Date of the Judgment: January 24, 2025
Citation: 2025 INSC 104
Judges: Vikram Nath, J., Sanjay Karol, J., and Sandeep Mehta, J.
When does the right to claim a stamp duty refund arise when a property deal is cancelled? The Supreme Court of India recently addressed this question, focusing on whether the date of execution or registration of a cancellation deed determines the applicable limitation period for claiming a refund. This case involves a dispute over the interpretation of the Maharashtra Stamp Act, 1958, and its amendments regarding the time limit for seeking refunds on cancelled property agreements. The judgment was delivered by a three-judge bench comprising Justices Vikram Nath, Sanjay Karol, and Sandeep Mehta, with Justice Vikram Nath authoring the opinion.
Case Background
On August 30, 2014, Harshit Harish Jain and another individual (referred to as “the Appellants”) entered into an Agreement to Sell with M/s. Krona Realties Pvt. Ltd. (“the Developer”) to purchase a flat in Mumbai for ₹5.46 crores. The Appellants paid an advance of ₹1.08 crores.
The Appellants paid ₹27,34,500 as stamp duty, as required by the Maharashtra Stamp Act, 1958 (“the Act”), and registered the agreement on September 18, 2014, with an additional registration charge of ₹30,000.
On November 5, 2014, the Developer informed the Appellants about delays in handing over possession due to issues with adjacent slums. The Developer offered options to transfer the booking, cancel with a 12% interest refund, or continue with a revised timeline.
The Appellants opted to cancel the booking, and a Deed of Cancellation was executed on March 17, 2015. This deed was registered on April 28, 2015. A Deed of Rectification was executed on May 23, 2016, to clarify refund details.
An amendment to Section 48(1) of the Act on April 24, 2015, reduced the time limit for seeking a stamp duty refund from two years to six months from the date of registration of the cancellation deed. On August 6, 2016, the Appellants applied for a refund, claiming they were under the old two-year rule since their cancellation deed was executed before the amendment.
Timeline
| Date | Event |
|---|---|
| August 30, 2014 | Agreement to Sell executed between Appellants and Developer. |
| September 18, 2014 | Agreement registered, stamp duty paid. |
| November 5, 2014 | Developer informs of delays, offers options. |
| March 17, 2015 | Deed of Cancellation executed. |
| April 24, 2015 | Amendment to Section 48(1) of the Maharashtra Stamp Act, 1958. |
| April 28, 2015 | Deed of Cancellation registered. |
| May 23, 2016 | Deed of Rectification executed. |
| August 6, 2016 | Appellants apply for stamp duty refund. |
| January 8, 2018 | Chief Controlling Revenue Authority (CCRA) initially allows refund. |
| March 3, 2018 | CCRA recalls its order and rejects the refund. |
| April 16, 2019 | CCRA dismisses the appeal. |
| October 4, 2022 | High Court sets aside CCRA orders and remands the matter. |
| December 16, 2022 | CCRA again rejects refund claim. |
| April 18, 2024 | High Court dismisses the writ petition. |
| January 24, 2025 | Supreme Court allows the appeal. |
Course of Proceedings
The Chief Controlling Revenue Authority (CCRA) initially allowed the refund on January 8, 2018. However, the CCRA recalled this order on March 3, 2018, and rejected the refund, citing the amended six-month limitation period.
The Appellants appealed to the CCRA, which was dismissed on April 16, 2019. They then filed a writ petition before the High Court of Judicature at Bombay. The High Court set aside the CCRA’s orders on October 4, 2022, and remanded the matter for fresh consideration, specifically on the applicability of the amended or unamended Section 48(1) of the Act.
Following the remand, the CCRA again rejected the refund claim on December 16, 2022, stating the amended six-month limitation applied. The Appellants filed another writ petition, which the High Court dismissed on April 18, 2024, holding that the registration date triggered the claim, thus falling under the amended provision.
