Document Fragment View

Matching Fragments

After respective arguments have been advanced, at the very outset, we proceed to examine the provisions of Sections 27, 47-A and 75 of the Indian Stamp Act, 1899, which reads as follows;

"27. Facts affecting duty to be set forth in instrument.- The consideration (if any) and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein.
(2) In the case of instruments relating to immovable property chargeable with an ad valorem duty on the value of the property, and not on the value set forth, the instrument shall fully and truly set forth the annual land revenue in the case of revenue paying land, the annual rental or gross assets, if any, in the case of other immovable property the local rates, Municipal or other taxes, if any, to which such property may be subject, and any other particulars which may be prescribed by rules made under this Act.

The Collector is to issue notice to parties to the instrument to show cause within 30 days of the receipt of such notice as to why the market value of property set-forth in the instrument and the duty payable threon be not determined by him. The Collector is also entitled to admit oral or documentary evidence, if any, produced by the parties to the instrument and call for and examine the original instrument to satisfy himself as to the correctness of the market value of the subject matter of the instrument and for determining the duty payable thereon. The Collector is entitled to call for any information or record from any public office, officer or authority under the Government or a local authority and examine and record the statement of any public officer or authority under the Government or the local authority and also inspect the property after due notice to parties to the instrument. Even after considering the representation of the parties, if any, and examining the records and other evidence, the Collector shall determine the market value of the subject-matter of the instrument and the duty payable thereon. If, as a result of such enquiry, the market value is found to be fully and truly set forth and the instrument duly stamped according to such value, it has to be returned to the person, who made the reference with a certificate to that effect. A copy of such certificate shall also be sent to the Registering Officer concerned. If, as a result of inquiry, the instrument is found to be under-valued and not duly stamped, necessary action has to be taken in respect of it according to relevant provisions of the Act.

In the circumstances, we answer the second question as referred in the aforesaid terms."

This Court in the case of Ratan Shankar Dwivedi Vs. State of U.P., Writ Petition No. 58020 of 2007, decided on 2.3.2012, explained the object of Stamp Act as follows;

"The Stamp Act is a fiscal measure enacted with an object to secure revenue for the State on certain classes of instruments. It is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. The stringent provisions of the Act are conceived in the interest of the revenue. Once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of initial defect in the instrument. The sole object of Stamp Act under its various provisions is to require the parties concerned to set forth correct market value of the property at which the transaction has taken place so that appropriate duty in accordance with the Act is paid by them to avoid large scale evasion of stamp duty. It also mandates that while setting forth the correct market value of the property in dispute the competent authority must not apply their mind in a fact fashion and in a haphazard way."

In the said case, Ratan Shankar Dwivedi (supra), the Court explained the meaning and purport of market value under the Act as follows;

"The term "market value" has not been defined under the Act. However there are some precedents laying down certain guidelines as to how and in what manner a market value would be determined. The consensus opinion is that the market value of any property is the price which the property would fetch or would have fetched if sold in the open market, if sold by a willing seller, unaffected by the special need of a particular purchaser. It is interesting to note that the Act provides first for determination of minimum value of the property and further says that if the market value of the property set forth in the instrument is less than the minimum value determined under the Act, in such case before registering the instrument the registering authority shall refer the instrument to Collector for determination of market value of the property and the proper duty payable thereon and when the Collector determines market value of the property thereafter the parties shall proceed accordingly. Therefore, a market value of the property in all cases cannot be said to be higher than the alleged minimum value determined under the rule by the concerned authority, inasmuch as, it is only a kind of guideline provided to the authorities for the purpose of considering as to whether the proper stamp duty is being paid by setting forth true market value of the property in question in the instrument. The various provisions with respect to minimum value etc. are only in aid and assistance of the authorities to find out the true amount of consideration on which the parties have entered into transaction so that the correct duty is collected therefrom."