IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.02.2010 CORAM THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN C.M.A.No.3269 of 2004 M.Senthilnathan ... Appellant vs. 1.The Chief Controlling Revenue Authority cum Inspector General of Registration, Santhome High Road, Chennai - 600 004. 2.The District Revenue Officer, (Stamps) Coimbatore, Collectorate, Coimbatore. 3.The Sub Registrar, Gobichettipalayam, Erode District. ... Respondents Civil Miscellaneous Appeal is filed under Section 47A(10) of Indian Stamp Act against the order of the Chief Controlling Revenue Authority cum Inspector General of Registration, Chennai passed in his proceedings No.14671/No.2/2003 dated 29.09.2004 confirming the order of the District Revenue Officer (Stamps) Coimbatore passed in his proceedings Mu.Pa.4078/2002 dated 08.02.2003. For appellant : Mr.A.K.Kumarasamy For respondents : Mrs.V.Bhavani Subbarayan Special Government Pleader JUDGMENT The appeal has been preferred against the order of the first respondent confirming the order of the second respondent with regard to the Stamp duty payable by the Appellant in respect of the sale deed registered as document No.2015 of 2002. 2. The case of the appellant is that:- He purchased the one acre land by virtue of a sale https://hcservices.ecourts.gov.in/hcservices/ deed dated 28.10.2002 registered as document No.2015 of 2002. The guideline value maintained by the Registrar in respect of the land is Rs.88/- per square feet. As the appellant paid lower Stamp duty, the document was referred by the third respondent under Section 47A (1) of the Stamp duty to the second respondent. Considering the inspection report dated 07.12.2002 the second respondent fixed the value at Rs.74/- per square feet. The said order was passed on 08.02.2003 against which an appeal was preferred to the first respondent on 24.03.2003. 3. After the appeal was filed before the first respondent, the second respondent inspected the property and through his report, he submitted that the compound wall has been constructed on the three sides of the property; and that coconuts saplings are planted and that the land is situate abutting Sathiyamangalam Main Road and that it has got every potential to become house sites and that therefore, the second respondent recommended value of the land as Rs.30,00,000/- per acre. Based on the report of the second respondent and also considering the guideline value of the property the first respondent passed the impugned order observing that even though the property is proved to be agricultural land and it has got potential to become house site and therefore the first respondent instead of Rs.30,00,000/- fixed the value of the land at Rs.25,00,000/-. The said order passed by the first respondent fixing the market value of the property at Rs.25,00,000/- is impugned in this appeal. 4. Mr.A.K.Kumarasamy, learned counsel for the appellant submitted that when the first respondent came to the conclusion that the property is proved to be agricultural land, there is no occasion for the first respondent, to consider an uncertain future event that the land would become house site is not sustainable. Even second respondent's inspection report says that the property is maintained as agricultural land and Onion and Pumpkin are raised in the said land. When the second respondent's report, itself proved the contention of the appellant, in all fairness the first respondent ought to have accepted the value given by the appellant. Learned counsel further submitted that there is no fraudulent intention on the part of the appellant to suppress the value as the second respondents report itself would fortify the contention of the appellant that the property is agricultural land. Learned counsel relied upon the Division Bench Judgment of this Court in the Government of Tamil Nadu Vs. S.Jayalakshmi and others reported in 2009 (1) CTC 305 wherein it has been categorically stated that the exercise of powers under Section 47A can be resorted to when there is under valuation of subject matter with fraudulent intention to evade proper payment of Stamp duty. The said Division Bench Judgment was also followed a single Judge of this Court in C.Rajendra Raju and two others Vs. Inspector General of Registration and two others reported in 2010 (1) L.W.459. With regard to the use of land another Judgment of this Court in the Special Deputy Collector (Stamp), Cuddalore, Vs. https://hcservices.ecourts.gov.in/hcservices/ Chemicals and Plastics Limited reported in 2004 (1) CTC 187 wherein it was held that the market value of the land has to be valued as on the date of deed of conveyance and does not depend upon future or intended user of land by purchaser. By relying upon the said Judgments the learned counsel submitted that as on the date of the conveyance, it was proved to be an agricultural land, even as per the impugned order as well as the report of the second respondent. In fine, the learned counsel submitted that the land should be treated as agricultural land and the valuation shown by the appellant has to be accepted. Alternatively another contention has been made by the counsel that even if the potentiality of the land is considered and value is fixed at Rs.25,00,000/- as determined by the first respondent, 1/3 has to be deducted from the value as per the circular issued by the Inspector General of Registration on 05.10.1994 wherein it has been categorically stated that then the property is sought to be used as house sites 1/3 of the value has to be deducted. This contention is made as alternative contention. 