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2024 DIGILAW 1898 (ALL)

Naeem Khan v. State of U. P.

2024-08-14

PIYUSH AGRAWAL

body2024
JUDGMENT Piyush Agrawal, J. Heard Sri. Syed Fahim Ahmed, learned counsel for the petitioners and Sri. Rishi Kumar, learned Additional Chief Standing Counsel for the State-respondents. 2. By means of this writ petition, the petitioners have challenged the order dated 25.10.2017 passed by the respondent no.3 in Case No. 201713590572 under Section 47A(3) of Indian Stamp Act and the order dated 31.05.2018 passed by the respondent no.2 in Revision No. 00105 of 2018 (Computerized No. C201813000000105). 3. Learned counsel for the petitioner submits that the petitioners have purchased an agricultural land by way of execution of Sale deed dated 29.04.2016 and paid the due stamp duty thereof. Thereafter, on the basis of an ex-parte report, a notice was issued to which the petitioners have submitted their objection/reply. Thereafter, again on the request of the petitioners, a spot inspection was made. In the said inspection, it was found that over the property in question, agricultural activity were being undertaken and presently also, agricultural activity are being undertaken. Counsel for the petitioner submits that in spite of specific finding in the said report, the Collector while passing the impugned order dated 25.10.2017, has wrongly assessed the deficiency of stamp duty, amounting to Rs.11,25,150/-, against which a revision was preferred. During the pendency of the said revision, again an ex-part survey report was prepared on 24.05.2018, but by the impugned order dated 31.05.2018, relying upon the third survey as well as on the first survey, deficiency of the stamp duty has been confirmed and the revision has been dismissed. 4. Learned counsel for the petitioner further submits that while passing the impugned order, true material has not been considered. He further submits that the land in question has not been declared as an Abadi land under Section 143 of the U.P.Z.A. & L.R. Act to which a specific ground had been taken, but the same has not been considered by the authority. He next submits that the vicinity of the area is not relevant as held by this Court, but without considering the same, the impugned orders have been passed. 5. He further submits that if the property can have a better market value in future, that cannot be a ground for determining the deficiency of stamp duty. He next submits that the vicinity of the area is not relevant as held by this Court, but without considering the same, the impugned orders have been passed. 5. He further submits that if the property can have a better market value in future, that cannot be a ground for determining the deficiency of stamp duty. He further submits that the date on which the instrument is executed is the relevant date and after use cannot be a ground for determining the deficiency of stamp duty. He further submits that in absence of declaration of Abadi land under Section 143 of U.P.Z.A. & L.R. Act, any adverse inference drawn against the petitioners cannot be justified 6. In support of his submission, learned counsel for the petitioners has relied upon the judgement of Hon'ble Apex Court passed in the case of Smt. Pushpawati v. Chief Controlling Revenue Authority, Board of Revenue, U.P. At Allahabad & Ors., (1996) 0 Supreme (SC) 1036 as well as judgment of this Court passed in Writ-C No.51205 of 2010 (M/s Indo Continental Hotels and Resorts Pvt. Ltd. v. State of U.P. Thru Secretary Min. of Revenue and others), Writ- C No. 19644 of 2016 (Raj Kumar v. State of U.P. and 2 others) & Writ-C No.42628 of 2010 (Chhotey Lal v. State of U.P. and Others). He prays for allowing the writ petition. 7. Per contra, learned Additional Chief Standing Counsel supports the impugned order and submits that it is not dispute that at the time of execution of sale deed as well as in all the three survey reports, in the vicinity of the land in question, commercial activity were being undertaken. Once adjacent to the plot in question, commercial activity were being undertaken, the authorities have rightly initiated the proceedings and held the deficiency of stamp duty. 8. After hearing the parties, the Court has perused the record. 9. It is not in dispute that the agricultural land was purchased by the petitioners by way of aforesaid sale deed and thereafter, the proceedings of deficiency of stamp duty have been initiated against them on the premise that in the vicinity of the property in question, commercial activity were being undertaken. 9. It is not in dispute that the agricultural land was purchased by the petitioners by way of aforesaid sale deed and thereafter, the proceedings of deficiency of stamp duty have been initiated against them on the premise that in the vicinity of the property in question, commercial activity were being undertaken. Out of all the three surveys, one survey dated 05.08.2017 in which a specific finding was recorded that before the execution of the sale deed and at the time of survey, agricultural activity were being undertaken, have not been given due weightage by any of the authorities though noticed in the impugned order. Once the said fact has not been disputed that the agricultural activity were being undertaken before execution of sale deed and at the time of execution of sale deed as well as subsequent to the same, to which various documents were also brought on record showing that the agricultural activity were being undertaken over the property in question even after the execution of the sale deed, which has not been considered by