COUR T N O.2 IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition (M/S) 1349/2007 State of U.P. through the Collector Nainital. ………..Petitioner. Versus M/s Meenakshi Steel Industries Ltd. and another. ………..Respondents. Sri H.M. Raturi, learned Standing Counsel for the petitioner. Sri Sharad Sharma, learned Counsel for the respondent no. 1. None appears for the respondent no. 2. 21st July, 2008 Hon’ble P.C. Verma, J. This writ petition has been directed against the order dated 31.7.1997 (Annexure No. 1 to the writ petition) passed by the respondent no. 2 in Stamp Revision No. 245 of 1993-94. 2. Facts giving rise to this case are that Sri Shankar Dutt Dalakuti, S/o Devi Dutt Dalakuti, R/o Forest Lodge, Tallital, Nainital executed registered sale – deed in respect of 202 Nali and 10 Mutthi land out of Plot No. 27 and 23 Nali and 1 Mutthi land situated in village Satvanga, Tehsil and District Nainital in favour of M/s Meenakshi Steel Industry Ltd. Bombay for consideration of Rs. 16,21,000/- along with Stamp Duty of Rs. 2,35,100/- and sale consideration of Rs. 1,84,500/- along with stamp duty of Rs. 26,900. Both the lands are situated by the side of Nainital Mukteshwar Motor Road having potentiality for industrial and commercial purposes. Sub Registrar Nainital submitted his report to Collector Nainital on 4.12.1992 along with the document U/s 47-A(2) of Stamp Act for determination of the Market Value of the property in question stating therein that the documents indicate that the land will be used for agricultural or other use as permitted under law. It was further submitted in the report that since the purchaser is an Industrial Company, the land may be used for industrial purposes in future and as such a different stamp duty rate would be applicable in such circumstances. According to the rate fixed by the District Magistrate, the market value of the land in question is Rs. 5,000/- to 7,000/- per Nali. In the report, it was also mentioned that there are some trees standing, which have become fruitless due to lack of proper care. 3. A stamp case was registered and notice was issued to M/s Meenakshi Steel Industries Limited who filed objection stating that it purchased the land in question on Village Satvunga which is unirrigated and uneven land for agricultural purposes and not for Industrial purposes because there is no water, electricity, road, transport facility raw-material market facility which are necessary for setting up an industry. It was further alleged in the written statement that the stamp duty on the documents is sufficient and proper and there is no question of evading stamp duty and an affidavit to this effect has already been submitted before the Sub-Registrar. Further, in the end, a request was made to withdraw the notice. 4. Thereafter, Additional Collector called for a spot inspection report from the Tehsildar, Nainital who submitted in his report that the land in question in unirrigated land and is being used for agricultural purposes, the land is having fruit trees standing over it and there is no building given on rent over the said land. He also submitted in his report that according to the Circle Rate determined by the Collector / District Magistrate for grove land the value of the land is Rs. 5,000/- to 7,000/- per Nali. The Additional Collector after considering the entire evidence on record on 15.5.1993 passed an order holding that the respondent company is an industrial company having its office in Bombay and Delhi and it has nothing to do with the agriculture and the land has been purchased by the Company for industrial / commercial purposes and determined the marked value of the land in question at Industrial Rate of Rs. 35,000/- per Nali as fixed by the Collector for the relevant period as Circle Rate of the land. He directed to pay a sum of Rs. 7,92,642.50 after deducting the amount already paid by the respondents along with penalty of Rs. 50,000/- for concealing the stamp duty. 5. Being aggrieved by the said order, respondent no. 1 preferred Civil Revision No. 244/1993-94 and 245/1993-94 pertaining to both the cases arising out of two sale deeds, which were connected and decided together by the Chief Controlling Authority, Board of Revenue, U.P. Allahabad. Petitioner opposed the said revisions. Chief Revenue Authority on 31.7.1997 allowed both the aforesaid civil revisions holding that the land is for agricultural purposes and cannot be used for industrial purposes. 6. I have heard learned Counsel for the parties and have gone through the record. 7. Stamp duty is liable to be paid under Section 3 of the Indian Stamp Act, 1899. The charging Section 3 provides that subject to the provisions of this Act and the exemptions contained in Schedule I, the instruments shall be charged with duty of the amount as indicated in the Schedule as the proper duty therefor. The proviso appended to Section 3 provides that except otherwise expressly provided in this Act, and notwithstanding anything contained in clauses (a), (b) and (c) of this Section or in Schedule I or I-A the following instruments shall, subject to the exemptions contained in Schedule I-A or I-B be chargeable with duty of the amount indicated in Schedule I-A or I-B as the proper duty therefor respectively. Sub-clause (ii) of clause (bb) appended to the proviso of Section 3 is relevant, which provides that in the case of instruments mentioned in Schedule I-B, on or after the date the U.P. Stamp (Amendment) Act, 1952, comes into force, and relates to any property situated, or to any matter or thing done or to be done in