Allowed

Jageshwar v. State of U.P. Thru Collector Rae Bareli and 2 Others

Allahabad HC13 Jul 2023WRIC/1002934/2002

Case brief

AI extract

What is this about?

The High Court of Judicature at Allahabad, Lucknow Bench, allowed a writ petition challenging orders under Section 47A and Section 56 of the Indian Stamp Act. The Court quashed the orders imposing penalty and interest because the Assessing Authority treated agricultural land as non-agricultural based on its future potentiality without considering the status on the date of execution or providing re

What did the court decide?

Impugned orders dated 30.06.1999 and 09.08.2002 quashed under certiorari; direction to register and return the deed; liberty granted for refund of 1/4th deposit with interest.

Jageshwar Vs State of U.P. Thru Collector Rae Bareli… — Property and Title | Allahabad HC (2023)

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Neutral Citation No. - 2023:AHC-LKO:45379

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Court No. - 20

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Case :- WRIT - C No. - 1002934 of 2002

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Petitioner :- Jageshwar Respondent :- State Of U.P. Thru Collector Rae Bareli And 2 Others Counsel for Petitioner :- P.V. Chaudhary,A.S. Chaudhary,Mahendra Pratap Singh Counsel for Respondent :- C.S.C.

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Hon'ble Manish Mathur,J.

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Heard Mr. Mahendra Pratap Singh, learned counsel for petitioner and learned State Counsel appearing on behalf of opposite parties.

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Petition under Article 226 of the Constitution of India has been filed challenging order dated 30.06.1999 passed under Section 47A of Indian Stamp Act, 1899 as well as the order dated 09.08.2002 passed under Section 56 of the Act whereby instrument of transfer of property dated 14.08.1996 has been found to be under valued whereby penalty and interest has been imposed upon petitioner.

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Learned counsel for petitioner submits that during course of proceedings under Section 47A of the Act, the Tehsildar concerned submitted his report dated 06.04.1999 clearly indicating the property to be agricultural in nature although its location was indicated as being adjacent to abadi, town area and being in the vicinity of Railway Station and Allahabad-Kanpur link road. It is submitted that by means of impugned order, submissions of petitioner that the property was agricultural in nature have been rejected treating it to be non agricultural but without adverting to objections that had been raised by petitioner and in fact without indicating any reasons for disbelieving the Tehsildar report. It is submitted that the assessing authority has passed the order regarding under valuation only on the aspect of future potentiality of the property, which could not have been done in view of settled proposition of law in various cases enunciated by Hon'ble the Supreme Court as well as by this Court.

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It is further submitted that even the order passed under Section 56 of the Act rejecting petitioner's revision is also based on the future potentiality of land without adverting to the fact that location of the property is required to be seen as on the date of execution of sale-deed and not three years thereafter as in the present case since the Tehsildar report was furnished after three

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years and that too indicating the property to be agricultural in nature.

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Learned counsel has placed reliance on the following judgments:

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(1) Sumati Nath Jain versus State of U.P & Anr. reported in 2016(2) ADJ 533 (DB) Allahabad High Court ,

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(2) Sandeep Kumar Kanodia versus Chief Controller Revenue Board of Revenue Alld. U.P. & Ors passed in Writ C No.1001267 of 2015 ,

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(3) Usman Ali S/o Tufail Ahmad & Anr. versus Mukhya Niyantrak Rajasv Parishad of U.P. Allahabad Ors. passed in Writ.- C No.1007375 of 2010 ,

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(4) Mahendra Singh & Ors. versus State of U.P. & Anr. passed in Writ C No.7764 of 2004 , and

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(5) Smt. Pushpa Sareen versus State of U.P. reported in 2015(3) ADJ 136(FB) .

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Learned State counsel appearing on behalf of opposite parties has refuted submissions advanced by learned counsel for petitioner with the submission that the orders impugned have taken into account the location of property which is abutting not only the abadi but also is in the vicinity of a Railway Station and Highway and as such no error has been committed by the assessing and revisional authorities in taking cognizance of the said fact, particularly when Full Bench of this Court in the case of Smt. Pushpa Sareen (supra) permits the assessing authority to take into account future potentiality of land.

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Upon consideration of submissions of learned counsel for parties, it is evident that question requiring adjudication in the present question is with regard to future potentiality of the property for the purposes of being used as residential although they have been presented as agricultural properties and stamp duty there upon has been paid in that context.

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With regard to aforesaid question, reference can be made to the judgment rendered by Hon'ble Supreme court in the case of Ambrish Tandon (supra) in which it has been held as follows:-

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"15. The impugned order of the High Court shows that it was not seriously disputed about the nature of user of the building, namely, residential purpose on the date of the purchase. Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty.

