[Cites 34, Cited by 0]
Bombay High Court
Suresh Ramchandra Sancheti And Anr vs The State Of Maharashtra Thr The Dept Of ... on 12 December, 2025
2025:BHC-AS:54670-DB
WP.8365.2024.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8365 OF 2024
1. Suresh Ramchandra Sancheti & Anr.
2. Mrs. Sunita Suresh Sancheti ....Petitioners
Versus
1. The State of Maharashtra,
Through the Department of Revenue,
2. The Controller of Stamps,
3. The Additional Controller of Stamps,
4. The Chief Controlling Revenue Authority,
and Revenue Authority and Inspector
General of Registration. ....Respondents
Mr. S. R. Nargolkar a/w Mr. Arjun Kadam & Ms. Neeta Patil,
Adv. for Petitioners.
Mr. Y. D. Patil, AGP for Respondent-State.
CORAM : SOMASEKHAR SUNDARESAN, J.
RESERVED ON : DECEMBER 8, 2025
PRONOUNCED ON : DECEMBER 12, 2025
JUDGEMENT:
Context and Factual Background:
1. Whether the extraordinary writ jurisdiction can be invoked to
seek a direction of a refund of stamp duty paid with the intention of
being impressed on an instrument that was never executed, is the
question that has arisen in this Writ Petition.
Digitally
signed by
AARTI
AARTI GAJANAN
GAJANAN PALKAR
PALKAR Date:
2025.12.12
16:21:04 DECEMBER 12, 2025
+0530
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2. The facts of the case fall in a very narrow compass. The
Petitioner No. 1, Suresh Ratanchand Sancheti (" Suresh") is the
designated guardian of his wife, Petitioner No. 2, Sunita Suresh
Sancheti ("Sunita"). Suresh was appointed as the legal guardian of
Sunita in 2019 pursuant to a guardianship petition filed in connection
with Sunita having suffered a 100% locomotor and mental disability
arising out of an aneurysmal stroke suffered in 2017.
3. Suresh finalised an agreement for sale with his neighbour for
purchase of a flat in the same building, sometime in July 2019.
Towards this end, an amount of Rs. 10.80 lakh was paid into the
treasury for the purchase of stamp on July 6, 2019 and he was issued a
challan and certificate confirming receipt of the amount paid on a
consideration amount of Rs. 1.80 crores. The same challan also
confirms receipt of registration fee of Rs. 30,000. The stamp duty
amount appears to have been credited into the State's account with the
Reserve Bank of India on July 8, 2019. The execution draft of the
instrument was finalised but was not executed. The payment of stamp
duty on the instrument intended to be executed was made
electronically through Punjab National Bank.
4. Learned Advocate for Suresh would contend that the
intention to acquire the property was reversed in 2020 during the
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Covid-19 Pandemic and the family decided that the transaction would
not be pursued and he would instead use the money on taking care of
Sunita.
5. Suresh filed an application for a refund on September 15,
2020, invoking Section 47(b) of the Maharashtra Stamp Act, 1958
("Stamp Act"), stating that the document was written but not signed by
any party. He would point out that the payment of stamp duty
electronically was a simple purchase of stamp and this was never
effectively impressed on any draft of any instrument and the stamps
purchased have been rendered useless. Suresh had stated that he was
unable to pay the consideration post-Covid and the transaction was
cancelled. The provisions invoked to seek allowance on the stamp duty
paid, were Section 47(b) read with Section 48(3) of the Stamp Act.
6. The Stamp Authorities rejected the application for refund,
primarily on the premise that the application for refund had been made
one year, two months and ten days after the purchase of the stamp duty
and not within six months of execution of the instrument as required
under Section 48(3) of the Stamp Act. The initial rejection was by an
order dated September 9, 2021 passed by the Additional Controller of
Stamps, and an appeal impugning such order was rejected by an order
dated October 4, 2022 passed by the Inspector General of Registration.
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7. Both these orders are impugned in this Petition.
Analysis and Findings:
8. Having heard the Learned Advocate for the Petitioners and
the Learned AGP for the State, and having examined the record with
their assistance, in my view, it is necessary to first place the factual
matrix within the relevant applicable legal matrix under the Stamp Act.
Scheme of the Stamp Act:
9. A brief overview of the scheme of the Stamp Act would be
vital. Section 3 of the Stamp Act provides that the " instruments" listed
in Schedule I of the Act would be chargeable with stamp duty indicated
in that schedule. As regards timing of payment, Section 3 provides that
where such an instrument that has not been executed in the State of
Maharashtra before the commencement of the Act and is executed in
the State, stamp duty would be payable. If such an instrument is
executed outside the State but relates to any property situated in the
State or anything to be done in the State and is brought into or received
in the State, stamp duty would be payable.
