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TMI Blog2023 (9) TMI 1544X X X X Extracts X X X X X X X X Extracts X X X X ..... rea 1362.34 sq. meters, Khasra No. 249 area 1429.523 sq. meters, Khasra No. 218 area 2182.19 sq. meters, Khasra No. 249 area 4150.75 sq. meters situated in village Arthala, Pargana Loni, Tehsil and district Ghaziabad for sale consideration of Rs. 3,55,53,825/- and paid stamp duty of Rs. 35,52,500/- and thereafter the same was registered through sale deed No. 12140 dated 11.6.2003 in Bahi No. 1 Zild No. 105 at pages 316-322. It is stated that the land in question was purchased as totally vacant industrial land. Thereafter the proceedings under Section 33/47 A of the Stamp Act was initiated in which the petitioner has submitted detailed reply, however being not satisfied with the same, the impugned order has been passed on 27.11.2007 holding stamp deficiency of Rs. 1,49,19,900/- along with penalty of Rs. 14,92,000/-. The petitioner had challenged the said order in revision, which has also been dismissed by the impugned order dated 28.7.2010 confirming the stamp deficiency as well as levy of penalty. Hence the present petition. 4. Learned Senior Counsel appearing on behalf of petitioner has submitted that admittedly the land in question was purchased as totally vacant industrial land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Senior counsel for the petitioner has relied upon the judgement of this Court in the cases of Sunny Motors Pvt. Ltd. Vs. State of U.P. and others, 2008 (8) ADJ 154, Ramesh Chandra Srivastava Vs. State of U.P. and others, AIR 2007 All 39, Haridwar Hotels Pvt. Ltd. Vs. Chief Revenue Commissioner/ Chief Controller, Revenue, Uttaranchal, 2009 (1) ALJ 138, Shakumbari Sugar and allied Industries Ltd. Vs. State of U.P. and others, 2007 JIR 827, Prafulla Singh Vs. Sate of U.P. and others, 2009 (3) ADJ 488, Maya Foods and Vanaspati Ltd. Co. Vs. Chief Controlling Revenue Authority (Board of Revenue) U.P. 1999 (90) RD 57, Gopi Cold Storage Private Limited Vs. Chief Controlling Revenue Authority UP at Allahabad and others, 2009 (108) RD 548, Ashok Kumar Dubey Vs. State of UP and others, 2008 (105) RD 514 as well as Supreme Court in the Case of Prakashwati Vs. Chief Controlling Revenue Authority, Board of Revenue,UP at Allahabad 1996 (4) SCC 637. 9. In the alternative, learned counsel for the petitioner has further submitted that after purchase of land, the petitioner has moved an application for sanction of map before the Ghaziabad Development Authority in respect of construction of multip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction was standing thereon and the land was declared as industrial use, still the deficiency of stamp has been levied on the ground that the land in question can be used for commercial purpose. 14. This Court in the case of Sunny Motors (supra) has held that proceedings can be initiated on the basis of report but decision cannot be relied upon on the basis of said report until and unless the Collector has made the inspection himself or through some authorized person. Further the Court has observed that until and unless area in question has been declared as commercial by the State Government, the land use cannot be changed from industrial to commercial and no stamp deficiency can be levied. The relevant part of the judgement is quoted hereunder :- "7. After respective arguments have been advanced relevant provision which covers the field namely section 47-A of the Indian Stamp Act as applicable in the State of U.P. and relevant provision of U.P. Stamp (Valuation of Property) Rules, 1997 are being quoted below: Section 47-A :under-valuation of instrument.- [(1). (a) If the market value of any property, which is the subject of any instrument, on which duty is chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market value of the property not already referred to him under sub-section (1), 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 such instrument, he may determine the market value of such property and the duty payable thereon: Provided that, with the prior permission of the State Government an action under this sub-section may be taken after a period of four years but before a period of eight years from the date of registration of the instrument on which duty is chargeable on the market value of the property. [Explanation.-The payment of deficit stamp duty by any person under any order of the registering officer under sub-section (1) shall not prevent the Collector from initiating proceedings on any instrument under subsection( 3)]. (4) If on enquiry under sub-section (2) and examination under sub-section (3), the Collector finds the market value of the property- (i) truly set forth and, the instru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sub-rule (1), send a statement in three part to the Registrar, the first part of such statement shall contain the division of the district under his jurisdiction, into urban area, semi-urban area and the country side, second part shall specify the minimum value of land situated in different parts of the sub-district and the third part shall contains, in the case of non-commercial building the minimum value of construction and in the case of commercial building the minimum rent fixed under sub-rule (1). (4) The Registrar shall supply copies of statement mentioned in sub-rule (3) to the Sub-Registrars under his control and shall also forward a copy of the same to the Inspector General of Registration, Uttar Pradesh. (5) Every Registering Officer shall cause a copy of the above statement to be affixed on the notice board outside the registering offices. Rule-5 :Calculation of minimum value of land, grove, garden and building-For the purposes of payment of stamp duty, the minimum value of immovable property forming the subject of an instrument shall be deemed to be such as may be arrived at as follows: (a) In case of land-Minimum value. Whether agriculture or non-agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on who made the reference with a certificate to that effect. A copy of such certificate shall also be sent to the Registering Officer concerned. (6) If as a result of such inquiry, the market value is found to be undervalued and not duly stamped, necessary action shall be taken in respect of it according to relevant provision of the Act. 9. The provisions quoted above has been subject-matter of interpretation before this Court in the case of Ram Khelawan v. State of U. P., as follows: Relevant paragraphs 15 to 25 is being extracted below: "15. It is quite possible that even in the first instance the instrument/deed may show the valuation of the property to be less than the minimum value determined in accordance with Rules of 1997 (popularly known as circle rate) still purchaser or seller may not be required to pay more stamp duty. The only purpose of the minimum market value fixed and circulated under Rule 4 of the Rules of 1997 is that in case on the face of it the market value of the property set forth in the sale deed is less than minimum market value fixed under the said Rules then Registering Officer cannot register the deed and it will have to refer the same to the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registering Officer to the Collector before registration. Even after such reference market value is to be determined not in accordance with the minimum value fixed under Rule 4 of the Rules of 1997 but in accordance with general principles of determination of market value as applicable in land acquisition cases. Simultaneously when proceedings are initiated after registration of the document under section 47-A (3) of the Act market value has to be determined in accordance with genera principles applicable for the said purpose like principles of determination of market value in land acquisition cases without taking recourse to minimum market value of the property fixed in accordance with Rule 4 of the Rules of 1997. 