Demand for deficit stamp duty is unsustainable where the liability has already been fully discharged.

The Petitioner entered into a development agreement in 2010 with a leaseholder, Hemaben Sureshbhai Shah, to develop residential plots in Akota, Vadodara

Following the completion of the project ("SUNSTONE"), a flat was sold in 2012 via a registered sale deed where the Petitioner was a confirming party

In 2015, the authorities scrutinized the 2010 development agreement for short-levied stamp duty; the Petitioner subsequently paid the determined deficit of Rs. 1,39,461/- under Section 5(z) of the Act

However, Respondent No. 3 later issued a fresh notice and passed an ex-parte order dated 03.11.2023, demanding further deficit stamp duty and a penalty totaling Rs. 17,47,156/- regarding the 2012 transaction

The Petitioner’s appeal to the Chief Controlling Revenue Authority was disposed of without addressing the claim that the dues were already settled

1. Whether the impugned order dated 03.11.2023, demanding deficit stamp duty and penalty, is legally sustainable when the Petitioner had already satisfied the stamp duty requirements in 2015.

2. Whether the appellate authority erred in failing to consider the Petitioner’s prior payment of the deficit duty before upholding the demand.

The court primarily applied the provisions of the Gujarat Stamp Act, 1958, specifically Section 5(z) concerning the valuation and levying of stamp duty on development agreements

It further exercised its writ jurisdiction under Article 226 of the Constitution of India to review administrative actions that are arbitrary or lack application of mind

The Petitioner contended that the demand for Rs. 17,47,156/- was erroneous as the liability regarding the development rights had been fully discharged in 2015

During the proceedings, the Assistant Government Pleader (AGP), upon instructions from the concerned revenue officers, verified and admitted that the Petitioner had indeed paid the deficit stamp duty in 2015 as previously demanded by the State

The Court observed that while the Petitioner failed to clearly present this proof of payment during the departmental appeal, the respondent authorities issued the 2023 order without verifying their own records of prior realization

Given the State’s admission that the duty was already paid, the Court found the impugned order to be redundant and a result of non-application of mind.

The Court held that since the deficit stamp duty had been cleared by the Petitioner in 2015—a fact confirmed by the State’s counsel—the subsequent demand and penalty were unsustainable

Rule was made absolute