10. As regards time for stamping the instrument, Section 17 of
the Stamp Act deals with the time as to when the stamp must be affixed
on the instrument - that is discussed a bit later below.
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11. However, at the threshold, it is vital to examine the meaning
of the term "instrument". Section 2(l) of the Stamp Act defines an
instrument as including "every document by which any right or liability
is, or purports to be, created, transferred, limited, extended,
extinguished or recorded". The definition excludes a number of
instruments from its ambit, such as various types of negotiable
instruments, transfer of securities and the like - it is easy to notice that
the excluded instruments are those falling within the domain of the
Union of India and Parliament being on the Union List in the Seventh
Schedule of the Constitution of India. Such instruments are positively
left out of the ambit of instruments falling within the ambit of the State
of Maharashtra and the State Legislature in respect of matters that are
not on the Union List.
12. Therefore, for the charging provision of stamp duty to be
attracted, an instrument has to come into being. The instrument is
necessarily any kind of document by which any right or liability is
created or even merely recorded, and indeed any document by which
such right or liability is transferred, curtailed, expanded or
extinguished. If a document does not conform to the definition, it
would not be "instrument", and if it is not an instrument at all, the
charging provision of the Stamp Act would not apply to it.
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13. It is important to note that a document that purports to do
any of the things referred to above, would also be an instrument.
However, the timing for payment of stamp duty is its execution.
14. In other words, merely because an executed document may
be interpreted to not convey, record, affect or create a right or liability,
it would not fall outside the scope of being an instrument amenable to
stamp duty. However, what is vital is that the document must evidence
or purport to evidence what is set out in the definition in Section 2(l) of
the Stamp Act, and the charging provision would be attracted when the
instrument is executed within the State or is brought into the State
after execution outside the State.
15. Under Section 5 of the Stamp Act, an instrument relating to
several distinct matters would be chargeable with the aggregate amount
of the stamp duty applicable on each instrument relating to each such
matter. However, under Section 6 of the Stamp Act, an instrument that
falls within two or more descriptions set out in Schedule I would be
chargeable with the highest of the duties stipulated under Schedule I.
16. Section 10 of the Stamp Act deals with how stamp duty is to
be paid and provides that all duties payable on an instrument must be
paid and such payment must be indicated on the instrument by means
of stamps. Section 10(3) provides for such payment to be made by the
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means set out therein, and this includes payment by franking, cash,
demand draft, pay order or by electronic payment.
17. Under Section 17 of the Stamp Act, " all instruments
chargeable with stamp duty and executed in the State shall be stamped
before or at the time of execution or immediately thereafter on the next
working day following the day of execution ". This provision underlines
the importance of the role of execution in the process of stamping. It is
only instruments executed outside the State and brought into the State
that may be stamped within three months on receipt of the instrument
in the State. For such instruments, Section 19 of the Stamp Act
provides for a credit for any stamp duty already paid outside the State.
18. What is clear is that Stamp Duty is not a transaction tax but a
duty payable on an instrument, which necessarily has to conform to the
definition set out in the Act. The implication of payment of Stamp Duty
on a chargeable instrument is that the instrument would be admissible
in evidence in any proceedings. The payment of Stamp Duty lends
authenticity to the existence of the instrument in proceedings. The
detailed framework in this regard set out in the Stamp Act is not being
discussed here to avoid prolixity.
Section 47 analysed:
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19. It is against this backdrop and context that one must examine
Section 47 of the Stamp Act. This provision enables the Collector to
make allowance for impressed stamps spoiled in the cases set out in
that provision. Towards this end, Section 48 stipulates the period
within which an application may be made seeking allowance for stamps
that are impressed on an instrument and spoiled.
