In the High Court of Judicature at Madras Dated 12.11.2011 Coram The Honourable Mr.Justice R.SUBBIAH Civil Miscellaneous Appeal No.2405 of 2011 and M.P.Nos.1 and 2 of 2011 M/s.Kumararaja Paper Mills (P) Ltd., rep.by its Director N.S.Balasubramanian, Srikumar Complex, No.146, Main Road, Tiruchengode-637 211, Namakkal District. ..Appellant/Petitioner. ..vs.. 1. Tamilnadu Principal Revenue Control Officer-cum-The Inspector General of Registration, Santhome, Chennai-600 028. 2. The Special Deputy Collector (Stamps), "Salem, Namakkal, Dharmapuri & Krishnagiri", 105, Ramnagar, Kumarasamipatti, Salem-636 007. 3. The Sub-Registrar, Office of the Sub-Registrar, Tiruchengode. ..Respondents Civil Miscellaneous Appeal filed under Section 47-A(10) of the Indian Stamp Act, to set aside the order passed by the 1st respondent in the Proceedings in Pa.Mu.No.14918/N2/ 2008 dated 24.06.2011, confirming the order of the 2nd respondent in Ci.Pa.No.95/03/TGE dated 19.11.2007. For Appellant : Mr.P.Valliappan For Respondents: Mr.S.Pattabiraman, G.A.,(C.S.) https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT This appeal is filed against the Proceedings of the 1st respondent dated 24.06.2011 in g/K/vz;.14918/N2/2008, whereby the order passed by the 2nd respondent in rp/g/vz;/ 95/03/TGE dated 19.11.2007, directing the appellant to pay a sum of Rs.10,52,606/- as deficit stamp duty, was confirmed. 2. The facts, which are necessary to decide the issue involved in the appeal, are as follows: (a) One M/s.Sankar Paper and Board Mills Private Limited had borrowed a loan from the State Industries Promotion Corporation of Tamilnadu Limited (SIPCOT), by creating an equitable mortgage by deposit of title deeds on 18.03.1994 in respect of a property situated in S.No.135/1A measuring 4.20 acres, S.No.263/1A measuring 3.00 acres and S.No.264/1 measuring 2.95 acres with buildings, other structures, fixtures, fittings and machineries thereon in A.Erayamangalam Village. Subsequently, the said Sankar Paper and Board Mills Private Limited committed a default in payment of the loan amount and the SIPCOT, by resorting to Section 29 of the State Financial Corporation Act, 1951, took possession of the mortgaged assets on 16.07.1998 and called for tenders in public auction through advertisements/limited sealed offers. In the said public auction, the appellant herein offered a highest bid of Rs.1,12,00,752/- for the buildings, land and machinery. The offer made by the appellant was accepted by SIPCOT and on 07.06.2002 itself, the appellant company paid the entire bid amount and the authorised officer of SIPCOT had executed a sale deed on that day itself in respect of the building and the land for a sum of Rs.39,33,000/- in favour of the appellant company. So far as the machinery in the said property is concerned, as the same being movables, a separate sale note/sale certificate was issued on the very same date i.e.on 07.06.2002 for Rs.72,67,752/- by the said authorised officer in favour of the appellant. The appellant presented the sale deed in respect of the building and the land before the 3rd respondent for registration on 07.06.2002 and paid the necessary stamp duty of Rs.4,72,000/- towards the sale consideration of Rs.39,33,000/-. (b) Since the sale deed was executed by SIPCOT in favour of the appellant conveying the land and building without mentioning the plant and machinery, the 3rd respondent registered the same as 'pending document' and referred it to the 2nd respondent, who served a demand notice directing the appellant to pay a stamp duty of Rs.10,52,606/- towards the purchase of machinery. 3. Aggrieved over the said order, the appellant herein filed an appeal before the 1st respondent, who confirmed the order of the 2nd respondent by his Proceedings dated 24.06.2011. Challenging the same, the present appeal has been filed. https://hcservices.ecourts.gov.in/hcservices/ 4. Learned counsel appearing for the appellant submitted that though the document was registered on 07.06.2002, the demand notice under Form-II was issued only on 05.12.2007 under Rule 7 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 i.e.after a lapse of nearly 5½ years and hence, the demand notice is time barred. Therefore, on this ground alone, the order is liable to be set aside. In this regard, the learned counsel has relied on the decisions reported in THE DISTRICT COLLECTOR, ERODE DISTRICT, ERODE AND OTHERS .vs. M.PONNUSAMY (2001(2) M.L.J.458) and S.R.SEBGOTAVELU, SERVAMPATTI ..vs.. THE DISTRICT COLLECTOR, NAMAKKAL AND OTHERS ((2003) 3 M.L.J.625). 