Smt. Chhaya Gupta, Puneet Gupta, Swan Gupta and Master Chirag Gupta Vs The District Registrar, T. Nagar, Chennai-600 017

@JUDGMENTTAG-ORDER

E. Padmanabhan, J.@mdashFour petitioners have joined together and filed the present writ petition praying for the issue of writ of certiorarified mandamus calling for the records relating to the proceedings of the respondent dated 25.2.2002 in respect of pending document Nos. 195/01 and 2430/01 and quash the same and, consequently, direct the respondent to register and release the deed of partition dated 13.06.2001 executed by the petitioners herein and presented for registration and pass such further or other orders.

I. The petitioners'' case and contentions:-

The first petitioner is the mother, while petitioners 2, 3 and 4 are the sons of the first petitioner and late V.K. Gupta, who died during 2001. The said V.K. Gupta died intestate on 2.2.2001. The petitioners herein and one Sheela Devi are the legal heirs of the said V.K. Gupta. They jointly executed a deed of partition dated 13.06.2001 and presented the same for registration before the respondent. In terms of the partition deed, all the properties, left by deceased were divided as detailed in the said partition deed. "A" Schedule in the partition deed consists of the entire properties. The 2nd petitioner herein was allotted "B" Schedule. Sheela Devi since deceased, first party to the partition was allotted "B" schedule. The first petitioner was allotted "C" Schedule. The third petitioner was allotted "E" Schedule and the 4th petitioner was allotted "F" Schedule. The first party Sheela Devi to the partition deed passed away on 24.07.2001, after the execution and presentation of the deed on 13.6.2001.

2. The respondent by communication dated 25.2.2002 merely stated that according to the computation furnished by him, the petitioners are liable to pay a sum of Rs. 4,85,231/- towards differential stamp duty and a sum of Rs. 2,42,665/- towards registration charges and in all demanded remittance of Rs. 7,27,896/-. No details are set out as to how stamp duty has been levied for such an astronomical figure nor any reason has been set out. The respondent by letter dated 25.2.2002 called upon the petitioner to pay Rs. 7,27,896/- towards deficit stamp duty and registration charges and collect the partition deed. The impugned communication reads thus:-

OFFICE OF THE SUB-REGISTRAR OFFICE T. NAGAR, SAIDAPET, CHENNAI-600 015

To

Puneet Gupta 16, Parthasarathy Gardens Alwarpet, Chennai-600 108

Dear Sir,

Sub: Payment Reg.

Ref: Your Pending Document No. 195/2002/D/No. 2530/2001

With reference to the above, you have to pay the balance stamp duty and registration charges on your partition deed as per details below:-

Your are requested to pay the balance stamp duty and registration charges immediately and collect your partition deed.

Thanking your,
District Registrar
T. Nagar, Madras-600 017.

3. The petitioners have valued the properties of the shares allotted to each of them and paid stamp duty and registration charges of Rs.10.65 lakhs on the separate shares of the property excluding the share of the 2nd petitioner as detailed in para-4 of the affidavit, which reads thus:

1st party in the partition Deed (subsequently deceased)-Schedule ''B'' property under the partition Deed 4,160.00

1st petitioner-Schedule ''C'' property under the partition deed 4,70,59,551.09

2nd petitioner-Schedule ''D'' properly under the partition deed 1,06,15,586.00

3rd petitioner-Schedule ''E'' property under the partition deed 1,41,81,586.00

4th petitioner-Schedule ''F'' property under the partition deed 1,06,15,586.00

There is no quarrel that the petitioners have remitted Rs. 10.65 lakhs towards stamp duty on the partition deed and registration charges.

4. petitioners have also set out the comparative statement of valuation of stamp duty and registration charges for the instrument, which reads thus:-

Stamp duty demanded by the resp. - 11,93,670

Registration charges demanded by the resp. - 5,96,835

Diff. between demand and amount paid - 7,27,896

5. Challenging the demand for payment of additional stamp duty and registration charges arbitrarily without any basis and without assigning any reason, the present writ petition has been filed, as the impugned action is ultra vires, violative of the provisions of The Indian Stamp Act, 1899, as well as The Indian Registration Act.

