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Quashes ₹2.60 Crore Stamp Duty Demand Against Kumar Housing Under Section 4
In a significant ruling that reinforces the principle of in stamp duty adjudication, the on , quashed a demand of ₹2.60 crore against . Justice Amit Borkar held that a series of agreements and a final conveyance executed between 1995 and 2012 formed a under . The Court ruled that the stamp authorities could not treat the 2012 conveyance as a fresh independent transfer merely because the earlier documents bore different titles.
A Stream of Instruments, One Continuous Transaction
Kumar Housing had entered into an Agreement on to acquire rights in land at Pashan, Pune for ₹3.12 crore, followed by a Development Agreement on for another portion for ₹1.88 crore. Supplementary agreements were executed in confirming possession had been handed over. Finally, on , a Deed of Conveyance formally completed the transfer, with Kumar Housing paying ₹45 lakh in additional stamp duty, bringing the total to ₹50 lakh on the aggregate consideration of ₹5 crore.
Despite initially accepting that calculation and registering the conveyance, the Sub-Registrar later issued notices claiming the property’s market value in 2012 was ₹61.09 crore, demanding deficit duty of ₹2.60 crore plus a 2% monthly penalty. The and appellate authority upheld the demand, leading to the .
The 2012 Conveyance Was Not a Fresh Start
The Court deeply analysed the documents. It observed that the 1995 and 1999 agreements gave substantial development and transfer rights, and possession was indeed handed over. Justice Borkar noted that merely calling them "Development Agreements" did not change their real legal character. The critical question was whether these instruments were
"employed for completing the transaction"
under Section 4.
The judgment clarified:
"Section 4 cannot be understood to mean that stamp duty can be avoided. The provision protects the revenue because the
is required to bear the highest stamp duty which would be chargeable amongst the several instruments used for completing the transaction. At the same time, the provision does not permit the same transaction to be treated as separate transactions only because more than one instrument was executed for completing the same."
The High Court found a clear factual continuum: same parties, same property, progressive creation of rights, and a final deed that merely formalised what had already been agreed. Even the reduction in land area (due to road acquisition by the ) did not create a new transaction.
A Reversal of Position by the Stamp Authorities
A critical factor in the Court’s reasoning was the authorities’ inconsistent stance. When registering the 2012 conveyance, the stamp office treated the earlier agreements as connected, calculated duty on the ₹5 crore aggregate consideration, and credited the ₹5 lakh already paid. Later, while raising the impugned demand, they acted as if the 2012 deed was unrelated.
The judgment noted:
"For the purpose of registration of the Conveyance in 2012, the Authorities treated the earlier transactions as connected with the Conveyance and gave credit for the stamp duty paid. Thereafter, for making a demand, the Authorities proceeded as if the earlier transactions and the Conveyance were unrelated transactions. In my view, these two positions do not go together."
The Court also rejected the State’s argument that prevented the petitioner from arguing that the earlier agreements were not pure development agreements. It held that is governed by statute, not by what a party earlier called an instrument.
A Victory for
The allowed the , quashing the demand of ₹2.60 crore along with the 2% monthly penalty and other charges. It declared that the must be considered under , and that the State cannot treat a final conveyance as an entirely fresh transaction for levying full based on market value on the date of execution.
The judgment reiterates that when multiple instruments progressively create, confirm, and finally complete rights from one continuous property transaction, the revenue cannot split them into separate taxable events simply because they bear different names or were executed at different times.
