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2024 DIGILAW 319 (ALL)

Mohd. Ashif Khan v. State of U. P.

2024-01-30

SARAL SRIVASTAVA

body2024
JUDGMENT : Saral Srivastava, J. Heard learned counsel for the petitioners and Sri Rishi Kumar, Additional Chief Standing Counsel for the respondents. 2. The petitioners by means of the present writ petition have assailed the order dated 22.3.2010 passed by respondent No. 3-Collector Stamp/District Magistrate, Shajahanpur in Stamp Case No. 67/24/2009, under Section 47A (3) of the Indian Stamp Act determining the deficiency of stamp duty to the tune of Rs. 14,53,410/- and, imposition of penalty of Rs. 1590/- and interest at the rate of 1.5% per month, and the order dated 25.4.2012 passed by the respondent No. 2-Chief Controlling Revenue Authority/Board of Revenue U.P. at Allahabad in Stamp Appeal No. 50/2011-12 affirming the order passed by the respondent No. 3-Collector Stamp. 3. The facts, in brief, are that the petitioners through sale-deed No. 8006/2009, dated 13.4.2009, purchased a piece of land measuring area 1.166 hectares i.e. 11,660 sq. meters from plot No. 64 having a total area of 2.485 hectares situated in the village Northern Area of the City outside Chungi near Village Chinnaur for agricultural purpose and paid stamp duty as per the circle rate prevailing in the area applicable for agricultural land i.e. Rs. 9,42,000/- per hectare (hereinafter referred to as the 'plot'). 4. According to the petitioners, the distance of the plot purchased by them from the road is about 1 kilometre and the Abadi is also about 1/2 kilometre from the plot. Since the use of the plot on the date of the sale-deed was agricultural, therefore, the petitioners paid the stamp duty of Rs. 77,000/-. 5. It appears that an inspection of the plot was conducted by the Sub Registrar, Sadar, Shahjahanpur on 11.8.2009. He found that Gata No. 64 is situated on the road connecting to brick-klin (Bhatta), and the bricks have been stored on the plot, and plotting activities were also being carried out over the plot. The report of the Sub-Registrar further stated that another sale-deed No. 3613/09 was executed from the same plot. In the sale-deed No. 3613/09, stamp duty was paid as per the circle rate applicable to the residential area. The Assistant Collector (Stamp) registered a case based on the report of the Sub Registrar, under Section 47A(3) of the Indian Stamp Act as case No. 67/24/2009 and issued notice to the petitioners calling upon them to submit an objection about the deficiency in payment of stamp duty. The Assistant Collector (Stamp) registered a case based on the report of the Sub Registrar, under Section 47A(3) of the Indian Stamp Act as case No. 67/24/2009 and issued notice to the petitioners calling upon them to submit an objection about the deficiency in payment of stamp duty. 6. The petitioners submitted an objection contending inter alia that the report of the Sub-Registrar is based upon incorrect facts. It is also stated that the plot is an agricultural plot and is surrounded by agricultural land, therefore, the petitioners have paid the correct stamp duty as per the circle rate applicable to the agricultural land. 7. The Collector (Stamp) rejected the objection of the petitioners by recording a finding that the stamp duty as per residential area was paid in respect to another sale-deed No. 3613/09 purchased from the same plot which establishes that the residential activities are being carried out in the vicinity of the plot, and the petitioners have submitted incorrect map alongwith the sale-deed to pay insufficient stamp duty. Accordingly, he concluded that the petitioners are liable to pay the stamp duty applicable to the residential land. Consequently, he determined the deficiency of stamp duty to the tune of Rs. 14,53,410/-. He further imposed a penalty of Rs. 1590/- and interest at the rate of 1.5% per month on the deficient stamp duty. 8. The order passed by the Collector Stamp was assailed by the petitioners in statutory appeal being Stamp Appeal No. 50/2011-12. In the memo of appeal, petitioners have specifically stated that the report of the Sub-Registrar was ex-parte and no spot inspection was carried out by the Collector Stamp before determining the stamp duty. It is further stated that the sale-deed No. 3613/09 is not relevant for the determination of the present case. 9. The Respondent No. 2-Chief Controlling Revenue Authority rejected the appeal of the petitioners vide order dated 25.4.2012 by recording a finding that though the petitioners have filed Khasra of the plot for Fasli Year 1415, 1416, 1417 which corresponds to the Year 2008, 2009 and 2010 which reflects that the crop of wheat and paddy were sown on the plot. The Respondent No. 2-Chief Controlling Revenue Authority rejected the appeal of the petitioners vide order dated 25.4.2012 by recording a finding that though the petitioners have filed Khasra of the plot for Fasli Year 1415, 1416, 1417 which corresponds to the Year 2008, 2009 and 2010 which reflects that the crop of wheat and paddy were sown on the plot. However, he did not consider the Khasra on the ground that the plot is a big plot having an area of 2.485 hectares whereas the plot purchased by the petitioners is 1.166 hectares, and Khasra does not establish