IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18/06/2003 Coram The Hon'ble Mr. Justice E.PADMANABHAN W.P.No.5978 of 1999 and W.P.No.13966 of 2002 and W.P.M.P.No.18845 of 2002 Coimbatore District Real Estate Promoters' Association rep. by its President .. Petitioner in both the W.Ps -Vs- 1.The State of Tamil Nadu rep. by its Secretary, Registration Department, Fort St. George, Chennai  9. 2.The State of Tamil Nadu rep. by its Secretary, Revenue Department, Fort St. George, Chennai  9. 3.The Chief Controlling Revenue Authority, Board of Revenue, Ezhilagam, Chennai  5. 4.The District Collector, Coimbatore District, Coimbatore. 5.The Inspector General of Registration, Santhome High Road, Chennai. 6.The Deputy Inspector General of Registration, Coimbatore, Pankaja Mill Road, Coimbatore  18. 7.The District Registrar, Coimbatore Registration District, Coimbatore. 8.The District Registrar, Tiruppur Registration District, Tiruppur. .. Respondents in both the W.Ps Petitions filed under Article 226 of The Constitution of India praying to issue a writ of declaration and a writ of mandamus as stated therein. !For Petitioner .. Mr.R.Gandhi for Mr.Palani Selvaraj ^For Respondents .. Mr.N.R.Chandran, Advocate General assisted by Mrs.D.Malarvizhi, Govt. Advocate :COMMON ORDER In W.P.No.5978 of 1999, the writ petitioner, Coimbatore District Real Estate Promoters Association has prayed for the issue of writ of Declaration, to declare that the guideline value fixed by the respondents from 01.04.1999 for the purpose of levying stamp duty for registration of deed of conveyance or sale of immovable properties are illegal and unenforceable and consequently forbear the respondents from fixing the guideline value in future for the purpose of levy of stamp duty for registration of documents. 2.The above is the substituted prayer as per the order passed by this court on 13.01.2003 in W.P.M.P.No.1481 of 2003. 3.The very same petitioner association filed W.P.No. 13966 of 2002 praying for the issue of a writ of mandamus forbearing the respondents 2 to 8 from increasing the guideline value arbitrarily and without issuing public notice calling for objections and without framing any guideline as to the basis for such increase of guideline value of the properties situate within the Coimbatore and Tiruppur Registration Districts from 01.04.2002 onwards. 4.At the joint request of the counsel for the petitioner as well as the respondents, both the writ petitions were consolidated and taken up for final disposal. 5.According to the petitioner, the petitioner is a society registered under The Tamil Nadu Societies Registration Act, 1975 and it has been established with the object of protecting and safeguarding its members, who are engaged in real estate business and who desire to fight it out legally the arbitrary and unreasonable action of the respondents. The members of the petitioner association are property developers, which business they have been carrying on for the past several years. 6.The Indian Stamp Act, 1899 is a fiscal enactment charging stamp duty on instruments of various kinds, under which dutiable instruments are classified under Schedule I. For each class of instrument, rate or rates of stamp duty payable thereof have been prescribed. The stamp duty payable on the date of conveyance is on the ad valorem basis, on the value as set forth in the instrument, as was originally enacted. However, from 1968 onwards, there has been a different basis of charge in this state, on conveyance of immovable properties. According to the present system, stamp duty is payable on the guideline value of the property, which is the subject matter of conveyance. The deeds or documents are being registered under the Indian Registration Act, 1 908. The effect of registration is a notice to all the public. 7.In the Indian Stamp Act or the rules framed thereunder there is no definition of the expression 'guideline value' and/or 'market value'. The explanation to Section 47-A of the Indian Stamp Act provides that for the purpose of the Act, market value of any property shall be estimated to be the price at which the property would have fetched or would fetch, if sold in the open market, on the date of execution of instrument. According to the petitioner, market value itself is a changing factor and the same depends on various elements, circumstances and matters relevant thereof. No exactitude, is in the nature of things possible as there can be either increase or fall in the market value depending upon the demand. 8.According to the members of the petitioner association, the guideline value fixed for the purpose of registration and supplied to the registering officers, the value of properties in a registration district or locality or village or street, has already been arrived at and those guidelines are being insisted to be taken as the market value for levy of stamp duty. The said guideline value does not reflect the market value. The guideline value so fixed are prepared at the instance of the Board of Revenue, is being revised upward from time to time or enhanced by a flat rate of fixed percentage every year as a customary, from the first day of financial year according to the whims and fancies of respondents 2 to 4 and without any criteria as to on what basis, the guideline value is always increasing or enhanced annually. Before preparation of guideline value or revision of guideline value, no publicity is given nor residents in the locality or the trade there is informed of the proposal to revise, nor they are called upon to state their objections if any, and such revision is being carried on secretly. Because of such revision arbitrary and unreasonable enhancement of guideline value, the entire transacting public, particularly, the members of the petitioner association, who are property developers, are put to hardship and they are forced to pay stamp duty in terms of guideline value. If the stamp duty is not paid in accordance with the guideline value, the Registrar either returns the document or keeps it pending, which leads to other complications. It has been the routine and customary practice of the respondents to enhance the guideline value annually, year after year by adopting a particular flat rate increase as if there has been an alround or a gradual increase everywhere in the district or village or locality. The petitioner association sent telegrams and representations but there has been no response. However, the sixth respondent instructed the petitioner to contact the fifth respondent. The fifth respondent had not taken any steps subsequently to look into the matter and without considering the representations made by the petitioner, increased the guideline value, which is being implemented as a matter of course. 