A Division Bench of the Madras High Court on Thursday stayed the operation of a single judge’s December 18, 2023 order that quashed the March 30, 2023 circular of the Inspector-General of Registration (IGR) fixing the guideline value for immovable properties in all 50 registration districts of Tamil Nadu.
Justices S.M. Subramaniam and K. Rajasekar granted the interim stay after being prima facie convinced with the submissions of Advocate-General P.S. Raman, representing the IGR, that the single judge had quashed the circular because of a misconception that the rules had been flouted while it was issued.
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The A-G, assisted by Additional Government Pleader B. Vijay, told the Bench that guideline value referred to the minimum value fixed by the government for immovable properties to ensure that they do not get undervalued for evading payment of stamp duty and registration charges during conveyance. The Tamil Nadu legislature had inserted Section 47AA into the Indian Stamp Act, 1899, through an amendment in 2008 and the provision came into force on June 1, 2010. It mandated revision of guideline values at regular intervals, as determined by a State-level central valuation committee and sub-committees. After the legal provision came into force, sub-committees were constituted to estimate the guideline values. Based on their reports, the rates were approved by the central valuation committee in 2012. Accordingly, the then IGR issued a circular on March 28, 2012, revising the guideline values from April 1, 2012. However, acting upon requests to reduce the revised values, the IGR issued another circular on June 8, 2017, reducing the revised values by 33% for all properties with effect from June 9, 2017. The decision to reduce the revised values was taken without any reference to the sub-committees.
The result of such reduction was that the guideline values for the immovable properties remained too low, though the market value continued to rise. It led to a consequent loss of revenue to the government due to reduced payment of stamp duty and registration charges, the A-G said.
Hence, on March 30, 2023, the IGR decided to nullify the 2017 decision to reduce the revised guideline values by 33% and fixed the values for all properties in accordance with the 2012 circular. While doing so, the IGR had taken only the opinion of the State central committee and not the sub-committees. There was no necessity to refer the matter to the sub-committees. However, the single judge quashed the circular on a misconception that the matter had to be referred to the sub-committees. In fact, it was the 2017 decision on the 33% reduction that should have been taken after referring it to the sub-committees. Since that was not done, the IGR had now restored the values determined by the central committee and the sub-committees in 2012, he said.
“The Registration Department had registered 26,81,234 documents between April 1, 2023 and January 27, 2024 on the basis of the March 30, 2023 circular, and they involve stamp duty as well as registration fees to the tune of ₹14,590.05 crore. Quashing of such circular will cause serious financial implications to the exchequer,” Mr. Raman said.
The A-G further said that the order quashing the circular might open up up a pandora’s box of litigations by executants of all kinds of conveyance deeds refusing to pay the necessary stamp duty and registration charges, as demanded by the Registration Department.
