I. T. C. LIMITED Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) Since common issue is involved in all these writ petitions, with the consent of the parties, they were heard together and are now being decided by way of this common order. D.B. Civil Writ Petition No. 9532/2006 is taken as lead file to peruse the facts.

(2.) The petitioner-company is engaged in the business of running and operating hotels throughout the country, including the city of Jaipur in Rajasthan. The petitioner-company was operating the Hotel Rajputana Palace Sheraton in Jaipur, for which the land in question was leased for a period of 20 years vide lease deed dtd. 14/7/1989. The subject matter of the present writ petitions are three strips of land bearing Khasra No. 328/3 admeasuring 800 sqmtr, 400 sqmtr, and 380 sqmtr, which are within the Atal Ban area on which the hotel is constructed. The present writ petitions arises out of proceedings for adjudication of classification of lease deed dtd. 23/3/1998 executed by M/s J.K. Atal HUF in favour of the petitioner-company, with regard to the three strips of land as mentioned above, the levy and charge of stamp duty thereupon as also the valuation of the lease deed for aforesaid purpose. When the lease deed was presented for registration before the Respondent No.2 / Sub-Registrar, Jaipur, the Respondent No.2 classified it as a perpetual lease and for the purpose of determining value of the subject land, applied a land rate being 110% of Rs.36,000.00 per square meter. The Respondent No.2 had obtained the said rate from the rates prescribed by the District Level Committee (for short "DLC") for commercial property situated at main station road, Jaipur. As the petitioner was not satisfied with the valuation arrived at by Respondent No.2, the matter was referred to Respondent No. 3 / The Additional Collector (Stamp), Jaipur, under Sec. 47-A (i) of the Rajasthan Stamp Law (Adaptation) Act, 1952 (hereinafter referred to as "the Act of 1952"). The Respondent No. 3 confirmed the proposal made by the Respondent No. 2 vide impugned order dtd. 31/12/2005. Against the said impugned order, the petitioner filed a revision petition before the Tax Board, which was also dismissed vide impugned order dtd. 3/10/2006. Being aggrieved by the impugned orders dtd. 31/12/2005 and 3/10/2006, the present writ petitions were filed under Article 226 and 227 of the Constitution on India.

(3.) Learned counsel for the petitioner submits that the Respondent No. 2 had mis-classified the lease deed dtd. 23/3/1998 as perpetual lease because the lease was clearly issued only for the time till the adjacent premises were used by the petitioner-company for running the hotel. The lease for the hotel, dtd. 14/7/1989, was only for a period of 20 years and at the time of execution of lease deed dtd. 23/3/1998, more than ten years had already elapsed and accordingly the petitioner- company was only leasing the subject property for a definite period of about 9-10 years. Learned counsel for the petitioner further submits that there was a termination clause in the lease deed itself, which goes to show that the lease deed was never intended to be for indefinite or perpetual. Learned counsel for the petitioner contends that even the classification of hotel activity as commercial activity is erroneous in light of Notification dtd. 4/3/1989 bearing No. F.12(4) IInd/85, issued by Industries (Gr.I) Department, Government of Rajasthan, by which the State Government had declared all tourism units to be treated as an industry. Learned counsel for the petitioner further contends that Respondent No. 2 ought to have applied the industrial rate and not the commercial rate, in consonance with the correct and latest legal position. Learned counsel for the petitioner further submits that as per Sec. 47-A of the Act of 1952, the Respondent No. 3 was obligated to conduct an inquiry in respect of the market value of the property and on the basis of such inquiry, the quantum of tax/duty could be determined. However, the Respondent No. 3 failed to conduct any inquiry and mechanically approved the levy of duty as arrived at by Respondent No. 2. The statutory power of framing an assessment which has been conferred onto the competent authority necessarily have to be exercised by him/her by applying his/her own mind to relevant material and factors. That being the settled position, it is contended that, it is not open for the competent authority to abdicate his/her statutory powers and functions by mechanically following any administrative circular issued by any Department in respect of determination of market value and assessment of stamp duty. Learned counsel for the petitioner has also relied on Apex Court judgments of B. Arvind Kumar Vs. Govt. of India & Ors. reported in (2007) 5 SCC 745, State of U.P. & Ors. Vs. Lalji Tandon (Dead) through LRs reported in (2004) 1 SCC 1, Juthika Muliek (Smt.) & Anr. Vs. Mahendra Yashwant Bal & Ors. reported in (1995) 1 SCC 560 and Hardesh Ores Pvt. Ltd. vs. Hede and Company reported in (2007) 5 SCC 614 and Allahabad High Court judgment of Ashish Kumar vs. Deputy Commissioner (Stamp) and Ors. reported in 2010 (7) ADJ 55.