A.F.R.

HIGH COURT OF JUDICATURE AT ALLAHABAD

Neutral Citation No. - 2024:AHC:63681

Court No.1
WRIT - C No. - 18282 of 2023

SHEEL MOHAN BANSAL

Vs.
STATE OF U.P AND 2 OTHERS

Counsel for Petitioner :- Sanjay Goswami,

Sukumari Vallabh Goswami

Counsel for Respondent :- C.S.C.

HON’BLE SHEKHAR B. SARAF, J.

(Judgement dictated in Court)

1. Heard Sri Sanjay Goswami, learned counsel appearing on

behalf of the petitioner and Sri Siddharth Singh, learned
Standing counsel for the State respondents.

2. This is a petition under Article 226 of the Constitution of

India, wherein the petitioner assails the order dated November
18, 2022 passed by respondent no.2 and the order in Appeal
dated March 13, 2023 passed by respondent no.3. By virtue of
these orders, the authorities have claimed additional stamp duty
with regard to a gift deed of a plot of land in question on the
ground that the potential of the land would increase the market
value of the land. Further ground has been enumerated stating
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that within 200 meters of land in question there are residential

areas as well as within 50 meters there is a petrol pump.

CONTENTIONS OF THE PARTIES

3. Sri Sanjay Goswami, learned counsel appearing on behalf

of the petitioner has submitted that the instrument in question
being a deed of gift, the entire proceedings that have been
initiated by the authorities under Section 47-A (3) of the Indian
Stamp Act, 1899 (hereinafter referred to as "the Act") is without
any basis in law. He has submitted that the authorities
concerned does not have the power under Section 47-A of the
Act to reassess the stamp duty paid by the petitioner on the
grounds that duty would be chargeable on the market value of
the property. To buttress his arguments, he relies on the
judgements in the matter of Sumit Gupta v. State of U.P. &
Others reported in 2011 (3) ADJ 712; Vijay Kumar vs. Chief
Controller, Board of Revenue and others reported in [2017
(136) RD 364] and Sai Janseva And Another v. State of U.P.
And 4 Others (decided on February 7, 2024 in Writ – C
No.5185 of 2022 [Neutral Citation No. - 2024:AHC:21964])
and submits that in the case of gift deed, the ‘value of the
property’ is required to be taken and not the ‘market value’. He
has emphasized the fact that under Article 33 of the Schedule 1-
B of the Act, the description of the instrument wherein a gift is
given the proper stamp duty is required to be paid for a
consideration equal to the ‘value of the property’.

4. Per contra, counsel appearing on behalf of the respondents

has relied on the inspection report to indicate that to the east of
the property within 50 meters there is a petrol pump as well as
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agricultural activities are being carried out. He has further

indicated that within 200 meters there are certain
residential/commercial activities being carried out. He
emphasized that the future potential of the land and the market
value of the land would be more, and therefore, actual value
should increase by 50%.

ANALYSIS AND CONCLUSION

5. Upon a perusal of the judgement of a coordinate Bench of

this Court penned by Hon'ble Mr. Justice Pankaj Mithal, J. in
Sumit Gupta (Supra) wherein it has been categorically
examined whether in case of gift deed there was any application
of Section 47-A, and the very concept of market value. The
relevant paragraphs are delineated below:-

"The more important aspect involved in this writ petition is

whether the authorities under the Act are competent under
Section 47-A of the Act to determine the market value of the
property referred to in the gift-deed in question for the purposes
of levy of stamp duty.

A Gift-deed is chargeable to stamp duty under Article 33 of

Schedule 1-B of the Act, which is reproduced as under:

Description of Proper Stamp-duty

instrument
33. Gift – Instrument of, not The same duty as a
being a Settlement Conveyance No.23 clause (a)
(No.58), or Will or for a consideration equal to the
Transfer (No.62) value of the property.

Hiring Agreement or
Agreement of Service -
See "Agreement" (No.5)
Note: Emphasis supplied
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It provides that a gift is chargeable to stamp duty as a

conveyance provided under Article 23 clause (a) for a
consideration equal to the value of the property.

