# Vijay Kumar and another v. Commissioner & another

- **Citation:** (2008) 2 ILRA 470
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2008-03-27
- **Case number:** Civil Misc. Writ Petition No.2307 of 1999
- **Bench:** Prakash Krishna
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/vijay-kumar-and-another-v-commissioner-another-41117
- **Pages:** 7

## Headnote

Act,
Section
49-ADeficiancy of stamp duty-based upon
report of sub Registrar without any
basis-such report can be basis for
proceeding but can not be basis for
penality-imposition of additional dutyheld-illegal-half of the amount deposited
in compliance of court order-be refunded
with 10% interest.

Held: Para 16

The sole basis of the impugned orders
holding that proper stamp duty has not
been paid by the petitioners is the report
of the Sub Registrar, reporting the
matter to the ADM(F&R) that proper
stamp duty has not been paid. Except
the said report, there is no material on
record to show that the petitioners by
arrangement deliberately under valued
the property while setting forth the
market value in the instrument.

## Text

470 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
under Order XXI Rule 2 of the Code was
held not liable to be condoned.

11. It is well settled by the
pronouncement of the Hon'ble Apex
Court in the case of Lakshmi Narayan
Vs. S.S. Pandian (2000) 7 SCC-240 as
well as Padma Ben Banushali and
another Vs. Yogendra Rathore and
others, (2006) 12 SCC-138 that unless the
agreement/adjustment
is
recorded
as
required under Order XXI Rule 2 of the
Code it cannot be recognized by the
executing court and the executability of
the decree would not be effected.

12. In view of the aforesaid
pronouncement of the Hon'ble Apex
Court, in the case in hand, the alleged
compromise having not been presented
within time before the executing court for
recording adjustment of the decree and
the delay being not liable to be condoned
in as much as Section 5 of the Limitation
Act is not applicable being expressly
excluded, the alleged compromise will not
effect executability of the decree in favour
of
the
landlord-respondent
and
the
execution is not liable to be struck
off/dismissed on the basis of the said
compromise.

13. In view of the aforesaid facts
and discussions, no illegality has been
committed by the court below in rejecting
the application filed by the tenantapplicant. Revision accordingly falls and
stands dismissed in limine.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 27.03.2008

BEFORE
THE HON'BLE PRAKASH KRISHNA, J.

Civil Misc. Writ Petition No.2307 of 1999

Vijay Kumar and another ...Petitioners
Versus
Commissioner & another...Respondents

Counsel for the Petitioners:
Sri Siddhartha

Counsel for the Respondents:
S.C.

Indian
Stamps
Act,
Section
49-ADeficiancy of stamp duty-based upon
report of sub Registrar without any
basis-such report can be basis for
proceeding but can not be basis for
penality-imposition of additional dutyheld-illegal-half of the amount deposited
in compliance of court order-be refunded
with 10% interest.

Held: Para 16

The sole basis of the impugned orders
holding that proper stamp duty has not
been paid by the petitioners is the report
of the Sub Registrar, reporting the
matter to the ADM(F&R) that proper
stamp duty has not been paid. Except
the said report, there is no material on
record to show that the petitioners by
arrangement deliberately under valued
the property while setting forth the
market value in the instrument.

(Delivered by Hon'ble Prakash Krishna, J.)

1. By means of a registered sale
deed registered on 21.3.1992 in the office
of Sub Registrar, Tehsil Kairana, District
Muzaffarnagar, the petitioner purchased a
double-storey shop measuring 58 square
2 All] Vijay Kumar and another V. Commissioner and another
471
meter situate in Mohalla Dhimanpura,
M.S.K
Road
Shamli,
District
Muzaffamagar from one Manohar Singh
for a sum of Rs.1,70,000/- and paid the
stamp duty thereon as per the circle rate
fixed by the District Magistrate. The Sub
Registrar,
Tehsil
Kairana
District
Muzaffarnagar on 25.3.1992 sent a report
to the Additional District Magistrate
(Finance & Revenue) that the valuation of
the property has not been correctly
disclosed in the sale deed. According to
him the market value of the property is
Rs.3,60,000/- instead of Rs.1,70,000/- on
which a sum of Rs.52,200/- was payable
as stamp duty. In other words according
to him there was a deficiency of stamp
duty of Rs.27,550/-. Proceedings under
section 47-A of Indian Stamp Act was
initiated
by
the
Additional
District
Magistrate (Finance & Revenue) on the
basis of the said report. He also called for
a report regarding the market value of the
property in question from the Tahsildar
who reported that the market value of the
land is around Rs.l,40,400/- and the cost
of the construction standing there on is
approximately Rs.40,000/-. Thus the total
value of the property sold as per his report
was Rs.1,80,400/- while it was shown as
Rs.l,70,000/- in the instrument i.e. the sale
deed.

