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Reassessment of stamp duty and penalty as per stamp act by addl. collector – found wrong=The District Magistrate, Lucknow made a spot inspection of the property in question on 21.07.2003. During inspection, the land has been found having an area of 12,099 sq. ft. with a two storey building having an area of 5,646.3 sq. ft. at ground floor and an area of 5192.3 sq. ft. at the first floor. In the inspection report, the property in question has been valued for Rs. 3,87,74,097/- and the stamp duty on the said property has been calculated by the competent authority as Rs. 38,78,000/-. However, at the time of purchase, respondents herein paid Rs. 15,53,000/- as Stamp duty, 2 =Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty.

REPORTABLE

Map of Lucknow in 1909

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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 735 OF 2012

(Arising out of SLP (C) No. 33851 of 2009

 

 

State of U.P. & Ors. …. Appellant (s)

 

Versus

 

Ambrish Tandon & Anr. …. Respondent(s)

 

 

J U D G M E N T
P. Sathasivam, J.
1) Leave granted.

 

2) This appeal is filed against the final judgment and order

 

dated 25.01.2007 passed by the Division Bench of the High

 

Court of Judicature at Allahabad in Writ Petition No. 732

 

(M/B) of 2005 whereby the Division Bench while allowing the

 

petition filed by the respondents herein issued a writ in the

 

nature of certiorari quashing the impugned order dated

 

 

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27.09.2004 passed by the Additional Collector (Finance &

 

Revenue), Lucknow and the demand notice dated 20.01.2005.

 

3) Brief Facts:

 

a) A Sale Deed dated 16.04.2003 was executed between Har

 

Charan Singh and the respondents herein in respect of the

 

property situated at 17/1 Ashok Marg, Lucknow measuring

 

11,029 sq. ft. and registered as Sale Deed Document No. 5341

 

of 2003. The total value of the property was computed as Rs.

 

1,55,28,860/- for the purposes of Stamp Duty and the

 

respondents herein paid Rs. 15,53,000/- as stamp duty.

 

b) The District Magistrate, Lucknow made a spot inspection

 

of the property in question on 21.07.2003. During inspection,

 

the land has been found having an area of 12,099 sq. ft. with

 

a two storey building having an area of 5,646.3 sq. ft. at

 

ground floor and an area of 5192.3 sq. ft. at the first floor. In

 

the inspection report, the property in question has been

 

valued for Rs. 3,87,74,097/- and the stamp duty on the said

 

property has been calculated by the competent authority as

 

Rs. 38,78,000/-. However, at the time of purchase,

 

respondents herein paid Rs. 15,53,000/- as Stamp duty,

 

 

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hence a deficiency of Rs. 23,50,000/- has been pointed out by

 

the authorities. The District Magistrate, vide report dated

 

26.07.2003, directed to register a case against the

 

respondents herein

 

c) On the basis of the aforesaid report, Case No. 653

 

Stamp-2003 under Sections 47A/33 of the Indian Stamp Act,

 

1899 (in short `the Act’) was registered. Vide order dated

 

27.09.2004, the Additional Collector (Finance & Revenue)

 

Lucknow directed the respondents to make good the deficiency

 

in the stamp duty and also imposed a penalty amounting to

 

Rs. 8,46,000/- for such tax evasion. On 20.01.2005, for

 

failure to deposit the aforesaid amount, a demand notice

 

claiming an amount of Rs. 38,30,500/- plus 10% recovery

 

charges was issued and the respondents herein were directed

 

to pay the said amount within a period of seven days.

 

d) Being aggrieved by the order dated 27.09.2004 and demand

 

notice dated 20.01.2005, the respondent filed a writ petition

 

being No. 732 of 2005 before the High Court. By order dated

 

25.01.2007, the High Court, while allowing the petition filed

 

by the respondents herein issued a writ in the nature of

 

 

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certiorari quashing the impugned order dated 27.09.2004

 

passed by the Additional Collector (Finance & Revenue),

 

Lucknow and the demand notice dated 20.01.2005.

 

e) Aggrieved by the said decision, the State has preferred this

 

appeal by way of special leave petition before this Court.

 

4) Heard Mr. Shail Kumar Dwivedi, learned Addl. Advocate

 

General for the appellant-State and Mr. K.V. Viswanathan,

 

learned senior counsel for the respondents.

