# Smt Raziya Kahtoon v. State of U.P. & Ors

- **Citation:** (2025) 12 ILRA 670
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-12-03
- **Case number:** Writ C No. 19818 of 2017
- **Bench:** Syed Qamar Hasan Rizvi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-raziya-kahtoon-v-state-of-u-p-ors-52965
- **Pages:** 18

## Headnote

(i) Whether, in proceedings under Section 47-A
of the Indian Stamp Act, 1899, it is incumbent
upon the Collector to inspect the property after
due notice to the parties to the instrument in
terms of Rule 7(3)(c) of the U.P. Stamp
(Valuation of Property) Rules, 1997; and
(ii)
Whether
any
inspection
report
not
conducted in accordance with Rule 7(3)(c) of
the Rules of 1997 could validly form the basis of
an order for recovery of alleged deficient stamp
duty.

HEADNOTE
Constitution of India, Art. 226 - Indian Stamp
Act, 1899, Ss. 47-A, 33 & 56(1) - U.P. Stamp
(Valuation of Property) Rules, 1997, R. 7(3)(c) -
Determination of market value - Deficiency of
stamp duty - Mandatory requirement of
inspection after due notice - Ex parte spot
inspection
report
-
Reliance
on
NaibTehsildar/Sub-Registrar report - Burden of proof
on State - Comparable sale - Potentiality and
nature of land to be assessed on date of
execution of instrument - Future use or
presumed commercial potential - Irrelevant
considerations
-
"Reason
to
believe"
-
Subjective satisfaction of Collector to be
founded on material - Recovery of registration
fee - No statutory power under Stamp Act

HELD:
The value of the land, in so far as it relates
to the Indian Stamp Act, 1899, can be
determined only with reference to the
date
on
which
the
document
was
executed and any subsequent change in
the nature or use of the land which may
result in the enhancement of the market
value of the property cannot be taken into
account. The market value of the land is
not liable to be determined with reference
to the use to which a buyer intends to put
it in future, and the market value of the
property
is
to
be
determined
with
reference to its character on the date of
execution of the instrument. The potential
of the land is to be assessed on the date of
execution of the instrument itself, and the
nature of use is relatable to the date of
purchase which is relevant for the purpose
of computing the stamp duty. Where,
however, the potential of the land can be
assessed on the date of execution of the
instrument itself by referring to exemplar
or comparable sale instances it may be
relevant and germane to determine the
true market value.
The Indian Stamp Act, 1899 does not
provide Collector to order recovery of any
deficiency in the payment of registration
fee and, in the absence of statutory
provision, the Collector could not pass any
order
for
recovery
of
deficiency
of
registration fee in proceedings under the
Stamp Act.
The registering officer, after registration
of the document, can refer the same for
adjudication before the Collector if the
subject matter of the instrument is found
prima facie undervalued and there are
reasons to believe that the same has been
done deliberately; the expression reason
to believe is not synonymous with the
subjective satisfaction of the officer and
the
satisfaction
must
be
based
on
objective
satisfaction
arrived
at
reasonably and on material avail

## Text

_Characters 0–39,982 of 61,845. This is a partial read: ask again with offset=39982 for what follows._

670 INDIAN LAW REPORTS ALLAHABAD SERIES
Representation of the People Act, 1951 are
similar
to
those
contained
in
the
Municipalities Act. Therefore, the principle
of law that the provisions contained in
Section 5 of the Limitation Act would not
apply to the election petitions filed under
the Representation of the People Act, will
also apply to the election petitions filed
under the Municipalities Act, 1916.

37. The aforesaid view is fortified by
the fact that the proviso appended to
Section 23 (2) of the Municipalities Act
provides that the provision contained in
Section 12 (2) of the Limitation Act would
apply to the election petitions filed under
this
Act.
When
the
legislature
has
specifically provided for application of a
particular provision of the Limitation Act
and has not made the other provisions
applicable to it, Section 5 of the Limitation
Act would not apply to the election
petitions filed under the Municipalities Act.

38. Although an election petition filed
under Section 20 of the Municipalities Act
is not a suit, it is an original proceeding
which has to be decided in the manner
provided for decision of suits. Section 5 of
the Limitation Act does not apply to suits.
For this reason also, Section 5 of the
Limitation Act would not apply to filing of
election petitions under the Municipalities
Act, 1916.

39.
In
view
of
the
foregoing
discussion, I am of the considered view that
the provisions of Section 5 of the
Limitation Act would not apply to an
election petition filed under Section 20 of
the Municipalities Act. The impugned
order dated 04.11.2025, passed by the
learned Additional District Judge, allowing
the application under Section 5 of the
Limitation Act is unsustainable in law and
the same is set aside. The judgment and
order dated 15.11.2025 allowing the
election petition is also unsustainable in
law as being barred by the limitation
period; the election petition was liable to be
dismissed.

