Recovery Of Stamp Duty Not Levied Or Short Levied Can Be Done Only Within Five Years After Registration Of Documents: Karnataka HC
The Karnataka High Court has reiterated that proceedings by way of show cause notice under Section 46A of the Karnataka Stamps Act for recovery of stamp duty not levied or short levied cannot be initiated five years after the registration of the document, being the date on which the stamp duty fell due.Justice Suraj Govindaraj said this while allowing a petition filed by B C Prasad challenging...
The Karnataka High Court has reiterated that proceedings by way of show cause notice under Section 46A of the Karnataka Stamps Act for recovery of stamp duty not levied or short levied cannot be initiated five years after the registration of the document, being the date on which the stamp duty fell due.
Justice Suraj Govindaraj said this while allowing a petition filed by B C Prasad challenging an order passed by the Karnataka Appellate Tribunal (KAT), which upheld the order of the Registrar dated 30-10-2010, directing the petitioner to remit a shortfall in the stamp duty of Rs.98,500 on the documents registered in the year 1995.
The petitioners argued that notice has been issued to the power of attorney and not to the person who has executed the power of attorney. The stamp duty, if any, would be liable to make payment by persons who have executed the power of attorney.
Further, any action under Section 46A of the Karnataka Stamp Act, 1957, was required to be taken within five years from the date of execution of the document. In the present case, the document was executed and registered on 23.11.1995, and notice was issued on 30.10.2010, i.e., a little over a month after the expiry of fifteen years, and as such, under Section 46A, there are no powers vested with the respondents to reopen the matter and issue a notice.
The government opposed the plea, submitting that though notice was issued on 30.12.2010, the Official Memorandum had been issued on 16.12.2010, and it took some time for necessary action to be initiated. Therefore, the delay will not come in the way of the respondents initiating the action.
Referring to Section 46A, the court said, “Under normal circumstances, an action for payment of proper duty can only be made by issuance of a show cause notice from the date on which the stamp duty fell due, in this case from the date on which the document was registered.”
It added “Due to reason of fraud, collusion or any willful misstatement, the due payment of stamp duty is not made then such a show cause notice could be issued within ten years from the date on which the stamp duty was due in terms of the amendment which has been carried out in the year 1983.”
Following which, it held, “In the present case, there is no allegation of fraud, collusion or willful misstatement which has been made. What has been stated is that the adequate stamp duty has not been paid on the GPA. In that view of the matter, it is only five years which would be applicable in terms of the provisio to Subsection (1) of Section 46A.”
It added, “As such, any proceedings which could have been initiated by issuance of a show cause notice by the controlling revenue authority or any other authorized officer on behalf of State ought to have been done within five years from 23.11.1995. The same not having been done by 22.11.2000 and the proceeding having been initiated only on 30.2.2010 after a period of nearly 15 years is clearly and hopelessly barred by Section 46A.”
Accordingly, it allowed the petition and quashed the order.
Appearance: Senior Advocate K.N Phanindra for Advocate Vaishali Hegde for Petitioners.
AGA Mahantesh Shettar for Respondents
Citation No: 2025 LiveLaw (Kar) 96
Case Title: B C Prasad & ANR AND The District Registrar And Deputy Commissioner of Stamps & Others
Case No: WRIT PETITION NO. 41844 OF 2017
