Partly allowed

S. Nithin Kumar v. the State of Karnataka

Karnataka HC5 Dec 2024WP/24247/2021

Case brief

AI extract

What is this about?

In this writ petition, the High Court of Karnataka addressed allegations of stamp duty evasion regarding a property sale where construction existed prior to registration. The Court found evidence of pre-existing construction and dismissed the claim of no violation. It reduced the maximum penalty to a single-time differential amount, exempting interest on the penalty, and granted a 30-day payment s

What did the court decide?

The penalty was reduced to one-time differential dues; interest on penalty levied; thirty days' time granted for payment.

S. Nithin Kumar Vs the State of Karnataka — Pension and Retirement Benefits | Karnataka HC (2024)

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1 - NC: 2024:KHC:50297 WP No. 24247 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5^TH DAY OF DECEMBER, 2024 BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 24247 OF 2021 (GM-ST/RN)

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BETWEEN:

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S. NITHIN KUMAR S/O N. SHANKAR RAO AGED 36 YEARS,

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S. PAVAN KUMAR S/O N. SHANKAR RAO AGED 32 YEARS,

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BOTH ARE R/O NO.205, LAKSHMI VENKATESHWARA KRUPA, 2^ND STAGE, 2^ND BLOCK, VINOBHNAGARA EXTENSION, SHIMOGA-577201

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…PETITIONERS

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(BY SRI. PRASAD B S., ADVOCATE)

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AND:

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Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA MINISTRY OF REVENUE VIDHANASOUDHA BANGALORE-560001 REPRESENTED BY ITS SECRETARY.

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REGIONAL COMMISSIONER BANGALORE DIVISON 2^ND FLOOR, BMTC BUILDING, K H ROAD,SHANTHINAGARA, BANGALORE-560027

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THE DISTRICT REGISTRAR SHIMOGA DISTRICT, SHIMOGA-577201

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NC: 2024:KHC:50297 WP No. 24247 of 2021

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THE SUB-REGISTRAR SHIMOGA CITY, SHIMOGA-577201

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ABID REHAMAN

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S/O ABDUL REHAMAN AGED ABOUT 32 YEARS BYPASS ROAD, VADI-A-HUDA EXTENSION, SHIMOGA CITY, SHIMOGA-577201.

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SHAMSHIA TAZ W/O ABID REHAMAN AGED ABOUT 30 YEARS, #205, LAKSHMI VENKATESHWARA KRUPA, 2^ND STAGE, 2^ND BLOCK, VINOBHNAGARA EXTENSION, SHIMOGA-577201.

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…RESPONDENTS

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(BY SMT. SPOORTHY HEGDE, AGA FOR R1 TO R4, R5 IS SERVED.)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 22.12.2015 IN DOCUMENT NO.10387/2010-11 AND IN DISPUTE NO.STP 45-A(3) SMG 92/2011-12 PASSED BY THE R- 3 VIDE ANNX-K ETC.

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THIS PETITION, COMING ON FOR HEARING ON INTERLOCUTORY APPLICATION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE SURAJ GOVINDARAJ

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3 - NC: 2024:KHC:50297 WP No. 24247 of 2021

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ORAL ORDER

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The petitioners are before this Court seeking for the following reliefs:

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a. Quash the order dated 22.12.2015 in document No.10387/2010-11 and in dispute No.STP 45A(3) SMG 92/2011-12 passed by 3^rd respondent at Annexure-K

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b. Quash the order dated 26.09.2019 in case No.STP(Aa)4/2016-17 passed by 2^nd respondent at Annexure-M

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c. Pass such other orders or directions as deem fit to the facts and circumstances of the case.

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The petitioners claimed to have purchased site from one Abid Rehaman S/o. Abdul Rehman and Smt. Shamshia Taj, W/o. Abid Rehaman in Khatha No.128 and Schedule Municipal old Khatha No.814:132:128 and running Municipal Khatha No. 814-1,132-1,1281 measuring 10802.50 Sq.ft under the registered sale deed dated 23.03.2011 which was registered as document No.10387/2010-11. Proceedings were initiated against the petitioners for contravention of

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4 - NC: 2024:KHC:50297 WP No. 24247 of 2021

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Section 28 of the Karnataka Stamp Act, 1957 (hereinafter referred to as 'Act' for the sake of brevity) on the ground that the petitioners have not disclosed the correct information inasmuch as the sale deed was purported to have been executed as regards the vacant site which infact there is construction put up thereon.

