Removal Of Objections In Any Proceedings Before An Authority Does Not Render The Proceedings Time Barred: Bombay High Court

Justice Abhay Ahuja, while allowing a writ petition challenging the rejection of petitioner’s application for refund of stamp duty on grounds of limitation, held –

“Correction/removal of objections in any proceeding before a Court or an authority does not render proceeding time barred, particularly when the objection does not alter the nature of the proceeding…Petitioner had purchased the stamps and it is only a ministerial act that Petitioner’s partner’s name was voluntarily corrected to include the Petitioner’s name. Naturally, therefore, removal of such objection would relate back to the date of the original application.”

The refund application was made in time but in the name of the partner instead of the partnership firm (original purchaser of stamps) which was later corrected.

“...the absence of any provision to amend, alter, change or modify the name of the applicant in the application for claiming refund of stamp duty should not come in the way of making a bonafide correction as long as there is no express statutory prohibition to do so. In fact, the authority to correct ministerial errors is an inherent power vested in every authority”, the court held.

The petitioner, a partnership firm, in 2013 agreed to execute an agreement with some agriculturalists for development of land for Rs. 1,35,62,000/-. A stamp duty of Rs. 40,78,940/- was fixed. The petitioner purchased the stamps on January 13, 2013. However, the agreement could not be executed as some co-owners of the land were not interested anymore. Therefore, on July 24, 2013, under sections 47 and 48 of the Maharashtra Stamp Act 1958, the petitioner applied for refund of stamp duty. In the application, only the name of partner of the petitioner firm was mentioned. The authority raised an objection since the stamps were purchased in the name of the petitioner firm. Thereafter, the application was corrected to include the name of the partnership firm on December 10, 2013.

The Joint District Registrar and the Deputy Inspector General of Registration recommended the refund of stamp duty. However, the Chief Controlling Revenue Authority refused to grant the refund on the ground that since the correction was made on December 10, 2013, the application was filed beyond the limitation period of six months under Act. Hence the present petition.

Advocate Preeti Walimbe for the petitioner submitted that the original date of filing of application would be material and not the date of correction.

AGP Sachin H. Kankal for the state submitted that though the application was made within six months by one of the partners, the application on behalf of the petitioner firm (the original purchaser) itself was only made on December 10, 2013 which is beyond the limitation period. Further, there is no provision under the Act for making amendments to the name of the applicant in the application for refund. Thus, it is contrary to section 52B of the Act.

Under section 52 of the Act, the state government is obliged to repay to a person the value of stamps if the stamps have not become spoiled or useless for the intended purpose but for which the person has no immediate use.

Section 52B provides that the stamps should be used within six months of purchase and if not used and also not applied for refund, they will be rendered invalid beyond this period.

This isn’t case where an unconnected person has applied for refund, the court said. Persons who may not have complete knowledge of procedure may make applications which when scrutinized are found to have errors and then those errors are corrected, the court noted. “It also happens in the filings made in the various courts of our country including this Court”, the court remarked.

The court said that this was a bonafide error and in absence of any allegation of mala fides, cannot be used to time bar the application. The court said that since the application was made within the limitation period, section 52-B of the Act would not come in the way though the stamps may be rendered invalid as not used.

Therefore, the court directed the Chief Controller of Stamps to consider the petitioner’s application afresh and pass a reasoned order after giving opportunity of hearing to petitioner.

Case no. – Writ Petition No. 8021 of 2019

Case Title – Freedom City Ventures v. State of Maharashtra

Citation: 2023 LiveLaw (Bom) 55