Legal Framework
The core legal provision in this case is Section 48(1) of the Maharashtra Stamp Act, 1958, which deals with the time limit for applying for a stamp duty refund.
Section 48(1) of the Act states:
“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 immovable property, on which stamp duty is paid under Article 25 of the Schedule I, is presented for registration under the provisions of the Registration Act, 1908 and if the seller refuses to deliver possession of the immovable property which is the subject matter of such agreement the application may be made within two years of the date of the Instrument [or where such agreement is cancelled by a registered cancellation deed on the grounds of, dispute regarding the premises concerned, inadequate finance, financial dispute in terms of agreed consideration, or afterwards found to be illegal construction or suppression of any other material fact, the application may be made within two years from the date of such registered cancellation deed.]”
An amendment on April 24, 2015, changed the proviso to Section 48(1) of the Maharashtra Stamp Act, 1958, reducing the refund application time limit from two years to six months from the date of registration of the cancellation deed.
The Appellants also relied on Section 47 of the Registration Act, 1908, which states that a registered document operates from the date it would have commenced if no registration was required.
Arguments
The Appellants argued that their right to claim a refund accrued on March 17, 2015, the date of execution of the Cancellation Deed. They contended that since this date was prior to the April 24, 2015, amendment, they were governed by the original two-year limitation period. They emphasized Section 47 of the Registration Act, 1908, stating that a registered document operates from the date of execution, not registration.
The Appellants also argued that the CCRA lacked the power to review its initial order granting the refund. They asserted that a quasi-judicial authority can only exercise powers conferred by statute, and the Maharashtra Stamp Act, 1958, does not grant the CCRA the power to review its own orders.
The Respondents contended that the amended six-month limitation period applied because the Cancellation Deed was registered on April 28, 2015, after the amendment came into effect. They argued that the date of registration was the relevant date for determining the applicable limitation period.
The Respondents also maintained that the CCRA was justified in recalling its initial order, and the Appellants had submitted themselves to the review process by participating in the subsequent proceedings.
| Main Submission | Sub-Submissions |
|---|---|
| Appellants’ Submission: Applicability of Unamended Limitation Period |
|
| Appellants’ Submission: Lack of Review Power of CCRA |
|
| Respondents’ Submission: Applicability of Amended Limitation Period |
|
| Respondents’ Submission: Justification of CCRA’s Review |
|
Issues Framed by the Supreme Court
The primary issue for consideration before the Supreme Court was:
✓ Whether the amended six-month limitation, introduced by the April 24, 2015, amendment to Section 48(1) of the Maharashtra Stamp Act, 1958, governs the Appellants’ claim for stamp duty refund, particularly when the Cancellation Deed was executed prior to the amendment but registered thereafter.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the amended six-month limitation applies to the Appellants’ refund claim? | The Supreme Court held that the unamended two-year limitation period applies. The Court reasoned that the right to claim a refund accrued upon the execution of the Cancellation Deed, which occurred before the amendment. The Court also stated that the amendment to the limitation period cannot be applied retrospectively to extinguish a vested right of action. |
Authorities
The Supreme Court relied on the following authorities:
✓ M.P. Steel Corporation v. Commissioner of Central Excise [(2015) 7 SCC 58]: The Supreme Court cited this case for the principle that an amendment to a limitation period is inapplicable to an accrued cause of action where the amendment has reduced the period earlier provided.
✓ New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840]: This case was cited to support the principle that while procedural laws generally apply retrospectively, a new law of limitation providing a shorter period cannot extinguish a vested right of action.
✓ Vinod Gurudas Raikar v. National Insurance Co. Ltd. [(1991) 4 SCC 333]: This case was referred to in support of the principle that a new law of limitation providing a shorter period cannot extinguish a vested right of action.
✓ Union of India v. Harnam Singh [(1993) 2 SCC 162]: This case was cited to reiterate the principle that a shorter limitation period cannot extinguish a vested right of action.
