In Harshit Harish Jain & Anr. v. State of Maharashtra & Ors. (2025 INSC 104), the Supreme Court of India ruled that the limitation period for seeking a refund of stamp duty commences from the date of execution of the cancellation deed, not from its registration. The judgment overruled the Bombay High Court’s decision, ensuring that statutory amendments curtailing limitation periods do not retroactively affect vested rights.
Facts of the Case
The appellants, Harshit Harish Jain and another, had entered into an Agreement to Sell on August 30, 2014, for a flat in the “Lodha Venezia” project in Mumbai. They paid ₹27,34,500 as stamp duty and registered the agreement on September 18, 2014. Due to project delays, the developer allowed cancellation, leading to a Deed of Cancellation executed on March 17, 2015, but registered later on April 28, 2015.
On April 24, 2015, an amendment to Section 48(1) of the Maharashtra Stamp Act, 1958, reduced the limitation period for refund claims from two years to six months from the date of registration of the cancellation deed. The appellants applied for a refund on August 6, 2016, arguing that the limitation period should be governed by the law applicable at the time of execution, not registration.
Initially, the Chief Controlling Revenue Authority (CCRA) allowed the refund on January 8, 2018, but later reversed its decision on March 3, 2018, citing the amended limitation period. The appellants’ subsequent writ petition before the Bombay High Court was dismissed, prompting an appeal to the Supreme Court.
Key Legal Issues
- Whether the limitation period for stamp duty refund under Section 48(1) of the Maharashtra Stamp Act, 1958, starts from the date of execution or registration of a cancellation deed.
- Whether an amendment reducing the limitation period can apply retrospectively to transactions executed before its enactment.
- Whether the CCRA had the authority to review and recall its previous order granting a refund.
Arguments by the Parties
Appellants (Harshit Harish Jain & Anr.):
- The cancellation deed was executed before the April 24, 2015, amendment, so the unamended two-year limitation period should apply.
- Section 47 of the Registration Act, 1908, states that a registered document operates from the date of execution, not registration.
- The CCRA had no statutory authority to recall its previous order granting the refund.
Respondents (State of Maharashtra & Others):
- The amendment to Section 48(1) clearly mandated that limitation runs from the date of registration, making the appellants’ refund claim time-barred.
- The CCRA acted within its powers in reviewing the refund order to correct an erroneous grant.
- The High Court correctly held that the statutory amendment governed the refund application.
Supreme Court’s Reasoning
1. Limitation Period Runs from Execution, Not Registration
The Court held that the right to claim a refund accrues on the date of execution of the cancellation deed, not its registration. Relying on M.P. Steel Corporation v. Commissioner of Central Excise (2015) 7 SCC 58, the Court reaffirmed that amendments shortening limitation periods cannot extinguish an accrued right retrospectively.
2. Registration Act’s Application to the Present Case
Referring to Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2012) 1 SCC 656, the Court emphasized that under Section 47 of the Registration Act, 1908, a document operates from the date of execution, making the execution date the reference point for limitation.
3. CCRA’s Lack of Review Power
The Supreme Court found that the CCRA had no statutory authority to review or recall its earlier refund grant. Citing Committee-GFIL v. Libra Buildtech Pvt. Ltd. (2018) 3 SCC 732, the Court reiterated that an administrative authority cannot assume review powers in the absence of statutory backing.
4. Equity and Fairness in Refund Claims
The Court emphasized that statutory provisions governing refunds must be interpreted to prevent unjust enrichment by the State. It referenced Bano Saiyed Parwaz v. Chief Controlling Revenue Authority (2024 SCC OnLine SC 979), where it was held that technical limitations should not defeat legitimate refund claims.
Conclusion and Implications
The Supreme Court set aside the Bombay High Court’s ruling and reinstated the appellants’ entitlement to a refund. The Court’s key holdings were:
- The limitation period for refund claims begins from the execution of the cancellation deed, not its registration.
- Amendments reducing limitation periods cannot retroactively affect accrued rights.
- The CCRA acted without authority in reviewing and rejecting the previously granted refund.
- The appellants were entitled to a full refund along with 6% interest from January 8, 2018, until payment.
This ruling strengthens legal certainty by preventing retrospective application of limitation laws to transactions executed before statutory amendments. It also reinforces the principle that public authorities must act within their statutory powers, preventing undue denial of financial claims.
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