# The Institute of the Franciscan Clarist Sisters of the Most Blessed Sacrament v. State of U.P. & Ors

- **Citation:** (2020) 9 ILRA 537
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-02-18
- **Case number:** WRIT - C No. 23232 of 2007
- **Bench:** Pankaj Bhatia
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-institute-of-the-franciscan-clarist-sisters-of-the-most-blessed-sacrament-v-45997
- **Pages:** 16

## Headnote

538 INDIAN LAW REPORTS ALLAHABAD SERIES
C.S.C.

A. Civil Law - Indian Stamp Act,1899 - Section
47-A (3) & U.P. Stamp (Valuation of Property)
Rules
1997,-Rule
3(1)
(A)-applicationdeficiency of stamp duty-agriculture land was
purchased-no declaration u/s 143 U.P.Z.A. &
L.R. Act converting the land use from
agriculture to non-agriculture land had been
passed-there is no rule which authorises the
Collector to determine the valuation beyond
the mandate of Rule 3 (1) (A) solely on the
ground that in future the same may be used
for
non-agricultural
purpose-no
material
before the Collector to form a "reason to
believe"-"reason to believe" can not be
equated to a "reason to suspect"-impugned
orders are bad in law-mandatory deposit for
preferring an appeal shall be refunded to
petitioner
with
interest
@8%
per
annum.(Para 1 to 35)

B. Section 47-A (3) of the Stamp Act
confers the power on the Collector to take
steps for examining the instruments for
the purpose of satisfying himself as to
correctness of the market value of the
property, which is the subject matter of
the
instrument
and
if
after
such
examination he has reason to believe that
the market value of such property has not
been truly set forth, in such instrument,
he may determine the market value and
the duty payable thereon. (Para 29)

C. Rules 1997 in exercise of powers u/s
27, 47-A and 75 of the Act, which provide
for the manner in which the valuation of a
property is to be determined. Rule 3 of the
said Rules describes lands of following
four natures, being agricultural land, nonagricultural land, grove and garden and
buildings and the manner of valuation of
each of the category of land is clearly
specified in the said Rules. (Para 27)

The petition is allowed. (E-6)
List of cases cited: -

## Text

_Characters 0–39,746 of 55,325. This is a partial read: ask again with offset=39746 for what follows._

9 All. The Institute of Franciscan Clarist Sister of the most Blessed Sacrament Vs. State of U.P. & Ors. 537
also clearly passed beyond such period of
six months.

19. There is no material difference
between Section 13A of the Land Acquisition
Act, 1894 (hereinafter referred to as the Act of
1894) and Section 33 of the Act of 2013.
Section 33 of the Act of 2013, in our opinion,
is in pari materia of Section 13A of the Act of
1894 and hence, the principles propounded by
the Apex Court in the case of Naresh Kumar
(supra) while examining the scope of Section
33 of the Act of 2013 shall squarely govern the
exercise of power by a Collector or the
competent authority u/s 33 of Act of 2013.
The three judgements which have been relied
upon by the learned counsel for the respondent
no. 4 in support of his contention that the
competent authority under the facts and
circumstances of the case was fully justified in
reviewing its original awards, are of no
assistance to him.

20. In none of the cases relied upon
by the learned counsel for the respondent
no. 4, the scope of power of correcting a
clerical/arithmetical mistake in an order,
was examined.

21. Although learned counsel for the
respondent no. 4 has argued that by the
impugned award, the original awards have
been corrected but the reading of the two
awards tells an entirely different story.
There is not even a whisper in the
impugned award to the effect that any
correction was made in the original awards
and in fact the competent authority in the
garb
of
making
clerical/arithmetical
correction in the original awards, has
passed a fresh award which is not
permissible under the law.

22. The impugned award having been
passed by the competent authority without
any jurisdiction, cannot be sustained and
are liable to be quashed.

23. The writ petitions succeed and are
accordingly
allowed.
The
impugned
awards dated 15.05.2018 (Annexure No. 5
to WRIT - C No. - 25323 of 2019,
Annexure No. 6 to WRIT - C Nos. - 22248
of 2019 and 23046 of 2019 and Annexure
No. 9 to WRIT - C No. 19215 of 2019), is
hereby set-aside.

24. However, liberty is given to the
respondent no. 4 to pursue the remedy
available to him u/s 3G (5) of the Act. The
arbitrator shall decide the application, if
any, moved by the respondent no. 4 before
him without being influenced by the
observations made hereinabove.

25. Needless to say that status quo
with regard to the possession of the plots in
question shall be maintained till the
arbitration proceedings are finalized.
----------
(2020)09ILR A537
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.02.2020

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

WRIT - C No. 23232 of 2007

The Institute of the Franciscan Clarist
Sisters of the Most Blessed Sacrament
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri M.K. Gupta, Sri Jaideep Bedi, Sri J. Nagar,
Sri Pratik J. Nagar, Smt. Supriya Pratik Nagar

Counsel for the Respondents:
538 INDIAN LAW REPORTS ALLAHABAD SERIES
C.S.C.