6. Article 45 of the Stamp Act provides for levy of stamp duty on instruments of partition. The State Government introduced amendment to Section 9 of The Indian Stamp Act and revised the Stamp duty payable on instruments of partition under Article 45 in Schedule I to 2% for the amount of value of the separate share or shares in the property. According to the petitioners, for the levy of stamp duty, the value as set out in the document alone are to be adopted or insisted and not on the basis of market value as sought to be levied. The State Government by a circular dated 11.1.2002 in respect of settlement deed has instructed the Registering Officers to adopt only the value as set forth in the instrument. There is no reason why the same should not be adopted with respect to instrument of partition between the members of the family. It is the contention of the petitioners that the demand of deficit stamp duty based upon the market value or guideline value is arbitrary, unjust, unsustainable and ultra vires the provisions of The Indian Stamp Act, 1899. The respondent has acted in violation of principles of natural justice, in that he has not issued a show cause notice to the petitioners nor given an opportunity while demanding a huge deficit stamp duty and registration charges and disclosing the manner of assessment towards levy of stamp duty on Partition Deed.

7. The petitioners being members of the Hindu undivided jointly family, effected partition of the joint family property among the members of the joint family. Such an instrument of partition will not fall u/s 47A and, therefore, the respondent has no jurisdiction to demand deficit stamp duty nor arrive at the market value in its discretion or at its whims and fancies without any reason or rhyme. The action of the respondent is arbitrary, illegal and in violation of The Indian Stamp Act, The Indian Registration Act and the rules framed thereunder. Being a partition among the members of the joint family, it is not a transfer or conveyance, but it is only a severance or division among members of the joint family and being a partition, the value of the property as set out by the erstwhile joint owners has to be taken for the purpose of levy of stamp duty and not any notional value or market value as sought to be assessed and levied by respondent. Such a levy is illegal, arbitrary and contrary to law.

8. The action of the respondent in determining the stamp duty on the basis of the market value as on the date of instrument is illegal, arbitrary and such a levy is without jurisdiction and not authorised by law. The levy and demand is unconstitutional and runs counter to the statutory provisions, which provides for a levy on instrument of partition. Hence, the impugned communication is liable to be quashed.

II. Respondents'' case and contentions:

9. Per contra, even though no counter affidavit has been filed by the respondent, the learned Advocate General appearing for the respondent made his submissions, while stating that there is no factual dispute. It is contended though Section 47A has no application to instrument of partition, yet the petitioners are liable to pay stamp duty on the market value of the property, though it is an instrument of partition and there is no illegality in the assessment of stamp duty as well as registration charges, which is impugned in the writ petition. According to the learned Advocate General, it is well open to the respondent to come to the conclusion that the document, admittedly an instrument of partition in this case, has been undervalued and if there is a substantial difference between the value of consideration or the market value as the case may be expressed in the document presented for registration, then it is open to the respondent to call upon the person liable to pay stamp duty, the deficit stamp duty as assessed by the Registering Officer and such an action is neither illegal nor without jurisdiction nor it is violative of The Constitution and the provisions of The Stamp Act. The learned Advocate General referred to certain circulars set out in the Stamp Manual as well as the provisions of The Indian Stamp Act as amended, the rules framed by the State of Tamil Nadu and contended that the petitioners are not entitled to the relief prayed for. It is also the contention of the learned Advocate General that the petitioners are liable to pay stamp duty on the instrument of partition on the basis of market value even if an instrument of Partition is not included in Section 47 A of The Stamp Act.

III. Points for consideration:

10. In the circumstances, the following points arise for consideration in this writ petition:-

"A. Whether division by way of partition among the joint family members amounts to a transfer or conveyance warranting levy of stamp duty on the basis of market value of the property divided?

B. Whether powers conferred u/s 47A could be invoked by the respondent in respect of an instrument for partition falling under Art. 45 of Schedule I?

C. What is the legal basis to assess and levy stamp duty payable in respect of an instrument of partition?

D. Whether levy of Stamp duty on the basis of the market value as determined by the respondent is legally sustainable?

E. Whether the assessment and levy stamp duty in respect of Partition Deed on the basis of market value as arrived by the respondent as if Section 47A applies to the instruments of partition is authorised by law?

F. To what relief, if any, the petitioners are entitled to?."

The above points could be considered together conveniently and it is not necessary to answer each point separately.

IV. Points:-

11. Taking up the point ''B'', there is no doubt, in that section 47A of The Indian Stamp Act as amended by Tamil Nadu Act 24 of 1967 cannot be invoked in respect of an instrument of partition. Section 47A reads thus:-

"(1) If the registering officer appointed under the Indian Registration Act, 1908 (Central Act XVI of 1908) while registering any instrument of conveyance, exchange, gift, release of benami right of settlement, has not been truly set forth in the instrument he may, after registering such instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon."

