D:Dis. No. 1508/P1/2022, Revision Petition on Pending Document No.182/2021
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D:Dis. No. 1508/P1/2022 dated 24 January 2023 on a revision petition filed by M/s. SEZ Recycling concerning a deed assigning leasehold rights in the Mahindra World City SEZ. The proceedings conclude that the deed qualifies for stamp duty exemption because it was executed by the SEZ Developer and in favour of an approved SEZ Unit, contrary to the District Registrar, Chengalpattu's finding that deficit stamp duty and a penalty were payable.
What the proceedings decide
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D:Dis. No. 1508/P1/2022 dated 24 January 2023 under section 56(1) of the Indian Stamp Act, 1899. It considers whether pending document No. P182/2021 at the Joint II Sub Registrar Office, Chengalpattu, is eligible for stamp duty exemption under the last proviso to section 3 of that Act.
The authority concludes that the deed qualifies as an instrument executed by an SEZ Developer and in favour of an SEZ Unit. On that basis, it finds the deed eligible for stamp duty exemption.
Property and transaction covered
D:Dis. No. 1508/P1/2022 concerns 1.96 acres in eight survey numbers in Thenmelpakkam Village, together with buildings on the land.
Key transaction details are:
- Mahindra Industrial Park Limited originally leased the land for 99 years to Velankani Information Systems Private Limited through a lease deed registered in 2005.
- Velankani Information Systems Private Limited later assigned the remaining leasehold rights to M/s. SEZ Recycling by a deed executed on 26 August 2021.
- Mahindra World City Developers Limited, described as the Developer and original lessor, also joined in executing the assignment.
- The total consideration recorded was Rs.5,77,50,000, including Rs.27,50,000 received by the Developer as transfer charges.
- The assignment deed carried stamp duty of Rs.100.
Earlier stamp duty assessment
The District Registrar, Chengalpattu, classified the assignment as a transfer of lease and determined deficit stamp duty of Rs.28,87,400 and a penalty of Rs.600. The District Registrar considered the document ineligible for exemption because it followed an earlier lease and was not treated as a qualifying document executed by a Developer or Unit.
Why exemption was accepted
The Chief Controlling Revenue Authority and Inspector General of Registration relied on the parties and their SEZ status:
- M/s. SEZ Recycling appeared to be an approved Unit within the Mahindra World City SEZ since 7 April 2006.
- The available approval was valid until 22 March 2023.
- Mahindra World City Developers Limited, the SEZ Developer, executed the deed.
- The assignment was made in favour of M/s. SEZ Recycling, an approved Unit.
The proceedings therefore treat the assignment as satisfying the stated requirements for stamp duty exemption.
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Common questions
Does the assignment deed in favour of M/s. SEZ Recycling qualify for stamp duty exemption?
Yes. D:Dis. No. 1508/P1/2022 concludes that the deed is eligible because it was executed by the SEZ Developer and in favour of an approved SEZ Unit.
What deficit stamp duty and penalty had the District Registrar demanded?
The District Registrar, Chengalpattu, determined deficit stamp duty of Rs.28,87,400 and imposed a penalty of Rs.600.
Does this decision say that only the first document relating to an SEZ can receive exemption?
No. The proceedings assess whether the particular instrument was executed by or in favour of an SEZ Developer or Unit, or in connection with SEZ purposes. They conclude that this later assignment qualifies based on the Developer's participation and the assignee's approved Unit status.
Does the conclusion also expressly grant registration fee exemption for this assignment?
The revision petitioner claimed both stamp duty and registration fee exemption, but the conclusion supplied in the proceedings expressly addresses eligibility for stamp duty exemption.