2. The petitioner, in response to the
show cause notice, appeared before the
ADM (F&R) and contended that the sale
consideration in the instrument has been
properly and correctly set out. The stamp
duty has been paid as per the circle rate
fixed by the District Magistrate. He
further submitted that the exemplar
referred to in the report of the Sub
Registrar are not applicable to the facts of
the present case as properties mentioned
there in are differently situated.
3. The ADM (F&R) by the order
dated 29.11.1995 rejected the report of the
Tahsildar as well as the case of the
petitioner and presumed that at the time of
the transfer, the monthly rent of the
property in question could not have been
less than Rs.1,200/- and by multiplying it
by 300/- as provided for under Rule 341
of Indian Stamp Rule, it estimated the
valuation at Rs.3,60,000/-. This order was
challenged by way of revision No.4 of
1995-1996 before the Commissioner,
Meerut Division, Meerut, under section
56 of the Indian Stamp Act. The revision
having been dismissed by the impugned
order dated 29.11.1998, the present writ
petition has been filed for quashing the
impugned orders.

4. Heard and considered the
respective submissions of the learned
counsel for the parties and perused the
record.

5. Section 47-A of the Act, for the
sake of convenience, is reproduced
below:-

47-A Under valuation of instrument-
(1)(a) If the market value of any property,
which is the subject of any instrument, on
which duty is chargeable on market value
of the property as set forth in such
instrument is less than even the minimum
value determined in accordance with the
rules made under this Act, the registering
officer appointed under the Registration
Act, 1908 shall, notwithstanding anything
contained in the said Act immediately
after presentation of such instrument, and
before accepting it for registration and
taking any action under section 52 of the
said Act, require the person liable to pay
stamp duty under section 29, to pay the
deficit stamp duty as computed on the
472 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
basis of the minimum value determined in
accordance with the said rules and return
the instrument for presenting again in
accordance with section 23 of the
Registration Act, 1908.
(b) When the deficit stamp duty required
to be paid under clause (a), is paid in
respect of any instrument and the
instrument
is
presented
again
for
registration, the registering officer shall
certify by endorsement thereon, that the
deficit stamp duty has been paid in
respect thereof and the name and the
residence of the person pay them and
register the same.
(c) Notwithstanding anything contained in
any other provisions of this Act, the deficit
stamp duty may be paid under clause (a)
in
the
form
of
impressed
stamps
containing such declaration as may be
prescribed.
(d) If any person does not make the
payment of deficit stamp duty after
receiving the order referred to in clause
(a) and presents the instrument again for
registration, the registering officer shall,
before registering the instrument refer the
same to the Collector for determination of
market value of the property and the
proper duty payable thereon.

(2) On receipt of a reference under subsection (1), the Collector shall, after
giving the parties a reasonable
opportunity of being heard, and after
holding an inquiry in such manner as
may be prescribed by rules made
under this Act, determine the market
value of the property which is the
subject of such instrument, and the
proper duty payable thereon.
(3) The Collector may, suo motu, on a
reference from any Court or from the
Commissioner of Stamps, or an
Additional Commissioner of Stamps
or a Deputy Commissioner of Stamps
or an Assistant Commissioner of
Stamps or any officer authorised by
the State Government in that behalf,
within four years from the date of
registration of any instrument, on
which duty is chargeable on the
market value of the property not
already referred to him under subsection (1), call for and examine the
instrument
for
the
purpose
of
satisfying
himself
as
to
the
correctness of the market value of the
property, which is the subject of such
instrument, and the duty payable
thereon 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 of such property and
the duty payable thereon:
Provided that, with the prior permission
of the State Government an action under
this sub-section may be taken after a
period of four years but before a period of
eight years from the date of registration
of the instrument on which duty is
chargeable on the market value of the
property.
Explanation --------------------
Sub-sections (4-A) to (6) are not
relevant."

