Heard Counsel for the parties.
Learned Counsel for the petitioner submits that the petitioner purchased agricultural land out of Khasra No.108 Minjumla, measuring 0.0995 hectare, situated at Lucknow-Faizabad Road at Village Safedabad, Pargana Dewan, Tehsil Nawabganj, District Barabanki by means of registered sale deed on 24.01.2007. Thereafter, the Sub-Registrar sent a reference to the Collector reporting deficiency in stamp duty on which a case was registered under Section 47-A (3) against the petitioner. Without affording any opportunity of hearing to the petitioner, the Collector, Barabanki, opposite party no.2 passed the impugned order dated 3.11.2008. Feeling aggrieved, the petitioner preferred an appeal before the Commissioner, Faizabad, who in turn, dismissed the appeal vide order dated 16.3.2009 by which he upheld the order passed by the collector. Being aggrieved, he filed the instant writ petition assailing the order dated 3.11.2008 passed by the Collector, Barabanki and the order dated 16.3.2009 passed by the Commissioner, Faizabad Division, Faizabad, opposite party no.3.
State Counsel submits that the impugned orders are perfectly justified and there is no infirmity. He also submits that the petitioner has not produced any evidence regarding agriculture activities over the land in question.
In the case of Prakashwati v. Chief Controlling Revenue Authority, Board of Revenue;1996 AWC 1331, the Apex Court had held that situation of a property in an area close to a decent colony not by itself would make it part thereof and should not be a factor for approach of the authority in determining the market value. According to the said decision, valuation has to be determined on constructive materials which could be made available before the authorities concerned.
In Anirudha Kumar and Ashwini Kumar Versus Chief Controlling Revenue Authority [2000 (3) A.W.C. 2587] and Smt. Anasuya Singh vs. Commissioner, Faizabad Division [2008 (26) LCD 588], in which reliance has been placed by the petitioner, this Court has referred the aforesaid Prakashwati's case [supra] and observed as under:-
In the present case, the market value is to be determined on the basis of the value that would satisfy the vendor. Thus, the question of future potential cannot be a factor for determining the market value of such a land for the purpose of stamp duty payable under the Stamp Act. The vendee pays the price that satisfies the vendor and, therefore, it is the utility of the land as on the date of transfer by the vendor and as such, if the land was an agricultural land, it has to be treated as such and the valuation has to be done accordingly. Whether in future the purchaser puts the land into residential use or changes the character, is immaterial for the purpose of payment of stamp duty. The principle that has been laid down in P. Ram Reddy (supra) can be attracted for the purpose of determining the market value only to the extent of potential as on the date of transfer and not beyond. Thus, the market value has to be determined according to the factors, which includes the situation of the land, the amenities available in and around and various other factors, including the close proximity of the residential area as well as any transfer made immediately before the transfer or after the transfer in close proximity if such documents are produced in respect of the area that similarly situated land by either of the parties.
In Rakesh Chandra Mittal's case[supra] a Division Bench of this Court held:-
It is well settled that market value of the property has to be determined with reference to the date on which the document is executed. Market value as such keeps on varying and changing. Any subsequent improvement or change in the nature or user of the land, which may result into enhancement of the market value of the property on the date of execution of the document that is to be considered for the purpose of determination of property stamp duty payable on the instrument.
Apart from the above decisions, recently a Full Bench of this Court in the case of Shri Ramesh Chandra Srivastava, Kanpur v. State of U.P. and others; 2007 UPTC 335 held that the market value of the property has to be determined with reference to the date on which the document is executed. The valuation cannot be determined straightway on such an assumption that the land is situated in close proximity of 'abadi' area or on the presumption that the land is to be used for a purpose other than the agriculture. As averred above, the Full Bench of this Court has clearly held on the basis of the various provisions of the Stamp Act, that the market value is to be determined with reference to the date on which the document was executed and that any subsequent change in the nature or use of the land which may result in the enhancement of the market value of the property was not to be taken into account.
Thus, the legal position which emerges out from the aforesaid cases is that the market value of the land cannot be determined with reference to the use of the land to which buyer intends to put it. The market value is what a general buyer may offer and what the officer may reasonably expect. In determining the market value, the potential of the land as on the date of sale alone can be taken into account and not what potential it may have in the distant future. Any subsequent improvement or change in the nature or user of the land, which may result into enhancement of the market value of the property, is not to be taken into account and it is only the value of the property on the date of execution of the document that is to be considered for the purpose of determination of proper stamp duty payable on the instrument.
In addition to above legal proposition, it may be pointed out that the State Government has issued a Government Order dated 16.9.1999 to all the Divisional Commissioners, District Magistrates and Additional District Magistrates (Finance & Revenue), providing therein that while determining the valuation of the property under 1997 Rules, neither the future potential or use of the property nor the status of the purchaser (Organization, Society, Company etc.) will be taken into consideration.
Having considered the submissions made by the learned Counsel for the parties and the materials placed before this Court, it appears that the authority had proceeded to determine the value on the presumption that though the land is an agricultural land but it has not been purchased for the said purpose. The said presumption does not appear to be sound and reasonable.
Accordingly, the writ petition is allowed and the impugned order dated 3.11.2008( Annexure no.7) passed by the Collector, Barabanki, opposite party no.2 and the order dated 16.3.2009 (Annexure no.8 ) passed by the Commissioner, Faizabad Division, Faizabad, opposite party no.3 are hereby quashed. The opposite parties shall act accordingly.
Order Date :- 22.11.2011 RK/*