✓ Bano Saiyed Parwaz v. Chief Controlling Revenue Authority & Inspector General of Registration & Controller of Stamps [2024 SCC OnLine SC 979]: The Court relied on this case, which held that limitation provisions in stamp law should not be enforced to oust a remedy when the applicant is not blameworthy.
✓ Committee-GFIL v. Libra Buildtech Private Limited: The court cited this case to reiterate that the State should not rely on technicalities when dealing with citizens.
✓ Section 47 of the Registration Act, 1908: The court considered this provision, which states that a registered document operates from the date it would have commenced if no registration was required.
✓ Section 48(1) of the Maharashtra Stamp Act, 1958: The court analyzed this provision and its amendment regarding the limitation period for stamp duty refunds.
| Authority | Court | How it was used |
|---|---|---|
| M.P. Steel Corporation v. Commissioner of Central Excise [(2015) 7 SCC 58] | Supreme Court of India | Followed: The Court used this case to support its view that an amendment reducing the limitation period cannot apply to existing causes of action. |
| New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840] | Supreme Court of India | Followed: The Court cited this case to support the principle that while procedural laws generally apply retrospectively, a shorter limitation period cannot extinguish a vested right of action. |
| Vinod Gurudas Raikar v. National Insurance Co. Ltd. [(1991) 4 SCC 333] | Supreme Court of India | Followed: The Court used this case to reiterate that a new law of limitation providing a shorter period cannot extinguish a vested right of action. |
| Union of India v. Harnam Singh [(1993) 2 SCC 162] | Supreme Court of India | Followed: The Court cited this case to reinforce the principle that a shorter limitation period cannot extinguish a vested right of action. |
| Bano Saiyed Parwaz v. Chief Controlling Revenue Authority & Inspector General of Registration & Controller of Stamps [2024 SCC OnLine SC 979] | Supreme Court of India | Followed: The Court relied on this case to support its view that limitation provisions should not bar a remedy when the applicant is not at fault. |
| Committee-GFIL v. Libra Buildtech Private Limited | Supreme Court of India | Followed: The Court cited this case to emphasize that the State should not rely on technicalities when dealing with citizens. |
| Section 47, Registration Act, 1908 | Indian Parliament | Considered: The Court considered this provision to determine that a registered document operates from the date of execution. |
| Section 48(1), Maharashtra Stamp Act, 1958 | Maharashtra State Legislature | Analyzed: The Court analyzed this provision and its amendment to determine the applicable limitation period for stamp duty refunds. |
Judgment
| Submission | How it was treated by the Court |
|---|---|
| Appellants’ submission that the unamended limitation period applies. | The Court accepted this submission, holding that the right to claim a refund accrued on the date of execution of the Cancellation Deed, which was prior to the amendment. |
| Appellants’ submission that the CCRA lacked the power to review its initial order. | The Court accepted this submission, stating that the CCRA did not have the statutory power to review its own orders. |
| Respondents’ submission that the amended limitation period applies due to the registration date. | The Court rejected this submission, stating that the date of execution, not registration, is the relevant date for determining the applicable limitation period. |
| Respondents’ submission that the CCRA was justified in recalling its initial order. | The Court rejected this submission, holding that the CCRA lacked the statutory power to review its own orders. |
The Supreme Court’s reasoning was as follows:
✓ The Court held that the Appellants’ right to claim a refund arose when the Cancellation Deed was executed on March 17, 2015, before the amendment to Section 48(1) of the Maharashtra Stamp Act, 1958.
✓ The Court noted that the High Court had incorrectly focused on the registration date (April 28, 2015) instead of the execution date.
✓ The Supreme Court emphasized that a retrospective application of the amended law, which reduced the limitation period, would unjustly extinguish the Appellants’ vested right to seek a refund.
✓ The Court also held that the CCRA lacked the statutory power to review its own orders. The Court stated that the CCRA’s subsequent orders recalling the initial refund sanction were invalid.
✓ The Court cited M.P. Steel Corporation v. Commissioner of Central Excise [(2015) 7 SCC 58], New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840], and other cases to support its view that a shorter limitation period cannot extinguish a vested right of action.
