Can Stamp Duty Proceedings Continue Beyond 6 Years? Bombay HC Single Judge Refers Issue To Larger Bench

On Friday, 28 August, a Single-Judge Bench of the Bombay High Court referred to a Larger Bench the question whether proceedings to recover deficit stamp duty under Section 53A of the Maharashtra Stamp Act, 1958 must be completed within six years, or whether it is sufficient for the proceedings to be initiated within that period.

Justice Amit Borkar was hearing a writ petition filed by Sahyog Homes Ltd. and another, challenging an order passed by the Chief Controlling Revenue Authority directing them to pay Rs. 2.31 crore towards deficit stamp duty. He questioned:

“Whether, on a true interpretation of Section 53A(1) of the Maharashtra Stamp Act, 1958, as it stood prior to the insertion of the proviso in 2026, the period of six years prescribed therein operates only as a period within which proceedings under Section 53A must be initiated, or whether the Chief Controlling Revenue Authority is required to pass the final order determining and recovering deficit stamp duty within the said period of six years?”

The dispute arose from a 2004 conveyance of land at Oshiwara, Mumbai, for which Rs. 13 lakh had originally been paid as stamp duty following adjudication by the Stamp Authority.

The Court noted that the key issue was whether the six-year period under Section 53A applies only to initiation of proceedings or extends to the entire process, including the final order determining and recovering deficit stamp duty.

The petitioners relied on the decisions in Sony Mony Electronics Limited v. State of Maharashtra, Kolte Patil Developers Ltd. v. State of Maharashtra and Romell Real Estate Pvt. Ltd. v. State of Maharashtra, in which Single Benches of the High Court had held that the six-year limitation covers the entire exercise under Section 53A, including the final recovery order.

Justice Borkar, however, noted the significance of the 2026 amendment to Section 53A. The newly inserted proviso states that where a notice initiating proceedings is issued within six years, the proceedings will not lapse merely because the six-year period expires and may continue until the Chief Controlling Revenue Authority passes the final order.

The Court observed that the amendment raises the question whether it introduced a new legal position or merely clarified the legislative intent underlying the unamended provision. It also noted that the interpretation adopted in Sony Mony Electronics is currently under consideration before the Supreme Court.

Further, the Bench observed that the issue concerns the interpretation of a fiscal statute and has implications both for the State's power to recover deficient stamp duty and for the certainty and finality available to persons whose instruments have already been adjudicated. It stated:

“Thus, there appears to be considerable force in the submission that the interpretation in Sony Mony, particularly the conclusion that the final order under Section 53A(1) must necessarily be passed within six years, may require reconsideration by a larger Bench. The question concerns interpretation of a fiscal statute. The answer affects the extent of revisional power of the Chief Controlling Revenue Authority and the certainty and finality available to a person whose instrument has already been adjudicated by the Collector.”

Justice Borkar also referred a connected question as to whether, even if the six-year period applies only to the initiation of proceedings, the final order must be passed within a reasonable period and, if so, what principles should govern the determination of such period. The Larger Bench will also consider whether the proviso inserted in 2026 is declaratory or substantive in nature.

Accordingly, the Single-Judge Bench directed the Registry to place the papers before the Chief Justice for the constitution of a Larger Bench. It clarified that the writ petition will remain pending and will be decided after the Larger Bench answers the questions referred to it.

For the Petitioners: Mr. Durgaprasad Sabnis, Advocate, along with Rajani Yadav, instructed by LEX FIRMUS

For Respondent Nos. 1 to 4: Smt. A.A. Nadkarni, AGP