40.
Accordingly,
the petition
is
allowed.
The
impugned
order
dated
04.11.2025, passed by learned Additional
District Judge (F.T.C.-I), Ambedkar Nagar
in Election Petition No.4 of 2023 is set
aside. Consequently the judgment and
order dated 15.11.2025 passed in the
aforesaid case is also set aside and the
election petition is dismissed. All necessary
consequences shall follow. It goes without
saying
that
the
office
order
dated
19.11.2025
issued
by
the
District
Magistrate, Ambedkar Nagar, appointing
an administrator as the office of the
Chairman, Nagar Panchayat, had fallen
vacant consequent to the election petition
being allowed, would ipso facto stand
nullified consequent to the dismissal of the
election petition and consequently the
petitioner shall be entitled to continue as
Chairperson
of
Nagar
Panchayat
concerned.
----------
(2025) 12 ILRA 670
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 03.12.2025

BEFORE

THE HON'BLE SYED QAMAR HASAN RIZVI, J.

Writ C No. 19818 of 2017

Smt Raziya Kahtoon ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Ratnesh Singh Tomar, Surya Prakash
12 All. Smt Raziya Kahtoon Vs. State of U.P. & Ors.
671
Counsel for the Respondents:
C S.C.

ISSUE FOR CONSIDERATION
(i) Whether, in proceedings under Section 47-A
of the Indian Stamp Act, 1899, it is incumbent
upon the Collector to inspect the property after
due notice to the parties to the instrument in
terms of Rule 7(3)(c) of the U.P. Stamp
(Valuation of Property) Rules, 1997; and
(ii)
Whether
any
inspection
report
not
conducted in accordance with Rule 7(3)(c) of
the Rules of 1997 could validly form the basis of
an order for recovery of alleged deficient stamp
duty.

HEADNOTE
Constitution of India, Art. 226 - Indian Stamp
Act, 1899, Ss. 47-A, 33 & 56(1) - U.P. Stamp
(Valuation of Property) Rules, 1997, R. 7(3)(c) -
Determination of market value - Deficiency of
stamp duty - Mandatory requirement of
inspection after due notice - Ex parte spot
inspection
report
-
Reliance
on
NaibTehsildar/Sub-Registrar report - Burden of proof
on State - Comparable sale - Potentiality and
nature of land to be assessed on date of
execution of instrument - Future use or
presumed commercial potential - Irrelevant
considerations
-
"Reason
to
believe"
-
Subjective satisfaction of Collector to be
founded on material - Recovery of registration
fee - No statutory power under Stamp Act

HELD:
The value of the land, in so far as it relates
to the Indian Stamp Act, 1899, can be
determined only with reference to the
date
on
which
the
document
was
executed and any subsequent change in
the nature or use of the land which may
result in the enhancement of the market
value of the property cannot be taken into
account. The market value of the land is
not liable to be determined with reference
to the use to which a buyer intends to put
it in future, and the market value of the
property
is
to
be
determined
with
reference to its character on the date of
execution of the instrument. The potential
of the land is to be assessed on the date of
execution of the instrument itself, and the
nature of use is relatable to the date of
purchase which is relevant for the purpose
of computing the stamp duty. Where,
however, the potential of the land can be
assessed on the date of execution of the
instrument itself by referring to exemplar
or comparable sale instances it may be
relevant and germane to determine the
true market value.
The Indian Stamp Act, 1899 does not
provide Collector to order recovery of any
deficiency in the payment of registration
fee and, in the absence of statutory
provision, the Collector could not pass any
order
for
recovery
of
deficiency
of
registration fee in proceedings under the
Stamp Act.
The registering officer, after registration
of the document, can refer the same for
adjudication before the Collector if the
subject matter of the instrument is found
prima facie undervalued and there are
reasons to believe that the same has been
done deliberately; the expression reason
to believe is not synonymous with the
subjective satisfaction of the officer and
the
satisfaction
must
be
based
on
objective
satisfaction
arrived
at
reasonably and on material available on
record;
enquiry
by
the
Registering
Authority is a pre-condition for making
reference to the Collector.
The
report
of
the
Registrar/UpMahanirikshak Nibandhan is only for the
purposes of initiation of proceedings
under Section 47-A of the Act and cannot
be read as evidence, and the burden to
prove that the market value of the
property has not correctly been disclosed
in the instrument is on the department,
which must be supported by exemplars or
comparable sale deed of any property in
the vicinity.
In the present case, no notice was served
to the petitioner as contemplated under
Rule 7(3) of the U.P. Stamp (Valuation of
Property) Rules, 1997 before carrying out
the inspection, and the Collector passed
the
impugned
order
determining
deficiency in stamp duty merely relying
upon the report submitted by the NaibTehsildar without any basis or proof,
without
considering
any
oral
or
672 INDIAN LAW REPORTS ALLAHABAD SERIES
documentary evidence. The impugned
orders do not refer to any document nor
any documentary evidence in the form of
comparable sale deed of any property in
the vicinity of the subject matter of the
instrument to indicate that the value of
the property comprised in the instrument
was higher than disclosed in the saledeed, and no other material was brought
on record to show that the subject matter
of instrument is commercial in nature.
Impugned orders were set aside and a
writ of mandamus was issued to refund
the
amount
deposited,
with
simple
interest at the rate of 6 per cent per
annum in case of default. The matter was
not remanded, as valuation under the
Stamp Act can be determined only with
reference to the date on which the
document
was
executed
and
any
subsequent inspection would be of no use
under law for determination of stamp duty
on the date of execution of the sale
deed.(Paras 34, 41-43, 48, 35-36, 32, 30-31,
47, 50-54) (E-5)

