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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SANDEEP V. MARNE, J.
Axayraj Buildwell Pvt. Lltd. (Presently known as Moongipa Realty Pvt. Ltd.) - Petitioner
Versus
State of Maharashra and Anr. - Respondents
Writ Petition No. 772 Of 2022
Decided On : 31-01-2024
Stamp Duty - Recovery of Deficit Stamp Duty - Maharashtra Stamp Act, 1958, Section 32A, 33A - The court examined the statutory framework empowering the Respondents to recover deficit stamp duty and concluded that the proceedings initiated under Section 33A, where the dispute was about the true market value of the property, were erroneous. The court held that the correct procedure to be adopted in such cases is as per subsections (4) and (5) of Section 32A. The court further held that even if the error committed by the Collector in making reference to Section 33A is to be ignored, and even if the proceedings were to be treated as the one initiated and conducted under the provisions of sub-sections (4) and (5) of Section 32A, initiation of proceedings is clearly barred by the outer limit of 10 years. The impugned Order dated 31 May 2021 was held to be unsustainable and was set aside.
Fact of the Case:
The Petitioner, a Developer, challenged the Notice dated 3 September 2015 issued by Sub-Registrar and Order dated 31 May 2021 and Demand Notice dated 13 October 2021 issued by the Collector of Stamps, Andheri demanding deficit stamp duty of Rs.22,56,010/- and penalty of Rs.87,08,200. The Petitioner contended that the proceedings for recovery of alleged deficit stamp duty were barred under the provisions of sub-section (5) of Section 32A of the Stamps Act.
Finding of the Court:
The court found that the proceedings initiated under Section 33A, where the dispute was about the true market value of the property, were erroneous. The court held that the correct procedure to be adopted in such cases is as per subsections (4) and (5) of Section 32A. The court further held that even if the error committed by the Collector in making reference to Section 33A is to be ignored, and even if the proceedings were to be treated as the one initiated and conducted under the provisions of sub-sections (4) and (5) of Section 32A, initiation of proceedings is clearly barred by the outer limit of 10 years. The impugned Order dated 31 May 2021 was held to be unsustainable and was set aside.
Issues: The issues involved in the case were the validity of the Notice dated 3 September 2015, Order dated 31 May 2021, and Demand Notice dated 13 October 2021 issued by the Collector of Stamps, Andheri demanding deficit stamp duty and penalty, and the applicability of the provisions of sub-section (5) of Section 32A of the Stamps Act.
Ratio Decidendi: The court held that the proceedings initiated under Section 33A, where the dispute was about the true market value of the property, were erroneous. The court held that the correct procedure to be adopted in such cases is as per subsections (4) and (5) of Section 32A. The court further held that even if the error committed by the Collector in making reference to Section 33A is to be ignored, and even if the proceedings were to be treated as the one initiated and conducted under the provisions of sub-sections (4) and (5) of Section 32A, initiation of proceedings is clearly barred by the outer limit of 10 years.
Final Decision: The impugned Order dated 31 May 2021, Notice dated 3 September 2015, and Demand Notice dated 13 October 2021 were set aside.
JUDGMENT :
1. Rule. Rule is made returnable forthwith. With the consent of the parties, petition is taken up for hearing.
2. By this petition, Petitioner has challenged the Notice dated 3 September 2015 issued by Sub-Registrar and Order dated 31 May 2021 and Demand Notice dated 13 October 2021 issued by the Collector of Stamps, Andheri demanding deficit stamp duty of Rs.22,56,010/- and penalty of Rs.87,08,200/-.
3. Briefly stated, facts of the case are that Petitioner is a Developer and entered into Development Agreement with ‘D.N. Nagar Shree Ashtavinayak Co-operative Housing Society Limited’ on 6 September 2005, under which, he agreed to carry out redevelopment of the Society’s building on terms and conditions more particularly described in the Development Agreement. It is Petitioner’s case that the Development Agreement was lodged for registration and Petitioner was called upon to pay stamp duty of Rs.8,42,000/- thereon. Petitioner accordingly paid stamp duty of Rs.8,42,000/- and the Agreement came to be registered in the office of the Sub-Registrar, Andheri- 3 on 7 October 2005. It is Petitioner's case that in pursuance of the Development Agreement, it has completed the redevelopment of society’s building by constructing a new building and has already sold flats/shops/offices coming to its share in the sale component of the reconstructed building.
4. On 26 October 2015, Petitioner received notice dated 3 September 2015 issued by Sub-Registrar of Assurances for initiation of proceedings under Section 33A of the Maharashtra Stamp Act, 1958 (Stamp Act). The notice stated that the office of the Inspector General of Registration and Controller of Stamps (IGR), Maharashtra State, Pune had carried out an audit, in which it was observed that in the document registered at Serial No. 9752/2005, the market value ought to be Rs.30,97,91,000/- and there is deficit stamp duty of Rs.22,56,010/-. Petitioner was therefore called upon to deposit the original document for the purpose of recovery of deficit stamp duty. Petitioner contends that though the Notice bears the date 3 September 2015, the same was dispatched by Registered Post A.D. on 21 October 2015 and was received on 26 October 2015. Petitioner replied the notice on 27 October 2015 contending that the stamp duty has been correctly paid as per the adjudication and that no claim can be made after expiry of 10 years from the date of execution of the document. Nothing happened thereafter for about two years. On 14 September 2017 Notice was issued by the Collector of Stamps, Andheri calling upon Petitioner to remain present for hearing in the proceedings initiated under Section 33A of the Stamp Act for recovery of deficit stamp duty out of Rs.22,56,010/-. Petitioner filed its reply on 11 October 2017. The Collector of Stamps thereafter passed Order dated 31 May 2021 rejecting Petitioner’s contention about the proceedings being barred after lapse of period of ten years observing that the proceedings are initiated under Section 33A for which there is no period of limitation. Petitioner’s objection was therefore rejected, and Petitioner was directed to pay deficit stamp duty of Rs.22,56,010/- within 30 days failing which penalty at the rate of 2% was to be levied from the date of registration of the document. Petitioner did not pay the deficit stamp duty. Consequent to the Order dated 31 May 2021, Demand Notice dated 13 October 2021 is issued by the Collector of Stamps calling upon the Petitioner to pay deficit stamp duty of Rs.22,56,010/- and penalty of Rs.87,08,200/-. Petitioner is aggrieved by Notice dated 3 September 2015, Order dated 31 May 2021 and Demand Notice dated 13 October 2021 and has filed the present petition.
5. Appearing for the Petitioner, Mr. Nargolkar, the learned counsel would submit that initiation of proceedings for recovery of alleged deficit stamp duty is barred under the provisions of sub-section (5) of Section 32A of the Stamps Act. That the impugned action is pr
The correct procedure for determining the true market value of the property and recovering deficit stamp duty in cases of dispute is as per sub-sections (4) and (5) of Section 32A of the Maharashtra ....
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There is no error in assumption of jurisdiction under Section 33(5) read with Section 40 of the Act. The petitioner was given an opportunity to reply to the show cause notice. That he did. However, i....
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