Bombay High Court orders stamp-duty refunds with interest for buyers whose flat-sale agreements were cancelled within the statutory two-year window

The petitioners had paid stamp duty on registered Agreements to Sell residential flats.

The agreements were later cancelled: in W.P. No. 2219 of 2017 because the developer failed to deliver possession, and in the other petitions because of errors in the descriptions of the flats.

Each petitioner applied for a refund within two years of registration of the relevant cancellation deed.

The authorities rejected the applications, finding the stated reasons inconsistent with Section 48(1) of the Bombay Stamp Act, 1958.

The petitioners challenged those orders under Article 226 of the Constitution

Whether the refund applications could be rejected by calculating limitation only from the dates of the original Agreements to Sell, without considering the applicable part of the proviso to Section 48(1)

Whether the stated grounds for cancellation—failure to deliver possession or errors in the descriptions of the flats—were capable of falling within the relevant grounds for refund under the proviso

Section 48(1) of the Bombay Stamp Act, 1958, and the proviso applicable to the claims governed the time for seeking refund.

As set out in the judgment, the proviso provided a two-year period from the instrument where the seller refused to deliver possession, and a separate two-year period from registration of a cancellation deed where cancellation was on specified grounds, including a dispute regarding the premises concerned.

Harshit Harish Jain v. State of Maharashtra, (2025) 3 SCC 365, required consideration of the applicable statutory regime and recognised that a genuine refund claim should not be defeated by a technical limitation objection where the claim was otherwise valid.

Bano Saiyed Parwaz v. Chief Controlling Revenue Authority, (2025) 2 SCC 201, supported considering bona fide refund claims in their proper legal context, while not eliminating statutory requirements.

Bhaskar Ramgonda Patil v. District Deputy Registrar (Class I), 2025 SCC OnLine Bom 1075, distinguished cancelled or non-fructified transactions from completed transactions in which only excess stamp duty is disputed.

The Court held that the State could not calculate limitation solely from the dates of the original agreements without first identifying which part of the proviso applied.

All four refund applications were filed within two years of registration of the relevant cancellation deeds.

The possession-related dispute in W.P. No. 2219 of 2017 and the disputes over the premises’ descriptions in the other petitions required assessment under the relevant statutory grounds; an application could not be rejected merely by declaring the reasons inconsistent with Section 48(1).

The Court distinguished Bhaskar Ramgonda Patil because the petitioners’ agreements had been cancelled and the record did not show completed transactions in which the petitioners retained acquired rights while seeking only a refund of excess duty.

It directed the State to refund the stamp duty paid on each Agreement to Sell, including Rs. 18,60,020 in W.P. No. 2219 of 2017, with simple interest at 6% per annum from the dates of the impugned orders until payment.

Payment was ordered within eight weeks of production of an authenticated judgment; any amount unpaid after that period would carry further interest at 12% per annum until payment.

The refund was to be paid directly to the petitioners without requiring fresh proceedings