Dukhi vs State Of U.P. And Others
2012 Latest Caselaw 5429 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

                                                                                            Reserved on 16.5.2012
 
                                                                                            Delivered on 2.11.2012
 

 

 
Case :- WRIT - C No. - 53337 of 2002
 

 
Petitioner :- Dukhi
 
Respondent :- State Of U.P. And Others
 
Petitioner Counsel :- S.P.Lal,S.K. Chaubey,T.P.Gupta
 
Respondent Counsel :- C.S.C.
 

 
Hon'ble Mrs. Sunita Agarwal,J.

Heard Shri S.K. Chaubey, learned counsel for the petitioner and learned standing counsel.

Petitioner has challenged the validity and legality of the order dated 8.10.2002 passed by Additional Collector (Administration) Allahabad as also the order dated 23.6.2001 passed by the Commissioner, Allahabad Division, Allahabad. Further prayer has been made in the nature of writ of mandamus commanding the respondents not to recover the amount of Rs. 74,440/- from the petitioner as deficiency of stamp duty.

By order dated 8.10.2002 deficiency of stamp duty and penalty has been imposed under section 47 of the Stamp Act.

The facts giving rise to the present writ petition are that the petitioner had purchased land, namely Gata no. 848/2 area 5 Bishwa 10 Bishwansi situated in village Mauja Bamrauli Uparhar, Pargana and Teshil Sadar, District Allahabd through registered sale deed dated 23.9.1997. The stamp duty paid was Rs. 8,250/- the land was purchased as mentioned in the sale deed for the agricultural purposes.

The document was placed for registration before the Sub- registrar on 23.8.1997, the Sub-registrar referred the matter to the District Magistrate Allahabad under section 33/47(A) of the Indian Stamp Act ( hereinafter referred to as the 'Act')The reason given in reference order dated 29.9.1997/15.10.1997 passed by the Sub- registrar was that land purchased lies in residential area and can be used for residential purpose. On such reference made Additional Collector (Administration), Allahabad issued notice dated 8.2.2000 asking the petitioner to appear on 23.2.2000 to explain as to why decision be not taken on the report of the Sub- registrar.

Petitioner submitted his objection/reply to the notice dated 8.3.2000 in which he categorically submitted that land subject matter of the sale deed was an agricultural land purchased for agricultural purposes. The stamp duty has been made as per circle rate.

Further Additional Collector (Administration), Allahabad issued a direction on 27.5.2000 to the Tehsildar, Sadar, Allahabad to inquire into the matter and submit report. The Naib Tehsildar (N) Sadar submitted a report through Tehsildar Sadar (Allahabad) mentioned therein that after making on the spot inspection of the land in question, it was found that disputed land lies 50 meters away from the G.T. Road. There was no construction over the land in dispute which was lying vacant at the time of inspection. It has further been stated in the report that land being situated in the residential area, same could be used for residential purpose. Relying upon the report of the Naib Tehsildar submitted through Tehsildar (Sadar),the Additional Collector (Administration) Allahabad by order dated 23.6.2001 imposed deficiency of stamp duty of Rs. 74,440/- after deduction of stamp duty paid by him and penalty of Rs. 2000/- .The direction was given to recover the total amount of Rs.76,400/- from the petitioner.

The petitioner being aggrieved by the order dated 23.6.2001 filed revision under section 56 (1) of the Act. The revisional authority i.e. Commissioner, Allahabad Division, Allahabad after hearing both the parties upheld the order passed by the Additional Collector (Administration), Allahabad relying upon the report of Tehsildar.

From the perusal of the orders dated 23.6.2001 and 8.10.2002 passed by the Additional Collector (Administration),Allahabad and Commissioner Allahabad Division, Allahabad it appears that apart from the reasons given by the Tehsildar in its report and reference order passed by the Sub- registrar land is situated in residential area, it has been recorded that purchased land is 1500 Sq. meter and,therefore,can be used for residential purpose. The Commissioner Allahabad Division, Allahabad while upholding the order of imposition of stamp duty, set aside the order of imposition of penalty of Rs. 2,000/- by the Additional Collector (Administration) Allahabad . The revision was disposed of accordingly.

The learned counsel for the petitioner submitted that authorities below had committed manifest error of law in computing the stamp duty at the rate prescribed for the land being used for residential purpose. He further submits that reason given by the Sub- registrar that land lies in residential area and is situated near G.T. road is incorrect. He submits that land in question is not situated on the main road but is one km. away in a by-lane. The land in question is not an Abadi land and the same has been purchased for agricultural purpose. He further submits that future potential use of the land cannot be taken into consideration for the purpose of computing the stamp duty. The land is required to be assessed as existed on the date of sale and in future use likely of land cannot be made basis of computation of stamp duty at the time of sale.

