MP HC Quashes ₹95,220 Stamp-Duty, Registration Fee And Penalty Order After Notice Came Beyond Section 48-B’s Five-Year Limit

In brief

The question

Whether proceedings to recover alleged deficit stamp duty could be initiated by notice issued more than five years after execution of the instrument, having regard to Section 48-B of the Indian Stamp Act, 1899.

The court held

The Court held that the proceedings were barred by the limitation prescribed under Section 48-B and that the alternative-remedy objection did not warrant declining writ jurisdiction.

It also directed

It allowed the petition and quashed the order dated 29 July 2024 directing recovery of ₹95,220.

01Facts

The petitioner challenged an order dated 29 July 2024 by the Senior District Registrar and Collector of Stamps, Vidisha, directing recovery of alleged deficit stamp duty of ₹44,850, registration fees of ₹5,520 and penalty, totalling ₹95,220.

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The action was initiated suo motu on the basis of an audit report.

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The instrument was executed on 2 August 2018, and the notice initiating recovery proceedings was issued on 29 April 2024.

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The State opposed the writ petition on the ground that statutory appeals were available under Section 40(1)(d) and (e) of the Indian Stamp Act, 1899.

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The petitioner relied on Krishna Builders and Developers, Jabalpur v. Collector of Stamps, W.P. No. 15281 of 2021, decided 23 January 2023.

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02Issues

i.Whether proceedings to recover alleged deficit stamp duty could be initiated by notice issued more than five years after execution of the instrument, having regard to Section 48-B of the Indian Stamp Act, 1899.

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ii.Whether the High Court should entertain the writ petition despite the availability of statutory appeals, where the petitioner challenged the authority’s jurisdiction on limitation grounds.

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03Law Applied

The proviso to Section 48-B of the Indian Stamp Act, 1899 bars action under that section after five years from the date of execution of the instrument; the Court treated this limitation as mandatory and jurisdictional.

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The rule that an alternative statutory remedy ordinarily restrains, but does not absolutely bar, writ jurisdiction permits the High Court to intervene where the challenged action is without jurisdiction.

p. 5

The Court relied on Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others, (1998) 8 SCC 1, for this exception.

p. 5

The Court referred to Krishna Builders and Developers, Jabalpur v. Collector of Stamps, Collector Office, Jabalpur & Another, W.P. No. 15281 of 2021, decided 23 January 2023, in support of entertaining a challenge to the authority’s competence despite an alternative remedy.

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Provisions in the judgment · 2 · Linked ones open on LawLens

Indian Stamp Act, 1899 Section 48 Section 40

04Reasoning

The instrument was executed on 2 August 2018, so the five-year period under the proviso to Section 48-B expired on 2 August 2023.

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The notice initiating proceedings was not issued until 29 April 2024, and therefore fell outside that period.

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The audit report could not extend the statutory limitation or confer jurisdiction after the period had expired.

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Because the limitation objection went to the authority’s competence, the availability of statutory appeals did not prevent the Court from considering the writ petition.

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05Holding

The Court held that the proceedings were barred by the limitation prescribed under Section 48-B and that the alternative-remedy objection did not warrant declining writ jurisdiction.

p. 7

It allowed the petition and quashed the order dated 29 July 2024 directing recovery of ₹95,220.

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LawLens.Madhya Pradesh High Court

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