In CWP No. 23246 of 2018 (O&M)-PUNJ HC- Nature of land existing at time of registration of sale deed is relevant for calculating stamp duty and not any date subsequent thereto: P&H HC Justice Jaishree Thakur [05-04-2022]

Read Order: ARC Bio-Fuel Pvt. Ltd.v. State of Punjab and others 

Monika Rahar

Chandigarh, April 13, 2022: While dealing with a revision petition wherein the petitioner was put under scrutiny for payment of insufficient stamp duty on purchase of an agricultural land which was later put to commercial use, the Punjab and Haryana High Court has held that for the purpose of calculating the amount of the stamp duty, the nature of the land existing at the time of registration of sale deed is relevant and not the use to which such land is put to, subsequently. 

In the words of Justice Jaishree Thakur, “In fact, the nature of user is relatable to the date of purchase and it is that date that would be relevant for the purpose of calculation of stamp duty and not any date subsequent thereto.”

Further, it was also held (in respect of the present case) that merely because the land is being used for a commercial purpose at a later point of time is not relevant for the purpose of assessing the stamp duty. 

The instant writ petition under Articles 226/227 of the Constitution of India was filed by the Court for the issuance of a writ in the nature of Certiorari seeking quashing of the order of the Commissioner, Patiala, Division, Patiala (the second respondent) by which the appeal filed by the respondent-State was allowed and the case was remanded back to the District Collector, Barnala, with a direction to decide the same afresh. 

The brief facts giving rise to the instant writ petition are that the petitioner purchased agricultural land through two registered sale deeds. Since the said land came under Code No.1 of the Collector rate as such the requisite stamp duty was paid at the time of registration of the sale deeds. After purchasing the above said land, the petitioners obtained CLU (change of land use) of the entire purchased land for setting up a biogas which was granted after paying requisite fee amount. 

However, on a complaint by someone, the third respondent issued a notice under Section 47-A of the Indian Stamp Act to the petitioner regarding deficiency in the stamp fee affixed on the sale deeds, to which the petitioner replied along with the relevant record. He also  called for a report from the Sub Divisional Magistrate, Barnala, who opined that the petitioner correctly affixed the stamp duty as per the Collector rate because the land was agricultural land at the time it was purchased and CLU has been issued thereafter. 

Eventually, the Collector, Barnala, closed the proceedings initiated under Section 47-A of the Indian Stamp Act. But, the State filed an appeal which was allowed by the Commissioner, Patiala Division, Patiala, vide impugned order. Hence, the present petition. 

The case of the petitioner’s counsel was primarily that for the purpose of payment of requisite stamp duty, the nature of the land has to be seen as on the date the sale deed is being registered and subsequent user cannot be taken into account for calculation of stamp duty. 

Per contra, counsel for the respondent-State argued that the second respondent rightly remanded the matter to the Collector as the CLU was obtained by the petitioner subsequent to the registration of the sale deed with due deliberation in order to cause loss to the State exchequer. 

At the very outset, the Court noted that admitted facts of the case which were to the effect that on the date when the land in question was purchased by the petitioner, it was an agricultural land and the stamp duty was paid as per the Collector rate prevalent at that point of time. Thereafter, the petitioner obtained CLU for setting up a biogas industry from the Town & Country Planning Department, which was duly granted to the petitioner. 

Further, the Court observed that while remanding the matter, the second Respondent  observed,“issue in this case is as to whether the land in dispute is agricultural in nature or commercial in nature”, whereas, the question that ought to have been decided should have been, as to what nature of the land was when the same was purchased.

Elaborating upon this aspect, the Court added that the nature of user is relatable to the date of purchase and it is that date that would be relevant for the purpose of calculation of stamp duty and not any date subsequent thereto.
Therefore, the Court, while holding that merely because the land is being used for a commercial purpose at the later point of time is not relevant for the purpose of assessing the stamp duty, allowed the petition.