TaxTMI 
TaxTMI 
2019 (11) TMI 1820
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....tamp duty under the Indian Stamp Act, 1899 (hereinafter referred to as 'the Act, 1899'). 2. FACTUAL MATRIX * For the property in question ad measuring 1100 sq. yds. which situate at 66-A, Friends Colony (East), New Delhi-110065, a sale deed has been entered into between the respondent (original petitioner) and the purchaser for Rs. 36,00,00,000/-. The sale deed is dated 12th September, 2016 and the stamp duty paid by the respondent (original petitioner) is Rs. 2,16,00,000/-. * The registering authority objected that there was under valuation in the transaction so far as payment of stamp duty under Indian Stamp Act, 1899 is concerned because prevailing circle rate is higher. * The registering authority referred the matter to the Collector for fixing the market value under the provisions of the Indian Stamp Act, 1899 especially, under Section 47A thereof [as amended by the Indian Stamp (Delhi Second Amendment) Act, 2001]. * Collector vide order dated 22nd July, 2017 has passed an order on the basis of the circle rate. No sale deeds of the surrounding properties were ever produced by the Collector and no copies of the same were given to the respondent (original ....
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....6) DLT 385 (DB) as well as on State of Haryana vs. Manoj Kumar, (2010) 4 SCC 350. On the basis of the aforesaid decisions it has been submitted by the counsel for appellant that the circle rate can be the sole basis for the determination of valuation to determine stamp duty. Unless this presumption of determination of value of property on the basis of the circle rate is dislodged by the respondent (original petitioner), the valuation on the basis of circle rate is binding upon the respondent. This aspect of the matter has not been properly appreciated by the learned Single Judge and hence the judgment and order dated 14th March, 2019 passed by the learned Single Judge in W.P. (C) 3587/2018 deserves to be quashed and set aside. (iv) It is also submitted by the counsel for appellant that the respondent (original petitioner) has failed to give any evidence that why the determination of value on the basis of circle rate should not be followed in the present case. In the absence of any evidence given by the respondent, the determination of valuation on the basis of circle rate is binding upon the respondent. 4. Arguments canvassed by respondent: (i) Per contra, the counsel appe....
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....es reliance on Ramesh Chand Bansal & Ors. vs. District Magistrate/Collector (1999) 5 SCC 02; Thakur Kuldip Singh vs. Union of India (2010) 3 SCC 794; R. Sai Bharathi vs. J. Jayalalitha & Ors. (2004) 2 SCC 9; Ranvir Singh & Anr. vs. UOI (2005) 12 SCC 59; P. Ram Reddy & Ors. vs. LAQ (1995) 2 SCC 305; Kausalya Devi Bugro & Ors. v. LAQ, Aurangabad & Anr. (1984) 2 SCC 324; Special Land Acquisition Officers & Anr. vs. R.K. Rafiq Saheb (2011) 7 SCC 714; Ravinder Narain & Anr. vs. UOI (2003) 4 SCC 481. (vii) On the basis of the aforesaid decisions, it has been submitted by the counsel for respondent that the valuation of the property depends on verities of factors like- (a) the width of the road upon which the property is situated; (b) the nature and use of the adjacent property; (c) the use of the property in question; (d) the area, locality and location of the property in question; (e) the price agreed upon by the parties; (f) whether it was a distress sale; and (g) whether local prices had escalated or reduced. (viii) The counsel further submits that market rate depends upon the existing factors, whereas, the circle ra....
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.... "27. Facts affecting duty to be set forth in instrument- The consideration (if any) and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it its chargeable, shall be fully and truly set forth therein. 47A. Instruments of conveyance, etc. undervalued how to be dealt with. - (1) If the Registering Officer, while registering any instrument transferring any property, has reason to believe that the value of' the property or the consideration, as the case may be, has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the value or consideration, as the case may be, and the proper duty payable thereon. (2) On receipt of a reference under sub-section (1), the Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under this Act, by order, determine the value of the property or the consideration and the duty aforesaid, and the deficient amount of duty, if any, shall be payable b....
