Gyanprakas And Anr vs State Of Madhya pradesh And Others

This order will govern disposal of WP Nos. 6254/12, 6275/12, 6276/12, 6277/12, 6278/12, 6279/12, 6280/12, 6281/12, 6282/12, 6283/12, 6289/12,

6290/12, 6291/12, 6292/12, 6293/12, 6294/12, 6295/12, 6296/12, 6297/12, 6298/12, 6299/12, 6300/12, 6301/12, 6302/12, 6303/12, 6304/12, 6305/12,

6306/12, 6307/12, 6308/12, 6309/12, 6310/12, 6311/12, 6312/12, 6313/12, 6314/12, 6315/12, 6316/12, 6317/12, 6318/12, 6319/12, 6320/12, 6321/12,

6322/12, 6323/12, 6324/12 & 7398/12, since it is jointly stated by counsel for the parties that all writ petitions involve same issue in identical facts

situation.

2/ For convenience the facts have been noted from P No.6254/2012.

3/ This writ petition has been filed by petitioner challenging the order dated 31st August 2010 passed by Collector of Stamps as affirmed by order

dated 1/2/2011 in appeal by the Commissioner and the order dated 18th January 2012 in Second appeal by board of revenue.

4/ The case of petitioner is that petitioner was allotted plot no. 1498 Sudama Nagar Indore by respondent no. 4 in the year 1984 which is a registered

society. The area of plot is 30 X 50 =1500 sq.ft. and price paid by petitioner was Rs. 11,001/-. Further case of petitioner is that after allotment of plot,

the petitioner himself constructed house thereon in the year 1985 and on account of some legal complications, the registered instrument in respect of

plot was not executed by the society and after obtaining permission for registration by respondent no. 4 society the instrument for registration was

executed on 10/11/2009. But the Registrar had taken objection that value of the property was not correctly stated in the instrument therefore, the

matter was referred to the Collector of Stamps under Section 47-A of Indian Stamp Act. The Collector of Stamps vide order dated 31st August 2010

has held that the stamp duty will be calculated on the basis of value of the plot and construction raised thereon and has further held that market value

will be determined in reference to the date of execution of instrument. Accordingly the Collector of Stamp determined the market value at Rs.

16,81,000/- and treating construction to be more than 20 years old granted 10% exemption and calculated the stamp duty of Rs. 1,59,695/- and after

deducting the stamp duty of Rs. 1050 already paid, he demanded the balance stamp duty of Rs. 1,58,645/-.

5/ The first appeal preferred by petitioner has been dismissed by the Commissioner vide order dated 1/2/2011 by affirming the order of Collector of

Stamp and second appeal has also been dismissed by the Board of Revenue vide order dated 18th January 2012.

6/ Learned counsel for petitioner submits that stamp duty is payable on the value of the property as on the date of allotment i.e. the price paid by

petitioner to the society. He further submits that petitioner himself has constructed the house after allotment of plot therefore, value of the house

cannot be taken into account for the purpose of calculating stamp duty. He has further submitted that identical writ petition being WP No. 1556/06 has

already been decided by this court vide order dated 15/1/2008 and said writ petitioner has been held liable to pay the stamp duty on the basis of price

paid to the society for allotment of plot.

7/ As against this learned counsel for respondents have supported the impugned orders.

8/ Having heard the learned counsel for parties and on perusal of the record it is noticed that the first issue raised by petitioner relates to determination

of relevant date for calculating the value of the property for the purpose of payment of stamp duty.

9/ The contention of counsel for petitioner is that the date of allotment of plot in the year 1984 is the relevant date whereas the contention of

respondent is that date of execution of instrument i.e. 10/11/09 is the relevant date for ascertaining the market value.

10/ Explanation to Section 47A of Indian Stamp Act, 1899 inserted by MP Act 30 of 1997 w.e.f. 15/11/1997 in clear terms provides that:

“Explanation-For the purpose of this Act, Market Value of any property shall be estimated to be the price which in the opinion of the Collector or

the appellate authority, as the case may be, such property would have fetched or would fetch if sold in the open market on the date of execution of the

instrument.â€​

11/ A bare reading of the aforesaid explanation reveals that date of execution of the instrument is the relevant date for estimating the market value of

the property i.e. the price, such property would fetch if sold in the open market on that date.

12/ Similar issue had come up before this court in the matter of Smt. Harvinder Kaur and others Vs. State of MP and others reported in AIR 2007

MP 86 wherein the agreement was executed on 28/8/1978 and the date of tendering the documents was around 1997, this court has held that:

 “11. From perusal of the said section, it is clear that Registrar can demand additional stamp duty whenever he is of the opinion that market value

put forth in the document is not truly set forth in the instrument. Said section, nowhere indicates that the Registrar can exercise said power only in

case of fraud or evasion of stamp duty. The object of registration is not only to prevent the evasion of stamp duty but to provide authority to the

execution of document.