the authorities nor any contrary material denying the survey has been brought on record, impugned orders are bad. 10. The Hon'ble Apex Court as well this Court has held that the vicinity of the area cannot the only ground for initiating proceedings of deficiency of stamp duty. 11. The Hon'ble Apex Court in the case of Smt. Prakashwati (supra) in para nos. 3 & 4 has held as under:- "3. Before the High Court as also here, it was urged on behalf of the appellant that since sufficient guidelines have not been provided in Section 47-A of the Act, the provision was unworkable. The High Court repelled the contention holding that a procedure was prescribed under sub-sections (3) and (4) of Section 47-A which requires to be adopted for determining market value of the property which has not been truly set-forth in the document in question. The manner of the inquiry, as required to be held, is appropriately given therein. According to the High Court the procedure postulated was observed in the instant case and nothing further was required to be done. The manner of the inquiry, as required to be held, is appropriately given therein. According to the High Court the procedure postulated was observed in the instant case and nothing further was required to be done. Rule 341 of the U.P. Stamp Rule 1942 providing for determination of the minimum market value, also subserving the purpose of Section 47-A of the Act was explained to say that the minimum market value determinable was not the end of the matter and value could be determined at a figure higher than that if warranted. 4. We have carefully examined the orders of the first respondent. Noticeable the house is built on a very small area i.e 68.84 sq yards only in a town which is not metropolis. Presumably the smallness of the area would not suggest the same by itself to be a costly property or be situated in a prestigious or posh locality, where the upper classes would rub shoulders to acquire it. Secondly, its being situated in an area which is close to Samrat Vikram Colony, said to be decent locality, where people of high income group reside does not by itself make it a part thereof we are doubtful whether the said factum of closeness by itself would cast any reflection on the price of property in question. Seemingly, influenced by the factor of the close proximity of Samrat vikram colony the Assistant Commissioner, Stamps, for one does not know how, determined the monthly rental value of the property at Rs. 1500/- per mensem and worked out the price of the house on that basis. Despite that the Tehsildar at a subsequent stage reported that the annual rental value of the house was Rs. 1200/- per annum, whereas for house tax purpose it was recorded as Rs. 480/- per annum. The first respondent ignoring the same worked out the monthly rental of the property at Rs. 830/- per mensem and its value at Rs. 2.5 lack, ostensibly on the basis that the average cost of construction of building in the year 1992 was about Rs. 400/- per sq yards, inclusive of the land cost. This figures too was arrived at, one knows not from where, without determining the age of the building, the quality of construction and citing appropriate instances. 2.5 lack, ostensibly on the basis that the average cost of construction of building in the year 1992 was about Rs. 400/- per sq yards, inclusive of the land cost. This figures too was arrived at, one knows not from where, without determining the age of the building, the quality of construction and citing appropriate instances. The approach of the authorities, to say the least, was highly vain, casual and unsatisfactory and dehors any constructive material on the basis of which on could have said that the decision arrived at by the first respondent was fair and reasonable we cannot approve of such an assumptive posture of the respondent in treating the appellant as an evader. We must therefore, upset the impugned order of the first respondent and the proceedings for the supposed deficient payment of stamp, but confining the end result to the facts and circumstances of the instant case, when the valuation under Section 341 of the Stamp Rules." 12. This Court in the case of M/s Indo Continental Hotels and Resorts Pvt. Ltd M/s Indo Continental Hotels and Resorts Pvt. Ltd (supra) in para no. 16, 20 & 22 has held as under:- "16. However, if deed has been registered then action may be taken only under section 47A(3) of the Stamp Act. Rule 7 of the Rules of 1997 prescribes the procedure for determining market value of the subject-matter of the instrument. This Rule nowhere refers to the minimum value of the property fixed in accordance with Rule 4 of the said Rules, Sub-section (2) of section 47A of Stamp Act obliges the Collector for the purpose of determining of the market value of the property which is the subject of instrument presented for registration after holding inquiry in such manner as may be prescribed by Rules made under the said Act. This clearly refers to Rule 7 of Rules of 1997. However, subsection (3) of the said section only says that Collector may examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property, which is subject of such instrument. Manner of examination has not been mentioned and the said sub-section (3) also does not refer to any Rules. However, Rule 7 makes itself applicable to both situations; pre-registration inquiry as well as post registration examination regarding market value of the property. Manner of examination has not been mentioned and the said sub-section (3) also does not refer to any Rules. However, Rule 7 makes itself applicable to both