REPORTABLE        

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.    735          OF 2012 (Arising out of SLP (C) No. 33851 of 2009

State of U.P. & Ors.                     .... Appellant (s)

Versus

Ambrish Tandon & Anr.                       .... Respondent(s)

J U D G M E N T  

P. Sathasivam, J.

1) Leave granted.

2) This appeal is filed against the final judgment and order  

dated 25.01.2007 passed by the Division Bench of the High  

Court  of  Judicature  at  Allahabad  in  Writ  Petition  No.  732  

(M/B) of 2005 whereby the Division Bench while allowing the  

petition filed by the respondents herein issued a writ in the  

nature  of  certiorari  quashing  the  impugned  order  dated  

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27.09.2004  passed  by  the  Additional  Collector  (Finance  &  

Revenue), Lucknow and the demand notice dated 20.01.2005.  

3)    Brief Facts:

a) A Sale Deed dated 16.04.2003 was executed between Har  

Charan Singh and the respondents herein in respect of  the  

property  situated  at  17/1 Ashok Marg,  Lucknow measuring  

11,029 sq. ft. and registered as Sale Deed Document No. 5341  

of 2003.  The total value of the property was computed as Rs.  

1,55,28,860/-  for  the  purposes  of  Stamp  Duty  and  the  

respondents herein paid Rs. 15,53,000/- as stamp duty.   

b) The District Magistrate, Lucknow made a spot inspection  

of the property in question on 21.07.2003.   During inspection,  

the land has been found having an area of 12,099 sq. ft. with  

a  two  storey  building  having  an  area  of  5,646.3  sq.  ft.  at  

ground floor and an area of 5192.3 sq. ft. at the first floor.  In  

the  inspection  report,  the  property  in  question  has  been  

valued for Rs. 3,87,74,097/- and the stamp duty on the said  

property has been calculated by the competent authority as  

Rs.  38,78,000/-.  However,  at  the  time  of  purchase,  

respondents  herein  paid  Rs.  15,53,000/-  as  Stamp  duty,  

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hence a deficiency of Rs. 23,50,000/- has been pointed out by  

the  authorities.   The  District  Magistrate,  vide  report  dated  

26.07.2003,  directed  to  register  a  case  against  the  

respondents herein    

c) On  the  basis  of  the  aforesaid  report,  Case  No.  653  

Stamp-2003 under Sections 47A/33 of the Indian Stamp Act,  

1899  (in  short  ‘the  Act’)  was  registered.   Vide  order  dated  

27.09.2004,  the  Additional  Collector  (Finance  &  Revenue)  

Lucknow directed the respondents to make good the deficiency  

in the stamp duty and also imposed a penalty amounting to  

Rs.  8,46,000/-  for  such  tax  evasion.   On  20.01.2005,  for  

failure  to  deposit  the  aforesaid  amount,  a  demand  notice  

claiming  an  amount  of  Rs.  38,30,500/-  plus  10% recovery  

charges was issued and the respondents herein were directed  

to pay the said amount within a period of seven days.  

d) Being aggrieved by the order dated 27.09.2004 and demand  

notice dated 20.01.2005, the respondent filed a writ petition  

being No. 732 of 2005 before the High Court.  By order dated  

25.01.2007, the High Court, while allowing the petition filed  

by  the  respondents  herein  issued  a  writ  in  the  nature  of  

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certiorari quashing  the  impugned  order  dated  27.09.2004  

passed  by  the  Additional  Collector  (Finance  &  Revenue),  

Lucknow and the demand notice dated 20.01.2005.

e)   Aggrieved by the said decision, the State has preferred this  

appeal by way of special leave petition before this Court.

4) Heard Mr. Shail Kumar Dwivedi, learned Addl. Advocate  

General  for  the  appellant-State  and  Mr.  K.V.  Viswanathan,  

learned senior counsel for the respondents.

5) The  only  question  for  consideration  in  this  appeal  is  

whether  the  High  Court  is  justified  in  interfering  with  the  

order  dated  27.09.2004  passed  by  the  Additional  Collector  

(Finance  and  Revenue),  Lucknow  demanding  differential  

stamp duty with interest  and penalty in respect of  the sale  

deed dated 16.04.2003 executed in favour of the respondents  

herein.   According to the respondents,  through a registered  

Sale Deed dated 16.04.2003 they have purchased the house  

No. 17/1 Ashok Marg, Lucknow for a total sale consideration  

of Rs.1.5 crores on which required stamp duty of Rs. 15.53  

lakhs was paid.  When the Additional Collector issued a notice  

under Section 47A/33 of the Act, the respondents submitted  

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objection dated 29.08.2003 stating that the extent, area and  

