# Sanjay Maheshwari v. State of U.P. & Ors

- **Citation:** (2021) 11 ILRA 386
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-09-28
- **Case number:** Writ C No. 40261 of 2018
- **Bench:** Ajay Bhanot
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sanjay-maheshwari-v-state-of-u-p-ors-46559
- **Pages:** 3

## Headnote

C.S.C.

A. Stamp deficiency - Nature of land -
Small
scale
production
of
jiggery
-
Industrial activity - Competent authority
declared the land as agricultural land in a
proceeding u/s 144 of UPZA&LR Act, 1950
- However, Collector (Stamps) determined
the valuation holding that land was not
being used for agricultural purpose
-
Legality challenged - Held, Production of
jaggery on small scale is an agricultural
activity undertaken by small farmers. This
is clearly distinguishable from large scale
industrial production of jiggery - Small
scale production of jaggery is often made
by various village households. The same
cannot be categorized as industrial activity
for the purposes of the Indian Stamp Act -
High Court set aside the impugned order
holding it arbitrary and illegal - Matter
remanded back to the Collector (Stamp)
with several direction. (Para 5, 6 and 7)
Writ petition allowed. (E-1)

## Text

386 INDIAN LAW REPORTS ALLAHABAD SERIES
there was absolutely no other material existing
to treat the donations received by the Society
to be receipts of the Institution.

26. Similarly, the further reasoning
offered by the appellate authority to affirm
the order of the assessing authority is wholly
erroneous and contrary to law. Merely
because the assessee Society was the person
running the Institution, it did not cause any
legal effect of depriving the benefit of
Section 10(23C)(iiiad) which was activity
specific and had nothing to do with the other
income of the same assessee.

27. To complete the discussion, the
Tribunal has also erred in looking at
provisions Section 12 AA of the Act and the
fact that the donations received by the
Society may not have been received with
any specific instructions. It is not relevant in
the facts of the present case. It is so because
here the assessee had only claimed the
benefit
of
Section
10(23C)(iiiad)
with
respect to the receipts of the Institution,
Information Management and Technology
and it had not claimed any benefit with
respect to the donations received by the
Society.

28. In view of the above, the question
of law is answered in the negative i.e. in
favour of the assessee and against the
Revenue. There would be no clubbing of the
receipts of the Institution with the other
income of the Society, for the purpose of
considering
the
benefit
of
Section
10(23C)(iiiad).

29. Appeal Allowed. No order as to
costs.
----------
(2021)11ILR A386
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.09.2021

BEFORE

THE HON'BLE AJAY BHANOT, J.

Writ C No. 40261 of 2018

Sanjay Maheshwari ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Pawan Kumar Shukla

Counsel for the Respondents:
C.S.C.

A. Stamp deficiency - Nature of land -
Small
scale
production
of
jiggery
-
Industrial activity - Competent authority
declared the land as agricultural land in a
proceeding u/s 144 of UPZA&LR Act, 1950
- However, Collector (Stamps) determined
the valuation holding that land was not
being used for agricultural purpose
-
Legality challenged - Held, Production of
jaggery on small scale is an agricultural
activity undertaken by small farmers. This
is clearly distinguishable from large scale
industrial production of jiggery - Small
scale production of jaggery is often made
by various village households. The same
cannot be categorized as industrial activity
for the purposes of the Indian Stamp Act -
High Court set aside the impugned order
holding it arbitrary and illegal - Matter
remanded back to the Collector (Stamp)
with several direction. (Para 5, 6 and 7)
Writ petition allowed. (E-1)
(Delivered by Hon'ble Ajay Bhanot, J.)

1. The order dated 30.10.2017 passed by
the Collector (Stamps)/ District Magistrate,
Moradabad found that there is an old
dilapidated boundary wall around the disputed
land. Further the existence of sugar cane
crushing equipment attests the fact that the
land was not being used for agricultural
11 All. Sanjay Maheshwari Vs. State of U.P. & Ors.
387
purposes. On this footing it was found that the
land was not agricultural land. The valuation
of the land comprised in the instrument was
accordingly made and the stamp liability was
then determined.

2. The appellate authority agreed with
the findings of the adjudicating authority in
the impugned judgment dated 20.09.2018 and
affirmed its judgment.

3. Heard Sri Pawan Kumar Shukla,
learned counsel for the petitioner and Sri
Sanjay Goswami, learned Additional Chief
Standing Counsel for the State.

4. The appellate authority neglected to
consider the fact that parcel of land comprised
in the instrument had been declared as land to
be used for agricultural propose by the
competent authority in proceedings taken out
under Section 144 of the U.P.Z.A.& L.R. Act
by the judgment dated 19.07.2013. The sale
deed was executed on 30.06.2015. The
Collector Stamps/ Adjudicating authority as
well
as
the
appellate
authority
cannot
overreach
the
findings
and
declaration
regarding agricultural usage of land entered by
the competent authority in proceedings under
Section 144 of the U.P. Z.A & L.R. Act.