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The nature of user is relatable to the date of purchase and it is relevant for the purpose of calculation of stamp duty. Though the matter could have been considered by the appellate authority in view of our reasoning that there was no serious objection and in fact the said alternative remedy was not agitated seriously and in view of the factual details based on which the High Court has quashed the order dated 27-9-2004 passed by the Additional District Collector, we are not inclined to interfere at this juncture."

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The aforesaid judgment has thereafter been followed by Full Bench decision of this court in the case of Pushpa Sareen (supra) in which also following has been held:-

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"27. The true test for determination by the Collector is the market value of the property on the date of the instrument because, under the provisions of the Act, every instrument is required to be stamped before or at the time of execution. In making that determination, the Collector has to be mindful of the fact that the market value of the property may vary from location to location and is dependent upon a large number of circumstances having a bearing on the comparative advantages or disadvantages of the land as well as the use to which the land can be put on the date of the execution of the instrument.

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28. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land. This potential has to be assessed with reference to the date of the execution of the instrument. In other words, the power of the Collector cannot be unduly circumscribed by ruling out the potential to which the land can be advantageously deployed at the time of the execution of the instrument or a period reasonably proximate thereto. Again the use to which land in the area had been put is a material consideration. If the land surrounding the property in question has been put to commercial use, it would be improper to hold that this is a circumstance which should not weigh with the Collector as a factor, which influences the market value of the land."

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The Full Bench in the case of Pushpa Sareen while following the judgment rendered by Hon'ble Supreme court has indicated that future potentiality of land may also be a factor required to be considered but only as on the date of execution of instrument of transfer and also looking to the wordings of the instrument itself. The Full Bench also has clearly indicated that nature of user as on the date of purchase would be relevant for the purpose of computing stamp duty.

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Upon applicability of aforesaid judgments in the present facts and circumstances of the case, it is evident that sale deed in question was executed in the year 1996 with first inspection taking place only three years thereafter on 06.04.1999 wherein also the property in question has been indicated to be

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agricultural in nature. It is a relevant factor that the assessing authority while passing order under Section 47A of the Act has not indicated any reasoning whatsoever to discard the same on the aspect that the property is agricultural in nature. The property has been treated to be non agricultural only on the basis of its future potentiality. The said aspect has already been adjudicated upon by Division Bench judgment of this Court in the case of Sumati Nath Jain versus State of U.P. & Anr. reported in 2016(2) ADJ 533 in the following manner:

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18.We may note that on the date of execution of the instrument the land was admittedly recorded as agricultural. In fact the Khasra of the property remained unchanged throughout and continued to represent the land as recorded for agricultural purposes. The respondents were in our opinion wholly unjustified in initiating proceedings based on an unsubstantiated assumption that the property in future was likely to be put to non-agricultural use.

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19. The perceived or presumed use to which a buyer may put the property in the future can never be the basis for adjudging its value or determining the stamp duty payable. The Act, we may note is a fiscal statute. The taxable event with which it concerns itself is the execution of an instrument which is chargeable to duty. The levy under the statute gets attracted the moment an instrument is executed. ............".

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It is thus clear that in terms of judgments referred to hereinabove, there was no occasion for the assessing authority to have treated the property in question to be non-agricultural in nature only on the basis of future potentiality particularly when such future potentiality has not been indicated with regard to the date of execution of deed and is in fact on the basis of an inspection report submitted three years after the date of execution of deed. The impugned orders are therefore clearly erroneous.

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In view of aforesaid, the impugned order dated 30.06.1999 passed in Case No.1755 of 1997-98 under Section 47A and the order dated 09.08.2002 passed in Revision No.784 of 1998-99 under Section 56 of the Act are hereby quashed by issuance of a writ in the nature of certiorari.

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It has been submitted that in pursuance of the said orders, ¼ of the amount has been deposited by the petitioner before authority concerned. Liberty as such is granted to petitioner to file an appropriate application for refund of the deposited amount, which shall be refunded along with interest @ 6% per annum from the date of deposit to till the date of actual payment within a period of three months from the date application for same is made.

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Resultantly, petition succeeds and is allowed . Parties to bear

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their own costs.

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It has been submitted by learned counsel for petitioner that deed upon presentation for registration was not returned to the petitioner and was in fact was sent to the District Magistrate concerned as has been indicated in the paragraph no.4 of the counter affidavit itself.

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Since the petition has been allowed, opposite parties are directed to register the aforesaid deed and return the same to petitioner after registration in accordance with law.

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Order Date : - 13.7.2023 Subodh/-

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Digitally signed by :- SUBODH KUMAR SINGH High Court of Judicature at Allahabad, Lucknow Bench

Jageshwar v. State of U.P. Thru Collector Rae Bareli and 2 Others

Case brief

What is this about?

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Jageshwar v. State of U.P. Thru Collector Rae Bareli and 2 Others

Case brief

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