Case Note & Summary
The petitioners, Harshit Harish Jain and another, entered into an Agreement for Sale dated 30 August 2014 with M/s Krona Realties Private Limited for purchase of a flat. They paid stamp duty of Rs.27,34,500/- and registration charges. On 5 November 2014, the developer informed them that possession could not be handed over by 31 March 2017 due to issues relating to adjacent slums, and offered three options: transfer of booking, refund with interest, or continue with changed possession date. The petitioners opted for cancellation, and a Deed of Cancellation was executed on 17 March 2015 and registered on 28 April 2015. A Deed of Rectification was executed on 23 May 2016. The petitioners applied for refund of stamp duty on 6 August 2016. The Additional Stamp Inspector initially questioned the cancellation as premature, but the Chief Controlling Revenue Authority (CCRA) initially allowed refund on 8 January 2018. However, CCRA subsequently rejected the refund on 3 March 2018 citing Section 48(1) of the Maharashtra Stamp Act, which requires application for refund within six months from the date of cancellation. The petitioners' appeal under Section 53 was rejected on 16 April 2019. The petitioners then filed Writ Petition No.8276 of 2019, which was disposed of with a direction to CCRA to reconsider. CCRA again rejected the appeal on 16 December 2022, leading to the present petition. The High Court held that the cancellation was for valid reasons (developer's inability to deliver possession) and the application for refund was made within a reasonable time. The court noted that the CCRA had initially allowed refund, and the subsequent rejection was erroneous. The court set aside the impugned order and directed refund of Rs.27,34,500/- with interest at 6% per annum from the date of application until payment.
Headnote
A) Stamp Duty - Refund - Cancellation of Agreement for Sale - Section 48(1) Maharashtra Stamp Act, 1958 - Refund of stamp duty paid on an agreement for sale which was cancelled due to developer's failure to deliver possession - The court held that the cancellation was for valid reasons and the application for refund was made within a reasonable time, thus the bar under Section 48(1) did not apply - The Chief Controlling Revenue Authority's order rejecting refund was set aside (Paras 1-12).
Issue of Consideration
Whether the Petitioners are entitled to refund of stamp duty paid on an Agreement for Sale which was subsequently cancelled due to the developer's inability to deliver possession, and whether the application for refund was barred by limitation under Section 48(1) of the Maharashtra Stamp Act.
Final Decision
The High Court allowed the Writ Petition, set aside the order dated 16 December 2022 passed by the Chief Controlling Revenue Authority, and directed the respondents to refund the amount of Rs.27,34,500/- to the petitioners along with interest at the rate of 6% per annum from the date of application (6 August 2016) until the date of payment.
Law Points
- Refund of stamp duty
- Cancellation of agreement for sale
- Section 48 Maharashtra Stamp Act
- Limitation for refund application
- Valid reasons for cancellation
Case Details
2024 LawText (BOM) (04) 110
WRIT PETITION NO. 2018 OF 2024
Mr. Prathamesh Kamath a/w Ms. Heenal Wadhwa i/b The Law Point for Petitioners, Mr. Vishal Thadani, Addl. GP for State-Respondent Nos. 1 & 3
Harshit Harish Jain & Anr.
State of Maharashtra & Ors.
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Nature of Litigation
Writ Petition challenging order of Chief Controlling Revenue Authority rejecting refund of stamp duty.
Remedy Sought
Petitioners sought refund of stamp duty of Rs.27,34,500/- paid on an Agreement for Sale which was subsequently cancelled.
Filing Reason
The Chief Controlling Revenue Authority rejected the petitioners' appeal for refund of stamp duty on the ground that the application was not made within six months from the date of cancellation as required under Section 48(1) of the Maharashtra Stamp Act.
Previous Decisions
CCRA initially allowed refund on 8 January 2018, but later rejected it on 3 March 2018. Appeal under Section 53 was rejected on 16 April 2019. Writ Petition No.8276 of 2019 was disposed of with direction to reconsider. CCRA again rejected appeal on 16 December 2022.
Issues
Whether the petitioners are entitled to refund of stamp duty paid on an Agreement for Sale which was cancelled due to developer's failure to deliver possession.
Whether the application for refund was barred by limitation under Section 48(1) of the Maharashtra Stamp Act.
Submissions/Arguments
Petitioners argued that the cancellation was for valid reasons (developer's inability to deliver possession) and the application for refund was made within a reasonable time.
Respondents argued that the application was not made within six months from the date of cancellation as required under Section 48(1) of the Maharashtra Stamp Act.
Ratio Decidendi
The bar under Section 48(1) of the Maharashtra Stamp Act for refund of stamp duty within six months from the date of cancellation is not absolute. Where the cancellation is for valid reasons and the application for refund is made within a reasonable time, the authority may grant refund. In this case, the cancellation was due to the developer's inability to deliver possession, and the application was made within a reasonable time.
Judgment Excerpts
By this Petition, Petitioners challenge Order dated 16 December 2022 passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune rejecting their Appeal and holding that they are not eligible for grant of refund of Rs.27,34,500/- against stamp duty.
Petitioners opted for cancellation of the transaction and accordingly a Deed of Cancellation was executed between Petitioners and the Developer on 17 March 2015.
CCRA passed Order dated 8 January 2018 allowing refund of amount of Rs.27,33,500/- to Petitioners.
CCRA issued Order dated 3 March 2018 rejecting the application for refund by referring to provisions of Section 48(1) of the Maharashtra Stamp Act stating that the application for refund was not made within six months from date of registration of the Cancellation Deed.
Procedural History
Petitioners filed application for refund on 6 August 2016. CCRA initially allowed refund on 8 January 2018, but rejected it on 3 March 2018. Appeal under Section 53 was rejected on 16 April 2019. Writ Petition No.8276 of 2019 was filed and disposed of with direction to reconsider. CCRA again rejected appeal on 16 December 2022. Present Writ Petition filed in 2024.
Acts & Sections
- Maharashtra Stamp Act, 1958: Section 48(1), Section 53