CASE LAW CITED
Ram Gopal v. State of U.P., 2009 (7) ADJ 185
(LB);
Ram Khelawan @ Bachcha v. State of U.P., 2005
(98) RD 511;
Ajay Agarwal v. Commissioner, 2023 (2) ADJ 561
(LB);
Reena Gupta v. State of U.P., (2020) 2 ADJ 162;
Smt. Leela Devi Shah v. State of U.P., (2014)
125 RD 297;
Smt. Pushpa Sareen v. State of U.P., (2015) 3
ADJ 136;
State of U.P. v. Ambush Tandon, (2012) 5 SCC
566;
Sumati Nath Jain v. State of U.P., 2016 (2) ADJ
533 (DB);
Haroon Ahmad v. State of U.P., 2012 (115) RD
803;
Sunil Jaiswal v. State of U.P., 2015 SCC OnLine
All 5904;
Neeraj Jain v. State of U.P., (2015) 11 SCC 437;
Chief Revenue Controlling Officer v. P. Babu,
2025 SCC OnLine SC 42;
Ganesh Chandra Agarwal versus State of U.P. &
others (Writ-C No. 11531 of 1996, decided on
15.09,2010)
Mohali Club, Mohali versus State of Punjab, AIR
2011 P&H 23 ;
G. Karmegam versus The Joint Sub-Registrar,
Madurai, 2007 SCC Online Mad 960;
Vijay Kumar and another Versus Commissioner,
Meerut Division and Anr., AIR 2008 All 176;
Ratna Shankar Dwivedi versus State of U.P and
others AIR 2012 ALL 100;
M/s. Maya Food And Vanaspati Ltd. Co. versus
Chief Controlling Revenue Authority (Board of
Revenue) Allahabad; 1990 (90) RD 57

List of Acts
Constitution of India;
Indian Stamp Act, 1899;
U.P. Stamp (Valuation of Property) Rules, 1997;
U.P. Zamindari Abolition and Land Reforms Act,
1950.

List of Keyword
Deficient stamp duty; Ex parte inspection; Rule
7(3)(c); Due notice; Market value; Comparable
sale; Potentiality of land; Future use; Reason to
believe; Burden of proof; Penalty; Registration
fee;
Independent
application
of
mind;
Perversity; Mandatory procedure.

CASE ARISING FROM
Challenge to the order dated 04.02.2016
passed by the Collector, Barabanki in Case
under Section 47-A/33 of the Indian
Stamp Act, 1899, and the revisional order
dated 24.05.2017 passed by the Deputy
Commissioner, Faizabad Division in Case
under Section 56(1) of the Indian Stamp
Act, 1899.

Appearances for Parties
Advs For Petitioner: Ratnesh Singh Tomar; Surya
Prakash
Advs For Respondents: C.S.C.; Abhishek Kumar
Pandey; Suresh Chandra Kushwaha; Mohd.
Kasim

(Delivered by Hon'ble Syed Qamar Hasan
Rizvi, J.)

1. Shri Surya Prakash & Shri Arsh
Bugga, learned counsels for petitioner; Shri
Abhishek
Kumar
Pandey,
learned
Additional Chief Standing Counsel along
12 All. Smt Raziya Kahtoon Vs. State of U.P. & Ors.
673
with Shri Suresh Chandra Kushwaha and
Shri Mohd. Kasim, learned Standing
Counsels for the State, are present.

2. By means of the present writ
petition, the petitioner has assailed the
order dated 04.02.2016 passed by the
Collector,
Barabanki
in
Case
No.
D20140412001297 under Section 47A / 33
of the Indian Stamp Act, 1899 and the
order dated 24.05.2017 passed by the
Deputy Commissioner, Faizabad Division,
Faizabad in Case No. C2016040000510,
under Section 56(1) of the Indian Stamp
Act, 1899, inter alia, praying for the
following reliefs:

"(i). Issue any writ, order or
direction in the nature of certiorari for
quashing of the impugned orders dated
04.02.2016 & 24.05.2017 contained as
annexure no.1 & 2 to this petition.

(ii). Issue a writ, order or
direction in the nature of mandamus
commanding the opposite parties to refund
the deposited amount along with interest in
pursuance of the impugned orders.

(iii). Issue such other order or
direction which this Hon'ble Court may
deem just and proper of the case."

4. The relevant facts of the case, in
brief, as have culled out from the pleadings
available on record are that the petitioner
purchased half portion of the plot of land
having Gata No. 2311 measuring half (1/2)
of the area 0.349 Hectare from one, Sri.
Maneesh Kumar, on 24.06.2013. The
boundary of plot no. 2311 is given as: East:
Land of Hospital, West: Pond, North: Land
of Mateen and others, South: Deva to
Kurshi Road.

