Allahabad High Court
Santosh Kumar Gupta vs State Of U.P. Thru Prin. Secy. U.P. ... on 7 January, 2025
Author: Manish Mathur
Bench: Manish Mathur
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
?Neutral Citation No. - 2025:AHC-LKO:957
Court No. - 19
Case :- WRIT - C No. - 1001064 of 2015
Petitioner :- Santosh Kumar Gupta
Respondent :- State Of U.P. Thru Prin. Secy. U.P. Finance And Revenue And Ors
Counsel for Petitioner :- Mata Prasad Yadav
Counsel for Respondent :- C.S.C.
Hon'ble Manish Mathur,J.
1. Heard Mr. M.P. Yadav, learned counsel for petitioner and learned State Counsel for opposite parties.
2. Petition has been filed challenging order dated 30.07.2014 passed under Section 47-A of the Stamp Act. Revisional order dated 12.02.2015 rejecting petitioner's revision under Section 56 of the Act is also under challenge as well as the citation dated 21.11.2014.
3. Learned counsel for petitioner submits that a perusal of impugned orders will make it evident that after execution of sale deed dated 13.01.2014, an ex parte inspection took place on 17.05.2014 whereafter only proceedings under Section 47-A were instituted. It is submitted that subsequent to initiation of proceedings under Section 47-A of the Act, no further on site inspection ever took place with prior notice to petitioner in accordance with mandatory provisions of Rule 7 (3)(c) of the U.P. Stamp (Valuation of Property) Rules, 1997.
4. It is submitted that it is settled law that an order under Section 47-A of the Act cannot be passed placing reliance only on the ex parte inspection report which even otherwise took place prior to initiation of proceedings.
5. Learned counsel has thereafter adverted to the memorandum of revision as well as the revisional order to submit that the revisional order also is based only on the aforesaid ex parte initial spot inspection report dated 17.05.2014. He has adverted to judgment rendered by this Court in the case of Ajay Agarwal and Ors. versus Commissioner Lucknow and Ors., Writ-C No. 1000019 of 2008 as well as in the case of Ganga Ram versus State of U.P. and others reported in 2020 (38) LCD 1991 and in the case of Ram Khelawan @ Bachcha versus State of U.P. and others reported in 2005 (2) JCLR 610 (Allahabad).
6. Learned State Counsel appearing on behalf of opposite parties has refuted submissions advanced by learned counsel for petitioner with the submission that a perusal of the inspection report dated 17.05.2014 will make it evident that although stamp duty has been paid at residential rates, a potion of the property in question in fact is being utilized for commercial purposes and therefore enhancement of stamp duty has been imposed upon petitioner.
7. Upon consideration of submissions advanced by learned counsel for parties and perusal of material on record, it is evident that the matter would be covered by judgment rendered in the case of of Ajay Agarwal (supra) in which this Court has recorded the procedure which is required to be followed by the authorities concerned for determination of Stamp Duty under Section 47A of the Act of 1989 as well as the Rules of 1997.
8. The relevant portion of the judgment is as follows:-
"11. The procedure required to be followed for determination of market value of the property and stamp duty required to be paid on the instrument of transfer have been indicated in sub section (4) of Section 47 A which clearly states that if on inquiry under sub-section (2) and examination under sub-section (3) the Collector finds the market value of the property to be set forth or not truly set forth, he is required to pass appropriate orders pertaining to same. Thus, it is evident that the Collector is required to embark upon an inquiry under sub-section (2) and an examination of instrument of transfer under sub-section 3 in order to find the correct market value of the property and for determination of stamp duty required to be paid.
17. However upon perusal of Section 47A (3) of the Act, it is evident that the Collector either suo motu or on a reference is required to determine the market value of property for the purposes of satisfying himself as to correctness of the market value of property which is subject of such instrument and the duty payable thereon. The provisions of Section 47A(3) of the Act clearly indicates that while determining market value of the property on the basis of instrument of transfer, the Collector has to satisfy himself with regard to correctness of a market value and if after such examination, he has reason to believe that 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.
