The petitioner, having executed an Agreement to Sale on 11th June 2009 for the purchase of a flat, paid stamp duty of Rs. 95,100/-. This agreement was duly registered with the concerned authority. However, the agreement was canceled on 15th March 2010 due to disputes between the parties and the petitioner’s inability to arrange the required finances. Following the cancellation, the petitioner applied for a refund of the stamp duty on 26th April 2010, attaching the relevant cancellation deed and the original sale agreement.

Both the original authority and the appellate authority rejected the refund application, citing that it was filed beyond the time limit set under Section 48 of the Bombay Stamp Act, which stipulates a six-month window from the date of the instrument for making a refund application. This rejection was contested by the petitioner, who argued that the application had been made within the time limits as per the applicable provisions, including the amendments introduced in 2010.

Section 48(1) of the Maharashtra Stamp Act governs the time frame for seeking relief under Section 47, which includes applications for refund. At the relevant time (in 2010), the section allowed for a six-month period to make a refund claim from the date of the instrument, which in this case was the Agreement to Sale executed on 11th June 2009.

However, an important proviso to this section was amended in April 2010 (by Maharashtra Act 5 of 2010), extending the period for refund applications in specific circumstances. The amendment allowed a two-year window from the date of a registered cancellation deed if the cancellation was due to disputes, inadequate finances, or other specified reasons, such as illegal construction or suppression of material facts.

The petitioner’s counsel, Ms. Parasnis, argued that under the first proviso to Section 48(1), which applied as per the 2010 amendment, the refund application could be made within two years from the date of the registered cancellation deed. Since the cancellation deed was registered on 15th March 2010 and the refund was requested on 26th April 2010, within two months of the cancellation, the application was well within the prescribed time limit.

In the alternative, Ms. Parasnis also contended that even under the original provisions of Section 48(1) (without the amendment), the refund application fell within the six-month window, as it was made within six months of the cancellation of the Agreement to Sale.

The respondents, represented by Mr. Kankal, opposed the petition, arguing that the cancellation was mutually agreed upon, and therefore, the proviso allowing an extended time limit for refund did not apply. Additionally, they contended that the amendment by Maharashtra Act 5 of 2010 was not applicable to the petitioner’s case, and thus, the six-month time limit should apply, barring the refund application.

The Court carefully examined the provisions of Section 48(1) as they stood prior to and post the 2010 amendment. It observed that under the original Section 48(1), the six-month period for applying for a refund from the date of the instrument (in this case, the Agreement to Sale) applied. Since the cancellation deed was executed on 15th March 2010, the petitioner’s application for refund on 26th April 2010 was within the six-month period from the date of cancellation.

Further, the Court noted that the 2010 amendment extended the refund application period to two years from the date of the cancellation deed if the cancellation was due to disputes or other valid reasons. In this case, the reason for cancellation—disputes between the parties and the petitioner’s inability to arrange finance—fell within the purview of the amended proviso.

Therefore, the Court ruled that the petitioner’s refund application was not time-barred and that the rejection of the application by the authorities was erroneous. The Court emphasized that even if the six-month period was applied, the refund application would still be within the limit. Moreover, the amended provisions under the 2010 amendment, which extended the time limit to two years, were also applicable to the petitioner’s case, strengthening the claim for refund.

The Court ultimately quashed the orders of the original and appellate authorities, directing the respondents to refund the stamp duty amount of Rs. 95,100/- to the petitioner within four weeks from the date of uploading the order. The Court also clarified that permissible deductions, if any, could be made in accordance with law.

This ruling serves as a crucial reminder of the nuances in the application of stamp duty refund provisions under the Maharashtra Stamp Act. It highlights the importance of carefully interpreting the provisions, including the impact of amendments, and reinforces the fact that the time limit for refund claims is not always rigid. In this case, the Court’s intervention ensured that the petitioner’s legitimate claim for a refund was recognized, upholding the spirit of fairness and justice in legal proceedings related to stamp duty.