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18. In order to address the mischief of undervaluing or incorrectly set forth the consideration in a sale deed or other instruments for transfer of interest in immovable property, for avoiding stamp duty, Section 47-A was introduced in the Stamp Act as applicable to Delhi by virtue of the Indian Stamp (Delhi Second Amendment) Act, 2001. Section 47-A of the Stamp Act (as applicable to Delhi) reads as under:-

"47A Instruments under-valued how to be dealt with (1) If the Registering Officer, while registering any instrument transferring any property, has reason to believe that the value of the property or the consideration, as the case may be, has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the value or consideration as the case may be, and the proper duty payable thereon.

(3)The Collector may, suo moto within two years from the date of registration of any instrument not already referred to him under sub-section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of its value or consideration, as the case may be, and the duty payable thereon, and if after such examination he has reason to believe that the value or consideration has not been truly set forth in the instrument, he may determine the value or consideration and the duty aforesaid in accordance with the procedure provided for in sub-section (2), and the deficient amount of duty, if any, shall be payable by the person liable to pay the duty and, on the payment of such duty, the Collector shall endorse a certificate of such payment on the instrument under his seal and signature.

26. It follows from the plain language of Entry 23 to Schedule-I of the Stamp Act as well as various decisions rendered by the Supreme Court that the stamp duty is to be calculated on the value of the consideration set forth in the sale deed. The only exception is if the Registering Authority while registering any instrument, transferring the property has reason to believe that the value of the property or the consideration has not been truly set forth in the instrument. In such cases, the Registering Authority can make a reference under Section 47A(1) of the Stamp Act to the Collector for determination of the value/consideration. It is relevant to note that such reference is to be made only after Registering Authority has registered the sale deed.

30. It is amply clear from the plain language of Rule 7(2) of the Rules that the Collector is not required to act mechanically and simply apply the circle rates. He has to determine the value of the property or consideration and assess the deficient duty by making such enquiry as is necessary in the facts of the case.

31. The said enquiry would also entail the determination of the date in reference to which the market value is required to be determined. Thus, in given cases, the Collector may consider a date prior to the date of execution of the sale deed, as the appropriate date for determining the valuation of the property that was required to be set forth in the Instrument required to bear stamp duty. This determination has to be made bearing in mind the object of enacting Section 47-A of the Stamp Act (as applicable in Delhi); that is, to counter the mischief of deliberately understating the consideration/value of the property set forth in the instrument to be stamped.