Prayagraj, 14 April: The Allahabad High Court said that when any piece of land or land is gifted to someone, the stamp duty will be charged as per the gift given. Stamp duty cannot be recovered by fixing its price on the basis of estimated market value.
Therefore, officers performing quasi-judicial functions should exercise special caution while performing such tasks. So that they can pass a judicious order. This order was given by Justice Shekhar B. Saraf has given this while accepting the petition filed by Sheel Mohan Bansal of Jhansi.
The court also said that the legislature has defined both the market value and the value of the property in different ways. Stamp duty on gifted land can be levied only on the value of the property and not as per the market value. In the present case the petitioner had received a land as a gift. Taking action under Section 47A of the Indian Stamp Act, the concerned authorities passed the order to collect additional stamp duty on 18 November 2022.
The petitioner appealed against this to a higher authority but it was rejected. The petitioner approached the High Court. On behalf of the petitioner advocate, it was said that there is no legal basis for the recovery order. Because under the Stamp Act the authorities do not have the right to reevaluate the stamp duty. The petitioner cited the order given by the Supreme Court in the case of Sumit Gupta vs. State of UP.
Said that it is clear that it is necessary to charge stamp duty equal to the value of the property in the gift registry. Market value may not be applicable to it. However, this was opposed by the department. It was said that there is already a petrol pump in the gifted land. Apart from this, commercial activities are going on within two hundred meters. Therefore, stamp duty should be collected on the basis of market value.
The court said that generally two parties are involved in the sale of property, the seller and the buyer. And while determining the market price, it is determined on the basis of market prices i.e. demand and supply of the commodity. In a gift deed only the gift taker is relevant. It depends on how much importance he gives to his property. Therefore, the action taken by the authorities under Section 47-A of the Stamp Act is not correct. Apart from this, there is no requirement of determination of market value in the gift deed.
The court has asked the petitioner to return the amount deposited as additional stamp duty to the department at the rate of five percent interest within six weeks.
