1. You had not sold the land. What you had done was to execute an agreement to sell the land on a subsequent date for 3100000 out of which 500000 was paid to you as advance amount at the time of the agreement. The purchaser subsequently backed out of the deal.
2. Was a lawyer's notice for cancellation issued by the purchaser to you? What is the cancellation clause mentioned in the agreement? The advance amount is generally forfeited. If you have not included this in your agreement then it is a blunder.
3. Once the deal with the purchaser is called off you are at liberty to sell the land to another purchaser.
4. You should engage a lawyer to reply to the legal notice issued to you and thereafter proceed to sell the land.
5. You can certainly ask the purchaser to enter into a fresh agreement at the current market rate. The stamp duty will be payable at the market rate.