Summary: Kolte Patil Developers Ltd. challenged a large stamp duty demand by the State of Maharashtra, arguing it was imposed beyond legal limits. The Bombay High Court sided with Kolte Patil, canceling the demand as time-barred and procedurally flawed.
Kolte Patil Developers Ltd., based in Pune, found itself in a legal conflict with the State of Maharashtra. The issue revolved around a Development Agreement made on February 24, 2004, with Voltas Limited. This agreement involved a transfer of development rights for Rs. 21.80 crores and was appropriately stamped and registered.
On April 23, 2006, an audit objection was raised, suggesting the agreement should have been stamped at a higher rate. However, on August 28, 2006, the Collector of Stamps dismissed this objection, confirming the stamp duty was correct. This decision was not contested and became final.
Fast forward to September 14, 2009, when the Inspector General of Registration ordered a re-evaluation under Section 33A of the Maharashtra Stamp Act, accepting the old audit objection. This led to a notice demanding an additional Rs. 1.96 crores in stamp duty, with 2% monthly interest.
On April 26, 2014, the Inspector General of Registration issued an order demanding a 10% stamp duty. Kolte Patil argued this was beyond the legal time limit and authority, as no actions under Section 53A were initiated within the required period.
"The order is clearly beyond the period of limitation prescribed under the relevant provisions of the said Act." - Mr. Godbole, Senior Lawyer for Kolte Patil
Kolte Patil's lawyer, Mr. Godbole, emphasized that the 2006 order was final and could not be reopened after the time limit. He argued that the official who issued the 2014 order was not the right person to do so under Section 33A.
On the other hand, the State, represented by Mr. Chandurkar, argued that the agreement essentially transferred property rights, justifying the stamp duty as a property transfer.
The Court, led by Justice Amit Borkar, found that the 2014 order was issued beyond the six-year time limit set by Section 53A. The Court also noted that the person who issued the order didn't have the proper authority.
"Any attempt to reopen the issue of stamp duty liability after the 2006 order had attained finality must withstand scrutiny on two counts." - Justice Amit Borkar
The Bombay High Court canceled the April 26, 2014 order, allowing Kolte Patil to withdraw the deposited amount with interest. This decision emphasized the importance of following legal time limits and proper authority in legal proceedings.
