CHENNAI: The Madras High Court has ruled that stamp duty for registration of property has to be paid by calculating the guideline value reflected by the market value prevailing at the time of presentation of the document for registration and not based on the value prevailing at the time of entering into the sale agreement.
The ruling was given by a division bench comprising Justices S S Sundar and P Dhanabal recently on an appeal filed by the state government against a single judge’s order that directed registration of the sale deed of the respondent persons as per the guideline value prevailing at the time of the sale agreement.
Guideline value is the minimum value of a property, as fixed by the state government, at which property can be registered.
The Adyar sub-registrar had refused to register a sale deed, executed by a civil court pursuant to a decree, on the ground that the stamp duty was not paid based on the market value of the property on the date when the deed was presented for registration.
Subsequently, a writ petition was filed by R K Jalan and B K Jalan, partner of JK Iron and Steels Manufacturing Company, who were denied registration.
The single judge, in the order passed on April 15, 2024, held that the stamp duty should be paid based on the market value of the property on the date of the sale agreement between the parties and directed the sub-registrar to register the document.
Challenging this order, the state government authorities preferred the appeal.
Additional Government Pleader B Vijay appeared for the appellant authorities.
The division bench observed that Section 17 of the Indian Stamp Act mandates that all instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of registration.
It is well settled that an agreement of sale does not create any right in any immovable property and there is transfer of title only when the sale deed is registered, the bench noted.
Setting aside the order of the single judge, the division bench directed the sub-registrar to initiate the proceedings under Section 47A of the Indian Stamp Act for collecting the stamp duty as per the current market value.