In a significant ruling, the Madras High Court has held that no interest can be demanded on stamp duty if the full amount is paid during the pendency of an appeal. The judgment was delivered by Justice R. Vijayakumar, in a review application filed by the Chief Revenue Controlling Authority, Chennai, and the Special Deputy Collector (Stamps), Thanjavur.
Case Background
The case, REV.APLC(MD)No. 65 of 2024, arose from a land purchase transaction. R. Muniyandi, the respondent, had purchased 1.40 acres of land in Survey No. 51/1 and registered it on July 6, 2005, at the Joint Registrar Office No. 1, Pattukottai. Subsequently, the document was referred under Section 47-A of the Indian Stamp Act for valuation.
The original authority fixed the property’s value at Rs. 105 per square foot, which was confirmed by the First Appellate Authority. Challenging this valuation, Muniyandi filed an appeal (CMA(MD).No. 77 of 2010) in the Madras High Court.
Legal Issues and Court’s Decision
The primary legal issues in this case revolved around:
1. The determination of property valuation for stamp duty purposes
2. The payment of interest on belated stamp duty payments
On April 26, 2023, the High Court had set aside the lower authorities’ orders, ruling that “the nature of user is relatable to the date of purchase and therefore, authorities cannot determine the market value on the basis of presumption that it is likely to be converted into house-site use in future”.
The Revenue authorities sought a review of this order. However, during the review hearing, it came to light that Muniyandi had already paid the entire additional stamp duty as demanded by the authorities on August 5, 2019.
Court’s Observations
Justice Vijayakumar made several important observations:
1. On the review petition: “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 re-hearing the appeal”.
2. On interest 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”.
3. The judge further clarified: “In the present case, the entire amount as demanded by the authorities has been paid even during the pendency of the appeal. Therefore, the question of demanding any interest for the belated payment does not arise”.
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Final Verdict
The court concluded that it was unnecessary to review its earlier order and closed the Review Application without costs.
Mr. Veera Kathiravan, Additional Advocate General, assisted by Mr. C. Satheesh, Government Advocate, appeared for the appellants, while Mr. K. Rajeswaran represented the respondent.
