Dismissed

State of Chhattisgarh v. the Board of Revenue and Ors.

Chhattisgarh HC14 Jul 2014WP227/2784/2010

Case brief

AI extract

What is this about?

In a writ petition under Article 227, the State challenged the Board of Revenue's decision allowing an appeal by a property buyer against the Collector Stamps' valuation. The court held the Collector failed to follow mandatory statutory factors in the 1975 Rules, dismissing the State's petition.

What did the court decide?

The writ petition under Article 227 of the Constitution of India was dismissed, upholding the Board of Revenue's order.

State of Chhattisgarh Vs the Board of… — Pension and Retirement Benefits | Chhattisgarh HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BILASPUR CHHATTISGARH WRITPETITIONf227)NO.^^ /2010 SINGLJ ! ' ^l • ,.„. .' . . PETITIONER State of Chhattisgarh Through: The Secretary, Department ofCommercial Tax '^s^".^ ^°^-^y (Registration & Stamps), ^'a~.••••..-^y'".••••..-^y'" .-•"' D.K.S. Bhawan, Maatralaya, y..--:'y?~::"..--'" ^-iv'.&'^K.' ..y6 G.E. Road, Raipur (C.G)

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RESPONDENTS

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VERSUS

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TheBoardofReveaue,

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(1) Chhattisgarh Bilaspur, Through: The Registrar, Bilaspur.

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(2) J.P.Agrawal S/o Shri Baynath Prasad Agrawal, R/o Minocha Colony, Tahsil & DistrictjBilaspur.

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(3) Smt. Neeta Dua, Wd/o Late Shri. Naresh Kumar, R/oNearArya Samaj Mandir, Dharmashala, fiilaspur (C.G)

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WMTPETmONlINDERARTICLE2270FTHE

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CONSTITUTIONOF INDIA

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HIGH COURT OF CHHATTISGARH : BILASPLtR

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Sjngle Bench: HQH'bleS^^^ IVIohan Shrivastava.J,

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Writ Petition (227) No. 2784/2010

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Petitioner

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State of Chhattisgarh

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Versus

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Respondents The Board of Revenue, Bilaspur & others

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(Writ Petition under Article 227 of the Constitution of India)

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Present: - Shri Adhiraj Surana, Dy. G.A. for the State/petitioner.

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Shri R.S. Marhas, counsel for respondent No.2.

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ORALORDER

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(Passed on 14/07/2014)

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This petition underArticie 227 ofthe Constitution of India is preferred against order dated 31/01/09 passed by the Board of Revenue in the matter of appeal preferred by 2 respondent whereby the Board of Revenue has set aside the order ofthe Collector Stamps.

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Briefly stated facts necessary for determination of the controversy involved in the writ petition are that the 2 respondent purchased an open land admeasuring 24,614 Sq.ft. 0.56.5 acres 0.229 hectares from

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respondent No.3 vide sale deed dated 20/04/05. For the purposes of payment and affixation of stamp duty leviable in respect of the sale transaction, the parties to sale disclose and stated Rs.19,23,500/- as the valuation of land. However, as per the existing guidelines published by the Collector, the market value of the property being Rs.21,06,000/-, stamp duty of Rs.2,08,070/- on the market value of Rs.21,07,000/- was paid. The registering authority accepted the valuation and proceeded to register the sale deed.

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The Collector Stamps, however, suo moto initiated proceedings under Section 47 (A) (3) of the Indian Stamp Act, 1899 (for short "the Stamp Act") on a prima facie consideration that the market value of the land which was the subject matter of instrument was under valued. Notices were issued to the parties to the instrument. The record shows that spot inspection report was also obtained and thereafter, the Collector passed an order on 26/12/2007 (Annexure P/3) holding that the market value has been under valued. According to the Collector Stamps, the subject matter of sale, the land, was located near the main road and even though it was a residential area, looking to its vicinity from the main road, it was liable to be valued at Rs.9,717/- per sq. mtr. On that basis, the valuation was arrived at Rs.1,77,52,000/- and accordingly a deficit stamp duty of Rs.16,70,100/was directed to be paid.

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Aggrieved by this order, the purchaser/second respondent preferred an appeal before the Board of Revenue. The Board of Revenue allowed the appeal holding that the Collector Stamps did not fix proper rates and it was highly exorbitant being almost 10 times the rate fixed under the existing guidelines. It is this order which is under challenge by the State before this Court.

