https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=462014 https://www.taxtmi.com/caselaws?id=462014 Validity and jurisdiction of the order imposing additional stamp duty and penalty under Sections 47-A and 33 of the Indian Stamp Act, 1899 - notice issued for inadequacy of stamp duty payment - instrument was in respect of a property, which had been valued at agricultural rates - alternative remedy - breach of the procedure prescribed under the Act - second respondent suffering from non application of mind - HELD THAT:- From the facts, we may note that the initial stamp duty which stood paid on the instrument by the appellant was Rs. 1,07,600/-. The order of the second respondent held the appellant liable to pay additional stamp duty as well as penalty totaling Rs. 8,93,313/-. This we may note represents an increase of eight times over the initial stamp duty which was paid on the instrument. This was, therefore, clearly one of the exceptional situations which were envisaged by the Supreme Court in Smt. P. Laxmi Devi [2008 (2) TMI 850 - SUPREME COURT] and Har Devi Asnani [2011 (9) TMI 957 - SUPREME COURT] as instances where the petitioner was not liable to be relegated to the alternative remedy of an appeal or a revision under Section 56 of the Act. We further find that the proceedings taken against the appellant were clearly without jurisdiction, violative of the procedure prescribed under the Act and there existed no justification in the second respondent invoking the powers conferred by sections 47A or 33 of the Act. We proceed to set forth our reasons for arriving at the above conclusions hereinafter. We find in the facts, that not only was there a complete non disclosure of the relevant material to which the appellant could respond to establish his innocence, the notice itself was couched in tenor and language which would have led any person to face the specter of what the Supreme Court described as the "impregnable wall of prejudged opinion". In the case of an instrument which creates rights in respect of property and upon which duty is payable on the market value of the property comprised therein, since the tax liability gets fastened immediately upon execution it must necessarily be quantified on the date of execution. The levy of tax or its quantum cannot be left to depend upon hypothetical or imponderable facets or factors. The value of the property comprised in an instrument has to be adjudged bearing in mind its character and potentiality as on the date of execution of the instrument. Thus, we fail to find the existence of the essential jurisdictional facts which may have warranted the invocation of the powers conferred by section 47A (3). We are therefore of the firm opinion that the initiation of proceedings as well as the impugned order based upon a presumed future use of the property for residential purposes was wholly without jurisdiction and clearly unsustainable. We find that the proceedings taken against the appellant were even otherwise liable to be quashed outright. The reason which compels us to arrive at the above conclusion is this. The response filed before the second respondent clearly asserted that the property in question fell within the flood plain area of the Hindon river. The order of the NGT, NOIDA Master Plan as well as the Government Order clearly restrained all residential activities in this area. There was therefore no basis for the Sub Registrar or for that matter the second Respondent presuming that the property was liable to be treated as for residential purposes and taxed at residential rates. For this additional reason also we find that the proceedings initiated against the appellant and the order impugned in the writ petition are rendered unsustainable. Thus, we find merit in the instant appeal. We are of the opinion that the learned Single Judge clearly erred in dismissing the writ petition and relegating the appellant to pursue the alternative remedy. We accordingly allow the special appeal and set aside the judgment and order of the learned Single Judge dated 21 December 2015. We consequently also allow the writ petition and quash the order of the second respondent dated 26 October 2015 and all proceedings taken against the appellant. Case-Laws Indian Laws Thu, 14 Jan 2016 00:00:00 +0530