5. It is pleaded by the petitioner that at
the time of registration of the Sale-Deed in
respect of the aforesaid plot of land, the
petitioner
paid
stamp
duty
@
Rs.
46,00,000/- (Rs. Forty Six Lacs only) per
hectare. She also paid 150% excess cost as
the land was within 100 meters from the
residential area and is adjoining to the
village. Thus, total value of the land as
calculated was Rs. 20,53,000/- (Rs. Twenty
Lacs Fifty Three Thousand only). Further,
being a lady, the petitioner paid 4% stamp
duty on the amount of Rs. 10,00,000/- (Rs.
Ten Lacs only) and 5% stamp duty on the
rest of the amount, accordingly, the total
stamp duty paid was Rs. 92,650/- (Rs.
Ninety Thousand Six Hundred and Fifty
only).

6. The Sub Registrar Fatehpur, based
on a spot inspection, submitted its Report
dated 20.08.2013 before the Assistant I.G.
Stamp mentioning therein some deficiency
of stamp duty. Accordingly, on the strength
of the said Report, a case under section
47A / 33 of The Indian Stamp Act was
registered as Case No. 42/(2013-14).
Consequently, notice was issued to the
petitioner, however, it is alleged in the writ
petition that the same was never served
upon the petitioner. The learned Collector,
Barabanki (opposite party no.3) finally
passed the order dated 28.07.2014 against
the petitioner.

7. The Collector, Barabanki (opposite
party no.3) vide the aforesaid order dated
28.07.2014 held that the plot of land is
situated at Kursi Road and at present a sawmachine / Aara machine is stalled in the
southern side of the plot of land. Further,
some shops also exist on the south side
road and a Primary Health Center is located
in the eastern side of the said plot. As per
the report, no agricultural activity was
found on the spot, although, as per the
Sale-Deed the plot of land was purchased
674 INDIAN LAW REPORTS ALLAHABAD SERIES
by the petitioner as agricultural land but in
view of the spot inspection report, stamp
duty at commercial rate is liable to be
determined. Accordingly, the Collector
(opposite party no.3) vide order dated
28.07.2014
imposed
penalty
of
Rs.
1,00,000/- (Rs. One Lac only) against the
petitioner by holding deficiency of stamp
duty amounting to Rs. 4,28,850/- (Rs. Four
Lacs
Twenty
Eight
Thousand
Eight
Hundred and Fifty only) along with simple
interest @ 1.5% per month with effect from
the date of execution of the sale deed i.e.
24.06.2013, to be recovered from the
petitioner.

 8. It has been pleaded on behalf of the
petitioner that it was only after receipt of
Recovery Certificate dated 30.08.2014, the
petitioner came to know about the aforesaid
order dated 28.07.2014 passed by the
Collector, Barabanki (opposite party no. 3).
Thereafter, she filed an application for
recall of the said order dated 28.07.2014
along with an application for condonation
of delay stating therein that neither any
notice was ever served upon her nor she
had any information about the said
proceedings and prayed therein that the
said ex-parte order dated 28.07.2014 is
liable to be recalled and for hearing of the
Case No. 42/(2013-14) afresh after due
opportunity of hearing. The Collector
(opposite party no.3) vide order dated
17.10.2014
recalled
the
order
dated
28.07.2014 with the condition of the
deposit of 25% amount of the stamp duty.

9. It is stated in paragraph 8 of the
Writ Petition that in compliance of the
order dated 17.10.2014, the petitioner
deposited Rs. 1,00,000/- (Rs. One Lac
only). against penalty and Rs. 32,250/- (Rs.
Thirty Two Thousand Two Hundred and
Fifty
only)
against
stamp
duty
on
26.11.2014.

10. During the course of proceedings,
the Collector (opposite party no.3) sought a
report from the Sub-Divisional Magistrate,
Fatehpur
which
was
submitted
on
26.03.2015 on the basis of the report
submitted by the Naib-Tehsildar, Kursi on
25.02.2015.

11. As per the report dated 25.02.2015
annexed as Annexure No.7 to the writ
petition,
the
Naib-Tehsildar,
Kursi,
Fatehpur conducted an inspection and
found a Primary Health Center and an Aara
Machine on the remaining half portion of
Gata No.2311, appurtenant to the plot of
land/ subject matter of instrument. It is also
mentioned in the said report that the plot of
land has not been declared non-agricultural
under Section 143 of the U.P. Zamindari
Abolition & Land Reforms Act, 1950 and
no construction was found over the same,
at the time of inspection.

12. Taking into consideration the
aforesaid report dated 26.03.2015, the
Collector (opposite party no.3) passed the
impugned
order
dated
04.02.2016.
Aggrieved by the said order, the petitioner
preferred Revision before the Court of
learned Deputy Commissioner, Faizabad
Division, Faizabad (opposite party no.2),
under Section 56(1) of the Indian Stamp
Act, 1899. The said revision came to be
registered
as
Revision
No.
C
2016040000510. The learned Revisional
Court vide the impugned order dated
24.05.2017, found no case for interference
in the order dated 04.02.2016 passed by the
Collector (opposite party no. 3), and
dismissed the said revision being devoid of
merit.
12 All. Smt Raziya Kahtoon Vs. State of U.P. & Ors.
675

13. The contention of the learned
counsel for the petitioner is that the report
dated 20.08.2013 submitted by the Sub
Registrar was made only on the basis of an
ex-parte inspection. Moreover, the Sub
Registrar, without any basis, proof or
document and in the most arbitrary manner,
calculated the estimated value of Aara
Machine to be of Rs. 2,00,000/- (Rs. Two
Lacs only); the value of trees standing on
the northern side of the land as Rs.
1,20,000/-
(Rs.
One
Lakh
Twenty
Thousand only) and the value of land to be
Rs. 1,06,30,000/- (Rs. One Crore Six Lacs
and Thirty Thousand only), which is totally
hypothetical rather unbelievable and as
such cannot be the basis for ascertaining
the value of the land.