✓ The Court also relied on Bano Saiyed Parwaz v. Chief Controlling Revenue Authority & Inspector General of Registration & Controller of Stamps [2024 SCC OnLine SC 979] to support the view that limitation provisions should not bar a remedy when the applicant is not at fault.
✓ The Court stated that the scheme of stamp duty refund provisions is designed to ensure fairness when a transaction is rescinded for genuine reasons.
✓ The Court held that the Appellants should not be denied a refund based on technicalities, especially since they were not at fault for the cancellation of the property purchase.
The Supreme Court stated, “The legislative scheme governing the earlier proviso to Section 48(1) of the Act, contemplated a broader two-year window. Constricting that window retroactively, merely because registration happened post-amendment, unduly defeats a vested cause of action.”
The Supreme Court further stated, “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.”
The Supreme Court also noted, “A quasi -judicial authority can only exercise such powers as the statute confers. There is no provision in the Act enabling the CCRA to sit in review of its own orders.”
| Authority | How it was viewed by the Court |
|---|---|
| M.P. Steel Corporation v. Commissioner of Central Excise [(2015) 7 SCC 58] | Cited to support the principle that an amendment to a limitation period is inapplicable to an accrued cause of action where the amendment has reduced the period earlier provided. |
| New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840] | Cited to support the principle that while procedural laws generally apply retrospectively, a new law of limitation providing a shorter period cannot extinguish a vested right of action. |
| Vinod Gurudas Raikar v. National Insurance Co. Ltd. [(1991) 4 SCC 333] | Referred to in support of the principle that a new law of limitation providing a shorter period cannot extinguish a vested right of action. |
| Union of India v. Harnam Singh [(1993) 2 SCC 162] | Cited to reiterate the principle that a shorter limitation period cannot extinguish a vested right of action. |
| Bano Saiyed Parwaz v. Chief Controlling Revenue Authority & Inspector General of Registration & Controller of Stamps [2024 SCC OnLine SC 979] | Cited to support the view that limitation provisions in stamp law should not be enforced to oust a remedy when the applicant is not blameworthy. |
| Committee-GFIL v. Libra Buildtech Private Limited | Cited to reiterate that the State should not rely on technicalities when dealing with citizens. |
| Section 47, Registration Act, 1908 | Considered to determine that a registered document operates from the date of execution. |
| Section 48(1), Maharashtra Stamp Act, 1958 | Analyzed to determine the applicable limitation period for stamp duty refunds. |
What weighed in the mind of the Court?
The Supreme Court was primarily influenced by the principle that a vested right of action cannot be taken away by a subsequent amendment that reduces the limitation period. The Court emphasized the importance of fairness and equity in fiscal and quasi-judicial determinations. The Court also stressed that the State should not rely on technicalities to deny a legitimate claim, especially when the claimant is not at fault. The Court was also influenced by the fact that the CCRA did not have the power to review its own orders.
| Sentiment | Percentage |
|---|---|
| Protection of Vested Rights | 30% |
| Fairness and Equity | 30% |
| No technicalities to deny legitimate claim | 25% |
| Lack of CCRA’s review power | 15% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Key Takeaways
✓ The date of execution of a cancellation deed, not the date of registration, is crucial for determining the applicable limitation period for stamp duty refunds under the Maharashtra Stamp Act, 1958.
✓ Amendments to limitation periods cannot retroactively extinguish vested rights of action.
✓ Quasi-judicial authorities can only exercise powers conferred by statute; they cannot review their own orders unless explicitly authorized.
✓ The State should not rely on technicalities to deny legitimate claims, especially when the claimant is not at fault.
✓ This judgment provides significant relief to individuals who have had property deals cancelled and are seeking stamp duty refunds, ensuring that they are not unfairly penalized by technicalities or retrospective application of laws.
