Indian Kanoon - Search engine for Indian Law

7. In order to meet such a difficulty and to empower the revenue authority to determine the market value of the property, which is the subject of the conveyance, exchange, gift, settlement, award, or trust, and the duty as payable by the person liable to pay the same that Section 47-A was inserted.

8. Sub-section (1) of Section 47-A provides that if the Registering officer finds that the market value of the property as set forth for such instrument was less than even the minimum value determined in accordance with the Rules framed under this Act, he shall refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. Under Sub-section (2), power has been conferred on the Registering officer to refer the case to the Collector if he finds that the market value has not been truly set forth in the instrument for determination of the market value of such property and proper duty payable thereon. Sub-section (3) of Section 47-A provides the procedure which is required to be followed in cases of Sub-sections (1) and (2) of Section 47-A.

9. From the above, we find that Sub-sections (1) and (2) of Section 47-A apply to two different situations. In the instant case, the Registering Officer was since of the opinion that the market value as set forth in the sale deed was less than even the minimum value determined in accordance with the rules, he referred the same to the Collector. Before the Collector, the petitioner had filed evidence but by applying the Rule 341, the Additional Collector found that the market value set forth in the conveyance was less and, thereafter, by applying the rule of calculation or computation of the market value stated in Rule 341, he determined the market value of the two sale deeds and found the stamp duty payable thereon.

10. We are of opinion that the Rule 341 which has been relied upon by the Additional Collector has only the limited object of providing guidelines. For invoking Sub-section (1) of Section 47-A, it is not conclusive of the determination of the market value. While determining the question whether the market value has been truly set forth in the instrument, the power of the Collector is not confined to Rule 341 of the Rules framed under the Act. It can, if evidence made available before it establishes, determine the market value of the property, which is the subject matter of the conveyance to be more than the minimum given in the rules. While determining this question, he will have to find that the market value of the property has not been truly set-forth in the instrument. He will be required to confine his consideration to the particular document which has been presented for registration before him and in that case the limited enquiry to be made by him would be whether the parties to the conveyance or instrument deliberately undervalued it for the purpose of deceitful gain. In a case where it is found that the value of the conveyance was fraudulently made although more has passed on it, Section 47-A would come into play and upon that determination, the difference, if any, in the amount of duty shall be payable by the person liable to pay the duty. Fraud comprises all acts and concealments involving a breach of legal duty resulting in damage to the revenue. In the case of undervaluation of a document, the intention of the parties is to mislead the revenue by false allegations and by concealment of that which should have been disclosed.

17. We find force also in the argument of the petitioner's learned counsel that since Section 47A does not empower the Collector to impose penalty in the event of his finding that the market value was not truly set forth in the instrument, such an order imposing the same would be beyond Section 47-A. For imposing penalty in a case like the present, power was specifically to be conferred. In the absence of a specific provision made in that respect, it is not possible to uphold the contention of the Standing Counsel that penalty could be imposed whenever and wherever the Collector under Section 47-A finds that the value set forth was not true. Section 47-A as stated above, was brought in recently to cover a case of evasion. While enacting Section 47-A, the legislature although empowered the Collector to determine the market value of the property, which is the subject of conveyance and the duty payable thereon, it did not make any provision empowering the Collector to impose penalty.