A. Civil Law - Indian Stamp Act,1899 - Section
47-A (3) & U.P. Stamp (Valuation of Property)
Rules
1997,-Rule
3(1)
(A)-applicationdeficiency of stamp duty-agriculture land was
purchased-no declaration u/s 143 U.P.Z.A. &
L.R. Act converting the land use from
agriculture to non-agriculture land had been
passed-there is no rule which authorises the
Collector to determine the valuation beyond
the mandate of Rule 3 (1) (A) solely on the
ground that in future the same may be used
for
non-agricultural
purpose-no
material
before the Collector to form a "reason to
believe"-"reason to believe" can not be
equated to a "reason to suspect"-impugned
orders are bad in law-mandatory deposit for
preferring an appeal shall be refunded to
petitioner
with
interest
@8%
per
annum.(Para 1 to 35)

B. Section 47-A (3) of the Stamp Act
confers the power on the Collector to take
steps for examining the instruments for
the purpose of satisfying himself as to
correctness of the market value of the
property, which is the subject matter of
the
instrument
and
if
after
such
examination he has reason to believe that
the market value of such property has not
been truly set forth, in such instrument,
he may determine the market value and
the duty payable thereon. (Para 29)

C. Rules 1997 in exercise of powers u/s
27, 47-A and 75 of the Act, which provide
for the manner in which the valuation of a
property is to be determined. Rule 3 of the
said Rules describes lands of following
four natures, being agricultural land, nonagricultural land, grove and garden and
buildings and the manner of valuation of
each of the category of land is clearly
specified in the said Rules. (Para 27)

The petition is allowed. (E-6)
List of cases cited: -

1. St. Of U.P. Vs Ambrish Tandon & anr.,(2012)
SCC, Vol. 5, Pg 566
2. Surendra Singh & anr. Vs St. Of U.P. &
ors.,(2009) ADJ, Vol. 2, Pg 560

3. Rajesh Pandey Vs St. Of U.P. & ors., (2011)
ADJ, Vol. 4, Pg 801

4. Maya Foods & Vanaspati Ltd. Vs Chief Controlling
Revenue Authority; (1998) AWC, Vol. 4, Pg 636

5. Ratna Shanker Dwivedi Vs St. Of U.P. & ors..;
(2012) ADJ,Vol. 5, Pg 414

6. Dukhi Vs St. Of U.P. & ors.; (2013) ADJ,
Vol.6, Pg 622

7. Smt. Munni Devi Vs Chief Controlling Revenue
Authority & ors.; (2013) ADJ, Vol. 8, Pg 425

8. Varun Gopal Vs St. Of U.P. & ors.; (2015)
ADJ, Vol. 2, Pg 311

9. Sumati Nath Jain Vs St. Of U.P. & anr.;
(2016) ADJ, Vol. 2 Pg 533

10. Ashwani Kumar Vs St. Of U.P. & ors.; (2017)
ADJ, Vol. 2, Pg 661

11. Reena Gupta Vs St. Of U.P. & ors.; (2020)
ADJ, Vol. 2, Pg 162

12. Rajendra Kumar Vs St. Of U.P. & ors.,
(2011) 3, ADJ Pg 888

13. Sarvodaya Babu Uddeshiya Vikas Samiti Vs
Commr. Kanpur Div. & ors.; (2014) 1, ADJ Pg 415

14. M/s Prosperous Buildcon Pvt. Ltd. Vs St. Of
U.P. & ors.

15. Smt. Vijaya Jain Vs St. Of U.P. & ors.;
(2015) 9 ADJ 503

16. Smt. Pushpa Sareen Vs St. Of U.P.,(2015) 3
ADJ 136

17. Smt. Vijay Kumar & anr. Vs Commr., Meerut
Div.,Meerut & anr.;(2008) 3 AWC 2997

(Delivered by Hon'ble Pankaj Bhatia, J.)

1. The petitioner, a society registered
under the Societies Registration Act
9 All. The Institute of Franciscan Clarist Sister of the most Blessed Sacrament Vs. State of U.P. & Ors. 539
purchased a property by means of a sale
deed
dated
29.10.1998,
whereby
agricultural plots no. 774, 775, 784, 785,
786, 787, 789 and 790 admeasuring 9
Bigha, 12 Biswa from a Co-operative
Society for a total sale consideration of Rs.
25 Lakhs. The said land being agricultural
land, the stamp duty was paid in terms of
the Property Valuation Rules, valuing the
property at Rs. 66,36,000/-, which was the
prescribed rate by the Collector, Agra being
Rs. 30 Lakhs per hectare for agricultural
lands and consequently, the stamp duty was
paid thereupon.

