ORDER

1. The petitioner entered into a Registered Lease Deed dated 19.08.1996 with Sri E. Sheshadri for the development of the vacant floor above the existing ground floor premises and for the occupation of the ground floor. The lease period, as stated in the Lease Deed, is for 30 years. The rent payable by the petitioner for the ground floor was as specified in clause 2(b) of the Registered Lease Deed. Additionally, the Lease Deed provided for the petitioner to occupy the developed property constructed by them for a period of 30 years from the date of the Lease Agreement. The Sub Registrar concerned registered the Lease Deed without raising any objections regarding the deficit stamp duty paid on the Registered Lease Deed.

2. Under these circumstances, the Respondents issued an order dated 07.06.2005, stating that the petitioner is liable to pay a deficit stamp duty of Rs.2,88,000/- and a registration fee of Rs.57,600/-, amounting to a total sum of Rs.3,45,600/-. This order prompted the petitioner to file an appeal before the Karnataka Appellate Tribunal, Bengaluru. The Tribunal confirmed the order passed by the Respondent, prompting the petitioner to file the present petition.

3. Learned counsel for the petitioner submits that the Lease Deed was registered on 19.08.1996 and that proceedings under Section 46A of the Karnataka Stamp Act, 1957, could have been initiated only within five years from the date on which the deficit stamp duty became payable. However, the Respondents initiated the proceedings under Section 46A of the Act after a lapse of more than 9 years, which makes the proceedings barred by limitation. Hence, the order passed by the Respondent lacks authority. The counsel also placed reliance on the order passed by a Co-ordinate Bench of this Court in W.P.No.37072/2017, disposed of on

17.12.2021.

4. Learned Additional Government Advocate (AGA) for the State submits that notices were issued to the petitioner within the prescribed limitation period and that the petitioner, having not paid the deficit stamp duty on the registered Lease Deed, was rightly subject to the impugned order passed by the Respondent, which does not warrant interference.

5. The arguments of learned counsel for both parties have been duly considered.

6. It is an undisputed fact that the Lease Deed was registered on 19.08.1996. The audit objection regarding the deficit stamp duty and registration charges paid on the registered Lease Deed was raised in the year 2005. Section 46A of the Karnataka Stamp Act deals with the recovery of stamp duty not levied or short-levied. It states that when an instrument chargeable with duty has not been duly stamped, the competent authority may, within five years from the date of the commencement of the Karnataka Stamp (Amendment) Act, 1939, or the date on which the duty became payable, whichever is later, serve a notice on the person by whom the duty was payable, requiring them to show cause why the proper duty or the amount required to make up the same should not be collected. The proviso to this provision states that in cases of fraud, collusion, willful misstatement, suppression of facts, or contravention of any provisions of this Act or its rules with the intent to evade payment of duty, proceedings can be initiated within ten years from the date on which the duty was payable.

7. In the present case, there is no allegation that the petitioner either fraudulently, in collusion, through misrepresentation, or by suppression of facts got the Lease Deed Agreement registered. Therefore, the competent authority was required to initiate proceedings within five years from the date on which the duty became payable. The State Government has not presented any document to substantiate that notices were issued to the petitioner within five years from the date on which the duty became payable. Consequently, since the proceedings were initiated after the expiration of the limitation period prescribed under Section 46A of the Act,