RAMESH CHAND BANSAL AND ANR. versus DISTRICT MAGISTRATE/COLLECTOR GHAZIABAD AND ORS.

Citation: [1999] 3 S.C.R. 462 · Decided: 11-05-1999 · Supreme Court of India · Bench: AJAY PRAKASH MISRA · Disposal: Dismissed
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Judgment (excerpt)

A 
RAMESH CHAND BANSAL AND ANR. 
v. 
DISTRICT MAGISTRATE/COLLECTOR GHAZIABAD AND ORS. 
MAY I I, 1999 
B 
[A.P. MISRA AND N. SANTOSH HEGDE. JJ.] 
' 
F 
Stamp Act-U.P. Act XI of 1969 Section 47-A-U.P. Stamp Rules, 1942-
Rule 340-A(a) Circle Rate is a prima facie determination of the value of the 
land by the collector for guidance to the assessing authority in determining 
C the stamp duty-it is a mere guideline and demarcates the exercise of power 
between the assessing authority and the collector-If the property is 
undervalued in relation to the circle rate, then the matter is to be referred 
to the collector and the property owner has the right to prove the correctness 
of the valuation as submitted by him. 
D 
E 
The appeal is against the dismissal of writ petition, challenging a 
circular dated 29th November, 1991 whereby, inter alia, the rates of land in 
village of Surajpur were to increase by 20% after one year from the date 
of notification. The appellant paid the stamp duty but disputed the enhancement 
by 20%, and refused to pay it in spite of a Show Cause notice. 
Dismissing the appeal, the Court 
HELD: 1. The object of the Indian Stamp Act is to collect proper stamp 
duty on an instrument or conveyance on which such duty is payable. This is 
to protect the State revenue. It is matter for common knowledge that in order 
F to escape such duty by unfair practice many a time under valuation of a 
property or lower consideration is mentioned in a sale deed. Imposition of 
stamp duty on sale deeds ~re on the actual market value of such property 
and not the value described in the instrument. Thus an obligation is cast on 
authority to properly ascertain its true value for which he is not bound by 
G the apparent tenor of the instrument. He had to truly decide the real nature 
of the transaction and value of such property. For this, the Act empowers an 
authority to charge stamp duty on the instrument presented before it for 
registration. The market value of a property may vary from village to village, 
from location to location and eve~ may differ from tile sizes of area and other 
relevant factors. This apart there has to be some material before such 
H -authority as to what is the likely value of such property in that area. In its 
' 
462 
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R.C. BANSAL v. DISTT. MGST./COLLECTOR 
463 
absence it would be very difficult for such Registering Authority to assess A 
the valuation of such instrument. It is to give support to the Registering 
Authority Rule 340-A is introduced. Under this Rule Collector has to satisfy 
himself based on various factors mentioned therein before recording the 
circle rate, which would at best be the prima facie rate in that area concerned. 
A copy of the statement recording circle rate and average price of land under· B 
the said Rule 340-A has to be supplied by the collector biennially in every 
pargana, corporation or local body of this district. The supply of biennial 
statement would only mean supplying such statement once in two years but 
while supplying that statement there is no inhibition either under this Rule 
or any other Rule or under the Act nor any provision has been pointed out 
which restricts the Collector to give such rate differently for two years. The C 
restriction, if any, is that such statement shall only be supplied once in two 
years. If there be any material in possession of the Collector clearly indicating 
a regular pattern of increasing percentage of the prices of land every year 
then to that extent if he in his biennial statement refers to such increase 
for the following years it cannot be said that the Collector lacks competence 
to exercise such power. (466-C-F; 468-E-G) 
D 
State of Punjab & Ors. v. Mohabir Singh & Ors., (1996) 1 SCC 609, 
referred to. 
2. Under Section 47-A introduced by the UP Act XI of 1969 conveys E 
how a Registering Authority is to deal in case where there is divergence in 
the valuation between what is described in an instrument and in the circle 
rate. Reading Section 47-A with the aforesaid Rule 340-A it is clear that the 
circle rate fixed by the Collector is not final but is only a prima fa<;ie 
determination of rate of an area concerned only to give guidance to the 
Registering Authority to test prima facie whether the instrument has properly F 
described the value of the property. This is merely a guideline which helps 
the Registering Authority to assess the true valuation of a transaction in an 
instrument. The circl
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