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2023 (5) TMI 2 - SC - Indian LawsStamp duty - Asserting value of immovable property - Comprehensive sale of all the assets and, in a single transaction - Whether it is permissible to draw up a conveyance for only a part of such transaction for seeking registration? - whether the Registration Authorities are empowered to go behind an ostensible instrument and ascertain the stamp duty payable on the actual transaction? - applicability of GoMS 103 dated 07.02.2001. HELD THAT - In Member, Board of Revenue 1955 (10) TMI 27 - SUPREME COURT , this Court had the occasion to expound the law by interpreting Sections 3, 4, and 5 of the Indian Stamp Act. In the said case, the Respondent therein had executed a power of attorney. The power of attorney countenanced power being conferred on the agent by the respondent in his individual capacity and also in other capacities such as trustee, etc. The question which inter alia fell for decision was whether the word matter in Section 5 was to be conflated with category - this court has held that When two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expression distinct matters in Section 5 and descriptions in Section 6 have different connotations - In other words, the Court apparently approved of the view taken that the Court should look at the instrument as it stood. When it comes to the definition of immovable property in the Transfer of Property Act, it has been defined as not including standing timber, growing crops or grass . In the Registration Act, 1908, immovable property includes, apart from land and buildings, things attached to the earth or permanently fastened to anything which is attached to the earth but not including standing timber, growing crops or grass. Most importantly, we cannot also be oblivious that Section 8 of the Transfer of Property Act declares that in the absence of an express or implied indication, a transfer of property passes to the transferee all the interests, which the transferor was capable of passing in the property and in the legal incidents thereof. Such incidents includes, inter alia, where the property is land, all things attached to the earth. When the property is machinery attached to the earth, the movable parts thereof also are comprehended in the transfer. The mere fact that there is no express reference to plant and machinery in the Recital Clause cannot mean that the interest in the plant and machinery which stood attached to the land, which was scheduled, was not conveyed to the first respondent. The value of, what was actually purchased, has been expressly set out in the Preamble to the sale deed. The effort of respondents 1 and 2 was to avoid payment of the stamp duty as due in law. The Division Bench erred in not noticing the true purport of the sale deed in conjunction with Section 8 of the Transfer of Property Act and the definition of the word immovable property , which we have adverted to. Viewed in the context of Duncans Industries Limited (supra) and Member, Board of Revenue (supra), as also the other attendant facts, including the contents of the Preambular portion, as also the conduct of the Respondents 1 and 2, it would be clear that the sale deed operated to convey the rights over the plant and machinery as well, which was comprised in the land scheduled in the sale deed. As far as the plant and machinery is concerned, it must, however, be only such plant and machinery, which was permanently embedded to the earth and answering the description of the immovable property as defined. It would appear that such an inquiry was not done to ascertain the same by the appellants. The second appellant will ascertain the value of plant and machinery on the basis of it answering the description of the immovable property as understood in law. The Appeal filed against the Judgment in Writ Appeal No. 2457 of 2005 is partly allowed.
Issues Involved:
1. Delay in registration and stamp duty assessment. 2. Validity of sale deed and valuation of assets. 3. Applicability of GOMS No.103 for stamp duty exemption. 4. Authority of the Registrar to determine the true value of the property. Summary: Issue 1: Delay in Registration and Stamp Duty Assessment The Supreme Court condoned the delay and granted leave. The High Court of Andhra Pradesh ordered the winding up of M/s. Midwest Iron & Steel Company Ltd. and the sale of its assets, which were auctioned and purchased by M/s. SMC Marketing Private Ltd. The Official Liquidator executed the sale deed in favor of M/s. Dankuni Steel Ltd. for Rs.8.35 crores. The Sub-Registrar kept the registration pending due to discrepancies in the stated value and the claim for 50% exemption under GOMS No.103. Issue 2: Validity of Sale Deed and Valuation of Assets The learned Single Judge found that the assets were sold as one lot, not in three different lots, and the sale deed undervalued the land, building, and civil works at Rs.1,01,05,000/-. The judge noted the Official Liquidator's unfair conduct in favoring the petitioners by suppressing facts. The Court ruled that the sale deed covered all assets, including plant and machinery, and the value of these must be considered for stamp duty. Issue 3: Applicability of GOMS No.103 for Stamp Duty Exemption The respondents claimed the benefit of GOMS No.103, which provides a 50% exemption on stamp duty and registration fees for industrial units. The learned Single Judge found that the respondents intended to use the assets for industrial purposes and were eligible for the exemption. However, the Division Bench ruled that the Sub-Registrar could not force the registration of plant and machinery if the respondents did not seek it. Issue 4: Authority of the Registrar to Determine the True Value of the Property The Supreme Court, referring to Sections 3, 4, 5, and 27 of the Indian Stamp Act, held that the Registrar has the authority to inspect the property and determine the true value, including plant and machinery embedded in the earth. The Court emphasized the importance of considering the entire transaction and the actual value of all assets conveyed. Conclusion: The Supreme Court allowed the appeal against Writ Appeal No. 1873 of 2005 and partly allowed the appeal against Writ Appeal No. 2457 of 2005. The Court set aside the Division Bench's judgment and restored the Single Judge's judgment with modifications. The Registrar was directed to ascertain the value of plant and machinery as immovable property and determine the applicability of GOMS No.103 for stamp duty exemption. The second respondent was not held liable under this judgment.
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