9.The petitioner submitted that they have forwarded a registered letter to the fifth respondent demanding disclosure of details as to how and on what basis and under which provision of law, the guideline value is being fixed or increased annually. But, there was no reply from the fifth respondent. The petitioner has followed the said representation with reminders dated 29.12.1998 and 30.12.1998. Thereafter, on 20.03.1999, an evasive reply was sent by the fifth respondent, advising the petitioner association to find out the market value in Coimbatore District and report. 10.It is contended that there is no basis for preparation of guideline value or for revision of guideline value and the respondents cannot insist that stamp duty has to be paid on instrument of conveyance on the basis of guideline value. The fixation of guideline value for levy of stamp duty is arbitrary, illegal and violative of the statutory provisions and liable to be quashed. There is no provision enabling the respondents to prepare the guideline value either under the Indian Stamp Act or under the Indian Registration Act. 11.It is alleged that the respondents have increased the guideline value from 01.04.1999 onwards by 20%, which is arbitrary, without any basis and there is no rationale behind such increase. According to the petitioner, there has been no demand for lands at all in Coimbatore District consequent to the bomb-blast in Coimbatore and other communal riots that took place during 1998-1999. As a result of such unfortunate incidents, there has been no demand at all for lands or buildings as there were not many takers for the land or building as the case may be after the bomb blast and communal riots which continues and there has been a downward trend in the market price in the District. 12.It is pointed out that there is no provision either in the Indian Stamp Act or the rules made thereunder nor the rules contemplate any procedure or method or criteria to draw the guideline value nor there is any provision to increase the guideline value and extract stamp duty on the basis of guideline value without reference to the bona fide presumption which is entered between willing purchaser and willing buyer. The respondents have neither the jurisdiction nor the authority to fix or enhance or revise or increase the guideline value and the registering authorities asserted their powers by insisting payment of stamp duty based upon guideline value which is furnished to them. 13.It is submitted that as per Article 265 of the Constitution, no tax shall be levied or collected except by the authority of law. The respondents cannot on their own fix or increase or enhance the guideline value of the properties for the purpose of levying stamp duty, which is without authority of law. They have also no authority either to fix or enhance or revise and on that basis to levy stamp duty. The registering authority is the competent authority for examination as to whether the instrument has been duly stamped and in case a common procedure has been laid down under the Indian Stamp Act and the rules framed thereunder to refer the instrument for adjudication to the Collector, after affording opportunity, assess the market value of the particular property. Without referring to that, the respondent/ registering officers insist for payment of stamp duty solely based upon the Guideline Register. The registering authority being a quasi judicial authority exercising statutory power of levying stamp duty, have conferred their powers on to the respondents who have circulated the guideline value entries of which have been prepared by the committee without reference to the ground conditions or prevailing market value. There cannot always be increase in prices and price depends upon the demand in a particular locality or village or town and it is not fixed. The price of immovable property always do not increase day by day or month by month as is being suggested by respondents. 14.When there is no provision to prepare the guideline value, it is not known under what authority the respondents have compelled the registering authority to follow the guideline value as prepared by them for the purpose of levy of stamp duty. If such a procedure is adopted, it is nothing but abdication of quasi judicial statutory power of levying stamp duty which is per se illegal, discriminatory and arbitrary. The act of the respondents in fixing the guideline value or revising or compelling the registering authority to levy stamp duty based upon the guideline value is arbitrary and violative of Articles 265 and 14 of The Constitution of India. 