Maharashtra Stamp Act | Limitation Period For Refund Starts From Execution Of Cancellation Deed, Not Its Registration: Supreme Court

Observing that the right to claim a refund of stamp duty originates from the date of execution of the cancellation deed, the Supreme Court on Friday (January 24) directed the refund of stamp duty to flat owners whose claim had been rejected on limitation grounds. The bench comprising Justices Vikram Nath, Sanjay Karol, and Sandeep Mehta was hearing the case relating to the refund of the stamp duty under the Maharashtra Stamp Act. Dissatisfied with the developer's delay in completing the project, the Appellants cancelled the booking and executed a cancellation deed on March 17, 2015, registered on April 28, 2015. The limitation period for stamp duty refund applications was reduced from two years to six months, with effect from April 24, 2015. The Respondent-State denied the refund, arguing that the Appellant's August 2016 application was filed beyond the six-month limit. They contended that the new six-month period applied since the cancellation deed was registered on April 28, 2015, and the previous limitation period no longer applied. In contrast, the Appellant argued that the amended limitation period did not apply to their case, as their right to claim a stamp duty refund arose from the date of the execution of the cancellation deed. Since the two-year limitation period was in effect then, they contended that the application filed for stamp duty refund in August 2016 was valid. Aggrieved by the High Court's decision to deny relief, the Appellants appealed to the Supreme Court. Setting aside the High Court's decision, the judgment authored by Justice Vikram Nath observed that the High Court “laid undue emphasis on the registration date without fully appreciating that the Appellants' accrued right to claim a refund arose the moment the Cancellation Deed was validly executed.” “The legislative scheme governing the earlier proviso to Section 48(1) of the Act, contemplated a broader two-year window. Constricting that window retroactively, merely because registration happened post-amendment, unduly defeats a vested cause of action.”, the court added. In this regard, the Court referred to the case of M.P. Steel Corporation v. Commissioner of Central Excise (2015) 7 SCC 58, in which it was held that an amendment to the provision as to limitation is inapplicable to an accrued cause of action where the amendment has reduced the period earlier provided.According to the Court, the new law of limitation should not bar an existing claim, especially when it would make the claim practically unfeasible. “the findings recorded by the High Court in the impugned judgment warrant interference. The High Court's focus on the date of registration as determinative of the applicable legal regime under Section 48(1) of the Act overlooks the accrued right crystallizing at the time of execution of the Cancellation Deed.”, the court said. “we conclude that the Appellants are entitled to the benefit of the unamended proviso of Section 48(1) of the Act. Their refund application, therefore, cannot be repelled as time-barred merely because the deed's registration was post-amendment.”, the Court held. Accordingly, the appeal was allowed. Case Title: HARSHIT HARISH JAIN & ANR. VERSUS THE STATE OF MAHARASHTRA & ORS.Citation : 2025 LiveLaw (SC) 110Click here to read/download the judgmentAppearance: For Petitioner(s) Mr. Santosh Krishnan, AOR For Respondent(s) Mr. Shrirang B. Varma, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR

Maharashtra Stamp Act | Limitation Period For Refund Starts From Execution Of Cancellation Deed, Not Its Registration: Supreme Court

Yash Mittal

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