The Allahabad High Court has said stamp duty cannot be imposed on the sale deed of agricultural and residential land on the basis of the future potential of the land becoming commercial.
A single-judge bench of Justice Piyush Agrawal heard the petition filed by Anupam Varshney.
The petition has been filed assailing the order dated 30.11.2018 passed by the respondent no 2 as well as the order dated 22.7.2019 passed by the respondent no 3 in the proceeding under Section 47 A/ 33 of the Stamp Act.
Counsel for the petitioner submitted that vide registered sale deed, petitioner purchased agricultural/ residential property after paying requisite stamp duty in accordance with the prevalent circle rate.
He further submitted that after execution of sale deed, an inspection was made in the absence of the petitioner and thereafter a report was prepared by which deficiency of stamp duty was pointed out.
Thereafter, a notice was sent to the petitioner of which the petitioner has raised an objection, but being not satisfied with the same, the impugned order has been passed holding deficiency of stamp together with penalty and interest. The petitioner challenged the order in appeal but the same has also been dismissed without considering the matter in proper perspective.
Counsel for the petitioner also submitted that construction of boundary wall was admitted at the time of inspection, which itself proved that no boundary wall existed at the time of execution of sale deed.
Counsel for the petitioner said that at the time of execution of the sale deed, the land in question was agricultural land and no other activity was going on.
He further said that prior to passing of the impugned order, the authorities were required to make spot inspection in accordance with Rule 7 (3) (c) of UP Stamp (Valuation of Property) Rules 1997 but no spot inspection was made in the presence of the petitioner.
He also said that in the grounds of appeal, a specific plea has been made that there is no compliance of rule 7(3)(c) of UP Stamp (Valuation of Property) Rules 1997, but the impugned order has been passed.
He next submitted that the character of the land cannot be the basis of its future potential and as such, the impugned orders are bad and liable to be quashed.
Per contra, ACSC supports the impugned orders and submitted that the petitioner’s land was having commercial value, which was wrongly described as agricultural land and therefore, the proceedings have rightly been initiated against the petitioner.
“It is not in dispute that the property was purchased as agricultural / residential property and impugned orders indicate that compliance of Rule 7(3) (c) of the Rules has not been made. The proceedings under section 47-A of the Stamp Act were initiated on the basis of inspection report, which has been made in the absence of the petitioner, but in spite of the specific ground having been taken in the appeal with regard to non-compliance of rule 7(3)(c) of the Rules, no finding was recorded with regard to the same.
The Court in Jagroop Singh Vs State of UP & 2 Others; decided on 15.07.2024 has held that in absence of compliance of rule7(3)(c) of the Rules, the impugned order cannot be justified,” the Court observed while allowing the petition.
In view of the facts and circumstances of the case as well as the law laid down by the Court, the impugned orders passed in all the aforesaid writ petitions, cannot be sustained in the eyes of law and same are hereby quashed by the high court.
The Court directed the authority concerned to refund any amount deposited by the petitioner either pursuant to the impugned orders or in pursuance of the direction made by the Court, along with interest @ 4% per annum from the date of its deposit till the date of refund, within a period of one month from the date of production of a certified copy of the order.