20. Section 47 of the Stamp Act reads thus:
47. Subject to such rules as may be made by the State Government as to the
evidence to be required, or the enquiry to be made, the Collector may, on
application made within the period prescribed in section 48, and if he is satisfied as
to the facts, make allowance for impressed stamps spoiled in the cases hereinafter
mentioned, namely:--
(a) the stamp on any paper inadvertently and undersignedly spoiled,
obliterated or by error in writing or any other means rendered unfit for the purpose
intended before any instrument written thereon is executed by any person;
(b) the stamp on any document which is written out wholly or in part, but
which is not signed or executed by any party thereto;
(c) the stamp used for an instrument executed by any party thereto which--
(1) has been afterwards found by the party to be absolutely void in law
from the beginning ;
(1A) has been afterwards found by the Court, to be absolutely void from the
beginning under section 31 of the Specific Relief Act, 1963;
(2) has been afterwards found unfit, by reason of any error or mistake therein,
for the purpose originally intended;
(3) by reason of the death of any person by whom it is necessary that is should
be executed, without having executed the same, or of the refusal of any such person
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to execute the same, cannot be completed so as to effect the intended transaction in
the form proposed;
(4) for want of the execution thereof by some material party, and his inability
or refusal to sign the same, is in fact incomplete and insufficient for the purpose for
which it was intended;
(5) by reason of the refusal of any person to act under the same, or to advance
any money intended to be thereby secured, or by the refusal or non-acceptance of
any office thereby granted, totally fails of the intended purpose;
(6) becomes useless in consequence of the transaction intended to be thereby
effected by some other instrument between the same parties and bearing a stamp of
not less value ;
(7) is deficient in value and the transaction intended to be thereby effected had
been effected by some other instrument between the same parties and bearing a
stamp of not less value ;
(8) is inadvertently and undersignedly spoiled, and in lieu whereof another
instrument made between the same parties and for the same purpose is executed and
duly stamped :
Provided that, in the case of an executed instrument, except that falling under sub-
clause (1A)], no legal proceeding has been commenced in which the instrument
could or would have been given or offered in evidence and that the instrument is
given up to be cancelled or has been already given up to the Court to be cancelled.
Explanation.--The certificate of the Collector under section 32 that the full duty
with which an instrument is chargeable has been paid is an impressed stamp within
the meaning of this section.
[Emphasis Supplied]
21. A plain reading of the foregoing would indicate that the
substantive right to an allowance for stamp duty has been set out in
multiple scenarios. The aforesaid provisions further underline the
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relevance of execution for an instrument and the relevance of
admissibility into evidence. The Explanation to Section 47 makes it
clear that a certificate of the Collector that full duty with which an
instrument is chargeable has been paid constitutes an "impressed
stamp" for purposes of Section 47 of the Stamp Act.
22. Section 47(b) deals with impressed stamp being spoiled in the
case of the stamp on a document which is written out wholly or in part,
but which is not signed or executed by any party thereto. Applying this
provision to the facts of the case what is apparent is that Suresh made
an electronic payment of the stamp duty and was issued a certificate
that the duty computed by him as being payable has been paid. What
we have on hand is a certificate that the stamp duty as computed by
Suresh has been paid, and not an adjudicated confirmation that full
stamp duty has been paid. The challan and receipt issued to Suresh is
not a certification that the Stamp Authorities have adjudicated and
confirmed that the full duty payable has been paid. The Stamp Act
being a fiscal statute, it should be strictly construed and a necessary
ingredient is that "full duty with which the instrument is chargeable " is
certified as having been paid for the certificate to constitute an
impressed stamp.
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23. However, what has transpired in the instant case is that the
document has not even been executed. The term "executed" is defined
in Section 2(i) with reference to instruments as "signed". Therefore,
what is clear is that in the instant case, in the absence of "execution", no
"instrument" has come into existence in the eyes of the law. Since the
execution draft of the agreement for sale was never signed and
therefore not executed, no instrument came into being for it to be
chargeable with Stamp Duty.
24. This is where the distinctive use of the word " document" in
Section 47(b) contradistinguished from the use of the word " paper" in
Section 47(a) and use of the word " instrument" used in Section 47(c)
gains significance. Cases covered by Section 47(c) would necessarily
have to be "instruments" within the meaning of the term in the Stamp
Act.
25. The term "paper" is also a defined term under Section 2(q) to
mean a vellum1, parchment or other material on which an 'instrument'
may be written. Section 47(b) of the Stamp Act consciously adopts the
word "document". Therefore, an unexecuted document, intended to be
a future instrument (and in respect of which stamp duty has been paid
electronically with every intention to execute the "document" to bring
an "instrument" into existence) would constitute an "impressed stamp".
1 A fine parchment made originally from the skin of a calf.
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The Petitioners' application for allowance invoked Section 47(b) of the
Stamp Act. The term "spoiled" would need to be understood as having
been rendered useless because the document was not executed.
Section 48 analysed:
26. Having examined the scope of Section 47 of the Stamp Act, it
would be pertinent to examine Section 48 of the Stamp Act, which
reads thus:
48. The application for relief under section 47 shall be made within the
following period, that is to say,--
(1) in the cases mentioned in clause (c)(5), within six months of the date of the
instruments :
Provided that, where an agreement to sale of immovable property on which stamp
duty is paid under Article 25 of the SCHEDULE I, is registered under the provisions
of the Registration Act, 1908 and thereafter such agreement is cancelled by a
registered cancellation deed for whatsoever reasons before taking the possession of
the property which is the subject matter of such agreement, within a period of five
years from the date of execution of the agreement to sale, then the application for
relief may be made within a period of six months from the date of registration of
cancellation deed.
