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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K. R. Shriram, Jitendra Jain, JJ.
Nanji Dana Patel - Petitioner
Vs.
State of Maharashtra Through Government Pleader & Ors. - Respondent
WRIT PETITION NO.1897 OF 2019
Decided On : 27-08-2024
Refund - Stamp Duty - Maharashtra Stamp Act, 1958 - Sections 48(1), 53(1)A - The court interpreted the provisions regarding the time limit for refund applications, emphasizing that while a six-month limit exists, it does not bar the right to claim a refund, allowing for consideration of merits despite delays.
Fact of the Case:
The petitioner sought a refund of stamp duty paid on a development agreement that was later cancelled. The application for refund was rejected as it was filed beyond the six-month limit set by the Maharashtra Stamp Act.
Finding of the Court:
The court found that the delay in filing the refund application should be condoned, as the petitioner was entitled to the refund, and the state should not rely solely on technicalities to deny a just claim.
Issues: Whether the application for refund of stamp duty could be rejected solely on the grounds of being filed beyond the six-month period stipulated in the Maharashtra Stamp Act.
Ratio Decidendi: The court held that the expiry of the limitation period may bar the remedy but not the right, allowing for the consideration of the merits of the refund application despite the delay.
Result: The court quashed the rejection order and remanded the matter for a merits-based decision on the refund application.
Key Points: - The right to claim a refund of stamp duty is not extinguished by the expiration of the statutory limitation period (!) (!) . - The court may condone delay in filing a refund application and consider the merits despite the delay (!) (!) . - The expiry of the limitation period may bar the remedy but not the right, allowing merit-based consideration (!) (!) . - The state should not rely solely on technicalities to deny a just claim for refund (!) (!) . - The court treated the belated application as under Section 5 of the Limitation Act, requiring sufficient cause for delay (!) (!) . - Retention of surplus stamp duty collected on the same transaction is contrary to the constitutional provisions if refund is due (!) (!) . - The matter is remanded for a merits-based decision with a personal hearing (!) . - The court relied on the principle from a Supreme Court judgment that delay should be examined for sufficient cause (!) . - The refund application can proceed despite the six-month statutory limit if sufficient cause is shown (!) (!) . - The court quashed the rejection order and directed a reasoned decision on the refund (!) .
JUDGMENT :
K. R. Shriram, J.
1. Rule. Rule made returnable forthwith. By consent of the parties, heard finally.
2. Petitioner is impugning an order dated 3rd July 2018 passed by Respondent No.2, rejecting Petitioner’s application for refund of stamp duty that was paid. Rejection has been on the sole ground that it was filed beyond the period of six months mandated under Section 48(1) of the Maharashtra Stamp Act, 1958 (“the Stamp Act”).
3. Though the petition was served over five years ago and on 12th February 2019, time was taken by AGP for seeking instructions, no reply has been filed till date.
4. The petition was originally listed before Single Judge of this Court and in view of the amendment to the petition by which the Petitioner has challenged constitutional validity of Section 53(1)A of the Stamp Act, matter has been listed before the Division Bench. We are not inclined to grant any time to Respondents to file affidavit-in-reply. The issue in the petition is very narrow, i.e., whether the application could have been rejected under the provisions of Section 48(1) of the Stamp Act.
5. Briefly stated, Petitioner had entered into a development agreement with one Keshav Krishanlal Syngal on 3rd March 2014. Admittedly, stamp duty of Rs.78,65,000/- has been paid by way of challan dated 3rd March 2014. Admittedly, this deed has been registered on 3rd March 2014. Subsequently, a supplementary agreement dated 4th July 2014 was entered into by Petitioner with the said Keshav Krishanlal Syngal and on payment of stamp duty of Rs.300/- and registration fees of Rs.1,720/-, the supplementary agreement was registered.
6. Thereafter, the parties decided to cancel the development agreement and it was agreed instead, the said Keshav Krishanlal Syngal would convey the property to Petitioner for valuable consideration. Accordingly, Petitioner and the said Keshav Krishanlal Syngal executed a cancellation deed dated 24th June 2015 for cancelling the development agreement dated 3rd March 2014. Admittedly, the cancellation deed has been registered on 26th June 2015 vide Serial No.BDR1-5760-2015.
7. Petitioner and the said Keshav Krishanlal Syngal entered into conveyance deed also executed on 25th June 2015 by which the property was conveyed to Petitioner. On the conveyance deed, Petitioner has paid stamp duty of Rs.1 crore and the conveyance deed is registered vide registration No.BDR1-5757-2015 dated 26th June 2015.
8. Thereafter, Petitioner filed an application for refund of the stamp duty paid on the development agreement and this application was filed on 15th February 2018 seeking refund of Rs.78,65,000/- paid on the development agreement that was cancelled on 26th June 2015. The application for refund, therefore, has been filed, according to Mr. Babar, 2 years, 7 months and 20 days late from the date of registration. Mr. Babar submitted that the application should have been made within 6 months from the date of registration of the cancellation agreement and since it was not so filed the impugned order came to be passed rejecting the application.
9. Mr. Reis submitted, as a consequence of cancellation of the development agreement on which the Government had collected stamp duty amounting to Rs.78,65,000/- and then on execution of conveyance deed between the same parties, State has collected stamp duty amounting to Rs.1 crore. This would in effect mean, the Government has collected stamp duty twice on the same property / plot and on transaction between the same parties. Mr. Reis submitted that the Government is entitled to only Rs.1 crore that has been paid on the conveyance deed and if the refund is not granted by the State it would amount to unjust enrichment and if the refund is granted no loss would be caused to the Government.
10. Mr. Reis also relied upon a judgment of the Apex Court in Bano Saiyed Parwad vs. Chief Controlling Revenue Authority and Inspector General of Registration and Controller of Stamps & Ors., 2024 SCC OnLine SC 979 to submit
The court established that the right to claim a refund of stamp duty is not extinguished by the expiration of the statutory limitation period, emphasizing the need for a merits-based evaluation.
Limitation bars remedy but not right to refund of stamp duty paid under wrong head due to error.
The right to claim a refund of stamp duty is governed by statutory provisions, and failure to comply with the prescribed limitation period without sufficient justification precludes the possibility o....
Refund of Stamp Duty – Denying a legitimate refund solely on technical grounds of limitation, fails to strike equitable balance ordinarily expected in fiscal or quasi-judicial determinations.
The main legal point established in the judgment is that the petitioner is entitled to a refund of the stamp duty amount under the Maharashtra Stamp Act, 1958, despite the initial document being unex....
The expiration of a limitation period may bar the remedy but not the right, ensuring that legitimate claims for refunds are not denied on technical grounds.
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