that the agricultural activity is being carried on over the area 1.166 hectare of plot purchased by the petitioners, and since another sale-deed No. 3613/09 out of the same plot was executed on which the stamp duty applicable to the residential area has been paid, therefore, it cannot be denied that the land has a potential of residential land. Consequently, he held that the Collector (Stamp) had correctly determined the stamp duty. 10. Challenging the aforesaid orders, learned counsel for the petitioners has contended that the impugned order cannot be sustained since there is non-compliance with Rule 7(3)(C) of Uttar Pradesh Stamp (Valuation of Property), Rules, 1997 (hereinafter referred to as 'Rules, 1997'). It is submitted that except the report of the Sub-Registrar, there was no evidence on record to conclude that any residential activity was being carried out on the plot, and therefore, in such circumstances, it was incumbent upon the Collector Stamp to conduct an inspection as contemplated under the Rules, 1997 after giving due notice to the petitioners, and since, in the instant case it has not been done by the Collector, therefore, the orders impugned are per se illegal. He has placed reliance upon the judgment of this Court in the case of Smt. Saroj Verma v. State of U.P. and others, 2022(5) ADJ 368 (LB). He has further submitted that on the date of execution of the sale-deed, the plot was an agricultural plot and while determining the stamp duty, the future potentiality of the land is not to be considered or looked into and the stamp duty is to be paid as per the nature of the land on the date of execution of the sale-deed. 11. 11. It is submitted that in the instant case, since the plot was an agricultural plot, therefore, the correct stamp duty has been paid by the petitioners as applicable to the agricultural plot and the authority below failed to consider this aspect of the matter. Accordingly, it is submitted that the impugned orders are liable to be set aside on this ground alone. In support of his contention, he has placed reliance upon the judgment of this Court in the case of Manorama v. Board of Revenue/CCA of Revenue and Stamp Ald and others, 2022(12) ADJ 510 . 12. It is further submitted that in a proceeding under the Stamp Act, the burden is upon the State to prove that correct stamp duty has not been paid on the instrument, and since the State has failed to establish that on the date of execution of sale-deed, the plot was a residential plot, therefore, the orders impugned cannot be sustained. In support of his submissions, he has placed reliance upon the judgment of this Court in the case of Ajay Bahadur v. State of U.P. and others, 2023(12) ADJ 201 . 13. Per contra, learned Standing Counsel would contend that in the instant case, the report of the Sub Registrar reflects that another sale-deed No. 3613/09 executed from the same plot, the stamp duty as applicable to the residential plot was paid and this fact alone is sufficient to conclude that on the date of execution of sale-deed, the land has the potential of residential use and the Collector Stamp has rightly concluded that there is deficiency to the tune of Rs. 14,53,410/-.It is submitted that the fact that the sale-deed No. 3613/09 from the same plot was executed, the stamp duty applicable to the residential area had been paid on the said instrument, and sale-deed No. 3613/09 has not been denied, therefore, the State has discharged its burden of proving that on the date of execution of sale-deed, the land has the potential of residential use. He further contends that it is not a case where the authority below has relied upon only the ex-parte report of the Sub Registrar, but also another documentary evidence i.e. sale-deed No. 3613/09 which was in respect of a plot carved out from the same plot from which the petitioners have purchased the plot, and which instrument has not been denied by the petitioners, therefore, there was enough evidence on record to conclude that the plot has the potentiality of residential use and in such view of the fact, the Collector Stamp didn't need to conduct any enquiry contemplated under the Rules, 1997. Accordingly, it is submitted that the petitioners have failed to make out any case for interference by this Court and the writ petitions lack merit and deserve to be dismissed. 14. I have considered the rival submissions advanced by the learned counsel for the parties and perused the record. 15. The facts as emanates from the record are that the petitioners purchased a plot having an area of 1.66 hectares by sale-deed No. 8006/09 dated 13.4.2009 from plot No. 64 having an area of 2.485 hectares situated in the Village Chinnaur for agriculture purposes. An inspection of the plot was conducted by the Sub-Registrar and he submitted the report which is reproduced below : 16. Perusal of the report reflects that the Sub-Registrar while inspecting the plot found that the plotting activities are being carried out in the surrounding of the plot of the petitioners and also another sale-deed No. 3613/09 from the same plot i.e. khasra No. 64 was executed on which the stamp duty based on circle rate applicable to the residential area was paid. Accordingly, a case under Section 47A of the Indian Stamp Act was registered against the petitioners, and a notice was issued. 