(2) in the case when for unavoidable circumstances any instrument for which
another instrument has been substituted cannnot be given up to be cancelled, the
application may be made within six months after the date of execution of the
substituted instruments;
(3) in any other case, within six months from the date of purchase of stamps.
[Emphasis Supplied]
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27. Section 48(1) and Section 48(2) deal with "instruments" i.e.
documents that have actually been executed. Section 48(3) deals with
all other cases.
28. It will be seen that, in the instant case, Section 48(3) would
be attracted and the time limit for making the application is six months
from the date of purchase of stamps. The timing for seeking relief
under Section 48 is set out in this provision as linked to the time at
which the stamps were purchased. The timing of actually affixing the
stamp on the document is not linked to the deadline for the application.
Therefore, it is clear that for a refund to be claimed invoking Section
47(b) read with Section 48 of the Stamp Act, the deadline of six months
from the purchase can be said to be stipulated.
29. Applying the deadline stipulated in Section 48, evidently,
Suresh has applied beyond the period of six months from the purchase
of the stamps. The stamp duty was paid on July 6, 2019 while the
application was made on September 15, 2020. At the time the stamp
was purchased by making the e-payment through Punjab National
Bank, Suresh had every intention to execute the agreement for sale but
as events transpired and with the onset of the Covid Pandemic, the
proposed transaction was abandoned. It is then that Suresh made an
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application for refund, which was itself a decision made well after six
months from the purchase of the stamps.
Reasons for Intervention:
30. It is in this backdrop and in the light of precedents obtaining
from the approach approved of by the Supreme Court and earlier
decisions of other benches of this Court that, in my opinion, a case for
exercise of the extraordinary writ jurisdiction has been made out. The
substantive right to allowance for Stamp Duty is in Section 47 of the
Stamp Act while the procedural deadline for the application for
allowance to be made is stipulated in Section 48 of the Stamp Act.
Even a plain reading of the two provisions would show that Section 48
is not the provision dealing with the substantive right to a refund. It is
a procedural provision that is in aid of the substantive right to a refund
stipulated in Section 47 of the Stamp Act, read in the context of the
charging provisions on Stamp Duty including Section 3, Section 5,
Section 10 and Section 17 of the Stamp Act dealt with above.
31. A wider reading of the scheme of the Stamp Act would also
indicate that the law is not that once a stamp has been purchased,
making an allowance for it is impossible, save and except for
compliance with deadlines under Section 48 of the Stamp Act. For
example, Section 49 enables making an allowance for stamped papers
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used in printed forms for instruments by banks and bodies corporate if
such forms are no longer required by such person. While this provision
stipulates no time limit at all, Section 50 provides for allowances to be
made in relation to any instrument inadvertently stamped with a
greater value than necessary or wrongly stamped despite not being
charged with duty to be allowed for, but with a six-month deadline for
an application to be made.
32. Section 52 provides that where the stamps have not been
spoiled, or rendered unfit or rendered useless for the intended purpose,
but no immediate use is envisaged, the Collector is required to repay
the value of the stamp upon being satisfied that the purchase of the
stamp was with a bona fide intention to use them. Here too, a deadline
of six months has been fixed for making such an application.
33. What is clear is that value of the stamps once purchased are
not necessarily lost to a party that purchased the stamp. However, in
specific circumstances and with specific requirements, the Collector's
discretion to make allowances has been regulated. Indeed, as seen
above, there are some examples of the law not stipulating any deadline
and yet there are also circumstances in which deadlines have been
stipulated. The deadlines stipulated in this regard are meant to
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regulate the exercise of discretion by the Stamp Authorities in
processing applications for allowances.
34. In the facts of this case, stamp duty was paid by Suresh on the
document that was meant to become an instrument but never did
become one, because it was not executed. Assuming, in the absence of
a certificate from the Stamp Duty authorities that full payment has
been made on July 6, 2019, that the duty paid is indeed an impressed
stamp, such stamp has been rendered useless and can be considered to
be spoiled. Therefore, the deadline of six months from the purchase of
stamps would be attracted for the Stamp Duty authorities to exercise
their discretion in the matter. Therefore, the Stamp Authorities were
not wrong in their refusal to exercise their discretion owing to the
deadline for application to them for exercise of their discretion being
missed.