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Learned counsel for the State/Petitioner, assailing the correctness and validity of the order passed by the Board of Revenue, submits that the Collector stamps, while exercising its jurisdiction under Section 47(A) of the Stamps Act had taken into consideration, all relevant aspects. He submits that the Collector Stamps found that the land was situated near main road and connected through a small inroad 40-50 feet away from main road. The Collector also took into consideration that even though the land was situated in a residential area, the vicinity of the land from main road and being surrounded by commercial sites required a higher valuation than what was done by the parties and accepted by registering authority. Learned State counsel also submitted that the guidelines issued by the Collector from time to time are not binding on the Collector Stamps and other relevant factors can be taken into consideration to assess proper market value of subject matter of sale and purchase. It is also contended that the Collector Stamps, taking into consideration that the land was

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situated in residential area abutting a commercial plot and situated near main road, workout average rate of commercial and residential land and also deducted substantially, taking into consideration other diminishing factors that the land was bigger in size, uneven and not having even measurement. Thus, there was no illegality or perversity in the order passed by the Collector stamps warranting any interference in appeal by the Board of Revenue. In support of submission, learned State counsel relied upon the judgment of the Supreme Court in the cases of State of Punjab and others Vs. IVIphabir Sinah^AIR 1996 SC 2994 andRamesh Chand Bansal and others Vs. District Magistrate/Collector, Ghaziabad and others, AIR 1999 SC 2126.

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Per contra, learned counsel for the second respondent submitted that present petition is liable to be dismissed only on the ground of delay because the writ petition has been preferred after 501 days. He submits that the reasons assigned in the petition do not explain the entire period and even though sanction was obtained for filing petition on 09/02/2010, this writ petition came to be filed on 15/06/2010.

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It is then contended fhat the Collector stamps has arrived at a very highly exorbitant rate which is almost 10 times more than the rates prescribed under the existing guidelines. He submits that the Collector adopted a wrong approach in arriving at rate by drawing average of

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commercial and residential rates. He submits that as the land is situated in residential area, it cannot be put to commercial use and therefore, under no circumstances, the land could either be treated as commercial or semi commercial. He further submits that the Collector stamps itself rejected the spot inspection report and yet fixed an exorbitant market value only on the ground of vicinity of residential area to the main road. Lastly, it is submitted that the Board of Revenue has passed the order which cannot be said to be suffering from any jurisdictional error or grave dereliction of duty so as to warrant interference by this Court and has relied upon the judgment of the Supreme Court in the case of Jai Singh and others v. IVIunicipal Corporation of Delhi and another wjth Mynicipal Corporation of Delhi v. Jai Sinah and others.2010 (9) SCC 385.

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Section 47 (A) of the Indian Stamp Act empowers the Collector to suo moto 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 subject matter of any such instrument and the duty payable thereon. Under the statutory scheme, such power can be exercised if he has reason to believe that the market value of such property has not been truly set forth in the instrument.

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In exercise of powers conferred by Section 75 read with Section 47(A) of the Indian Stamp Act, rules have been framed by the State Government which lay down guidelines for determination of market value, styled as Indian Stamp Act (C.G. Prevention of Undervaluation of Instruments) Rules, 1975 (for^{short"theRulesof1975").} The provisions contained in Rule 4 to 8 of the Rules of 1975 not only regulate the procedure to be followed by the Collector while undertaking an exercise of determination of market value in exercise of powers under Section 47 (A) of the Stamp Act but also the principles which shall be kept in mind while determining the market value.

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Rule 5 lays down relevant factors to be taken into consideration in the matter of determination of market value in case of land or house sites or building or properties other than land, house site and building, as the case may be.

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Word "house site" appearing in clause (b) of Rule 5 of the Rules of 1975 has not been defined under the Rules. .Therefore, in the absence of any specific meaning assigned to house site under the Rules, ordinary meaning in which the word "house site" is understood, has to be taken into consideration. This would obviously mean and include the land which under the plan of the city, are earmarked for being developed as residential area. This Court prefers the aforesaid meaning in view of a

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specific clause (c) under Rule 5 which makes separate provision for determination of market value in case of building. A conjoint reading ofthe three clauses namely clause (a), (b) & (c) of Rule 5 indicates that the Rules postulate determination separately in respect of land, building and house site.

