Section 47-A stamp valuation cannot be invoked where industrial assets are sold through an open, supervised tender process.

Section 47-A of the Indian Stamp Act, 1899 applies only where the registering authority has a reasoned belief that the instrument does not truly reflect market value and that undervaluation is being used to evade stamp duty. Where industrial assets of a sick company are sold through a statutory, open tender process and the highest bid is accepted, the disclosed consideration is treated as a market-tested price. On those facts, there is no basis to infer fraudulent undervaluation, so additional stamp duty cannot be demanded and registration must follow the value stated in the conveyance.

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Issues: Whether proceedings under Section 47-A of the Indian Stamp Act, 1899 could be sustained in respect of a sale of industrial assets conducted pursuant to BIFR/AIFR directions and sold by open tender, and whether the authorities were justified in treating the disclosed consideration as undervaluation.

Analysis: Section 47-A is attracted only where the registering authority has reason to believe that the market value has not been truly set forth in the instrument. The power is not meant to be invoked as a routine measure for every conveyance; it presupposes a basis for forming a belief of wilful undervaluation with an intention to evade proper stamp duty. On the facts, the property formed part of the assets of a sick industrial company, was sold through a process supervised by statutory authorities, bids were invited in the open market, and the highest tender was accepted. In such circumstances, the disclosed consideration represented the market-tested price, and there was no material to infer fraudulent undervaluation.

Conclusion: Section 47-A had no application, and the demand for additional stamp duty could not be sustained.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and registration was directed on the basis of the value stated in the conveyance.

Ratio Decidendi: Section 47-A of the Indian Stamp Act, 1899 can be invoked only on a reasoned belief of true undervaluation aimed at evading stamp duty; where property is sold through an open, supervised tender process and the price is market-determined, the provision does not apply.

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