Stamp duty refund -Transaction Fails – No Cancellation Deed

Judgment dated 3.9.2025 of the High Court of Bombay in Writ Petition No.9140 of 2018 of Qwik Supply Chain Pvt Ltd & another  Vs. Chief Controlling Revenue Authority & others with connected matter.

When Transaction Fails – No Cancellation Deed required for stamp duty refund

Refund of Stamp Duty –Is Deed of Cancellation mandatory   – Section 47[c][5] Stamp Act

Two Deeds of Transfers in favour of the petitioner No.1 were signed by the parties.   They were un-dated.   The petitioner no.1 paid stamp duty of Rs.17,50,000/- and Rs.42,50,000/-, respectively, on two Deeds of Transfer.

However, the said transfers did not fructify and both the unregistered Deeds did not materialize.   Neither the consideration of Rs.3.50 crores was paid nor there was any transfer and handing over of the possession of the flats / land to the petitioner no.1. The conveyance deed was not lodged for registration.

On 13.4.2011, two applications for refund of stamp duty were filed.  However, the Authority insisted on production of a duly executed Cancellation Deed.  One of the affidavits – cum – indemnity bond specifically mentioned the reasons for non-submission of formal Deed of Cancellation due to non-cooperation and refusal of the proposed vendors to join execution of the Cancellation Deed.

HELD that section 47[c][5] is enacted to prevent unjust enrichment of the State when the transaction fails at inception.  The petitioner no.1 paid stamp duty as bona fide purchaser of properties in view of proposed Transfer deeds.  Admittedly, the transfer did not fructify. State cannot insist on Deed of Cancellation especially due to vendor’s reluctance.

Here is a case where the vendors are reluctant to execute Deed of Cancellation.   In the alternate, affidavits-cum-indemnity bound were filed by the Directors of the company as adequate substitutes in such circumstances.