The High Court of Karnataka has directed the State government to refund the additional stamp duty from the owners of commercial spaces in Prestige Tech Park III situated in Bengaluru while setting aside the demand notices issued to them to pay additional duty.
Justice Krishna S. Dixit passed the order while allowing the petitions filed by Shehnaz Bilal and 88 others. The petitioners have questioned the legality of the demand notices issued in August–September 2019 by the District Registrar and Deputy Commissioner of Stamps. The petitioners had purchased the commercial spaces during 2015–16.
While Prestige Tech Park I and II are situated on land falling under Kadubeesanahalli, Tech Park III is situated on the adjacent land in Amane Bellandur Khane village.
Following an audit objection raised by the Accountant General for the State of Karnataka, the District Registrar had suo motu examined the instruments and found that commercial spaces in Tech Park III were undervalued. The District Registrar held the three units of the tech park as one block and had demanded payment of additional stamp duty based on the guidance value fixed for commercial properties at Kadubeesanahalli.
The court, however, noted that the notification of the guidance value issued in 2014 by the government listed Prestige Tech Park (commercial) under Kadubeesanahalli, and by the “very text and context of the notification, the structures erected in other villages [including Amane Bellandur Khane] logically stand excluded in ascertaining the market value for the purpose of levying stamp duty as rightly contended by the petitioners.
“... A land developer may take up construction in one single project comprising multiple villages and call it with one single nomenclature, that per se does not disentitle the duty payer from invoking be beneficial guidance values that may be otherwise applicable to each of the constituent villages independently,” the court observed while noticing that Tech Park III was constructed on land falling under Amane Bellandur Khane village and not on adjoining land falling under Kadubeesanahalli.
The court also upheld the contention of the petitioners that the government could not have issued demand notices after expiry of the two-year limitation period fixed under section 45-A(3) of the Karnataka Stamp Act, 1957 as the instruments were registered in 2015–16.
