Case Note & Summary
The Petitioner, M/s Shweta Infrastructure and Housing (I) Pvt. Ltd., entered into an agreement for sale on 29 September 2014 with the Khatib family for purchase of non-agricultural land in Nashik for a total consideration of Rs.51,51,50,000/-. The Petitioner paid Rs.1,51,50,000/- as part consideration and stamp duty of Rs.3,09,09,000/- on the agreement, which was registered. Due to a downturn in the real estate market and financial constraints, the Petitioner could not arrange the balance consideration of Rs.50 crores by the stipulated date. Consequently, the transaction did not proceed, and no sale deed was executed. The Petitioner applied for refund of stamp duty under Sections 47 and 48 of the Maharashtra Stamp Act, 1958. The Chief Controlling Revenue Authority (CCRA) rejected the application on 12 December 2019 and dismissed the appeal on 18 June 2020, holding that the agreement was not void ab initio and that the application was time-barred. The Petitioner challenged these orders by way of a writ petition under Article 227 of the Constitution. The High Court analyzed the provisions of Sections 47 and 48, which allow refund of stamp duty when an instrument is not followed by a conveyance within the prescribed period, subject to certain conditions. The court noted that the agreement for sale was not followed by a sale deed, and there was no allegation of fraud or misrepresentation. The court held that the CCRA erred in rejecting the refund on the ground that the agreement was not void ab initio, as Section 47 does not require the instrument to be void. The court also found that the application was within the limitation period of six months from the date of the agreement as per Section 48. The High Court allowed the petition, set aside the impugned orders, and directed the respondents to refund the stamp duty of Rs.3,09,09,000/- after deducting 10% as per Section 48, within eight weeks.
Headnote
A) Stamp Duty - Refund - Sections 47 and 48 Maharashtra Stamp Act, 1958 - Agreement for Sale Not Followed by Conveyance - Petitioner entered into an agreement for sale and paid stamp duty of Rs.3,09,09,000/-. Due to market downturn and inability to arrange balance consideration, the transaction did not proceed. Petitioner applied for refund under Sections 47 and 48. The Chief Controlling Revenue Authority rejected the application on grounds of delay and that the agreement was not 'void ab initio'. The High Court held that the authority erred in rejecting the refund as the instrument was not followed by a conveyance and there was no fraud or misrepresentation. The court allowed the refund subject to deduction of 10% as per Section 48. (Paras 1-20) B) Limitation - Refund Application - Section 48 Maharashtra Stamp Act, 1958 - Period of Limitation - The application for refund was made on 12.12.2019, within six months from the date of the agreement (29.09.2014) as per Section 48. The authority's finding of delay was incorrect. (Paras 15-18) C) Stamp Duty - Refund - Section 47 Maharashtra Stamp Act, 1958 - Void Agreement - The authority's view that the agreement was not void ab initio was irrelevant; the section applies when the instrument is not followed by a conveyance. The court clarified that the provision does not require the agreement to be void. (Paras 12-14)
Issue of Consideration
Whether the Petitioner is entitled to refund of stamp duty paid on an agreement for sale that did not culminate into a sale deed due to market downturn and financial constraints, under Sections 47 and 48 of the Maharashtra Stamp Act, 1958.
Final Decision
The High Court allowed the writ petition, set aside the orders dated 12 December 2019 and 18 June 2020, and directed the respondents to refund the stamp duty of Rs.3,09,09,000/- after deducting 10% as per Section 48 of the Maharashtra Stamp Act, 1958, within eight weeks.
Law Points
- Refund of stamp duty
- Sections 47 and 48 Maharashtra Stamp Act
- 1958
- Agreement for sale not followed by conveyance
- Market downturn as valid ground for non-performance
- No fraud or misrepresentation
- Limitation for refund application
