TaxTMI 
TaxTMI 
2008 (8) TMI 1030
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....he land at the time of sale deed was agricultural. Thereafter on 28.8.2004 after execution of the sale deed the name of the petitioner was recorded in the relevant revenue record by the order of Tehsildar. Thereafter petitioner sought to change the nature of the land from agricultural to Industrial (Commercial) and sought a declaration under Section 143 of the U.P.Z.A& L.R. Act and same was allowed on 25.11.2004. On 9.10.2006 the DIG (Registration) Kanpur Nagar conducted an ex-parte inspection and submitted his report pointing out a deficiency of Rs. 8,36,300/- and recommended proceedings under Section 47-A(3) to be initiated against the petitioner. On 17.11.2006 notice was issued to petitioner to appear and submit his reply. Pursuance thereto petitioner entered appearance and filed its objection. Additional District Magistrate, (F&R) Kanpur Nagar on 31.12.2007 passed order imposing stamp deficiency of Rs. 8,36,300, and interest of Rs. 5,26,869 and penalty of Rs. 6,831/- total amount of Rs. 13,70,000 as due against the petitioner. Said order was questioned by the petitioner by preferring Revision before Chief Controlling Revenue Authority, U.P. Allahabad and said Revision had also ....
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.... of the property as set forth in such instrument is less than even the minimum value determined in accordance with the rules made under this Act, the registering officer appointed under the Registration Act, 1908 shall, notwithstanding anything contained in the said Act, immediately after presentation of such instrument, and before accepting it for registration and taking any action under Section 52 of the said Act, require the person liable to pay stamp duty under Section 29, to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument for presenting again in accordance with Section 23 of the Registration Act, 1908. (b) When the deficit stamp duty required to be paid under clause (a), is paid in respect of any instrument and the instrument is presented again for registration, the registering officer shall certify by endorsement thereon, that the deficit stamp duty has been paid in respect thereof and the name and the residence of the person pay them and register the same. (c) Notwithstanding anything contained in any other provisions of this Act, the deficit stamp duty may be pa....
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....rty- (i) truly set forth and the instrument duly stamped, he shall certify by endorsement that it is duly stamped and returned it to the person who made the reference; (ii) not truly set forth and the instrument not duly stamped, he shall require the payment of proper duty or the amount required to make up the deficiency in the same, together with a penalty of an amount not exceeding four times the amount of the proper duty or the deficient portion thereof. Sub-sections 4-A to 6 are not relevant. 8. Relevant portions of Rules 4, 5 and Rule 7 of U.P. Stamp (Valuation of Property) Rules, 1997 are quoted below: "Rule-4. Fixation of minimum rate for valuation of land construction value of non-commercial building and minimum rate of rent of commercial building.-(1) The Collector of the district shall biennially, as far as possible, in the month of August, fix the minimum value per acre/per square meter of land, the minimum value per square meter of construction of non-commercial building and the minimum monthly rent per square meter of commercial building situated in different parts of the district taking into consideration the following facts: ....
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....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-agriculture-Area of land multiplied by minimum value fixed by Collector of the district under rule. (b) in case of grove of garden: (i) (ii) (iii). (iv) (c) in case of building: (i) Non-commercial building-Minimum value of land whether covered by the construction or not, which is subject matter of instrument, as worked out under Clause (a) building arrived at by multiplying the construction area of each floor of the building by the minimum value fixed by the Collector of the district under rule. (ii) commercial building-Minimum value of land whether covered by the construction or not, which is subject-matter of instrument as worked out under Clause (a) plus three hundred times the minimum monthly rent of the building arrived at by multiplying the constructed area of each floor of the building with the minimum rent fixed by the Collector of the district under Rule 4. Rule-7. ....
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....r 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 Collector unless on being asked by him to make good the deficiency in stamp duty, parties to the sale deed make good the requisite deficiency. In case deficiency is not made good then matter will have to be referred by Registering Officer to the Collector. However, thereafter it is quite possible that Collector may hold that even though market value of the property set forth in the deed is less than minimum market value fixed under the Rules of 1997 still the market value set forth in the sale deed is correct and proper stamp has been paid. It is quite clear from section 47-A(4)(i) and Rule 7(5). 16. However, if deed has been registered then action may be taken only under Section 47-A (3) of the Stamp Act. Rule 7 of the Rules of 1997 prescribes the procedure for determining market value ....
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....Singh v. Addl. Collector & Dist Magistrate (F&R), AIR 1986 All 107 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 conveyance or instrument have deliberately undervalued it for the purpose of deceitful gain. In a case where it is found that the value of the conveyance was fraudulently made although more has passed on it, Section 47-A would come into play (para-10). In the said authority the following observation of AIR 1974 Mad 117 was quoted: "We are inclined to think that the object of the Amending Act being to avoid large scale evasion of stamp duty, it is not meant to be applied in a matter of fact fashion and in a haphazard way. Market value itself as we already mentioned, as a changing factor and will depend on various circumstances and matters relevant to the consideration. No exactitude is in the nature of things possible. In working the Act, great caution should be taken in ....
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....up 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., 2000 R.D. 566. 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.RZ.A.&L.R. Act is made and that market value of land is to be determined on the basis of the character of the land and its user. In para-21 of the said authority it has also been held that valuation cannot be determined on the basis of its future potential. 24. In H.L. Sahu v. State of U.P. AIR 2004 All 190 a Single Judge of this Court struck down Note-2 of order dated 3.8.1997 prescribing circle rate of District Kaushambi under Rule 4 of the Rules of 1997 which provided that in case agricultural land is not transferred in favour of a co-tenure holder or a person having adjoining agricultural plot then the same shall be valued on the basis of per Sq. Meter ....
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.....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/- per Sq. Ft. and for sale after development they have valued the same land for residential purposes about Rs. 400/- per Sq. Ft. and for commercial purposes about Rs. 600/- per Sq. Ft. in a most arbitrary and illegal manner. The artificial increase of the price of such land is not in the interest of public at large. While fixing the rates of the agricultural, residential and commercial land for the purposes of stamp duty under the provisions of the U.P. Stamp (Valuation of Property) Rules....
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.... bearing to the formation of belief and are not extraneous or irrelevant to the purpose of Section, as held in S. Narayanappa and others v. C.I.T. Bangalore, AIR 1967 SC 523. The words 'reason to believe' are stronger than the expression 'for satisfaction' Belief must not be arbitrary or irrational. It must be reasonable or must be based on reasons which are relevant and material. 9. In view of the fact that expression 'reason to believe' has been used in sub-section (3) of Section 47-A of the Act, the power conferred under this Section though is wide but they are not plenary. The power cannot be exercised when the Collector has reason to suspect that there is evasion of proper stamp duty. 12. The other phrase used in sub-section (3) of Section 47-A is 'market value'. The 'market value' means what is willing purchaser would pay to a willing seller for the property having regard to the advantages available the land and the development activities which may be going in the vicinity and potentiality of the land and as such an offer to sale of land to an industrialist on concessional rate with a view to induce him to set up indus....