Madurai, Jul 12: In a landmark judgement, the Madurai Bench of the Madras High Court has ruled that the land buyers have to pay 'Stamp Duty' as per the property's prevailing market value on the date of registration, even if they had purchased it for a lesser consideration years ago.
Justice P Jyothimani, while disposing of a writ-petition here last evening said it is not mere payment of price or delivery of possession that completes a conveyance, but it is the intention of the parties to transfer ownership that completes the sale.
The petitioners, a couple from Madurai said the Industries and Commerce Department allotted a few vacant plots here to it on March 28, 2002, for a consideration of Rs 3,45,000 setting up Industries.
While registering the documents in the year 2006, the sub-registrar insisted on paying Stamp Duty for a market value of Rs 11,23,200.
The petitioners claimed that there was no deliberate suppression of the market value, as enunciated in the Stamp Act, since their 'Sale Deed' reflected the amount paid by them to the seller.
The petitioners said the registrar refused to give the registered sale deeds, pending an enquiry and hence prayed the court's intervention to release it.
Justice Jyothimani said by applying Section-17 of the Indian Stamp Act, 1899, duty attracted in respect of the property to be registered could be calculated only at the time of execution of the sale deed and not at the time of allotment of property.
He directed the registered authority to release the sale deeds within two weeks after making necessary endorsements on the original documents to the effect that an enquiry under Section-47A of the Stamp Act was pending.
The endorsements should also be reflected in the register maintained in the Registrar's office, so that it could be reflected in the encumbrance certificates for the benefit of future buyers, he added.
He said, it could, however, be deleted after the completion of the enquiry and payment of the entire Stamp Duty.