Mahesh Chandra & Others vs State Of U.P.& Others
2012 Latest Caselaw 4543 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?AFR
 
Court No. - 26
 

 
Case :- WRIT - C No. - 12315 of 2000
 

 
Petitioner :- Mahesh Chandra & Others
 
Respondent :- State Of U.P.& Others
 
Petitioner Counsel :- K.M. Tripathi
 
Respondent Counsel :- C.S.C.
 

 

 
Hon'ble B. Amit Sthalekar,J.

By means of this writ petition, the petitioners are challenging the order of the Additional Commissioner Stamps, Bulandsahar dated 28.11.1997 and the order of the Chief Controlling Revenue Authority, Allahabad dated 31.8.1999.

The case of the petitioner in brief is that the shop situated at house no.18 at mohalla Gurushganj, Bulandshahar was in possession of the petitioners' family. A sale deed took place on 1.2.1991, whereby the said property belonging to Ram Saran Das and Gopal Das was sold to the petitioners at the market price of Rs. 2 lacs for the purposes of conducting the business. The petitioners 1 and 2 came in possession of half part and the petitioners 3, 4 and 5 came in possession of the other half part of the shop in question. The sale deed was registered on 1.2.1991 and after registration of the same at Book No.1, parts 173, pages 35 to 62 at Serial No. 499, the Sub Registrar, Registration has handed over/ returned the sale deed to the petitioners on 10.2.1991.

It is further contended that on some alleged inspection report of the Assistant Inspector General (Registration), the sale deed was referred to the Additional Commissioner Stamps, Bulandsahar who initiated proceedings under section 47 (A) for recovery of deficiency of stamp duty. It is contended by the petitioners that these proceedings were totally ex parte and no notice had been given to the petitioners. Thereafter, an ex parte order was made on 26.09.1996 and the valuation of the property was fixed at Rs. 6 lacs, and deficiency of stamp duty was fixed at Rs. 58,000/- + penalty of Rs. 2,000/-, total Rs. 60,000/-.

On coming to know of this order the petitioners immediately filed a restoration application and the ex parte order dated 26.09.1996, was thereafter recalled by order dated 20.2.1997. Thereafter, the petitioners filed their objections supported by evidence stating therein that there is only one shop half of which was in possession of petitioner nos. 1 and 2 and the other half was in possession of petitioner nos. 3, 4 and 5 and the petitioners are residing in the said premises in the upper floor after making additional constructions. The Assistant Commissioner Stamps rejected the objection of the petitioners and thereafter by the impugned order dated 28.11.1997 has held the value of the property to be Rs. 6 lacs and has determined the deficiency of Stamp Duty at Rs. 58,000/- and has also imposed penalty of Rs. 2,000/- i.e. a total of Rs. 60,000/-.

Aggrieved by the order dated 28.11.1997, the petitioner filed a revision under Section 56 of the Indian Stamp Act, 1899, before the Chief Controlling Revenue Authority, Allahabad who also has conformed the order of the Additional Commissioner Stamps and has rejected the revision by his order dated 31.8.1999.

Hence the present writ petition.

I have heard Sri K.M. Tripathi, learned counsel for the petitioners and learned Additional Chief Standing Counsel appearing for the respondents.

The principal objection of Sri Tripathi is that while passing the impugned order dated 28.11.1997, the Additional Commissioner Stamps-respondent no.3 has relied on the report of the Assistant Registrar General (Stamps), who had referred the matter for consideration of deficiency of stamp duty by the Additional Commissioner Stamps as will be clear from the first order of the Additional Commissioner Stamps dated 26.9.1996 which was ultimately recalled by him by his order dated 20.2.1997.

From a perusal of the impugned order dated 28.11.1997, it will be seen that the respondent no.3 has relied upon the report of the Tehsildar dated 13.7.1996, wherein, the Tehsildar has stated that these shops were purchased for a total sum of Rs. 6 lacs, which included godown. Although at the time of spot inspection by the Tehsildar, there was no godown and there were only two shops. As per this report the shop is situated in the market.

Spot inspection was also conducted by the Additional Commissioner Stamps-respondent no.3 on 11.6.1997 and as per his report, in a half portion of the shop, there was a three storeyed building on the ground floor of which there was a shop and godown for the use of general stores. On the above portion, there was a godown, and on the third floor, the portion was being used for residential purposes. Based on his own inspection report dated 11.6.1997 and the report of the Tehsildar dated 13.7.1996, the Additional Commissioner Stamps has, therefore submitted that the value of the property is Rs. 6 lacs and has determined the deficiency of stamp duty at Rs. 58,000/- and has also imposed penalty of Rs. 2,000/- , total Rs. 60,000/-.

From the above facts, it will be noticed that the sale deed was registered on 1.2.1991, whereas, the Tehsildar submitted his report on 13.7.1996 whereas  the respondent no.3 also conducted his spot inspection on 11.6.1997 i.e. almost six years after the sale deed of the property in question had been executed. Based on these reports, the impugned order dated 28.11.1997 has been passed. The law in this regard has been well settled by this Court that valuation of the property is to be determined on the date of which the sale deed was executed and not on some subsequent date.