5. The learned counsel for the appellant further submitted that the proceedings under section 47-A of the Stamp Act can be initiated only when there is a suspicion of fraudulent evasion of stamp duty. But in the instant case, the proceedings were initiated by the respondents mainly on the ground that the value of the movables was not mentioned in the sale deed and as such, the appellant is liable to pay the stamp duty for the movables purchased under a sale note. Since there is no fraudulent evasion of stamp duty, the proceedings initiated by the respondents under section 47-A is not legally sustainable. In this regard, the learned counsel has relied on the decisions reported in LOKASHAN JAIN UDYOG MANDIR LTD., .vs. KALOORAM AND ANOTHER (AIR 1965 RAJASTHAN 15) and S.P.PADMAVATHI .vs. STATE OF T.N.AND OTHERS (AIR 1997 MADRAS 296(1). 6. The learned counsel for the appellant further submitted that the sale certificate was issued by SIPCOT, a Government Corporation and as such, the registration is not compulsory under section 17(2) (xii) of the Registration Act. Under such circumstances, the order passed by the respondents including the value of the plant and machinery as immovable property for the purpose of levying stamp duty is not legally sustainable. The learned counsel further submitted that the plant and machinery purchased by the appellant cannot be construed as immovable properties. In support of these submissions, the learned counsel relied on the decisions reported in K.CHIDAMBARA MANICKAM .vs. SHAKEENA (2008(I) CTC 660) and CENNEY HOTELS PVT.LTD., ..vs.. STATE OF TAMIL NADU(2010(4) CTC 802). 7. On the contrary, learned Government Advocate appearing on behalf of the respondents has submitted that the value mentioned for the land and building is grossly undervalued when the whole of the property is sold for Rs.1,12,00,752/- and, as such, the 3rd respondent registered the sale deed as Document No.1932 of 2002 and referred the same to the 2nd respondent after obtaining the building valuation report from the Assistant Executive Officer. The 2nd respondent had determined the value of the properties including plant and machinery along with land and building after adopting the procedure laid down in the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, by his order in SR.No.95/03/TGE dated .11.2007 at https://hcservices.ecourts.gov.in/hcservices/ Rs.1,27,05,015/- and demanded the deficit stamp duty of Rs.10,52,606/-. Hence, it is incorrect to state that the reference is not legally sustainable. The learned Government Advocate further submitted that most of the plant and machinery are attached to the earth. Therefore, the plant and machinery have to be construed as 'immovable properties' and as such the immovable properties purchased by the appellant are liable for stamp duty. In this regard, the learned Government Advocate placed a reliance on the judgment reported in M/s.DUNCANS INDUSTRIES LTD., .vs. STATE OF U.P.(AIR 1998 ALLAHABAD 72) with regard to the ground of limitation raised by the learned counsel for the appellant and submitted that under section 47-A(1), no time limit has been prescribed for the Registering authority to refer the document. However, in the instant case, the reference was approved on 14.02.2003 within a period of eight months from the date of registration. Since there is no delay on the part of the registering authority to refer the matter to the 2nd respondent, no infirmity could be found in the order passed by the respondents. Thus, he prayed for the confirmation of the order. 8. This Court has paid its anxious consideration on the submissions made by the learned counsel on either side and perused the materials available on record. 9. The sum and substance of the submissions made by the appellant is, firstly, the sale certificate issued by the Authorised Officer, SIPCOT, a Government Corporation, needs no compulsory registration and under such circumstances, the value of the plant and machinery added for the purpose of levying stamp duty is not legally sustainable; secondly, there is a delay of 5-½ years in passing the final order and as such, the order is hit by limitation; thirdly, there is no fraudulent evasion of stamp duty since the property was purchased in public auction conducted by the Government Corporation and hence, the reference made by the 3rd respondent under section 47-A of the Stamp Act is bad; and fourthly, the plant and machinery cannot be construed as 'immovable properties'. Therefore, the order passed by the 2nd respondent on the value of plant and machinery is not legally sustainable. 