State of Raj Vs M/S Land Mark Builders Ors.

Instant writ petition is preferred by petitioner aggrieved from order dated 01.08.2013 in Revision Petition No. 768/2009/Jaipur passed by the Rajasthan Tax Board, Ajmer.

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Learned AAG while placing reliance upon provisions of Rajasthan Stamps Act, 1998 has submitted that the dispute pertains to assessment of use of basement for the purpose of collection of stamp duty on transfer of property, considering future use. He further submitted that the

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(2 of 5)

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building was approved for residential purpose, but selling of flats itself is a commercial activity and the property constructed attracts the duty on the basis of commercial DLC rates. He further submitted that as per inspection report, the basement was commercial, therefore Rule 59-A of Rajasthan Stamps Rules, the property was adjudicated as commercial and a reference was made to Additional Collector (Stamps) who accepted the report and directed the respondent to pay commercial DLC rate as assessed by the Sub-Registrar. He further submitted that the respondent no.1 has preferred a revision before the Rajasthan Tax Board, but same was allowed in erroneous manner. He further placed reliance upon a full judge bench judgment in case of Pushpa Sareen Vs. State of UP, Manu/UP/0248/2015 (Allahabad) and submitted that the Collector has duty to fix valuation of plot on assumption that was likely to be used for commercial purpose and discretion vest in him.

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Aforesaid contentions were opposed by learned counsel appearing on behalf of respondent no. 1 (applicant) and submitted that the conveyance deed dated 25.09.2006 clearly reflects that the property was residential in nature and the reply submitted by respondent clearly indicate that building plan for residential building were approved by Nagar Nigam. He further submitted that the petitioner is bound to collect stamp duty on the basis of use of the property at the time of purchase or transaction. He further submitted that if nature of use is changed after purchase, then the stamp duty cannot be assessed on the basis of future intentions. He

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further submitted that legal position was considered by the Tax Board and accordingly the revision was rightly allowed. He also placed reliance upon judgment in case of State of Rajasthan & Others vs Khandaka Jain Jewellers, reported as (2007) 14 SCC 339 , State of UP & Others vs Ambrish Tandon & Anr. (2012) 5 SCC 566 and Sunita Minechem Industries (Herbal) Vs. State of Rajasthan reported as 2024 RJ (JD) 51510.

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Heard learned AAG and learned counsel appearing for respondent. Perused the material placed on record and also the judgment as referred by learned counsel for the parties.

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The only dispute in the instant case is that a sale deed dated 25.09.2006 was submitted by the respondent no. 2 for registration in the name of respondent no. 1 on 25.09.2006. The inspection of property was conducted on 20.12.2006 and on the basis of inspection, it was found that a basement was constructed which led to classification of the property as commercial. On the basis of report the Sub-Registrar, JaipurII has made a reference to the Collector (Stamps) and vide order dated 30.03.2009 the Collector has directed for classification of property as commercial and ordered recovery of deficit stamp duty. The respondent no. 1 has filed a revision under Section 65 of the Rajasthan Stamps Act, 1998 to the Rajasthan Tax Board, Ajmer and same was allowed on 01.08.2013.

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In case of Pushpa Sareen (supra), a full Bench of the Allahabad High Court while considering reference under the Stamps Act has held that the Collector can exercise power to

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fix value of plot on assumption that it was likely to be used for commercial purpose, but there has to be adequate material to support the findings.

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In case of Sunita Minechem Industries (Herbal) vs State of Rajasthan (supra), a Co-ordinate Bench at Principal Seat Jodhpur after considering Section 54 of the Rajasthan Stamps Act has held that stamp duty should be based on the valuation at the time of execution of sale deed and placed reliance upon judgment in case of State of UP vs Ambrish Tandon (supra) . The tax Board has placed reliance upon judgment in case of State of Rajasthan and others vs Khandaka Jain Jewellers (supra) , wherein Hon’ble Supreme Court has held that the rates of property at the time when parties entered into agreement to sale or at the time when party files suit for a specific performance of contract are irrelevant and at the time of registration, if the property is undervalued, the registering authority would send the same to the Collector for proper valuation, but certainly future use is not considered to charge stamp duty.

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Considering the legal position, the date of registration of a property is material for the purpose of charging stamp duty under the Rajasthan Stamps Act. Only in case that the property is undervalued, then the registering authority may make a reference to the Collector (Stamps). In no case, future intention of the party can be taken into consideration for charging the stamp duty. The relevant date for recovery of stamp duty is the date of submission of conveyance deed in the office of Sub-Registrar.

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In view of law as referred herein above, the property cannot be valued on the basis of future use or future intention of the parties, therefore the Rajasthan Tax Board considering the legal position in correct manner has rightly set aside the order dated 30.03.2009 passed by the Collector (Stamps), Jaipur. Thus, there is no perversity or illegality in the order passed by the Tax Board, thus the writ petition is liable to be dismissed.

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In view of discussion made herein above, the writ petition preferred by the petitioner is hereby dismissed with pending application, if any.

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(ASHOK KUMAR JAIN),J

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(INDERJEET SINGH),J

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CHETNA BEHRANI /73

State of Raj v. M/S Land Mark Builders Ors.

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State of Raj v. M/S Land Mark Builders Ors.

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