The court ruled that stamp duty on a sale certificate is 5%, and Section 47-A does not apply to public auctions conducted under court supervision.

JUDGMENT :

(Judgment of the Court was made by R.SUBRAMANIAN, J.)

Prayer : Writ Appeal filed under Clause 15 of the Letters Patent, to set aside the order dated 13.09.2023 passed in the writ petition in W.P.No.7194 of 2023.

The petitioner in W.P.No.7194 of 2023 is on appeal aggrieved by the dismissal of its writ petition with the following prayer:-

“Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a writ of Certiorarified Mandamus, calling for the records of 3rd respondent pertaining to the impugned Refusal check slip in Refusal Number FRL/Thuraiyur/4/2023 dated 4.01.2023 and quash the same as arbitrary, illegal and without jurisdiction and consequently direct the respondents herein to refund the excess amount of Rs.1,35,33,970/- paid by the petitioner firm for registration of sale certificate under protest as stamp duty and registration charges as claimed by the 3rd respondent and direct the respondents not to proceed with under Section 47(A) of Indian Stamp Act to fix any other value or seek valuation of the Eauctioned property under Court proceedings and in furtherance direct the 3rd respondent to release the registered sale deed vide Doc.No.47 of 2023 dated 04.01.2023.” The facts that led to the filing of the writ petition are as follows:-

2. The Company by name Cethar Limited formerly known as Cethar Vessels Pvt. Ltd., was directed to be wound up by the Chennai Bench of National Company Law Tribunal and one Thiru.V.Nagarajan was appointed as the Official Liquidator by the Tribunal with a direction to realise the assets of the Company. The Official Liquidator conducted a public auction (E-Auction) of the property measuring about 92.47 acres with a built up area of 8,32,945 sq.f. situate at Peramangalam Village of Trichirapalli District. The petitioner participated in the said public auction and was declared the successful bidder for a bid amount of Rs.27,06,77,000/-. The petitioner also paid the entire bid amount less the TDS applicable at 1%. The sale certificate to that effect was issued by the Official Liquidator appointed by the National Company Law Tribunal on 28.12.2022.

3. A sale deed was also executed by the Official Liquidator on 04.01.2023 and the same was presented for registration. The Sub-Registrar concerned demanded stamp duty. The petitioner paid the stamp duty at 5% as per G.O.Ms.No.46 of Commercial Taxes and All Department dated 27.03.2012 and 1% towards registration charges. The Sub-Registrar refused to accept the same and demanded stamp duty as per Article 18 read with Article 23 of Schedule-I to the Indian Stamp Act, 1899 treating it as the conveyance. The petitioner however paid the amount under protest on 04.01.2023. Thereafter, the Sub-Registrar registered the instrument and referred it under Section 47-A claiming that there has been a wilful undervaluation of the property. Hence, the instant writ petition by the petitioner seeking the reliefs as aforesaid.

4. Though it has been held that a sale certificate does not amount to conveyance, if it is to be registered, the duty required under the Stamp Act has to be paid. Article 18 read with Article 23 makes it obligatory on the part of the purchaser to pay the stamp duty treating the sale certificate as a conveyance, if he wants registration of the instrument. However, by G.O.Ms.No.46 of Commercial Taxes and All Department dated 27.03.2012 referred to above, the Government exercising powers under Section 9 of the Indian Stamp Act had remitted duty payable on sale certificate to 5%. It is not in dispute that the petitioner has paid 5% duty and 1% towards registration charges. Therefore, the petitioner has paid the proper stamp duty. When the Registrar made a demand for higher duty, the petitioner has paid it under protest and the petitioner is now seeking refund.

5. The issue relating to payment of stamp duty on sale certificate is no longer res-integra. One of us [Hon'ble Mr.Justice R.Subramanian] has in Bell Tower Ente