The Madhya Pradesh High Court dismissed two writ petitions filed by purchasers challenging the order of Collector (Stamp) determining the market value on land transactions that were declared as “agricultural” but found to be located in a residential area.
The petitioners had purchased lands in 2008 through sale deeds describing them as agricultural land. The registering authority, found that there has been undervaluation of lands and evasion of stamp duty. He referred the matter to the Collector (Stamps) under Rule 4(1) of the Madhya Pradesh Prevention of Undervaluation of Instruments Rules, 1975 (1975 Rules), invoking Section 47-A of the Indian Stamp Act, 1899.
The Collector issued notices to the petitioners, obtained a report from the Tehsildar, and conducted a spot inspection in the presence of the parties. It was found that the lands were situated near the residence of the Superintendent of Police, surrounded by several houses, and equipped with civic amenities. Treating the lands as residential and partly commercial, the Collector reassessed their market value and determined a deficit stamp duty of ₹19.52 lakh and ₹6.18 lakh. The Additional Commissioner and the Board of Revenue upheld this order.
Challenging the orders, the petitioners argued that the Collector wrongly assessed the market value based on the land’s potential rather than its actual agricultural use on the date of sale. They relied on State of U.P. v. Ambrish Tandon, 2012 (5) SCC 506, and similar precedents to contend that valuation must be based on current use on the date of execution of the documents and not on the basis of its potential use in future.
The State countered that the findings were factual and based on physical inspection showing the lands were no longer agricultural on the date of execution of the documents.
The Court rejected the petitioners’ reliance on State of U.P. v. Ambrish Tandon, observing that those precedents dealt with valuation of genuinely agricultural land and did not apply to the present case, where the properties were situated in a fully developed residential area.
Justice Amit Seth concluded that no illegality or perversity was found in the orders of the Collector, the Additional Commissioner, or the Board of Revenue. The writ petitions were accordingly dismissed.
Appearances
Shri Siddharth Sijoria and Shri Madhur Bhargava – Advocates for petitioners in Writ Petition No.1111/2015.
Shri Ravindra Dixit – Government Advocate for respondents No.1, 2 and 5/State.
None for respondents No.3 and 4 though served.
