A Gift Deed executed by a father in favor of his daughter qualifies for concessional stamp duty as a family settlement under Article 58(a)(i) of the Indian Stamp Act, 1899.

ORDER :

(S. Sounthar, J.)

(PRAYER: Writ Petition is filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the entire records on the file of the second respondent pertaining to the order dated 14.12.2006 and demand of deficit stamp duty in Form 2 dated 14.12.2006 vide No.Ci.Pa.Ku.Mu.Ka.No.275/2006/WLJ and quash the same and consequently direct the first respondent to release the Registered Document No.3043 of 2005 dated 24.06.2005 on the file of the first respondent to the petitioner.)

The writ petition is filed challenging the Form-2 Notice in Ci.Pa.Ku.Mu.Ka.No.275/2006/WLJ, dated 14.12.2006 issued by the 2nd respondent provisionally determining the market value of the property covered by the settlement executed in favour of the petitioner dated 24.06.2005 and stamp duty payable thereon.

2. It is the case of the petitioner that land and building bearing Plot No.124 in Ranipet Industrial Estate comprised in Survey Nos.62, 63, 68, 69 and 70 of Karai Village and in Survey Nos.225, 226, 352 and 353 of Narashingapuram Village, Walaja Taluk, Vellore District was originally owned by petitioner's father M.S.Venkatasamy Raja. He purchased the same under a Sale Deed dated 11.07.1991 from SIDCO, Vellore. The petitioner's father was carrying on manufacturing activities in the said property under the name and style of 'Revathy Industries' as a Sole Proprietor. The petitioner's father out of love and affection settled the subject property in favour of the petitioner by executing a Gift Deed dated 24.06.2005. The same was registered at the office of the 1st respondent and assigned with Registration No.3043 of 2005. The petitioner paid stamp duty of Rs.10,000/-, which was the maximum stamp duty payable at that point of time, for settlement deeds executed among the family members as per the Article 58(a)(i) of Ist schedule to Indian Stamp Act, 1899. After registration, the document was not released to the petitioner and it appears the 1st respondent referred the matter under Section 47-A of Indian Stamp Act, 1899, for determination of market value to the 2nd respondent. It is also stated by the petitioner that the 2nd respondent without conducting any enquiry passed provisional order determining market value of the property at Rs.38,28,150/- and the stamp duty payable on the instrument at Rs.3,06,256/-. As a consequence, the 2nd respondent issued impugned Form-2 Notice directing the petitioner to pay deficit stamp duty of Rs.2,96,256/-. Aggrieved by the same, the petitioner has come before this Court.

3. Mr.K.V.Ananthakrushnan, learned counsel appearing for the petitioner submitted that in the instant case Gift Deed was executed by father in favour of his daughter and therefore, it shall be treated as a settlement among family members eligible for concessional stamp duty under Article 58(a)(i) of Schedule-I to Indian Stamp Act, 1899. However, the 2nd respondent treating the same as a gift in favour of the non-family member demanded stamp duty at the ad valorem rate of 8% under Article 58(a)(ii)(B) of Schedule-I to Indian Stamp Act, 1899. Therefore, the Form-2 Notice issued by the 2nd respondent on the assumption that it is a Gift Deed in favour of a non-family member is erroneous and liable to be set aside.

4. The learned counsel further submitted that before issuing Form-2 Notice, the 2nd respondent has not issued Form-1 Notice and conducted any enquiry. The learned counsel further submitted that the 2nd respondent after issuing Form-2 Notice, failed to pass any final orders within three months from the date of Form-2 Notice and kept the matter pending for nearly 12 years and therefore, there is no possibility for the petitioner to file an appeal and hence, even on the ground of delay, the impugned Form-2 Notice is liable to be quashed.

5. Mr.B.Vijay, learned Additional Government Pleader appearing for the respondents would contend that the impugned Form-2 Notice is only a provisional order an