2011 (9) TMI 957 - SC - Indian Laws

Whether the determination of the value of the property purchased by the appellant and the demand of additional stamp duty made by the appellant by the Additional Collector were exorbitant so as to call for interference under Article 226 of the Constitution?

Summary

Issues Involved:

1. Valuation of the property and determination of stamp duty.
2. Constitutional validity of the proviso to Section 65(1) of the Rajasthan Stamp Act, 1998.
3. Availability and efficacy of alternative remedies under the Rajasthan Stamp Act, 1998.
4. Jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India.

Detailed Analysis:

1. Valuation of the Property and Determination of Stamp Duty:

The appellant purchased a plot for Rs. 18 lacs, but the Sub-Registrar determined the value at Rs. 2,58,44,260/-, resulting in a demand for additional stamp duty, registration charges, and penalty totaling Rs. 15,70,000/-. The appellant contended that the plot was for residential purposes and cited lower valuations of adjacent plots. The Additional Collector upheld the Sub-Registrar's valuation and demand.

2. Constitutional Validity of the Proviso to Section 65(1) of the Rajasthan Stamp Act, 1998:

The appellant challenged the proviso to Section 65(1) of the Act, which requires a deposit of 50% of the recoverable amount before a revision application is entertained, as arbitrary and unconstitutional. The High Court upheld the proviso's validity, relying on a previous decision in M/s Choksi Heraeus Pvt. Ltd. v. State & Ors., which distinguished it from the Mardia Chemical Ltd. case, where a 75% pre-deposit was deemed onerous. The Supreme Court affirmed that the proviso to Section 65(1) is constitutionally valid, as it pertains to the revisional stage, not the initial adjudication.

3. Availability and Efficacy of Alternative Remedies:

The High Court dismissed the appellant's writ petition, suggesting the alternative remedy of revision before the Board of Revenue. However, the Supreme Court noted that the High Court should have considered whether the valuation and demand were exorbitant, potentially making the revision remedy ineffective. The Supreme Court emphasized that in cases of arbitrary or exorbitant demands, the High Court could intervene under Article 226.

4. Jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India:

The High Court initially dismissed the writ petition, citing the availability of an alternative remedy. The Supreme Court, however, highlighted that the High Court should have examined the facts to determine if the demand was exorbitant, justifying intervention under Article 226. The Supreme Court remanded the case to the High Court for fresh consideration, emphasizing the need to evaluate the reasonableness of the valuation and demand.

Conclusion:

The Supreme Court upheld the constitutional validity of the proviso to Section 65(1) of the Rajasthan Stamp Act, 1998, requiring a 50% deposit for revision applications. However, it remanded the case to the High Court to assess whether the valuation and demand were exorbitant, thereby justifying intervention under Article 226. The appeal challenging the High Court's dismissal was allowed, and the case was sent back for fresh consideration.