WARAHI ENGINEERINGS PVT LTD V. CHIEF CONTROLLING REVENUE AUTHORITY/COMMISSIONER AND ANOTHER

WRIC/50142/2004

AI Insights

The case revolves around a dispute concerning the deficiency of stamp duty imposed on Warahi Engineerings Pvt Ltd, a private limited company engaged in manufacturing and selling electrical and electronic goods. The company had purchased agricultural land in Bijnor for agricultural purposes but was later subjected to additional stamp duty based on the presumption that the land was purchased for commercial use due to the nature of the buyer. The petitioner contested the orders imposing the deficiency, arguing that the land was used solely for agricultural purposes, supported by income tax returns showing agricultural income. The State defended the imposition of the deficiency, asserting that the land was purchased for industrial purposes. The court, referencing a Full Bench decision, found that the presumption of commercial use based solely on the buyer's nature was unfounded and quashed the impugned orders.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 690032 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 14-07-2023
• Assessment Year: misc
• Other Referred Cases: Pushpa Sareen Vs. State of U.P. 2015 AIR (All) 83
• Laws Referred To: Stamp Act, Section 47 A of the Stamp Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: C S C
• Assessee Lawyers: T A KHAN
• Keywords: Agricultural Land; Commercial Use; Industrial purpose; Stamp duty deficiency; Revision dismissed
• Section: 47(a)

Judgement Text

"Neutral Citation No. - 2023:AHC:139803 Court No. - 5 Case :- WRIT - C No. - 50142 of 2004 Petitioner :- Warahi Engineerings Pvt Ltd Respondent :- Chief Controlling Revenue Authority/Commissioner And Another Counsel for Petitioner :- T.A. Khan Counsel for Respondent :- C.S.C. Hon'ble Piyush Agrawal,J. 1. Heard Mr. T.A. Khan, learned counsel for the petitioner and learned Standing Counsel for State-respondents. 2. The present writ petition has been filed for quashing the order dated 11.12.1998 passed by respondent no. 2 by which certain deficiency with regard to stamp duty was fixed upon the petitioner- company and the order dated 30.10.2004 passed by the Chief Controlling Revenue, Authority / Commissioner, Moradabad Division, Moradabad, respondent no. 2 by which the order of the Collector has been affirmed in the revision filed by the petitioner. 3. Brief facts of the case are that the petitioner is a private limited company engaged in the business of manufacture and sale of electronic & electrical goods. The director of the petitioner- company had purchased 20 bighas of agricultural land situated in village Dara Nagar, pargana Dara Nagar, Tehsil and District Bijnor through registered sale deed dated 29.12.1995 for a sale consideration of Rs. 5,24,400/- and due stamp duty of Rs. 77,565/- was paid on the valuation of the land. However on the reference of Accountant General, Audit, U.P. Allahabad, the proceedings under Section 47 A of the Stamp Act was initiated against the petitioner. The petitioner has filed objection in the said case on 9.11.1998 however the Collector has passed the impugned order dated 11.12.1998 imposing deficiency of stamp duty to the tune of Rs. 2,09,935/-. Against the said order, the petitioner has preferred a revision which is registered as Stamp Revision No. 846 of 1998-99 before the Chief Controlling Revenue Authority / Commissioner, Moradabad Division, Moradabad, who by the impugned order dated 30.10.2004, has dismissed the revision of the petitioner and affirmed the order of the Collector. Hence the present petition. 4. Learned counsel for the petitioner submits that the petitioner, being a manufacturer unit had purchased the agricultural land for the purposes of agriculture. He further submits that the native place of the Director of the petitioner-company belongs to the place where the plot in question was purchased, therefore, the said plot was purchased in the name of company. He submits that prior and after the date of purchase, the land in question was used only for the agricultural purpose. In support of his arguments, the petitioner has filed income tax returns showing his income from agricultural resources also. He further submits that deficiency of stamp duty was imposed without any basis as the future use of the land in question cannot be assessed. He further submits that the date on which the sale deed is executed, was a decisive factor and the proximity of the land in question can be taken into account. He further submits that land in question along with its surrounding land were only undertaken for agricultural activities, therefore, the impugned orders have been passed without considering the material available on record. 5. Per contra, learned Standing Counsel submits that since the petitioner is a private limited company engaged in the business of manufacture and sell of electrical as well as electronic goods, the land in question was purchased for industrial purpose, therefore, the proceedings has rightly been initiated and stamp deficiency has rightly been imposed. He supports the impugned orders and prays for dismissal of the writ petition. 6. The Court has perused the records. 7. Admittedly, the petitioner is a private limited company engaged in the business of manufacture and sale of electrical & electronic goods. The plot in question was purchased as an agricultural land through registered sale deed dated 29.12.1995 and due stamp duty was paid thereof. However, the proceedings under Section 47 A of the Stamp Act has been initiated only on the basis that the purchaser is a private limited company and in the name of its director, the land was purchased, therefore, the purpose of purchase of land is commercial and not agricultural, thus the said stamp deficiency was imposed upon the petitioner-company. The petitioner has brought on record certain materials to show that in the vicinity of the land in question, only agricultural activities were being undertaken. It is also brought to the notice of the Court that before and after purchase of land in question only agricultural activities were being undertaken. The petitioner has also filed income tax return where the agricultural income is shown. 8. Full Bench of this Court in Pushpa Sareen Vs. State of U.P. 2015 AIR (All) 83 in paragraph 30-31, has held that date of the execution of the instrument is relevant and the possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land, cannot be said to be decisive factor for determining the value of the land without any cogent material on record. It has further been held that deficiency of stamp duty can be determined by the Collector on the basis of adequate material and cannot be on surmises and conjectures. In the case in hand, the proceedings has been initiated on the ground that petitioner being an industrial unit had purchased the land in question in the name of its director, therefore, it was presumed that the land will be used for commercial purpose. The said presumption cannot be sustained in the eyes of law. 9. In view of above, the impugned orders dated 11.12.1998 and 30.10.2004 are hereby quashed. In the results, the writ petition is allowed with the cost of Rs. 10,000/- (ten thousands) to be paid to the petitioner by the State-respondents within a period of one month from today. The State exchequer will be at liberty to recover the said cost from the erring officer. 10. It is further directed that any amount already deposited by the petitioner towards imposition of deficiency of stamp duty as aforesaid, shall be returned to the petitioner within a period of one month from today and in case of default in payment of the same, interest at the rate of 18 % p.a. shall be paid to the petitioner from the date of deposit of the amount till the date of actual payment being made to the petitioner. 11. The petitioner undertakes to serve a certified copy of this order before respondent no. 2 within ten days from today. 12. List after two months in Chamber in order to enable the respondents to file an affidavit of compliance of this order. Order Date :- 14.7.2023 Rahul Dwivedi/- Digitally signed by :- RAHUL DWIVEDI High Court of Judicature at Allahabad "