35. However, the question that arises is whether the
extraordinary jurisdiction of the writ court would be available for
making an intervention in the peculiar and specific facts and
circumstances of the case. Evidently, Suresh has a seriously ailing wife
to take care of, and the considerable amount of stamp duty paid by him
(Rs. 10.80 lakhs) has been rendered totally useless when the
transaction has been abandoned. As stated above, stamp duty is not a
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transaction tax but a duty to be paid and affixed by way of a stamp on
the instrument to enable such instrument to be admissible in evidence.
When the instrument has not even come into being and the document
on which the stamp is notionally impressed is useless, the question that
arises is whether the extraordinary jurisdiction of the writ court could
be used to make an intervention.
36. One cannot lose sight of the fact that to begin with, the very
charge of stamp duty under the Stamp Act is on instruments listed in
Schedule I to the Stamp Act in the amount of duty stipulated in that
schedule. It is the procedural provisions on how to pay stamp duty on
an intended instrument and how to handle applications for allowances
(refunds) for duty paid on a document that is not eventually executed
that have led to Suresh being denied an allowance.
37. Against this backdrop, certain judgements of the Supreme
Court and certain decisions by this Court provide guidance - most of
which are in fact rendered in situations where the instruments were
actually executed and the transactions evidence in such instruments
were thereafter reversed. Seen in that light, a case where a document is
stamped but was never converted into an executed instrument because
the intention to execute the instrument is abandoned, stands on a
better footing as compared with situations where stamp duty has been
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directed to be refunded despite execution, where a chargeable
instrument comes into being, after which other circumstances lead to
abandonment of the transaction documented in the executed
instrument.
Case Law Analysed:
38. In Committee-GFIL2, the Supreme Court was considering a
case where a committee set up to monitor the assets of a plantation
company under liquidation finalised a sale with successful bidders in
respect of certain properties. Sale deeds were executed and even
registered but the Committee did not hand over the properties. The
Court directed that the amounts paid towards partial discharge of the
purchase consideration be refunded. This led to an application for
refund of stamp duty paid on the sale deeds being filed with the
Government of Punjab, which was rejected on the basis of the similar
provisions in that state's law, stipulating a deadline for making such an
application. At the risk of copious extraction, the following analysis by
the Supreme Court is noteworthy:
21. The question which arises for consideration in this case is
whether the applicants are entitled to claim refund of stamp duty
amount of Rs 6.22 crores.
2 Committee-GFIL vs. Libra Buildtech Private Limted and Others - (2015) 16 SCC
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22. From the facts set out supra which are part of judicial record
of the cases decided by this Court and the Delhi High Court, it is
clear that despite the applicants depositing the entire sale
consideration (Rs 101.80 crores) and Rs 6.22 crores for stamp duty to
purchase the properties in question, and having performed their part
of contract, in letter and spirit, the GFIL Committee i.e. seller failed
to place the applicants in possession of the properties. This event
resulted in frustrating the purpose as was originally intended between
the parties.
24. In our considered opinion, keeping in view the undisputed facts
mentioned above, the applicants are also entitled to claim the refund
of entire stamp duty amount of Rs 6.22 crores from the State
Exchequer, which they spent for execution of sale deeds in their
favour in relation to the properties in question. This we say for the
following reasons.
25. In the first place, admittedly the transaction originally
intended between the parties i.e. sale of properties in question by
GFIL Committee to the applicants was not accomplished and failed
due to reasons beyond the control of the parties. Secondly, this Court
after taking into consideration all facts and circumstances also came
to the conclusion that it was not possible for the parties to conclude
the transactions originally intended and while cancelling the same
directed the seller (GFIL Committee) to refund the entire sale
consideration to the applicants.....
26. In our considered opinion, while deciding a case of this nature,
we have to also bear in mind one maxim of equity, which is well
settled, namely, actus curiae neminem gravabit meaning--an act of
the court shall prejudice no man. In Broom's Legal Maxims, 10th
Edn., 1939 at p. 73 this maxim is explained saying that it is founded
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upon justice and good sense and afforded a safe and certain guide for
the administration of law. This maxim is also explained in the same
words in Jenk. Cent. 118. This principle is fundamental to any system
of justice and applies to our jurisprudence. [See Busching Schmitz (P)
Ltd. v. P.T. Menghani [Busching Schmitz (P) Ltd. v. P.T. Menghani,
(1977) 2 SCC 835] and Raj Kumar Dey v. Tarapada Dey [Raj Kumar
Dey v. Tarapada Dey, (1987) 4 SCC 398] ].
