Chhattisgarh HC upholds Jurisdiction of Stamp Collector for Market Value of Immovable Property Transferred under Income Tax Act [Read Order]

The Chhattisgarh High Court upheld the jurisdiction of the stamp collector for the market value of immovable property transferred under the provision of the Income Tax Act, 1961. It was observed that since the petitioner cooperated in the enquiry the subsequent stand taken by petitioner questioning the jurisdiction of the concerned Collector of Stamps is not permissible under the law.

The appellant/ writ petitioner, Nuvoco Vistas Corporation Limited has filed this writ appeal assailing the order dated 04.04.2025 passed by the Single Judge of this Court in WP No. 320 of 2002, by which, the Single Judge has disposed off the writ petition filed by the writ petitioner.

The Respondent No. 3 owned a Cement Plant at Sonadih, District Baloda Bazar-Bhatapara (the then Raipur District)

(C.G.) and agreed to transfer the said Cement Plant of Sonadih to the Petitioner No. 1, Nuvoco Vistas Corporation Limited, District-Raipur, CG.

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The Petitioner No. 1 decided to purchase the said Cement Plant under the terms and conditions settled between them. It was agreed by the parties that the immovable properties would be transferred by a deed of conveyance under the provisions of the relevant law.

Respondent No. 3 made an application in Form 34A of the Income Tax Act, 1961 (for short, ‘the Act, 1961’), for approval as required under Section 230A of the Act, 1961. In the said Form No. 34A, cost of the property was mentioned as Rs. 44,45,78,549/- and value of assets which was to be transferred through the deed of conveyance was mentioned as Rs. 36,11,15,305/-. Thereafter, On 14-09-1999, Respondent No. 3 wrote a letter to the District Registrar, Raipur, to provide sufficient stamp duty in the franking machine so that it may be put in the conveyance deed instead of annexing the non-judicial stamp.

The certificate issued under Section 230A of the Act, 1961 dated 10-08-1999 was sent to the District Registrar/Collector of Stamps, Raipur, vide covering memo dated 29-09-1999, which was received by the Deputy

Registrar on 01-10-1999. It is submitted that Respondent No. 2 constituted a committee of 2 members for the assessment of the market value of the property, which was to be transferred through the deed of conveyance. Respondent No. 3 has also handed over the details of the properties to Respondent No. 2.

The officers of Respondent No. 2 visited the spot; they have independently assessed the market value of the properties based on guideline issued for the determination of market value and came to conclusion that market value of the property was Rs. 28,81,27,807/- and including the value of the constructed area which was Rs. 20,43,07,367/-, and open area was Rs.8,38,20,440/-.

Since there was a dispute with respect to the valuation of the property between Respondent No. 2 and 3, the sub-registrar issued an adjudication on 15-10-1999 that market value of the property which was to be transferred was Rs. 28,81,27,807/- and therefore, the requisite stamp duty was Rs. 3,20,48,985/- and the registration fee was leviable as Rs. 28,89,169/-.

The Collector of Stamp has not finally adjudicated the issue and it is pending for its order. The petitioner company has duly participated in the proceeding before the Collector of Stamp and contested the case on merits. Any adjudication by the Collector of Stamp is liable to be challenged in the first and second appeal. Therefore, it cannot be said that any prejudice is being caused to the petitioners at this stage, by initiating the enquiry proceeding for determination of market value of the property of the instrument.

Since, the petitioner has stated before the court on the very first day of hearing that they would cooperate in the enquiry it means that the petitioner has accepted the jurisdiction and authority of Collector of Stamps, hence the subsequent stand taken by petitioner questioning the jurisdiction of the concerned Collector of Stamps is not permissible under the law.

The Single Judge categorically observed that since the petitioner/appellant has already participated in the proceedings till the last and the case is closed for passing of the orders, the appellant would be at liberty to pursue the case before the Collector of Stamps, Raipur, in case No.13/B-105/2000-01, which is kept in abeyance there till the further direction of the Court in the writ petition.

The Single Judge while vacating the interim order directed the Collector of Stamps to decide the matter, in accordance with law and on its own merits, without being influenced by any of observations made in the order impugned. The Chief Justice , Ramesh Sinha and Justice Bibhu Datta Guru upheld the order passed by the Single Judge and dismissed the appeal.

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