Amrr Maharaja Dhall Mills Private Limited vs. The Inspector General Of Registration

Facts

The petitioner, AMRR Maharaja Dhall Mills Private Limited, sought to register two sale deeds (Nos. 2280/2025 and 2281/2025) for immovable property. The Sub-Registrar (third respondent) requested an inspection and valuation report from the Assistant Executive Engineer (Building), Madurai. The report indicated the presence of machinery on the premises. Consequently, the Sub-Registrar issued a demand notice dated 26.11.2025, demanding payment of deficit stamp duty of Rs. 25,41,000/- and registration fees of Rs. 7,26,000/-, including the value of the machinery. The petitioner contended that they had independently purchased the machinery as lessees prior to the sale deed for the immovable property and had disclosed these in their balance sheets for FY 2022-23 and 2023-24, thus not being liable for additional duty on them.

Held

The Court allowed the writ petition and quashed the impugned demand notice dated 26.11.2025. The Court found that the petitioner had independently purchased the machinery as a lessee when the mill was leased to them. This was supported by the balance sheets for the financial years 2022-23 and 2023-24, which clearly reflected the machinery as the property of the lessee (petitioner). Therefore, the machinery did not belong to the vendor and was not part of the sale of the immovable property. The Court held that the Assistant Executive Engineer, in his inspection and valuation, failed to consider this crucial fact, leading to a non-application of mind and the issuance of the erroneous demand notice. The ratio decidendi is that independently owned assets, even if present on the property being sold, should not be included in the valuation for stamp duty and registration fees for the immovable property if they do not belong to the vendor and were acquired separately by the buyer.

Key Issues

1. Whether the machinery present on the premises at the time of inspection, which was independently purchased by the petitioner as a lessee, should be included in the valuation for stamp duty and registration fees for the sale deed of the immovable property, thereby attracting additional tax liability under the GST regime? (Question of law and fact, concerning the scope of sale deeds and taxability of machinery). Petitioner's Contention: The petitioner argued that they had already purchased the machinery as a lessee and had disclosed it in their balance sheets for FY 2022-23 and 2023-24. Therefore, the machinery did not belong to the vendor and should not be included in the sale deed for the immovable property, nor should they be liable for any additional stamp duty or registration fees on its value. They relied on their balance sheets as proof of independent ownership. Respondents' Contention: The respondents, through the Additional Government Pleader, argued that since the machinery was present on the premises at the time of inspection, it must be considered as purchased along with the land by the petitioner. Therefore, it could not be excluded from the valuation, and the demand notice was issued based on the Assistant Executive Engineer's report.