2. A notice was served upon the
petitioners in exercise of powers under
Section 47-A of the Stamp Act proposing
to redetermine the stamp duty. The
petitioner-society
filed
its
objections
specifying therein that the land in question
was an agricultural land and the entire area
in the vicinity was undeveloped and thus
for the purposes of valuation, the property
was valued on the rates specified for
agricultural properties and thus requested
that show cause notice be dropped. An
affidavit was also filed by the petitionersociety specifically stating therein that no
declaration under Section 143 of the U.P.
Z.A. & L.R. Act was made in respect of the
property in question.

3. In support of the contentions of the
petitioner-society, a copy of the revenue
records as well as the map of the village
showing that the village is not even
connected to any road and the property was
surrounded by agricultural plots was filed
and evidence in the form of a sale deed
dated 3.11.1999 in respect of the land in the
same village, was also filed, wherein stamp
duty was charged at the rate of Rs.
30,000,00/- per hectare and in proceedings
arising out of the said sale deed, an order
had been passed in case no. 1223 of 1999
by the respondent no. 2 himself holding
that there were no deficiency in the stamp
duty. The petitioner has also filed herein a
Government Order dated 13th August,
1999, in which directions have been issued
directing that the future use of the property
should not be the basis for computation of
the stamp duty.

4. Despite the said objections, the
respondent no. 2 vide his order dated
28.1.2003 passed an order holding that
there was deficiency of stamp duty of Rs.
19,90,200/- and further a sum of Rs.
50,000/- was imposed as penalty. Thus, the
petitioners were directed to pay a total
amount of Rs. 20,40,200/-.

5. A perusal of the said order reveals
that the deficiency in stamp duty was
imposed on the ground that the land in
question has been sold by a Co-operative
Housing Society and the purpose of the
society is not to sell lands for agricultural
purposes and further that the purchaser is a
Christian Institution and as per the terms of
the sale deed, the intention is to construct
an Educational Institution thereupon and as
such it was not possible to accept that an
agriculture activity can be carried out over
the property in question. It was also
observed that on an inspection of the
property in question, it was clear that no
development had been carried out over the
property in question and the property was
being used for agricultural purposes.
However, proceeded to hold that the stamp
duty should be calculated for residential
accommodations
and
on
that
basis
proceeded to assess the deficiency of stamp
duty, as recorded above.

6. Aggrieved against the said order,
the petitioner preferred an appeal, in which
540 INDIAN LAW REPORTS ALLAHABAD SERIES
as an interim measure, an interim order was
passed on 8.4.2003 directing the petitioner
to deposit 1/3rd of the disputed amount and
the balance was stayed during the pendency
of the appeal.

7. Ultimately vide order dated
12.1.2007, the appeal was dismissed on
merits affirming the order passed by
respondent no. 2, on the grounds on which
the earlier order was passed.

8. Challenging the said two orders
being order dated 28.1.2003 as well as the
order dated 12.1.2007, the present writ
petition has been filed.

9. I have heard Sri J .Nagar, Senior
Advocate assisted by Sri Pratik J. Nagar,
counsel for petitioner and Standing Counsel
for the State-respondents.

10. Sri Nagar has assailed the said
orders on the ground that there was no
material on record to initiate proceedings
under Section 47-A (4) of the Act, as the
market value given in the instrument was
same what was prescribed by Rule 3 of the
U.P. Stamp (Valuation of Property) Rules,
framed under the Act. He further submits
that the orders suffer from error as the very
basis of the order is the future use of the
property, completely overlooking the fact
that on the date of the purchase, the
property
in
question
was
a
purely
agricultural property. He further submits
that in respect of a similar plot in the same
village, the respondent no. 2 had passed an
order accepting the stamp paid on the
valuation of Rs. 30 Lakhs per Hectare. He
further argues that in respect of the land in
question, no declaration under Section 143
of the U.P. Z.A. & L.R. Act had been made
and there was no evidence on record to
come to the conclusion that on the date of
the execution of sale deed, the property was
not agricultural in nature. He further argues
that even in terms of the report furnished
before the respondent no. 2, it was clear
that the property was agricultural in nature
and was being used for agricultural purpose
only. His next contention is that the order
was passed ignoring the Government Order
dated 16.8.1989 as well as the judgments of
this Court and thus prays that the impugned
orders be set aside.

