The Punjab and Haryana high court has said that the stamp duty must be determined as per the market rate prevailing at the time of execution of the sale deed and not on the date on which an agreement to sell was entered into.
The high court bench of justice Kuldeep Tiwari dismissed a petition filed by a Jalandhar resident challenging the April 9, 2019, decision of the divisional commissioner, Jalandhar, over calculations of stamp duty.
The petitioner had argued that the levy should have been assessed based on the prevailing market rate on the date of execution of the agreement to sell, and not the sale deed. Further, it was argued that the shops in question were situated in a multi-storied building, but the sub-registrar, in its report, had erroneously calculated the stamp duty considering the property to be part of a multiplex.
According to the state government’s 2003 industrial policy, the expression ‘multiplex’ denotes an integrated entertainment and shopping centre/complex having at least three cinema halls with aggregate seating capacity of 1,000 persons spanning over an area of 4,000 square yards, with a minimum investment of ₹20 crore, including the cost of the land. However, the word ‘multiplex’ has not been explained in the Indian Stamp Act, 1899, nor in relevant rules under it. The petitioner said the definition embodied in the industrial policy would be of much significance for the purpose of assessment of stamp duty; however, the authorities had imposed exorbitant duty illegally.
The government counsel argued that the minimum market value is assessed on the date of registration of the sale deed, and not on the date of execution of agreement to sell between the parties. The court was also informed that in April 2012, minimum property rates were notified by the administration and the area in which the property is situated was fixed at ₹7,800 per square feet.
{{/usCountry}}The government counsel argued that the minimum market value is assessed on the date of registration of the sale deed, and not on the date of execution of agreement to sell between the parties. The court was also informed that in April 2012, minimum property rates were notified by the administration and the area in which the property is situated was fixed at ₹7,800 per square feet.
{{/usCountry}}The court was informed that the party presented a sale deed of ₹20 lakh and the sub-registrar forwarded the case to the collector as he was of the view that there was a deficiency of ₹22.38 lakh of stamp duty as well as registration charges.
The collector, upon examination, assessed the deficiency of ₹30.44 lakh, including interest of ₹8.06 lakh. The petitioner had approached the divisional commissioner, Jalandhar, against the decision, who dismissed the appeal in 2016. After that, the petitioner approached the high court and a coordinate bench remanded the case back, observing that the order passed was cryptic. Thereafter, the divisional commissioner, Jalandhar, passed a fresh order reiterating the earlier decision in January 2019. It was this decision that was under challenge before the high court now.
The court said that the collector had notified the minimum market value of the land/property in the district concerned, both locality-wise and category-wise, in April for the year 2012-2013. The sale deed was registered in 2013 even as agreement regarding the same was signed in 2001.
The court observed that stamp duty was not assessed considering the property in question to be a part of either a multiplex or multi-storied building but was rationalised, in terms of the rate list issued by the collector in 2012. Therefore, the use of the expression “multiplex /multi-storey” by the sub-registrar has no significance in adjudication of this case. Dismissing the plea, the court said that stamp duty is required to be determined as per market rates prevailing at the time of the sale deed.