The legal position in this regard is that stamp duty has to be calculated on the basis of the nature of the land on the date of the sale deed and not the use for which the land is capable of being put to in future.

In 2004 (5) AWC 3952, Rakesh Chandra Mittal and others Versus State of U.P. and another, a Division Bench of this Court

held as follows:

"10. There is no finding returned by the respondent No. 1 that the oil extracting plant was in existence on the land at the time of execution of the sale deed. The finding of the existence of the oil extracting plant is based on inspection by the Tehsildar which was ddone after more than three and half years of the execution of the sale deed. Even the petitioner stated in his objection that he has installed the machine after about three years of purchase of the land. It is well settled that the market value of the property has to be determined with reference to the date on which the document is on varying and changing. Any subsequent improvement or change in the nature or the 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 the absence any evidence on record or any finding in the impugned order to the effect that the oil extracting machine was in existence on the land at the time of execution of the instrument, the respondent No. 1 was not justified in valuing that part of the land in applying commercial rates. The entire land has to be valued treating it to be an agricultural land.

In view of the above finding of the respondent No. 1 with regard to the market value of part of the property treating to be an agricultural land, it is clear that if the entire area is treated as agricultural land then the market value of the property has been correctly shown in the instrument and proper stamp duty has been paid thereof."

In the case reported in 2006(2) AWC 1492, Smt. Sushila Verma Versus State of U.P. and others this Court held as follows:

"4.......The value of the land is to be considered as on the date of the transaction and not on the presumption that it may, in future, be used for residential or any other purposes, and on such presumption, charge stamp duty after assessing the value of the land, as if it was for residential purpose. It has not been found by the authorities that the land in question, when purchase, was not agricultural land. In such a situation, the assessment of the price of the land for the purpose of payment of stamp duty, treating it to be residential plot and charging the stamp duty on the basis of circle rate fixed by the Collector, Allahabad, is totally unreasonable and liable to be set aside.

5. Learned standing counsel has however stated that as per Article 23 of Schedule 1B of the Indian Stamp Act, 1899 as amended by the State of U.P., stamp duty is to be charged on either the sale price or the market value of the land, whichever is higher. The sale price of the land in question as declared by the petitioner is Rs.1,65,000/-, on which, stamp duty has already been paid. The market value of the land in question has not been considered by the authorities below, except for applying the principle of circle rate for residential plots, which is not tenable for reasons mentioned above, as the land, when purchased, was agricultural land. As such, the impugned orders dated 5.8.2002 and 9.9.2002 are liable to be set aside and are thus quashed."

In another case reported in 2007 (1) AWC 727, Nar Singh Das Agrawal Versus Chief Controlling Revenue Authority, Board of Revenue, Allahabad and others, this Court has held that merely because a residential house is adjacent to a road, will not lead to a presumption that it is a commercial accommodation. Para 3 of the said judgment reads as follows:

"3. Along with report of Tehsildar map was also annexed showing that on three sides of the house in dispute there were residential houses. Merely because house was situated at Malgodown road, it could not be inferred that it was commercial. Houses also require roads. The mere fact that a house is adjacent to a road does not convert it into a commercial accommodation. There is no finding that on the road in question, i.e., Malgodown road there were shops adjacent to the house in dispute."

Another point raised by Sri Tripathi, learned counsel for the petitioners is that under the Indian Stamp Act, 1899, as prior to its amendment, the Collector could proceed for determination of deficiency of stamp duty under Section 47-A (4) either suo motu or on a reference from any court or from the Commissioner of Stamps or an Additional Commissioner of Stamps within 4 years from the date of registration of any Instrument on which duty is chargeable on the market value of the property.

Section 47-A (4) (as in force at the relevant point of time) reads as follows:-

"47-A. Instruments of conveyance, etc., if under-valued, how to be dealt with-

(1)......................

(2).......................

(3).........................

(4) The Collector may, suo motu [for on a reference from any Court or from the] [Commissioner of Stamps or an Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any officer authorised by the Board of Revenue in that behalf] within [four years] from the date of registration of any instrument [on which duty is chargeable on the market value of the property] not already referred to him under sub-section 91) or sub-section (2), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the subject [of such instrument] and the duty payable thereon, and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty payable thereon in accordance with the procedure provided for in sub-section (3). the difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty]."