12. Instrument of partition not being a conveyance, exchange or gift, or release of benami right or settlement, it is rightly contented that Section 47A cannot be invoked by the respondent to initiate action or to arrive at a conclusion that the subject matter has not been truly set forth in the instrument. "Partition" has been deliberately excluded by the State Legislature while introducing Sec. 47A. Therefore, it follows that the respondent has no authority to refer an instrument of partition to the Collector for determination of market value or for levy of Stamp duty payable thereon. Hence, this point has to be necessarily answered in favour of the petitioners and against the respondent. If the instrument of "Partition" is not included in Sec. 47A then the legal position is obvious.

13. Section 2(15) defines the expression "instrument of partition". The definition reads thus:-

"Instrument of partition'' means any instrument whereby co-owners of any property divide or agree to divide such property in severally, and includes also a final order for effecting a partition passed by any revenue-authority or any civil Court and an award by an arbitrator directing a partition."

14. In the present case, the instrument in question is an instrument of partition, by which the coparceners of the undivided joint family property have agreed to divide in severalty among themselves the various schedules, which they have been hitherto holding as members of the Hindu joint family. A perusal of the instrument would show that by the document, the petitioners, who were joint owners hitherto, divided the joint family property among themselves and allotted such portion as agreed to among themselves exclusively to each member of the erstwhile joint family. The legal position being joint family property has been converted into separate properties of the members of the joint family by partition and the severance of joint family had taken place.

15. Instrument of partition means an instrument, which is executed by co-owners and a division is effected by that instrument. The essence of the definition of partition is that there should be co-ownership and it should be put an end to with the result that such property is divided in severalty and such instrument is liable to be stamped under Article 45. The deed of partition is a deed very different from relinquishment or deed of gift or conveyance or settlement. The co-sharer in the joint family properties is entitled to seek for partition even if he is not in possession thereof unless exclusion and ouster are pleaded and prayed against him.

16. With respect to an instrument of partition, the Supreme Court in Kalyani (dead) by Lrs. vs. Narayanan 7 others reported in 1980 Supp. SCC 298, held thus:-

"10.....Partition is a word of technical import in Hindu law. Partition in one sense is a severance of joint status and coparcener of a coparcenary is entitled to claim it as a matter of his individual volition. In this narrow sense all that is necessary to constitute partition is a definite and unequivocal indication of his intention by a member of a joint family to separate himself from the family and enjoy his share in severalty. Such an unequivocal intention to separate brings about a disruption of joint family status, at any rate, in respect of separating member or members and thereby puts an end to the coparcenary with right of survivorship and such separated member holds from the time of disruption of joint family as tenant-in-common.

xxx xxx xxx

18.... However, in Hindu law qua joint family and joint family property the word "partition" is understood in a special sense. If severance of joint status is brought about by a deed, a writing or an unequivocal declaration of intention to bring about such disruption, qua the joint family, it constitutes partition (see Raghavamma v. Chenchamma). To constitute a partition all that is necessary is a definite and unequivocal indication of intention by a member of a joint family to separate himself from the family. What form such intimation, indication or representation of such interest should take would depend upon the circumstances of each case. A further requirement is that this unequivocal indication of intention to separate must be to the knowledge of the persons affected by such declaration."

17. It is also the settled legal position that an instrument of partition is not a transfer in strict sense and it is only an adjustment of the rights of various members of the family, who jointly hold. Such an arrangement entered cannot be equated to or considered as disposition or transfer or conveyance. Partition of assets held by a Hindu undivided family cannot be considered as disposition or conveyance or transfer etc.

18. In The The Commissioner of Gift Tax, Madras Vs. N.S. Getty Chettiar, , the Supreme Court had occasion to consider the meaning of disposition, conveyance, settlement, assignment, delivery as well as partition and in that context held that partition of a joint Hindu family property cannot be considered as a ''transfer'' in the strict sense the sense in which the legal actions are understood. In this respect the Apex Court held thus:-

"13. It is now settled by the decision of this Court in Commissioner of income tax, Gujarat v. Keshavlal Lallubhai Paul, that a partition of joint Hindu family property cannot be considered as transfer in the strict sense the sense in which all legal expressions are understood and more particularly in tax laws. In the course of that judgment, Sikri, J. (as he then was) speaking for the Court observed:

"....But, is a partition of joint Hindu family property a transfer in the strict sense? We are of the opinion that it is not. This was so held in Gutta Radhakrishnayya v. Gutta Sarasamma, Subba Rao, J. (then a judge of the Madras High Court) after examining several authorities came to the conclusion that "partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in severally. Each one of the shares had an antecedent title and, therefore, no conveyance is involved in the process, as a conferment of a new title is not necessary". The Madras High Court again examined the question in M.K. Strematm v. Commissioner of income tax, with reference to Section 16(3)(a)(iv). It observed that "obviously no question of transfer of assets can arise when all that happens is separation in status. Though the result of such severance in status is that the property hitherto held by the coparcenary is held thereafter by the separated members as tenants-in-common. "Subsequent partition" between the divided members of the family does not amount either to a transfer of assets from that body of the tenants-in-common to each of such tenants-in-common."

