stamps deficiency based on presumed future use of property for residential
purposes is sustainable- Held, ―No‖
Section 47A (3) as a plain reading of the provision would indicate
comes into operation if the Collector has before him material which may lead
him to believe that the market value of the property comprised in an instrument
has not been truthfully disclosed. In the present case the Collector proceeded in
the matter solely on the basis of the report of the Sub Registrar dated 7
February 2012. This report doubted the valuation of the property on the ground
that in the area abutting it, various residential houses had come up and that
Greater NOIDA had become a development hub. Bearing in mind the location
of the plot and its likely use, the Sub Registrar opined, it would be
inappropriate to value the property at agricultural rates. Court find that the very
bedrock upon which the opinion of the Sub Registrar based his report was
faulty and could not have consequently formed the basis for further action
under section 47A (3).
Court may note that on the date of execution of the instrument the land
was admittedly recorded as agricultural. In fact the Khasra of the property
remained unchanged throughout and continued to represent the land as 134
recorded for agricultural purposes. The respondents were in our opinion wholly
unjustified in initiating proceedings based on an unsubstantiated assumption
that the property in future was likely to be put to non-agricultural use.
The perceived or presumed use to which a buyer may put the property
in the future can never be the basis for adjudging its value or determining the
stamp duty payable. The Act, court may note is a fiscal statute. The taxable
event with which it concerns itself is the execution of an instrument which is
chargeable to duty. The levy under the statute gets attracted the moment an
instrument is executed. These propositions clearly flow from a plain reading of
the definition of the words "chargeable", "executed" and "instrument" as carried
in the Act. In the case of an instrument which creates rights in respect of
property and upon which duty is payable on the market value of the property
comprised therein, since the tax liability gets fastened immediately upon
execution it must necessarily be quantified on the date of execution. The levy
of tax or its quantum cannot be left to depend upon hypothetical or
imponderable facets or factors. The value of the property comprised in an
instrument has to be adjudged bearing in mind its character and potentiality as
on the date of execution of the instrument. For all the aforesaid reasons court
fail to find the existence of the essential jurisdictional facts which may have
warranted the invocation of the powers conferred by section 47A (3). Court
therefore of the firm opinion that the initiation of proceedings as well as the
impugned order based upon a presumed future use of the property for
residential purposes was wholly without jurisdiction and clearly unsustainable.
Court finds that the proceedings taken against the appellant were even
otherwise liable to be quashed outright. The reason which compels us to arrive
at the above conclusion is this.
HIGH COURT OF JUDICATURE AT ALLAHABAD
The Chief Justice's Court
Case: - SPECIAL APPEAL No. - 3 of 2016
Shri Sumati Nath Jain
V
State Of U.P. And Another
Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice
Hon'ble Yashwant Varma,J.