6. Section 47-A refers to minimum
value determined in accordance with
Rules made under the Act, as held by the
Apex Court in Ramesh Chandra Bansal
Vs. District Magistrate, AIR 1999 SC
2126, confers power upon a registering
authority to deal with the case of under
valuation. Section 47-A uses the words
'minimum
value'
determined
in
accordance with any Rules made under
the Act in sub clause (1) of Section 47-A.
2 All] Vijay Kumar and another V. Commissioner and another
473
A Division Bench of this Court in Kaka
Singh Vs. The Additional Collector and
District
Magistrate
(Finance
and
Revenue) Bulandshahr and another,
1986 A.L.J. 49 has held that Section 47-A
empowers the Collector to deal with those
cases where the parties by arrangement
deliberate under valued the property while
setting forth the market value less than the
minimum value determined under Rule
341
with
a view to defraud the
Government of legitimate revenue by way
of stamp duty. In the present case, it is not
disputed by the respondents that the
petitioners have not paid even the
minimum value fixed under the Rules i.e.
'circle rate'. The power appears to have
been exercised under sub section (3) of
Section 47-A. It may be noticed that in
sub section (3) of Section 47-A, power
has been conferred on the Collector to
examine any instrument within four years
from the date of registration on which
duty is chargeable on a market value of
the property. The Collector, if after such
examination, has 'reason to believe' that
the market value of such property has not
been truly set forth, he may determine the
market value of such property and duty
payable thereon. On a close reading of
sub section (3) of Section 47-A the words
used therein are 'reason to believe' and
'market value' of such property. These are
key words.

7. The Stamp Act is a fiscal statute
and it has to be interpreted strictly and
construction of hardship or equity has no
role to pay in its construction. It is a
taxing statute and has to be read as it is. In
other
words,
the
literal
rule
of
interpretation applies to it. See- State of
Rajasthan
Vs.
Khandaka
Jain
Jewellers, AIR 2008 SC 509. In this case
the Supreme Court has referred its earlier
judgment in the case of A.V. Fernandez
Vs. State of Kerala AIR 1957 SC 657,
Also Government of A.P & others
versus Smt. P. Laxmi Devi 2008 AIR
SCW 1826.

8. In the above background the
phrase 'reason to believe' occurring in sub
section (3) of Section 47-A has to be
considered. Identical phrases have been
placed in almost every fiscal statutes such
as Income Tax Act, Sales Tax Act etc.
With reference to the expression 'reason
to believe' used in Section 34 of the Old
Income Tax Act it has been held that they
do not mean purely subjective satisfaction
on the part of the Income Tax Officer.
The 'belief must have been held in good
faith, it cannot be merely a pretence. To
put it differently it is open to court to
examine the question whether the reasons
to believe have a rational connection or a
relevant bearing to the formation of belief
and are not extraneous or irrelevant to the
purpose of section, as held in S.
Narayanappa and others Vs. CIT
Bangalore, AIR 1967 SC 523. The words
'reason to believe' are stronger than the
expression 'for satisfaction' Belief must
not be arbitrary or irrational. It must be
reasonable or must be based on reasons
which are relevant and material.

9. In view of the fact that expression
'reason to believe' has been used in sub
section (3) of Section 47-A of the Act, the
power conferred under this section though
is wide but they are not plenary. The
power cannot be exercised when the
Collector has reason to suspect that there
is evasion of proper stamp duty.