The Punjab High Court come to the same conclusion in Jagan Nath v. State of Punjab. Agreeing with these authorities, we hold that when the joint Hindu family property was partitioned, there was no transfer of assets within Section 16(3)(a)(iii) and (iv) to the wife or the minor son."

19. in The Controller of Estate Duty, Andhra Pradesh Hyderabad Vs. Kancharla Kesava Rao, the Supreme Court followed its earlier pronouncement in The The Commissioner of Gift Tax, Madras Vs. N.S. Getty Chettiar, and approved the judgment of this Court in Gutta Radhakristnayya minor, by mother and guardian Nagarattamma Vs. Gutta Sarasamma, In that context, the Apex Court held thus:-

7.....A partition is not a transfer in a strict sense. It is an adjustment of the rights of the various members of the family. In Commissioner Of Income Tax, Gujarat Vs. Keshavlal Lallubhai Patel, this Court quoted with the approval a passage from the decision of the Madras High Court in Gutta Radhakrishnayya Vs. Gutta Sarsamma. That passage reads thus:-

Partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in severalty. Each one of the sharers had an antecedent title and, therefore, no conveyance is involved in the process as a conferment of a new title is not necessary.

Therefore there cannot be two different opinion and the law is well settled. A partition among the members of a Hindu undivided family cannot be considered as a disposition or conveyance or assignment or settlement nor it is a transfer in the strict sense.

20. In Chief Controlling Revenue Authority vs. B.A. Mallaya reported in 1971 (1) MLJ 177, a Full Bench of this Court had occasion to consider whether the particular instrument in question is a "Partition" or "release" and on facts, the Full Bench held thus"

"5. It is conceivable that in a partition between co-owners, one should go out of the co-ownership in lieu of a certain fixed sum to be paid to him by the others. If the test is applied from the standpoint of release in the sense that a person who has a claim against a person or property gives it up in consideration of something received by him, it may not be conclusive in deciding whether a document amounts to partition. In a partition of joint family property in a sense, there is a kind of release by one sharer of his interest in favour of the other who is allotted that interest. But the true concept of a coparcenary is that it is peculiar in its character. It cannot be said that when coparcenary exists any one of the persons has any particular or definite interest in the coparcenary. The entire property is owned by the entire coparcenary as such, though practical exigency has necessitated attribution of an interest as inhering in a coparcener, where for instance he purports to alienate his share and justice has to be done between him and a third party or even as between the coparceners. The essence of partition, as we mentioned, is that the asset in co-ownership as it were, as in the case of a coparcenary, is split up into severally, the process involving the destruction of the co-ownership and conversion of the same into several interests which are available for exclusive allotment to each sharer. Such allotment of the interests may be wholly in favour of one of the erstwhile coparceners without the other coparcener getting anything as and by way of share. That will be a partition and not a release. Release is not necessarily destruction of co-ownership. We think that those are the essential elements of distinction between a release and a partition of property owned in co-ownership. Merely because, as we said, in a sense a partition may involve release, it cannot on that account be said that what is partition is not that but only a release."

21. Partition is a right incident to the ownership of property and once the parties are co-owners, their right to partition cannot be resisted. In State of Tamil Nadu vs. Chandrasekhara reported in AIR 1979 MAD 117, the validity of Indian Stamp Act (Madras Amendment) Act 1967 was the subject matter of consideration. The Division Bench upheld the validity but the said pronouncement is not an authority for the proposition that in respect of "Partition" stamp duty is payable on the market value. If such interpretation is given, it would amount to rewriting Section 47A as well as few of the Articles in Schedule I.

22. Partition is a severance of joint status and as such it is a matter of individual volition of members who constituted the joint family or co-owners or as such institution. To constitute a partition, all that is necessary is a definite and unequivocal indication of intention by a member of a joint family to separate himself from the family and enjoy his share in severalty. By such a process the joint family gets severed.

23. The instrument of partition falls under Article 45 of The Indian Stamp Act. In terms of Section 29(g), in the case of an instrument of partition, the expense of providing appropriate stamp paper shall be borne by the parties thereof in proportion to their respective shares in the whole property partitioned. The stamp duty payable on an instrument of partition is the same duty as a "Bottomry bond" for the amount of the value of the separated shares of the property. Under Article 45 Proviso (b), where the land is held on revenue settlement and paying full assessment or is an Inam land assessed under the Tamil Nadu Inam Abolition Act, the value for the purpose of duty shall be calculated at 25 times the annual revenue. The said proviso indicates the method of assessment of the value for the purpose of stamp duty.

