2005 (1) TMI 684 - SC - Indian Laws

Supreme Court affirms Sub-Registrar's authority on stamp duty for plant & machinery in conveyance deed

Board Of Control For Cricket Versus Netaji Cricket Club

The Supreme Court upheld the High Court's decision in a case involving the authority of the Sub-Registrar to refer a document for stamp duty assessment, ... Whether by the conveyance deed dated 9.6.1994, the plant and machinery were also transferred; and if so, whether the High Court was right in accepting the valuation as made by the authorities for the purpose of stamp duty payable ? Issues Involved:1. Authority of the Sub-Registrar to refer the document under Section 47-A(2) of the Stamp Act.2. Classification of plant and machinery as immovable property.3. Inclusion of plant and machinery in the conveyance deed dated 9.6.1994.4. Valuation of the plant and machinery for stamp duty purposes.Issue-Wise Detailed Analysis:1. Authority of the Sub-Registrar:The appellant challenged the authority of the Sub-Registrar to refer the document to the Collector under Section 47-A(2) of the Stamp Act. The High Court rejected this contention, stating that the Sub-Registrar was within his rights to refer the document for proper valuation and stamp duty assessment due to non-compliance with Section 27 of the Act. The Supreme Court noted that no arguments were advanced on this issue before it, thereby upholding the High Court's decision.2. Classification of Plant and Machinery as Immovable Property:The appellant argued that the plant and machinery were movable properties and should not attract stamp duty as immovable properties. However, the High Court concluded that the machinery was permanently embedded in the earth with the intention of running the fertilizer factory, making it immovable property. The Supreme Court agreed, stating that the intention behind embedding the machinery and the nature of its use indicated that it was intended to be permanent. The Court referenced previous cases like Reynolds v. Ashby & Son and Official Liquidator v. Sri Krishna Deo to support this conclusion, emphasizing that the machinery was not meant to be removed or sold separately.3. Inclusion of Plant and Machinery in the Conveyance Deed:The appellant contended that the conveyance deed dated 9.6.1994 did not transfer the title of the plant and machinery. The Supreme Court examined the agreement of sale dated 11.11.1993 and the conveyance deed, concluding that the intention was to transfer the entire fertilizer business, including the plant and machinery. The Court noted that the conveyance deed and the agreement of sale both indicated the transfer of the entire business as a going concern. The Court also considered the appellant's application to the Income-Tax Department, which included the plant and machinery in the valuation of the property, further supporting the conclusion that the conveyance deed covered the entire fertilizer business.4. Valuation of Plant and Machinery for Stamp Duty:The appellant challenged the valuation of the plant and machinery, arguing that the reconstitution of the Enquiry Committee by the Collector was unauthorized. The Supreme Court dismissed this contention, stating that the Collector had the authority to reconstitute the Committee and that the appellant had not shown any prejudice caused by this action. The Court reviewed the valuation process and found it to be based on relevant materials, including reports from technical valuers and documents provided by the appellant. The Supreme Court upheld the High Court's decision, noting that the valuation was not seriously challenged before the High Court and was rightly accepted.Conclusion:The Supreme Court dismissed the appeal, upholding the High Court's decision on all counts. The plant and machinery were deemed immovable property, included in the conveyance deed, and the valuation for stamp duty purposes was found to be proper and justified. The appeal was dismissed with costs.