Village in question was purchased jointly by petitioners by means of sale deed dated 27.10.1998. It is submitted that subsequently proceedings under Section 47-A of the Act of 1899 were drawn in pursuance of spot inspection report dated 05.02.2000 and have culminated in passing of impugned orders. 4. Learned counsel for petitioners submits that the entire basis of impugned order dated 12.07.2002 is only assumption without any concrete corroborating evidence to support the same. It is submitted that order assumes the property to have been purchased for residential purpose only on account of fact that a small portion of the plot has been purchased jointly by eight persons who are unrelated and do not belong to the Village in question. It is submitted that the order also is based on the initial spot inspection report indicating residences having been constructed over the property in question. It is submitted that authority concerned has erred in placing reliance only on the spot inspection reports which even otherwise did not pertain to the status of property which is subject matter of instrument of transfer as on the date of execution of instrument. It is submitted that the stamp duty cannot be imposed on the basis of future potentiality of the property. Learned counsel has also drawn attention to impugned appellate order to submit that the findings recorded by authority concerned under Section 47-A of the Act of 1899 has merely been followed by the appellate authority without any independent application of mind and is also on the basis of assumption. Learned counsel has also drawn attention to impugned appellate order to submit that the findings recorded by authority concerned under Section 47-A of the Act of 1899 has merely been followed by the appellate authority without any independent application of mind and is also on the basis of assumption. Learned counsel has placed reliance on decision rendered by Hon'ble the Supreme Court in State of U.P. and others v. Ambrish Tandon and another, reported in (2012) 5 SCC 566 and a decision of this Court in Ram Khelawan @ Bachchha v. State of U.P. and others reported in 2005 (98) RD 511 to buttress his submissions. 5. Learned counsel appearing on behalf of opposite parties have refuted the submissions advanced by learned counsel for petitioners on the ground that no error has been committed by the Prescribed Authority in passing order impugned under Section 47-A of the Act of 1899 since only a small portion of the property has been purchased jointly by eight persons, which cannot be for the purposes of agricultural and in fact can only be for the purposes of residence. It is submitted that even spot inspection report clearly indicates residential accommodations having been constructed over the property in question by petitioners at the time of spot inspection and therefore the property has been rightly considered to be residential and deficiency of stamp duty as well as penalty has been rightly imposed. 6. Learned counsel has also submitted that the penalty clause was not rightly adhered to by the authority under Section 47-A of the Act of 1899 and that wrong has been corrected by appellate authority enhancing the penalty, which is in consonance with the provisions of the Act of 1899. 7. Learned counsel has also placed reliance on Full Bench decision of this Court rendered in Pushpa Sareen v. State of U.P. and others reported in 2015 (33) LCD 1575 to submit that potentiality of land which is subject matter of instrument of transfer is also a relevant aspect which was required to be seen by the authorities concerned as has been done by impugned order. 8. 8. Upon consideration of submissions advanced by learned counsel for the parties and perusal of material on record it transpires that the property in question was purchased jointly by petitioners by means of sale deed dated 27.10.1998 where after proceedings under Section 47-A of the Act of 1899 were instituted on the basis of spot inspection report of Sub-Registrar dated 05.02.2000 in which it has been indicated that at the time of spot inspection, residential accommodation stood constructed over the property. The report has been brought on record by means of supplementary affidavit. Another report dated 13.04.2001 submitted by Naib Tehsildar has also been brought on record indicating that the property purchased by means of instrument of transfer is being used for residential purpose. It is these reports which have been taken cognizance of by the Prescribed Authority in passing order under Section 47-A of the Act of 1899. However, assumption with regard to residential use of the plot in question is based on the reasoning that a small portion of the property has been purchased by eight unrelated persons and spot inspection report also indicates residential accommodations having been constructed over the property in question due to which its use for residential purpose has been indicated. 9. It is a relevant factor that spot inspection took place after more than one and half years of execution of the sale deed. 10. Hon'ble the Supreme Court in State of U.P. and others v. Ambrish Tandon (Supra) has clearly held that the status of property purchased by means of an instrument of transfer is to be seen as on the date of execution of the deed and not as on the date of spot inspection report, which does not appear to have been adhered to in impugned order. Relevant portion of the decision is as follows:- "15. The impugned order of the High Court shows that it was not seriously disputed about the nature of user of the building, namely, residential purpose on the date of the purchase. Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty. The nature of user is relatable to the date of purchase and it is relevant for the purpose of calculation of stamp duty. Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty. The nature of user is relatable to the date of purchase and it is relevant for the purpose of calculation of stamp duty. Though the matter could have been considered by the appellate authority in view of our reasoning that there was no serious objection and in fact the said alternative remedy was not agitated seriously and in view of the factual details based on which the High Court has quashed the order dated 27-9-2004 passed by the Additional District Collector, we are not inclined to interfere at this juncture." 11. The aforesaid aspect particularly with regard to potentiality of the land for its use has also been considered by a Full Bench decision of this Curt in Pushpa Sareen (supra) in following terms:- "27. 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." "28. 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. 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." 12. Upon applicability of the aforesaid judgements in present facts and circumstances of the case, it is evident that even potentiality of land which is subject matter of instrument of transfer is required to be seen as on the date of execution of the deed and not as per future use or on the basis of future reports by authorities concerned which has been done while passing impugned orders. Impugned order also does not indicate any reason as to why an agricultural plot can be deemed to be for use only as residential if it is not a large tract of land and has been purchased jointly by eight persons. There does not appear any bar under law where a small tract of land cannot be used for agricultural purpose even jointly by eight persons 13. It is also evident that impugned order has been passed placing reliance only on spot inspection report without authority himself adverting to the fact and circumstance of the case and arriving independently at a conclusion that the property in question was in use for residential purpose as on date of execution of the deed. 14. This Court in Ram Khelawan @ Bachchha(Supra) has held that spot inspection reports cannot be the sole basis of orders passed in proceedings under Section 47-A of the Act of 1899 and that authority concerned is required to independently apply its mind and record a subjective satisfaction that the property in question which has been purchased is not in accordance with agricultural use. The relevant portion of the judgement is as follows:- "25. It has been found in several cases like the present one that the entire basis of determination of market value for the purpose of stamp duty is ex-parte report of Tehsildar or other officer. Ex-parte inspection report may be relevant for initiating the proceedings under Section 47A of Stamp Act. However, for deciding the case no reliance can be placed upon the said report. After initiation of the case inspection is to be made by the Collector or authority hearing the case after due notice to the parties to the instrument as provided under Rule-7(3) (c) of the Rules of 1997. Moreover in the inspection report distance of the property from other residential or commercial properties and road must be shown and wherever possible sketch map must also be annexed along with the report so that correct valuation may be ascertained with reasonable certainty.' 15. A reading of impugned appellate order also reveals that petitioners' appeal has been dismissed on the same analogy as has been drawn in order passed under Section 47 A of Act. 16. In the considered opinion of this Court as per discussions made herein above, it is evident that orders impugned dated 12.07.2002 passed under section 47-A(3) of the Act of 1899 and Appellate order dated 30.09.2002 dismissing Appeal under Section 56 of the Act of 1899 are against the dictum of Hon'ble the Supreme Court as well as this Court and are accordingly set aside. 17. Resultantly, the petition succeeds and is allowed. The parties to bear their own costs. 18. It is submitted by learned counsel for petitioners that in pursuance of impugned orders, certain deposits have been made by petitioners, which shall be refunded to them along with interest at the rate of 6% per annum from the date of deposit till actual payment is made within a period of three months from the date of production of a certified copy of this order, upon application being so made by petitioners.