2018 Supreme(All) 2169

IN THE HIGH COURT OF ALLAHABAD
SALIL KUMAR RAI, J.
State Of U.P. Thru’ Sub Registrar-Sadar, Pratapgarh - Petitioner
Versus
Chief Controller Revenue Authority, U.P. & Others - Respondent
Writ - C No.45943 of 2016
Decided On : 09-08-2018

Headnote:

Indian Stamp Act, 1899 – Section 47-A(1)(d) and Section 47-A(2) – Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 – Rule 5(c)(ii) – Insufficient stamp duty –Property was situated had not been notified for offices and the building existing on the plot was not a commercial building under the Rules, 1997 – Challenging order – Held, While computing the stamp duty to be paid on any instrument, the market value of the property which is the subject of the instrument has to be determined – A perusal of Rule 3 of Rules, 1997 shows that in case of a building, the actual annual rent of the building is a relevant factor to be taken into consideration while determining its market value even if the building is a non-commercial building – While passing the order dated 30.11.2015, the CCRA did not consider the said factor – Order passed by CCRA allowing Appeal is also contrary to law and liable to be set-aside – Writ petition is allowed. (Para 10,11 and 12)

Facts of the case:

A sale deed dated 12.5.2015 of a plot measuring 510 sq. meter and a building constructed on 240.5 sq. meter of the said plot was executed in favour of respondent nos. 2 to 5. In the aforesaid sale deed, it was disclosed that the building was a residential building and stamp duty was accordingly computed and paid by the respondents. Subsequently, the Sub-Registrar submitted a report dated 15.5.2015 stating that the building was occupied by the Assistant Divisional Transport Officer and consequently a reference dated 25.5.2015 under Section 47-A(1)(d) of the Indian Stamp Act, 1899 (hereinafter referred to as, ‘Act, 1899) was made by the Assistant Inspector General of Registration to the Collector, Pratapgarh recommending that the market value of the property and the stamp duty to be paid on the sale deed dated 12.5.2015 had to be determined on the rates fixed for commercial building and according to Rule 5(c)(ii) of the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 (hereinafter referred to as, ‘Rules, 1997’). On the aforesaid report, Case No. 22 under Section 47-A(2) of the Act, 1899 was registered in the court of Collector, Pratapgarh and in the said case, show cause notice was issued to respondent nos. 2 to 5 who submitted their reply to the same. In their reply, respondent nos. 2 to 5 stated that they had not received any rent from the Assistant Divisional Transport Officer and as the building was a residential building and not a commercial building, therefore, its market value had to be determined by ascertaining the value of its construction and not on the minimum monthly rent fixed by the Collector for the area. The Collector, Pratapgarh vide his order dated 12.8.2015 rejected the defence of respondent nos. 2 to 5 and relying on the report of the Sub-Registrar held that the building was a commercial building and the market value of the property and the stamp duty to be paid on the sale deed had to be determined accordingly. In view of the aforesaid finding, the Collector determined the market value of the property by multiplying the total area of the plot i.e. 510 sq. meter with three hundred times the minimum rent fixed by the Collector for the area under Rule 4 of Rules, 1997 i.e. Rs.250/- per sq. meter. Consequently the Collector, Pratapgarh held that there was a deficiency of Rs.21,67,500/- in payment of stamp duty by respondent nos. 2 to 5 and therefore directed that the aforesaid amount along with a penalty of 5% on the said amount and an interest calculated at the rate of 1.5% per month be recovered from respondent nos. 2 to 5. Against the order dated 12.8.2015 passed by the Collector, Pratapgarh, respondent nos. 2 to 5 filed Appeal No. 175/2015-16 before the Chief Controlling Revenue Authority, Uttar Pradesh at Allahabad (hereinafter referred to as, ‘CCRA’) under Section 56 of the Act, 1899. The CCRA vide its order dated 30.11.2015 allowed Appeal No. 175/2015-16 and set-aside the order dated 12.8.2015 passed by the Collector on the ground that the area in which the property was situated had not been notified for offices and the building existing on the plot was not a commercial building under the Rules, 1997. In his order dated 30.11.2015, the CCRA held that there was no deficiency in payment of stamp duty on the sale deed dated 12.5.2015. The order dated 30.11.2015 passed by the CCRA in Appeal No. 175/2015-16 has been challenged by the State of Uttar Pradesh in the present writ petition.

Findings of the case:

While computing the stamp duty to be paid on any instrument, the market value of the property which is the subject of the instrument has to be determined – A perusal of Rule 3 of Rules, 1997 shows that in case of a building, the actual annual rent of the building is a relevant factor to be taken into consideration while determining its market value even if the building is a non-commercial building – While passing the order dated 30.11.2015, the CCRA did not consider the said factor – Order passed by CCRA allowing Appeal is also contrary to law and liable to be set-aside

Result: Writ petition is allowed