Hon’ble V.K. Shukla, J.—Varanasi Builders and Developers Association through its Secretary Raman Singh is before this Court for a declaration that Rules 4 and 5 of U.P. Stamp (Valuation of Property) Rules, 1997 be declared ultra vires and further prayer has been made to quash the impugned rate list issued by the District Magistrate, Varanasi, in so far as it relates to enhancement of construction cost effective w.e.f. 1.8.2016.

2. Brief background of the case is that petitioner claims that its an association of builders and developers and in this background a society has been registered under the Societies Registration Act, 1860 with the name and style of Varanasi Builders and Developers Association. Petitioner claims that the members of the petitioner’s association are engaged in the business of constructing multi-storied building, group housing and developing the residential colonies and at the point of time of purchase of land and at the time of sale of flats/plots the payment of stamp duty necessarily comes into play under the umbrella of the Indian Stamp Act, 1899 read with U.P. Stamp (Valuation of Property) Rules, 1997 and under the Stamp Act all kinds of instruments which are charged with the stamp duty are liable to be paid according to the rate prescribed in Schedule I and I-B of the Stamp Act. Section 33 of the Indian Stamp Act provides for examination and impounding of the instrument where the deficiency in the stamp duty paid on the instrument is found and Section 35 provides that instrument not duly stamped is inadmissible in evidence. Section 47-A of the Stamp Act provides for dealing with the instrument, conveyance etc. if the said instrument is undervalued and empowers the District Magistrate/Collector to recover the deficient amount with penalty. Certain instruments including the instrument of conveyance on which the stamp duty is payable on the market value of the property. In exercise of the power under Section 75 of the Indian Stamp Act, the State of U.P. has made U.P. United Province Stamp Rules, 1942 to carry out generally the purposes of the Act. The Stamp Rules, 1942 aforesaid were notified on 25.3.1942 and are in effect since then. Chapter XV of the Stamp Act, 1942 provides for rules for determining the market value of certain instrument and Rules 340 to 352 came into effect on 21.2.1970 and the Rules 340, 341, 344, 346, 349 and 352 in their present form came into force on 1.7.1976 vide notification dated 24.6.1976.

3. Rule 340 of the Stamp Rules, 1942 requires for disclosure of certain particulars in the instrument where the instrument is relating to immovable property if chargeable with an ad valorem duty. Rule 340 (a) empowers the District Magistrate to supply District Registrar and such other officers as the State Government may specify a copy of the statement showing classification of soil, circle rate and the average price of land appertaining to each such classification situate in every pargana, corporation or local body of his district.

4. Rule 341 of the Stamp Rules, 1942 provides for determining the minimum market value of immovable property and envisages that the same shall not be less than that as arrived on the basis of the multiples given in Sub Rules (I), (ii) and (iii) of Rule 341. For example, minimum market value of the bhumidhari land may be 800 times the land revenue; similarly the sirdari land may be 400 times the land revenue and where the land is not assessed to revenue 25 times the annual average of the profits and in case, the land is non-agricultural and is situate within the limits of any local bodies, equal to the value worked out on the basis of the average price per square meter prevailing in the locality on the date of instrument. Rule 340 of the Stamp Rules, 1942 provides for the governing principle for determining the minimum market value and the District Magistrate is bound to govern by such principle while determining the circle rate under Rule 340 (a) of the