Court rules Sub Registrar's demand for additional stamp duty as unauthorized under the Kerala Stamp Act, 1959.
In a significant judgment, the Kerala High Court quashed the demand made by a Sub Registrar for deficit stamp duty concerning the installation of ATM counters, ruling it unauthorized under the Kerala Stamp Act, 1959. The verdict, delivered by Justice P.V. Balakrishnan, came in response to a writ petition filed by the Branch Manager of the State Bank of Travancore against the State of Kerala.
The case revolved around a lease agreement executed in 2014, which included provisions for ATM installation without any separate rental agreement. In 2016, the Sub Registrar issued a notice demanding an additional stamp duty of Rs. 37,500 based on an amendment introduced by the Kerala Finance Act, 2015. The amendment required a stamp duty of ?2,500 per year for documents related to the installation of ATM counters. However, the court observed that the relevant statutory provision, Section 33A, came into effect only on April 1, 2019.
The bank challenged this demand, arguing that the Sub Registrar lacked the authority to demand additional stamp duty under the provisions applicable during the time of the lease's execution. The court agreed, emphasizing that the Sub Registrar's order was issued without legal backing, as the pertinent legal provision was not in force at the time.
Furthermore, the court took note of the administrative actions involved, where the Deputy Inspector General of Registration had directed the Sub Registrar to compensate for the shortfall in stamp duty. The court deemed the Sub Registrar's inability to pay the deficit due to her low salary as an invalid reason to pass the financial burden onto the petitioner bank.
Concluding the judgment, Justice Balakrishnan ruled in favor of the petitioner, nullifying the Sub Registrar's order and relieving the bank from the obligation to pay the contested amount. This decision underscores the importance of adherence to statutory timelines and provisions in administrative and financial demands, setting a precedent for similar cases in the future.
Bottom line:-
Stamp duty - Sub Registrar has no authority to demand deficit stamp duty for installation of ATM counters under Section 33A of the Kerala Stamp Act, 1959, when the provision came into effect after the issuance of the order.
Statutory provision(s):
Kerala Stamp Act, 1959 Section 33A, Kerala Finance Act, 2015 Article 5(e)
Branch Manager, State Bank of Travancore v. State of Kerala, (Kerala) : Law Finder Doc id # 2948555
