Official guidance, Tamil Nadu land law
D.Dis.No. 24790/P1/2019, Revision Petition on Document No. P.45/2018
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis.No. 24790/P1/2019 dated 18 April 2024, deciding Reliance Jio Infocomm Limited's revision petition concerning a sale deed registered at the Joint I Sub Registrar Office, Vellore. The authority rejected the claim that the earlier company demerger was not liable to stamp duty, but directed the District Registrar to recalculate the duty under Government Order G.O. (Ms.) No. 47 dated 19 February 2020.
What the proceeding covers
D.Dis.No. 24790/P1/2019 dated 18 April 2024 was issued by the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, under section 56(1) of the Indian Stamp Act, 1899. It concerns Document No. P.45/2018 at the Joint I Sub Registrar Office, Vellore, a sale deed executed on 16 August 2018 by Reliance Communications Limited in favour of Reliance Jio Infocomm Limited for property valued at Rs.3,55,00,000.
The seller claimed title through a company demerger sanctioned by the Bombay High Court. The registering authority treated the demerger and the later sale deed as two separate conveyances, described as a dual sale.
Decision on stamp duty liability
The Chief Controlling Revenue Authority rejected Reliance Jio Infocomm Limited's argument that a High Court sanctioned demerger was not a sale transaction and could not be charged as a conveyance.
Key findings were:
- Madras High Court decisions cited in the proceedings treated amalgamations, mergers and similar arrangements as conveyances.
- Inspector General of Registration Circular No. 49282/P1/2018 dated 20 November 2018 had been upheld by the Madras High Court Division Bench.
- A document may require stamping even if it does not require compulsory registration.
- The demerger scheme had to be duly stamped before it could be used as evidence for registering the later sale deed.
Recalculation directed
The Joint I Sub Registrar in the cadre of District Registrar had determined deficit stamp duty of Rs.24,85,500 and a penalty of Rs.1,500. The revision decision did not accept the petitioner's request to avoid stamp duty altogether.
However, Government Order G.O. (Ms.) No. 47 dated 19 February 2020 had reduced stamp duty for merger, demerger and reconstruction schemes to 2 per cent of the market value of the immovable property or 0.6 per cent of the aggregate market value of the shares, whichever is higher, with retrospective effect from 1 April 1956. The District Registrar was therefore directed to recalculate the duty under that Government Order instead of applying the earlier 7 per cent claim.
The District Registrar was also instructed to check whether the property was the only property in Tamil Nadu transferred under the scheme before proceeding.
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Common questions
Did the authority cancel the stamp duty demand on the demerger?
No. The Chief Controlling Revenue Authority held that the demerger scheme was liable to stamp duty, but directed the District Registrar to recalculate the amount under G.O. (Ms.) No. 47 dated 19 February 2020.
What property transaction was examined?
The proceeding examined Document No. P.45/2018 at the Joint I Sub Registrar Office, Vellore. It was a sale deed executed by Reliance Communications Limited in favour of Reliance Jio Infocomm Limited for property valued at Rs.3,55,00,000.
Why was the document treated as involving two conveyances?
The seller had acquired rights through a High Court sanctioned demerger and later transferred the property through the sale deed. The registering authority treated the demerger transfer and the later sale as two distinct conveyances.
What must the District Registrar verify before proceeding?
The District Registrar must determine whether the property concerned is the only property situated in Tamil Nadu that was transferred under the relevant scheme of arrangement.