After perusing the aforesaid judgments in the case of Sub-Registrar, Kodad Town and Mandal (AIR 1998 AP 252) (supra), S.P. Padmavathi

(supra) and Smt. Shantidevi Prasad (AIR 2001 Pat 161) (supra), I find that said judgments are based on interpretation of Section 47-A of the Act as

applicable in their respective states. So far as State of Madhya Pradesh is concerned, the position is made clear by explanation of Section 47-A of the

Act, which was inserted by MP Act 30 of 1997 which came into effect from 15/11/1997. Said explanation read as under:

“Explanation-For the purpose of this Act, Market Value of any property shall be estimated to be the price which in the opinion of the Collector or

the appellate authority, as the case may be, such property would have fetched or would fetch if sold in the open market on the date of execution of the

instrument.

From reading of said explanation, it is clear that for the purpose of Indian Stamp Act, market value of any property shall be estimated to be the price

which in the opinion of the Collector or the appellate authority, as the case may be, such property would have fetched or would fetch if sold in the

open market on the date of execution of the instrument.â€​

13/ Having regard to the aforesaid, I am of the opinion that no error has been committed by the Collector of Stamps and appellate authorities in holding

that market value of the property will be determined in reference to the date of execution of the instrument.

14/ The next issue is as to whether while determining the market value, only the value of the plot which has been allotted by the society is to be taken

into account or the value of the house which according to petitioner has been constructed by him after allotment, could also be taken into account.

15/ Section 3 of the Stamp Act deals with the instrument chargeable with duty. Instrument has been defined under Section 2 (14) of the Act to include

every document by which any right or liability is or purported to be created, transferred, limited, extended, etc. Similarly Section 2(10) of the Act

defines conveyance to include a conveyance on sale and every instrument by which property, whether moveable or immovable is transferred inter

vivos and which is not otherwise specifically provided for by Schedule I. A perusal of the relevant provision of the Act reveals that the stamp duty is

payable on the value of the property which is subject matter of transfer in the instrument.

16/ Supreme court in the matter of State of UP and others Vs. Ambrish Tandon and another reported in AIR 2012 SC 1140 in a case where the

owner was claiming the house to be residential property whereas the Collector of stamps was treating the land as commercial has held that nature of

user is relatable to date of purchase and it is relevant for the purpose of calculation of stamp duty.

17/ This court also in the circumstances which are identical to the present case in the matter of State of MP Vs. M/s Godrej G.E. Appliances Ltd and

others reported in 2008 RN 414, where the sale deed was executed for open land and 68 sq.ft. old construction, has held that market value cannot be

determined on five storied building and duty has to be paid on transfer affected by instrument, by holding that:

 “6. In my opinion this approach of the Collector and Commissioner was illegal, misconceived and contrary to law with regard to the imposition of

duty of stamp. It is well settled in law that duty has to be paid on a transfer effected by the instrument and not on the basis of intentions or assumption

of parties to the sale deed in question. In the present case what is transferred is the open land only, there is nothing in the sale deed to indicate that the

so called five storied building or superstructure said to be existing over the land is also transferred by the sale deed in question.â€​

18/ Counsel for petitioner has also placed reliance upon circular No. 1245/ /2006 Bhopal dated 30th June 2006 issued by Mahanirikshak

Panjiyan MP to the effect that if after allotment of plot the construction has been raised by allottee then stamp duty is payable only on the value of the

plot. Though this circular is in respect of allotment by government and semi-government institutions but it reflects position of law in respect of charging

of stamp duty on such instruments.

19/ Having examined the impugned order, I am of the opinion that petitioners have been held liable to pay the stamp duty at the market rate on the

value of land as also house constructed thereon. The sale deed in question clearly mentions that allottee had constructed house on the plot, but the

impugned order reveals that petitioner’s plea in this regard has been rejected without any justifiable reason and without holding any enquiry in this

regard. The fact disclosed in the sale deed either should have been accepted by the authorities or if authorities intended to reject it, they should have

assigned due and proper reason.

20/ It has been pointed out that similar contention of another allottee in WP No. 1656/06 in case of Smt. Gangabai and another Vs. Board of Revenue

and others has already been allowed by the Coordinate Bench by judgment dated 15/1/2008 by setting aside the orders of Collector, Commissioner and

Board of Revenue and remanding the matter back to the Collector (Stamps) Indore for consideration of the controversy afresh.

21/ For the reasons assigned aforesaid, the impugned orders of Collector, Commissioner and Board of Revenue cannot be sustained and are hereby

set aside and the matter is remanded back to the Collector of Stamps for fresh decision in respect of subject matter of transfer in the instrument, after

giving an opportunity of hearing and conducting the enquiry, if required, in accordance with law. The signed order be placed in the record of WP No.

6254/2012 and copy whereof be placed in the record of connected writ petitions.

 C.c. as per rules.