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....reciated by the learned Single Judge vide judgment and order dated 14th March, 2019 and the matter was remanded to the Collector for fresh determination of the market value. It further appears from the facts of the case that the sale deeds upon which the reliance is placed by the Collector, the copies of which were given only at appellate stage to the respondent (original petitioner), but, looking at the said sale deeds, it appears that they were of plots measuring approximately 10% of the plot area of the respondent. (vi) Looking at the sale deeds upon which the sole reliance is placed by the Collector, it appears that even in those sale deeds, the sale consideration was lesser than the valuation arrived at on the basis of the circle rates. Moreover, for a smaller plot area, higher sale consideration can be fetched by the seller and, therefore, whenever any comparison is to be made for arriving at a value for the plot in question, as far as possible the sale deed of the plots having similar measurements should have been kept in mind. Looking at the sale deeds upon which the reliance is placed by the Collector, it appears that for a smaller plot (which is 10% of the plot i....
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.... property disclosed in an instrument requiring payment of stamp duty. Thus the guideline value fixed is not final but only a prima facie rate prevailing in an area. It is open to the registering authority as well as the person seeking registration to prove the actual market value of property. The authorities cannot regard the guideline valuation as the last word on the subject of market value. This position is made clear in the explanation to Rule 3 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968. The said Explanation reads as follows: Explanation-The 'guidelines register' supplied to the officers is intended merely to assist them to ascertain prima facie, whether the market value has been truly set forth in the instruments. The entries made therein regarding the value of properties cannot be a substitute for market price. Such entries will not foreclose the enquiry of the Collector under Section 47-A of the Act or fetter the discretion of the authorities concerned to satisfy themselves on the reasonableness or otherwise of the value expressed in the documents." 23. This Explanation also will have to be read in conjunction....
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....ircle rate is one of the factors for arriving at the value of the property. Meaning thereby, there are several other factors, which must be appreciated, before arriving at value of the property. (g) The valuation of the property in question depends upon the varieties of factors like: * The area of the plot in question or the property in question; * The use of the property in question; * Nature of property in question like new property and ten years old property. * The width of the road upon which the property is situated; * The nature of the adjacent properties; * The nature of use of the adjacent properties, e.g., if an adjacent property is of a commercial nature, then the sale consideration fetched is bound to be different and if the adjacent property is a public convenience constructed by the Government, then the sale consideration fetched by the property in question can be entirely different. * The existing market factors varies time to time, whereas, the circle rates are usually prescribed on a much prior point of time. In the facts of the present case, the circle rates were prescribed by the Government on....
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....e basis for determination of a market value of a large stretch of land. In Ram Phool [(2003) 10 SCC 166, 167] this Court held that an isolated deed of sale showing a very high price cannot be the sale basis for determining the market value. The said decision was rendered in relation to a land situated at Village Poothkalan which is adjacent to the lands in question. Even the claimants, it is interesting to note, had exhibited sale deeds in respect of the land situated at Village Poothkalan for proving their claim." (Emphasis supplied) (j) Thus, in view of the facts of the present case, it appears that the aforesaid factors and such other relevant factors for arriving at the valuation have never been gone into by the Collector nor by the Additional District Judge--Appellate Authority. (k) It appears that mechanically, and without appreciating the varieties of the factors, which govern the market forces, and solely on the basis of the circle rates, the valuation to determine stamp duty has been arrived at by the Collector vide order dated 22nd July, 2017 as well as by the Additional District Judge--appellate Authority vide order dated 16th March, 2018 and h....
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....n followed by the Collector as per Section 47-A(2) of the Act, 1899 keeping in mind the aforesaid aspects of the matter as well as the principles propounded by the Hon'ble Supreme Court, for determination of the value of the property. The mechanical approach of the Collector only to follow the circle rate is hereby deprecated. 7. With the aforesaid observations, this Letters Patent Appeal is hereby dismissed as we see no reason to interfere with the judgment and order dated 14th March, 2019 passed by the learned Single Judge in W.P. (C) 3587/2018 since no error was committed by the learned Single Judge in appreciating the aforesaid facts of the matter. 8. The money deposited by the respondent (original petitioner) with this Court as per the order dated 12th April, 2018 passed by the learned Single Judge shall remain deposited with the Registrar General of this Court and will be invested in a nationalised bank, since the matter is being remanded to the Collector for fresh determination of the valuation, and if any additional stamp duty is required to be paid by this respondent (original petitioner), the amount of Rs. 1,06,87,791/- will be adjusted towards the same. If more....