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In that background, after providing an opportunity of hearing to the petitioners, the third respondent vide order dated 22.12.2015, had directed the petitioners to make payment of stamp duty on the value of the construction and the property which is valued at Rs.82,38,000/- (Rupees Eighty two lakhs thirty two thousand only) and directed the petitioners to make payment of sum of Rs.4,24,185/- (Rupees Four lakhs twenty four thousand one hundred and eighty five only) as a differential stamp duty and Rs.62,380/(Rupees Sixty two thousand three hundred and eighty only) as differential registration fee and as

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5 - NC: 2024:KHC:50297 WP No. 24247 of 2021

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also imposed a penalty of 5 times the said differential amount along with interest @ 12% p.a. from the date of registration on the differential stamp duty amount, differential registration fee as also on the penalty. Challenging the same, the petitioners are before this Court.

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Learned counsel for the petitioners submits that there was in fact no construction which had been put up on the suit property and what the petitioners have purchased is only a vacant site. There being a dispute between the petitioners and one of his uncle, a false complaint had been lodged against the petitioners which resulted in the aforesaid proceedings being taken up in the year 2015, the sale deed has been executed in the year 2011, in the meanwhile, the petitioners had put up the construction.

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The submission of Sri. B S Prasad, learned counsel for the petitioners is that without ascertaining the

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date and time of construction, the respondents authorities cannot contend that the construction has been put up even prior to the sale deed having been executed and call upon the petitioners to make payment of the differential stamp duty and registration fee let alone imposing of penalty thereon.

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The respondents were called upon to make their submissions as to on what basis it has been contended that the construction has already been put up.

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The submission of the learned AGA in that regard is that there being an electricity connection which has been availed in the year 2008 for 10 kilowatt, the same would indicate that there was in fact a construction completed and in occupation. The construction licence having been obtained in the year 2006-07 by the earlier vendor of the petitioners.

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NC: 2024:KHC:50297 WP No. 24247 of 2021

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Heard the learned counsel Sri. B S Prasad for petitioners and Sri. Spoorthy Hegde, learned AGA for respondents No.1 to 4 and perused the papers.

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Though this Court had called upon the respondentState to ascertain if there is any scientific methodology of ascertaining the age of the building. Learned AGA submits that the Public Works Department (PWD) does not have any such scientific equipment to measure the age of the building.

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That being so, this Court would have to look into the documents which are now available on record.

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The plan sanction had been granted in the year 2006-07, building plan license has been issued in the year 2006-07, electricity connection for 10 kilowatt has been obtained in the year 2008, the petitioners having purchased the property in the year 2011, the description of the property was indicated to be a vacant site in the registered sale deed.

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The fact that the electricity connection for 10

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kilowatt as a permanent connection has been obtained and not a temporary connection would indicate that there is building which has already constructed and a permanent connection was serviced to the said house, if not it would have been temporary connection with much lesser kilowatt which would have been obtained by vendor of the petitioners. The photographs which have been produced also indicates that the building is quite old. However, the said photographs is not relied by me to determine the age of the building. The plan sanction

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and servicing of electricity connection would be sufficient to hold that the building in fact had been completed and the electricity connection was obtained in the year 2008 itself. That being the case, the claim of the petitioners that there is no construction put up and therefore, the same is not required to be mentioned in the sale deed and

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consequently there is no violation of Section 28 of the Act cannot be countenanced in law and facts. Hence, no grounds can be made out and the petition would be liable to be dismissed.

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However, taking into consideration that the maximum penalty has been imposed in terms of Section 61 of the Act, I am of the considered opinion that construction being that of a house and in terms of the submission made by the learned counsel for petitioner, the said house has also been mortgaged and now proposed to be sold by Bank, I am of the considered opinion that the penalty can be reduced taking into consideration the peculiar circumstances with human element.

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In that view of the matter, the penalty imposed is reduced to one time the differential stamp duty and differential registration fee which was required to be paid. The interest cannot be levied on the penalty and it can be levied only on the differential stamp

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duty and as such, the petitioners have deposited certain amount before the second respondent at the time of filing of the appeal. If that so, due credit to the said deposited amount would have to be provided to the petitioners. Hence, the petitioners would be liable to make payment of the differential stamp duty of Rs.4,24,185/- (Rupees Four lakhs twenty four thousand one hundred and eighty five only) and differential registration fee of Rs.63,280/(Rupees Sixty three thousand two hundred and eighty only) after taking into account the deposited amount of Rs.2,12,095/- (Rupees Two lakhs twelve thousand and ninety five only), the interest at the rate of 12% being paid on the said differential amounts after taking into consideration the aforesaid amount and also penalty equivalent to the differential stamp duty and Registration Fee. The petitioners are granted thirty days time to make payment of the aforesaid amount.

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11 -

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NC: 2024:KHC:50297 WP No. 24247 of 2021

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With the above said observations, the writ petition

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stands disposed of.

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SD/(SURAJ GOVINDARAJ) JUDGE

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SSD/List No.: 1 Sl No.: 15

S. Nithin Kumar v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

S. Nithin Kumar v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

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