'Stamp Duty Revision Must Conclude Within 6 Years': Bombay High Court Quashes ₹1 Cr Deficit Demand In Slum Rehab Deal

The Bombay High Court has held that the six-year limitation prescribed under Section 53A of the Maharashtra Stamp Act, 1958, governs the entire revisional process, from initiation to passing of the final order, and not merely the issuance of notice. The Court observed that a fiscal statute must be construed strictly and that permitting initiation within six years but completion thereafter would introduce uncertainty in property transactions contrary to legislative intent.

Justice Somasekhar Sundaresan was hearing a writ petition filed by Romell Real Estate Pvt. Ltd. challenging Demand Notices issued by the Collector of Stamps, and an order dated 20 June 2024 passed by the Chief Controlling Revenue Authority (CCRA) under Section 53A. The petitioner had entered into an Agreement for Sale in respect of land at Malad for the implementation of a Slum Rehabilitation Project. The stamp duty was computed at ₹3.15 crores, which was paid. Nearly five years later, the Collector issued a demand alleging a deficit stamp duty of ₹1.01 crores on the ground that the market value ought to have included the cost of constructing the Permanent Transit Camp (PTC) component. The CCRA confirmed this view by adding ₹20.33 crores towards the PTC construction cost.

On merits, the Court held that the computation was contrary to Guideline No.26 of the Annual Statement of Rates (ASR), which specifically governs the valuation of instruments relating to slum rehabilitation schemes. The Court found that the PTC component is a cost to be incurred by the developer and not a value receivable by him, and therefore could not be added to the consideration. The CCRA had arbitrarily mixed up distinct elements of valuation and departed from the statutory guideline, rendering the impugned order unsustainable.

“… the CCRA has completely missed the point. There is simply no basis for adding the construction cost of the PTC. The CCRA could have at best examined whether Guideline No. 26 has been applied correctly,” the Court observed.

Turning to limitation, the Court held that a plain and literal reading of Section 53A indicates that the entire exercise of calling for the instrument, granting opportunity of hearing, examining chargeability and ordering recovery must be completed within six years. The provision links the power to require production and the power to order recovery within the same temporal limitation. It observed:

“A plain and literal reading of Section 53A would show that if the original certificate issued under Section 31 of the Stamp Act is said to have contained a mistake resulting in a deficit in stamp duty, then the CCRA, within six years, may call for the instrument, examine it, and endorse it after payment of deficit stamp duty as assessed by the CCRA.”

The Adjudication Order having been passed on 19 January 2017, the six-year period expired in January 2023. The impugned order dated 20 June 2024 was therefore beyond limitation.

Holding that both on merits and on limitation the action of the authorities was unsustainable, the Court allowed the writ petition and quashed the impugned order along with the demand notices.

Case Title: Romell Real Estate Pvt. Ltd. v. The State of Maharashtra & Ors. [Writ Petition No. 18259 of 2024]

Citation: 2026 LiveLaw (Bom) 82

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