 

5) The only question for consideration in this appeal is

 

whether the High Court is justified in interfering with the

 

order dated 27.09.2004 passed by the Additional Collector

 

(Finance and Revenue), Lucknow demanding differential

 

stamp duty with interest and penalty in respect of the sale

 

deed dated 16.04.2003 executed in favour of the respondents

 

herein. According to the respondents, through a registered

 

Sale Deed dated 16.04.2003 they have purchased the house

 

No. 17/1 Ashok Marg, Lucknow for a total sale consideration

 

of Rs.1.5 crores on which required stamp duty of Rs. 15.53

 

lakhs was paid. When the Additional Collector issued a notice

 

under Section 47A/33 of the Act, the respondents submitted

 

 

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objection dated 29.08.2003 stating that the extent, area and

 

valuation are in accordance with the revenue records and the

 

stamp duty paid by them on the sale deed was proper. It is

 

also stated by the respondents that before passing the order

 

dated 27.09.2004, the Additional Collector (Finance and

 

Revenue) Lucknow has not afforded sufficient opportunity to

 

them and the impugned order was passed in a most arbitrary

 

manner ignoring the objection submitted by them. It is also

 

stated that at the time of sale deed the house was a residential

 

property and in order to avoid unnecessary harassment at the

 

hands of the revenue and for the purpose of stamp duty and

 

registration they had valued the said property at the rate fixed

 

by the Collector, Lucknow treating the land as commercial at

 

the rate of Rs.11,300 per sq. metre. In other words, for the

 

purpose of stamp duty and registration, according to the

 

respondents, they added additional 10% to the value.

 

6) In support of the contention that they were not given

 

adequate opportunity by the Addl. Collector and order was

 

passed on a public holiday, before the High Court as well as in

 

this Court, the respondents herein have placed the order sheet

 

 

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which contains the various dates and the date on which the

 

ultimate decision was taken by him. It shows that the matter

 

was heard and decided on a public holiday. In all fairness, the

 

High Court instead of keeping the writ petition pending and

 

deciding itself after two years could have remitted the matter

 

to the Addl. Collector for fresh orders. However, it had gone

 

into the details as to the area of the plot, nature of the

 

building i.e. whether it is residential or non-residential and

 

based on the revenue records and after finding that at the time

 

of execution of the sale deed, the house was used for

 

residential purpose upheld the stand taken by the

 

respondents and set aside the order dated 27.09.2004 passed

 

by the Addl. Collector.

 

7) Learned counsel appearing for the appellant-State

 

submitted that as per the provisions of the Act and the Rules

 

made therein, there is a provision for appeal and instead of

 

resorting the same, the respondents have straightaway

 

approached the High Court by exercising writ jurisdiction

 

under Article 226 which is not permissible. A perusal of the

 

proceedings before the High Court show that the State was not

 

 

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serious in raising this objection relating to alternative remedy

 

and allowed the High Court to pass orders on merits, hence we

 

are not entertaining such objection at this juncture though it

 

is relevant. In fact, on receipt of the notice from the High

 

Court in 2005, the appellants who are respondents before the

 

High Court could have objected the writ petition filed under

 

Article 226 and sought for dismissal of the same for not

 

availing alternative remedy but the fact remains that

 

unfortunately the State or its officers have not resorted to

 

such recourse.

 

8) We have already held that it is the grievance of the

 

respondents that the orders were passed by the Additional

 

Collector on a public holiday. Regarding the merits though

 

the Collector, Lucknow made a surprise site inspection, there

 

is no record to show that all the details such as measurement,

 

extent, boundaries were noted in the presence of the

 

respondents who purchased the property. It is also explained

 

that the plot in question is not a corner plot as stated in the

 

impugned order as boundaries of the plot mentioned in the

 

freehold deed executed by Nazool Officer and in the sale deed

 

 

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dated 16.04.2003 only on one side there is a road. It is also

 

demonstrated that at the time of execution of the sale deed,

 

the house in question was used for residential purpose and it

 

is asserted that the stamp duty was paid based on the position

 

and user of the building on the date of the purchase. The

 

impugned order of the High Court shows that it was not

 

seriously disputed about the nature and user of the building,

 

namely, residential purpose on the date of the purchase.

 

Merely because the property is being used for commercial

 

purpose at the later point of time may not be a relevant

 

criterion for assessing the value for the purpose of stamp duty.

 

The nature of user is relatable to the date of purchase and it is

 

relevant for the purpose of calculation of stamp duty. Though

 

the matter could have been considered by the Appellate

 

Authority in view of our reasoning that there was no serious

 

objection and in fact the said alternative remedy was not

 

agitated seriously and in view of the factual details based on

 

which the High Court has quashed the order dated 27.09.2004

 

passed by the Additional District Collector, we are not inclined

 

to interfere at this juncture.

 

 

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9) Under these circumstances, we find no valid ground for

 

interference with the impugned order of the High Court.

 

Consequently, the appeal fails and the same is dismissed with

 

no order as to costs.

 

 

………………………………………….J.

(P. SATHASIVAM)

 

 

…………………………………………J.

(J. CHELAMESWAR)

NEW DELHI;

JANUARY 20, 2012.

 

 

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