24. Article 45 merely provides that the duty payable on an instrument of partition shall be the same duty as a Bottomry Bond for the amount of value of the separated share or shares of the property. In respect of land held on revenue settlement and paying full assessment or inam land, the value, for the purpose of duty, shall be calculated at 25 times the annual revenue and such levy is not on the basis of market value but on notional value. The said Article is silent as to how the value to be assessed for the value of separated share or shares of the property for purposes of levy of stamp duty.

25. Chapter III of The Indian Stamp Act provides for adjudication as to stamps. Chapter IV provides how instruments not duly stamped are to be treated.

26. The question whether the instrument of partition requires registration or requires to be registered compulsorily or whether the partition could be effected orally or whether it comes within the mischief of Section 49 of The Registration Act was the subject matter of consideration before the Supreme Court in Nanni Bai and Others Vs. Gita Bai, Sinha, J., speaking for the Bench, held as follows :

"(11).........The question, therefore, is whether those documents "purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, of or in immovable property," within the meaning of S. 17(l)(b) of the Registration Act. No authority has been cited before us in support of this contention. Partition in the ''Mitakshara'' sense may be only a severance of the joint status of the members of the coparcenary, that is to say, what was once a joint title has become a divided title though there has been no division of any properties by metes and bounds. Partition may also mean what ordinarily is understood by partition amongst co-sharers who may not be members of a Hindu coparcenary. For partition in the former sense, it is not necessary that all the members of the joint family should agree, because it is a matter of individual volition. If a coparcener expresses his individual intention in unequivocal language to separate himself from the rest of the family, that effects a partition, so far as he is concerned, from the rest of the family. By this process, what was a joint tenancy has been converted into a tenancy in common. For partition in the latter sense of allotting specific properties or parcels to individual coparceners, agreement amongst all the coparceners is absolutely necessary. Such a partition may be effected orally, but if the parties reduce the transaction to a formal document which is intended to be the evidence of the partition, it has the effect of declaring the exclusive title of the coparcener to whom a particular property is allotted by partition, and is thus within the mischief of S. 17(l)(b), the material portion of which has been quoted above. But, partition in the former sense of defining the shares only without specific allotments of property has no reference to immovable property. Such a transaction only affects the status of the member or the members who have separated themselves from the rest of the coparcenary. The change of status from a joint member of a coparcenary to be a separated member having a defined share in the ancestral property may be effected orally or it may be brought about by a document. If the document does not evidence any partition by metes and bounds, that is to say, the partition in the latter sense, it does not come within the purview of S. 17(l)(b), because so long as there has been no partition in that sense, the interest of the separated member continues to extend over the whole joint property as before. Such a transaction does not purport or operate to do any of the things referred to in that section. Hence, insofar as the documents referred to above are concerned, they are evidence of partition only in the former sense and they are not compulsorily registrable under S. 17, and would, therefore, not come within the mischief of S. 49 which prohibits the reception into evidence of any document "affecting immovable property." (emphasis supplied)

27. In V.N. Sarin Vs. Ajit Kumar Poplai, the Supreme Court examined as to what is the true nature of partition and replied the contention that partition of an undivided Hindu family property must necessarily mean transfer of the property to the individual coparceners. P.B. Gajendragadkar, C.J.(as he then was) speaking for the five Judges'' Bench, held thus :

(10).........In other words, what happens in a partition is that in lieu of the property allotted to individual coparceners they, in substance, renounce their right in respect of the other properties; they get exclusive title to the properties allotted to them and as a consequence, they renounce their undefined right in respect of the rest of the property. The process of partition, therefore, involves the transfer of joint enjoyment of the properties by all the coparceners into an enjoyment in severalty by them of the respective properties allotted to their shares. Having regard to this basic character of joint Hindu family property, it cannot be denied that each coparcener has an antecedent title to the said property, though its extent is not determined until partition takes place. That being so, partition really means that whereas initially all the coparceners have subsisting title to the totality of the property of the family jointly, that joint title is by partition transformed into separate titles of the individual coparceners in respect of several items of properties allotted to them respectively. If that be the true nature of partition, it would not be easy to uphold the broad contention raised by Mr. Purshottam that partition of an undivided Hindu family property must necessarily mean transfer of the property to the individual coparceners. As was observed by the Privy Council in Girja Bai v. Sadashiv Dhundiraj, 43 Ind App 151 at p. 161 : (AIR 1916 PC 104 at P.108-4 L.W. 114):

Partition does not give him (a coparcener) a title or create a title in him; it only enables him to obtain what is his own in a definite and specific form for purposes of disposition independent of the wishes of his former co-sharers.

