Refund of stamp duty is permissible under the Maharashtra Stamps Act when the transaction fails, and the application for refund must be made within the prescribed period.

JUDGMENT :

1) Petitioners have filed this petition challenging the order dated 24 June 2021 passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune rejecting Appeal No.133/2020 preferred by them challenging the order dated 23 September 2020 passed by the Collector of Stamps, Satara rejecting their application for refund of stamp duty.

2) Brief facts of the case are that Petitioners intended to purchase Flat Unit No. 7 admeasuring 975 sq. foot (built-up area) in building Rukmini Heights, Kasbe-Karad, Satara. Initially Agreement for Sale was executed between the parties on 19 March 2020, under which the Petitioners paid part consideration of Rs. 4,00,000/- out of the agreed consideration of Rs. 26,00,000/-. The balance was agreed to be paid on sanction of loan. The Agreement came to be registered on 20 March 2020. Petitioners paid stamp duty of Rs. 1,56,000/- and registration fees of Rs.26,000/-, total amount of Rs.1,82,000/-. It is the case of the Petitioners that possession of the flat was not handed over to them. They applied for loan to various financial institutions, which was not sanctioned. Petitioners also faced same difficulties and decided not to go ahead with the transaction and communicated to the vendor that they were not in a position to purchase the flat. Accordingly, Deed of Cancellation came to be executed and registered on 10 September 2020. On 15 September 2020, Petitioners filed application for refund of stamp duty with the Collector of Stamps. The Collector of Stamps however rejected the application by order dated 23 September 2020 referring to a covenant in the Agreement for Sale by inferring that possession of the flat was handed over to the Petitioners. The Collector of Stamps referred to Proviso to sub-section (1) of Section 48 of the Maharashtra Stamps Act, 1958 (Stamp Act) and held that refund was impermissible on account of handing over of possession of the flat in pursuance of the Agreement for Sale.

3) Petitioners preferred Appeal before the Second Respondent under the provisions of Section 53(A) of the Stamp Act. The Appeal is however rejected by order dated 24 June 2021. The Petitioner has accordingly filed the present petition challenging the orders passed by the Collector of Stamps on 23 September 2020 and by the Inspector General of Registration and Controller of Stamps and Chief Controlling Revenue Authority (CCRA) dated 24 June 2021.

4) Mr. Nargolkar, the learned counsel appearing for the Petitioner would submit that Respondent No.3 has grossly erred in rejecting the application for refund by erroneously inferring that possession of the flat was handed over to the Petitioners in pursuance of the Agreement for Sale. That flat’s possession was not handed over with execution of the Agreement for Sale. That the Deed of Cancellation specifically records so. That it is otherwise inconceivable that Flat’s possession would be handed over on payment of just 15% of agreed consideration.

5) Alternatively, Mr. Nargolkar would submit that even if possession of the flat is treated to have been handed over to the Petitioners, the application for refund of stamp duty was made under sub-section (1) of Section 48. That the application was made within the time limit of six months prescribed under sub-section (1) of Section 48. That the Proviso makes a special exception in case of Agreement for Sale by providing for extended period for making an application for refund of stamp duty. That in the present case, the application for refund was made within a period of six months from the date of execution of Agreement for Sale and that therefore the case would be governed by sub-section (1) of Section 48 and not by Proviso thereto. He would therefore submit that in either of the cases, the Petitioner is entitled to refund of stamp duty,

6) The petition is opposed by Ms. Bane, the learned AGP appearing for the Respondents. She would submit that the Proviso to sub-section (1) of Section 48 would govern ever