Case Note & Summary
The appellant, Prestige Exora Business Parks Limited, filed an intra-court appeal against an order dated 27.01.2025 passed by a learned Single Judge of the High Court of Karnataka in W.P.No.5031/2023. The appellant had challenged an order dated 03.12.2022 passed by the District Registrar of Stamps and Registration (respondent No.3) imposing cess/additional stamp duty of ₹2.5 crores, being 10% of the maximum stamp duty of ₹25 crores. The appellant paid the amount under protest on 01.02.2023 and sought refund with interest at 12% per month. The Single Judge dismissed the writ petition. In appeal, the Division Bench noted that the levy was purportedly under Section 4 of the Karnataka Cess on Stamp Duty Act, 1962 read with Section 45B of the Karnataka Stamp Act, 1957. However, the Cess Act only authorizes levy of cess on stamp duty payable under the Stamp Act, not on a notional maximum stamp duty. The court held that the levy was without authority of law and the appellant was entitled to refund. The court directed the respondents to refund ₹2.5 crores with interest at 6% per annum from the date of payment (01.02.2023) till the date of repayment, within four weeks. The appeal was allowed.
Headnote
A) Stamp Duty - Cess/Additional Stamp Duty - Refund - Levy of 10% cess on maximum stamp duty of ₹25 crores was imposed by District Registrar under Section 4 of Karnataka Cess on Stamp Duty Act, 1962 read with Section 45B of Karnataka Stamp Act, 1957 - Appellant paid under protest and sought refund - Single Judge dismissed writ petition - Division Bench held that the levy was without authority of law as the Cess Act does not authorize levy on maximum stamp duty - Directed refund of ₹2.5 crores with interest at 6% per annum from date of payment (01.02.2023) till repayment (Paras 1-10).
Issue of Consideration
Whether the appellant is entitled to refund of cess/additional stamp duty of ₹2.5 crores paid under protest, along with interest, when the levy was imposed without authority of law?
Final Decision
The appeal is allowed. The impugned order dated 27.01.2025 passed by the learned Single Judge in W.P.No.5031/2023 is set aside. The respondents are directed to refund the amount of ₹2.5 crores paid by the appellant as cess/additional stamp duty, along with interest at 6% per annum from the date of payment (01.02.2023) till the date of repayment, within four weeks from the date of receipt of the order.
Law Points
- Refund of cess/additional stamp duty paid under protest
- Levy of cess on maximum stamp duty without legislative authority
- Interest on refund of tax paid under mistake of law
- Section 4 of Karnataka Cess on Stamp Duty Act
- 1962
- Section 45B of Karnataka Stamp Act
- 1957
Case Details
2020 LawText (KAR) (08) 25
WA No. 401 of 2025 (GM-ST/RN)
Vibhu Bakhru, Chief Justice, C M Joshi
Saji P. John (for appellant), S.H. Raghavendra (AGA for respondents)
Prestige Exora Business Parks Limited
State of Karnataka, The Inspector General of Registration and Commissioner of Stamps, The District Registrar of Stamps and Registration of Shivajinagar
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Nature of Litigation
Intra-court appeal against dismissal of writ petition seeking refund of cess/additional stamp duty paid under protest.
Remedy Sought
Appellant sought refund of ₹2.5 crores paid as cess/additional stamp duty with interest at 12% per month from date of payment.
Filing Reason
Appellant challenged order dated 03.12.2022 imposing cess/additional stamp duty of ₹2.5 crores, being 10% of maximum stamp duty of ₹25 crores, as without authority of law.
Previous Decisions
Learned Single Judge dismissed W.P.No.5031/2023 on 27.01.2025.
Issues
Whether the levy of cess/additional stamp duty of ₹2.5 crores (10% of maximum stamp duty) was without authority of law?
Whether the appellant is entitled to refund of the amount paid under protest with interest?
Submissions/Arguments
Appellant argued that the levy of 10% cess on maximum stamp duty of ₹25 crores was not authorized under Section 4 of the Karnataka Cess on Stamp Duty Act, 1962 read with Section 45B of the Karnataka Stamp Act, 1957.
Respondents contended that the levy was valid and the writ petition was rightly dismissed.
Ratio Decidendi
The levy of cess/additional stamp duty at 10% of the maximum stamp duty of ₹25 crores was without authority of law as the Karnataka Cess on Stamp Duty Act, 1962 only authorizes levy of cess on stamp duty actually payable under the Karnataka Stamp Act, 1957, and not on a notional maximum. Therefore, the appellant is entitled to refund of the amount paid under protest with interest.
Judgment Excerpts
The appellant had discharged the levy of the said additional stamp duty/cess and accordingly claimed refund of the same along with interest at the rate of 12% per month, from date of payment – that is, from 01.02.2023 – till the date of repayment.
The levy of 10% cess on maximum stamp duty of ₹25 crores was not authorized under Section 4 of the Karnataka Cess on Stamp Duty Act, 1962 read with Section 45B of the Karnataka Stamp Act, 1957.
Procedural History
The appellant filed W.P.No.5031/2023 before the High Court of Karnataka challenging the order dated 03.12.2022 imposing cess/additional stamp duty. The learned Single Judge dismissed the writ petition on 27.01.2025. The appellant then filed the present intra-court appeal under Section 4 of the Karnataka High Court Act, which was allowed on 06.08.2025.
Acts & Sections
- Karnataka Cess on Stamp Duty Act, 1962: Section 4
- Karnataka Stamp Act, 1957: Section 45B