15.In terms of Section 47-A, the fourth respondent has the authority to determine the market value of any property and if such property is undervalued in the view of the registering authority, the same has to be referred to the Collector and in case if the Collector's decision is not satisfactory, an appeal is provided under the Tamil Nadu ( Prevention of Undervaluation) Rules for the determination of market value in respect of property covered by the instrument. In respect of lands, various factors have to be taken into consideration by the registering authority while assessing the market value and levying of stamp duty. The second legal position being the registering authority has to apply his mind independently as a competent statutory authority and act as a quasi judicial authority in arriving at the market value of a particular property in respect of the instrument submitted for registration. The registering authorities without exercising such quasi judicial statutory powers have abdicated their powers to the other respondents, who have fixed the guideline value and if stamp duty is not paid for a particular property as per the guideline value, either refuse to register or compel the payment of stamp duty as found in the guideline register which is illegal and without authority. The flat rate increase in guideline value also is illegal and without jurisdiction. For preparation of such guideline value there is neither a basis nor there is any criteria, which has been fixed in this respect. There cannot always be an upward trend in market value and without reference to the willing buyer who is willing to purchase and the willing seller who is willing to sell for a particular amount, the demand or extraction of stamp duty based upon the guideline value is illegal, besides it is violative of Articles 300-A, 265 and 14 of The Constitution of India. In the light of the said averments, the petitioner has prayed for issue of a writ of Declaration. 16.The petitioner has also filed a writ petition in W.P.No.13966 of 2002 with identical averments forbearing the respondents 2 to 8 from increasing the guideline value while setting out identical averments in the affidavit filed in support of the wr etition and also certain allegations on revision of guideline value for the subsequent year. This challenge is also identical and it is not necessary to refer to the details of the said averments once over. 17.In W.P.No.5978 of 1999, the Deputy Secretary to Government, Commercial Taxes Department, Chennai  9, who is administratively concerned with the subject, has filed a counter. The said counter has been filed on behalf of all the respondents. It is useful to extract the very stand taken by the respondents while extracting the material portion of the counter, which runs thus: "3. It is submitted that the introduction of market value has basis, upon which Stamp Duty is payable on certain instrument, which has become essential to provide tool to the Registering Officers to assess prima facie. These correctness of market value is expressed in such instruments. 4. It is submitted that the Registering Officers were unable to know whether the value furnished in the document is correct market value or not. Hence, the necessity for equipping the registering officers to arrive at the valuation of the document was felt. Thus, the guideline registers were supplied to Registering Officers to arrive at the value of the document without inspecting the property. 5. It is submitted that the duty of a Registering Officer is to conduct an enquiry under rule 3(3) of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 to find out the true market value mentioned in the document. Since the Registering Officer cannot go out of his office to verify the correctness of the market value stated in the document, the Department thought that it was quite necessary to provide him with some modalities or guideline to find out prima facie whether the document has been correctly valued. For this purpose, the erstwhile Board of Revenue was asked to evolve a procedure to be followed by the Registering Officers. The Board of Revenue with the help of Revenue and Registration Department Staff found out the value for each survey number in the village. Those registers were called "Guideline Registers" and supplied to the registering authorities in 1970. Such Registers were first prepared in the year 1968. But subsequently the Guideline values were revised in the year 1971, 198 1 and 1986. As the land value of the properties are increasing sharply year after year, it was felt that updating the value in the Guideline Register is essential to prevent loss of revenue to Government. The Government have, therefore, ordered for annual revision of the guideline value. The Government have also constituted a "Value Fixation Committee" under one Additional Inspector General of Registration ( Guidelines) as Chairman, Deputy Inspector General of Registration of the concerned Zone, District Registrar of the concerned District, as Members and one District Registrar (Guidelines) as Secretary to the Committee, to supervise and guide the annual revision of guideline value. 6. It is submitted that the Committee has been empowered to revise the guideline value on the basis of the growth rate, conditions of the place and on enquiries wherever and whenever necessary. The annual revision is being done on the basis of growth rate, sales statistics, use of land, environmental and geographical conditions, breadth of roads and value ascertained by enquiry. The Committee is also committed to rectify anomalies if any in the existing value by fixing new guideline value. The Committee is taking steps with the regular field staff of the department to inspect the layouts and plots and find out the correct value by enquiry and by reference to registration statistics. The petitioner filed a writ petition against the guideline revision made by Registration Department as stated above. 7. It is submitted that the Guideline Committee will revise the guideline by working out the value on the basis of growth rate, sales statistics and local enquiry. Fancy price, motivated price and price arising out of disputes are ignored and eliminated while arriving at the growth rate. Market value determined by Special Deputy Collectors under Section 47-A(1) of the Indian Stamp Act, 1899 (Central Act 2 of 1 899) (hereinafter referred to as the Act) is taken into consideration while fixing the guideline value. 8.It is submitted that in Tiruppur Municipal area, the growth rate for the year 1999-2000 varies from 11.36 to 16.65%. In Pollachi SubRegistry Office comprising wards 1 to 8, the growth rate is between 10.37% and 14.01% and in Udumalpet Municipal Area comprising wards A to E, the growth rate is between 11.75% and 15.16%. 