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The Times of India
The Times of India
Swati Deshpande | TNN

Collector can’t revise stamp duty already levied and paid, rules Bombay HC

MUMBAI: In a setback to the state’s stamps department and relief to a builder, the Bombay high court had recently held that the collector of stamps had no power under the Maharashtra Stamp Act to revise the stamp duty after it was already levied once and paid. The HC quashed and set aside a show cause notice issued in February to the builder for attachment of his properties over default in payment after repeated demand notices to pay an alleged outstanding of more than Rs 1 crore.

“In the scheme of the enactment, once the collector has passed an order i.e., he certifies an endorsement on the document depicting payment of full duty, then adjudication becomes effective and final and it is not open for him to reopen the said adjudication,” Justice Bharati Dangre had held.

The state is now contemplating filing a review petition against the HC single judge bench order.

Sukoon Construction Pvt Ltd had filed a petition to challenge as “arbitrary and illegal” the collector’s notice and action in relation to a deed of assignment dated August 2009, handing over all rights title and interest of a 4,000-odd sq meter plot at Mouje Oshiwara in its favour. His counsel Mayur Khandeparkar said that the full stamp duty as determined by the collector in May 2010, of over Rs 30 lakh, was paid by the developer.

But on December 31, 2013, the stamp collector issued a notice saying that its audit team noticed that the 2009 deed was “inadequately stamped”. He then received a demand notice in 2019, for paying ‘deficit stamp duty’ of Rs 26 lakh and later two more demand notices, including the last one in February 2022, to also pay penalty of Rs 73 lakh.

Khandeparkar argued that the notice issued is beyond what the Maharashtra Stamp Act contemplates as only the Chief Controlling Revenue Authority has the power to — within six years — revise the decision of the collector — in fixing the stamp duty amount. Once collector endorses the amount, he becomes ‘functus officio’ — lacks power to re-examine the decision.

Khandeparkar also said “action (of attachment) contemplated is in blatant violation of principles of natural justice, as no hearing was granted to the petitioner before revising the stamp duty payable on the said deed and before issuing demand notice.”

State’s lawyer Jyoti Chavan said the revision was justified as the stamp duty earlier levied was improperly calculated.

“The collector has clearly acted beyond his powers in revising the stamp duty on the ground that it was not properly levied and since he had become functus officio, he could not have exercised the power of revising the duty,” said the high court.

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