Stamp duty assessment orders passed without actual service of notice violate principles of natural justice.

The petitioner, a registered partnership firm, purchased a sub-divisional plot in Taluka Kamrej, District Surat, via a registered sale deed dated 08.10.2020 for a consideration of Rs. 5,59,75,750/-.

Following the purchase and the commencement of residential construction, a third party initiated proceedings alleging a deficit in stamp duty.

A site inspection was conducted on 01.03.2021, recording the ongoing construction.

The respondent authority purportedly issued several notices between July 2021 and August 2023 to determine the market value; however, none of these notices were served upon the petitioner or its partners.

On 12.09.2023, the respondent passed an ex parte order determining the market value at Rs. 10,49,03,600/- and levying a deficit stamp duty and charges totaling Rs. 1,07,80,554/-.

The petitioner became aware of these proceedings only after an encumbrance entry was mutated in the revenue records.

Consequently, the petitioner challenged the order under Articles 226 and 227 of the Constitution.

1. Whether the impugned order dated 12.09.2023 was legally sustainable given the alleged lack of service of notice and violation of the principles of natural justice?

The Court primarily relied on the principles of natural justice (specifically audi alteram partem) as enshrined under Articles 14 and 226 of the Constitution of India, which require that no person be condemned unheard.

It further considered the procedural requirements for determining market value under the Gujarat Stamp Act, 1958, and the Gujarat Stamp (Determination of Market Value of Property) Rules, 1984.

The Court reviewed the record and confirmed that while notices were dated 29.07.2021, 28.03.2022, 22.07.2022, and 29.08.2023, they were never actually served upon the petitioner.

The Court noted the absence of any signatures or acknowledgments of receipt from the partners of the petitioner firm.

The Court reasoned that the respondent authority was legally obligated to ensure due service of notice before proceeding to determine market value ex parte.

By failing to provide the petitioner with an opportunity to be heard or to contest the site inspection findings, the respondent acted arbitrarily.

The Court held that the breach of procedural fairness and natural justice necessitated the setting aside of the order to allow for a determination on the merits.

The Court directed the authority to provide the petitioner and all concerned parties a fair opportunity of hearing and to pass an appropriate order in accordance with the law within three months of receiving the judgment.