TaxTMI 
TaxTMI 
2023 (9) TMI 1544
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.... 242 area 1423.41 sq. meters, Khasra No. 243 area 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....
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....y is not justified. 8. In support of his claim, learned 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 ....
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....me of execution of sale deed, plot in question was vacant and no construction 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 m....
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....te Government in that behalf, within four years from the date of registration of any instrument, on which duty is chargeable on the 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 ....
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....ion of minimum value or rent, as the case may be. (3) The Collector of the district shall after fixing the minimum value per acre/per square meter of land, and of the construction of non-commercial building and the minimum rent per square meter of commercial building under 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 mini....
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....sentation of the parties, if any, and examining the records and other evidence, the Collector shall determine the market value of the subject-matter of the instrument and the duty payable thereon. (5) If, as a result of such inquiry, the market value is found to be fully and truly set forth and the instrument duly stamped according to such value, it shall be returned to the person 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) s....
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....documentary evidence, calling for information or record from any public office and inspection of property. The result is that, whether Rule 7 of Rules of 1997 applies or not market value has to be determined on the same principle on which market value in land acquisition cases is determined. Minimum market value fixed in accordance with Rules of 1997 is relevant only and only for the purposes of referring the document by 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 ....
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....ot control the quasi Judicial discretion to determine the correct valuation of the property. 20. In Maya Food v. C.C.R.A., a Single Judge of this Court has held that market value of the land cannot be determined with reference to the use of the land to which buyer intends to put it and that in determining the market value the potential of the land as on the date of the sale alone can be taken into account and not the potential it may have in the distant 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 a....
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....the authority in determining the market value. According to said decision, valuation has to be determined on constructive materials, which could be made available before the authorities concerned. 23. The rate list dated 16.6.2004 also provides that the valuation of the agricultural land situate on the main road for the purpose of stamp duty and registration from Chinhat circle upto the border of Lucknow district has been fixed at the rate of Rs. 24,00,000/- per hectare and the petitioner has paid the 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 Propert....
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....tion of the hotel and, therefore, multiplied the market value by one and half times, which is contrary to the provisions of article 23 of Schedule I-B appended to the Stamp Act, which in very clear terms provides the value of the consideration of such conveyance as set forth therein or the market value of the immovable property which is subject matter of the conveyance. The subject matter of the conveyance was the open land. It does not contemplate the stamp duty to be paid on the nature of future use of the property. ...." 16. This 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 p....
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....prove of such an assumptive posture of the respondent in treating the appellant as an evader. We must, therefore, upset the impugned order of the first respondent and the proceedings for the supposed deficient payment of stamp duty, but confining the end result to the facts and circumstances of the instant case, when the valuation fixed is at least not below the minimum prescribed under Section 341 of the Stamp Rules." 18. This Court in the case of Prafulla Singh (supra) has held as under :- "5. In P. Ram Reddy v. Land Acquisition Officer, Hyderabad 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 residentia....
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....al purpose in future will not make the land commercial nor would it change the use of the land. So long as the land is recorded as an agricultural land and its use has not been changed by the authorities, the rates applicable for the purpose of stamp duty will be that as prescribed for the agriculture land. This view of mine is fortified by a catena of cases which the Court had considered in Ashok Kumar Dubey v. State of U.P. and Ors. MANU/UP/0829/2008 : 2008 (105) RD 514 : 2008 (4) AWC 3718. The said judgment is squarely applicable to the present facts of the case." 21. This Court in the case of 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 presum....