Vijay Kumar Tiwari And 2 Others vs State Of U.P. And 2 Others
2023 Latest Caselaw 13316 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Court No. - 9
 

 
Case :- WRIT - C No. - 13375 of 2023
 

 
Petitioner :- Vijay Kumar Tiwari And 2 Others
 
Respondent :- State Of U.P. And 2 Others
 
Counsel for Petitioner :- Santosh Kumar Tiwari,Tripurari Pal
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Alok Mathur,J.

1. Heard Sri Santosh Kumar Tiwari, learned counsel for the petitioners as well as learned Standing Counsel for the respondents.

2. By means of present writ petition the petitioner has challenged the order dated 24.01.2023, passed by the Assistant Commissioner (Stamp)/Collector (Stamp, Sant Kabir Nagar, under Section 47A of the Indian Stamp act, 1899, thereby imposing deficiency in the stamp duty of Rs.93,500/-, deficiency of Rs.18,700/- in registration fee and also imposed penalty of Rs.93,500/- alongwith interest at the rate of 1.5% per month since the date of execution of sale deed.

3. It has been submitted by learned counsel for the petitioner that petitioner had purchased 182 sq. meters of land in Gata No. 509/1, situated in Village - Digha, Tehsil - Khalilabad, District - Sant Kabir Nagar though registered sale deed dated 10.03.2021 from its owner Ramanand. On the said sale deed petitoners have paid requisite stamp duty as per the prevailing circle rate. It seems that some inspection was made by area Lekhpal who has prepared a report that petitioner has undervalued the property and has not paid adequate stamp duty on the sale deed and consequently, proceedings have been initiated against petitioner under Section 47 of the Act, 1899. 

4. It is next submitted by learned counsel for the petitioners that the petitioners refuted the allegations stated in the notice and after hearing the parties the impugned order dated 24.01.2023 has been passed to the effect that petitioner has undervalued the property be has purchased and concluded that petitioner has not paid adequate stamp duty on the instrument showing deficiency of Rs. of Rs.93,500/-, in stamp duty, imposed Rs.18,700/- as deficiency  in registration fee and also imposed penalty of Rs.93,500/- alongwith interest at the rate of 1.5% per month from the date of execution of sale deed. 

5. Learned Standing Counsel at the very outset has submitted that petitioner has efficacious alternate remedy of appeal before the Commissioner under Section 56 of the U.P. Stamp Act and consequently writ petition should be dismissed on the ground of alternate remedy.

6. Learned counsel for the petitioners submits that said proceedings were held in gross violation of Section 7(3)(c) of U.P. Stamp (Valuation of Property) Rules, 1997 inasmuch as no spot inspection was conducted after giving notice to the petitioners and consequently a bare reading of impugned order would indicate that respondents have conducted the proceedings merely on the basis of inspection report which was prepared prior to issuance of notice to the petitioners. Once it is clearly established that proceedings have been conducted in gross violation of statutory provisions then the writ petition would be maintainable and writ petitioner could not be relegated to the competent authority.

7. In support of his contentions learned counsel for the petitioners has relied upon the judgment of Apex Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai, (1998) 8 SCC 1 wherein the Court has held as follows :-

"Rashid Ahmad Vs. Municipal Board, Kairana, AIR 1960 SC 163, laid down that existence of an adequate legal remedy was a factor to be taken into consideration in the matter of granting Writs. This was followed by another Rashid case, namely, K.S.Rashid & Son Vs. The Income Tax Investigation Commissioner AIR 1954 SC 207 which reiterated the above proposition and held that where alternative remedy esisted, it would be a sound exercise of discreation to refuse to interfere in a petition under Article 226. This proposition was, however, qualified by the significant words, "unless there are good grounds therefor", which indicated that alternative remedy would not operate as an absolute bar and that Writ Petition under Article 226 could still be entertained in exceptional circumstances. Specific and clear rule was laid down in State of U.P. Vs. Mohd. Nooh, 1958 SCR 595, AIR 1958 SC 86, as under :

"But this rule requiring the exhaustion of statutory remedies before the Writ will be granted is a rule of policy convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies."

