Maharashtra Stamp Act | Collector Has No Power To Revise Stamp Duty Once It's Already Been Levied & Paid: Bombay High Court

The Collector of Stamps under the Maharashtra Stamp Act cannot revise stamp duty once it has been levied and paid, the Bombay High Court held earlier this year.

The court set aside notices alleging that the petitioner has defaulted on stamp duty for a deed of assignment. A show-cause notice asking why the petitioner's properties shouldn't be attached for non-payment of the alleged outstanding amount of more than 1 Crore Rs, was also set aside.

"In the scheme of the enactment, once the Collector certifies an endorsement on the document depicting payment of full duty, then adjudication becomes effective and final and, it is not open for him to reopen the said adjudication", Justice Bharati Dangre said while referring to the Maharashtra Stamp Act, 1958.

The court was dealing with a writ petition challenging the demand notices and the show-cause notice issued to the petitioner.

In 2009, one Vasudev Babayya Kamat had assigned his leasehold rights, title and interest in a 1 acre plot at Mouje Oshiwara to Sukoon Constructions Pvt. Ltd., the petitioner. The petitioner paid a stamp duty of over Rs. 30 lakh on this deed of assignment as determined by the Collector, in 2010. In December 2013, the Collector of Stamps issued a notice stating that the audit office had found that the deed was inadequately stamped. In 2019, the petitioner received two demand notices demanding outstanding stamp duty of over Rs 26 lakh. A third notice was then issued, stating that a penalty of almost Rs 74 lakh was also required to be paid. The petitioner challenged these notices in the Bombay High Court.

Advocate Mayur Kandeparkar for the petitioner argued that the Collector acted in violation of principles of natural justice as no hearing was granted to the petitioner before revising the stamp duty and issuing demand notices.

He relied on Guruashish Construction Pvt. Ltd. v. Collector of Stamps and contended that the Collector of Stamps had endorsed the deed and this endorsement can only be revised by the Chief Controlling Revenue Authority within a limitation period of six years as per section 53-A of the Maharashtra Stamps Act. Thus, the revision of stamp duty is ex facie illegal and without jurisdiction of the Collector.

A.G.P. Jyoti Chavan contended that the notices were justified as the stamp duty was not properly calculated in 2009.

The court analysed the relevant provisions of the Act and concluded that the Collector had acted beyond his powers under Section 32 of the Act.

The court relied on Supreme Court judgment in Government of Uttar Pradesh v. Raja Mohammad Amir Ahmad Khan and held, "the Collector could not have revised the stamp duty upon the Deed of Assignment, when he has already once levied the stamp duty and endorsed a certificate to that effect on the Deed and, based on which the stamp duty was also paid by the petitioner".

"The Collector has clearly acted beyond his powers in revising the stamp duty on the ground that it was not properly levied and since he had become functus officio, he could not have exercised the power of revising the duty, which is, at the most, available with the Chief Controlling Revenue Authority under Section 53-A of the Stamp Act", the court added.

Case no. – Writ Petition (L) No.6268 of 2022

Case Title – Sukoon Construction Pvt. Ltd v. The Collector of Stamp & Anr.

Coram – Justice Bharati Dangre

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