Learned counsel for the petitioner has drawn the attention of this Court to the Full Bench decision of our Court reported in 1998 (1) AWC 403 (Girijesh Kumar Srivastava and another Vs State of U.P. and others), wherein, in para 10 the Full Bench has held that the period of 4 years qualified the action to be taken by the Collector and the date of registration of the Instrument, even if, the reference is made within a period of 4 years. The full Bench has further referred to the proviso to sub-section (4) of Section 33, wherein, it is provided that action under section 4 sub- section (5) for determination of deficiency in stamp duty shall not be taken after a period of 4 years from the date of execution of the Instrument. The relevant paragraphs of the Full Bench decision, namely, paras 10 and 11 read as follows:-

"10. There is no dispute from either side that the starting point of limitation is the date of registration of the instrument and the period of limitation is four years. According to learned Chief Standing Counsel, if a reference from any Court or Commissioner of Stamps or Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or any officer authorised by the Board, of Revenue in that behalf is made within four years from the date of registration of the Instrument, whether any action is taken by the Collector or not, the proceedings would be within limitation. Shri Rajiv Joshi, learned counsel for the applicants has, on the other hand, contended that the limitation of four years is for the Collector to initiate action and the date on which a reference is made by a Court or authorities enumerated in the opening part of sub-section (4) of Section 47 A is irrelevant. The question which arises for consideration is whether the period of four years qualifies the action of the Collector or the making of reference. Under sub-section (1) of Section 47 (A) of the registering officer is required to make a reference to the Collector before registering the instrument, while under sub-section (2) a discretion has been given to him to register the Instrument and then make a reference to the Collector for determination of market value. In normal course of events this reference would be made immediately after registering the Instrument and, therefore, the enquiry under sub-section (3) is likely to commence soon as the person in whose favour the instrument has been executed would forthwith come to know about the reference and would be interested to get the matter concluded. In the first case the Instrument would remain unregistered and in the second case he will not get back the instrument after registration on account of it having been referred to the Collector. Therefore, in cases covered by sub-section (1) and sub-section (2) at least the factum of reference would be immediately known to the person in whose favour instrument has been executed and he is bound to take all proceedings expeditiously in order to secure his title or get the benefits of the instrument. Under sub-section (4) power has been conferred on the Collector to call for and examine the instrument after it has been registered for the purpose of satisfying himself as to the correctness of the market value of the property which is subject of such instrument and the duty payable thereon. This action can be taken either suo motu or on a reference from any Court or any one of the authorities enumerated in the sub-section. In our opinion, the language of the sub-section shows that the period of four years qualified the action which may be taken by the Collector. If the interpretation suggested by learned Chief Standing Counsel was correct, the sub-section would have read like this:

"The Collector may, suo motu or on a reference from any Court or from the Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any officer authorised by the Board of Revenue in that behalf made within four years from the date of registration of any instrument."

From the language in which the sub-section has been couched, it is not possible to hold that the period of four years qualifies the reference.

11. It may be noticed that the language used in the opening part of sub-section (4) of Section 33 is exactly similar to the language used in the opening part of sub-section (4) of Section 47-A. The proviso to sub-section (5) of Section 33 says that no action under sub-section (4) or sub-section (5) shall be taken after a period of four years from the date of execution of the Instrument. Here the bar of limitation applies to the action which may be taken by the Collector and not to a reference. There is no reason why similar interpretation should not be given to sub-section (4) of Section 47A specially when both the sections namely Section 33 and Section 47A find place in same chapter IV of the Stamp Act which deals with Instrument Not Duly Stamped."

From the averments made in para 17 of the writ petition, it is seen that the proceedings for determination of deficiency of stamp duty was initiated by issuing a show cause notice dated 10.2.1995.  This was clearly beyond the period of 4 years, as laid down in the proviso to Section 33 (5) of the Indian Stamp Act, 1899, and was taken after the expiry of the period of 4 years from the date of registration of sale deed dated 1.2.1991, and thus, in view of the provisions of Section 33 (5) and its proviso read with Section 47 (A) (4) the entire proceedings initiated for determination of stamp duty would be void. In the circumstances, the impugned orders date 28.11.1997 passed in the said proceedings as well as the appellate order dated 31.8.1999 would also be void ab initio.

Learned Additional Chief Standing Counsel could not dispute the legal position settled by this Court in the cases, referred to above, as well as the impact of the Full Bench decision of this Court in the case of Girijesh Kumar Srivastava and another Vs. State of U.P. and others (Supra).

In view of the above facts situation and the law laid down by the Full Bench of this Court, the impugned order dated 28.11.1997 and the appellate order dated 31.8.1999 are quashed.

The writ petition is allowed. There shall be no order as to cost.

Order Date :- 27.9.2012/N Tiwari

Case :- WRIT - C No. - 12315 of 2000

Petitioner :- Mahesh Chandra & Others

Respondent :- State Of U.P.& Others

Petitioner Counsel :- K.M. Tripathi

Respondent Counsel :- C.S.C.

Hon'ble B. Amit Sthalekar,J.

Re: Civil Misc. Recall application no. 218126 of 2012.

This is an application for recalling of the order dated 13.7.2012.

Perused the averments made in the affidavit filed in support of the recall application. The cause shown in the affidavit is sufficient. Application is allowed. The order dated 13.7.2012 is recalled.

Office is directed to restore the case to its original number.

Order Date :- 27.9.2012

N Tiwari