CHENNAI: The Madras High Court has ruled that a person, after presenting a document for registration, cannot evade paying the deficit stamp duty by seeking to take back the document without registering it.
A division bench of justices S M Subramaniam and Mohammed Shaffiq issued the ruling recently while dismissing an appeal filed by Gita Power and Infrastructure Private Limited against a single judge’s order refusing to direct the authorities of the registration department to return the document without insisting on payment of the shortfall in stamp duty.
The matter pertains to an assignment agreement, which is generally used for transferring the rights and obligations of a party in a contract to another party, presented by Gita Power and Infrastructure Private Limited for registration in 2021.
The sub-registrar in Kotturpuram found a shortfall in the stamp duty and referred the matter to the district registrar-administration. In the meantime, the company found the value of the stamp duty to be higher and hence submitted an application to withdraw the document. Its application and a review application were rejected by the authorities. After its writ petition in this regard was also dismissed by the single judge, it preferred the appeal.
Citing sections 33, 38, 40, 42 and 48 of the Indian Stamp Act read with Rule 107 of the Registration Rules, the bench in its recent order explained that non-registration of a document is not the ground to seek its return. It said execution of the document itself would be sufficient for recovering the deficit stamp duty as per the provisions of the Stamp Act.
“The legal position is unambiguous that any document/instrument presented for registration must be scrutinised at the first instance on correctness of the stamp duty paid. Once the registering authority found insufficient stamp duty has been paid, he is duty bound to impound the document and send it in original to the collector for determination of stamp duty,” the order said.
“After determination and recovery of deficit stamp duty, the document is to be sent back to the registration authority, who in turn has to issue notice to the presenter of the document. Thereafter, the presenter of the document may take a decision either to complete the registration or seek return of the document,” the bench further said.