14. It is stated on behalf of the
petitioner that she has already deposited Rs.
1,32,250/- (Rs. One Lac Thirty Two
Thousand Two Hundred and Fifty only) in
compliance of the order dated 17.10.2014
passed by the Collector (opposite party
no.3) and the rest of the amount of Rs.
50,750/-
(Rs.
Fifty
Thousand
Seven
Hundred and Fifty only) was deposited
after the final order passed by the Collector
(opposite party no.3).

15. Further, it is contended by the
learned counsel for the petitioner that the
report submitted by the Sub Divisional
Officer, Fatehpur dated 26.03.2015 is in
utter disregard to Rule 7(3)(c) of the U.P.
Stamp (Valuation of Property) Rules, 1997.
He submitted that the Collector (opposite
party no.3) never inspected the property nor
issued any notice to the concerned parties,
i.e. seller and purchaser and arbitrarily
imposed / determined deficiency in stamp
duty. It has been asserted on behalf of the
petitioner that determination of deficiency
in stamp duty without making any spot
inspection
or
without
recording
the
statement of any public officer / authority
or in the absence of cogent evidence /
material, in violation of the provisions of
Rule 7(3)(c) of the Rules of 1997 renders
the same as illegal and unsustainable under
law being dehors of relevant rules.

16. It is also argued on behalf of the
petitioner that the nature of the land is
recorded as agricultural in the revenue
records and has never been declared as
non-agricultural under Section 143 of the
U.P. Zamindari Abolition & Land Reforms
Act, 1950. The name of the petitioner was
entered in the revenue records vide order
dated 24.02.2016 passed by the competent
Revenue Court, and the penalty imposed by
the authority holding deficiency in stamp
duty, presuming future potentiality of the
land to be commercial is a clear violation
of the settled law on the subject. It has been
categorically stated by the learned counsel
for the petitioner that the plot of land has
never been used for commercial purposes
by the petitioner. The same reflects the
arbitrariness and the non-application of
mind by the respondent authorities while
passing the impugned orders.

17. It is also submitted that the
petitioner herself sold the property in
question to one Babu son of Nanhey
through
registered
Sale-Deed
dated
16.03.2016 and consequently his name has
been mutated in the revenue records vide
order dated 13.05.2016.

18. It is argued on behalf of the
petitioner
that
the
authorities
have
committed patent illegality in treating the
land as commercial only for the reason that
the land in question is situated near the
Primary Health Center, Powerhouse and
some shops constructed at the southern side
676 INDIAN LAW REPORTS ALLAHABAD SERIES
of the same. He further argued that the
report of the Sub Divisional Officer,
Fatehpur provides that on the other half
(1/2) portion of the said Gata No. 2311, an
Aara machine is found stalled but nowhere
it has been stated that the same was found
in
running
condition.
Therefore,
the
valuation of the Aara machine; the
valuation of the trees planted at the
northern side is totally baseless and the
allegation of evasion of stamp duty
amounting to Rs. 4,28,850/- (Rs. Four Lacs
Twenty Eight Thousand Eight Hundred and
Fifty only) is arbitrary, without any proof
and is bad in law being liable to be set
aside.

19. It is very categorically argued on
behalf of the petitioner that the petitioner
has not violated or breached any Rule. She
paid the entire stamp duty as per the then
'circle rate' duly fixed by the competent
authority and as such the impugned order
passed based on the presumption of future
use of the plot of land for commercial
purpose is totally arbitrary and illegal. It is
further submitted that in the present case, it
is not the subject matter of instrument on
which Aara machine was found stalled but
on the adjoining piece of land.

20. Per contra, the learned Counsel
appearing
for
the
State-respondents
submitted that the order dated 04.02.2016
passed by the Collector (opposite party
no.3) and the order dated 24.05.2017
passed by the Deputy Commissioner
(opposite party no.2), were passed after
taking into account the reports based on the
spot inspection that the existing nature of
the subject matter of instrument is nonagricultural rather commercial. Therefore,
the impugned orders do not suffer from any
illegality or perversity. To elaborate his
contention, the learned counsel for the
State-respondents submitted that petitioner
purchased the plot of land as agricultural
with the intention to evade the stamp duty
as the said plot of land is of commercial
potential. Thus, the petitioner has violated
section 27 of the Indian Stamp Act, 1899. It
is further submitted by the learned Counsel
appearing for the State-respondents that
only after one and a half (11/2) month of the
execution
of
the
sale-deed,
a
spot
inspection was carried out by the Sub
Registrar,
Fatehpur,
Barabanki
on
13.08.2013 and it was found that there was
no agricultural activity on Gata No. 2311 or
the land adjacent to it. Rather, the
abovementioned 'Ara Machine' was found
operational showing commercial activities
within the boundary of the said Gata No.
2311. Moreover, on the adjacent plot, a
Primary Health Centre, powerhouse, road
and shops on the southern side were found
constructed.

