Non execution of document: Bombay HC quashes order rejecting refund of stamp duty [Read Order]

A Single Bench of the Bombay High Court quashed order rejecting refund of stamp duty as being barred by limitation on the ground of non-execution of document under consideration.

After negotiations and rounds of discussion, the owners of the land, in principle, agreed to execute a development agreement for a consideration of Rs. 1 crore in favour of the Petitioner, Freedom City Ventures. The petitioner, thereafter, prepared the draft of the development agreement and submitted the same to the Joint District Registrar for the purposes of adjudication and determination of the stamp duty that would be payable on the said document.

It is the case of the Petitioner, that subsequently, the Petitioner was informed by the owners that out of 11 co-owners, of the subject property, 5 of them have refused to enter into the development agreement and therefore, the agreement could not be executed.

Accordingly, as per the provisions of Sections 47 and 48 of the Maharashtra Stamp Act, 1958, (the Maharashtra Stamp Act), Petitioner submitted an application to the Joint District Registrar for the refund of stamp duty of Rs. 40 lakhs after deducting the necessary charges.

Section 52 of the Maharashtra Stamp Act obliges the State Government to repay to a person the value of stamps in money where a person is possessed of a stamp which has not been spoiled or rendered unfit or useless for the purpose intended but for which he has no immediate use.

Section 52-B of the Maharashtra Stamp Act mandates that the stamps will be rendered invalid, if they have not been used or no allowance has been claimed, in respect thereof, within a period of six months from the date of purchase. The application for refund has been made within a period of six months i.e., an allowance has been claimed within a period of six months

In present case that the stamp duty of an amount of Rs. 40 lakhs have been purchased by the Petitioner, which has not been used as the development agreement was not executed in view of the five co-owners refusing to execute the same. The State exchequer has received this amount.

Hence the State is under an obligation to refund the said amount as per rules on the basis of a document which is not executed. In this case also the application has, as observed, been made in time and the State would be obliged to refund the same, as per rules.

The Bench of Justice Abhay Ahuja observed that “In the circumstances, holding the application for refund of stamp duty to be time barred requires to be set aside.”

To Read the full text of the Order CLICK HERE

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