Interest Can't Be Demanded When Entire Stamp Duty Paid During Pendency Of Appeal: Madras High Court

The Madras High Court has held that interest cannot be demanded when the entire amount as demanded by the authorities has been paid even during the pendency of the appeal.

The bench of Justice R. Vijayakumar has observed that the present appeal has been filed under Section 47-A(10) of the Indian Stamp Act, 1899. Only after orders are passed by the Court will the liability get fastened upon the purchaser to pay interest on the belated payment. The entire amount as demanded by the authorities has been paid even during the pendency of the appeal. The interest cannot be demanded because the belated payment does not arise.

The respondent/assessee purchased an extent of 1.40 acres in Survey.No.51/1 and registered it on 06.07.2005 before the Joint Registrar Office, Pattukottai. After registration, the document was referred under Section 47-A of the Indian Stamp Act. The original authority had fixed the value of the property at Rs. 105 per sq. ft. On appeal, the First Appellate Authority confirmed the order. Challenging the order, the appeal has been filed by the purchaser.

After perusing the orders of the Original as well as the Appellate Authority, the Court had arrived at a finding that the market value of the land had been fixed by the Authority on the presumption that the property is likely to be used for commercial purposes at a later point in time. The court relied upon the decisions of the Division Bench judgment of the High Court and the Supreme Court and set aside the order on the ground that the nature of the user is relatable to the date of purchase, and therefore, authorities cannot determine the market value on the basis of the presumption that it is likely to be converted into house-site use in the future. The order is sought to be reviewed.

The department contended that the presumption of the property being used for commercial purposes in the future is not the only ground on which the market value is fixed. The neighboring owners who have purchased the properties from the same subdivision have been fixed with a market value of Rs. 102 per sq. ft. Therefore, authorities were right in fixing it at Rs. 105 per sq. ft.

The purchaser of the entire additional stamp duty as demanded by the authorities had been remitted by the purchaser. However, it would not be brought to the notice of the Court when the appeal was heard and disposed of on 26.04.2023. When the entire amount as demanded by the authorities has already been remitted by the purchaser, no purpose would be served in reviewing the order or rehearing the appeal.

The department argued that the sale deed is dated 06.03.2000, but the entire stamp duty was remitted only on 05.08.2019, and therefore, interest has to be remitted by the purchaser for the belated payment.

Proviso to Section 47-A(4) of the Indian Stamp Act 1899 points out that the interest payable shall get postponed till the disposal of the appeal and it shall be calculated on the amount that becomes due in accordance with the final order passed in the appeal.

The court, while refusing to review the order, held that the question of demanding any interest for the belated payment does not arise.

Counsel For Applicant: Veera.Kathiravan

Counsel For Respondent: K.Rajeswaran

Case Title: The Chief Revenue Controlling Authority Chennai Versus R.Muniyandi

Citation: 2024 LiveLaw (Mad) 288

Case No.: REV.APLC(MD)No.65 of 2024 in CMA(MD).No.77 of 2010

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