Uttar Pradesh, and is received in Uttar Pradesh. The instrument has been defined in sub-Section 14 of Section 2 of the Stamp Act that the “Instrument” includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. Word ‘Instrument’ is used in word ‘conveyance’, which is defined under sub-Section 10 of Section 2 of the Act, which reads that “Conveyance” includes a conveyance on sale and every instrument by which property, whether movable or immovable is transferred inter vivos and which is not otherwise specifically provided for by Schedule I, Schedule I-A or Schedule I-B as the case may be. In article 23 of Schedule I-B appended to the Act, as applicable in the State of Uttar Pradesh and also applicable in the State of Uttarakhand, provides for stamp duty on conveyance, which reads as under: Description of Instrument Proper Stamp-duty 23. CONVEYANCE as defined by Section 2(10) not being a Transfer charged or exempted under No. 62— (a) if relating to immovable property where the amount or value of the consideration of such conveyance as set forth Sixty rupees. therein or the market value of the immovable property which is the subject of such conveyance, whichever is greater does not exceed Rs. 500. Where it exceeds Rs. 500; but does not exceed Rs. 1000. And for every Rs. 1000 or part thereof in excess of Rs. 1000. One hundred and twenty- five rupees: One hundred and twenty- five rupees: Provided that the duty payable shall be rounded off to the next multiple of ten rupees. 8. A conjoint reading of these Sections with article 23 clearly reveals that the stamp duty shall be payable on the consideration of the conveyance or on the market value of the immovable property which is subject of such conveyance, whichever is greater. For the purpose of levy of stamp duty, rules have been framed under Section 75 of the Indian Stamp Act by the State Government. In exercise of the powers conferred under Section 75, the State of Uttar Pradesh has framed the rules known as Uttar Pradesh Stamp (Valuation of Property) Rules, 1997. The rules prescribe the division of the districts in various circles and for each circle, for the purpose of valuation, the circle rate is notified under Rule 4(3) of the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997. 9. In the report submitted by the Tehsildar it has come that some trees are standing over the land and the land is agricultural land in nature and in this respect, the purchaser / petitioner has given its affidavit stating therein that the land shall be used for agricultural purposes. It has also come in the judgment passed by the Court below that there is no facilities of linked water, electricity connection, transport, raw material, market and labour which are necessary for establishment of an industry. At the time of presentation of registration of the sale deed of the land in question on 20.12.1992 and it remained as agricultural land upto the last report submitted by the S.D.M. Nainital in the year, 1996. 10. Mr. H.M. Raturi, learned Standing Counsel for the petitioner has submitted that respondent Company is an Industrial Company registered under Indian Companies Act having its office at Bombay and Delhi and has purchased the land in a large scale which is situated on the road site in between Ramgarh and Mukteshwar in Nainital Mukteshwar Road, the place is having scenic beauty with pollution free environment and is suitable for electronic industry and is suitable for establishing Holiday Home and Holiday Resort and Hotels. 11. I find no force in the submission of the learned counsel for the petitioner as only on the basis of the apprehension that the land can be used for industrial purposes, circle rate of the land cannot be determined as the circle rate applicable to the land for industry. 12. From the above, it is clear that the land was an agricultural land and cannot be said to be a land purchased for industrial purposes. The stamp duty was paid as per the relevant provisions of the Stamp Act. The Collector has wrongly applied the circle rate of Rs. 35,000/- per Nali (total a sum of Rs. 54,66,500) contrary to the circle rate determined under the rules having the statutory force of law as well as enhanced the stamp duty on the basis of apprehension that the land may be used for industrial / business purposes and the stamp duty has been directed to be paid thereupon to the extent of Rs. 7,92,642.50, which is contrary to the provisions of article 23 of Schedule I-B appended to the Stamp Act, which in very clear terms provides the value of the consideration of such conveyance as set forth therein or the market value of the immovable property which is subject matter of the conveyance. The subject matter of the conveyance was the open land. It does not contemplate the stamp duty to be paid on the nature of future use of the property. The Revisional Court has rightly rejected the order passed by the Collector by holding that the documents in question do not suffer from insufficiency of stamp duty and the value of the property in question as disclosed in the documents/sale deed is proper and there is no evasion of stamp duty of any kind whatsoever and further, that the Additional Collector has no jurisdiction to impose penalty under Section 47 A of the Indian Stamp Act. I do not find any illegality or infirmity in the order passed by the revisional Court and the same deserves to be confirmed. 13. For the reasons recorded above, the writ petition is dismissed. Impugned order dated 31.7.1997 is confirmed. There shall be no order as to costs. (P.C. Verma, J) 21.7.2008 Rathour