17. It has been held by a Division Bench of this Court in Kaka Singh v. Additional Collectors, District Magistrate (F & R),that treating method of calculation of market value given under Rule 341(since repealed and substituted by Rule 4 of the Rules of 1997) as conclusive and final is erroneous in law. It has further been held that the purpose of entire exercise under section 47-A as supplemented by the relevant rules is to see as to whether the parties to the conveyan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant future. 21. In R.K. Agarwal v. C.C.R.A., a Single Judge of this Court has held that assumed rental value without any basis cannot form the basis for determining market value and that the proper course is to decide the market value on the basis of some exemplars of other land in the vi-cinity which had been sold at the relevant time (para-4). 22. In Smt. Prabhawati v. C.C.R.A., held that mere smallness of the area would not suggest the same by itself to be a costly property and that merely because property situated in an area which is close to a decent colony where people of high income group reside does not by itself make it a part thereof. 23. The view that Rules of 1997 (which have been framed at the place of old Rules 340, 340-A and. 341) cannot be taken into consideration at the time of determination of market value which I have taken is squarely covered by the authority of a Single Judge of this Court in Aniruddha Kumar v. C.C.R.A.. In the said authority it has also been held that agricultural land cannot be treated as residential plot unless declaration under section 143 of U.P.Z.A. & L.R. Act is made and that market value of land is to be determined on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stamp duty at the rate of Rs. 24,00,000/- per hectare. The agricultural land situate on the roadside of a highway in semi-urban area or countryside area cannot be treated as commercial or residential unless that area is declared as commercial or residential in the Master Plan prepared by the State Government. Admittedly, Khasra No. 448 is recorded, as agricultural land and it cannot be treated to be a residential plot or commercial plot until there is a declaration under section 143 of the U.P. Zamindari Abolition and Land Reforms Act. 26. While revising the rates for the purposes of stamp duty and registration under the provisions of U.P. Stamp (Valuation of Property) Rules, 1997, the authorities must remember at what rate they are acquiring the property under the provisions of the Land Acquisition Act and at what rate they are intending to sell to the public at large. Artificial increase of the rates of residential, commercial and agricultural is not in the interest of general public at large. The Collector, Lucknow, who has acquired the land for Lucknow Development Authority for Gomti Nagar Extension Scheme has paid the compensation to the land owner at the rate of Rs. 23/- pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Shakumbari Sugar and allied Industries Ltd (supra) has held that deficiency of stamp cannot be levied as property could be used for different purpose on the basis of potential value in near future. The relevant part of the judgment is extracted below:- "19. In view of the judgments of this Court, it is clear that the market value of the property has to be determined with reference to the date of which the document is executed. The market value of the property cannot be determined on the basis that the said property could be used for a different purpose nor could the market value be determined on the basis that it has a potential value in future. A Full Bench of this Court has clearly held that on the basis of the various provisions of the Stamp Act, the market value is to be determined with reference to the date of which the document was executed and that any subsequent change in the nature or use of the land which may result in the enhancement of the market value of the property was not to be taken into account." 17. Supreme Court in the case of Prakashwati (supra) has held as under :- "4. We have carefully examined the orders of the first respondent. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Urban Development Authority, Hyderabad, (1995) 2 SCC 305 : (1995 AIR SCW 871), the Supreme Court held that the question of future potential of the land in question cannot be the determinatric factor for determination of the market value of the land for the purpose of stamp duty payable under the Stamp Act. 6. .. 7. In view of the aforesaid, this Court is of the opinion that the stamp duty can only be determined on the basis of the land use recorded by the State in the revenue records. The mere fact that the land is in close proximity to a residential land will not make an agricultural land into a residential land nor can the authority determine the stamp duty of an agricultural land treating the said land as a residential land." 19. This Court in the case of Maya Foods and Vanaspati Ltd. Co. (supra) has held as under:- "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 grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ashok Kumar Dubey (supra) has held as under "6. In the light of the aforesaid, the admitted position in the present case is, that the land is an agricultural land and is situated in a semi-urban area and is located adjoining an abadi area. The mere fact that the land is adjoining an abadi land will not make the agriculture land as an abadi land unless the land in question is converted into a residential land by the authorities. So long as the land is recorded as an agriculture land, the rates prescribed for agricultural land would be applicable and the authorities cannot presume that the land would be put to a different use in future. The potential value of the land in future is clearly outside the scope and ambit of the proceedings under the Stamp Act for judging the market value of the land in question. The market value of the land is required to be judged on the nature and use of the land existing on the date of the purchase of the land in question and the authorities are not required to judge the use of the land which could be put to a different use in future. 7. In view of the aforesaid, the impugned orders cannot be sustained and are quashed. The writ petition is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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