O R D E R

This writ petition is filed by the petitioner / Society as against the orders dated 09.08.2010 and 18.02.2011, in and by which, the petitioner was directed to pay a sum of Rs.13,49,470/- as stamp duty for registration of the document presented on 21.06.2010, pending as Document No.51 of 2010.

2. The petitioner Society purchased certain lands from M/s.Kothari Industrial Corporation Ltd., under a sale deed dated 21.06.2010 and the same was registered as Document (pending) No.51 of 2010, on the file of the third respondent. In the document, one K.Periasamy Gounder was also included as a confirming party, confirming the said transaction. The document does not involve any transfer of interest by the said K.Periasamy Gounder, however, as a confirming party, at the instance of the petitioner, he was also shown. The petitioner has also paid the stamp duty with reference to the sale consideration mentioned in the document and also remitted the required registration fee.

3. While so, they were served with an order dated 09.08.2010 of the third respondent directing them to pay deficit stamp duty of Rs.10,000/- and deficit registration fee of Rs.13,39,470/-, in terms of the orders of the second respondent dated 27.07.2010 and the orders of the first respondent dated 13.07.2009. The petitioner was also served with another order dated 18.02.2011 reiterating the demand. Challenging these orders, the petitioner Society has moved the instant writ petition.

4. Learned Senior Counsel appearing for the petitioner made his submissions as follows:-

4.1. The property, which was purchased by the petitioner Society from M/s.Kothari Industrial Corporation Ltd., was originally proposed to be purchased by one K.Periasamy Gounder. A sale agreement dated 16.03.2009 was also entered upon. However, the said transaction did not take place and the petitioner Society has purchased the property. Though it is not required for the petitioner to obtain any signature from K.Periasamy Gounder, in order to avoid any future litigations, as an abundant caution, the said K.Periasamy Gounder has been added as a confirming party to the present sale proceedings and his signature was also obtained. However, by citing the same, the Department concluded that two transactions took place in the sale deed and made the impugned demand. There is only one transaction between the petitioner and the vendor, M/s.Kothari Industries Corporation Ltd.

4.2. As per Section 54 of the Transfer of Property Act, 'sale' has been defined as transfer of ownership in exchange for a price paid or promised or part-paid or part-promised by the buyer. Similarly, 'contract for sale' has been defined as a contract that a sale of such property shall take place on terms settled between the parties. A mere sale agreement does not, by itself, create any interest or charge on such property.

4.3. The said K.Periasamy Gounder signed in the sale deed only as a confirming party and not as a vendor or as a person relinquishing his rights, if any. Even assuming that there are numerous transactions in the sale deed, the Department has to look into the instrument and not the transactions. The primary instrument is the deciding factor. Here, the primary instrument is the sale deed executed in favour of the petitioner by M/s.Kothari Industries Corporation Ltd.

4.4. As per Section 4 of the Indian Stamp Act, if several instruments are used in a single transaction, the principal instrument alone shall be chargeable with the duty prescribed and the rest of the instruments shall be charged with Rs.5/-. The parties shall decide which is the principal instrument, provided the duty chargeable on the instrument shall be the highest duty which would be chargeable in respect of any of the said instruments.

4.5. At the most, the instruments can be construed as (i) the cancellation of the prior agreement of sale; and (ii) the conveyance by the vendor to the buyer. If it is so construed, these two transactions namely that of cance