The market value of the property for stamp duty purposes should be determined with reference to the date of execution of the document, and the Collector has no power to impose penalty under the Indian Stamps Act.

Krishna Murari, J.

By means of the present petition filed under Article 226 of the Constitution of India, the petitioner has challenged the order dated 24th February, 1990 passed by the Additional District Magistrate (Finance and Revenue), Moradabad under Sections 47 and 33 read with Section 40 of the Indian Stamps Act (hereinafter referred to as 'the Act').

2. We have heard Sri A.K. Gaur, learned counsel for the petitioners and the learned Standing Counsel for the respondents.

3. We are conscious of the fact that the petitioner has an alternative statutory remedy available u/s 56 of the Act before the Chief Controlling Revenue Authority, U. P. However, since the petition was entertained by this Court and was admitted in the year 1990 and remained pending for more than 13 years, we do not think it proper to relegate the petitioners to the forum of alternative remedy after lapse of such a considerable period.

4. The factual matrix as set out in the petition is that the petitioners purchased a land measuring 1.65 acre comprising of khasra plots No. 509 and 510/1 situate in village Maulagarh, Pargana and Tehsil Bilari, District Moradabad by means of sale deed dated 11-7-1985 registered on 18-9-1995 (1985). A total sum of Rs. 49,000/- was paid as consideration and a sum of Rs. 5,200/-was paid as stamp duty.

5. The Additional District Magistrate (Finance and Revenue), respondent No. 1 issued notices to the petitioners in March, 1989 almost three and half years of the execution of the sale deed on the ground that property had been undervalued in the instrument and directed the Tehsildar to make spot inspection and submit a report.

6. The petitioners submitted reply to the said notice stating therein that at the time of purchase, the land was being used for agricultural purposes and wheat crops was standing thereon and accordingly, proper stamp duty had been paid. It was further mentioned in the objection that after a long time of purchase of the land, the petitioners installed a small machine for extracting peppermint oil over a very small part of the said land. It was also pleaded that the land was neither situated in the industrial area nor abadi.

7. The respondent No. 1 vide order dated 24th February, 1990 determined the value of the land to Rs. 3,67,260/- and accordingly, levied a deficiency of Rs. 33,387/-towards stamp duty. A penalty of Rs. 33,000/- was also imposed.

8. We have gone through the impugned order of the respondent No. 1. A very strange and peculiar method has been adopted by respondent No. 1 for determining the value of the property. An area of 0.20 decimal over which the machine for extracting peppermint oil was installed has been held to be a commercial land and accordingly, the market value of the said area has been determined to Rs. 3,23,760/- by applying the commercial rate of Rs. 400/- per sq. mtr. The remaining area of 1.45 acre has been valued at Rs. 43,000/- treating it to be an agricultural land. Thus it is clear that if the market value of the land was determined treating the entire area to be an agricultural land, the stamp duty paid by the petitioners on the instrument would have been sufficient.

9. Two questions, which arise for our consideration, are -- firstly, whether the respondent No. 1 was justified in treating the part area of the land as commercial land and the other part as agricultural and secondly, whether he was empowered to levy any penalty.

10. There is no finding returned by the respondent No. 1 that the oil extracting plant was in existence on the land at the time of execution of the sale deed. The finding of the existence of the oil extracting plant is based on inspection by the Tehsildar which was done after more than three and half years of the execution of the sale deed. Even the petitioner stated in his objection that he has installed the machine after about three years of purchase of the land. It is well settled that market value of the property has to be determined with referen