17. Accordingly, a case under Section 47A of the Indian Stamp Act was registered against the petitioners, and a notice was issued. 17. In the instant case, though the report of the Sub-Registrar was indeed an ex-parte report, and after institution of proceeding under Section 47 A (3) of the Indian Stamp Act, no inspection was conducted by the Collector (Stamp) as contemplated under the Rule 7 (3) (C) of the Rules, 1997, but in the present case, there is an additional factor which needs to be noticed that another sale-deed No. 3613/09 of a plot which was carved out from the same plot from which the petitioners purchased the plot was executed in which stamp duty chargeable to residential area was paid. The fact that the sale-deed No. 3613/09 was executed from the same plot i.e. plot No. 64 from which the petitioners have also purchased the plot, and the fact that the stamp duty applicable to residential land has been paid at the time of execution of sale-deed No. 3613/09 is not denied by the petitioners and is admitted fact between the parties. 18. In the light of the aforesaid fact, now the Court proceeds to consider the arguments advanced by the respective counsel. 19. So far as the first argument of learned counsel for the petitioners regarding the issue of non-compliance of Rule 7 (3) (C) of the Rules, 1997 is concerned, this Court may note that the power under Rule 7 (3) (C) of the Rules, 1997 conferred upon the Collector is only discretionary and is not mandatory in cases where there is other evidence on record from which nature of the land on the date of execution of the sale-deed can be determined. Though it is true that the Collector is conferred with the power to do spot inspection of the property under Rule 7 (3) (C) of the Rules, 1997, the said power is to be exercised depending upon the facts of each case. The Collector while determining the deficiency of stamp duty is bound to follow Rule 7 (3) (C) of the Rules, 1997 where there is no evidence on record to determine the nature of the land on the date of execution of the sale-deed, since the ex-parte report of the Sub-Registrar cannot be relied upon against the assessee inasmuch as placing reliance on such report would violate the principles of natural justice. 20. The judgment of this Court in the case of Smt. Saroj Verma (supra) relied upon by the learned counsel for the petitioners has been rendered in a fact situation where the Collector Stamp has placed reliance upon the ex-parte report of the Sub-Registrar, and there was no other evidence on record which could establish the nature of the land on the date of execution of sale-deed, and in such circumstances, this Court held that the Collector Stamp was bound to comply with Rule 7 (3) (C) of the Rules, 1997 to determine the stamp duty. This judgment is not applicable in the facts of the present case because of the admitted fact between the parties that on the sale-deed No. 3613/09 in respect of a plot carved out from the same plot from which petitioners' plot has been taken out, stamp duty applicable to the residential plot has been paid. This instrument itself is sufficient to determine the potentiality of land that the land has potential for residential use on the date of execution of the sale-deed. 21. So far as the other argument of learned counsel for the petitioners regarding burden of proof is concerned, there is no quarrel to the proposition of law that the burden is upon the State to establish by leading cogent evidence on record that incorrect stamp duty has been paid on an instrument as has been held by this Court in the case of Ajay Bahadur (supra), but in the instant case, the State has discharged its burden by placing reliance upon the sale-deed No. 3613/09, which instrument is not denied and on the said sale-deed stamp duty applicable to residential plot has been paid. 22. Now, coming to the last submission of learned counsel for the petitioners the potentiality of the land on the date of execution of the sale-deed is to be seen and no future potentiality of the land is to be considered while determining the stamp duty. This Court may note that there is also no quarrel to the aforesaid proposition as has been held by the Coordinate Bench of this Court in the case of Manorama (supra) wherein this Court has also considered and reproduced in paragraph No. 13 paragraphs No. 26 to 28 of Full Bench judgement of this Court in the case of Smt. Pushpa Sareen v. State of U.P., 2015(3) ADJ 136 (FB). 23. 23. However, the facts of the present case are different from the facts in the case of Manorama (supra). In paragraphs Nos. 14 to 16 of the said judgement, this Court records reasons for holding the order passed by the authority are not sustainable in law. Paragraphs No. 14 to 16 are reproduced herein-below : ''14. In the present case except the Naib Tehsildar report dated 6.11.1995, revenue record and the sale-deed in question there was no evidence on record to hold that land in dispute is not an agricultural land as such the impugned orders cannot be sustained in the eye of law in which on the point of future potential of the land without any basis the stamp duty paid by the petitioner was found deficient. 