Allahabad High Court: Section 47-A Inapplicable to Gift Deeds for Stamp Duty Determination

The Allahabad High Court recently clarified that Section 47-A of the Indian Stamp Act, pertaining to stamp duty based on market value, does not apply to gift deeds. Justice Shekhar B. Saraf emphasized that market value is irrelevant for gift deeds, and authorities must not invoke Section 47-A to demand additional stamp duty.

Section 47-A of the Indian Stamp Act outlines procedures when the market value stated in an instrument falls below the minimum value determined by the Act. However, Justice Saraf underscored that this provision is not applicable to gift deeds, where stamp duty is determined based on the property's value, not its market value.

Citing precedents such as Sumit Gupta v. State of U.P. & Others and Vijay Kumar vs. Chief Controller, Board of Revenue, the court affirmed that for gift deeds, the value of the property suffices for stamp duty computation, rendering market value irrelevant. Justice Saraf emphasized that authorities should instead resort to other sections of the Act for addressing deficient stamp duty, such as Sections 27, 33, 62, 62-A, 64, and 64-B.

The case stemmed from the imposition of additional stamp duty on a gift deed for land, based on the assumption of increased market value due to surrounding developments. Despite dismissal of the appeal against this decision, the petitioner sought relief from the High Court.

In defense of the impugned order, counsel for the respondent argued that the land's future market value warranted additional stamp duty. However, the Court, relying on precedent and Article 33 of Schedule 1-B of the Act, reiterated that market value is irrelevant for gift deeds.

Quashing the impugned orders, the Court chastised the authorities for disregarding established legal principles. It directed them to exercise greater caution in quasi-judicial activities and consider relevant legal precedents presented before them.