Document Fragment View

Matching Fragments

"47-A. Instruments of conveyance etc. if under valued, how to be dealt with.-- (1) If the market value of any property which is the subject of any instrument of conveyance, exchange, gift settlement, award, or trust, as set forth in such instrument is less than even the minimum value determined in accordance with any rules made under this Act, the registering officer appointed under the Indian Registration Act, 1908, shall refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon.

7. Now the question arises whether S.D.O. Chail was justified in acting on order dated 3-8-1997 in which is contained Note 2 oblivious of requirements of Rules 3 and 4 and Section 47-A of the Stamp Act. Section 47-A(2) of the Stamp Act prescribes that if such Registering Officer has reason to believe that the market value of the property has not been truly set forth in the instrument, he may refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. Likewise, Section 47-A(3) envisaged that on reference. Collector shall after giving the parties reasonable opportunity of being heard and after holding enquiry in Such manner as may be prescribed by the Rules, determine the market value of property. In connection with the proposition that phrase "reason to believe" is a sine qua non for Section 47-A(2), it is settled position that Sub-section (2) of Section 47-A is the condition precedent of making of a reference to the Collector under Sub-section (2). The phrase "reason to believe" came up for judicial exposition in I.-T.O. v. Lakhmani Mewal Das, AIR 1976 SC 1753. It was a case relating to a dispute under Income-tax Act. The Apex Court was considering Section 147(a) of the Income-tax Act, 1961 and it was held that the words in the statute are "reasons to believe" and not "reason to suspect," It was also held that the expression "reason to believe" does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The reason must be held in good faith. It cannot be merely a pretence. It is open to the Court 9 examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and not extraneous or irrelevant for the purpose of the section. In Duncans Industrial Ltd., Kanpur v. State of U.P., 1997 (3) All WC 1928 : (AIR 1998 All 72), Hon'ble S. R. Singh, J. (as he then was) explained the significance of the phrase "reason to believe" as under :

"The term 'reason to believe' occurring in Sub-section (2) of Section 47-A spells out that Registering Officer, must have some material direct, circumstantial or even intrinsic evidence on the basis of which, he may come to a reasonable belief that the market value of the property has not been truly set forth in the instrument. In other words, the belief must be that of the honest and reasonable person based upon reasonable grounds. . . . ."

8. The learned single Judge further observed in the self-same decision as under :

"These guidelines were avowedly intended merely to assist the Sub-Registrars to find out, prima facie, whether the market value set out in the instruments had been set forth correctly. The guidelines were not intended as a substitute for market value or to foreclose the inquiry by the Collector which he is under a duty to make under Section 47-A of the Act when once a reference comes to him from the Registering authority. The Collector, under Section 47-A cannot shirk his responsibility of determining the market value by adopting the guidelines nor can he fix the market value without proper materials and evidence to support it. The very idea of an inquiry contemplated by Section 47-A and the detailed procedure prescribed in the relevant rules goes to show that the Collector's finding must be verifiable by evidence. The valuation guidelines prepared by the Revenue officials at the instance of the Board of Revenue were not prepared on the basis of any open hearing of the parties concerned, or of any documents with a view to eliciting the market value of the properties concerned. They were based on data gathered broadly with reference to classification of land, grouping of land and the like. This being so, the Collector acting under Section 47-A cannot regard the guidelines valuation as the last word on the subject of market value. To do so would be to surrender his statutory obligation to determining market value on the basis of evidence, which is a judicial or a quasi-Judicial function which he has to perform. To adopt figures prepared at the instance of the Board of Revenue in the valuation guidelines which are merely a compilation of data by subordinate officials of an administrative authority on the basis of administrative action would be dangerous, because they offer no guarantee of truth or correctness of the data, not being susceptible to check or verification by a judicial or quasi-judicial process of evaluation of evidence."