IMPORTANT POINT
The potential of the land can be assessed on the date of execution of the instrument for determination by the Collector of the true market value. The valuation by the Collector must be based on adequate material and cannot be a matter of hypothesis or surmise. Spot verification is necessary, and the burden of proof lies on the State to establish the nature and potential use of the land.

JUDGMENT :

1. Heard learned counsel for the petitioner and the learned Additional Chief Standing Counsel for the State.

2. This writ petition under Article 226 of the Constitution of India has been filed assailing the order dated February 3, 2011 passed by the respondent No.2 in Stamp Case No.V-767/09-10 and the order passed in appeal dated October 17, 2011 by the respondent No.1 in Appeal No.21/2010-11.

3. The challenge in this writ petition is with regard to the additional stamp duty sought by the respondents-authorities having treated the land in question as a non-agricultural land.

CONTENTIONS OF THE PARTIES

4. Counsel appearing on behalf of the petitioner submits that the nature of the land at time of execution of the sale deed was agricultural in nature and it was forty metres away from the highway. He has submitted that the authorities have treated the land as non-agricultural land on the basis of another sale deed of an adjacent land that is nearer to the highway. He has further submitted that no spot verification was carried out as per Rule 7(3)(c) of the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 (hereinafter referred to as “the Rules”), which according to him is mandatory as has been pronounced time and again by this Court in various judgments including Ajay Agarwal and others v. Commissioner Lucknow and others reported in 2023 (2) ADJ 561 (LB), and Ram Khelawan alias Bachcha v. State of U.P. and another reported in 2005 (2) AWC 1087. Lastly, counsel for the petitioner submitted that at the relevant point of time, the land in question was agricultural in nature and there were no structures or any activity apart from agriculture being carried out on the said land. He has relied upon the judgment of the coordinate Bench of this Court in Raj Kumar v. State of U.P. and others (Writ-C No.19644 of 2016 decided on April 13, 2023) and the Full Bench judgment of this Court in Smt. Pushpa Sareen v. State of U.P. reported in (2015) 0 Supreme (All) 132 to support his arguments.

5. Per contra, learned Additional Chief Standing Counsel has also relied upon the judgment in Smt. Pushpa Sareen’s case (supra) to indicate that the Collector has the power to evaluate the value of a land depending on the potential use of the said land in question. He specifically relied upon paragraph Nos.26 to 28 of the aforesaid judgement to buttress his argument. He has fairly submitted that the spot verification was not carried out as per the said Rule and no notice of the same was given to the petitioner. He, however, submits that the valuation carried out by the Collector is in line with the principles established in law and in keeping with the potential use of the land in question.

ANALYSIS AND CONCLUSION

6. The Full Bench judgment of this Court in Smt. Pushpa Sareen’s case (supra) penned by Hon’ble D.Y. Chandrachud, C.J. (as he then was) has, in great detail, dealt with the power of Collector under Section 47-A of the Indian Stamp Act, 1899 (as applicable in the State of U.P.). The relevant paragraphs of the said judgment are provided below:

“26. The true test for determination by the Collector is the market value of the property on the date of the instrument because, under the provisions of the Act, every instrument is required to be stamped before or at the time of execution. In making that determination, the Collector has to be mindful of the fact that the market value of the property may vary from location to location and is dependent upon a large number of circumstances having a bearing on the comparative advantages or disadvantages of the land as well as the use to which the land can be put on the date of the execution of the instrument.

27. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being p