Allowed

Commissioner and Inspector General of Registration and Stamps v. Manchikatla Satyanarayana

Telangana HC27 Jun 2014WA/965/2014

Case brief

AI extract

What is this about?

The High Court upheld the Single Judge's order quashing notices issued by the Sub-Registrar for deficit stamp duty. Holding that Section 47-A mandates referral to the District Collector for value determination, the Court set aside the notices and directed the Officer to refer the matter immediately.

What did the court decide?

Notices for deficit duty quashed; matter directed to be referred to the District Collector for determination of market value within two weeks.

Commissioner and Inspector General of Registration and… — Property and Title | Telangana HC (2014)

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THE HON'BLE SRI JUSTICE K.C.BHANU AND THE HON’BLE MRS JUSTICE ANIS

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WRIT APPEAL Nos.962, 964 & 965 OF 2014

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COMMON JUDGMENT:- (per Hon’ble Sri Justice K.C.Bhanu)

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These Writ Appeals are filed challenging the common order, dated 22.07.2013, in W.P.Nos.7167, 7189 and 7200 of 2013 passed by a learned Single Judge of this Court.

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2. The respondent herein filed the aforesaid writ petitions before this Court seeking to issue writ of Mandamus declaring the action of the Sub-Registrar, Peddapally, Karimnagar District, the 3^rd appellant herein, in issuing notices Nos.57, 56 and 58 of 2013, all dated 15.02.2013, in respect of document Nos.P5, P4 and P6 of 2013 respectively, calling upon him to pay deficit stamp duty and registration fee for getting his documents regularized, as illegal and arbitrary.

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3. In the writ petitions, it was the case of the writ petitionerrespondent herein that in the auction conducted by the State Bank of Hyderabad, Ramagundam, for sale of three plots in Sy.No.239 of Peddapally, Karimnagar District, belonging to M/s. K.G.N.Auto Stores, he stood as the successful bidder for all the three plots. It was also his case that basing on the sale certificates issued in his favour, he paid the stamp duty and submitted the documents for

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registration, but the Sub-Registrar, Peddapally, the 3^rd appellant herein, issued the impugned notices contrary to the provision under Section 47-A of the Indian Stamp Act, 1899 (for short ‘the Act’), hence, prayed to set aside the same.

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4. By the impugned common order, the learned Single Judge of this Court allowed the writ petitions following the judgment of this Court in G.USHA RANI vs. JOINT SUB-REGISTRAR- 1^[1] . Challenging the same, the present writ appeals are filed.

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5. Learned Government Pleader for Revenue contended that in view of the circular instructions of the Government issued on 22.06.2012, the Sub-Registrar is competent to collect the deficit stamp duty and registration fee and, therefore, the notices dated 15.02.2013 issued by the 3^rd appellant are in accordance with law, hence, prayed to set aside the impugned order.

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6. On the other hand, learned counsel for the respondent contended that under Section 47-A of the Act, whenever a dispute arises with regard to the payment of stamp duty, the same has to be referred to the District Collector for determination of proper stamp duty and registration fee and, therefore, issuance of notices by the 3^rd appellant is contrary to law and the impugned order needs no interference by this Court.

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7. Section 47-A of the Act reads as follows:

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“47-A. Instruments of conveyance, etc., under-valued how to be dealt with:-- (1) Where the registering officer

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appointed under the Registration Act, 1908, (Central Act 16 of 1908), while registering any instrument of conveyance, exchange, gift, partition, settlement, release, agreement relating to construction, development or sale of any immovable property or power of attorney given for sale, development of immovable property, has reason to believe that the market value of the property which is the subject-matter of such instrument has not been truly set forth in the instrument, or that the value arrived at by him as per the guidelines prepared or caused to be prepared by the Government from time to time has not been adopted by the parties, he may keep pending such instrument, and refer the matter to the Collector for determination of the market value of the property and the proper duty payable thereon:

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Provided that no reference shall be made by the registering officer unless an amount equal to fifty per cent of the deficit duty arrived at by him is deposited by the party concerned.

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(2) On receipt of a reference under sub-section (1), the Collector shall, after giving the parties an opportunity of making their representation and after holding an enquiry in such manner as may be prescribed by rules made under this Act, determine the market value of the property which is the subject matter of such instrument and the duty as aforesaid:

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Provided that no appeal shall be preferred unless and until the difference, if any, in the amount of duty is paid by the person liable to pay the same, after deducting the amount already deposited by him.

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Provided further that where after the determination of market value by the Collector, if the stamp duty borne by the instrument is found sufficient, the amount deposited shall be returned to the person concerned without interest.