10. Now let us deal with the grounds raised by the appellant in seriatim. It is the first and foremost submission of the learned counsel for the appellant that the sale certificate issued by the Authorised Officer of a Government Corporation needs no compulsory registration and such being the position, the question of levying stamp duty on the value of movables purchased under the sale note/sale certificate on the ground that the value of movables was not mentioned in the sale deed dated 07.06.2002, through which land and building was conveyed to the appellant, is not correct. For https://hcservices.ecourts.gov.in/hcservices/ dealing with the said contention of the appellant, it would be appropriate to extract the relevant provisions from the Registration Act. Section 17(2)(xii) reads as follows: "17. Documents of which registration is compulsory:- ..... (1-A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53-A of the Transfer of Property Act, 1882, shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001, and if such documents are not registered on or after such commencement then, they shall have no effect for the purposes of the said section 53-A. (2) Nothing in clauses(b) and (c) of sub-section (1) applies to-- ...... (xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer". 11. This Court in the judgment reported in IN RE.THE OFFICIAL LIQUIDATOR, HIGH COURT, MADRAS (2010(2) CTC 113), has dealt with 'who is the civil officer or the revenue officer' and the relevant paragraphs in the said judgment are extracted hereunder: "57. The term "Revenue Officer" is defined in "Advanced Law Lexicon by P.Ramanatha Iyer" as "an Officer employed in or about the business of any branch of the public revenue". This definition was culled out from the Explanation to Section 125 of the Indian Evidence Act, 1872. In Sheopatsingh vs. Harishchandra {AIR 1958 Rajasthan 324}, it was held that the term "Revenue Officer" will include such Officers of the Income Tax, Sales Tax and Irrigation Department. Again in Gopi Parshad vs. State of Punjab {AIR 1957 Pun. 45}, it was held that the expression 'revenues' means "the income of the nation derived from its taxes, duties or other sources, for the payment of the nation's expenses". It is a term generally used in referring to income of a Government or governmental sub division and as so used means all the public moneys which the State collects and receives from whatever source and in whatever manner. In Kishore Chandra Deo Bhanj vs. Raghunath Misra {AIR 1959 SC 589}, the Village Accountants were also held to be Revenue Officers. 58. Similarly, the term "Civil Officer" is defined in "Advanced Law Lexicon by P.Ramanatha Iyer" as "any Officer holding appointment under the Government except in the Military or Naval Service, whether the duties are Executive or Judicial or in the highest or the lowest departments". The term "Civil Officer" has to be understood only in the context of "civilians" as opposed to persons in Military Service. It is https://hcservices.ecourts.gov.in/hcservices/ doubtful, if an Official Liquidator can be equated to a Civil Officer or a Revenue Officer, so as to make the certificate of sale issued by him come within the purview of Section 17(2) (xii) of the Registration Act, 1908. I do not think that an Official Liquidator can be considered to be a "Revenue Officer" within the meaning of Section 89(4) since he is not collecting revenue for the Government. Even assuming for the sake of argument that he can be equated, Article 18 under Schedule-I of the Indian Stamp Act makes a certificate of sale issued by a Revenue Officer also liable to stamp duty. The term "Revenue Officer" appearing both in Article 18 under Schedule-I of the Indian Stamp Act and also in sections 17(2)(xii) and 89(4) of the Registration Act, are to be given the same meaning and to be construed to indicate the same person". 12. On a reading of the above paragraphs, it could be easily inferred that only if the sale certificate issued by the Revenue officer in respect of the property conveyed by them for the purpose of deriving income from taxes, duties and other sources for the payment of the nation's expenses, it needs no compulsory registration. So far as the sale certificate issued by the Authorised Officer of the Government Corporation, such as SIPCOT is concerned, the same cannot be equated with the sale certificate issued by the revenue officers. Moreover, the function of the SIPCOT is purely entrepreneur in nature. For the purpose of collecting the loan due, the property was sold in the auction. Therefore, the sale certificate issued by the Authorised Officer of the Government Corporation, such as SIPCOT cannot be exempted from the registration. In fact, this Court, in the judgment relied upon by the learned counsel for the appellant in 2010(4) CTC 802 (supra), has held as follows: "14. ....But so far as the certificate issued by the Authorised Officer is concerned, it cannot be equated with the certificate issued by the Revenue or Civil Court. As contended by the learned counsel for the petitioner, the nomenclature given to the document issued by the Authorised Officer may not be relevant for giving exemption from paying the stamp duty since the sale certificate issued by the Authorised Officer will not be covered by Article 18 of Schedule I of the Stamp Act..." Therefore, I do not find any infirmity in the order passed by the respondents based on the value of the plant and machinery sold in the sale note dated 07.06.2002. 