11. He has placed reliance on the
following judgments of the Apex Court as
well as this Court:-

1. State of Uttar Pradesh v.
Ambrish Tandon and Another; 2012
Supreme Court Cases, Volume 5, Page
566.

2. Surendra Singh and Another
v. State of U.P. and Others; 2009
Allahabad Daily Judgments, Volume 2,
Page 560.

3. Rajesh Pandey v. State of
U.P. and Others; 2011 Allahabad Daily
Judgments, Volume 4, Page 801.

4. Maya Foods and Vanaspati
Ltd.
v.
Chief
controlling
Revenue
Auhtority;
1998
Allahabad
Weekly
Cases, Volume 4, Page 636.

5. Ratna Shanker Dwivedi v.
State
of
U.P.
and
Others;
2012
Allahabad Daily Judgments, Volume 5,
Page 414.

6. Dukhi v. State of U.P. and
Others;
2013
Allahabad
Daily
Judgments, Volume 6, Page 622.

7. Smt. Munni Devi v. Chief
Controlling
Revenue
Authority
and
Others;
2013
Allahabad
Daily
Judgments, Volume 8, Page 425.

8. Varun Gopal v. State of U.P.
and Others; 2015 Allahabad Daily
Judgments, Volume 2, Page 311.
9 All. The Institute of Franciscan Clarist Sister of the most Blessed Sacrament Vs. State of U.P. & Ors. 541

9. Sumati Nath Jain v. State of
U.P. and Another; 2016 Allahabad Daily
Judgments, Volume 2, Page 533.

10. Ashwani Kumar v. State of
U.P. and Others; 2017 Allahabad Daily
Judgments, Volume 2, Page 661.

11. Reena Gupta v. State of
U.P. and Others; 2020 Allahabad Daily
Judgments, Volume 2, Page 162.

12. 2011 (3) Allahabad Daily
Judgments, 888.

13. 2014 (1) Allahabad Daily
Judgments, 415.

12. The State has filed its counter
affidavit denying the allegations in the writ
petition, however with regard to the
specific case of the petitioner that in respect
of a sale deed dated 3.11.1999 pertaining to
similar land in the same village, an order
had been passed holding that the instrument
sufficiently stamped at the rate of Rs. 30
Lakhs per Hectare. Following are the
relevant pleadings, para 19 of the writ
petition is quoted hereinbelow:-

"That the petitioner filed certified
copy of the sale deed dated 3.11.99 with
respect to the land of the same Village and
also the order of Additional District
Magistrate (Finance and Revenue) dated
14.8.2000 in proceedings under Section 47A of the Stamp Act being Case No. 1223 of
1999 to demonstrate that the sale deed
dated 3.11.99 was held to be sufficiently
stamped at the rate of Rs. 30 Lacs per
hectare. The valuation of the land which is
subject matter of the instrument in question
in the instant appeal was also valued at the
same rate for purpose of payment of stamp
duty, though, in fact, it was purchased for
much lessor price. Respondent No. 2
committed a manifest error of law in not
taking
into
consideration
the
same
exemplar filed by the petitioner herein."

13. In paragraph 13 of the counter
affidavit, reply of para 19 of the writ
petition has been given, which is quoted
hereinbelow:-

"That the contents of para 19 and
20 of the writ petition are irrelevant for the
present controversy of market value with
regards to the impugned sale deed. The
petitioner cannot escape from the liability
of payment of stamp duty on the grounds of
some incorrect order passed earlier."

14. The Standing Counsel, on the basis of
the pleadings on record, submits that the writ
petition is liable to be dismissed, as there is no
error in the order passed. In reply to the
averments made in para 10 of the writ petition
that the order in respect of sale deed dated
3.11.1999, the order of the respondent no. 2 was
brought on record. The reply given in para 8 of
the counter affidavit is that an incorrect order
cannot be made basis for passing subsequent
orders.

15. In view of the pleadings
exchanged and the arguments advanced at
the bar, the sole question to be decided is
whether, a property which is agricultural
and has not been declared as nonagricultural under Section 143 of the U.P.
Z.A. & L.R. Act can be valued at nonagricultural rates only on the ground that in
future the same may be used for nonagricultural purposes.

16. Referring to the judgments cited
by Sri Nagar, the first case being State of
Uttar Pradesh Vs. Amrish Tandon and
Another (Supra), the Supreme Court in
view of the fact of the case recorded as
under:-

"The impugned order of the High
Court shows that it was not seriously
542 INDIAN LAW REPORTS ALLAHABAD SERIES
disputed about the nature and user of the
building, namely, residential purpose on
the date of the purchase. Merely because
the property is being used for commercial
purpose at the later point of time may not
be a relevant criterion for assessing the
value for the purpose of stamp duty. The
nature of user is relatable to the date of
purchase and it is relevant for the purpose
of calculation of stamp duty. Though the
matter could have been considered by the
Appellate
Authority
in
view
of our
reasoning that there was no serious
objection and in fact the said alternative
remedy was not agitated seriously and in
view of the factual details based on which
the High Court has quashed the order
dated 27.09.2004 passed by the Additional
District Collector, we are not inclined to
interfere at this juncture."

