The Supreme Court docket just lately held that the classification of a property below a grasp plan shouldn’t be determinative of stamp obligation legal responsibility, because the precise use of the property is the related consideration whereas figuring out its valuation.
A bench of Justice J.B. Pardiwala and Justice Okay. Vinod Chandran put aside the Rajasthan Excessive Court docket’s judgment, which had labeled the property as industrial for stamp valuation functions merely as a result of, along with manufacturing exercise, the property was additionally getting used for the sale of manufactured merchandise.
“The manufactured objects positively needed to be bought and if the premises is used for such sale too, even retail sale, it can’t result in a conclusion that the property is one used for industrial functions, as distinguished from an industrial goal.”, the Court docket stated, whereas disagreeing with the Excessive Court docket’s view.
The case involved a property coated by a present deed, which had been registered as residential land. The Sub-Registrar, nevertheless, carried out an inspection and located the property to be industrial, noting that it was getting used as a showroom within the identify of Sodhi Carpets and that a number of industrial institutions have been working within the surrounding space.
The Collector below the Rajasthan Stamp Act subsequently inspected the property and located {that a} manufacturing exercise/manufacturing facility was being operated from the premises. The Rajasthan Tax Board agreed with the Collector after contemplating each inspection reviews and the related State Authorities round.
The Excessive Court docket, nevertheless, reversed the concurrent findings of the statutory authorities. It held {that a} property may very well be handled as industrial provided that it was located in an industrial space and the exercise carried out was solely manufacturing. Since manufactured items have been additionally being bought from the premises, the Excessive Court docket handled it as a industrial property.
Aggrieved by the Excessive Court docket’s choice, an attraction was filed earlier than the Supreme Court docket contending that the property was getting used for industrial functions, because it was registered as a manufacturing facility below the Factories Act, 1948 and likewise registered as an trade with the District Industries Centre, Jaipur.
Permitting the attraction, the judgment authored by Justice Chandran rejected the State’s rivalry that the property must be labeled as industrial, quite than industrial, merely as a result of it was not geographically positioned inside an industrial space.
“The round requires that on the time of execution of the doc, if the land is being put to industrial use or is located in a RIICO Industrial Space or has been transformed to industrial goal, then it shall be valued on the industrial fee. Therefore, our discovering, that the consumer determines the valuation of the land, as distinguished from the classification, at the same time as per the Grasp Plan as submitted by the realized Authorities Advocate.”, the Court docket stated.
The Court docket notably relied on the language of the State Authorities’s round, which, in keeping with it, centered on the consumer of the land quite than the classification of the world.
“The Excessive Court docket clearly erred in stipulating a take a look at which doesn’t come out from the round of the State Authorities offering for valuation of various properties, particularly of business, residential and industrial properties.”, the Court docket stated.
In consequence, the attraction was allowed, thereby restoring the orders handed by the statutory authorities.
Trigger Title: Harinder Singh Sodhi Versus State of Rajasthan and Ors.
Quotation : 2026 LiveLaw (SC) 869
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For Petitioner(s) :Mr. Anant Kasliwal, Sr. Adv. Mr. Vaibhav Kasliwal, Adv. Mr. Bhargava V. Desai, AOR Mr. Shivam Sharma, Adv. Mr. Utkarsh Vats, Adv. Ms. Prakriti Rastogi, Adv. Ms. Surbhi Tuli, Adv.
For Respondent(s) :Mr. Shiv Mangal Sharma, A.A.G. Mr. Shivansh B. Pandya, Adv. Mr. Saurabh Rajpal, AOR
