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2014 Supreme(All) 40
ALLAHABAD HIGH COURT
Sudhir Agarwal, J.
Sarvoday Bahu Uddeshiya Vikas Samiti, Etawah -Appellant
Versus
Commissioner, Kanpur & Ors. -Respondent
C.M.W.P. No. 5888 of 2001
Decided On : 08-01-2014
For the Petitioner: Dinesh Pathak, Rakesh Pathak
For the Respondents: C.S.C.
The market value of property for stamp duty purposes should be determined based on its status at the time of the transaction, and subsequent use should not influence the determination of stamp duty.
Headnote:
Indian Stamp Act - Agricultural Land - 47-A of Indian Stamp Act, 1899 - 47-A
Fact of the Case:
The petitioner purchased an agricultural land but the respondents alleged that the land was purchased for commercial purposes and proceeded under Section 47-A of the Indian Stamp Act, 1899. The impugned order considered a spot inspection report to determine the true market value at the time of registration.
Finding of the Court:
The subsequent user of the land for commercial purposes does not justify an inference that the true market value was higher at the time of the transaction. The court considered the changes made to Section 47-A of the Act and emphasized that the market value should be determined based on the property's status at the time of the instrument's execution.
Issues: The main issue was the determination of the market value of the agricultural land at the time of registration and whether subsequent commercial use justifies an increase in stamp duty.
Ratio Decidendi: The court held that the market value should be based on the property's status at the time of the transaction and subsequent use should not influence the determination of stamp duty.
Final Decision: The writ petition was allowed, and the impugned orders were quashed.
Heard Sri Dinesh Pathak, learned counsel for the petitioner and learned Standing Counsel for the respondents.
2. It is contended that petitioner purchased an agricultural land in Gata No.61, area 0.37 acre vide sale deed dated 19.5.1997 but respondents proceeded under Section 47-A of Indian Stamp Act, 1899 (hereinafter referred to as "Act, 1899") alleging that subsequent commercial user shows that land was purchased for commercial purposes and liable for stamp duty on the rates admissible to commercial rates though at the time of transaction, it was an agricultural land and has been purchased accordingly by paying market value of agricultural property as existed.
3. From the impugned order dated 5.8.2000, it is evident that a spot inspection report was submitted by Tehsildar, Etawah on 16.7.1999 i.e. after more than two years and position as he found at that time has been taken into consideration to determine whether the instrument discloses true market value at the time of registration.
4. The subsequent user would not justify inference that the true market value is something higher than what it was stated in the instrument and there was deficiency of stamp duty. This question has repeatedly been considered by this Court and it has been held that potential value of land in future and future user will not justify determination of market value of property in a transaction on the date when instrument in question was executed/registered. When an instrument has disclosed consideration of property, subject of instrument, less than minimum value, Sub Registrar shall not register the instrument but refer it to the Collector for determination of market value of such property and proper duty payable thereon but where the value set forth in the instrument is more than minimum value as per Rule 340 but in view of registering authority it is less than true market value, he register the instrument and then refer it to Collector for determination of true market value. It was the position under Section 47-A(1) of Act, 1899 as stood before its amendment by U.P. Act No.38 of 2001.
5. Section 47-A has undergone substantial changes vide U.P. Act No.38 of 2001 and now after its amendment it reads as under:
47-A. Under-valuation of instrument.- (1) (a) If the market value of any property, which is the subject of any instrument, on which duty is chargeable on market value of the property as set forth in such instrument is less than even the minimum value determined in accordance with the rules made under this Act, the registering officer appointed under the Registration Act, 1908, shall, notwithstanding anything contained in the said Act, immediately after presentation of such instrument, and before accepting it for registration and taking any action under Section 52 of the said Act, require the person liable to pay stamp duty under Section 29, to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument for presenting again in accordance with Section 23 of the Registration Act, 1908.
(b) When the deficit stamp duty required to be paid under clause (a), is paid in respect of any instrument and the instrument is presented again for registration, the registering officer shall certify by endorsement thereon, that the deficit stamp duty has been paid in respect thereof and the name and the residence of the person paying them and register the same.
(c) Notwithstanding anything contained in any other provisions of this Act, the deficit stamp duty may be paid under clause (a) in the form of impressed stamps containing such declaration as may be prescribed.
(d) If any person does not make the payment of deficit stamp duty after receiving the order referred to in clause (a) and presents the instrument again for registration, the registering officer shall, before registering the instrument refer the same to the Collector for determination of market value of the