situations; pre-registration inquiry as well as post registration examination regarding market value of the property. It is interesting to note that Rule 7 no where prescribes the basis, formula or principle for determining market value. It only prescribes procedure like notice, admission of oral or documentary evidence, calling for information or record from any public office and inspection of property. The result is that, whether Rule 7 of Rules of 1997 applies or not market value has to be determined on the same principle on which market value in land acquisition cases is determined. Minimum market value fixed in accordance with Rules of 1997 is relevant only and only for the purposes of referring the document by Registering Officer to the Collector before registration. Even after such reference market value is to be determined not in accordance with the minimum value fixed under Rule 4 of the Rules of 1997 but in accordance with general principles of determination of market value as applicable in land acquisition cases. Simultaneously when proceedings are initiated after registration of the document under section 47-A (3) of the Act market value has to be determined in accordance with genera principles applicable for the said purpose like principles of determination of market value in land acquisition cases without taking recourse to minimum market value of the property fixed in accordance with Rule 4 of the Rules of 1997. 20. In Maya Food v. C.C.R.A., a Single Judge of this Court has held that market value of the land cannot be determined with reference to the use of the land to which buyer intends to put it and that in determining the market value the potential of the land as on the date of the sale alone can be taken into account and not the potential it may have in the distant future. 22. In Smt. Prabhawati v. C.C.R.A., held that mere smallness of the area would not suggest the same by itself to be a costly property and that merely because property situated in an area which is close to a decent colony where people of high income group reside does not by itself make it a part thereof." 13. 22. In Smt. Prabhawati v. C.C.R.A., held that mere smallness of the area would not suggest the same by itself to be a costly property and that merely because property situated in an area which is close to a decent colony where people of high income group reside does not by itself make it a part thereof." 13. Further, this Court in the case of Raj Kumar (supra) in para no. 16 & 20 has held as under:- "16. In view of the definition of land contained in the law relating to land tenures, i.e. U.P. Zamindari Abolition & Land Reforms Act, 1950, the fact that the land was not declared as Abadi under section 143 of U.P. Zamindari Abolition & Land Reforms Act, 1950 as explained under section 3(14) of the said Act, in itself becomes a relevant factor for determining the nature of land that was subject matter of instrument. This Court in various authorities has held that when the land is purchased for agricultural purposes and declaration under section 143 of the U.P. Z.A. & L.R.Act, 1950 has not been made and merely because the land is situated in close vicinity of the nonagricultural land, the same would not loose its character as the agricultural land for the purposes of levy of stamp duty. Reference can be made to few authorities of this Court in the case of Aniruddha Kumar and Ashwini Kumar v. Chief Controlling Revenue Authority, U.P. Allahabad and another, reported in 2000 (3) AWC 2587 ; Smt. Sushila Verma v. State of U.P. and others reported in 2006 (2) AWC 1492 and Sudama v. Chief Controlling Authority and others, reported in 2013 (4) AWC 3571 . 20. Insofar as the imposing four times penalty is concerned, it is well settled that unless "mens rea" is established on the part of the purchaser, no penalty can be imposed, even if the provision of penalty is a creation of statute. Regarding imposition of penalty, reference can be made to a judgment of this Court in the case of Smt. Asha Kapoor v. Additional Collector (Finance & Revenue), Ghaziabad and others, reported in 2008 (72) ALR 125, where this Court has held that penalty can be imposed if there is an attempt to evade the stamp duty and penalty presupposes culpability and an intention to conceal or to play fraud with the authorities. I do not find any finding on record, whereunder any opinion has been formed by the respondent-Authorities that the petitioner defrauded the Government having mens rea at the time of getting the sale deed executed. Even the annexures to the writ petition disclosing the nature of land have not been disputed by the State in the counter affidavit. I also find that the sale deed in question conforms to the statutory requirements of disclosure of necessary particulars as per rule 3(1)(a) of the Rules of 1997. Therefore, imposition of penalty is also contrary to law of the land." 14. In view of the fact that once the proceedings under Section 143 of UPZA & LR Act have not been undertaken for making change in category of land from agricultural land to abadi land or otherwise, the impugned orders cannot be sustained in the eyes of law and the same are hereby quashed. 15. Accordingly, the writ petition is allowed. The matter is remanded to the Collector, Rampur to decide the matter afresh within two months from the date of production of certified copy of this order, by reasoned and speaking order, after hearing all the stakeholders. 16. Any amount deposited by the petitioner pursuant to the impugned orders, shall be subject to the outcome of the fresh order to be passed by the Collector, Rampur.