HC Remands Matter to Collector for Fresh Decision as Claimed Gap Between Sale & Market Price in Auctioned Property Lacked Basis

Case Details: Young Style Overseas v. State of U.P. - [2024] 168 taxmann.com 114 (HC-Allahabad)

Judiciary and Counsel Details

• Saral Srivastava, J.
• Sanjay Goswami, Shreyas Srivastava, Sudhanshu Kumar for the Petitioner.
• Chandan Kumar, Swapnil Kumar for the Respondent.

Facts of the Case

In the instant case, Bank ‘C’ invited tenders for the sale of a property by publishing a notice and the bid by the petitioner company was accepted by the bank. The sale was confirmed in favour of the petitioner.

An inspection of the property was conducted by the Collector and it was found that a factory was being run over the said property. A notice was issued by the Collector to the petitioner on the allegation that a sale deed was executed between the petitioner and bank in which the valuation of the property was shown as Rs.2 crores whereas as per the market rate, the valuation of the property is Rs.39 crores. Hence, there was a deficiency in the payment of stamp duty.

The Collector passed an order holding that the property was situated in an industrial area. Therefore, the circle rate applicable to the industrial area be applied. The Collector, by another order, held there was a deficiency in stamp duty and imposed interest and also imposed penalty.

On writ petition, the petitioner submitted that the sale conducted was an open market sale and thus excluded from scrutiny contemplated under section 47-A of Stamp Act, 1899.

High Court Held

The High Court noted that the order of the Collector was bad for the reason that Collector in concluding that rates corresponding to the industrial area would be applicable, was not supported by any reason.

The High Court held that since the objection of the petitioner in the writ petition was not considered by the collector, the order of the Collector could not be sustained being non-speaking. Therefore, orders were to be set aside, and the matter was to be remanded to the Collector to decide the matter afresh.

List of Cases Reviewed

• Sumati Nath Jain v. State of U.P and Others (2016) ILR 1 All 132, (para 37)
• Ashok Kumar and Others v. Chief Controlling Revenue Authority and Others AIR 2011 All 142, (para 95), followed
• V.N. Devadoss v. Chief Revenue Control Officer-cum-Inspector and Others
• (2009) 7 SCC 438 and Ballyfabs International Limited v. State of West Bengal and Others in W.P.A. No.7006 of 2020, (para 97), distinguished

List of Cases Referred to

• Purushottam Ramanata Quenim v. Makan Kalyan Tandel and Others (para 29),
• State of Rajasthan and Others v. Khandaka Jain Jewellers (2007) 14 SCC 339 (para 59)
• Duncans Industries Ltd. v. State of U.P. & Others 2000 (1) SCC 633 (para 104).