This proposition was considered by a Constitution Bench of this Court in A.V.Venkateswaran, Collector of Customs. Bombay Vs. Ramchand Sobhraj Wadhwani & Anr., AIR 1961 SC 1506 and was affirmed and followed in the following words "The passages in the judgments of this Court we have extracted would indicate (1) that the two exceptions which the learned solicitor General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive and (2) that even beyond them a discretion vested in the High Court to have entertained the petition and granted the petitioner relief notwithstanding the existence of an alternative remedy. We need only add that the broad lines of the general principles on which the Court should act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus per-eminently one of discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court"."

8. Heard learned counsel for the parties and perused the record.

9. From perusal of impugned order it is noticed that only material on the basis of which deficiency in stamp duty has been assessed is the inspection report of the area Lekhpal dated 12.06.2021 and on the basis of said report it has been concluded that petitioners have undervalued the property in question which was liable to be charged on higher rate considering its location and accordingly, deficiency in stamp duty has been assessed alongwith penalty and deficiency in registration fee.

10. The issue as to whether the provisions of Rule 7(3)(c) of the Rules, 1997 are mandatory or not, has been considered by this Court in the case of Smt. Pushpa Sareen Vs. State of U.P. and others, 2015 (2) ESC 819 (All) (FB) has held that the power of Collector to determine the market value either on a reference under Sub-section (1) or (2) of Section 47-A or acting suo motu under sub-section (4) was to determine the correct market value of the property. 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 Collector would be within jurisdiction in referring to exemplars which have a bearing on the true market value of property which is required to be assessed. The Full Bench considered the following questions in the said judgement:-

"(1) Whether the registering officer can refer a document even if he does not find that the market value of the property as set forth in the instrument is less than even the market value determined in accordance with the rules made under this Act;

(2) Whether the Collector Stamps has power to fix the valuation of a plot on the assumption that the same is likely to be used for commercial purposes, and whether the presumed future prospective use of the land can be a criterion for valuation by the Collector;

(3) What should be the norms for fixing the valuation of a free-hold land viz-a-vis lease land;

(4) Whether the Collector can demand stamp duty under Section 47-A of the Stamp Act without a finding of fact that the market value as stated in the document is less than that which was actually agreed upon between the parties;

(5) Whether the orders passed by the Chief Controlling Revenue Authority can be reviewed if it is shown that the known norms of valuation have not been followed in the case."

11. The Full Bench in Smt. Pushpa Sareen (supra) while answering Question No.2 has held that power and jurisdiction of the Collector under Section 47-A of the Act is to determine the actual market value of the property. The Collector in making that determination is not bound either by the value as described in the instrument or for that matter, the value as discernible on the basis of the Rules. It has been further held that 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. Paragraphs 26, 27 and 28 of the said judgement which are relevant, are extracted 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. 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 Vs. 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."

12. From the above it is clear that there is clear violation of statutory provisions contained under Rule 7(3)(c) of the Rules, 1997. In view of above, present writ petition may be disposed of without relegating the petitioners to the appellate authority.

13. In the light of discussion made above, this Court is of the considered view that in the present case there is clear violation of statutory provisions as contained in Rule 7(3)(c) of the Rules, 1997. There is no need to relegate the petitioners before the appellate authority and the impugned order is liable to be set aside.

14. In view of above, the impugned order dated 24.01.2023, passed by the Assistant Commissioner (Stamp)/Collector (Stamp, Sant Kabir Nagar, under Section 47A of the Indian Stamp act, 1899, is set aside. The matter is remitted to the Assistant Commissioner (Stamp)/Collector (Stamp, Sant Kabir Nagar to proceed against petitioners in accordance with law.

15. The writ petition stands allowed.

16. It is provided that in case petitioners have deposited any amount in pursuance to the order dated 24.01.2023, same shall be adjusted and taken into account a the time of passing final orders. Let aforesaid exercise be concluded expeditiously, not late than two weeks from the date of production of certified copy of this order.

Order Date :- 28.4.2023

A. Verma

(Alok Mathur, J.)