18. The provisions of section 47A (3) of the Act clearly prescribed that prior to passing an order in terms of the aforesaid provision, the Collector has to satisfy himself, which in fact would mean that he has to record his subjective satisfaction with regard to the correctness of market value of the property. Furthermore he is also required to record reasons to believe that market value of such property has not been truly set forth in the instrument, whereafter he is also required to determine the market value of his property and duty payable thereon. Clearly the Collector in exercise of power under section 47 A(3) of the Act as such is required not to rely only on the spot inspection report but also to record his subjective satisfaction with regard to under valuation of the instrument of transfer. As such while passing orders under section 47 of the Act, Collector cannot rely only on the post inspection report."
9. The aforesaid Rules of 1997 particularly Rule 7 (3) (c) thereof have been held to be mandatory in judgment rendered in the case of Ganga Ram versus State of U.P. and Ors. reported in 2020 (38) LCD 1991.
10. In the case of Ram Khelawan @ Bachcha versus State of U.P. and Ors. reported in 2005 (2) JCLR 610 (Allahabad), the provisions of Section 47 (A) of the Act as well as Rule 7 of the Rules of 1999 have been adverted to and standard principles for determination of market value has as per the land acquisition cases have also been held to be applicable in the cases of determination of Stamp Duty. The principles enunciated therein are indicated as follows:-
"9. Entire basis of report of Tahsildar and judgment of A.D.M. is that the land is of residential use/ potential (Awasiya prayojan). Even if it is assumed for the sake of argument that the land in dispute is having Abadi potential, still no basis of determining its valuation has been given. Once sale deed is registered then for determining market value of the land under Section 47-A Stamp Act no reliance can be placed upon Rules of 1997. If a case is instituted under Section 47-A of the Stamp Act after registration of the deed particularly sale-deed then valuation has to be determined on the general principles applicable for determining market value of immovable property. The method of determining market value and the factors to be taken into consideration for the said purpose have been discussed in detail and laid down with precision by the Courts white determining quantum of compensation under Land Acquisition laws. Exactly same principles shall apply for determining market value while deciding a case by Collector under Section 47-A Stamp Act.
11. The three standard principles of determining market value in Land Acquisition cases are; comparable sale method i.e. value of similar adjoining property sold in near past, multiplication by a suitable multiplier of monthly or yearly rent, income or yield; and adding the cost of construction to the value of the land."
11. Upon applicability of aforesaid judgments in the present facts and circumstances of the case, it is evident that impugned order are based completely on the ex parte inspection report dated 17.05.2014. Provisions under Section 47-A of the Act clearly read alongwith the rules particularly Rule 7 of the aforesaid rules clearly envisaged a separate spot inspection to take place subsequent to initiation of proceedings under section 47-A of the Act, which has not been done.
12. It can also be noticed that the aspect of market value has also not been determined in terms of judgments rendered in the case of Ajay Agarwal (supra) and Ram Khelawan @ Bachcha (supra), the relevant paragraphs of which have been quoted hereinabove.
13. In the case of Ganga Ram (supra), it has clearly been held that an ex parte inspection report cannot be the sole basis for passing an order regarding deficiency of stamp duty under Section 47-A of the Act. The relevant paragraphs of the judgment are as under :-
"25. Under the U.P. Stamp Valuation of Properties Rules, 1997, Rule-7 provides the procedure on receipt of a Reference or when suo moto action is proposed under Section 47-A of the Act. Rule 7(2)(c) provides that the Collector may inspect the property after due notice to parties to the instrument.
26. The complete reading of the aforesaid Rule clearly indicates that while deciding the proceedings under Section 47-A of the Act, the Collector or any other officer authorized to determine stamp duty, is required to make an inspection after due notice to the parties to the instrument. The proceedings under Section 47-A of the Act shall not be decided merely placing reliance on the ex-parte report of the Sub Registrar or the Tehsildar for that purpose."
14. In view of aforesaid facts and circumstances as well as the law indicated, the impugned orders dated 30.07.2014 and 12.02.2015 clearly being against the settled proposition of law as indicated hereinabove are hereby quashed by issuance of a writ in the nature of certiorari. Consequences to follow.
15. Accordingly, the petition succeeds and is allowed. Parties to bear their own cost.
Order Date :- 7.1.2025
Satish