10. A Division Bench of this Court
in Kishore Chandra Agarwal versus
474 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
State of U.P and others 2008 (104) RD
235 has held as follows:

"25. Every wide power, the exercise
of which has far reaching repercussion,
has inherent limitation on it. It should be
exercised to effectuate the purpose of the
Act. In legislations enacted for general
benefits
and
common
good
the
responsibility is far graver. It demands
purposeful approach. The exercise of
discretion should be objective. Test of
reasonableness is more strict. The public
functionaries should he duty conscious
rather than power charged. It actions and
decisions, which touch the common man,
have to be tested on the touchstone of
fairness and justice. An arbitrary action is
ultra vires."

11. In Hajari Lal Sahu Vs. State of
U.P. and others, 2004(1) A WC 899 a
learned Single Judge of this Court has
taken the similar view.

12. The other phrase used in sub
section (3) of Section 47-A is 'market
value' The 'market value' means what a
willing purchaser would pay to a willing
seller for the property having regard to the
advantages available to the land and the
development activities which may be
going in the vicinity and potentiality of
the land and as such, an offer of sale of
land to an industrialist on concessional
rate with a view to induce him to set up
industry in a particular area is not market
value.
See-
Mahabir
Prasad
Vs.
Collector, Cuttack, AIR 1987 SC 720.

13. The 'market value' of land means
a price at which both buyers and sellers
are willing to do business; the market or
current price.

14. Having noticed the imports of
the aforesaid two expressions used in sub
section (3) of Section 47-A now the facts
of the present case may be looked upon.

15. The learned counsel for the
petitioner submits that indisputably the
shop in question was not let out at any
point of time. Except the report of the Sub
Registrar, there is no material on record to
show that the market value set out in the
instrument is incorrect. He further submits
that the said report of the Sub-Registrar
cannot be relied upon for the purposes of
determining the deficiency if any in
payment of Stamp Duty under section 47A of the Act as the said report is not
relevant or admissible for passing the
order
thereunder.
Elaborating
the
argument he submits that the exemplars
were wrongly relied upon being document
1485 of 1989 and 6960 of 1989 wherein
the rent of that property has been shown
at Rs.800/- and 1200/- per month. The
submission is that there is no evidence to
show that the property in question is
similarly situate as those of the properties
referred in the aforesaid two documents.
In substance the documents No. 1485 of
1989 and 6960 of 1989 cannot be treated
as exemplar in the absence of material to
show that they are comparable with the
property in question. The learned standing
counsel on the other hand supports the
impugned orders.

16. The sole basis of the impugned
orders holding that proper stamp duty has
not been paid by the petitioners is the
report of the Sub Registrar, reporting the
matter to the ADM (F&R) that proper
stamp duty has not been paid. Except the
said report, there is no material on record
to
show
that
the
petitioners
by
arrangement deliberately under valued the
2 All] Vijay Kumar and another V. Commissioner and another
475
property while setting forth the market
value in the instrument.

17. In Ram Khelawan alias
Bachacha versus State of U.P through
Collector,
Hamirpur
and
another,
2005(98) RD 511, it has been held that
report of Tahsildar may be a relevant
factor for initiation of proceedings under
section 47-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. As
already pointed out above, the only
material is the report of Sub Registrar. It
may also be noticed that the report of the
Tahsildar was rejected by the authorities.

18. The learned counsel for the
petitioners rightly pointed out that in the
two impugned orders, there is no such
discussion to show that the shop in
question is similarly situate as the shops
mentioned in document No. 1483 of 1989
or 6960 of 1989. These documents
therefore, cannot be relied upon as
exemplar.

In the case of Prakashwati versus
Chief Controlling Revenue Authority
Board of Revenue, Allahabad, 1996 (87)
R.D.419 "Hon'ble the Apex Court has
held that situation of a property in an
area close to a decent colony not by itself
would make it part thereof and should not
be a factor for approach of the authority
in
determining
the
market
value.
According to said decision, valuation has
to
be
determined
on
constructive
'materials, which could be made available
before the authorities concerned.