17. The next case cited is Surendra
Singh (Supra), wherein this Court held as
under:-

"8. In M/s Maya Food and
Vanaspati Ltd. Co. v. Chief Controlling
Revenue Authority (Board of Revenue)
Allahabad, 1990 (90) RD 57, the Court
held that the market value of the land could
not be determined with reference to the use
of the land to which the buyer intends to
put in use. The Court held that a buyer may
intend
to
establish
an
industrial
undertaking thereon and that another buyer
may intend to use it for agricultural
purposes and a third person may intend to
dedicate it for charitable purposes and that
these different intentions of individual
buyers may affect the price of each of them
would be willing to pay for the property but
the market value would not depend upon
what each individual would offer for the
property in question and that the market
value would be that which a general buyer
would offer and what the owner reasonably
accepts for that property, the court held
that in determining the market value, the
potential of the land as on the date of sale
alone could be taken into account in
determining the market value and that the
potential value of the land that could be put
in use in future could not to be taken into
consideration.

13. None of the authorities below
besides the report of the Sub-registrar has
referred any other material in support of
their orders. In Ram Khelawan @ Bachha
v. State of U.P. through Collector,
Hamirpur and another, 2005 (98) RD 511,
it has been held that the report of the
Tehsildar may be a relevant factor for
initiation of the proceedings under Section
4-A of the Act, but it cannot be relied upon
to pass an order under the aforesaid
section. In other words, the said report
cannot form itself basis of the order passed
under Section 47-A of the Act. In the case
of Vijai Kumar v. Commissioner, Meerut
Division, Meerut, 2008(7) ADJ 293 (para
17), the ambit and scope of Section 47-A of
the Act has been considered with some
depth. Taking into consideration the
Division Bench judgment of this Court in
Kaka Singh v. Additional Collector and
District Magistrate (Finance and Revenue),
1986 ALJ 49; Kishore Chandra Agrawal v.
State of U.P. and others, 2008 (104) RD
253 and various other cases it has been
held that under Section 4-A (3) of the Act,
the burden lay upon the Collector to prove
that the market value is more than
minimum as prescribed by the Collector
under the Rules. The report of the Subregistrar and Tehsildar itself is not
sufficient to discharge that burden.

14. Viewed as above, it is, thus,
evident that the report of the Sub-registrar
could not legally form basis of the
impugned order. There is no material in
9 All. The Institute of Franciscan Clarist Sister of the most Blessed Sacrament Vs. State of U.P. & Ors. 543
possession of the respondents to show that on
the date of the execution of the sale deed, the
land in dispute was not agricultural land. The
laying of foundation subsequent to the sale
deed is of little consequence so far as it relates
to the determination of the payment of stamp
duty under Section 47-A of the Act is
concerned. Additionally, the learned counsel
for the petitioners submits that still the land in
dispute is being used for agricultural
purposes. In this connection, he has placed
reliance upon the extract of Khasra of 1414
Fasli. In the said Khasra it is mentioned that
cattle fodder has been sown on the spot.
However, in the Khasra under heading
category in column 18 of the said Khasra the
entry is "Abadi/Shamil Jot". The use of words
''Sha Ja' have been explained by the counsel
for the parties as "Shamil Jot" which means
joint cultivation. At this stage, the learned
Standing Counsel submits that entry of "
Abadi" reflects that the property in dispute is
not agricultural property. Along with the
counter affidavit the revenue extract (Khasra)
of 1412 Fasli which corresponds to the year
2007 has been annexed. From this Khasra it is
evident that crop of Urd was sown in Kharif
season in the land in question. However, there
is an entry of "Abadi/Shamil Jot" under the
column 18. The said document does not relate
to the date of the execution of the sale deed
nor appears to have been filed before the
authorities below and as such is liable to the
ignored. Besides above, the fact that the crop
was sown and factum of joint cultivation
mentioned in the said document are also liable
to be taken into consideration and cannot be
ignored. The fact remains that there is no
cogent or convincing material on the record to
show that the land on the date of execution of
the sale deed was other than the agricultural
land, at least."

18. The next case cited is Rajesh
Pandey (Supra), the same related to
valuation of the constructions. The said
judgment has no applicability to the facts of
the present case.

19. Coming to the next judgment in
the case of Maya Foods and Vanaspati
Ltd. (Supra), this Court recorded as
under:-

"20. I have reproduced paragraph 5
of the impugned order dated 14.11.94 for a
certain purpose. Learned Chief Controlling
Revenue authority has observed that the land
was purchased for an industrial purpose and
the Collector is not arbitrary in deciding the
price of the land on the basis of the proposed
usage. This proposition is legally incorrect. The
market Value of the land cannot be determined
with reference to the use of the land to which
buyer intends to put it. One buyer may intend to
establish an industrial undertaking thereon,
another may intend to use it for agricultural
purpose and a third person may intend to
dedicate it for charitable purposes like leaving
it open as pasture ground or a cremation
ground or a playground. These different
Intentions may affect the price that each of them
may be willing to pay for the property and such
prices have wide variations but the market
value is not what each such individual may
offer for the property. The market value is what
a general buyer may offer and what the owner
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."