28. In our considered opinion, the aforesaid maxim would apply
with full vigour in the facts of this case and if that is the position then
the applicants, in our opinion, are entitled to claim the refund of the
entire amount of stamp duty from the State Government which they
spent in purchasing the stamp papers for execution of sale deed in
relation to the properties in question. Indeed in the light of six reasons
set out supra which, in our considered opinion, in clear terms attract
the principle contained in the aforesaid maxim, the State has no right
to defend the order of the SDM for retaining the amount of stamp duty
paid by the applicants with them. The applicants' bona fide genuine
claim of refund cannot be denied on such technical grounds.
29. This case reminds us of the observations made by M.C.
Chagla, C.J. in Firm Kaluram Sitaram v. Dominion of India [Firm
Kaluram Sitaram v. Dominion of India, 1953 SCC OnLine Bom 39 :
AIR 1954 Bom 50] . The learned Chief Justice in his distinctive style
of writing observed as under in para 19: (Firm Kaluram case [Firm
Kaluram Sitaram v. Dominion of India, 1953 SCC OnLine Bom 39 :
AIR 1954 Bom 50] , SCC OnLine Bom)
"19. ... we have often had occasion to say that when the State
deals with a citizen it should not ordinarily rely on
technicalities, and if the State is satisfied that the case of the
citizen is a just one, even though legal defences may be open
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to it, it must act, as has been said by eminent Judges, as an
honest person."
We are in respectful agreement with the aforementioned observations,
as in our considered opinion these observations apply fully to the case
in hand against the State because except the plea of limitation, the
State has no case to defend their action.
30. Even apart from what we have held above, when we examine
the case of the applicants in the light of Sections 49 and 50 of the Act,
we find that the case of the applicants can be brought under Section
49(d)(2) read with Section 50(3) of the Act to enable the State to
entertain the application made by the applicants seeking refund of
stamp duty amount. The interpretation, which advances the cause of
justice and is based on the principle of equity, should be preferred.
We hereby do so.
32. In our considered opinion, even if we find that applications for
claiming refund of stamp duty amount were rightly dismissed by the
SDM on the ground of limitation prescribed under Section 50 of the
Act yet keeping in view the settled principle of law that the expiry of
period of limitation prescribed under any law may bar the remedy but
not the right, the applicants are still held entitled to claim the refund
of stamp duty amount on the basis of the grounds mentioned above. In
other words, notwithstanding dismissal of the applications on the
ground of limitation, we are of the view that the applicants are
entitled to claim the refund of stamp duty amount from the State in the
light of the grounds mentioned above.
[Emphasis Supplied]
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39. In Rajeev Nohwar3, the Supreme Court consciously invoked
Article 142 of the Constitution of India in a case where an executed
instrument was reversed pursuant to a ruling by the National
Consumer Disputes Redressal Commission on the premise that
rejection of the refund would violate principles of equity, justice and
fairness. The Supreme Court took the view that the pendency of
proceedings that led to the reversal of the transaction could not lead to
a denial of the refund of stamp duty despite the stamped instrument
being cancelled.
40. In the light of the decision in Committee-GFIL and Rajeev
Nohwar, a Learned Single Judge of this Court, in Satish Buba Shetty4
dealt with another case of a refund sought pursuant to disputes
between a flat purchaser and a developer being reversed by way of a
settlement in proceedings before the Real Estate Regulatory Authority.
The application for stamp duty was evidently well after the six-month
deadline, and the Learned Single Judge held that the Stamp Authorities
could not be faulted for their inability to exercise their discretion in
view of the six-month deadline having been missed. However, but in
exercise of the extraordinary writ jurisdiction, the Court allowed the
refund of stamp duty in the following words:
3 Rajeev Nowhar vs. Chief Controlling Revenue Authority, Maharashtra State, Pune
& Ors. - 2021 13 SCC 754
4 Satish Buba Shetty vs. Inspector General of Registration and Collector of Stamps
& Ors - 2024 (3) Mh.L.J. 293
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24. The authorities under the Stamp Act, 1958 may be justified in
rejecting the application in strict adherence to the letter of the law.
The statutory provision does not vest any discretion in the authorities.
It is trite, refund of the amount paid under any enactment is a matter
of a statutory right. Reading down the proviso to sub-section (1) of
section 48 of the Stamp Act, 1958 as directory may have serious
repercussions on the revenue. But, the High Court in exercise of the
extraordinary writ jurisdiction cannot be denuded of the power to
delve into the question as to whether the non-compliance of the
stipulation as to time was brought about by factors which were
beyond the control of the affected party and to insist performance
would have amounted to compelling such party to do impossible and,
thus, relieve such party of the hardship in deserving cases, where
injustice is writ large.
