CAG flags Rs 5.37-crore revenue loss in stamp duty, registration fee

The Comptroller and Auditor General (CAG) has uncovered major lapses in the valuation of properties across several sub-registrar offices, leading to a substantial revenue loss of Rs 5.37 crore to the state exchequer. A CAG report on the Revenue Department for the period ended March 2022 was laid on the table of the Himachal Vidhan Sabha last week.

The shortfall occurred due to incorrect application of Circle rates and acceptance of false affidavits regarding the distance of landholdings from the roads, which determine the applicable Stamp Duty (SD) and Registration Fee (RF).

According to Article 23 of the Indian Stamp Act, 1899, amended in 2013, the Stamp Duty is levied at six per cent for men and four per cent for women in Himachal Pradesh on either the market value of the property or the consideration amount, whichever is higher.

The Revenue Department’s 2012 notification mandates a two per cent registration fee on the same basis. A further notification issued in January 2016 classified land in rural and urban areas into five categories based on their distance from national highways, state highways and other roads. The purchasers are asked to file affidavits declaring the land’s distance from these road. The submitting of false affidavits could attract a penalty of up to 50 per cent of the SD/RF applicable to them.

In the first set of findings, the auditors scrutinised records from 27 sub-registrar offices for the period 2017–2021. It found that 151 sale deeds were registered for a consideration amount of Rs 38.60 crore, on which the SD and RF of Rs 2.45 crore was levied. However, the revenue authorities overlooked self-affidavits and jamabandis that would indicate the correct distance classification and nature of the land.

The cross-verification with patwaris on distance certificates revealed that incorrect Circle rates had been applied on the purchasers. Had the correct rates been used, the valuation would have been Rs 55.84 crore, and SD and RF amounting to Rs 3.92 crore should have been levied. This resulted in a short levy of Rs 1.47 crore, comprising Rs 1.06 crore in Stamp Duty and Rs 0.41 crore in Registration Fee.

In the second case, the auditors examined records of 32 sub-registrar offices, where 470 deeds registered between 2017 and 2020 relied solely on self-declared affidavits regarding land distance. These deeds were valued at Rs 83.23 crore, with the SD and RF of Rs 4.94 crore collected by the revenue department.

However, auditors cross-checked the affidavits with official maps (latha) maintained by kanungos and found that the correct valuation should have been Rs 123.10 crore. Consequently, the SD and RF worth Rs 8.84 crore should have been collected. The discrepancy led to a short levy of Rs 3.90 crore (Rs 2.83 crore in SD and Rs 1.07 crore in RF).

The Sub-Registrars stated that doubtful affidavits would be examined by the revenue authorities, but no concrete corrective action was documented by them.

Despite being referred to the government in March 2023, the audit observations did not receive a response as of January.