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(3) The Collector may suo motu within two years from the date of registration of such instrument, not already referred to him under Sub-section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the subject-matter of such instrument and the duty payable thereon and if, after such examination, he has reason to believe that market value

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of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty as aforesaid in accordance with the procedure provided for in sub-section (2). The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty:

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Provided that nothing in this sub-section, shall apply to any instrument registered before the date of commencement of the Indian Stamp (Andhra Pradesh Amendment) Act, 1971.

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(3A) (i) The Inspector General may suo motu, call for and examine the record of any order passed or proceedings recorded by the Collector under sub-section (2) or subsection (3) and if such order or proceeding recorded is found leading to loss of legitimate revenue due to disregard of market value by the Collector based on mistake, omission, or failure to take into account, any direct or collateral factual evidence affecting the market value of the property involved in the case referred under sub-section (2) or sub-section (3) as the case may be may make such enquiry or cause such enquiry and inspection of the property to be made and subject to the provisions of this Act may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order in reference thereto as he thinks fit determining the market value and corresponding deficit stamp duty:

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Provided that such action for revision shall be initiated within a period of one year from the date of the order or proceedings issued by the Collector acting under sub-section (2) or sub-section (3);

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(ii) the power under clause (i) shall not be exercised by the authority specified therein in respect of any issue or question which is the subject matter of an appeal before, or which was decided an appeal by, the appellate authority under sub-section (5);

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(iii) no order shall be passed under clause (i) enhancing any duty unless an opportunity has been given to the party to show cause against the proposed revision of market value and deficit Stamp Duty;

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(iv) where any action under this sub-section has been deferred in respect of any reference under sub-

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section (2) or sub-section (3) on account of any stay order granted by the court in any case or by reason of the fact that another proceeding is pending before the court involving a question of law having a direct bearing on the order or proceeding in question, the period during which the stay order was in force or such proceeding was pending shall be excluded in computing the period of one year specified in the proviso to clause (i) of this section for the purpose of exercising the power under this sub-section.

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(4) Any person aggrieved by an order of the Collector under Sub-section (2) or sub-section (3) may appeal to the appellate authority specified in sub-section (5). All such appeals shall be preferred within such time and shall be heard and disposed of in such manner, as may be prescribed by rules made under this Act.

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(4A) Any person aggrieved by the order of the InspectorGeneral under sub-section (3A) may appeal to the High Court within a period of two months from the date of receipt of such order.

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(5) The appellate authority shall be --

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(i) in the cities of Hyderabad and Secunderabad, the City Civil Court,

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(ii) elsewhere--

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(a) the Subordinate Judge or if there are more than one Subordinate Judge, the Principal Subordinate Judge, having jurisdiction over the area in which the property concerned is situated; or

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(b) if there is no such Subordinate Judge, the District Judge having jurisdiction over the area aforesaid.

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(6) For the purposes of this Act, market value of any property shall be estimated to be the price which in the opinion of the Collector or the appellate authority, as the case may be, such property would have fetched or would fetch if sold in the open market on the date of execution of any instrument referred to in sub-section (1):

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Provided that in respect of instruments executed by or on behalf of the Central Government or the State Government or any authority or body incorporate by or under any law for the time being in force and wholly owned by Central/State Government, the market value of any property shall be the value shown in such

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instrument.

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8. A perusal of the above provision makes it clear that in case any dispute arises with regard to determination of market value of the property, necessarily it has to be referred to the District Collector for determination of correct market value and, thereupon, on determination of such market value, the stamp duty and the registration charges have to be paid by the party.

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9. The circular instructions in Memo No.3358/Regn.I/A2/ 2012, dated 22.06.2012, issued by the Government cannot override the statutory provisions. The notices issued by the 3^rd appellant, directing the respondent herein to pay the deficit stamp duty and registration fee, are without jurisdiction and that is the reason why the learned Single Judge of this Court has rightly allowed the writ petitions. However, we direct the 3^rd appellant to refer the matter to the District Collector, for determination of proper market value of the property, within two weeks from the date of receipt of a copy of this order. On such reference, the District Collector shall determine the market value of the property basing on the material available on record, to enable the respondent herein to pay the deficit stamp duty and the registration charges accordingly, within two weeks after receipt of reference from the 3^rd appellant.

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10. Accordingly, these Writ Appeals are disposed of. There shall be no order as to costs. Miscellaneous Petitions, if any, pending in these Writ Appeals shall stand closed.

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______________________ JUSTICE K.C.BHANU

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_______________ JUSTICE ANIS 27.06.2014

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v v

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[1] 1998 (6) ALT 604

Commissioner and Inspector General of Registration and Stamps v. Manchikatla Satyanarayana

Case brief

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Commissioner and Inspector General of Registration and Stamps v. Manchikatla Satyanarayana

Case brief

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