TaxTMI 
TaxTMI 
2016 (1) TMI 1527
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....ect of Khasra No. 786 admeasuring 0.7160 hectares. This instrument, upon presentation in the office of the Sub Registrar, Gautam Budh Nagar and on payment of stamp duty of Rs. 1,07,600/- had been duly registered and returned to the appellant. 3. From the material brought on record of the writ petition, it appears that a copy of the instrument in question fell for scrutiny before the Sub Registrar, Gautambudh Nagar who on 7 December 2012 put up a note for consideration of the second respondent asserting therein that the instrument was in respect of a property, which had been valued at agricultural rates. In the opinion of the Sub Registrar, the property comprised in the instrument was liable to be taxed @ Rs. 6,500/- per square meter being the circle rate prescribed by the second respondent for residential properties. Consequently, the Sub Registrar opined that the instrument should be subjected to additional stamp of Rs. 7,14,650/-. Taking note of the aforesaid report, the second respondent assumed jurisdiction and issued a notice dated 30 August 2012 informing the appellant that proceedings in respect of the adequacy of stamp duty paid on the instrument in question were pend....
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....an appeal under Section 56. The judgment rendered by the learned Single Judge on that occasion fell for consideration before a Division Bench of the Court in a special appeal [Special Defective No. 598 of 2015 Vijaya Jain Vs. State of U.P. & 2 others decided on 1.9.2015] which ultimately came to be allowed by judgment and order dated 1 September 2015. The judgment of the Division Bench, we may note formed part of the record of the writ proceedings from which the present Special Appeal emanates. 6. Dealing with the correctness of the view taken by the learned Single Judge in relegating the appellant therein to pursue the alternative remedy, this Court in Smt Vijaya Jain found that the proceedings taken against her were liable to be set aside not just on account of violation of the principles of natural justice but also on the ground of the same having been initiated and continued in breach of the procedure prescribed under the Act and the orders passed by the second respondent suffering from non application of mind and the law as laid down by this Court. 7. On the issue of alternative remedy, the Division Bench in Smt Vijaya Jain noticed the law as enunciated by the Supreme Court ....
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....efore, clearly one of the exceptional situations which were envisaged by the Supreme Court in Smt. P. Laxmi Devi and Har Devi Asnani 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. 10. 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. 11. Pausing here we deem it appropriate to first briefly notice the objections which were taken by the appellant before the second respondent. 12. Referring to the deed in question, it was pointed out that the land was recorded as agricultural and the purpose disclosed in the sale deed also held it out to be for agricultural purposes. The appellant had contended that there was no material before the second respondent to assume that the land was residential on the date of execution of the instrument or to presume that it would be put to resident....
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....s. VALIDITY OF THE NOTICE DATED 30 AUGUST 2012 14. A plain reading of the notice indicates that the second respondent had accepted the report of the Sub Registrar and already formed an opinion that the instrument was liable to be taxed with additional stamp duty. There was no opportunity provided to the appellant to show cause why the second respondent may not assume jurisdiction under section 47A of the Act as mandated under Rule 7 of the U.P. Stamp (Valuation of Property Rules) 1997. The appellant was neither apprised of the basis nor provided the material upon which the Collector formed the opinion that the property comprised in the instrument was undervalued or that additional stamp duty was payable thereon. Dealing with this aspect of the matter the Division Bench in Smt Vijaya Jain held: - "From the provisions extracted above, it is apparent that the Collector proceeds under sub section (3) of Section 47-A read with rule 7 when he has reason to believe that the market value of the property comprised in the instrument has not been truly set forth and that in the opinion of the Collector, circumstances exist warranting him to undertake the enquiry contemplated under rule 7....
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....7. It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defense and prove his innocence. It is obvious that at that stage the authority issuing the charge-sheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show cause notice gets vitiated by unfairness and bias and the subsequent proceedings become an idle ceremony. 31. It is of course true that the show cause notice cannot be read hypertechnically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show cause notice and prove his innocence. If on a reasonable reading of a show cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impregnable wall of prejudged opinion, s....
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....e Act. 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. For all the aforesaid reasons 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. Dealing with this aspect of the matter and after noticing the consistent line of precedent on the subject the Division Bench in Smt Vijaya Jain observed: - "This Court on more than one occasion has held that the mar....