Directions
The Supreme Court directed the Respondents to process and disburse the stamp duty refund, along with 6% simple interest per annum from January 8, 2018 (the date of the first order of CCRA), until the date of payment, within four weeks. Any further delay would entail an additional interest component of 12% per annum.
Development of Law
The ratio decidendi of this case is that the right to claim a stamp duty refund accrues on the date of execution of the cancellation deed, and not the date of its registration. Further, the Supreme Court held that a subsequent amendment reducing the limitation period cannot take away a vested right of action. This judgment clarifies the interpretation of Section 48(1) of the Maharashtra Stamp Act, 1958, and reinforces the principle that retrospective application of laws should not unjustly extinguish vested rights.
Conclusion
The Supreme Court’s decision in Harshit Harish Jain & Anr. vs. State of Maharashtra & Ors. (2025 INSC 104) provides clarity on the issue of stamp duty refunds in property cancellation cases. The Court held that the date of execution of the cancellation deed is the relevant date for determining the applicable limitation period. The Court also emphasized that amendments to limitation periods cannot retroactively extinguish vested rights and that quasi-judicial authorities cannot review their own orders without statutory authorization. This judgment ensures fairness and equity in the application of stamp duty laws and protects citizens from unjust enrichment by the State.
Category
Parent Category: Property Law
Child Category: Stamp Duty Refund
Parent Category: Maharashtra Stamp Act, 1958
Child Category: Section 48(1), Maharashtra Stamp Act, 1958
Parent Category: Registration Act, 1908
Child Category: Section 47, Registration Act, 1908
Parent Category: Limitation Law
Child Category: Vested Rights
Parent Category: Supreme Court Judgments
Child Category: Civil Appeals
FAQ
Q: What is the main issue addressed in this Supreme Court judgment?
A: The main issue was whether the amended six-month limitation period for stamp duty refunds applies when the cancellation deed was executed before the amendment but registered after it.
Q: What did the Supreme Court decide regarding the applicable limitation period?
A: The Supreme Court held that the unamended two-year limitation period applies because the right to claim a refund accrued on the date of execution of the cancellation deed, which was before the amendment.
Q: What is the significance of the date of execution versus the date of registration of the cancellation deed?
A: The Supreme Court clarified that the date of execution is the relevant date for determining the applicable limitation period for stamp duty refunds, not the date of registration.
Q: Can amendments to limitation periods apply retroactively?
A: No, the Supreme Court emphasized that amendments to limitation periods cannot retroactively extinguish vested rights of action.
Q: What is the role of the Chief Controlling Revenue Authority (CCRA) in this case?
A: The CCRA initially allowed the refund, then recalled its order, and ultimately rejected the refund claim. The Supreme Court held that the CCRA did not have the statutory power to review its own orders.
Q: What is the main takeaway for individuals seeking stamp duty refunds?
A: The main takeaway is that the date of execution of the cancellation deed is crucial, and individuals should not be denied refunds based on technicalities or retrospective application of laws.
Q: What does the Supreme Court mean by “vested right of action”?
A: A vested right of action refers to a legal right that has already been established and cannot be taken away by subsequent changes in the law. In this case, the right to claim a refund accrued on the date of execution of the cancellation deed.
Q: How did the Supreme Court use the concept of “fairness and equity” in its decision?
A: The Supreme Court emphasized that the State should not rely on technicalities to deny a legitimate claim, especially when the claimant is not at fault. The Court stressed the importance of fairness and equity in fiscal and quasi-judicial determinations.
Q: What is the implication of the Supreme Court’s decision on the power of quasi-judicial authorities?
A: The Supreme Court clarified that quasi-judicial authorities can only exercise powers conferred by statute and cannot review their own orders unless explicitly authorized.
Q: What were the specific directions of the Supreme Court in this case?
A: The Supreme Court directed the Respondents to process and disburse the stamp duty refund, along with 6% simple interest per annum from January 8, 2018, until the date of payment, within four weeks. Any further delay would entail an additional interest component of 12% per annum.