STATE OF RAJASTHAN AND ORS. versus M/S KHANDAKA JAIN JEWELLERS

Citation: [2007] 12 S.C.R. 105 · Decided: 16-11-2007 · Supreme Court of India · Bench: A.K. MATHUR · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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STATE OF RAJASTHAN AND ORS. 
A 
v. 
MIS KHANDAKA JAIN JEWELLERS 
NOVEMBER 16, 2007 
(A.K. MATHUR AND MARKANDEY KAT JU, JJ.) 
B 
., 
Stamp Act, 1899: 
ss. 2(12), 3, 17, ands.47A(as inserted by RajasthanAct JO of 1982 c 
in Rajasthrm Stamp Law (Adaptation) Act, 1952)-Sale deed-
Registration of-Valuation for assessment of stamp duty-HELD: 
stamp duty on sale has to be assessed on market value of property at 
the time of registration of sale and not when parties entered into an 
agreement to sell nor when suit for specific performance of contract D 
is filed. 
Interpretation of Statutes: 
Provisions of Stamp Act-Interpretation of-HELD: Stamp Act 
is in nature of a taxing statute and has to be construed strictly. 
E 
Deeds and documents-Difference between agreement to sell and 
sale-Explained. 
In execution of decrees passed in two suits for specific 
) 
performance of contract arising out of agreements to sell entered F 
into on 20.10.1983, the court executed the sale deeds and sent the 
same on 17.3.1995 for registration before the Sub-Registrar, who, 
exercising his powers u/s. 47-A (1) as inserted by Rajasthan Act 10 
of1982 in Rajasthan Stamp Law (Adaptation) Act, 1952 sent the sale 
deeds to the Collector for determining market value of the properties 
G 
and to assess the charge of stamp duty. The Collector assessed the 
value of the properties and raised deficient stamp duty and deficient 
registration fees and also levied the penalty. The order of the 
Collector was challenged in a writ petition before the High Court. 
105 
H 
106 
SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
A The single Judge held that the relevant date for assessment of the 
market value would be the date on which the suit for specific 
performance of agreement to sell was filed. The Division Bench of 
the High Court having affirmed the view of the single Judge, the State 
Government filed the instant appeal. 
B 
c 
The question for consideration before the Court was: Whether 
valuation should be assessed on the market rate prevailing at the 
time of registration of the sale deed or when the parties entered into 
the agreement to sell. 
Allowing the appeal, the Court 
HELD: 1.1. There is a difference between an agreement to sell 
and a sale. An agreement to sell is not a sale. An agreement to sell 
becomes a sale after both the parties signed the sale deed. What is 
relevant in fact is the actual valuation of the property at the time of 
D the sale. The crucial expression used in Section 17 of the Stamp Act, 
1899 is "at the time of execution". Therefore, stamp duty on a sale 
has to be assessed on the market value of the property at the time 
of execution of sale deed, and not at the time of the prior agreement 
to sell, nor at the time of filing of the suit. 
E 
[Para 10)(115-E; 116-D, E] 
1.2. The Stamp Act, 1899 is in the nature of a taxing statute, 
and it has to be construed strictly; and cohsiderations of hardship 
or equity have no role to play in its construction. It is true that no 
one should suffer on account of the pendency of the matter in court 
F but this consideration docs not affect the principles ofinterpretation 
of a taxing statute. A taxing statute has to be construed as it is. The 
contingencies that the matter was under litigation and the value of 
the property by that time shot up cannot be taken into account for 
interpreting the provisions of a taxing statute. 
G 
[Para 10and14] [116-E; 118-D, EJ 
Sub Registrat. Kodad Town and Manda! v. Amaranaini China 
\ 
Venkat Rao and Ors., AIR (1998) Andhra Pradesh 252, disapproved. 
1.3. Literal rule of interpretation applies to the taxing statute. 
H Construing section 17 read with section 2(12) of the Stamp Act in 
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STATE v. MIS KHANDAKAJAIN JEWELLERS 
107 
this back-ground, there is no manner of doubt that the registering A 
authority is under an obligation to ascertain the correct market value 
at that time of registration and should not go by the value mentioned 
in the instrument. It is true that as per Section 3, which is the charging 
section, the instrument is to be registered on the basis of the valuation 
disclosed therein. But Section 3 cannot be read in isolation and has B 
to be read along with Section 17 of the Act.From a composite reading 
of Sections 3, 17 and 27, it becomes abundantly clear that the 
valuation given in an instrument is not conclusive. If any doubt arises 
in the mind of the registering authority that the instrument is under-
valued t

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