20. The next judgment is in the case
of Ratna Shanar Dwivedi (Supra),
wherein this Court considering the similar
controversy recorded as under:-

"16. Rule 7 of 1997 Rules while
providing for determination of market
544 INDIAN LAW REPORTS ALLAHABAD SERIES
value nowhere refers to either minimum
value fixed under Rule 4 or 5 of 1997 Rules
or provides that the market value shall be
determined by the Collector which must be
in all cases higher than the value set forth
in the instrument by the parties concerned.
The question as to how and what manner
market value would have to be determined
by the Collector has been discussed in
detail and various aspects have been
considered by this Court in Ram Khelawan
(Supra). Thus, the Collector is under a
statutory obligation before holding that an
instrument does not set forth correct
market value, to determine as to what is the
market value of the property in question.
The contention as raised by learned
Standing Counsel that immediate potential
user of the land is relevant for the purpose
of determining market value, cannot be
disputed but that is one of the relevant
consideration and can not be the sole basis
for holding that the value of the property as
set forth in the instrument is not correct
and it must be higher than that. Learned
Standing Counsel also failed to point out as
to which kind of land has no potential at all
for user as residential purposes in future.
The nature and character of land can
always be changed subject to its use by its
inhabitants
in
future.
Hence
future
potential of the land for residential user by
itself would not be a sole determinative
factor
for
determining
market
value
though, of course, it may be one of the
relevant consideration for the same. The
Collector however has to examine all
relevant
aspects
in
the
matter
and
thereafter to find out what is the correct
market value of the property in question.
He cannot proceed merely by saying that
since the land is adjacent to Abadi,
therefore, it must be valued at the rate of
residential land and duty must be charged
accordingly.

17. In Aniruddha Kumar and
Ashwini Kumar Vs. Chief Controlling
Revenue Authority U.P. Alld. and another
2000(3) AWC 2587 this Court has clearly
laid down that where in respect of
agricultural land there is no declaration
under Section 143 of the U.P. Z.A.and LR
Act its nature would not change and its
market value for the purposes of payment
of stamp duty would be determined on the
basis of the agricultural character of the
land not on the future potentiality.

18. In M/s. Maya Food and
Vanaspati Ltd. Co. Vs. Chief Controlling
Revenue Authority (Board of Revenue )
Allahabad, 1990 (90) RD 57 this Court has
held that market value of the land for the
purposes of payment of stamp duty can not
be determined with reference to its future
use or the intended use to which it is likely
to be put by the purchaser.

19. In view of the aforesaid legal
position and the facts and circumstances of
the case, as the land in dispute is of
agricultural nature, in the absence of any
declaration under Section 143 of the U.P.
Z.A. and LR Act coupled with the fact that
its potential use is of no relevance, the
authorities below has manifestly erred in
law in treating it to be an abadi land and
applying the circle rate prescribed for
abadi land for the area."

21. The next judgment is in the case
of Dukhi (Supra), wherein this Court was
confronted with the similar issue pertaining
to future potential as being a factor for
determining the market value of the land
for the purpose of stamp duty. This Court
considered the entire gamut of judgments
and placing reliance in the case of Maya
Foods, recorded as under:-

"19. The Division Bench of this
court in 2004 (5) AWC 3952, Rakesh
9 All. The Institute of Franciscan Clarist Sister of the most Blessed Sacrament Vs. State of U.P. & Ors. 545
Chandra Mittal and others Vs. State of
U.P. and another has held that it is well
settled principle that market value of the
property has to be determined with
reference to the date on which the
document is executed. The Division Bench
while holding the above proposition has
noticed that land therein was being used
for agricultural purpose at the time of
purchase and after long time of purchase of
the land, a small machine for extracting
peppermint oil over a very small part of the
land was installed. It has held that 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.

20.
In
view
of
the
above
discussion, proposition of law as as laid
down in the case of M/s Maya Foods and
Vanaspati Ltd., Allahabad (Supra) relied
upon by this court is the settled law and
squarely applies in the facts of the present
case. Accordingly reasoning given by the
authorities below on the question of
imposition of stamp duty on future potential
value is unsustainable. The orders passed
by both the authorities i.e. respondents no 2
and 3 are hereby set aside."

