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2008 Supreme(UK) 282
P. C. VERMA, J.
M/s. Haridwar Hotels Pvt. Ltd.
Versus
Chief Revenue Commissioner/Chief Controller, Revenue Tribunal, Uttaranchal Dehradun and Anr.
W. P. (M/S) No. 1130 of 2006
Decided on : 4-7-2008.
Alok Singh, learned Sr. Advocate, Assisted by Tarun Takuli, for Petitioner:J.P. Joshi, Chief Standing Counsel, for Respondents.
The stamp duty shall be payable on the consideration of the conveyance or on the market value of the immovable property, whichever is greater, and the revenue authorities cannot enhance the stamp duty based on the future use of the property, as it is not contemplated under the Stamp Act.
Headnote:
Stamp Duty - Property Valuation - Indian Stamp Act, 1899 - Section 3, Section 75, Schedule I-B - The court held that the stamp duty shall be payable on the consideration of the conveyance or on the market value of the immovable property, whichever is greater. The revenue authorities wrongly applied the rate contrary to the circle rate determined under the rules having the statutory force of law and enhanced the stamp duty based on the future use of the property, which is not contemplated under the Stamp Act. The court quashed the impugned orders and directed the respondents to refund the security amount deposited by the petitioner.
Fact of the Case:
The petitioner, an incorporated private limited company, purchased a piece of land in the residential area of municipal limits of Haridwar. An anonymous complaint alleged that the petitioner had paid lesser stamp duty on the conveyance. The Additional District Magistrate (Finance) imposed a penalty for the alleged shortfall in stamp duty, which was affirmed by the revisional Court.
Finding of the Court:
The court found that the revenue authorities wrongly applied the stamp duty rate and enhanced the duty based on the future use of the property, which is not contemplated under the Stamp Act. The court quashed the impugned orders and directed the respondents to refund the security amount deposited by the petitioner.
Issues: The issues revolved around the calculation of stamp duty on the conveyance of the purchased land and the application of circle rates and market value for stamp duty purposes.
Ratio Decidendi: The stamp duty shall be payable on the consideration of the conveyance or on the market value of the immovable property, whichever is greater. The revenue authorities cannot enhance the stamp duty based on the future use of the property, as it is not contemplated under the Stamp Act.
Final Decision: The writ petition was allowed, and the impugned orders were quashed. The respondents were directed to refund the security amount deposited by the petitioner.
This writ petition has been filed by the petitioner challenging the orders dated 1-8-2006 and 6-1-2006 passed by the Chief Revenue Commissioner/Chief Controller, Revenue Tribunal, Uttarakhand, Dehradun and Additional District Magistrate (Finance), Haridwar respectively. These orders are contained in Annexure 1 and Annexure 2 to the writ petition respectively.
2. Facts giving rise to these impugned orders are that the petitioner which is an incorporated private limited company purchased a piece of land measuring 2117.33 square metre pertaining to Khasra No. 91 in the residential area of municipal limits of Haridwar for a consideration of Rs. 25 lakhs from Sri Ashwani Kumar its owner.
3. The petitioner paid the stamp duty on Rs. 25,00,000/-.
4. An anonymous complaint was received by the Additional District Magistrate (Finance), Haridwar that the petitioner has paid lesser stamp duty on the conveyance (sale deed), by which the land was purchased. The Additional District Magistrate (Finance) after scrutiny of the sale deed found that in the sale deed the land was shown to be residential and at the time of sale deed the circle rate of the residential area was Rs. 3500/- per square metre and according to this, the ADM (Finance) has calculated Rs. 74,10,655/- as the value of the property. This amount was further multiplied by one and half times on the basis of the fact that the petitioner was a hotel company and was constructing a hotel and thus valued the property amounting to Rs. 1,11,16,000/-. According to the ADM (Finance), stamp duty was paid on Rs. 25,00000/- only and on the rest amount of Rs. 86,16,000/-, no stamp duty was paid. Therefore, stamp duty calculated on the rest amount was Rs. 8,61,600/- and by his order dated 6-1-2006, the ADM (Finance) imposed the penalty of Rs. 8,61,600/- and sent a notice of recovery of Rs. 17,23,200/-. Against this order, a revision under Section 56 of the Stamp Act was filed. The revisional Court, on the same reasoning as given by the ADM (Finance), affirmed the order of the ADM (Finance) and dismissed the revision.
5. I have heard learned Counsel for the parties and have gone through the record.
6. Stamp duty is liable to be paid under Section 3 of the Indian Stamp Act, 1899. The charging Section 3 provides that subject to the provisions of this Act and the exemptions contained in Schedule I, the instruments shall be charged with duty of the amount as indicated in the Schedule as the proper duty therefor. The proviso appended to Section 3 provides that except otherwise expressly provided in this Act, and notwithstanding anything contained in clauses (a), (b) and (c) of this Section or in Schedule I or I-A the following instruments shall, subject to the exemptions contained in Schedule I-A or I-B be chargeable with duty of the amount indicated in Schedule I-A or I-B as the proper duty therefor respectively. Sub-clause (ii) of clause (bb) appended to the proviso of Section 3 is relevant, which provides that in the case of instruments mentioned in Schedule I-B, on or after the date the U. P. Stamp (Amendment) Act, 1952, comes into force, and relates to any property situated, or to any matter or thing done or to be done in Uttar Pradesh, and is received in Uttar Pradesh. The instrument has been defined in sub-section 14 of Section 2 of the Stamp Act that the "Instrument" includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. Word 'Instrument' is used in word 'conveyance', which is defined under sub-section
10 of Section 2 of the Act, which reads that "Conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable is transferred inter vivos and which is not otherwise specifically provided for by Schedule I, Schedule I-A or Schedule I-B as the case may be. In article 23 of Schedule I-B appended to the Act, as applicable in the State of Uttar Pradesh and also a
