Stamp duty recovery after five years requires material showing fraud or deliberate evasion, Karnataka High Court rules

The petitioner challenged a notice dated 26 May 2025 issued by the Sub-Registrar, Belagavi, seeking recovery of alleged deficit stamp duty on a sale deed executed and registered in 2018.

The petitioner sought certiorari quashing the notice. The principal dispute concerned whether proceedings under Section 46A of the Karnataka Stamp Act, 1957, could be initiated beyond the ordinary five-year period by relying on the extended ten-year period.

Whether the ten-year limitation period under the proviso to Section 46A(1) applies automatically whenever a notice is issued within ten years of the transaction.

Whether the impugned notice could be sustained where it did not allege or disclose material supporting fraud, collusion, wilful misstatement, suppression of facts, or deliberate contravention intended to evade stamp duty.

Whether the writ petition could be entertained despite the availability of an alternative statutory remedy where the challenge concerned limitation and jurisdiction.

Section 46A(1) of the Karnataka Stamp Act, 1957, prescribes an ordinary five-year period for issuing notice to recover stamp duty not levied or short levied.

Its proviso extends that period to ten years only where non-payment resulted from fraud, collusion, wilful misstatement, suppression of facts, or contravention of the Act or Rules with intent to evade duty; the extended period is conditional, not automatic, and the authority must have a foundational basis to invoke it.

The Court also recognised that a writ petition may be entertained notwithstanding an alternative remedy where the very initiation of proceedings is challenged as time-barred and without jurisdiction.

Although the notice was issued within ten years of the 2018 transaction, that fact alone did not justify invoking the extended limitation period.

The notice contained no specific allegation of any circumstance listed in the proviso and disclosed no foundational material indicating deliberate evasion of stamp duty.

Because the ordinary five-year period had expired, the authority could not rely on the ten-year period without establishing the proviso’s conditions. The Court therefore treated the challenge as one going to limitation and jurisdiction, warranting writ review despite the alternative remedy.

It expressly left open the correctness of the valuation and the quantum of stamp duty otherwise payable, confining its decision to limitation and jurisdiction under Section 46A(1).

No order was made as to costs.