[Emphasis Supplied]
41. In Committee-GFIL, Article 142 had not been invoked. In
Rajeev Nowhar, Article 142 was invoked. The principles articulated in
both these decisions were invoked in Satish Buba Shetty in exercise of
the writ jurisdiction under Article 226 of the Constitution of India. In
Satish Buba Shetty, the Learned Single Judge indeed took the view that
the delays in litigation were outside the control of the party seeking the
refund, but it is also true that it was a case where there was a conscious
settlement arrived at between the parties to reverse the transaction,
although in the course of litigation.
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42. In S.K. Realtors5, a Learned Division Bench of this Court
dealt with a situation akin to the matter in hand - after franking a draft
of what would be an instrument, the parties changed their mind and
did not execute the instrument because the underlying transaction was
cancelled. The Learned Division Bench held thus:
10. The purpose behind incorporating section 48 of the
Maharashtra Stamp Act is clearly to ensure that in cases where
transaction is not executed, or cancelled before execution, then the
State is not entitled to claim revenue for execution of the said
document, and the State, therefore, is under an obligation to refund
the said amount. The State, therefore, in our view, cannot resort to
profiteering on the basis of a document which is not executed.
[Emphasis Supplied]
43. More recently, in Harshit Harish Jain6, a three-judge bench
of the Supreme Court was considering a case of whether a retroactive
effect of the amendment curtailing the right to a refund by truncating
the deadline for the application. In its analysis, relying on another
judgement of the Supreme Court in Bano Saiyed Parwaz7, even
assuming the amended and truncated deadline were to be applied, the
Supreme Court ruled as follows:
5 S.K. Realtors vs. The Inspector General of Stamps & Controller of Stamps,
Maharashtra State, Pune Ors. - 2016 SCC OnLine Bom 14536
6 Harshit Harish Jain and Anr. Vs. State of Maharashtra and Ors. - (2025) 3 SCC
7 Bano Saiyed Parwaz v. State of Maharashtra - (2025) 2 SCC 201
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19. Even if one were to hold that the appellants' claim is examined
under the amended six-month period, we are of the considered
opinion that a mere technical delay should not, by itself, extinguish an
otherwise valid claim. The scheme of stamp duty refund provisions is
designed to ensure fairness when the underlying transaction is
rescinded for bona fide reasons. The appellants were compelled to
cancel the purchase due to the developer's inability to deliver timely
possession, and were in no way remiss or at fault.
20. Denying a legitimate refund solely on technical grounds of
limitation, especially when the timing of registration fell close to the
legislative amendment, fails to strike the equitable balance ordinarily
expected in fiscal or quasi-judicial determinations. A measure of
discretion or consideration for good faith conduct is not alien to
statutory processes that safeguard citizens from unjust enrichment by
the State.
21. It has been laid down by this Court in Bano Saiyed
Parwaz v. State of Maharashtra that the limitation provision in stamp
law (to seek refund of stamp duty) should not be enforced so as to oust
the remedy when the applicant is otherwise not blameworthy. The
relevant paras of the same have been reproduced hereunder : (SCC
pp. 206-207, paras 14-16)
"14. In Committee-GFIL v. Libra Buildtech (P) Ltd.,
wherein the issue of refund of stamp duty under the same Act
was in question, this Court has observed and held inter alia as
under : (SCC pp. 44-45, paras 29 & 32)
'29. This case reminds us of the observations made
by M.C. Chagla, C.J. in Kaluram Sitaram
(Firm) v. Union of India [Kaluram Sitaram
(Firm) v. Union of India, 1953 SCC OnLine Bom 39 :
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AIR 1954 Bom 50] . The learned Chief Justice in his
distinctive style of writing observed as under in para
19 : [Kaluram (Firm) case [Kaluram Sitaram
(Firm) v. Union of India, 1953 SCC OnLine Bom 39 :
AIR 1954 Bom 50] , SCC OnLine Bom]
"19. ... we have often had occasion to say that when the
State deals with a citizen it should not ordinarily rely on
technicalities, and if the State is satisfied that the case of the
citizen is a just one, even though legal defences may be open
to it, it must act, as has been said by eminent Judges, as an
honest person."
We are in respectful agreement with the aforementioned
observations, as in our considered opinion these observations
apply fully to the case in hand against the State because except
the plea of limitation, the State has no case to defend their
action.
***
32. In our considered opinion, even if we find that
applications for claiming refund of stamp duty amount were
rightly dismissed by the SDM on the ground of limitation
prescribed under Section 50 of the Act yet keeping in view the
settled principle of law that the expiry of period of limitation
prescribed under any law may bar the remedy but not the
right, the applicants are still held entitled to claim the refund
of stamp duty amount on the basis of the grounds mentioned
above. In other words, notwithstanding dismissal of the
applications on the ground of limitation, we are of the view
that the applicants are entitled to claim the refund of stamp
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duty amount from the State in the light of the grounds
mentioned above.'