Learned counsel for the petitioner has placed reliance on the Khatuni annexed as annexure 9 to the writ petition for the year 1409 Fasli wherein land has been described as "Parti" in the column for "category of land". He further submits that the land is agricultural land and cannot be treated as residential plot, unless there is a declaration under section 143 of U.P. Z.A. & L.R. Act. There is no declaration made under section 143 of the U.P. Z.A. & L.R. Act. Additional Collector (Administration) Allahabad as well as revisional authority committed illegality in computing the market value on presumption and blindly relying upon the report of the Tehsildar and reference made by the Sub- registrar without applying their own independent mind.

Learned Standing Counsel on the other hand submits that report of the Naib Tehsildar is based on the spot inspection made by him and since land is located near G.T. Road in an area surrounded by Abadi and total area of the land purchased is less than 1500 sq. meter, the land in question had a potential value for Abadi purpose and therefore was rightly assessed on the basis of circle rate prescribed for Abadi land. He submits that orders impugned are passed after the evidence by the authorities having jurisdiction to pass the order. The orders are based on findings of fact and ,therefore, should not be interfered in writ jurisdiction.

Considered the respective submissions of the learned counsel for the parties and perused the record.

A perusal of the order dated 23.6.2001 passed by the Additional Collector (Administration), Allahabad show that it proceeded to calculate the market value of the land on the basis of the report of the Sub- registrar and Naib Tehsildar who upon inspection made found that land lies in the residential area and the presumption was drawn that same can be used in future for residential purpose. Admittedly land in question was purchased for agricultural land and was recorded as 'Parti' i,e. agricultural land in the revenue records. There being no declaration under section 143 of U.P. Z.A. & L.R. Act, declaring it as Abadi land, stamp duty can not be charged treating the land as Abadi land. The settled principle of law is that potential of land as on date of sale alone can be taken into account and not what potential it may have in distant future.

In M/s Maya Foods and Vanaspati Ltd. Allahabad Vs. Chief Controlling Revenue Authority (BR), Allahabad and others reported in 1998 (4) AWC 636 it has been held in paragraph 20:-

"20..........The market Value of the land cannot be determined with reference to the use of the land to which buyer intends to put it. One buyer may Intend to establish an industrial undertaking thereon, another may intend to use it for agricultural purpose and . a third person may intend to dedicate it for charitable purposes like leaving it open as pasture ground or a cremation ground or a playground. These different Intentions may affect the price that each of them may be willing to pay for the property and such prices have wide variations but the market value is not what each such individual may offer for the property. The market value is what a general buyer may offer and what the owner may reasonably expect. In determining the market value., the potential of the land as on the date of sale alone can be taken into account and not what potential it may have in the distant future."

The ratio in M/s Maya Foods and Vanaspati Ltd. Allahabad (Supra) was relied upon by this court in 2009 (1) AWC 512 Anshu Chhabara Vs. Collector, Jhansi and another. Paragraphs 21 and 22 of said judgement are relevant and reproduced below:-

"21. In my opinion, such presumption cannot be drawn by the authorities. The Stamp Act is a fiscal statute and the provisions has to be interpreted strictly and literally. There is no room for presumptions or approximation. the market value of the land is required to be assessed on the nature of the land as existing on the date of the sale of that land . What the land could be put in use in future could not be taken into consideration by any stretch of imagination. The market value of the land as existing as on the date of the execution of the sale-deed is required to be considered. The potential value of the land which could fetch in future is not required to be taken into consideration."

"22. There is another aspect . Admittedly, the land is a residential land close to a commercial area. The mere fact that the land in question is surrounded by commercial buildings will not make a residential land into a commercial land unless the use of the land is converted in the master plan under the provisions of the U.P. Urban Development and Planning Act, 1973. The petitioner has also filed the extract of the master plan indicating that the distance of a bazaar street is 30 meters from the Elite crossing Civil Lines Jhansi. Consequently, as per the master plan, land upto 30 meters from the crossing is to be treated as commercial land and beyond 30 meters, the land is treated as a residential land. The petitioner's land is admittedly beyond 30 meters."

In 2009 (2) AWC 1060 Surendra Singh and another Vs. State of U.P. and others, this court in paragraphs 11 and 12 has considered the various judgments of this court as also the Apex Court to conclude that there is no material in possession of the authorities to show that on the date of the execution of the sale deed, the land in question was not agricultural land . The court has relied upon the "Future use Principle" as laid-down in M/s Maya Foods and Vanaspati Ltd. Allahbabd (supra). The relevant paragraphs 8,11 and 12 of the said judgement are as follows -:

"8. In M/s Maya Food and Vanaspati Ltd. Co. V. Chief Controlling Revenue Authority,(Board of Revenue) Allahabd. 1998 (90) RD 57:1998(4) AWC 636, the court held that the market value of the land could not be determined with reference to the use of the land to which the buyer intends to put in use. The Court held that a buyer may intend to establish an industrial undertaking thereon and that another buyer may intend to use it for agricultural purposes and a third person may intend to dedicate it for charitable purposes and that these different intentions of individual buyers may affect the price of each of them would be willing to pay for the property but the market value would not depend upon what each individual would offer for the property in question and that the market value would be that which a general buyer would offer and what the owner reasonably accepts for that property , the Court held that in determining the market value, the potential of the land as on the date of sale alone could be taken into account in determining the market value and that the potential value of the land that could be put in use in future could not to be taken into consideration."

