Amit Kumar Tyagi & Another vs. State of U.P. & Others AIR 2014 All 40
The issue raised in the petition was that the authorities have determined market value of the property by enhancing it by 25% without giving any reason.
The instrument was executed and registered on 13-08-2010 in respect of the house’s total area of 252.42 sq. mtrs. The proceedings u/s. 47-A(iv) of Indian Stamp Act, 1899 were initiated pursuant to a spot inspection made by the Additional District Magistrate, Finance and Revenue, Ghaziabad and his report dated 20-10-2010, stated that the value set forth in the instrument appears to be less than the minimum residential circle rate prescribed by the Collector and, therefore, the proceedings for determining market value should be initiated.
The same officer, who submitted the inspection report dated 20-10-2010 and at whose instance the proceedings were initiated, took upon himself to consider the matter finally u/s. 47-A(4) and passed order dated 23-02-2011. He held that 25% should be added to the circle rate prescribed at the relevant point of time and accordingly thereto, the market value of the property comes to Rs. 68,47,060/-, whereupon the the stamp duty payable is Rs. 4,79,300/- and since only Rs. 3,91,000/- has been paid, therefore, there was a deficiency of stamp of Rs. 88,300/-.
It is contended that on the one hand, the Assistant Collector suggested that the stamp duty was to be paid according to the prescribed circle rate/ market value of the commercial land, but while passing the impugned order he has increased the value by 25% from the circle rate for which no reason has been assigned at all. On this ground, the petitioners challenged the order.
The Hon’ble Court observed that it goes without saying that proceedings u/s. 47-A(4) can be initiated only when there exists a ground that the correct market value has not been set forth in the instrument. The determination of market value does not depend on the fancy, imagination and conjectures of the Collector or any other competent authority.
The Court further observed that under the provisions of the Act, 1899 stamp duty is payable on the market value of the property in transacted by the sale deed. It is also true that the market value does not mean the circle rate itself but it is only a guiding factor. The Collector has to determine the market value taking into account various factors. In the case in hand, the Additional Collector has simply referred to the circle rate and in a mechanical way, passed the impugned order enhancing the circle rate by 25%.
U/s. 47-A of the Act, the obligation is on the Collector to find out the correct market value of the property which is alleged to have not been mentioned in the instrument. For the purpose of determining the market value, no machinery is provided in statutory provisions. However, a procedure has now been provided vide U.P. Stamp (Valuation of Property) Rules, 1997 (hereinafter referred to as the “1997 Rules”) in accordance whereto the Collector would determine the market value.
The term “market value” has not been defined under the Act. However, there are some precedents laying down certain guidelines as to how and in what manner a market value would be determined. The consensus is that the market value of any property is the price which the property would fetch or would have fetched if sold in the open market, if sold by a willing seller, unaffected by the special need of a particular purchaser. It is interesting to note that the Act provides first for the determination of minimum value of the property and further says that if the market value of the property set forth in the instrument is less than the minimum value determined under the Act, then before registering the instrument the registering authority shall refer the instrument to Collector for determination of the market value of the property and the proper duty payable thereon. Therefore, a market value of the property in all cases cannot be said to be higher than the minimum value determined under the rules by the concerned authority, inasmuch as, it is only a kind of guideline provided to the authorities for the purpose of considering as to whether the proper stamp duty is being paid by setting forth the true market value of the property in question in the instrument. The entire object of legislature in the various provisions of the Act is to require the parties concerned to set forth the correct market value of the property at which the transaction has taken place so that appropriate duty in accordance with the Act is paid by them. The various provisions with respect to the minimum value etc. are only in aid and assistance of the authorities to find out the true amount of consideration on which the parties have entered into transaction so that the correct duty is collected therefrom.
It is thus clear that the circle rate by itself does not provide a true market value of the property, which is the subject matter of the instrument. It is only a guiding factor. In the present case, interestingly, the proceedings were initiated on the assumption that the stamp duty has not been paid according to the prevailing circle rate/market value treating the market value at par with the circle rate, but when the impugned order has been passed instead of confining to the circle rate, the Additional Collector has gone on to increase the value by 25% further to the prescribed circle rate and in doing so he has not given any reason. The proceedings in question show a complete nonapplication of mind on the part of the authorities. Such proceedings are nothing but amounting to a sheer harassment of public at large and in particular, the person who actually suffers due to such whimsical order passed by the authorities. A serious statutory duty has been cast upon the respondents but instead of doing justice with their statutory requirement, the authorities are passing unmindful, arbitrary orders, whereby not only the large public is being harassed but it also results in burdening the Courts though such litigation otherwise could have been avoided. The petition was allowed.