19. There is another aspect of the
case. The sine qua non for invoking the
provisions of Section 47-A(3) of the Act
is that the Collector has reason to believe
that the stamp duty has not been properly
set forth in the instrument as per market
value of the property. Once the instrument
is registered and the prescribed stamp
duty as prescribed by the Collector as has
been paid, the burden to prove that the
market value is more than the minimum
as prescribed by the Collector under the
rules, is upon the Collector. The report of
the Sub Register or Tahsildar itself is not
sufficient to discharge that burden.
Reference can be made to a Division
Bench judgment of this Court in Kaka
Singh versus The Additional Collector
and District Magistrate (Finance and
Revenue) Bulandshahr and another,
1986 A.L.J. 49.

20. Viewed as above, the impugned
orders cannot be sustained and they are
liable to be quashed. This Court while
entertaining the writ petition granted a
conditional stay order on 27.1.1999
wherein it was provided that on deposit of
half of the deficiency within one month,
the further recovery shall be stayed. It was
further directed that the amount so
deposited shall be subject to the decision
of the writ petition.

21. In view of the above order, the
respondents are liable to refund the
amount thus deposited by the petitioner
along with the accrued interest within a
period of one month from the date of
production of a certified copy of this
order failing which they shall be liable to
pay the interest @ 10% per annum
thereafter on the sum due to the petitioner,
till the date of actual payment.

22. In the result, the writ petition
succeeds and is allowed. The impugned
476 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
orders dated 29.11.1995 (Anenxure-5)
and 19.11.1998 (Annexure-7) are hereby
quashed and it is held that the petitioners
are not liable to pay any further stamp
duty on the instrument in question. No
order as to costs.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.04.2008

BEFORE
THE HON'BLE JANARDAN SAHAI, J.
THE HON'BLE S.P. MEHROTRA, J.

Civil Misc. Writ Petition No. 13317 of 2008
Connected with
Civil Misc. Writ Petition No. 13318 of 2008
Civil Misc. Writ Petition No. 13734 of 2008

Zunaid Ahmad

...Petitioner
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioner:
Sri S.P. Singh
Sri Deo Prakash Singh

Counsel for the Respondents:
Sri Vishnu Pratap
Sri Alok Kumar Singh
S.C.

U.P. Minor Minerals (Concession) Rules,
1963-Rule45-Restrictions-no
use
of
machine-a part of contract-petitioner
can not be allowed to resigned from that
and resist the stoppage of the user of
Machine.

Held: Para 19

Moreover, there is another important
aspect in respect of these cases. The
condition regarding the prohibition on
the use of machine is part of a contract
between the State of Uttar Pradesh and
the lease holder and if the lease holder
has accepted the imposition of the
condition
and
has
acted
upon
the
contract by taking the lease, it is not
open to the lease holder to turn back and
to retract from the condition. We find
that
there
is
no
illegality
in
the
imposition of the condition in the lease
deed and the condition is not in breach
of any Government Order nor in breach
of
any
Statute
or
constitutional
provision. In view of the condition that
the lessee has no right to carry on
mining
operations
without
the
permission of the District Magistrate in
writing contained in lease the petitioner
has no right to resist stoppage of user of
machine for mining.
Case law discussed:
AIR 1980 SC 1789 (1), Civil Misc. Writ Petition
No. 46770 of 2004, Satyendra Kumar Tripathi
Vs. State of U.P. and others

(Delivered by Hon'ble Janardan Sahai, J.)

1. In these three Writ Petitions
identical controversy is involved and as
such all these Writ Petitions have been
heard together and are being disposed of
by a common order. Counter and
rejoinder affidavits have been exchanged
in these cases and the counsel for the
parties are agreed that the Petitions may
be disposed of finally.

2. The petitioners are mining lease
holders of Sand on the Yamuna River bed
in portions of District-Kaushambi. They
were granted mining leases in the year
2006 which are operative for a period of
three years i.e. till 2009. There is a
condition in the lease deed that they will
not conduct mining operations by use of
machines except with the permission of
the District Magistrate. It is not in dispute
that the petitioners have not obtained any
permission from the District Magistrate.
The petitioners are aggrieved by the
stoppage of mining operations on the
basis of oral orders of the District