Stamp Duty and Sale Certificates: Unpacking the Punjab United Forge Auction Case.
19 November 2024
Civil Appeals >> Civil & Consumer Law
This appeal arises from a decision by the High Court of Punjab and Haryana, which allowed a writ petition filed by Respondent No.1. The High Court directed the issuance of the original sale certificate for a property purchased by Respondent No.1 at an auction and ordered a refund of the stamp duty previously paid by them. The dispute centers around whether the successful auction purchaser is required to pay stamp duty for a sale certificate under the Indian Stamp Act and the Registration Act.
M/s Punjab United Forge Limited was ordered to be wound up, and its assets were auctioned by the Industrial Finance Corporation of India (IFCI). Respondent No.1, through a sister concern, successfully bid for the assets. A series of legal proceedings followed, involving disputes over the stamp duty to be paid on the immovable property. The Registrar’s decision to charge stamp duty based on a higher property valuation was challenged by Respondent No.1, which led to a writ petition.
The High Court ruled that the sale certificate issued under Order XXI Rule 94 of the Civil Procedure Code does not require stamp duty, as it is merely evidence of title and not an instrument of sale. The appeal raised by the State of Punjab contended that this was incorrect, but the Court upheld the High Court’s decision, citing previous judgments that clarified that a sale certificate, while not requiring registration, could attract stamp duty if presented for further purposes. The appeal was dismissed.