Statutory Limitation Period Cannot Justify Unjust Enrichment Where Stamp Duty is Paid Under Incorrect Head

The Petitioner purchased electronic stamps worth ₹3,00,100/- on 23.03.2018 for an apartment purchase.

Due to a clerical error, he selected the "consolidated stamp duty" head instead of "non-judicial stamps," rendering the stamps unusable for registration.

Petitioner filed for a refund on 30.11.2018, which was rejected by the Collector of Stamps, Borivali, on 17.12.2018 solely because it was filed 2 months and 8 days beyond the six-month limitation period prescribed under Section 48(3) of the Maharashtra Stamp Act, 1958.

The Chief Controller Revenue Authority upheld this rejection in appeal on 22.11.2021.

Petitioner challenged these orders, citing medical grounds for the delay and alleging unjust enrichment by the State.

1. Whether a delay of 2 months and 8 days in filing a stamp duty refund application can be condoned despite the statutory time limit in Section 48(3) of the Maharashtra Stamp Act.

2. Whether the State can retain stamp duty paid under an incorrect head solely on the grounds of procedural technicalities/limitation.

Section 47(c)(2) and (4) of the Maharashtra Stamp Act, 1958, which allows for allowances for stamps spoiled by error or mistake.

Section 48(3), which stipulates a six-month window for refund applications.

Article 265 of the Constitution of India, which prohibits the collection of tax except by authority of law.

Precedent in Committee-GFIL v. Libra Buildtech (P) Ltd. (2015) and Bano Saiyed Parwad, establishing that while limitation may bar a remedy, it does not extinguish the right to a refund of duty paid by mistake, and the State must act as an "honest person" rather than relying on technicalities.

The court found that the facts were admitted: the Petitioner paid the duty under the wrong head by mistake, a situation squarely covered by Section 47(c)(2).

The court reasoned that since the incorrect head prevented the Petitioner from using the stamps, and the State did not dispute that the transaction went unexecuted, the State's retention of the funds constituted "unjust enrichment".

Although the Stamp Act does not expressly provide the Authority with the power to condone delay beyond six months, the court held that the Act does not explicitly exclude the Limitation Act, nor does it state that applications made after the period cannot be entertained in the interest of justice.

Citing the Supreme Court, the court emphasized that a citizen should not be penalized for an inadvertent clerical error or "procedural technicalities" when their right to a refund is otherwise legitimate.

The Court directed the Respondents to refund ₹3,00,100/- with simple interest at 4% per annum within four weeks and the Writ Petition was allowed.