New Delhi: Supreme Court has ruled that fixation of accurate circle rates, the minimum value of land and properties in a locality, is a prerequisite of good governance and will help enhance ease of living and doing business, but lamented that this important aspect has escaped “adequate attention” of govts.
Circle rates notified by govts determine the stamp duty to be paid by purchasers of land and properties in a locality, and helps the land acquisition officer quantify the fair compensation to be paid to landowners.
A bench of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar, while rejecting an appeal by Madhya Pradesh Road Development Corporation, said, “While serving the interests of honest taxpayers, accurate circle rates would simultaneously deter non-compliant taxpayers by preventing under-valuation.”
In the judgment, the CJI stated, “Rational and fair circle rates are essential for good governance. Since the fixation of circle rates affects everyone financially, the data and methods used to determine them should be made public. Unfortunately, this important aspect has not received sufficient attention from authorities.”
“An inflated rate results in an unfair financial burden on purchasers. Conversely, an undervalued rate leads to inadequate stamp duty collection, adversely affecting the State’s revenue. Circle rates, which reflect the market price, ensure proper revenue collection for the State by preventing under-valuation of properties,” the bench said.
