2010 (6) TMI 900 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank is chargeable with stamp duty.
2. Whether the Sale Certificate requires registration under the Registration Act.

Issue-wise Detailed Analysis:

1. Chargeability of Stamp Duty on Sale Certificate:

The Petitioner challenged the letter dated 26.12.2008 by the 1st Respondent, which stated that the Sale Certificate issued in favor of the Petitioner was chargeable with 8% stamp duty under Article 23 of Schedule-I of the Indian Stamp Act. The Petitioner argued that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank under the SARFAESI Act should not be construed as an instrument chargeable with duty. The Petitioner cited several judgments to support the argument that such certificates are exempt from stamp duty.

The Respondents contended that the exemption under Article 18 of Schedule-I of the Indian Stamp Act applies only to Sale Certificates issued by a Civil or Revenue Court, Collector, or other Revenue Officer, and not to those issued by a bank's Authorized Officer. The court examined various judgments cited by both parties, including "Municipal Corporation of Delhi v. Pramod Kumar Gupta," "Shanti Devi L. Singh v. Tax Recovery Officer," and "Chidambara Manickam, K. v. Shakeena," among others.

The court found that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank does not fall under the exemptions provided in Article 18 of Schedule-I of the Indian Stamp Act. The court relied on the judgment in "In Re, The Official Liquidator, High Court, Madras, 2010 (2) CTC 113," which clarified that Sale Certificates issued by entities other than Civil or Revenue Courts are not exempt from stamp duty.

2. Registration of Sale Certificate:

The Petitioner argued that the Sale Certificate did not require registration under Section 17 of the Registration Act, as it was not an instrument as defined in Section 3 of the Indian Stamp Act. The Petitioner cited several judgments to support this claim, including "Shree Vijayalakshmi Charitable Trust v. The Sub-Registrar," which held that Article 18 imposing stamp duty on registration of Sale Certificates would apply only if a party goes for registration, and not when the Sale Certificate is sent to the Registrar for filing.

The Respondents countered that the Sale Certificate issued by the Authorized Officer of a bank cannot be equated with those issued by Civil or Revenue Courts, which are exempt from registration under Section 17(2)(xii) of the Registration Act. The court referred to the Supreme Court's judgment in "Shanti Devi L. Singh v. Tax Recovery Officer," which distinguished between the processes of filing and registration of documents.

The court concluded that while Sale Certificates issued by Civil or Revenue Courts are exempt from compulsory registration, the same does not apply to Sale Certificates issued by bank officers. The court upheld the view that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank is not exempt from registration and must comply with the relevant statutory provisions, including the payment of stamp duty.

Conclusion:

The court dismissed the Writ Petition, holding that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank is chargeable with 8% stamp duty under Article 23 of Schedule-I of the Indian Stamp Act and requires registration under the Registration Act. Consequently, the court found no infirmity in the order passed by the 1st Respondent and dismissed the Petition.