9.It is submitted that in Coimbatore Corporation area, the growth rate for the year 1998-99 for the wards comprised from 1 to 11 and Ganapathy varies from 6.65 to 14.67%. In Municipal area it varies from 10 .39 to 11.97%. 10.It is submitted that the Value Fixation Committee camped at Coimbatore during November, 1998 has approved the growth rate for Coimbatore and Tiruppur on the basis of sales statistics and local enquiry and based on this the guideline value was revised. 11.It is submitted that the guidelines are thus revised once in 3 years for Rural areas and annually for Corporation, Municipalities, Township and local planning areas. This year guideline value has been revised with effect from 1.4.99 in Coimbatore and Tiruppur also. 12.Regarding paragraphs 2 and 3 of the affidavit, it is submitted that the following are the guiding factors for determining the market value: Principles for determination of market value: (a) In the case of lands: (i) classification of the lands as dry, manavari or wet and the like; (ii) classification under various terms in the settlement register and accounts; (iii) the rate of revenue assessment for each classification; (iv) other factors which influence the valuation of the land in question; (v) points, if any, mentioned by the parties to the instrument or any other person which require special consideration; (vi) value of adjacent lands or lands in the vicinity; (vii) average yield from the land, nearness to road and market distance from village site, level of land, transport facilities, water available for irrigation such as tanks, wells and pumpsets. (viii) the nature of crops raised on the land. (b)In the case of house site: (i) the general value of house sites in the locality; (ii) nearness to road, railway station, bus route; (iii) nearness to market, shops and the like; (iv) amenities available in the place like public offices, hospitals and educational institutions; (v) development activities, industrial improvement in the vicinity; (vi) land tax and valuation of sites with reference to taxation record of the local authorities concerned. (vii) any other features having a special bearing on the valuation of the sites, and (vii) any special feature of the case represented by the parties. (c) In the case of building: (i) type and structure; (ii) locality in which constructed; (iii) plinth area; (iv) year of construction; (v) kind of materials used; (vi) rate of depreciation; (vii) fluctuation in rates; (viii) any other features that have a bearing on the value; (ix) property tax with reference to taxation records of local authorities concerned; (x) the purpose for which the building is being used and the income if any, by way of rent per annum secured on the building; and (xi) any special feature of the case represented by the parties. (d) Properties other than lands, house sites and building: (i) the nature and condition of the property; (ii) the purpose for which the property is being put to use; and (iii) any other special features having on the valuation of the property. 13. It is submitted that by taking into account the above factors, the Tamil Nadu Registration Department is adopting the land and building method to arrive at the value of the property, though there are other methods available such as development method, capitalization method and profit method. 14. It is submitted that the Guideline provided by the State would serve as prima facie material available before the registering authority to assist him regarding the value. It is common knowledge that the value of property varies from place to place even to locality. The guidelines were not intended as a substitute for market value or to foreclose the enquiry by Collector under Section 47-A (1) of the Act." 18.In terms of Section 47 A (1), when the registering authority has reason to believe that the instrument of conveyance has not been truly set forth, the instrument is referred to Special Deputy Collector for adjudication. The said collector under Section 47 A of the Act, according to the respondents, cannot shirk his responsibility of adopting the guideline value nor can he fix the market value without proper authority and evidence to support it. 19.It is contended that the guideline value is not the final value and it is not a substitution for market value. It has been pointed out that the guideline value is only a tool to find out prima facie whether the market value set forth in document is correct. It is contended that guideline value is revised only on the basis of the registration done, growth rate, higher values already recorded, geographical conditions, use of the land and value ascertained by the oral enquiry etc. It is contended that the guideline value is not revised or enhanced arbitrarily and as customary. The guideline value is merely a tool to find out prima facie whether the market value set forth is correct. The entries made in the Guideline Register cannot be a substitute for market value and it is the duty of the registering officer to collect stamp duty on the market value of the property, which is the subject matter of conveyance. But he cannot go out of office to verify the correctness of the value stated in the instrument. If the value of the property is not revised, it will not definitely reflect the real and true value of the property. If the registering officer feels and suspects the value stated in the document is not truly set forth, it is his utmost duty to prevent the leakage of the legitimate revenue to the State and he cannot compel the registrants to accept the value noted in the Guideline Register supplied to him for his reference, but he can refer the document to the Collector under Section 47-A of the Act. 20.It is submitted that the same method is being followed in the preparation of guideline value and revision there of. The Guideline Register is a mere register for reference to the registering officer and as such the contentions of the petitioner are devoid of merits. The Guideline Register supplied to the registering officials is intended merely to assist them