28. In the same pronouncement, the Supreme Court further held that:-

12.....It would be unreasonable to hold that allotment of one parcel of property belonging to an undivided Hindu family to an individual coparcener as a result of partition is an acquisition of the said property by transfer by the said coparcener within the meaning of Section 14(6).

29. Article 45 provides that an instrument of partition as defined by Section 2(15) is leviable with the same duty as a Bottomry Bond for the amount of the value of the separated share or shares of the property. The proviso (b) in Article 45 is relevant as it would indicate as to how the land held on Revenue Settlement and paying the full assessment, etc. has to be valued for the purpose of levy of stamp duty and the valuation being 25 times the annual revenue.

30. The expression ''market value'' has not been defined in The Indian Stamp Act nor the expression ''value'' has been defined in Art. 45 or in any other provision of the Stamp Act. There is no controversy that in respect of instruments of partition the recitals in the instruments have been taken for the purpose of levy of stamp duty.

31. Section 47-A came to be introduced by the Tamil Nadu Act 24/1967 and subsequently amended by Tamil Nadu Act 1 of 2000. Section 47-A will confer jurisdiction on the Registering officer in respect of an instrument of conveyance, exchange, gift, release of benami right or settlement and if he has reason to believe that the market value has not been truly set forth, the registering authority may, after registering the said instrument, refer it to the Collector for determination of the market value of such property and proper duty payable thereon. The Legislature has intentionally excluded the instrument of partition from Section 47-A, which has a definite significance and indication.

32. As seen Articles 23, 31, 33, etc., in respect of an instrument of conveyance falling under Article 23 or Exchange falling under Article 31 or Gift falling under Article 33 or Settlement in favour of other member or members of a family, the Legislature has specifically provided that stamp duty is leviable on the market value of the property, which is the subject matter of transfer or conveyance or settlement or gift, as the case may be. While in respect of settlement in favour of a member or members of a family under Article 58, the stamp duty is leviable for such amount or value as set forth in the settlement. This again indicates the departure made by the Legislature.

33. In the light of the said position, if we read Article 45, which imposes a levy on an instrument of partition, it has been rightly pointed out that stamp duty is leviable for the amount of the value of the separated share or shares of the property. The Legislature has purposely omitted to use the expression ''market value'' in respect of partition falling under the description of ''instrument partition'' (Art. 45), as it is neither a transfer nor creation of a new right for the first time.

34. The Legislature has purposely omitted to include the ''market value'' in respect of stamp duty payable in respect of instruments of partition which attracts levy under Art. 45. The same Legislature, as seen from explanation proviso (b) to Art. 45, has specified the manner of assessment for the purpose of duty namely twenty times the kist payable. There could be no assessment or levy of stamp duty in respect of the property falling under Proviso (b) to Article 45 either as value or market value and the value has to be calculated at 20 times the annual revenue in respect of other properties other than land held on revenue settlement and there is no specific provision as to how the value of share has to be worked out for levy of stamp duty.

35. In other words, Article 45 leaves it to the parties to the instrument of partition to value and submit the instrument for registration upon which stamp duty is leviable on the value of the separated share or shares of the property as set out in the instrument of partition.

36. In other words, from Section 47-A, partition has been excluded and Article 45 also indicates as to how the value has to be arrived at in respect of land and in respect of other properties being divided by way of partition. As seen from different terminology employed by the Legislature as pointed above, the Legislature has mentioned a trichotomy. It follows that it is only the value as furnished by the co-sharers or coparceners, as the case may be, and levy cannot be on the basis of the market value of such property as assessed by Respondent but on the stated value. There is a purpose to this silence as it is not a transfer or a conveyance nor it is a creation of right for the first time nor it is an extinguishment of the right of the co-parcener or a member of the joint family but it is a division among the cosharers. Therefore, it follows that it is the recited value of the instrument which has to be accepted by the Registrar for the purpose of levy of stamp duty in respect of an instrument of partition.

37. It is also pointed out that in respect of some other States other than Tamil Nadu, the expression ''partition'' has been included intentionally in Section 47-A by the respective States. However, so far as Tamil Nadu is concerned, the "partition" is not included intentionally by the Legislature while enacting Section 47-A of the Act. Therefore, levy on the basis of market value by placing reliance on Section 47-A is a misconception and it cannot be relied upon.