13. So far as the delay is concerned, I find from the records that Form-I notice was approved on 14.02.2003 (despatched on 20.02.2003) within a period of eight months from the date of registration of the sale deed. In fact, when a question was referred to a Full Bench as to whether the reference of a document to the Special Deputy Collector (Stamps) under Section 47-A(1) of the Indian Stamp Act is valid, if made after 21 days of registration of the https://hcservices.ecourts.gov.in/hcservices/ document, the Full Bench of this Court in the case of G.KARMEGAM AND OTHERS .vs. JOINT SUB REGISTRAR-IV, MADURAI reported in 2007(5) CTC 737 = 2008(1) M.L.J.789, has held as follows: "34. Applying the above ratio decidendi to the facts of the present case, since the provision viz., sub-section(1) of Section 47-A is quiet as regards the time limit, reference shall be made by the Registering Officer within a reasonable time, which should not be viewed as a one, that has deprived the rights of the parties, thereby causing injustice to them. In other terms, it can very well be stated that the conscience of the Registering Officer itself shall indicate that the time consumed by him would be an unreasonable one. The expression 'conscience' may be construed to be an inclination of the Registering Officer to perform the legal obligations imposed on him by a statute, which could be gathered by the Courts from the circumstances under which he acts subsequent to registration of the document, as mentioned in sub-section(1). If the said intention or inclination to execute the legal obligations on his part would tend to prejudice the valuable rights of the parties concerned to the document, it could unhesitatingly be termed to be unreasonable. The parties to a document shall not entertain suspicion over the attitude of the Registering Officer, in the process of his referring the document to the Collector. Such a view in the minds of the parties would lead to a conclusion that there is unreasonableness on the part of the Registering Officer. 35. We are of the considered view that no additions could be made to a statute by the Court, if it passes three tests, as adumbrated above in this order. In our opinion, sub-section (1) of Section 47-A has passed through the said tests and there is no need for the Court to supplement or suggest its view, as a suffix to it. In this respect, we could not subscribe our accent to the view taken by the learned Single Judge in his decision in M.Krishnan and 44 others .vs. The District Collector, Erode, 1998(3) CTC 366, as approved by the Division Bench in The District Collector, Erode v. M.Ponnusamy, 2001(2) CTC 449 : 2001 (2) MLJ 458. 36. At the close of the arguments of both sides, Mr.S.Ramasamy, learned Additional Advocate General, appearing for the Department, would draw attention of this Court to a proposal of the State Government to pass a Bill to amend The Indian Stamp Act, 1989, and The Registration Act, 1908, and their Application in the State of Tamil Nadu, which Bill is yet to be passed. 37. According to the proposed amendment to the aforesaid acts, the Registering Officer, while registering any instrument, shall estimate the market value of the property as per the market value guidelines of properties prepared by the "Valuation Committee", constituted under Section 47-A, and communicate the said estimated value to the parties concerned https://hcservices.ecourts.gov.in/hcservices/ and, unless the parties pay the duty on the basis of such valuation, he shall keep pending the process of registration of such instrument and refer the matter within a month along with a copy of such instrument to the Collector for determination of the market value of such property and the proper duty payable thereon. Some other amendments have also been proposed therein, which do not pertain to the issue in question. The primordial object of the said proposed Amendment Act is to prescribe a period of one month for the Registering Officer to refer the document to the Collector. As for the intention of the State Government, it is open for the State to add, alter or delete anything in the statute within its power conferred by the Constitution of India and, presently, we are not entering into the discussion of validity of the amendment as regards the above said feature, since the legislature, as law maker, is always at liberty to exercise such a power. 