Madras High Court
Sjlt Textiles Private Limited vs / on 3 January, 2024
Author: G.R.Swaminathan
Bench: G.R.Swaminathan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved On : 21.12.2023
Pronounced On : 03.01.2024
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
W.P(MD)Nos.1836 & 1768 of 2023
and
W.M.P.(MD)Nos.1628 &1571 of 2023
SJLT Textiles Private Limited
A company incorporated under the Companies Act, 1956,
Represented by its Managing Director &
Authorised Signatory, V.Selvadurai
Having its Registered office at
No.2E, Prince Arcae,
No.2E, 2nd Floor, 22-A,
Cathedral Road,
Chennai-600 086. ... Petitioner in W.P.(MD)No.1836 of 2023
SJLT Spinning Mills Private Limited
A company incorporated under the Companies Act, 1956,
Represented by its Managing Director &
Authorised Signatory, V.Selvadurai
Having its Registered office at
No.2E, Prince Arcae,
No.2E, 2nd Floor, 22-A,
Cathedral Road,
Chennai-600 086. ... Petitioner in W.P.(MD)No.1768 of 2023
Vs.
1/10
https://www.mhc.tn.gov.in/judis
1.The Sub Registrar,
Vedachandhur,
Dindigul District.
2.The District Revenue Officer (Stamps),
Old Ramanathapuram Collector Office,
Room No.104, Madurai 20.
3.The Inspector General of Registration,
No.100, Santhome High Road,
Chennai-28. ... Respondents in both W.Ps.
Prayer in W.P.(MD)No.1836 of 2023 : Writ Petition filed under Article
226 of the Constitution of India, praying this Court to issue a Writ of
Certiorarified Mandamus, to call for the records of the first respondent
vide notice dated 04.08.2021, quash the same as illegal, arbitrary and
unconstitutional and consequently, direct the respondents to return the
Document vide Doc No.3189 dated 10.12.2020 on the file of the first
respondent and consequently, refund of excess stamp duty of 2%
amounting to Rs.26,41, 120/- and additional registration fee of 3%
amounting to Rs.39,62,024/- already paid by the petitioner.
Prayer in W.P.(MD)No.1768 of 2023 : Writ Petition filed under Article
226 of the Constitution of India, praying this Court to issue a Writ of
Certiorarified Mandamus, to call for the records of the first respondent
vide notice dated 04.08.2021, quash the same as illegal, arbitrary and
unconstitutional and consequently, direct the respondents to return the
Document vide Doc No.3190 dated 10.12.2020 on the file of the first
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respondent and consequently, refund of excess stamp duty of 2%
amounting to Rs.18,69,431/- and additional registration fee of 3%
amounting to Rs.28,03,186/- already paid by the petitioner.
For Petitioner : Mrs.Ananda Gomathy
For Respondents : Mr.R.Baskaran
Additional Advocate General
assisted by Mr.C.Satheesh
(in both W.Ps.) Government Advocate
COMMON ORDER
Heard both sides.
2. The writ petitioners are companies registered under the
provisions of the Companies Act. They participated in an e-auction
conducted by M/s.Omkara Asset Reconstruction Company and purchased
the petition mentioned properties. The authorised officer conveyed an
extent of land measuring 24 acres and 93 cents in Vedachandur Taluk,
Kalvarpatti Village to SJLT Spinning Mills Pvt., Ltd and the land
measuring 23.09 acres to SJLT Textiles Pvt Ltd and the value of the land
bid by SJLT Textiles Pvt Ltd was Rs.13,20,47,600/- and the value of the
land bid by SJLT Spinning Mills Private Limited was Rs.9,34,31,379/-.
https://www.mhc.tn.gov.in/judis
3. The authorised officer issued sale certificates in favour of the
writ petitioners on 05.12.2020. They were presented for registration
before the first respondent. The registering authority impounded the
documents. The transaction was treated as conveyance and the petitioner
was called upon to pay stamp duty and registration charges at the rate of
7% & 4%. The petitioner complied with the said demand. The
petitioner realized only later that the stamp duty and registration charges
payable on a sale certificate was 5% & 1% respectively. The registering
authority further was of the opinion that the transaction has been
undervalued. According to the department, stamp duty and registration
fee were payable on the market value of the properties purchased by the
petitioners. Proceedings under Section 47A of the Stamp Act was also
taken and final orders were passed. The impugned notices dated
04.08.2021 were issued calling upon the petitioners to pay additional
stamp duty and registration charges to the tune of R.3,03,65,996/-.
Challenging the same and seeking return of the documents, the present
writ petitions came to be filed.
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4. The learned counsel appearing for the petitioners reiterated all
the contentions set out in the affidavit filed in support of the writ
petitions and called upon this Court to set aside the impugned notices
and grant relief as prayed for. The stand of the learned counsel is that the
issue raised in the writ petitions is no longer res integra and that it has
been answered already.
5. The registering authority has filed counter affidavit. The learned
Additional Advocate General took me through its contents and contended
that the writ petitions are bereft of merit and that they deserve to be
dismissed.
6. I carefully considered the rival contentions and went through the
materials on record. The entire defence of the department is anchored on
the Full Bench decision reported in 2019 (4) CTC 839 (R.Thiagarajan Vs. IG
of Registration). As rightly pointed out by the learned counsel for the
petitioner, the authorities are refusing to take cognizance of the
subsequent developments. A learned Judge of this Court vide order dated
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12.09.2022 in W.P.No.23237 of 2018 (Bell Tower Enterprises LLP Vs. State of Tamil
Nadu and others) held as follows:-
“25. From the above discussion, it could be seen that in view of the
pronouncement of the Hon’ble Supreme Court in Esjaypee Impex Pvt Ltd v.