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Thus, in view of above consideration, 1 am of the view that the land which is subject matter of sale and purchase, has to be categorised under clause (b) of Rule 5 as house site. If that be so, in the matter of determination of market value of a house site, following factors, specifically enumerated under clause (b), becomes relevant consideration and they are extracted hereinbelow -

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"Rule 5 (bl - In the case of house sites -

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i) the general value of house sites in locality; ii) nearness to roads, railway station, bus route; iii) nearness to market, shops and the like: iv) amenities available in the place like public offices, hospitals and educational institutions;

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v) development activities, industrial improvements in the vicinity;

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vi) local rates, municipal or other taxes to which such house site may be subject and valuation of site with reference to taxation records of the local authorities concerned;

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vii) any special feature having a special bearing on the valuation ofthe site; and

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viii) any special feature of the case represented by the parties."

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Apart from the factors enumerated in clause (i) to (vi), clause (vii) & (viii) reserve in favour of the competent authority, a general power to take into consideration any special feature having a special bearing on the valuation of the site. It be noted, this only allows the authority to exercise its discretion on relevant aspects and not on extraneous considerations.

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The Collector stamps, therefore, while undertaking the exercise of determination of market value is required to apply its mind by taking into consideration relevant factors as specifically enumerated in clause (i) to (vi) of clause (b) of Rule 5 with the authority to exercise discretion in terms of provisions contained in clause (vii) & (viii).

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The first sub-clause under clause (b) obliges the Collector Stamps to take into consideration the general value of the house sites in the locality. The other clauses relate to its proximity with road, railway station, bus route, market, shops and amenities available including development activities, local rates municipal and other taxes to which such house sites

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may be subject and valuation of site with reference to taxation records of the local authorities concerned.

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In the present case, the Collector stamps, while undertaking determination of market value in exercise of suo moto power reserved to it under sub-section (3) of Section 47-A has not specifically mentioned the general^{valueofhousesitesinthelocalityandithasalsonottakeninto} consideration the development activities much less local rates as specified in clause (vi). In order to arrive at an exorbitant rate of Rs.1,77,52,000/-, the Collector Stamps has taken into consideration the vicinity of the land from the main road which is 40 to 50 feet connected through a narrow road. The Collector Stamps has also not taken into consideration the rates of sale and purchase of house sites in near vicinity. Swayed mainly on the consideration that it is about 50 feet away from the main road and there are commercial areas in the near vicinity, the Collector has arrived at market value which is almost 10 times the existing rate provided under the guidelines.

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Learned counsel for the petitioner may be correct in submitting that in view of the judgment of the Supreme Court in the case of State of Punjab (supra) and Ramesh Chand Bansal (supra), the rates provided in the existing guidelines are not binding, nevertheless there are relevant

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considerations. Only on the ground of vicinity from main road, fixation market value 10 times more than the rate provided under the existing guidelines, cannot be justified. This is more so when there are no more rates available with regard to sale and purchase of the house sites in the recent past in the nearby vicinity. It cannot be ignored that the land which is subject matter of sale and purchase is situated in the residential area.

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The Collector stamps, has however, if 1 may say so, has adopted a peculiar approach of working out average of commercial or residential rates. This is wholly unwarranted. The proper course of action in such case would have been to determine the market value, taking into consideration the relevant factors as enumerated under the statutory Rules of 1975. Instead of adopting such approach, the Collector Stamps evolved his own formula ofavenging and arrived at an exorbitant rate.

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The Board of Revenue interfered with the order of the Collector considering mainly that the rate arrived by the Collector is almost 10 times the rate fixed under existing guidelines. The Board of Revenue has also taken into consideration that the Collector even though did not accept the spot inspection report, arrived at such a high market value. Even ifthe land is accepted to be in the near vicinity of the commercial area, the location of the land, even according to the order of the Collector is not directly attached to the main road but it is 40 - 50 feet away from the main road. In

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the order of the Coltector, there is no specific mention nor any material placed as to what are the rates of sale and purchase of the house site of the near vicinity. Taking into consideration all these aspects of the matter,

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the Board of Revenue has interfered with the order ofthe Collector.

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In yiew of the above consideration, l am of the view that no interference is called for in the matter in exercise of supervisory jurisdiction under Article 227 of the Constitution of India. This petition is accordingly

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dismissed.

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1 Sd/Manindra Mohan Shrwastava Judge

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Deepti

State of Chhattisgarh v. the Board of Revenue and Ors.

Case brief

What is this about?

What did the court decide?

State of Chhattisgarh v. the Board of Revenue and Ors.

Case brief

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