38. On a conspectus of the facts and circumstances of the matter and following the ratio laid down by the Apex Court, we answer the questions (i) and (ii) as follows: (i) The Court cannot fix or suggest a time frame to a statute in the normal course, if the statute is silent with regard to it. (ii) No guideline, in this regard, shall be introduced by the Court. However, it is mandatory on the part of the statutory authority, namely, Registering Officer, to perform his statutory obligations within a reasonable time, which should not be viewed as a one, that has deprived the rights of the parties to the document, causing injustice". 14. When no time limit was fixed under the statute for referring the document by the registering authority, the court cannot fix or suggest a time frame. Under the statute, the time limit was fixed only for suo motu revision by the respondent and not for the reference by the registering authority to the original authority. Therefore, I do not find any substance in the submission made by the learned counsel for the appellant that there is a delay of 5 ½ years in passing the final order. Therefore, the judgment relied on by the learned counsel for the appellant cannot be made applicable to the facts of the case., 15. Yet another submission was made by the learned counsel for the appellant that the plant and machinery sold by the SIPCOT cannot be construed as 'immovable properties'. In this regard, the learned counsel relied on a judgment reported in SIRUPUR PAPER MILLS LTD., . vs. COLLECTOR OF CENTRAL EXCISE, HYDERABAD (AIR 1998 SC 1489). On going through the facts of the case, I find that the judgment was delivered in the Central Excise Act while dealing with the case under the Central Excise Act and the Hon'ble Supreme Court has come to the conclusion as under: "5. The test is whether the paper making machine can be https://hcservices.ecourts.gov.in/hcservices/ sold in the market. The Tribunal has found as a fact that it can be sold. In view of that finding, we are unable to uphold the contention of the appellant that the machine must be treated as a part of the immovable property of the company just because a plant and machinery are fixed in the earth for better functioning, it does not automatically become an immovable property". The said principle cannot be made applicable to the facts of the case on hand since this appeal arises under the Stamp Act, which concerned about the levying of stamp duty on the true market value of the property purchased by the appellant. Hence, the dictum laid down under the Central Excise Act cannot be applied to the facts of this case. 16. Coming to the submission made by the learned counsel for the appellant that since there is no suspicion of evasion of stamp duty, the reference is bad, I find that the reference was made by the 2nd respondent on a reasonable belief that there is a fraudulent evasion of stamp duty. In fact, the 2nd respondent has determined the market value of the property at Rs.1,27,05,015/-. Therefore, it is incorrect to state that the reference made by the respondents is bad. 17. In fact, the principles laid down in the decision relied on by the learned Government Advocate reported in M/s.DUNCANS INDUSTRIES LTD., .vs. STATE OF U.P., (AIR 1998 ALLAHABAD 72) are squarely applicable to the case on hand since in the instant case, land and building along with plant and machinery attached to the earth were altogether conveyed to the appellant on 07.06.2002. The relevant paragraphs in the said decision are extracted hereunder: "9. The truth of argument of Shri Shanti Bhushan was that since the plant and machinery did not satisfy the description of 'immovable property', hence their transfer was effected by delivery of possession and not by means of the instrument in question and, therefore, no stamp duty was chargeable in relation to the value of the plant and machinery. Reliance was placed on South Indian Bank Ltd. v. V.K. Chettiar and Brothers, AIR 1953 Mad 215 (sic) in support of the contention that plant and machinery in the instant case, be treated as movable properties. The decision aforesaid is not of much avail to resolving the controversy as to whether the plant and machinery annexed to the earth satisfy the description of immovable property for, in the ultimate analysis, it "depends upon the mode of annexation and primarily on the intention of the parties and other relevant surrounding circumstances in each particular case" as propounded in the said decision. In Reynolds v. Ashby and Sons, 1904 AC 466, the machineries were fixed, as in the present case, to concrete beds in the floor of the factory by bolts and nuts and could have been removed https://hcservices.ecourts.gov.in/hcservices/ without injury to the building or the beds, Lord Liudley observed : "The purpose, for which machines were obtained and fixed, seems to me unmistakable; it was to complete and use the building as a factory. It is true that machines could be removed, if necessary, but the concrete beds and bolts prepared for them negative any idea of treating machines when fixed as movable chattels." The decision by House