15. The case law cited by learned counsel for the petitioner in Chotey Lal (Supra) is also applicable in the present controversy in which the full bench decision rendered in Smt. Pushpa Sarin (Supra) has been also considered. 16. Considering the facts and circumstances of the case as well as ratio law laid down in Smt. Pushpa Sarin (supra) and Chhotey Lal (Supra) the impugned order dated 29.1.1996 passed by the Additional Collector and order dated 14.5.2001 passed by the Board of Revenue Allahabad cannot be sustained in the eye of law as such the same are hereby set aside. The writ petition stands allowed. No order as to costs.'' 24. The reading of para-14 reflects that except the report of Naib Tehsildar dated 6.11.1995, there was no other evidence on record to conclude that the land in question is not agricultural. In the instant case, it is not solely the report of the Sub-Registrar but also, there is sale-deed No. 3613/09 in respect of a plot which was carved out from plot No. 64, from which the petitioners purchased the plot, in which the stamp duty applicable to the residential area was paid. This document is not denied by the petitioners in the memo of appeal or the writ petition. 25. At this juncture, it would be apposite to have a glance at paragraphs No. 26, 27 and 28 of the Full Bench judgment of this Court in the case of Pushpa Sareen (supra) which are reproduced herein-below : ''26. This document is not denied by the petitioners in the memo of appeal or the writ petition. 25. At this juncture, it would be apposite to have a glance at paragraphs No. 26, 27 and 28 of the Full Bench judgment of this Court in the case of Pushpa Sareen (supra) which are reproduced herein-below : ''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. 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. 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.'' 26. 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.'' 26. In the instant case, the law postulated by the Full Bench in paragraph-27 and 28 answers the contention advanced by the learned counsel for the petitioners that though the potentiality of the land is to be seen on the date of execution of the sale-deed, but 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 be considered by the Collector as a factor which influences the market value of the land. 27. In the present case, sale-deed No. 3613/09 was executed from plot No. 64 on which the stamp duty applicable to residential land has been paid. Once execution of the sale-deed No. 3613/09 is not denied by the petitioners nor the fact that stamp duty applicable to the residential plot has been paid in the sale-deed No. 3613/09, this fact cannot be ignored by the authorities below while determining the nature of the land on the date of execution of the sale-deed. The sale-deed No. 3613/09 which is in respect of plot which was part of plot No. 64 from which the petitioners have purchased the plot reflects that the plot purchased by the petitioners has the potential to be used for the residential plot on the date of execution of sale-deed, and in such view of the fact, this Court is of the view that both the authorities below have not committed any error in determining the deficiency of stamp duty of Rs. 14,53,410/-. 28. It is also urged by the learned counsel for the petitioners that another sale-deed No. 8185/09 dated 4.8.2009 has been executed from the same plot i.e. plot No. 64 on which the stamp duty applicable to the agricultural land has been has been paid. The said sale-deed has been filed alongwith the supplementary-affidavit dated 14.12.2022. Accordingly, it is submitted that the State cannot act arbitrarily and discriminate between the two assessees identically circumstanced in charging stamp duty. 29. The said argument in the opinion of the Court is fallacious and is incorrect. The said sale-deed has been filed alongwith the supplementary-affidavit dated 14.12.2022. Accordingly, it is submitted that the State cannot act arbitrarily and discriminate between the two assessees identically circumstanced in charging stamp duty. 29. The said argument in the opinion of the Court is fallacious and is incorrect. The sale-deed No. 8185/09 was not placed before the authority below i.e. either before the Collector (Stamp) or before the appellate authority and this has been placed for the first time in the writ petition. This Court is not inclined to accept the said sale-deed as evidence inasmuch as if it is treated to be evidence, then the opportunity of hearing has to be given to the respondents to explain under what circumstances the instrument i.e. sale-deed No. 8185/09 has been charged on agricultural basis. Secondly, the petitioners have not stated whether any proceeding under Section 47A of the Indian Stamp Act has been drawn against the vendee of sale-deed No. 8185/09. Thirdly, Article 14 of the Constitution of India cannot come into play to perpetuate any illegality, and in the present case, there was sufficient material before the authority below to determine that the plot of the petitioners has the potentiality of residential use on the date of execution of sale-deed, therefore, the petitioners cannot take advantage of sale-deed No. 8185/09. 30. Thus, for the reasons given above, this Court finds that the writ petition lacks merit. It is accordingly, dismissed with no order as to costs.