Munna Lal vs State of U.P. thorugh Principal Secy. Revenue Lucknow

Hon''ble Rajiv Sharma, J.—Heard learned Counsel for the parties.

By means of this writ petition, the petitioner has assailed the order dated 4.12.2010 passed by the Assistant Commissioner Stamp, District Bahraich imposing the deficiency in stamp duty and penalty in exercise of power provided u/s 47(A) of the Indian Stamp. The petitioner has also assailed the order dated 11.4.2011 passed by the Additional Commissioner Devi Patan Division, Gonda, District rejecting the appeal of the petitioner.

According to the petitioner, the petitioner purchased agricultural land for a sum of Rs. 30,000/- from the recorded tenure holders and paid the stamp duty as applicable on the agriculture land. He submits that inspite the facts that the land, which was purchased by the petitioner, was an agricultural land and it was not adjacent to abadi land and further the land in question was not declared as abadi land u/s 143 of U.P.Z.A & L.R. Act but the Assistant Commissioner, Stamp Bahraich, Bahraich, vide impugned order dated 4.12.2010, imposed the deficiency in stamp duty and penalty in exercise of power u/s 47 (A) of the Indian Stamp Act.He submits that against the order dated 4.12.2010, the petitioner filed an appeal before the Commissioner, Devi Patan Mandal, Gonda and the Commissioner, without looking the aforesaid facts, dismissed the appeal by the order dated 11.4.2011 and confirmed the order dated 4.12.2010 passed by the Assistant Commissioner. Learned Counsel for the petitioner submits that in pursuance to the impugned orders, the Tehsil authorities issued a recovery citation notice against the petitioner on 28.2.2011.

The legal position which emerges out from the aforesaid cases is that the market value of the land cannot be determined with reference to the use of the land to which buyer intends to put it. The market value is what a general buyer may offer and what the officer may reasonably expect. In determining the market value, the potential of the land as on the date of sale alone can be taken into account and not what potential it may have in the distant future. Any subsequent improvement or change in the nature or user of the land, which may result into enhancement of the market value of the property, is not to be taken into account and it is only the value of the property on the date of execution of the document that is to be considered for the purpose of determination of proper stamp duty payable on the instrument.

In Rakesh Chandra Mittal and Others Vs. Addl. District Magistrate and Another, , a Division Bench of this Court held:

It is well settled that market value of the property has to be determined with reference to the date on which the document is executed. Market value as such keeps on varying and changing. Any subsequent improvement or change in the nature or user of the land, which may result into enhancement of the market value of the property on the date of execution of the document that is to be considered for the purpose of determination of property stamp duty payable on the instrument.

Apart from the above decisions, recently a Full Bench of this Court in the case of Shri Ramesh Chandra Srivastava, Kanpur v. State of U.P. and others; 2007 UPTC 335 held that the market value of the property has to be determined with reference to the date on which the document is executed.

At this juncture, it would be useful to add that this Court in the case of Sarva Hitkarini Sahkari Awas Samiti Ltd. and Nishit Verma Vs. State of U.P. and Additional Collector/Magistrate, Finance and Revenue, has observed that the rules framed for determining market value under the Stamp Act and circle rates circulated under said rules are relevant only for initiation of proceedings u/s 47-A of Stamp Act. However, after initiation of the case the said rule becomes irrelevant and while deciding the case, market value shall be determined on the basis of general principles for determining market value which are applicable to the land acquisition matters. Moreover, future use of the property is not decisive.

Admittedly, the land was an agricultural land and was being used for agriculture purposes and therefore, it cannot be treated to be a residential or commercial plot. The valuation cannot be determined straightway on such an assumption that the land is situated in close proximity of ''abadi'' area or on the presumption that the land is to be used for a purpose other than the agriculture. As averred above, the Full Bench of this Court has clearly held on the basis of the various provisions of the Stamp Act, that the market value is to be determined with reference to the date on which the document was executed and that any subsequent change in the nature or use of the land which may result in the enhancement of the market value of the property was not to be taken into account.

Thus, the legal position which emerges out from the aforesaid cases is that the market value of the land cannot be determined with reference to the use of the land to which buyer intends to put it. The market value is what a general buyer may offer and what the officer may reasonably expect. In determining the market value, the potential of the land as on the date of sale alone can be taken into account and not what potential it may have in the distant future. Any subsequent improvement or change in the nature or user of the land, which may result into enhancement of the market value of the property, is not to be taken into account and it is only the value of the property on the date of execution of the document that is to be considered for the purpose of determination of proper stamp duty payable on the instrument.

Accordingly, the writ petition is allowed and the impugned order s dated 4.12.2010 passed by the Assistant Commissioner Stamp, Bahraich and the order dated 11.4.2011 passed by the Additional Commissioner Devi Patan Division, Gonda are hereby set-aside. Respondents shall act accordingly.

Costs easy.