Homebuyers Win: Allahabad HC Rules 8-Year Stamp Duty Refund Limit Can’t Apply Retrospectively [Read Order]

In a recent judgment, the Allahabad High Court quashed the denial of a stamp duty refund, ruling that the 8-year limitation period introduced by the U.P. Stamp (5th Amendment) Rules, 2021, applies prospectively and cannot defeat accrued rights.

Petitioners Seema Padalia and another filed a writ petition challenging an order dated 16.05.2024, which rejected their request for a Rs. 4.37 lakh stamp duty refund. The dispute arose from a failed tripartite sale and sublease agreement for a residential unit in "Homes 121," Noida.

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The petitioners had purchased stamp papers worth Rs. 4.37 lakh in 2015 for the transaction but due to unforeseen restrictions imposed by the New Okhla Industrial Development Authority (NOIDA), the agreement could not be executed. After surrendering their allotment in November 2023, they applied for a refund, which was denied based on the 2021 amendment imposing an 8-year limitation period.

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The respondents argued that the refund request was time-barred under the amended rules, which restricted stamp duty refunds beyond 8 years from the date of purchase. The petitioners countered, relying on the Supreme Court’s ruling in Harshit Harish Jain & Anr. v. State of Maharashtra & Ors. (2025 SC 105), which held that amendments reducing limitation periods cannot apply retrospectively to accrued claims.

The court also referenced earlier judgments emphasizing that technical delays should not extinguish legitimate claims and that the State cannot unjustly enrich itself by denying refunds based on procedural hurdles.

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A bench comprising Justices Shekhar B. Saraf and Vipin Chandra Dixit observed that the petitioners' right to a refund existed before the 2021 amendment and that the impugned order had failed to consider Supreme Court precedents. The court held that retrospective application of the amendment would be unjust, explaining that homebuyers should not be denied legitimate refunds on technical grounds.

The court ruled that the refund application must be reconsidered in light of these judgments and directed the concerned authorities to review and process the petitioners’ refund claim within three months. The writ petition was allowed.

To Read the full text of the Order CLICK HERE

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