22. The next judgment is in the case
of Smt. Munni Devi (Supra), wherein this
Court recorded as under:-

"7. The petitioner in paragraph 3
of the writ petition has categorically stated
that the land purchased by him was
agricultural
land.
No
reply
to
this
paragraph
has
been
made
by
the
respondents in their counter affidavit.

8. In paragraph 4 of the writ
petition, the petitioner has categorically
stated that after the purchase of the land
his name was mutated as a bhumidhar in
the khatauni, which fact is admitted by the
respondents in paragraph 3 of the counter
affidavit.

9. In the light of the aforesaid, the
valuation, if any, has to be calculated on
the basis of the land revenue and not on the
basis of the circle rate or on the basis of
the potential value of the land."

23. The next judgment in the case of
Varun Gopal (Supra) deal with a similar
issue and the Court after considering the
entire line of judgments recorded as under:-

"24. The sine qua non for
invoking provisions of Section 47-A(3) of
the Act is that the Collector had reason to
believe, that the value had not been
properly set forth in the instrument as per
market value of the property. Once the
instrument is registered and the stamp duty
as prescribed by the Collector was paid,
the burden to prove that the market value
was more than the minimum prescribed by
the Collector under the rules, was upon the
Collector. The report of the sub-Registrar
or Tehsildar was not sufficient to discharge
that
burden.
(Vijay
Kumar
v.
Commissioner, Meerut Division, 2008(7)
ADJ 293)

32. In the facts of the case, it is
admitted that the property is agricultural
property and is being used for agricultural
purpose,
the
property
adjoining
the
property is also agricultural property. The
basis of the Collector concluding that the
property is undervalued is the spot
inspection report, stating that the adjoining
agricultural property is being plotted for
residential purpose. The exemplars (sale
deeds) referred to have not been discussed,
546 INDIAN LAW REPORTS ALLAHABAD SERIES
nor does it show they are comparable with
the property in question. The property on
which
plotting
is
taking
place
is
agricultural land and not abadi. It is not
the case of the State that the land in and
around the property in question has
become abadi primarily. The minimum
value fixed by the Collector is Rs. 55 lacs
per hectare for agricultural land whereas
the Collector has determined the market
value at Rs. 210 lac per hectare i.e. four
times over and above the minimum value
fixed under the Rules, which on the face of
it appears to be irrational. The 'belief' must
not be arbitrary or purely subjective
satisfaction, belief must have rational
connection or relevant bearing to the
formation of the belief/opinion."

24. The next judgment is in the case
of Sumati Nath Jain (Supra), wherein this
Court while hearing an intra-court appeal
arising out of a writ petition, filed
challenging a show cause notice issued on
the basis of a unsubstantiated assumption
that the property is situate in NOIDA and
in future it may be put to non-agricultural
use, the Division Bench of this Court hold
as under:-

"15. It is apparent that the notice
on the basis of which proceedings were
initiated against the appellant suffered
from the same fundamental flaws and
defects as were noticed by the Bench in
Smt. Vijaya Jain. We may also note that the
requirements of a valid show cause notice
were lucidly explained by the Supreme
Court in Oryx Fisheries (P) Ltd. Vs. Union
of India in the following terms: -

"27. It is no doubt true that at the
stage of show cause, the person proceeded
against must be told the charges against
him so that he can take his defense and
prove his innocence. It is obvious that at
that stage the authority issuing the chargesheet, cannot, instead of telling him the
charges,
confront
him
with
definite
conclusions of his alleged guilt. If that is
done, as has been done in this instant case,
the entire proceeding initiated by the show
cause notice gets vitiated by unfairness and
bias and the subsequent proceedings
become an idle ceremony.

31. It is of course true that the
show
cause
notice
cannot
be
read
hypertechnically and it is well settled that it
is to be read reasonably. But one thing is
clear that while reading a show cause
notice the person who is subject to it must
get an impression that he will get an
effective
opportunity
to
rebut
the
allegations contained in the show cause
notice and prove his innocence. If on a
reasonable reading of a show cause notice
a person of ordinary prudence gets the
feeling that his reply to the show cause
notice will be an empty ceremony and he
will merely knock his head against the
impregnable wall of prejudged opinion,
such a show cause notice does not
commence a fair procedure..."

16. We find in the facts of the
present case that not only was there a
complete non disclosure of the relevant
material to which the appellant could
respond to establish his innocence, the
notice itself was couched in tenor and
language which would have led any person
to face the specter of what the Supreme
Court described as the "impregnable wall
of prejudged opinion".

