THE BOMBAY STAMP ACT, 1958 - Igrmaharashtra.gov.in

NotesThe section applies to eight types of deeds (i) conveyance, (ii) exchange, (iii) gift, (iv)certificate of sale, (v) partition, (vi) power of attorney with power to sell immovableproperty for consideration, (vii) deed of settlement, (viii) transfer of lease, being theinstruments on which duty is payable on ad valorem basis on market value of theproperty.Quasi-judicial functionWhile determining market value of the property, the collector's function would be quasijudicialfunction and all principles of natural justice has to be observed. His order must bereasoned order.JT 1996 (6) SC 190 -Smt. Prakshwati v. Chief Controlling Revenue AuthorityUnder UP Stamp Rule, 1942 and section 47A of Stamp Rule.Closeness to posh colony does not of itself make it part thereof.Approach of the authorities was highly vain, casual and unsatisfactory and deters anyconstructive material from where it could be said that decision was fair and reasonable.Factum of closeness to posh locality would not cast any reflection on the price of theproperty.Guidelines are substitute for market valueGuidelines for determining market value of land are no substitute for market value.(Gaurang Naik v. State 1992 Orissa 232).Basic valuation is for collecting stamp duty and guidelines cannot found basis of marketvalue!94-4-S-C-C-595 Jiwaji v. Revenue Officer.Section 32A and Entry 25 of Schedule IWhether an agreement entered into between Builder-Developer and the purchasers of theflats, executed in terms of section 4 of the Maharashtra Ownership Flats (Regulation ofthe Promotion of the Construction, Sale, Management and Transfer) Act, 1963 can besubjected to payment of stamp duty in terms of section 32 A read with Entry 25,Schedule I of the Act, was the issue raised in State 'Maharashtra v. Mahavir LalchandRathod (1993 Mh L.J. 1492) Special Bench of Bombay High court was constituted forthis purpose. Justice Kurdukar observed that, on construction of the agreement inquestion it must be held that although it has been described as an agreement to sell ineffect and for all purposes it is a conveyance falling under section 2(g) of the Act in asmuch as the right, title and interest in the writ flat stands transferred in favour of thepurchaser on payment of installments as provided therein. Even though the document inquestion is an agreement of sale only yet such agreement of sale is dutiable under the Actby virtue of Explanation 1 to Article 25 of schedule I of the Act. There is no clause in theagreement which requires the developer to execute any other deed at a later stage and thisposition militates against the contention of the petitioner. Held that the agreement inquestion is a conveyance and whether possession is given on that date or not is not therelevant and decisive factor. Such a document therefore is liable to stamp duty underArticle 25 in Schedule I of the Act, Entry 25 in Schedule I of the Act is not ultra vires theconstitution of India. It is stamp duty of State and the State Legislature is competent tolegislate in that behalf. Explanation 1 to Article 25 is intended to cover such agreementsof Sale.