38. Assuming that Section 47-A includes partition even then the Registering Officer has to refer the instrument to the Collector for determining the market value of the property and arrive at the duty. This is not so in this State. It is not the case herein. Therefore, there could neither be an adjudication by the Collector nor by the Registering Officer with respect to valuation and stamp duty payable in respect of an instrument of partition. No authority could assess the market value of the property and demand tax on that basis in respect of instruments of partition. Viewed from another angle also, the contentions advanced by the learned Advocate General appearing for the respondent cannot be, sustained.

39. Section 29 of the Act provides that the expenses for providing stamp duty shall be borne, in the case of an instrument of partition, by the parties thereto in proportion to their respective shares in the whole property partitioned. Therefore, in the case of partition, each one of the co-sharer has to pay the stamp duty, unless otherwise agreed among the sharers. Therefore, all the parties to the instrument have to pay the stamp duty. This in contra distinction to the remaining provisions in respect of the person who is liable to pay stamp duty with respect to other class instruments enumerated in Secs. 29(a)(b)(bb)(c)(d)(e) and (f).

40. Section 27 stipulates that the parties to the instrument shall set forth all the facts affecting changeability of any instrument with duty, which include "the market value" of the property as well, which will affect the changeability.

Section 27 reads thus:

27. Facts affecting duty to be set forth in instrument. - The consideration (if any) and the market value and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein."

Section 28 provides for direction as to payment of duty in case of certain conveyances, on the basis of "market value

41. On a consideration of Sections 31, 32 and 33, there is no doubt that the said provisions have no application to an instrument under Chapter IV.

42. The learned Advocate General relied upon the pronouncement in The Joint Director, Board of Revenue, Madras vs. K.R. Venkatarama Ayyar reported in 50 Madras 738 and contended that "value" means the real value of property of the nature of land and houses being ordinarily and most suitably estimated by determining what that property would fetch if sold in the open market. In that case the Court considered the case of a "settlement" for the purpose of assessment and levy of stamp duty and the very Article provides that in case of settlement in favour of 3rd party other than family members, the charging provision itself provides that levy on the market value.

43. Therefore, this Court is of the view that the above pronouncement, with due respect, has no application to the facts of this case in which the instrument of ''partition'' is the subject matter of consideration. What is the "value" or "stated value" or "market value" is the only question which requires to be considered in this case.

44. In 7 Madras 350 reference under Stamp Act Section 46, as well as 8 Madras 453 Full Bench, it has been held that the stamp duty shall be calculated on the value indicated in the sale deed or in the settlement deed respectively. That was the legal position as it existed before the introduction of amendment to the Stamp Act and in particular before the introduction of Section 47-A of the Act and also when the Articles relating to the particular instrument merely provided for payment of stamp duty on the value indicated in the sale deed. In 8 Madras 453, the Full Bench has held that :-

these terms do not mean the value of the interest or interests created by the settlement, but refer to the value of the property settled, which, it was intended by Legislature, should be set forth in the settlement.

45. Section 27 of the Act requires the consideration (if any), and the market value affecting the chargeability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein. If the duty is chargeable on the basis of market value, which is not the basis of levy in respect of instruments of partition and there is no obligation on the part of the parties to the instruments to set out the market value even in terms of Section 27. As already pointed out and as seen from various Articles, in Schedule I, the Legislature has used the expression, "stated value", "value" and "market value", there is significant departure in the language used in Schedule I in respect of various entries.

46. Though it is contended that "value" means "market value", however, in the light of the sections read with the Articles, this Court, as already pointed out, is of the considered view that in respect of partition, it is only the value as cited in the instrument by the parties, since it is not a transfer from one party to another party, but it is only a division among the sharers or joint owners or co-parceners effecting division among themselves so that joint tenancy or tenancy in common is broken.

47. In other words, they are the joint owners of the property, which are being partitioned hitherto and therefore, it is not a transfer as has been pointed out. This means that it is only the value as recited by the parties by way of adjustment or allotment of shares among themselves.

48. It is also being pointed out that the word ''partition'' is included in Section 47-A in the States of Andhra Pradesh, Bihar, Orissa, Union Territory of Pondicherry, Thiripura, and West Bengal, while in the State of Tamil Nadu, the instruments of partition are excluded specifically in Section 47-A and in various other States, Section 47-A includes instruments relating to the transfer of any property and in any instrument presented for registration, three categories have to be considered. Insofar as the State of Tamil Nadu is concerned, "instrument of partition" is not included in Section 47-A and therefore, there cannot be any reference or adjudication u/s 47-A.

49. Therefore, the question of under valuation and assessment thereon in terms of Section 47-A will not arise at all, as Section 47-A exists. When two views in respect of taxing statues is possible, the full benefit has to be given to the assessee as has been held by the Supreme Court in The Chief Controlling Revenue Authority, Madras Vs. Messrs Pioneer Spinners Private Ltd,(AIR 1968 SC 223). It has been laid down that the statutes imposing duties are not to be so construed as not to make any instrument liable to stamp duty unless it is manifestly within the intention of the Legislature.

