State Of U.P. & Ors vs Ambrish Tandon & Anr

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.

8 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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