Heard learned counsel for the petitioner and learned Standing Counsel.
The petitioner had purchased a piece of land which is 1/3rd measuring 0.308 Hectare of plot no.1335 situated in Mauza Atarra, District Banda on 2.3.2006 by executing a sale deed indicating therein that the said land was agricultural land and the value of the land has been paid according to circle rate and, therefore, the sale deed has been registered without any objection by the registering authority. It appears that after a gap of two years, report was submitted by Sub Divisional Magistrate on 28.05.2008 indicating therein that the property in question is not agricultural as stated in the sale deed but is in the midst of abadi and, therefore, the petitioner has not made correct disclosure regarding the nature of the property and thereby evaded the payment of proper stamp duty. Upon the aforesaid report, the Collector issued notice to the petitioner being notice dated 19th June, 2008 and initiated the proceeding under section 47-A (3) of the Indian Stamp Act. The petitioner filed his objection to the said notice on 8.9.2008 wherein disputing the averments made in the report dated 28.05.2008 and stated that no fresh inspection has taken place and the property in question was not residential as has been reported by the Sub Divisional Magistrate, therefore, requested that the spot inspection be made.
The Collector, however, proceeded to pass an order on 12.05.2009 solely relying upon the report of Sub Divisional Magistrate dated 28.05.2008 and determined the deficiency in stamp duty to the tune of Rs.2,39,200/-, deficiency in registration fee to Rs.3180/- and imposed penalty to the tune of Rs.4,78,400, totalling to Rs.7,20,780/- as demand against the petitioner. Against the aforesaid order, petitioner preferred an appeal before the Commissioner under section 56 (1-A) of the Indian Stamp Act as applicable to the State of U.P. The said appeal was also dismissed and the order of the Collector was affirmed. Hence, the present writ petition.
I have heard learned counsel for the petitioner and learned Standing Counsel and perused the order passed by the Collector under section 47-A (3) as well as order passed by the Appellate Court under section 56 (1-A) of the Indian Stamp Act. Admittedly, the petitioner had purchased the aforesaid property by way of sale deed dated 2.3.2006 which was registered without any objection. Thereafter, upon report of the Sub Divisional Magistrate dated 28.5.2008, proceedings were initiated against the petitioner by issuance of show cause notice dated 19.6.2008 to which the petitioner replied contradicting the report and requesting the Collector to make fresh inspection of the property in question. The Collector, however, proceeded to decide the matter against the petitioner solely on the report of Sub Divisional Magistrate, which was prior to the initiation of the proceedings under section 47-A (3) of the Indian Stamp Act. Section 47-A of the Indian Stamp Act merely stipulates that the proceeding can be initiated either suo moto by Collector or on a report by some authority. Thereafter, the Collector is required to issue notice to the purchaser in the sale deed which is reported to be deficiently stamped and after satisfying himself as to the correct market value of the property in question proceed in the matter. In the present case, upon the report of Sub Divisional Magistrate although notice was issued to the petitioner which was also replied, but solely on the report of Sub Divisional Magistrate, the Collector has proceeded to determine the deficiency in stamp duty without ascertaining and finding out the correct market valaue of the property in question, which is not permissible in law. The report of Sub Divisional Magistrate dated 28.05.2008 is prior to the initiation of proceeding under section 47-A (3). Once having issued notice under section 47-A (3), it was incumbent upon the Collector to satisfy himself and find out the correct market value of the property in question. The procedure for determining the correct market value has been enumerated in the decision of this Court in the case of Ram Khelawan alias Bachha Versus State of U.P. reported in 2005 (98) RD, 511, wherein it has been held in no uncertain terms that for determination of the market value the only procedure required to be adopted by the Collector is that of determination of compensation under the Land Acquisition Act. The collector having failed to do so could not have determined deficiency in stamp duty as has been done in the present case. In view of the aforesaid fact and with regard to the decision of this Court in the case Ram Khelawan (Supra), the order of the Collector passed under section 47-A (3) cannot be sustained and is hereby set aside. Consequently, the order of the Commissioner passed under section 56 (1-A) of the Indian Stamp Act also cannot be sustained and is hereby quashed.
It is further directed that any amount deposited by the petitioner pursuant to the aforesaid demand shall be refunded back to the petitioner within a period of two months from the date of presentation of a certified copy of this order. However, after a lapse of two months, the petitioner would be entitled to interest on the said amount at the rate of 10% per annum till its actual payment. It is also made clear that the authorities are at liberty to proceed a fresh against the petitioner in accordance with law, if law permits.
Subject to aforesaid observations, the writ petition succeeds and is allowed.
Order Date :- 4.2.2010 VS.