Introduction
In Harshit Harish Jain & Anr. v. State of Maharashtra & Ors., Civil Appeal @ SLP(C) No. 21778 of 2024, decided on 24 January 2025, the Supreme Court clarified the prospective application of amendments to limitation periods for refund of stamp duty under the Maharashtra Stamp Act, 1958. The Court held that the appellants’ right to refund—accrued prior to the legislative amendment—could not be extinguished by a reduced limitation period applied retroactively. Further, the Chief Controlling Revenue Authority (CCRA) was found to have acted without jurisdiction in recalling its earlier refund order.
1. Factual Background and Procedural History
The appellants had entered into an Agreement to Sell dated 30.08.2014 for a residential unit in the “Lodha Venezia” project, Mumbai, for ₹5.46 crore, paying ₹1.08 crore as advance. Pursuant to the agreement, they paid ₹27,34,500 as stamp duty and ₹30,000 as registration charges. Due to delays related to adjacent slum clearance, the developer offered cancellation. The appellants opted to cancel, executing a Cancellation Deed on 17.03.2015, registered on 28.04.2015.
While the Maharashtra Stamp Act was amended on 24.04.2015, reducing the limitation for refund from two years to six months, the appellants filed a refund application on 06.08.2016. Initially allowed by the CCRA on 08.01.2018, this order was later recalled on 03.03.2018 on the ground of limitation. The appellants’ subsequent challenges culminated in a writ petition being dismissed by the Bombay High Court on 18.04.2024. They approached the Supreme Court thereafter.
2. Identification of Legal Issues
- Whether the amended limitation period under Section 48(1) of the Maharashtra Stamp Act applies to a refund claim based on a cancellation deed executed before the amendment but registered afterwards.
- Whether the CCRA had jurisdiction to recall its earlier order allowing refund when no review power exists under the statute.
- Whether an accrued right to refund can be defeated by a procedural amendment.
- Whether interest is payable where a refund was wrongly withheld by the State.
3. Arguments of the Parties
Appellants:
- The right to refund accrued on 17.03.2015 (date of execution of the Cancellation Deed), predating the amendment, thus invoking the earlier two-year window.
- Cited Section 47 of the Registration Act, 1908 to argue that a registered deed operates from the date of execution.
- Argued that the CCRA lacked statutory review powers and its recall order dated 03.03.2018 was void.
- Cited M.P. Steel Corporation and Bano Saiyed Parwaz to assert that vested rights cannot be retrospectively curtailed.
Respondents:
- Claimed the refund was barred by limitation since the deed was registered post-amendment.
- Argued that the CCRA was entitled to correct its own decision if it was found to be contrary to law.
- Maintained that appellants participated in the proceedings, which amounted to acquiescence.
4. Court’s Analysis and Reasoning
On Accrued Rights and Retrospective Limitation:
The Court accepted the appellant’s plea that the cause of action for refund arose on the date of execution of the Cancellation Deed (17.03.2015), predating the 24.04.2015 amendment. Referring to M.P. Steel Corporation v. CCE, the Court emphasized:
“Though periods of limitation, being procedural law, are to be applied retrospectively, yet if a shorter period is provided by a later amendment, such period would render a vested right of action nugatory.”
Thus, applying the amended limitation to a pre-existing right was held to be impermissible.
On Section 47 of the Registration Act:
The Court underscored that a registered deed operates from the date of execution—not registration. Therefore, the execution date governs the rights and applicable limitation.
On Lack of Review Power of CCRA:
The Court decisively held that the CCRA had no statutory power of review. It stated:
“A quasi-judicial authority can only exercise such powers as the statute confers. Participation in an erroneous procedure cannot confer jurisdiction.”
Hence, the recall order of 03.03.2018 and subsequent affirmations were vitiated.
On Equity and Good Faith:
Drawing from Bano Saiyed Parwaz v. CCRA and Committee-GFIL v. Libra Buildtech, the Court reiterated that the State must not rely solely on technical defences when equity and good faith dictate otherwise. The appellants, having paid substantial sums and sought cancellation in good faith, were entitled to just treatment.
5. Final Conclusion and Holding
The Supreme Court allowed the appeal, holding:
- The unamended two-year limitation under Section 48(1) applied.
- The CCRA acted without jurisdiction in recalling the refund.
- The earlier refund order dated 08.01.2018 stands restored.
- The appellants are entitled to simple interest @6% per annum from 08.01.2018 until payment.
- Any delay beyond four weeks from the judgment date will attract interest @12% p.a.
Key Holding:
“The amended limitation period cannot retrospectively extinguish an accrued right to refund under the Stamp Act. Jurisdictional excesses by statutory authorities must be corrected to uphold fairness.”
FAQs:
1. Can a stamp duty refund be claimed under old law if the deed was executed before an amendment but registered after?
Yes. The Supreme Court held that the execution date, not the registration date, determines the applicable limitation period for stamp duty refunds.
2. Does a quasi-judicial authority like the CCRA have the power to review its own refund orders?
No. The Court ruled that unless expressly conferred by statute, quasi-judicial authorities cannot exercise review powers.
3. Can limitation periods in tax or stamp laws be applied retrospectively?
Only if they do not curtail an accrued right. If a limitation amendment reduces the period after the right has already arisen, it cannot be applied retroactively.
4. What is the legal effect of Section 47 of the Registration Act in refund claims?
Section 47 states that a registered document operates from the date of execution. This impacts when rights accrue, including in refund-related disputes.
5. Is interest payable when a valid refund is wrongfully withheld by the State?
Yes. The Court directed that the State pay 6% interest from the date of the refund order and 12% p.a. for any delay in actual disbursement beyond four weeks.
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