Court Rules Impugned Action by State Authorities as Ultra Vires Due to Expiration of Statutory Limitation Period and Lack of Jurisdiction
In a significant judgment, the Bombay High Court has quashed a recovery order demanding deficit stamp duty from Kolte Patil Developers Ltd. The court ruled the action taken by the State of Maharashtra as ultra vires, emphasizing the need for strict adherence to statutory provisions under the Maharashtra Stamp Act, 1958. The case, presided over by Justice Amit Borkar, revolved around a Development Agreement executed by Kolte Patil Developers Ltd. in 2004 with Voltas Limited, which was initially deemed to have sufficient stamp duty as per a 2006 order by the Collector.
The legal tussle began when, in 2009, the Auditor General raised objections, treating the Development Agreement as a conveyance that warranted a higher stamp duty. However, this objection was initially dismissed in 2006, and the order attained finality, with no subsequent appeal or revision filed within the statutory six-year period.
Despite this, in 2014, an order was issued demanding a substantial sum of Rs.1,96,20,000 in alleged deficit stamp duty, which Kolte Patil Developers Ltd. contested in the High Court. The court highlighted that the reopening of stamp duty assessment beyond the six-year period stipulated under Section 53A of the Maharashtra Stamp Act lacked jurisdictional authority. Moreover, the court underscored that only the Registering Officer, who initially registered the document, could impound the instrument under Section 33A, a power misappropriated by another officer in this case.
Justice Borkar noted that the alternative remedy argument put forth by the State did not preclude the court’s writ jurisdiction, especially when jurisdictional competence was fundamentally questioned. The court’s decision to quash the April 2014 recovery order underscores the judiciary's role in maintaining statutory adherence and protecting parties from retrospective fiscal liabilities.
The ruling serves as a reminder of the importance of procedural compliance and the limitations of administrative powers under the Maharashtra Stamp Act, offering relief to Kolte Patil Developers Ltd. from a hefty financial imposition deemed beyond statutory bounds.
Bottom Line:
Maharashtra Stamp Act - Finality of endorsement under Section 32 - Final adjudication of stamp duty sufficiency cannot be reopened beyond six years without adhering to statutory provisions.
Statutory provision(s): Maharashtra Stamp Act, 1958 Sections 32, 33A, and 53A; Article 226 of the Constitution of India.
Kolte Patil Developers Ltd. v. State of Maharashtra, (Bombay) : Law Finder Doc id # 2848504