[Emphasis Supplied]
44. There are subsequent decisions of multiple Learned Single
Judges on the subject, following the principles enunciated in these
three cases. To avoid prolixity, I am not extracting from them in this
judgement.
Application to Facts:
45. I have given my anxious consideration to the situation at
hand and applied the precedents analysed above. Indeed, in
Committee- GFIL, RajeevNowhar and Satish Buba Shetty, there was
litigation that led to a reversal of the transactions evidenced by the
instruments on which stamp duty had been paid. In one view of these
aforesaid cases, the payment of stamp duty had already led to those
instruments being capable of constituting evidence in those very
proceedings. Yet, based on the outcome of those proceedings, when the
underlying transactions were reversed, although stamp duty is not a
transaction tax but a duty payable on instruments to enable their
admission into evidence in order to prove the transactions, the
judgements looked to the facts and circumstances of the respective
cases to direct refund of stamp duty when the transactions were
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reversed. In Satish Buba Shetty, as stated above, the reversal was
pursuant to a settlement arrived at consciously, although in the course
of litigation.
46. In sharp contrast to the aforesaid cases, in the instant case,
the draft of the agreement for sale was not even executed; no
instrument even came into existence; and therefore, there has been no
reliance on the document as evidence in any forum. Without execution
leading to an instrument coming into being, whether Stamp Duty is
ever chargeable is a core question that rears its head. Indeed, in those
cases, the delay in the conduct of judicial proceedings was factored in,
but in those cases, the documents had actually been executed and the
instruments not only came into existence but were also part of the
evidence in the legal proceedings involved. In the instant case, the
transaction was abandoned during the Covid Pandemic and the money
was felt better conserved owing to Sangita's health condition.
47. Moreover, the approach of the Courts in the aforesaid cases
has been just, equitable and fair, precisely in exercise of the writ
jurisdiction, even while the reasoning was applied to instruments on
which stamp duty had been paid. Transactions contracted and
evidenced by such instruments had been reversed but in the
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extraordinary facts of the respective cases, the Courts invoked the
extraordinary powers of the writ jurisdiction and directed the refund.
48. The net result of the multiple iterations and declaration of the
law can be said to be that the writ court would have the power to
exercise its extraordinary jurisdiction to deal with the adjectival
provisions of the deadline for an application in Section 48 of the Stamp
Act, even while the Stamp Authorities would need to adhere to the
stipulated deadlines. Looking to the nature of the facts and
circumstances of the case, the deadlines in Section 48 of the Stamp Act
would not be directory in nature for purposes of exercise of discretion
by the Stamp Authorities, but would be so in the exercise of the
extraordinary writ jurisdiction.
49. The substantive right to refund must be discerned from the
application of the substantive provisions of the Stamp Act to the facts of
the case, while the procedural deadlines in the provisions dealt with
above would bind the Stamp Authorities but not the writ courts.
50. In the instant case, Sunita has a 100% disability and the
material on record shows that Suresh is the court-approved guardian
taking care of her. The stamp duty being retained by the State would
constitute unjust enrichment and would result in an unfair and unjust
outcome for Suresh and Sunita, where without a chargeable instrument
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even having come into being (unlike in the aforesaid cases dealt with by
the Supreme Court), an ailing couple would be out of pocket and denied
an allowance of stamp duty on what was not even a still-born
instrument but was an unborn instrument that had been aborted.
51. The sole hitch is that six months had elapsed from the date of
purchase of the stamps. Adopting the very same approach articulated
in the three decisions analysed above, and applying it to the peculiar
facts of the instant case, in my opinion, a case has been made out for
exercise of the extraordinary jurisdiction in favour of the Petitioners.
Directions and Order:
52. For the aforesaid reasons, and based on the analysis set out
above, the captioned Writ Petition is allowed.
53. The orders impugned i.e. the order dated September 9, 2021
and October 4, 2022 are hereby quashed and set aside.
54. The claim for allowance of stamp duty impressed on the
document that would have become an instrument i.e. the agreement for
sale is allowed.
55. The Petitioners shall be paid the refund of stamp duty paid
electronically on July 6, 2019 within a period of six weeks from the
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upload of this judgment on the website of this Court in accordance with
the rules for refund. The Respondents shall process any claim for
interest in accordance with applicable law.
56. Rule is made absolute in the aforesaid terms. No costs.
57. All actions required to be taken pursuant to this order shall
be taken upon receipt of a downloaded copy as available on this Court's
website.
[SOMASEKHAR SUNDARESAN J.]
DECEMBER 12, 2025
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