50. Even in respect of conveyance, prior to the Tamil Nadu Amendment, the mode of calculation of stamp duty being treating the amount or value of the consideration for such conveyance as set forth therein. Only after the amendment, the question of payment of stamp duty on market value, even in respect of conveyance and other articles where market value has been indicated arose. Before the amendment, the amount or value of the consideration for such consideration as set forth in the deed of conveyance, constituted the basis for determining the stamp duty payable and after the Amendment came to be introduced only such issue arose.

51. Section 47-A in so far as it has no application to partition. Article 45 "Partition" in Schedule-I merely stipulates the duty payable on instrument of partition being for the amount or the value of the separated share or shares of the property. Article 45 remains the same and even after introduction of Section 47-A it has not been amended to indicate that the Stamp Duty is payable on the market value of the separated share or shares of the property.

52. While upholding the validity of Section 47-A, this Court in State of Tamil Nadu vs. Chandrasekaran, reported in AIR 1974 Mad,170, merely sustained the validity of Section 47-A. The measure of stamp duty being value of the property dealt in the instrument of partition as recited therein and if the Legislature intend to charge or fix the measure of duty on the basis of market value, then Article 45 would have been amended to that effect or at least in Section 47-A, "partition" should have been included. This is not the case here.

53. As already pointed out, The Stamp Under-valuation Rules framed under the Act after the introduction of Section 47-A has no application at all in respect of instruments of partition. The stamp duty is a charge on the instrument which by itself, a taxable event, the measure of tax may be fixed or ad valorem. The chargeable event, being when an instrument as defined in the Act and described in the first column of the first schedule to the Act is executed and the measure of duty being as set out in column 3 of Schedule-I. As already pointed out, partition is not a transfer or a conveyance, nor it is as if it creates right or interest in the immovable property for the first time in favour of the sharer. Therefore the contention that for the purpose of Article 45, market value alone has to be taken cannot be sustained as the parties to the instrument of partition being already owning the property jointly or tenants in common or as co-parceners.

54. Even assuming the instrument is under valued, the Registering Officer has no authority to assess the value much less the market value in terms of Stamp Act and the Rules framed thereunder. The under valuation is not occasioned in terms of Secs. l9A; 19B; 27 or 28 and Sec. 47A does not take in an instrument of partition.

55. That apart, when Sec.47A has no application to an instrument of partition equally the Tamil Nadu Stamp (Prevention of under Valuation of Instruments) Rules 1968 framed under Sec.47A will not apply. That being the position the Registering Officer has neither the authority nor reason to believe that the partitioned instrument has been undervalued nor he could refer the instrument to the Collector for determination of market value for the deficit stamp duty. Further there is no other provision in the Stamp Act or Rules framed thereunder either to decide or assess the market value or assess deficit stamp duty in respect of instruments of partition and this is clear from the statutory provisions.

56. In any event in the present case the impugned communication calling upon the petitioner to pay the alleged difference in stamp duty as assessed by the respondent cannot be sustained as there is violation of principles of natural justice, in that no opportunity had been afforded to petitioners nor the criteria or basis of determination of valuation has been disclosed or on what basis the value has been arrived at has been disclosed and it is an arbitrary exercise of power to call upon the petitioners to pay a huge sum without any reason or rhyme besides it is illegal without jurisdiction and authority of law. On this ground as well the impugned proceedings are liable to be quashed and the relief prayed for has to be sustained.

57. In any view, the contentions advanced by the learned counsel appearing for the petitioners deserve to be sustained. This Court holds that the duty payable on the instrument of partition has already been remitted with registration fee and no additional sum is liable to be paid by the petitioners either towards the stamp duty or registration charges as well. In the result, all the points are answered In favour of the petitioners and the respondent is directed forthwith to complete the registration of the deed of partition dated 13.06.2001 submitted by the petitioners for registration, register the document without insisting for payment of further stamp duty and accepting the stamp duty already paid on the instrument as having been levied validly on the value as stated/estimated by the parties to the instrument in respect of their shares in terms of Art. 45, Schedule-I. The respondent shall complete the formalities of registration within three weeks from the date of communication of this order or production of a copy of this order, whichever is earlier and release the document of partition with necessary endorsement of registration. The writ petition is allowed and Rule Nisi is made absolute. The parties shall bear their respective cost in this writ petition. W.M.P.Nos.10573 of 2000 and 47071 of 2002 are closed consequently as unnecessary.