Circle rates are guidelines for determining property value, but authorities must provide evidence to justify any deviation from these rates when imposing stamp duties.

1. This appeal, by special leave, takes exception to the judgment and order dated 15.11.2011 passed by the High Court of Judicature at Allahabad1 dismissing the writ petition presented before it by the appellant.

2. The subject matter of challenge in the writ petition was an appellate order dated 27.07.2011 of the Additional Commissioner, Meerut Division, Meerut2 in Appeal No.100/2010-11, whereby the Commissioner dismissed the appellant’s appeal and affirmed the order dated 14.02.2011 of the Collector, Ghaziabad3 in Stamp Case No.96/2010-11.

3. The basic facts are not in dispute. The appellant had purchased a 1 High Court 2 Commissioner Collector Digitally signed by SWETA BALODI Date: 2024.05.20 16:56:04 IST Reason:

Signature Not Verified residential property4 vide sale deed dated 16.04.2010 built on 242.12 sq. mtr. of land in Rajendra Nagar, Ghaziabad, Uttar Pradesh, which is situate very near to the capital of the country. She claimed having paid requisite stamp duty [as per the prevailing circle rate applicable to Rajendra Nagar5, i.e., Rs.18,000/- per sq. mtr., under the Uttar Pradesh Stamp (Value of Property) Regulations, 1997] in a sum of Rs.10,25,000/- in respect of the total value of the property being Rs.1,47,80,691/-. Proceedings were triggered by a show cause notice issued by the Collector under section 33/47-A, Indian Stamp Act.

Objection was lodged by the appellant. The Collector was required to determine whether the instrument of transfer, i.e., the sale deed, was insufficiently stamped. Neither the Collector nor the Commissioner recorded any finding that the appellant had, by paying stamp duty at the circle rate, attempted to evade revenue; in fact, it was accepted by them that stamp duty had been paid according to the prevailing circle rate. However, it was based on an inspection report dated 08.07.2010 of the Additional Collector (F&R) Ghaziabad6 to the effect that the value of the property is “much more than the fixed minimum residential rate in collector rate list” that the Collector proceeded to determine liability of the appellant to pay excess stamp duty in a sum of Rs.1,03,120/- together with penalty amount of Rs.50,000/-. The said order of the Collector having been carried in appeal by the appellant, the Commissioner proceeded to dismiss the same.

4. It does not admit of any doubt that ‘circle rate’, which is in the nature ‘property’ effective from 01.10.2009 Additional Collector of a guideline value, is notified by the district administration for the guidance of the registrars, deputed at the registration offices, for revenue purposes. The object is to prevent evasion of stamp duty. Ordinarily, fixation of circle rate by the district administration to charge stamp duty takes into account the actual market value of a property situated in an area. Unless it is shown by an aggrieved person that fixation of the circle rate does not represent the correct market value of a property, it is considered safe to adopt the circle rate as the proper guide for determination of market value of a property. However, it is not the law that the circle rate is final; the authority charged with the duty to determine stamp duty may not be guided by the circle rate and keep the same aside if other materials exist and are produced which are sufficient to persuade such authority to decide otherwise.

5. In the present case, we find that the circle rate (applicable to Rajendra Nagar and effective from 01.10.2009) was fixed under the 1997 Regulations and the relevant document bears the signature of the Collector, the Additional Collector and the Asstt. I.G. Registrar, Ghaziabad. Once it is accepted by the Collector and the Commissioner that stamp duty as per the prevailing circle rate was paid, there ought to have been material before the Collector to enhance the rate of stamp duty payable by 10%. No exemplar was placed before the Collector by the Government Advocate (Revenue) in support of his argument that in and around the area