2008 (8) TMI 1030 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the order dated 31.12.2007 by Additional District Magistrate, Kanpur Nagar.
2. Validity of the revision order dated 25.02.2008 by Chief Controlling Revenue Authority, U.P. Allahabad.
3. Deficiency of stamp duty and imposition of penalty under Section 33/47-A of the Indian Stamp Act.
4. Determination of market value of the property at the time of sale deed execution.

Detailed Analysis:

1. Validity of the Order Dated 31.12.2007 by Additional District Magistrate, Kanpur Nagar:
The petitioner challenged the order dated 31.12.2007, which imposed a stamp deficiency of Rs. 8,36,300/-, interest of Rs. 5,26,869/-, and a penalty of Rs. 6,831/-, totaling Rs. 13,70,000/-. The Additional District Magistrate relied on an ex-parte inspection report by the DIG (Registration) Kanpur Nagar, which indicated a deficiency in stamp duty. The petitioner argued that the market value was not correctly determined as per the date of the sale deed execution, and reliance on the circle rate was misplaced.

2. Validity of the Revision Order Dated 25.02.2008 by Chief Controlling Revenue Authority, U.P. Allahabad:
The petitioner also contested the revision order dated 25.02.2008, which upheld the Additional District Magistrate's decision. The petitioner claimed that both authorities failed to conduct a proper inquiry to ascertain the market value of the property on the date of the sale deed and unjustly relied on the circle rate.

3. Deficiency of Stamp Duty and Imposition of Penalty under Section 33/47-A of the Indian Stamp Act:
The petitioner purchased the property on 21.07.2004, paying Rs. 1,03,300/- as stamp duty based on a market value of Rs. 10,32,920/-. The land was agricultural at the time of purchase and later converted to industrial use on 25.11.2004. The authorities imposed a deficiency based on an ex-parte inspection conducted on 09.10.2006, which the petitioner argued was not a valid basis for determining the market value.

4. Determination of Market Value of the Property at the Time of Sale Deed Execution:
The court emphasized that the market value should be determined based on the property's status and value at the time of the sale deed execution, not on subsequent changes or circle rates. The court referred to several precedents, including Ram Khelawan v. State of U.P. and Kishore Chandra Agarwal v. State of U.P., which established that the market value should be determined using general principles akin to those in land acquisition cases, not merely on circle rates or ex-parte reports.

Conclusion:
The court quashed the orders dated 31.12.2007 and 25.02.2008, directing the authorities to reassess the market value of the property as of the date of the sale deed execution. The reassessment should be conducted in accordance with the law, considering the property's status at the time of the sale, and not relying solely on circle rates or ex-parte reports. The matter was remitted back for fresh determination within two months from the presentation of the certified copy of the court's order. The writ petition was allowed and disposed of accordingly.