1999 (5) TMI 604 - SC - Indian Laws

Summary

Issues Involved:
1. Competence of the Collector to enhance circle rates by 20% for the next year.
2. Validity of the circular dated 29th November, 1991.
3. Application of Section 47-A of the Indian Stamp Act.

Summary:

1. Competence of the Collector to Enhance Circle Rates by 20%:
The primary issue was whether the Collector, while exercising powers u/r 340-A(a) of the U.P. Stamp Rules, 1942, had the competence to enhance the circle rates by 20% for the subsequent year. The appellants argued that the Collector could only fix a composite rate for two years and not different rates for each year. The Court found no merit in this argument, stating that the biennial supply of statements by the Collector does not restrict him from indicating different rates for two years if there is material evidence showing a trend of increasing land prices.

2. Validity of the Circular Dated 29th November, 1991:
The appellants challenged the circular dated 29th November, 1991, which became effective from 1st December, 1991, and included a note that all costs would automatically increase by 20% after one year. The High Court had dismissed the writ petition, holding the circular within the competence of the Collector. The Supreme Court upheld this decision, stating that the circular served as a guideline to help the Registering Authority assess the true valuation of a transaction. The Court emphasized that the circle rate is not final but a prima facie determination to guide the Registering Authority.

3. Application of Section 47-A of the Indian Stamp Act:
The appellants had to pay additional stamp duty as the sale consideration was less than the circle rate. The Registering Authority referred the matter to the Additional District Magistrate (Finance and Revenue) u/s 47-A of the Indian Stamp Act, who issued a show-cause notice for the enhanced payment of stamp duty based on the 20% increased rate. The Court explained that u/s 47-A, if the market value set forth in an instrument is less than the minimum value determined under the rules, the Registering Authority must refer it to the Collector for determination. The Court reiterated that the circle rate is a guideline and not final, allowing the concerned party to contest the valuation before the Collector.

Conclusion:
The Supreme Court found no merit in the appellants' submissions and upheld the validity of the impugned circular and notice. The appeal was dismissed, and costs were imposed on the parties.