Supreme Court on refund of stamp duty

Supreme Court: In a civil appeal against a decision of the Bombay High Court whereby the appellant’s demand for refund of Stamp Duty paid towards an un-executed conveyance deed was dismissed and upheld the Chief Controlling Revenue Authority and Inspector General of Registration and Controller of Stamps’ order (respondent), the Division Bench of BR Gavai and Prashant Kumar Mishra*, JJ. allowed the appeal and set aside the impugned orders and decision.

Factual Matrix

The appellant agreed to purchase the property from the vendor and to that effect, they prepared a deed of conveyance which was sent for adjudication to respondent on 07-05-2014 for payment of stamp duty, which was assessed at Rs.25,34,350. Accordingly, the appellant paid this sum and purchased the stamp duty on 13-05-2014 for registration of conveyance deed. Albeit, the stamp duty was paid by the appellant to respondent on 13-05-2014, the conveyance deed was not registered as the vendor had earlier sold the said property to a third party in 1992. Thereafter, the appellant decided to cancel the said transaction, but was unable to contact the vendor which compelled him to file a complaint with the police. Thereafter, the vendor executed the cancellation deed on 13-11-2014. However, the appellant had on 22-10-2014 already applied online for refund of the stamp duty as per Section 48 of the Maharashtra Stamp Act, 1958 (‘the Act’) and had filed written application on 06-12-2014. The appellant’s case was rejected by respondent on the ground that the application filed by her was beyond the limitation period as per Section 48 of the Act.

Analysis and Decision

The Court noted that the conveyance deed was not lodged for registration, as soon as the appellant become aware of the fraud played by the vendor, she immediately applied online on 22-10-2014 for refund of the stamp duty. It was only due to the intervention of the Police, the vendor was traced, and a cancellation deed was executed on 13-11-2014. Hence, the Court said that prima facie, the appellant was pursuing her remedies in law and she was not lax in her approach towards seeking refund of the stamp duty paid by her and she was denied the same only on the ground of limitation.

The Court found that the High Court’s finding that the appellant’s application for refund dated 22-10-2014 was not maintainable in law as it was filed before the cancellation of the conveyance deed dated 13-11-2014 was misplaced in so far as while submitting the online application no caution was advanced to the appellant that all of the documents and materials for the satisfaction of the Collector should be filed with the application, either online or hard copy itself. The Court added that the High Court’s finding was contrary to the requirements stipulated by Sections 47 and 48 of the Act which envisages that only the application for relief under Section 47 of the Act to be made within six months of the date of the instrument, which was done by the appellant in the present case.

The Court explained that in terms of Section 47 of the Act, the evidence required and enquiry to be made is a separate process altogether and for refund under Section 47 (c) (1) and (5) of the Act, evidence is not required to be filed along with the application, either the online application or separately on the same day by way of hard copy. The Court relied on Committee-GFIL v. Libra Buildtech (P) Ltd., (2015) 16 SCC 31 wherein the issue of refund of stamp duty under the Act was in question, and it was held that “even if we find that applications for claiming refund of stamp duty amount were rightly dismissed by the SDM on the ground of limitation prescribed under Section 50 of the Act, yet keeping in view the settled principle of law that the expiry of period of limitation prescribed under any law may bar the remedy but not the right, the applicants are still held entitled to claim the refund of stamp duty amount on the basis of the grounds. In other words, notwithstanding dismissal of the applications on the ground of limitation, the applicants are entitled to claim the refund of stamp duty amount from the State in the light of the grounds mentioned.

Hence, the Court said that the legal position is settled and reiterated that when the State deals with a citizen it should not ordinarily rely on technicalities, even though such defences may be open to it. Thus, the Court considered the appellant’s case fit for refund of stamp duty as it is settled law that the period of expiry of limitation prescribed under any law may bar the remedy but not the right. The Court held that the appellant was entitled to claim the refund of stamp duty amount on the basis of the fact that the appellant pursued her case as per remedies available to her in law and should not be denied the said refund merely on technicalities as the case of the appellant is a just one wherein she had paid the stamp duty bonafide for registration but fraud was played on her by the vendor which led to the cancellation of the conveyance deed.

Therefore, the Court allowed the appeal and we set aside the impugned orders and directed the State to refund the said stamp duty amount of Rs. 25,34,400/- deposited by the appellant.


2024 SCC OnLine SC 979

Appellants :
Bano Saiyed Parwaz

Respondents :
Chief Controlling Revenue Authority & Inspector General of Registration & Controller of Stamps

Advocates who appeared in this case

For the petitioner:

For Respondent:


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