Case Note & Summary
The petitioners, owners of immovable property in Devanahalli Taluk, executed a General Power of Attorney (GPA) dated 25.03.2011 in favor of their GPA holder, authorizing him to sell the property. The GPA mentioned a consideration of Rs.10,000/-. When presented for registration, the Sub-Registrar collected stamp duty of Rs.3,89,160/- based on the market value of the property, treating the GPA as a conveyance under Section 2(1)(d) of the Karnataka Stamp Act, 1957. The petitioners challenged the endorsement dated 02.01.2012 issued by the Inspector General of Registration and Commissioner of Stamps, which confirmed the duty on market value, and sought refund of the excess amount. The court examined the relevant provisions, including Section 2(1)(d) defining 'conveyance' to include a power of attorney when given for consideration, and Article 41 of the Schedule prescribing duty on a power of attorney. The court noted that Article 41(b) specifically applies when the power of attorney is given for consideration and authorizes the attorney to sell immovable property, and the duty is on the amount of consideration. The court held that the stamp duty on the GPA is payable on the consideration amount of Rs.10,000/-, not on the market value of the property. Consequently, the court quashed the endorsement and directed the respondents to refund the excess stamp duty of Rs.3,89,160/- within six weeks.
Headnote
A) Stamp Act - General Power of Attorney - Stamp Duty - Computation - The issue was whether stamp duty on a GPA executed for consideration authorizing sale of immovable property is payable on the market value of the property or on the consideration amount mentioned in the GPA. The court held that under Article 41(b) of the Schedule to the Karnataka Stamp Act, 1957, the duty is payable on the amount of consideration mentioned in the GPA, not on the market value of the property. The endorsement demanding duty on market value was quashed. (Paras 1-10) B) Stamp Act - Refund of Excess Stamp Duty - Limitation - The petitioners sought refund of excess stamp duty collected. The court directed the respondents to refund the excess amount of Rs.3,89,160/- within six weeks, without addressing limitation issues as the endorsement was quashed. (Paras 11-12)
Issue of Consideration
Whether the stamp duty on a General Power of Attorney executed for consideration and authorizing sale of immovable property is to be computed on the market value of the property or on the consideration amount mentioned in the GPA?
Final Decision
The court allowed the writ petitions, quashed the endorsement dated 02.01.2012, and directed the respondents to refund the excess stamp duty of Rs.3,89,160/- to the petitioners within six weeks.
Law Points
- Stamp duty on General Power of Attorney is payable on the consideration amount mentioned in the GPA
- not on the market value of the property
- Section 2(1)(d) of the Karnataka Stamp Act
- 1957 defines 'conveyance' to include a power of attorney when given for consideration
- Section 3 read with Article 41 of the Schedule to the Act prescribes duty on a power of attorney
- Article 41(b) applies when the power of attorney is given for consideration and authorizes the attorney to sell immovable property
- the duty is on the amount of consideration.
