Safiya Malik

The High Court of Allahabad at Lucknow, Single Bench of Justice Syed Qamar Hasan Rizvi, set aside orders that had fastened stamp-duty deficiency, interest and penalty on a purchaser of land, and directed refund of the amounts deposited pursuant to those orders within one month of a certified copy being produced, with simple interest at 6% per annum if the refund is delayed. The dispute arose from the stamp authorities treating the sale as warranting valuation at a higher, non-agricultural rate on the basis of inspection reports and surrounding commercial activity. The Court held that the U.P. Zamindari Abolition and Land Reforms Act, 1950 cannot form the basis for determining market value under the Indian Stamp Act, 1899, and that a notification regarding change of land use under the 1950 Act can only be one factor for consideration.

The dispute arose from proceedings initiated under the Indian Stamp Act, 1899 in relation to a sale deed executed for agricultural land. The petitioner purchased half portion of a plot measuring 0.349 hectare through a registered sale deed executed in June 2013. Stamp duty was paid on the basis of the applicable circle rate treating the land as agricultural, along with additional charges applicable due to proximity to a residential area.

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Subsequently, the Sub-Registrar conducted a spot inspection and submitted a report alleging deficiency of stamp duty on the ground that no agricultural activity was found and that commercial establishments existed nearby. On the basis of this report, proceedings under Section 47-A of the Indian Stamp Act were initiated, resulting in an order determining deficiency of stamp duty along with penalty and interest.

The petitioner challenged the order on the ground that the inspection was ex parte, no notice was served, and the land had never been declared non-agricultural under the relevant land laws. It was contended that valuation based on presumed commercial potential and surrounding development was impermissible. The Revisional Authority dismissed the revision and affirmed the Collector’s order, leading to the filing of the writ petition before the High Court.

The Court observed: ““There is no doubt that the provisions of U.P. Zamindari Abolition and Land Reforms Act, 1950 encompasses different object and cannot be applied for the purpose of determination of the value of the land insofar it relates to Indian Stamp Act. Such determination is not controlled in any manner by the provisions of U.P. Zamindari Abolition and Land Reforms Act 1950. Notification under Section 143 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 can at best be one of the factors for consideration at the time of determination of the market value under the Indian Stamp Act and relevant Rules as prescribed under the U.P. Stamp (Valuation of Property) Rules, 1997.”

On the reliance placed upon inspection reports, the Court recorded that “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” and that such reports could only justify initiation of proceedings, not final determination.

With respect to valuation, the Court observed that “the burden to prove that the market value of the property has not been correctly disclosed in the instrument is on the department” and noted the absence of any exemplar sale deeds or comparable evidence produced by the authorities.

The Court further recorded that “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” and reiterated that the taxable event under the Stamp Act is the execution of the instrument.

On the issue of penalty, the Court stated that “penalty should not be imposed mechanically” and that authorities are required to apply independent mind to the facts of each case. It was also observed that the Revisional Authority had merely affirmed the Collector’s order without addressing the specific grounds raised.

The Court concluded that the impugned orders were “based merely on an ex parte spot inspection report having no support of any credible material” and that mandatory procedural requirements had not been followed.

The Court directed that “the impugned order dated 04.02.2016 passed by the Collector, Barabanki and the judgment and order dated 24.05.2017 passed by the Deputy Commissioner, Faizabad Division are set-aside.”

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“A direction in the nature of Mandamus is issued to the Collector, Barabanki to refund the amount deposited by the petitioner during the pendency of the present litigation within one month from the date of production of a certified copy of this order.”

“If the amount is not refunded within the aforesaid period, the petitioner shall be entitled of simple interest @ 6 per cent per annum from the date of its deposit till the date of actual refund.”

Advocates Representing the Parties

For the Petitioner: Ratnesh Singh Tomar, Advocate; Surya Prakash, Advocate

For the Respondents: Abhishek Kumar Pandey, Additional Chief Standing Counsel; Suresh Chandra Kushwaha, Standing Counsel; Mohd. Kasim, Standing Counsel

Case Title: Smt. Raziya Khatoon v. State of Uttar Pradesh & Others
Neutral Citation: 2025: AHC-LKO:79825
Case Number: Writ – C No. 19818 of 2017
Bench: Justice Syed Qamar Hasan Rizvi