"11.The other limb of the argument is that the market value of the land cannot be determined with reference to use of the land to which buyer intends to put it in use has substance. The matter in depth has been examined by this court in Shakumbari Sugar and Allied Industries Ltd. V. State of U.P. and others, 2007 (5) ADJ 602: 2007(3) AWC 2769. In this case, reliance has been placed on earlier judgement in M/s Maya Foods and Vanaspati Ltd. Allahabad V. Chief Controlling Authority, 1998(4) AWC 636, wherein the following passage has been reproduced :

"Learned Chief Controlling Revenue Authorities has observed that the land was purchased for an industrial purpose and the Collector is not arbitrary in deciding the price of the land on the basis of the proposed usage. this proposition is legally incorrect. The market Value of the land cannot be determined with reference to the use of the land to which buyer intends to put it. One buyer may Intend to establish an industrial undertaking thereon, another may intend to use it for agricultural purpose and . a third person may intend to dedicate it for charitable purposes like leaving it open as pasture ground or a cremation ground or a playground. These different Intentions may affect the price that each of them may be willing to pay for the property and such prices have wide variations but the market value is not what each such individual may offer for the property. The market value is what a general buyer may offer and what the owner may reasonably expect. In determining the market value., the potential of the land as on the date of sale alone can be taken into account and not what potential it may have in the distant future."

12. More or less the similar view has been taken in Smt. Neelam Gupta V. Commissioner, Kanpur Division, Kanpur, 2007 (1) ADJ 289; 2007(5) AWC 5363. wherein the court has placed reliance upon on para 19 of a judgment of the Apex Court in P. Ram Reddy V. Land Acquisition Officer Hyderabad, JT 1995 (10 SC 593. The para 19 is reproduced below :

"The question of future potential cannot be a facor for determining the market value of such a land for the purpose of stamp duty payable under the Stamp Act. The vendee pays the price that satisfies the vendor and as such, if the land was an agricultural land. It has to be treated as such and the valuation has to be done accordingly. Whether in future the purchaser puts the land into residential use or changes the character is immaterial for the purpose of payment of stamp duty."

The same view had been reiterated in 2005(3) AWC 2529 Mukesh Vs. Chief Revenue Controlling Authority/ Board of Revenue, U.P., Allahabad and others and 2005 (2) AWC 1536 Surabhi Hospital (P) Ltd. Vs. State of U.P. and others, in which it was held that potential user of land cannot be looked into while determining the deficiency in stamp duty.

The Division Bench of this court in 2004 (5) AWC 3952, Rakesh Chandra Mittal and others Vs. State of U.P. and another has held that it is well settled principle that market value of the property has to be determined with reference to the date on which the document is executed. The Division Bench while holding the above proposition has noticed that land therein was being used for agricultural purpose at the time of purchase and after long time of purchase of the land, a small machine for extracting peppermint oil over a very small part of the land was installed. It has held that any subsequent improvement or change in the nature or user of the land , which may result into enhancement of the market value of the property is not to be taken into account and it is only the value of the property on the date of execution of the document that is to be considered for the purpose of determination of proper stamp duty payable on the instrument.

In view of the above discussion, proposition of law as laid down in the case of M/s Maya Foods and Vanaspati Ltd., Allahabad (Supra) relied upon by this court is the settled law and squarely applies in the facts of the present case. Accordingly reasoning given by the authorities below on the question of imposition of stamp duty on future potential value is unsustainable. The orders passed by both the authorities i.e. respondents no 2 and 3 are hereby set aside.

The writ petition was filed in the month of December, 2002 and interim order dated 12.12.2002 was passed by this court subject to the condition that in case, petitioner deposits a sum of Rs. 25,000/- within a period of six weeks from the date with the concerned respondent, recovery of remaining amount pursuant to the impugned order shall remain stayed till the next date of listing. On 5.3.2003, further order was passed that petitioner has already deposited a sum of Rs. 25,000/- in compliance of the order dated 12.12. 2002 passed by this court and therefore, the impugned recovery proceedings against him shall remain stayed until further orders of this court.

As already held that respondents could not have imposed stamp duty at the rate applicable for Abadi land and the stamp duty is to be calculated on the rate applicable to the agricultural land on the date of execution of sale deed i.e. on 23.9.1997. The stamp duty paid by the petitioner of Rs. 8,250/-, if found sufficient, after the fresh calculation made by the respondent as per observations made above, the amount of Rs. 25,000/- deposited by him under the interim order dated 12.12. 2002 passed by this court be refunded to the petitioner along with interest @ 6% per annum within a period of two months from the date of production of the copy of this order.

The writ petition stands allowed with the observations made above.

Aks

Date :2.11.2012