A stamp-duty demand cannot stand without proof of notice and an effective hearing.

Smt. Gangamma executed a registered release deed dated 8 July 2016, relinquishing her undivided share in favour of Hanumakka, Hanumaiah and Sanjeevamma.

Following an audit objection that the parties did not fall within the definition of “family” under Article 45 of the Schedule to the Karnataka Stamp Act, 1957, the Deputy Commissioner (Stamps) determined that deficit stamp duty and registration fees of ₹4,10,550 were payable.

The petitioner’s mother, Hanumakka, was proceeded against; the order recorded that she had not appeared or filed objections, but the record before the Court did not establish service of notice.

A consequential recovery notice was issued in July 2024. Hanumakka died in October 2024, and her son challenged both the determination and the recovery notice.

1. Whether the order determining deficit stamp duty and registration fees could stand when the record did not establish that notice had been duly served on Hanumakka or that she had received an effective opportunity to be heard

2. Whether the consequential demand notice should be set aside and the matter remitted for fresh consideration

A determination of liability for deficit stamp duty and registration fees has civil consequences, and the person affected must be afforded a reasonable opportunity of hearing in accordance with the principles of natural justice.

The authority’s reference to issuing notice is insufficient where there is no material establishing due service or an effective opportunity to contest the proposed demand.

Article 45 of the Schedule to the Karnataka Stamp Act, 1957, was relevant to the underlying dispute about the applicable stamp duty, but the Court expressly left its application and the classification of the instrument open for determination by the competent authority.

The Deputy Commissioner’s order recorded that notice had been issued and that Hanumakka had not responded, but the respondents produced no material proving that notice was served on her.

Because the determination imposed a financial liability with civil consequences, the absence of proof of service meant that an effective opportunity to contest the demand had not been established.

The Court therefore set aside the order on natural-justice grounds, without deciding whether the release deed attracted duty at the rate applicable to a conveyance or qualified for treatment under Article 45.

The order dated 4 January 2023 and the consequential demand notice dated 22 July 2024, signed on 26 July 2024, were set aside.

The matter was remitted to the Deputy Commissioner (Stamps) for fresh consideration after giving the petitioner an opportunity to file objections and be heard.

The petitioner was directed to appear on 2 November 2026, and the authority was directed to pass a reasoned order independently and in accordance with law.

All contentions, including those concerning Article 45, were left open.