Important Point
The imposition of stamp duty on sale deed are on the actual value of such property and not the value described in the instrument.

Headnote:Indian Stamp Act-Section 47A -U.P . Stamp Rules, 1942-Rule 340-A(a)-U.P. Act XI of 1969-Section 47A(1)(2) and (3)-Appellant purchased agricultural land-Through registered sale deed-Paid additional stamp duty as sale consideration less than circle rate-Additional District Magistrate issued show cause notice under Section 47-A of Indian Stamp Act for enhanced payment of stamp duty-Enhanced rate by 20 per cent for next year-Appellants filed writ petition for quashing circular, impugned notice and for return of sale deed ignoring 20% enhancement-Writ dismissed holding circular within competence of Collector-Appeal-Neither vires of Rule nor lack of material before Collector to fix price challenged - Challenge confined to power of enhancement for next year in question-If there be any material in possession of Collector clearly indicating regular pattern of increasing percentage of prices of land every year then to that extent if Collector in his biennially statement refers to such increase for following years-Cannot be said Collector lacks competence to exercise such power-Impugned circular and notice valid-Appeal devoid of any merit.
       Held : In the present case, neither the vires of the Rule nor lack of material before the Collector to fix the price is challenged . The challenge is confined to the power of enhancement for the next year in question as has been done in this case by increasing the rate by 20%. (Para 3)
       If there be any material in possession of the Collector clearly indicating a regular pattern of increasing percentage of the prices of land every year then to that extent if he in his biennially statement refers to such increase for the following years it cannot be said that the Collector lacks competence to exercise such power. The vires of this Rule is not under challenge nor there is any challenge that there was no such material before the Collector to enhance for subsequent year by 20 per cent. We do not find any such ground raised nor appellants could point out any raised before the authorities concerned. (Para 5)
       We hold the impugned circular and the notice to be valid. Notice has already been issued to the appellants and they have an opportunity to contest the valuation prima facie fixed under the said circular and to prove to the contrary in the proceedings before the Collector. (Para 7)

Judgment

Misra, J.-The short question raised is: whether the Collector while exercising powers under sub-Rule (a) of Rule 340-A of the U.P. Stamp Rules, 1942 framed under the Indian Stamp Act had the competence while fixing circle rates to enhance such rate by 20 per cent for the next year in question? The appellants, in other words, have challenged circular dated 29th November, 1991 which became effective from 1st December, 1991 under which the rate chargeable in Village Surajpur of revenue villages located in Tehsil Dadari area is fixed as under:

Prescribed Prescribed rate on rates on

Road per road (beyond sq. mt. 100 mts.) per sq. mt.

1. Surajpur Residential 600.00 400.00 Plots

2. Surajpur Commercial 750.00 300.00 Area Plots

3. Surajpur Commercial 3000.00 2500.00 Plots

Note:

All the costs shown in the above inventory will automatically be deemed increased by 20% after one year.”

(Emphasis supplied)

The appellants had challenged the note by which the rate was deemed to increase by 20% after one year.

2. The appellants purchased agricultural land through registered sale deed. The sale consideration being less than the aforesaid circle rate, the appellants had to pay the additional stamp duty which they have paid. The Registering Authority after registering the same instead of returning the sale deed sent the same to Additional District Magistrate (Finance and Revenue) under Section 47-A of the Indian Stamp Act who issued show-cause notice to the appellants for the enhanced payment of stamp duty. The difference sought to be recovered was not between the value shown in the sale deed and the said circle rate but the rate which is enhanced to 20% as per the note in the said circle rate. Dispute in this case is only with respect to this enhancement of 20%. The appellants instead of replying to the said show-cause, filed a writ petition before the High Court, for quashing the said circular and the impugned notice and for returning the sale deed already registered ignoring 20% enhancement. The High Court dismissed the writ petition holding the said circular to be within the competence of the Collector. Aggrieved by the said decision the present appeal has been filed.

3. The said circular issued under the aforesaid sub-rule (a) of Rule 340-A of the U.P. Stamp Rules, 1942, is quoted hereunder:

“(a) Every Collector shall biennially supply to the District Registrar and such other officers as the State Government may specify, a copy of the statement, showing classification of soil, circle rate and average price of land appertaining to each such classification situate in every pargana, corporation or local party of his district.”

Mr. Manoj Swarup, learned counsel for the appellants, submits that the Collector could only fix the circle rate composite for two years but not different rates by splitting for two different years and even if it could, the note to the impugned circular enhancing the rate for the next year by 20% is conjectural, arbitrary and beyond the powers of the Collector. He made strong reliance on the word “biennially” in the aforesaid Rule which would mean a rate to be for a period of two years, the Collector cannot fix different rates for two different years. In reply, Shirr AK Gel, learned Additional Advocate General for the State, repelling this submits that under this no duty is cast upon the Collector to fix a single or inflexible rates for two years. It is for th

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1999 Supreme(SC) 643

Important PointThe imposition of stamp duty on sale deed are on the actual value of such pro­perty and not the value described in the instrument.

Cases Referred (1)

Important Point
The imposition of stamp duty on sale deed are on the actual value of such property and not the value described in the instrument.