Assistant General Manager and Authorised Officer, Canara Bank, the law as it
stands today is that an Authorised Officer, who conducts a sale under the
provisions of the SARFAESI Act, would be a Revenue Officer and the
certificate issued by him in evidence of such sale, would be a document which
is not compulsorily registrable under Section 17(2)(xii) of the Registration
Act. It would be sufficient, if the document is lodged with the Registrar
under Section 89(4) to be filed by him in the Book-I maintained by him. The
decisions of this Court in the Inspector General of Registration v.
K.K.Thirumurugan, (Division Bench,) The Inspector General of Registration
v. Kanagalakshmi Ganaguru, (Division Bench), Dr.R..Thiagarajan v. Inspector
General of Registration, (Full Bench) and The Inspector General of
Registration v. Prakash Chand Jain, (Division Bench) are no longer good law,
in view of the pronouncement of the Hon’ble Supreme Court in Esjaypee
Impex Pvt Ltd v. Assistant General Manager and Authorised Officer, Canara
Bank.
26. The next question that would arise is to the amount of stamp duty
and registration charges payable, if such certificate is presented for
registration. Article 18 of the Stamp Act, provides for Stamp Duty payable on
a certificate of sale granted by a Civil or Revenue Court or Collector or other
Revenue Officer. Clause (c) of Article 18 makes the duty payable for a
conveyance would apply to a sale certificate also. Under Article 23 of
the Stamp Act, the Stamp Duty payable on a sale is 5% as per G.O.Ms.No.46-
CT and All Department dated 27.03.2012. As already pointed out since the
document would not be a conveyance there is no question of payment of any
surcharge either under Section 116-A of the Tamil Nadu District Municipality
Act 1920 or under the Tamil Nadu Duty on Transfer of Property (In Municipal
Areas) Act (32 of 2009).
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27. Insofar as the registration charges are concerned, the State
Government has fixed the registration charges at 1% under Section 78 of the
Registration Act and the same has been published in the Tamil Nadu
Government Gazette, as required under Section 79 of the Registration Act. By
G.O.Ms.No.49 dated 08.06.2017, the following proviso was added to Article
1 of the table of the fees:
“Provided further that notwithstanding anything contained in this
Table, in case of deeds of conveyance, exchange, gift and settlement
among non- family members, the Registration Fee shall be levied at
the rate of Rupees four per Rupees hundred or part thereof on the
value or amount on which stamp duty under the Indian Stamp Act,
1899 (Central Act II of 1899) is payable”.
28. It is the contention of Mr.Sharath Chandran, learned counsel for
the petitioner that the proviso would apply only in cases of deeds of
conveyance, exchange, gift and settlement among non-family members.
Inasmuch as a sale certificate would not amount to a conveyance, the
registration fee payable would be as provided under Article 1 that is at 1% and
nothing more. The judgment of this Court in Sakthi Foundations Pvt. Ltd., v
The Inspector General of Registration, supports the contention of the learned
counsel for the petitioner on this point. This Court after examining the
language of the proviso had held that it would not apply to a sale certificate
issued under SARFAESI Act. This renders the collection of registration
charges at 4% from the petitioner also illegal.
29. In the upshot of the above discussions, the Writ Petition has to be
necessarily allowed and the excess fee and the stamp duty collected will have
to be refunded by the respondents. The Writ Petition stands allowed, a Writ of
Mandamus will issue directing the respondents to refund the excess stamp
duty and registration fee to the tune of Rs.19,72,620/- with interest at 9% per
annum from the date of filing of this Writ Petition till date of payment. There
shall be no order as to costs.”
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7. The aforesaid decision does not leave any room for doubt.
When sale certificate is presented for registration by the purchaser, the
stamp duty payable is 5% and the registration charges is 1%. They are on
the bid amount and not on the market value. Therefore, the respondents
are not justified in demanding payment of additional stamp duty and
registration charges. On the other hand, they are bound to refund the
excess amount collected from the petitioners. Respectfully applying the
ratio laid down in W.P.No.23237 of 2018 dated 12.09.2022, the
impugned notices are quashed. The respondents are directed to refund
the excess stamp duty and registration fee collected from the petitioners.
I refrain from directing the respondents to pay interest. This is because,
the excess amounts were voluntarily paid by the petitioners though under
a mistaken impression. The documents have been presented for
registration on 10.12.2020. The decisions in favour of the petitioners
came subsequently. The respondents are directed to release the petition
mentioned documents that have been kept pending. This shall be done
immediately and without delay.
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8. The writ petitions are allowed. No costs. Consequently,
connected miscellaneous petitions are closed.
03.01.2024
NCC : Yes/No
Index : Yes / No
Internet : Yes/ No
rmi
To:-
1.The Sub Registrar,
Vedachandhur,
Dindigul District.
2.The District Revenue Officer (Stamps),
Old Ramanathapuram Collector Office,
Room No.104, Madurai 20.
3.The Inspector General of Registration,
No.100, Santhome High Road,
Chennai-28.
https://www.mhc.tn.gov.in/judis
G.R.SWAMINATHAN, J.
rmi
W.P(MD)Nos.1836 & 1768 of 2023
03.01.2024
https://www.mhc.tn.gov.in/judis
