Karnataka - Bangalore   

Payment of stamp duty must for apartment owners: Court

BANGALORE: In a judgment of far-reaching consequences, the Karnataka High Court on Friday held that persons or organisations that purchase flats (in apartments) are liable to pay stamp duty.

Justice A.S. Boppanna passed the order on a petition by S.G. Bhat and others who had challenged the notices by the authorities asking them to pay stamp duty in addition to penalty.

Partly allowing the petitions, the court said even if the owners of apartments had paid the registration fee, they have to pay stamp duty as both are different.

The court upheld the validity and legality of Section 33 of the Stamp Act, mandating owners of flats to pay stamp duty. Some of the buyers of flats had not paid stamp duty, saying that the apartment belongs to the society of which they are only members. They said they had registered the flats in their name but the apartment belonged to the society.

Contesting this stand, the State said stamp duty and registration fee are different and even if a property is registered, the owner gets a right over it only after he pays stamp duty. It said scores of owners (of flats) had evaded payment of stamp duty, saying that they are not the real owners but that they had only collected possession certificates.

The State said if possession certificate is obtained by a person, he would have to pay stamp duty as it is deemed or categorised as a conveyance (transaction) of a property.

The court, however, quashed notices issued to petitioners by the authorities under Section 39 of the Stamp Act under which the Department of Stamps and Registration had levied stamp duty and penalty. It said impounding of documents under Section 39 is bad in law and remitted it back to the authorities for fresh reconsideration.

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