Demand for deficit stamp duty already paid is unsustainable and liable to be quashed.

The Petitioner, a developer, entered into a development agreement on 13.03.2010 with a leaseholder, Bhadreshbhai Ramanbhai Patel, for land in Village Akota

Following an audit of the transaction, the respondent authorities identified a short-levy of stamp duty.

Consequently, on 16.05.2015, the Petitioner paid the entire deficit amount of ₹1,39,461/- as required under the Gujarat Stamp Act

Despite this, Respondent No. 3 issued a fresh notice and subsequently passed an ex-parte order on 03.11.2023, directing the Petitioner to pay a further deficit stamp duty and penalty totaling ₹16,47,562/- regarding the same transaction

The Petitioner challenged this order before the Chief Controlling Revenue Authority in Stamp Appeal No. 166 of 2023, but the appeal was disposed of without considering the prior 2015 payment

The Petitioner then approached the High Court under Article 226.

1. Whether the impugned order dated 03.11.2023, demanding deficit stamp duty and penalty, is legally sustainable in light of the Petitioner’s claim of prior satisfaction of the liability in 2015

The Court exercised its extraordinary jurisdiction under Article 226 of the Constitution of India to review administrative actions for legality and fairness

The substantive legal framework was governed by the Gujarat Stamp Act, 1958, particularly provisions relating to the valuation of instruments and the recovery of deficit stamp duty

The principle of factual verification in tax/duty matters, where a demand is rendered redundant if the underlying liability has already been discharged and verified by the State

The Court examined the Petitioner’s contention that the disputed amount of ₹16,47,562/- had effectively been addressed through payments made in 2015

To resolve the factual dispute, the Court sought verification from the State.

The Assistant Government Pleader (AGP), upon receiving instructions from the concerned departmental officers, explicitly confirmed that the Petitioner had indeed paid the deficit stamp duty in 2015 as previously demanded

The Court noted that the appellate authority (Respondent No. 2) had failed to account for this prior payment while disposing of the appeal

Since the State admitted the discharge of the liability, the Court reasoned that the subsequent order of 2023 for the same transaction was factually erroneous and lacked legal basis

The Court quashed and set aside the impugned order dated 03.11.2023 passed by Respondent No. 3 in Stamp/V-1/Vashi/9231/2023

Rule was made absolute