21. It is further submitted on behalf of
the respondents that the petitioner filed a
copy of the Khatauni in support of her case.
However, just to conceal the usage of the
land, no documents such as Khasra etc.
were produced by the petitioner before the
authorities in the said proceeding. It is also
submitted that since no legal partition has
been carried out on the said Gata No.
2311/0.349 Hectares, the petitioner is the
co-tenure holder of half of the whole
Rakba.

22. It is further submitted by the
learned counsel for the State-respondents
that half (1/2) portion of the land having
Gata
No.
2311
ad-measuring
0.349
Hectares, which comes to around 0.1745
Hectares or 1745 square meters, when
calculated as per the effective commercial
rate of Rs. 6000/- per square meter comes
to around Rs. 1,04,70,000/- (Rs. One Crore
12 All. Smt Raziya Kahtoon Vs. State of U.P. & Ors.
677
Four Lacs Seventy Thousand only); while
the estimated value of the 'Ara Machine' as
Rs. 2,00,000/- and the estimated value of
trees standing on the northern side of the
land as Rs. 1,20,000/- (Rs. One Lac Twenty
Thousand only) are added to Rs. 3,20,000/-
(Rs. Three Lacs Twenty Thousand only)
and thereafter the half (1/2) amount, which
comes to Rs. 1,60,000/- (Rs. One Lac Sixty
Thousand only) is further added to the price
of the land. In this way, the total comes to
around Rs. 1,06,30,000/- (Rs. One Crore
Six Lacs Thirty Thousand only) which is
the correct valuation of the non-agricultural
land that was purchased by the petitioner.
The total stamp duty payable on the said
land is Rs. 5,21,500/- (Rs. Five Lacs
Twenty One Thousand Five Hundred only),
whereas merely Rs. 92,650/- (Ninety Two
Thousand Six Hundred and Fifty only) as
stamp duty has been paid by the petitioner.
Therefore, prima facie evasion of stamp
duty amounting to Rs. 4,28,850/- (Rs. Four
Lacs
Twenty
Eight
Thousand
Eight
Hundred and Fifty only) has been found to
have been committed by the petitioner and
further a penalty amounting to Rs.
1,00,000/- (Rs. One Lac only) has been
imposed against the petitioner vide the
impugned Order passed by the District
Magistrate along with simple interest @
1.5% per month from the date of execution
of the sale deed and in spite of the fact that
as per the report submitted the Sub
Registrar, Fatehpur on the basis of spot
inspection,
non-agricultural
and
commercial activities were found on the
plot of land as an 'Ara Machine' was found
operational at the Gata No.2311.

23. It is contended on behalf of the
State-respondent that the conversion of the
land as per Section 142 and Section 143 of
the U.P. Zamindari Abolition and Land
Reforms Act, 1950 does not have any
bearing regarding the determination of
market value of a land under the Indian
Stamp Act and the valuation of the subject
matter of the instrument shall not be in any
way influenced by the provisions of the
said Act of 1950. In support of his
contention, he has placed reliance upon the
judgments passed by this Court in the cases
of Haroon Ahmad & Ors. versus State of
U.P., reported in 2012(115) R.D. 803 and
Sunil Jaiswal and Others versus State of
Uttar Pradesh and Others; reported in
2015 SCC OnLine All 5904.

24. Learned counsel appearing on
behalf of the State-respondents has also
placed reliance upon the judgment passed
by this Court in the case of Ganesh
Chandra Agarwal versus State of U.P. &
others (Writ-C No. 11531 of 1996, decided
on 15.09,2010), wherein a co-ordinate
Bench of this Court has held that it is not
only use of the land on the date of
registration which could have been taken
into consideration while determination of
market value, but the potentiality of land
could also be taken into consideration as
relevant factor for determination of correct
market value of land.

25. Having heard the rival contentions
of the learned counsels for the parties and
having perused the material available on
record, the issue for consideration before
this Court is whether the impugned orders
dated 04.02.2016 and 24.05.2017 passed by
the Collector, Barabanki (opposite part
no.3) and the Deputy Commissioner
(Stamp) (opposite party no. 2), Faizabad
Division
respectively,
whereby
the
instrument was found deficient in payment
of stamp duty and the penalty imposed
upon the petitioner are sustainable in law or
the same suffers from material irregularity
warranting interference by this Court in
678 INDIAN LAW REPORTS ALLAHABAD SERIES
exercise of its powers under Article 226 of
the Constitution of India.

26. Before entering into the merits of
the case, it would be apt to see whether for
the proceeding under Section 47-A of the
Indian Stamp Act, is it incumbent upon the
Collector to inspect the property after due
notice to the parties to the instrument.
Further, whether any inspection report
which
has
not
been
conducted
in
accordance with the provisions of Rule 7
(3) (c) of the Uttar Pradesh Stamp
(Valuation of Property) Rules, 1997, can
form the basis of an order for recovery of
deficient stamp duty?