It may be noted that in the above Article words used are "value
of the property" as distinguished from the "market value",
meaning thereby that for the purposes of determining stamp
duty on a gift-deed market value is not required to be
mentioned/determined. The disclosure of the value of the
property in the gift is sufficient for the purposes of payment of
stamp duty.

A perusal of Section 47-A of the Act indicates that it comes into

play only where the market value of the property in the
instrument is disclosed to be lesser than that determined in
accordance with the Rules made under the Act. So disclosure of
market value of the property is mandatory for the applicability
of Section 47-A of the Act and it should be less than the market
value determined under the Rules ie. the circle rate
prescribed/notified under the Act/Rules.

Thus, there is a clear departure in the language used in Article

33 of the Schedule I-B of the Act and Section 47-A of the Act.
Section 47-A of the Act uses the expression in "market value"
whereas for levying stamp duty on a gift-deed Article 33 of
Schedule 1-B of the Act uses the expression "value of the
property".

The legislature in its wisdom has differently used the words

"value of the property"' and "market value" in the Act. It is not
without purpose. "Market value" refers to the value of the
property prevailing in the market on which the prospective
purchaser is ready and willing to purchase and seller is ready
and willing to sell the property in the ordinary course of
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business. Therefore, market value is a bilateral transaction

depended upon the will of two persons. On the other hand,
'value' simply connotes the estimated monetary worth of the
property in the eyes of the seller and is in the nature of a
unilateral act.

In conveyance, such as sale of property, generally two parties,

ie. seller and purchaser are involved and the market value of the
property is determined on the basis of the market forces ie.,
demand and supply of the commodity. In a deed of gift it is only
the person making the gift who is relevant. It is up to him how
he values his property. The value of the property in the eyes of
the person receiving the gift is not material. This being the
situation, the legislature has deliberately used the word "value of
the property" in Article 33 while subjecting the gift to stamp
duty and has refrained from using the term "market value"."

6. In light of the above judgement, it is patently clear that for

levying stamp duty on a gift deed, the provisions of Section 47-
A of the Act do not come into play. Furthermore, there is no
requirement of determination of market value in case of gift
deeds. This judgement was accepted by the authorities and has
attained finality. The aforesaid judgment was thereafter cited in
Vijay Kumar (Supra) and a coordinate Bench has held that
Section 47-A of the Act would have no application whatsoever.
The said principle was thereafter, reiterated by a coordinate
Bench of this Court in Sai Janseva And Another (Supra).

7. Upon a perusal of the judgements provided above, it is

clear that in case of a gift deed that has been accepted and
registered, the authorities cannot take reference to Sub-section
(3) of Section 47-A of the Act and suo moto seek additional
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stamp duty based on the market value of the property. However,

the question arises that in the case of under valuation that may
have been done by the executor of the instrument what recourse
is available to the authorities.

8. In my view, the Indian Stamp Act, 1899 provides for

various provisions that may be acted upon that are provided in
Sections 27, 33, 62, 62-A, 64 and 64-B, wherein, if adequate
stamp duty has not been affixed, the authorities can proceed
against the executor for prosecution and collection of deficit
stamp duty. However, the authorities cannot proceed under
Section 47-A of the Act which is what has been done in the
present case. It is also seen, that the respondents have not taken
into account the judgements cited by the petitioner and
proceeded to adjudicate upon their whims and fancies. It was
incumbent upon the authorities to have taken note of the
judgements cited by the petitioner and pass a reasoned order on
the same, which has clearly not been done in the present case.
The authorities are directed to be far more cautious in their
approach in quasi judicial activities being carried out by them.

9. In light of the above findings, impugned orders dated

November 18, 2022 and March 13, 2023 are quashed and set
aside.

10. The instant writ petition is allowed in aforesaid terms.

Consequential reliefs to follow.

11. The amount that has been deposited by the petitioner is

directed to be refunded to the petitioner within a period of six
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weeks from date along with interest at the rate of 5% from the
date of deposit.

12. There shall be no order as to the costs.

Order Date :- 10.4.2024

Dev/-

(Shekhar B. Saraf, J.)

Digitally signed by :-
DEV PRAKASH
High Court of Judicature at Allahabad