5. Mrs.Bhavani Subbarayan, learned Special Government Pleader on the other hand supported by the impugned order passed by the first respondent. She relied upon the Tamil Nadu(Stamp) Rule (5) Tamil Nadu (Prevention of Undervaluation of Instruments) Rules, 1968. Rule 5 reads as follows:- "5.Principles for determination of market value:- The Collector shall, as far as possible, have also regard to the following points in arriving, at the provisional market value:- (iv) other factors which influence the valuation of the land in question (vi) value of adjacent lands or lands in the vicinity (b) In the case of house sites:- (v) development activities, industrial improvements in the vicinity; (viii) any special feature of the case represented by the parties." By referring to those rules the learned Special Government Pleader submitted that the Collector rightly determined the market value based on the other factors, namely the location of the property near the Gopichetty Main Road, the compound wall surrounding the land, house sites situated in adjacent properties were rightly taken into consideration by the first respondent based on the second respondent's report and rightly decided the market value. In fact https://hcservices.ecourts.gov.in/hcservices/ the impugned order was passed by the first respondent reducing the market value fixed by the second respondent from Rs.30,00,000/- to Rs.25,00,000/- and therefore, the impugned order does not warrant any interference by this Court. 6. A perusal of the impugned order and other connected records would show that the property has been maintained as agricultural land and the same is proved by the report of the second respondent which states that the Onion and Pumpkin are raised in the property. However, this Court cannot lose site of the fact that the property is situated abutting Gobichetty Main Road and that it is situated only 2-1/2 Kilometers from Gopi Bus Stand and that the property is surrounded by layouts. Apart from that compound wall was raised on the three sides of the property. Therefore, there is no perversity in the reasonings given by the first respondent while arriving at the market value of the land at Rs.25,00,000/-. There is no dispute with regard to dictum given in those Judgment referred to the counsel for the appellant. The rules prescribe the Collector to look into the surroundings circumstances and to consider the other factors and also the lands in vicinity, the special feature of the property and development activities in the vicinity. In view of the rules, even though there is no misrepresentation or fraudulent intention on the part of the appellant, there cannot be any prohibition for the Collector, to decide the matter as per the Tamil Nadu Stamp Rules. Tamil Nadu Stamp Rules is subordinate legislation framed as per Section 47A and 75A of the Indian Stamp Act, and the Rules should be considered as a stature and the Collector is bound by the said rules. In this case, the first respondent rightly followed the stamp rules and decided the matter. 7. However, as rightly pointed out by the learned counsel for the appellant, the respondents are bound to follow the circular dated 05.10.1994 issued by the Inspector General of Registration which prescribes 1/3 deduction from the value of the property which has potential of becoming house sites. Therefore, as per circular dated 05.10.1994 1/3 amount is to be deducted from the value fixed by the first respondent. In the following manner value of the property per acre is fixed by deducting 1/3 from Rs.25,00,000/- which is determined by the first respondent. 1/3 of the value is Rs.8,33,333/- market value determined by this Court is Rs.25,00,000- 8,33,333=Rs.16,66,667/-. 8. Therefore, the appeal filed by the appellant is allowed partly, by fixing the value of the property at Rs.16,66,667/- per acre. 9. The first respondent fixed 24% interest perannum for the deficit Stamp duty. However, the same is reduced to 12% perannum. The authorities are directed to fix the Stamp duty as per the orders passed by this Court. No order as to costs. https://hcservices.ecourts.gov.in/hcservices/ 10. The interest has to be calculated from the date of the assessment passed by the second respondent till the order passed by the first respondent that is on 29.09.2004. Sd/- Asst. Registrar //true copy// Sub Asst.Registrar smn To 1.The Chief Controlling Revenue Authority cum Inspector General of Registration, Santhome High Road, Chennai - 600 004. 2.The District Revenue Officer, (Stamps) Coimbatore, Collectorate, Coimbatore. 3.The Sub Registrar, Gobichettipalayam, Erode District. 1 cc to Government Pleader, Sr.No.5669 1 cc to Mr.A.K.Kumarasamy, Advocate, Sr.No.6005 C.M.A.No.3269 of 2004 NG {CO} TP/9.3.2010. https://hcservices.ecourts.gov.in/hcservices/