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Judgment
,,
Vibhu Bakhru, J",,
The petitioner has filed the present petition, inter alia, impugning an order dated 03.09.2015 (hereafter “the impugned orderâ€) passed by",,
respondent no. 2 (hereafter “the Collectorâ€), whereby the Collector has computed the deficit stamp duty at `4,35,000/- and had also held that the",,
petitioner would be liable to pay interest at the rate of 2% p.m. on compounded basis on the aforesaid deficit stamp duty from the date of execution of,,
the Deed (i.e. 03.06.2013) till the date of preparing the challan.,,
The principal controversy involved in the present petition relates to the method of calculation of value of a residential flat at the notified circle rates.,,
Briefly stated, the relevant facts necessary to address the controversy involved are as under:-",,
3.1. The petitioner purchased a built up floor (the third floor) in a building constructed on property bearing no. RZ-320, Gali No. 20, Third Floor,",,
Tughlakabad Extn., New Delhi by way of a Registered Sale Deed dated 03.06.2013. The said Deed reflected the total consideration paid by the",,
petitioner at `19,00,000/-. The said Deed was presented for registration on 03.06.2013 before respondent no. 3 (the Registering Authority) and was",,
examined by the Collector.,,
3.2. On 02.07.2013, a notice was issued to the petitioner stating that the Sale Deed presented by the petitioner before respondent no.3 had been",,
impounded under Section 33 of the Indian Stamp Act, 1899 (hereafter “the Actâ€) and had been referred to the Collector. Thereafter, by a notice",,
dated 12.07.2013, the petitioner was also called upon to show cause why penalty should not be imposed on him under Section 26 of the Act.",,
3.3. Subsequently, by an order 23.05.2014, the Collector assessed the deficit stamp duty as `2,83,440/- and also imposed a penalty of `1,00,000/-",,
3.4. Aggrieved by the aforesaid order, the petitioner preferred a Revision Petition (Revision Petition No. 54/2015 captioned “Saji Varghese v.",,
Collector of Stamps & Anr.â€) before the Chief Controlling Authority. The said Revision Petition was disposed of by the impugned order.,,
A plain reading of the impugned order indicates that the Chief Controlling Authority had noticed that there are two methods for valuation of a built,,
up property on the basis of the notified circle rates. The first method is by calculating the cost of land (that is, area of land multiplied by land rate per",,
unit area) and then adding the value of construction (that is built up area multiplied by construction rate per unit area). And, the second method is by",,
multiplying the built up area of flat by minimum rates for built up flats rate. The Chief Controlling Authority had proceeded on the basis that valuation,,
carried out by either of the two methods only provides the floor limit of the value of the property and, therefore, the higher of the two valuations must",,
be adopted as that alone would satisfy the requirement of Rule 4 of the Delhi Stamp (prevention of Undervaluation of Instruments) Rules 2007,,
(hereafter “the Rulesâ€).,,
In terms of Section 3 of the Act, stamp duty is chargeable with the amount as indicated in Schedule I of the Act. In terms of the said Schedule, the",,
stamp duty is chargeable ad valorem at the specified rate on the consideration as set forth in the instrument (in this case the sale deed).,,
Section 27 of the Act as applicable in Delhi is relevant and is set out below:-,,
“27. Facts affecting duty to be set forth in instrument.â€" 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.(1) In the Indian Stamp Act, 1899 (2 of 1899) as in force in the National Capital Territory of Delhi (hereinafter referred to as “principal Actâ€),",,
in section 27,-",,
(a) in sub-section (1), after the words and brackets “the consideration (if any)â€, the words “and the market value†shall be inserted;",,
(b) after sub-section (2), the following sub-section shall be inserted, namely:-",,
(3) In the case of instruments relating to land, chargeable with ad valorem duty, the Government may notify minimum rates for valuation of land.â€",,
In terms of Section 27(3) of the Act, the Government may notify the minimum rates for valuation of land.",,
Section 47A of the Act provides for the manner in which the under-valued instruments are to be dealt with. Section 47A(1) provides that if the,,
Registering Officer has the reason to believe that the value of the property or the consideration has not been truly set forth, he may refer the same to",,
the Collector for determination of the value or consideration as the case may be. In terms of Section 47A(2) of the Act, the Collector has to determine",,
the value of the property or the consideration in the manner as set forth in the Rules.,,
Rule 4 of the Rules expressly provides that the Government may from time to time notify the minimum rates for valuation of land through a,,