5. Production of jaggery on small scale is
an agricultural activity undertaken by small
farmers. This is clearly distinguishable from
large scale industrial production of jaggery.
There is no finding that the in the case at hand
at any point in time large scale production of
jaggery by industrial process was being made
on the disputed parcel of land. No existence of
any industrial unit capable of such large scale
production has been recorded in the impugned
order or disclosed from the record. Small scale
production of jaggery is often made by various
village households. The same cannot be
categorized as industrial activity for the
purposes of the Indian Stamp Act.

6. In the wake of preceding discussion
the impugned orders dated 20.09.2018 passed
by
respondent
No.
2/
Commissioner
Moradabad Mandal Moradabad as well as
order dated 30.10.2017 and 07.02.2018 passed
by respondent No. 3/ Collector Moradabad are
arbitrary and illegal and are liable to be set
aside and are set aside.

7. The matter is remitted to the
respondent no. 3/ Collector (Stamps)/ District
Magistrate, Moradabad with the following
directions:

(1) The respondent No. 3 shall
decide the controversy within a period of four
months from the date of receipt of copy of this
order downloaded from the official website of
the High Court of Judicature at Allahabad.
The concerned Court/ Authority/ Official shall
verify the authenticity of such computerized
copy of the order from the official website of
High Court Allahabad and shall make a
declaration of such verification in writing.

(2) The respondent No. 3 shall give
due opportunity of hearing to the petitioner.

(3) The respondent No. 3 shall
decide the controversy consistent with the
observations made in this judgment.

(4) The land comprised in the
offending instrument shall be treated as
agricultural land for the purpose of valuation
of property.

(5) The existence of sugar cane
crushers for production of jaggery, in the facts
of this case shall not be treated as proof of
industrial activity on the disputed parcel of
land.

8. The writ petition is allowed to the
extent indicated above.
----------
388 INDIAN LAW REPORTS ALLAHABAD SERIES
(2021)11ILR A388
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.10.2021

BEFORE

THE HON'BLE NAHEED ARA MOONIS, J.
THE HON'BLE SAUMITRA DAYAL SINGH, J.

Writ Tax No. 690 of 2015

M/s GEM AROMATICS PVT. LTD., Badaun
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri
Madan
Lal
Srivastava,
Sri
Naveen
Sinha(Senior Adv.)

Counsel for the Respondents:
C.S.C., Sri Akhilesh Tripathi, Sri C.B. Tripathi, Sri
S.K. Kakkar

A. Civil Law - U.P. Trade Tax Act, 1948 -
Sections 34 (1) & (2) - The property-in-dispute was
under the charge created 'in favour' of the State Bank
of India (SBI), till before the execution of the saledeed dated 16.07.2014. The sale deed was executed
in favour of the petitioner in pursuance of the One
Time Settlement reached between the 'assessee-indefault' and the SBI.

The Act created indefeasible right in the SBI by virtue
of its status as a 'banking company' as defined under
the Banking Act, occasioned by its charge over the
property-in-dispute. That indefeasible right cannot be
lost or diluted, merely because in the process of
recovering its dues, that bank chose to negotiate or
allow a third-party sale of the property-in-dispute, in
favour of the petitioner, instead of first obtaining title
in it. The words 'transfer in favour of banking
company' appearing in Section 34(2) of the Act are
wide enough to include within their plain ambit, a
transaction of this nature whereby instead of first
obtaining a transfer of the 'property-in-dispute', in its
own name, the SBI allowed that charged property to
be sold to the petitioner, for the same purpose, for its
benefit namely, to recover its dues from the
'assessee-in default'. (Para 30,31)
Writ Petition Allowed. (E-10)

List of Cases cited:-

1. Musahar Sahu & anr. Vs Hakim Lal &anr. AIR 1915
PC 115

2. Ma Pwa May & anr. Vs S.R.M.M.A. Chettyar Firm
AIR 1929 PC 279

3. Chogmal Bhandari Vs Deputy Commissioner Tax
Officer (1976) 3 SCC 749

4. U.O.I. Vs Rajeshwari & Co. & ors. (1986) 3 SCC
426

5. Dena Bank Vs Bhikabhai Prabhuda Parekh & CO. &
ors. (2000) 5 SCC 694

6. Reflex Industries & anr. Vs St. of U.P. & ors. 2004
(4) ACC 3471 (distinguished)

7. Madhav Rao Jivaji Rao Scindia Vs U.O.I. (1971) 1
SCC 85

8. U.O.I. Vs G.M. Kokil 1984 Supp SCC 196

9. Tirath Singh Vs Bachittar Singh AIR 1955 SC 830
(followed)

10. D. Saibaba Vs Bar Council of India (2003) 6 SCC
186

11. The Bank of Bihar Vs The St. of Bihar & ors.
(1972) 3 SCC 196

12. M/s Rana Girders Ltd. Vs U.O.I. (2013) 10 SCC
746

13. Principal Commissioner of Income Tax Vs Monnet
Ispat & Energy Ltd. 2018 (18) SCC 786

(Delivered by Hon'ble Naheed Ara Moonis, J.
&
Hon'ble Saumitra Dayal Singh, J.)

1. Heard Sri Navin Sinha, learned Senior
Counsel assisted by Sri Madan Lal Srivastava,
Sri Apoorv Hajela, learned Standing Counsel for
the revenue and Sri Sumit Kumar Kakkar,
learned counsel for the respondent- Bank.