No need to pay full stamp duty on jantri rates: HC

In an important judgment, Gujarat high court on Monday held that registration of property cannot be made mandatory on payment of stamp duty according to the jantri rates only. Thus, paying 5% stamp duty of the market rates as prejudged by the ready reckoner, will not be the deterrent in registration of property deals.

Restoring the system that prevailed before 2007, the high court has quashed a state government's circular issued on May 9, 2007 making it mandatory for the registration that full stamp duty should be paid as per the jantri rates of the property. The court has held that this circular was in violation of provisions of Registration Act and Bombay Stamp Act, said advocate R C Kakkad who represented a Rajkot-based petition.

In May 2007, the state government issued a circular and amended rule 45(1) of the Registration Act, and directed all sub-registrars to register property documents only if buyer-seller agrees to pay stamp duty as per the jantri rates only. Later the registration formats were provided in such a manner that registration of property could not be possible, if documents reveal that transaction amount was below the jantri rate.

Before this amendment, people could register the property while paying stamp duty on contracted value. After registration, the deputy collector of stamp duty used to decide property's value on site inspection. In case of difference, property buyers were at liberty to contest their cases before different fora, including court.

The lawyer said that the changes made in 2007 rendered provision of section 32A of the Act as redundant, as aggrieved persons could not raise their dispute because the duty amount was fixed as per the jantri rate. But now the authorities will have to register the property at any contracted value and they can ask for recovery at a later stage.

Petitioners had also demanded that a token or a receipt could also have solved the problem. They argued that as government has power to impound the document, at least a token or receipt should be issued in lieu of registration pending the valuation of the property.