27. For ready reference, Rule 7(3) of
the U.P. Stamp (Valuation of Property)
Rules, 1997, is extracted hereinbelow:

"Rule 7. (3): The Collector may-

a. Call for any information or
record from any public office, officer or
authority under the Government or a local
authority;

b. Examine and record the
statement of any public officer or authority
under the Government or the local
authority; and

c. Inspect the property after due
notice to the parties to the instrument."

28. A Coordinate Bench of this Court
in the case of Ram Gopal versus State of
U.P. and others, reported in 2009(7) ADJ
185 (LB), has observed that,

"13. ..The Uttar Pradesh Stamp
Valuation
of
Property
Rules,
1997
particularly Rule 7 provides the procedure
on receipt of a reference or when suo motu
action is proposed under Section 47-A of
the Stamp Act. The Rule 7(2) (c) provides
that the Collector may inspect the property
after
due
notice
to
parties
to
the
instrument. The complete reading of the
aforesaid rule clearly indicates that while
deciding the proceedings under Section 47A of the Stamp Act the Collector or its
authority
are
required
to
make
an
inspection after due notice to the parties to
the instrument. The proceeding under
Section 47-A of the Stamp Act shall not be
decided merely placing reliance on the ex
parte report of the Tehsildar or any
authority for that purpose. In the present
case the Tehsildar's report dated 3.5.2001
does not disclose as to whether any notice
was
given
to
the
petitioner
before
inspection of the land in question by the
Tehsildar. Rather it clearly shows that it
was an ex parte report. Hence the order
dated 26.7.2001 was passed in violation of
Rule 7(2) (c) of the U.P. Stamp Valuation
of Property Rule, 1997.''

(emphasis supplied by this Court)

29. Further, in the case of Ram
Khelawan @ Bachcha versus State of
U.P. and another; reported in 2005 (98)
RD 511, this Court also held that,

"25. It has been found in several
cases like the present one that the entire
basis of determination of market value for
the purpose of stamp duty is ex-parte report
of Tehsildar or other officer. Ex- parte
inspection report may be relevant for
initiating the proceedings under section 47A of Stamp Act. However, for deciding the
case no reliance can be placed upon the
said report After initiation of the case
inspection is to be made by the Collector or
authority hearing the case after due notice
to the parties to the instrument as provided
under Rule-7(3)(c) of the Rules of 1997.
Moreover, in the inspection report distance
12 All. Smt Raziya Kahtoon Vs. State of U.P. & Ors.
679
of the property from other residential or
commercial properties and road must be
shown and wherever possible sketch map
must also be annexed along with the report
so
that
correct
valuation
may
be
ascertained with reasoned certainty."

(emphasis supplied by this Court)

30. In the instant case, from the
perusal of the pleadings on record, it is
evident that no 'notice' was served to the
petitioner before carrying out the inspection
and the order dated 28.07.2014 was passed
on the basis of an ex-parte inspection
report. However, the said order was
recalled vide order dated 17.10.2014.
Subsequently,
inspection
report
dated
25.02.2015
was
obtained
from
Naib
Tehsildar, Kurshi. Although, the case of the
State-respondents is that the said inspection
was carried out after due information to the
counsel for the petitioner but there is
nothing on record to establish that any
'notice' was issued to the petitioner. In any
case, the 'notice' to the petitioner as
contemplated under Rule 7(3) of the U.P.
Stamp (Valuation of Property) Rules, 1997,
is lacking in the present case.

31. Now coming to the other aspect of
the matter that has been assailed by means
of in the present writ petition is that the
Collector (opposite party no. 3) before
passing
the
impugned
order
dated
04.02.2016, determining deficiency in
Stamp duty has not considered any oral or
documentary evidence and, has passed the
impugned order without any basis or proof
by
merely
relying
upon
the
report
submitted by the Niab-Tehsildar. Thus, the
said impugned order is in contravention to
the provisions of section 47-A (3) of the
Indian Stamp Act. This Court in the case of
Ajay Agarwal versus Commissioner,
reported in 2023 (2) ADJ 561 (LB)
observed that;

"18. The provisions of Section
47A (3) of the Act clearly prescribed that
prior to passing an order in terms of the
aforesaid provision, the Collector has to
satisfy himself, which in fact would mean
that he has to record his subjective
satisfaction with regard to the correctness
of
market
value
of
the
property.
Furthermore he is also required to record
reasons to believe that market value of such
property has not been truly set forth in the
instrument, whereafter he is also required
to determine the market value of his
property and duty payable thereon. Clearly
the Collector in exercise of power under
Section 47 A(3) of the Act as such is
required not to rely only on the spot
inspection report but also to record his
subjective satisfaction with regard to under
valuation of the instrument of transfer. As
such while passing orders under Section 47
of the Act, Collector cannot rely only on the
post inspection report."

