The Allahabad High Court (Lucknow Bench) has set aside orders passed by stamp authorities that had raised a hefty demand of additional stamp duty and penalty against a woman land buyer from Barabanki. The Court ruled that the authorities acted on assumptions and ex-parte reports, without following the mandatory legal procedure or placing reliable evidence on record. Smt Raziya Kahtoon
Background of the Case
The dispute arose from a sale deed executed in June 2013. Smt. Raziya Kahtoon purchased half of a plot of land in Barabanki district, recorded as agricultural land in revenue records. At the time of registration, she paid stamp duty based on the prevailing circle rate, including additional charges applicable as the land was near a residential area.
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Months later, the Sub-Registrar conducted a spot inspection and reported alleged deficiency in stamp duty, claiming the land had commercial potential because of nearby structures such as shops, a primary health centre, and an “Aara” (saw) machine in the vicinity. Acting on this report, the Collector initiated proceedings under the Indian Stamp Act and imposed a demand exceeding ₹4.28 lakh along with a penalty of ₹1 lakh and interest.
The initial order was passed ex-parte. According to the petitioner, no notice was served before inspection or adjudication. After recovery proceedings began, she sought recall of the order, which was allowed subject to partial deposit. Fresh reports were called for, but once again, the Collector relied mainly on inspection notes and treated the land as commercial, even though no conversion order under land laws existed.
Her revision before the Deputy Commissioner (Stamp) also failed, prompting her to approach the High Court.
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Court’s Observations
After hearing both sides, the High Court closely examined whether stamp authorities had followed the procedure laid down under the U.P. Stamp (Valuation of Property) Rules, 1997. The bench noted that Rule 7(3)(c) requires inspection of property only after due notice to the parties.
The Court observed that there was nothing on record to show that proper notice was ever served before inspection. It further held that ex-parte inspection reports can only trigger proceedings, but cannot be the sole basis for determining market value or imposing liability.
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“The authorities proceeded on presumptions of future commercial use, without any cogent material or comparable sale instances,” the Court noted, adding that market value must be assessed with reference to the nature and use of land on the date of execution of the sale deed.
The bench rejected the argument that nearby commercial activity automatically converts agricultural land into commercial for stamp purposes. It underlined that future or intended use cannot decide stamp duty.
Importantly, the Court found that the State failed to discharge its burden of proving undervaluation. No comparable sale deeds or independent evidence were produced to show that similar nearby land was sold at commercial rates.
“The perceived future use of land can never be the basis for adjudging its value,” the Court remarked, stressing that valuation cannot rest on guesswork or hypothesis.
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The High Court also criticised the revisional authority for merely affirming the Collector’s decision without independent reasoning. It held that penalties should not be imposed mechanically and that the revision order reflected no real consideration of the petitioner’s arguments.
Final Decision
Concluding that both the Collector’s order dated 4 February 2016 and the revisional order dated 24 May 2017 suffered from serious legal flaws, the Court set them aside in entirety.
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The Court directed the Collector, Barabanki, to refund all amounts deposited by the petitioner during the litigation within one month of producing a certified copy of the judgment. It further ordered that if the refund is delayed, the amount shall carry simple interest at 6% per annum until payment.
With these directions, the writ petition was allowed, and the long-running stamp dispute finally brought to an end. Smt Raziya Kahtoon
Case Title: Smt. Raziya Kahtoon vs State of Uttar Pradesh & Others
Case No.: Writ-C No. 19818 of 2017
Case Type: Writ Petition (Stamp Duty Dispute)
Decision Date: 03 December 2025