INVOCATION OF SECTION 47A

17. Section 47A (3) as a plain reading
of the provision would indicate comes into
operation if the Collector has before him
material which may lead him to believe that
the market value of the property comprised
in an instrument has not been truthfully
disclosed. In the present case the Collector
9 All. The Institute of Franciscan Clarist Sister of the most Blessed Sacrament Vs. State of U.P. & Ors. 547
proceeded in the matter solely on the basis
of the report of the Sub Registrar dated 7
February 2012. This report doubted the
valuation of the property on the ground
that in the area abutting it, various
residential houses had come up and that
Greater NOIDA had become a development
hub. Bearing in mind the location of the
plot and its likely use, the Sub Registrar
opined, it would be inappropriate to value
the property at agricultural rates. We find
that the very bedrock upon which the
opinion of the Sub Registrar based his
report was faulty and could not have
consequently formed the basis for further
action under section 47A (3).

18. We may note that on the date
of execution of the instrument the land
was admittedly recorded as agricultural.
In fact the Khasra of the property
remained unchanged throughout and
continued to represent the land as
recorded for agricultural purposes. The
respondents were in our opinion wholly
unjustified in initiating proceedings based
on an unsubstantiated assumption that the
property in future was likely to be put to
non-agricultural use.

19. The perceived or presumed
use to which a buyer may put the property
in the future can never be the basis for
adjudging its value or determining the
stamp duty payable. The Act, we may note
is a fiscal statute. The taxable event with
which it concerns itself is the execution of
an instrument which is chargeable to duty.
The levy under the statute gets attracted the
moment an instrument is executed. These
propositions clearly flow from a plain
reading of the definition of the words
"chargeable", "executed" and "instrument"
as carried in the Act. In the case of an
instrument which creates rights in respect
of property and upon which duty is payable
on the market value of the property
comprised therein, since the tax liability gets
fastened immediately upon execution it must
necessarily be quantified on the date of
execution. The levy of tax or its quantum
cannot be left to depend upon hypothetical or
imponderable facets or factors. The value of
the property comprised in an instrument has to
be adjudged bearing in mind its character and
potentiality as on the date of execution of the
instrument. For all the aforesaid reasons we
fail to find the existence of the essential
jurisdictional facts which may have warranted
the invocation of the powers conferred by
section 47A (3). We are therefore of the firm
opinion that the initiation of proceedings as
well as the impugned order based upon a
presumed future use of the property for
residential purposes was wholly without
jurisdiction
and
clearly
unsustainable.
Dealing with this aspect of the matter and
after noticing the consistent line of precedent
on the subject the Division Bench in Smt
Vijaya Jain observed: -

"This Court on more than one
occasion has held that 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. The market value
of the property is to be determined with
reference to its character on the date of
execution of the instrument and its
potentiality as on that date.
xxx xxx xxx

The above principles of law
enunciated
in
the
aforementioned
judgments have been consistently followed
by this Court. We however find that the
order of the Collector relies upon no
evidence which would support imposition
of residential rates on a property which
was stated to be agricultural on the date of
execution of the instrument."

25. The other judgments in the case of
Ashwani Kumar (Supra), ; Rajendra
548 INDIAN LAW REPORTS ALLAHABAD SERIES
Kumar v. State of U.P. and Others
[2011(3) ADJ 888]; Sarvoday Babu
Uddeshiya
Vikas
Samiti
v.
Commissioner, Kanpur Division and
Others: [2014(1) ADJ 415] deal with
similar issues and as such are not being
reproduced for the sake of brevity.

26. This Court in Writ-C No. 57052
of 2010 (Reena Gupta v. State of U.P. and
Others) had the occasion to deal with a
similar issue and the writ petition was
allowed by means of a judgment dated
18.1.2020 relying upon another judgment
of this Court in the case of M/s Properous
Buildcon Pvt. Ltd. v. State of U.P. and
others, wherein it was held as under:-

"This Court while considering the
similar question in the case of M/s
Prosperous Buildcon Pvt. Ltd. v. State of
U.P. and others, recorded as under:-

"A Division Bench of this Court
in 2015 (9) ADJ 503, Smt. Vijaya Jain vs.
State of U.P. and Others has held in
paragraphs 20 and 23 which read as
under:

"20.
Having
extracted
the
relevant statutory provisions above, the
following principles emerge therefrom.
Sub-section (1) (a) of Section 47-A of the
Act empowers the registering officer to call
upon the person who has presented an
instrument for registration to pay deficit
stamp duty. This power is exercisable by
the registering officer immediately after
presentation of an instrument and before
accepting it for registration and taking any
action under Section 52 of the Act. This
power is liable to be exercised in a
situation where the market value of the
property as set forth in the instrument is
less than even the minimum value fixed by
the Collector in accordance with the rules
made under the Act. In distinction to the
above, the power under sub-section (3) of
Section 47-A is exercised by the Collector
either suo motu or on a reference from any
Court or from the Commissioner of Stamps
or an Additional Commissioner of Stamps,
Deputy Commissioner of Stamps, an
Assistant Commissioner of Stamps or any
officer authorized in that behalf by the
State Government.