Stamp duty valuation must rest on real market value inquiry; circle rate and ex parte report cannot conclusively prove undervaluation.

In proceedings for determination of stamp duty deficiency, the Collector must assess market value on relevant material and follow the prescribed procedure; circle rate is only a prima facie guide and cannot, by itself, prove undervaluation. An ex parte inspection report may justify initiation of inquiry, but it is insufficient to sustain a final finding without a proper determination of value as on the date of execution of the instrument. The impugned orders were therefore quashed and the matter remitted for fresh decision in accordance with law.

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Issues: Whether the orders determining stamp duty deficiency could stand when the market value of the property was fixed mainly on the basis of circle rate and an ex parte inspection report, without a proper inquiry into the market value on the date of execution of the instrument.

Analysis: In proceedings under Section 47-A of the Indian Stamp Act and the U.P. Stamp (Valuation of Property) Rules, 1997, the Collector must determine market value on relevant material and in accordance with the prescribed procedure. The circle rate is only a guideline and cannot, by itself, be treated as conclusive proof of market value. An ex parte inspection report may justify initiation of proceedings, but it cannot by itself sustain a final finding of undervaluation. The burden remains on the revenue authority to establish that the instrument was undervalued, and the valuation has to be assessed with reference to the situation and character of the land as on the date of execution.

Conclusion: The impugned orders were unsustainable because they were founded on circle rate and ex parte material without a proper determination of market value; they were therefore quashed and the matter was remitted for fresh decision in accordance with law.

Ratio Decidendi: In proceedings for determination of stamp duty deficiency, circle rate is only a prima facie guide and cannot replace a reasoned inquiry into market value on the relevant date; an ex parte report alone is insufficient to uphold a finding of undervaluation.

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