Stamp Duty refund – Court Upholds Restitution and Interest
The Development Agreement dated 2.6.2011 between the Petitioner and Shri Rajiv Ghule and others was registered and was valued at Rs.10,05,45,000/-. The stamp duty of Rs.20,10,900/- at 2% under Article 25(1-a(A) of Schedule I of the Stamp Act, was paid. However, the petitioner was not given possession of the land.
However, the parties decided to cancel the transaction and the Deed was registered on 3.8.2011.
On 22.10.2012, the petitioner made application for refund of stamp duty under Section 48 of the Stamp Act.
On 12.8.2014, the said application was rejected on the ground that the case does not fit into the ambit of proviso to sub-section (1) of Section 48 of the Stamp Act since the stamp duty was paid under Article 5(g-a)(i) and not Article 25.
HELD that the refund of stamp duty in the present case is admissible under Section 47[c][5] of the Stamp Act, on account of failure of the transaction. However, the issue really is about the period of limitation for making application for refund of stamp duty.
Section 48 provides for different periods of limitation for three classes of cases for refund of stamp duty.
The proviso to sub-section (1) of Section 48 provides that the application for refund may be made in two years, if the stamp duty was paid on agreement to sell under Article 25.
Thus, the Development Agreement stands on par with instrument of conveyance for application of proviso to sub-section (1) of Section 48.
Interest on refund of stamp duty – Principle of Restitution
HELD that interest is normal accretion on capital and should follow when the doctrine of restitution is attracted. The State having received the money without right, retained and used it, is bound to make the party good, just as an individual would be under like circumstances.
Whenever money has been received by a party which ex aquo et bono ought to be refunded, the right to interest follows, as a matter of course.
The petitioner, which had made application for stamp duty refund in 2011, is entitled to simple interest at 6% on refund amount.
