1999 (12) TMI 857 - SC - Indian Laws

Transfer of Plant & Machinery: Legal Classification & Stamp Duty Valuation upheld

DUNCANS INDUSTRIES LTD Versus STATE OF U.P. & ORS

The High Court and Supreme Court affirmed the authority of the Sub-Registrar to refer the document to the Collector and classified plant and machinery as ... - Issues Involved:1. Authority of Sub-Registrar to make a reference u/s 47-A(2) of the Stamp Act.2. Classification of plant and machinery as immovable property.3. Whether the plant and machinery were transferred by the conveyance deed dated 9.6.1994.4. Correctness of the valuation of the plant and machinery for stamp duty purposes.Summary:1. Authority of Sub-Registrar to make a reference u/s 47-A(2) of the Stamp Act:The appellant challenged the authority of the Sub-Registrar to refer the document to the Collector, arguing there was no material to believe that the market value of the property was not truly set forth. The High Court rejected this contention, and no arguments were advanced on this point before the Supreme Court.2. Classification of plant and machinery as immovable property:The High Court concluded that the plant and machinery were immovable properties as they were permanently embedded in the earth with the intention of running the fertilizer factory. The Supreme Court agreed, stating that the intention of the parties and the nature of the machinery indicated that they were permanently fixed to the ground and not intended for removal or sale as scrap. The Court referenced the case of Reynolds v. Ashby & Son and Official Liquidator v. Sri Krishna Deo & Ors. to support this conclusion.3. Whether the plant and machinery were transferred by the conveyance deed dated 9.6.1994:The Supreme Court examined the intention of the parties and the contents of the agreement dated 11.11.1993, which indicated that the entire fertilizer business, including plant and machinery, was to be transferred. The Court found that the conveyance deed dated 9.6.1994 did indeed transfer the title of the plant and machinery along with the land. The Court noted that the appellant's attempt to separate the transfer of machinery from the land was unconvincing and that the recitals in the conveyance deed and the agreement supported the transfer of the entire fertilizer business.4. Correctness of the valuation of the plant and machinery for stamp duty purposes:The High Court noted that the valuation of the plant and machinery was not seriously challenged by the appellant's counsel. The Supreme Court reviewed the valuation process and found it to be based on relevant materials and documents produced by the appellant. The Court held that the method adopted by the authorities for valuation was appropriate and that there was no basis to interfere with the finding of fact regarding the valuation. Consequently, the Supreme Court dismissed the appeal with costs.