32. A co-ordinate Bench of this Court
in the case of Reena Gupta versus State
of U.P. and others; reported in (2020) 2
ADJ 162 has held that the burden of
proving that the market value of the
property is more than that disclosed in the
Sale-Deed is to be discharged by the State.
From perusal of the record, it is evident that
the State has failed to discharge the said
burden as there is no document in the form
of comparable sale deed of any property in
the vicinity to indicate that the value of the
property comprised in the instrument is
higher than the value that has been
disclosed in the sale-deed.

33. Similar view has been taken by the
co-ordinate Bench of this Court in the case
680 INDIAN LAW REPORTS ALLAHABAD SERIES
of Smt. Leela Devi Shah versus State of
U.P. and others; reported in (2014) 125
RD 297, wherein this Court observed as
under,

"5. The deficiency in stamp duty
has been determined on the basis of the
report of Up-Mahanirikshak Nibandhan
dated 27.10.2006 without taking into aid of
any other independent evidence for the
purposes of determining market value of
the property and consequently deficiency in
stamp duty. The burden to prove that the
market value of the property has not
correctly been disclosed in the instrument
is on the department who asserts that there
is deficiency in stamp duty.

6. In the absence of any material
to prove that the market value disclosed in
the instrument is incorrect or on the lower
side, the authorities below could not have
determined the market value on the basis of
report of Up-Mahanirikashak Nibandhan.
It has been settled by various decisions by
this Court that the report of the Registrar/
Up-Mahanirikshak Nibandhan is only for
the purposes of initiation of proceedings
under Section 47-A of the Act and cannot
be read as evidence.

7. Thus, in the absence of any
evidence to prove that the market value of
the property in question has not correctly
been shown, the authorities below have
manifestly erred in law in simply relying
upon
the
aforesaid
report
of
UpMahanirikshak Nibandhan and determining
the market value of the property in
question."

34. From the perusal of the impugned
order dated 04.02.2016, it emerges that the
Collector (opposite part no. 3), on the basis
of the spot inspection report submitted by
the Naib Tehsildar, Kursi to the Sub
Divisional Magistrate, Fatehpur has drawn
inference that the subject matter of
instrument has not been purchased by the
petitioner for the agricultural purposes but
with the commercial point of view, the
same is not sustainable in the light of law
laid down by the Full Bench of this Court
in the case of Smt. Pushpa Sareen versus
State of U.P. & others; reported in
(2015) 3 ADJ 136, wherein it has been held
that the nature of use is relatable to the date
of purchase which is relevant for the
purpose of computing the stamp duty.
Where however the potential of the land
can be assessed on the date of execution of
the instrument itself by referring to
exemplar or comparable sale instances
which may be relevant and germane to
determine the true market value. The
relevant
paragraph
of
the
aforesaid
judgement is quoted herein below,

"27. The fact that the land was
put to a particular use, for instance, a
commercial purpose at a later point in
time, may not be a relevant criterion for
deciding the value for the purpose of Stamp
Duty, as held by the Supreme Court in State
of U.P. v. Ambush Tandon, 2012 (5) SCC
566. This is because the nature of the use is
relatable to the date of purchase, which is
relevant for the purpose of computing the
Stamp Duty. Where, however, the potential
of the land can be assessed on the date of
the execution of the instrument itself, that is
clearly a circumstance which is relevant
and germane to the determination of the
true market value. At the same time, the
exercise before the Collector has to be
based on adequate material and cannot be
a matter of hypothesis or surmise. The
Collector must have material on the record
to the effect that there has been a change of
use or other contemporaneous Sale Deeds
in respect of the adjacent areas that would
have a bearing on the market value of the
12 All. Smt Raziya Kahtoon Vs. State of U.P. & Ors.
681
property
under
consideration.
The
Collector, therefore, would be within
jurisdiction in referring to exemplars or
comparable sale instances which have a
bearing on the true market value of the
property that is required to be assessed. If
the sale instances are comparable, they
would also reflect the potentiality of the
land,
which
would
be
taken
into
consideration in a price agreed upon
between a vendor and a purchaser."

35. It is settled in law that the
registering officer, after registration of the
document,
can
refer
the
same
for
adjudication before the Collector, if it finds
the subject matter of instrument prima facie
undervalued and has reasons to believe that
the same has been done deliberately. Such
a reference is not a mechanical act, but the
Registering Authority should have basis for
coming to the conclusion of prima facie
undervaluation of the property. It is
incumbent upon the Registering Authority
to ensure that the process of section 47-A
(1) does not work as a mechanical tool of
oppression nor as a matter of routine,
without application of mind as to the
existence of any material or reason to
believe that there exists malafide intention
to evade payment of proper stamp duty. It
goes without saying that the belief must be
held in good faith. Further, there must be a
rational, relevant and strong foundation for
the formation of the belief. The expression
'reason to believe' means some material on
the basis of which the competent authority
can re-open the proceeding. In any case, the
satisfaction of the concerned authority is
necessary in terms of material available on
record. In the case of Mohali Club,
Mohali versus State of Punjab, reported
in AIR 2011 P&H 23, a co-ordinate bench
of the Punjab and Haryana High Court has
held that the expression 'reason to believe'
is not synonymous with the subjective
satisfaction of the officer. However,
satisfaction is necessary in terms of
material available on record, which should
be based on objective satisfaction arrived at
reasonably.

36.