notification in the Official Gazette. Rule 4 of the said Rules is set out below:-,,
“4. Notification of minimum rates for valuation of land by the Government. - (1) (a) The Government may, from time to time, notify the minimum",,
rates for valuation of land through a notification in the official Gazette, for various districts/areas forming part of the district, on recommendation of",,
Deputy Commissioner concerned or otherwise which shall be effective from the date of the publication of the notification in the Official Gazette or as,,
specified in the notification.,,
(b) Before notifying these rates, the Government may, at its discretion, place these rates in the public domain for a period of fifteen days for inviting",,
objections/suggestions thereon, and take a decision on the objections/suggestions so received.",,
(c) Any instrument setting forth the market value of the land described in such instrument below such valuation shall be referred by the Registering,,
Officer to the Collector as provided herein below.,,
(2) As far as possible, once in two years in the month of April, the Deputy Commissioner of each District shall undertake the exercise of valuation of",,
the following categories of immovable properties, in consultation with MCD, NDMC, Cantonment Board, DDA, L & DO, etc. (as appropriate), and",,
such other land owning authorities of the Government of India and the Government of National Capital Territory of Delhi, namely:-",,
(A) In case of immovable properties (land rates),,
Category of Locality,"Minimum rate for valuation of land for residential
use (in Rupees per square meter)",
A,645000,
B,204600,
C,133200,
Category of the Locality,"Minimum rate of construction for
residential Use (in Rs. per sq.
mtr.)","Minimum rate of construction for
Commercial use (In Rs. Per sq
mtr.)
(1),(2),(3)
A,18300,21000
B,14500,16600
C,11600,13300
D,9300,10700
E,7800,9000
F,6850,7900
G,5800,6700
H,2900,3300
The Chief Controlling Authority has determined the value of the residential flat by applying the rates as specified in paragraph 4A as quoted,,
above; that is, `73,200/- per Sq. Meter. A plain reading of paragraph 4A of the Notification indicates that the said rate is applicable only in cases of",,
building having more than four storeys.,,
In the present case, it is not in dispute that the building consists of stilt parking, and four floors built above the Stilt Parking. Thus, if the stilt parking",,
is not considered as a floor of the building, the circle rates for any flat in the building cannot be assessed on the basis of paragraph 4A of the",,
Notification.,,
Clearly, the stilt parking is only a facility and cannot be considered as a separate floor. The respondents have also filed an affidavit, whereby it has",,
been clearly affirmed that the respondents do not consider stilt parking as a floor for calculating the minimum value of the property as per circle rates.,,
The second column of the table set out in paragraph 4 of the Notification (table 1.3) indicates that the uniform rate per sq mtr of built up flat is,,
applicable only in cases of DDA colonies/Cooperative and Group Housing Societies (in case of residential use). The above rates are not applicable for,,
computing the value of floors in residential buildings constructed by private builders. Undisputedly, the building in question is neither a DDA Colony nor",,
a part of a Co-operative or a Group Housing Society,,
In view of the above, the impugned order is not sustainable. The minimum value of the property as per circle rates, for the purpose of assessing",,
the stamp duty, ought to have been computed in accordance with paragraph 4 B of the Notification.",,
It does appear that the valuation provided by the petitioner was in conformity with paragraph 4B of the Notification. However, this Court considers",,
is apposite to set aside the impugned order and remand the matter to the Collector to verify whether the consideration as set forth in the Sale Deed is,,
greater than the value as determined in accordance with paragraph 4 B of the Notification. It is so directed.,,
In the event, the consideration as disclosed exceeds the minimum value of the property as computed in accordance with paragraph 4 B of the",,
Notification, respondent no. 3 shall register the Sale Deed and return the registered documents as expeditiously as possible and preferably within a",,
period of eight weeks from today. However, if the consideration value as disclosed is less than the minimum value of the property as determined,",,
respondent no. 3 shall register the Sale Deed and make a reference to the Collector in accordance with Section 47A(1) of the Act. Needless to state,,
that the Collector shall assess the value in accordance with Rule 7 of the Rules, inter alia, having regard to the minimum value of the property as",,
determined under paragraph 4 B of the Notification.,,
The petition and the pending application are disposed of.,,
Order dasti.,,