valuation are in accordance with the revenue records and the  

stamp duty paid by them on the sale deed was proper.  It is  

also stated by the respondents that before passing the order  

dated  27.09.2004,  the  Additional  Collector  (Finance  and  

Revenue) Lucknow has not afforded sufficient opportunity to  

them and the impugned order was passed in a most arbitrary  

manner ignoring the objection submitted by them.  It is also  

stated that at the time of sale deed the house was a residential  

property and in order to avoid unnecessary harassment at the  

hands of the revenue and for the purpose of stamp duty and  

registration they had valued the said property at the rate fixed  

by the Collector, Lucknow treating the land as commercial at  

the rate of Rs.11,300 per sq. metre.  In other words, for the  

purpose  of  stamp  duty  and  registration,  according  to  the  

respondents, they added additional 10% to the value.

6) In  support  of  the  contention  that  they  were  not  given  

adequate  opportunity  by  the  Addl.  Collector  and  order  was  

passed on a public holiday, before the High Court as well as in  

this Court, the respondents herein have placed the order sheet  

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which contains the various dates and the date on which the  

ultimate decision was taken by him.  It shows that the matter  

was heard and decided on a public holiday.  In all fairness, the  

High Court instead of keeping the writ petition pending and  

deciding itself after two years could have remitted the matter  

to the Addl. Collector for fresh orders.  However, it had gone  

into  the  details  as  to  the  area  of  the  plot,  nature  of  the  

building i.e.  whether  it  is  residential  or  non-residential  and  

based on the revenue records and after finding that at the time  

of  execution  of  the  sale  deed,  the  house  was  used  for  

residential  purpose  upheld  the  stand  taken  by  the  

respondents and set aside the order dated 27.09.2004 passed  

by the Addl. Collector.  

7) Learned  counsel  appearing  for  the  appellant-State  

submitted that as per the provisions of the Act and the Rules  

made therein, there is a provision for appeal and instead of  

resorting  the  same,  the  respondents  have  straightaway  

approached  the  High  Court  by  exercising  writ  jurisdiction  

under Article 226 which is not permissible.  A perusal of the  

proceedings before the High Court show that the State was not  

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serious in raising this objection relating to alternative remedy  

and allowed the High Court to pass orders on merits, hence we  

are not entertaining such objection at this juncture though it  

is  relevant.   In fact,  on receipt  of  the notice from the High  

Court in 2005, the appellants who are respondents before the  

High Court could have objected the writ petition filed under  

Article  226  and  sought  for  dismissal  of  the  same  for  not  

availing  alternative  remedy  but  the  fact  remains  that  

unfortunately  the  State  or  its  officers  have  not  resorted  to  

such recourse.  

8) We  have  already  held  that  it  is  the  grievance  of  the  

respondents  that  the  orders  were  passed  by  the  Additional  

Collector on a public holiday.  Regarding the merits though  

the Collector, Lucknow made a surprise site inspection, there  

is no record to show that all the details such as measurement,  

extent,  boundaries  were  noted  in  the  presence  of  the  

respondents who purchased the property.  It is also explained  

that the plot in question is not a corner plot as stated in the  

impugned order as boundaries of the plot  mentioned in the  

freehold deed executed by Nazool Officer and in the sale deed  

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dated 16.04.2003 only on one side there is a road.  It is also  

demonstrated that at the time of execution of the sale deed,  

the house in question was used for residential purpose and it  

is asserted that the stamp duty was paid based on the position  

and user of the building on the date of the purchase.  The  

impugned  order  of  the  High  Court  shows  that  it  was  not  

seriously disputed about the nature and user of the building,  

namely,  residential  purpose  on  the  date  of  the  purchase.  

Merely  because  the  property  is  being  used  for  commercial  

purpose  at  the  later  point  of  time  may  not  be  a  relevant  

criterion for assessing the value for the purpose of stamp duty.  

The nature of user is relatable to the date of purchase and it is  

relevant for the purpose of calculation of stamp duty.  Though  

the  matter  could  have  been  considered  by  the  Appellate  

Authority in view of our reasoning that there was no serious  

objection  and  in  fact  the  said  alternative  remedy  was  not  

agitated seriously and in view of the factual details based on  

which the High Court has quashed the order dated 27.09.2004  

passed by the Additional District Collector, we are not inclined  

to interfere at this juncture.

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9) Under these circumstances, we find no valid ground for  

interference  with  the  impugned  order  of  the  High  Court.  

Consequently, the appeal fails and the same is dismissed with  

no order as to costs.

...…………….…………………………J.           (P. SATHASIVAM)                                  

..…....…………………………………J.   (J. CHELAMESWAR)  

NEW DELHI; JANUARY 20, 2012.             

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