Case Summary: Harshit Harish Jain & Anr. v. State of Maharashtra & Ors. (2025) | Applicability of Limitation Period in Refund Claims

The case revolved around the refund of stamp duty under the Maharashtra Stamp Act, 1958. The judgment addressed the applicability of an amended limitation period for claiming refunds and the statutory powers of the Chief Controlling Revenue Authority (CCRA) to review its orders.

Case Title: Harshit Harish Jain & Anr. v. State of Maharashtra & Ors. 

Court: Supreme Court of India

Citation: Arising out of SLP (C) No. 21778 of 2024

 Judge(s): Justice Vikram Nath, Justice Sanjay Karol and Justice Sandeep Mehta

Judgment on: January 24, 2025

Facts of the Case

Agreement to Sell and Payment of Stamp Duty:

• The appellants agreed to purchase a residential flat (Flat No. 5102 in the Lodha Venezia project, Mumbai) from M/s. Krona Realties Pvt. Ltd. on August 30, 2014.
• They paid an advance of ₹1.08 crores and a stamp duty of ₹27,34,500 on September 18, 2014, as per the Maharashtra Stamp Act.

Developer’s Delay and Cancellation of Agreement:

• The developer informed the appellants of construction delays due to slum clearance issues and offered three options: transfer the booking, cancel with a refund (plus 12% interest), or continue with a revised possession date.
• The appellants opted for cancellation, and a Deed of Cancellation was executed on March 17, 2015, and registered on April 28, 2015. A subsequent Deed of Rectification was executed on May 23, 2016, clarifying refund terms.

Legislative Amendment and Refund Application:

• On April 24, 2015, an amendment to Section 48(1) of the Maharashtra Stamp Act reduced the time limit for claiming a refund from two years to six months (from the date of registration of the cancellation deed).
• On August 6, 2016, the appellants applied for a refund under the pre-amendment two-year limitation period, contending that their cancellation deed was executed before the amendment.

Administrative Decisions:

• The CCRA initially allowed the refund on January 8, 2018, but later reversed its decision on March 3, 2018, citing the amended limitation period.
• After multiple challenges, including writ petitions and remands, the CCRA reaffirmed its stance that the amended six-month limitation period applied.

High Court Decision:

• The appellants filed Writ Petition No. 2018 of 2024 before the Bombay High Court, which dismissed the petition on April 18, 2024, holding that the amended limitation period governed the case.

Issues for Consideration

The Supreme Court framed the following issues for adjudication:

• Whether the amended six-month limitation period under Section 48(1) of the Maharashtra Stamp Act applied to the appellants' claim for a stamp duty refund.
• Whether the CCRA had the statutory power to review and recall its earlier order granting the refund.

Key Arguments

Appellants' Submissions:

• The appellants argued that their right to claim a refund accrued on the date of execution of the cancellation deed (March 17, 2015), which fell under the unamended two-year limitation period.
• They relied on Section 47 of the Registration Act, 1908, which states that a registered document operates from the date of execution, irrespective of the date of registration.
• They contended that the CCRA lacked statutory authority to review or recall its order once the refund had been granted.

Respondents' Submissions:

• The respondents argued that the registration date (April 28, 2015) triggered the limitation period, and the amended six-month timeline applied.
• They justified the CCRA's recall of the refund order, asserting that procedural errors warranted reconsideration.

Supreme Court's Observations and Ruling

1. Applicability of Limitation Period

Accrued Right Under the Pre-Amendment Regime: The Court emphasized that the appellants' right to claim a refund arose on the date of execution of the cancellation deed (March 17, 2015) since this date preceded the amendment (April 24, 2015), the unamended two-year limitation period applied.

Section 47 of the Registration Act, 1908: The Court clarified that a registered document operates from the execution date. Thus, the date of execution, not registration, governed the appellants' claim.

Judicial Precedents: Citing M.P. Steel Corporation v. Commissioner of Central Excise (2015) and other rulings, the Court reiterated that amendments curtailing limitation periods cannot retrospectively extinguish vested rights or accrued causes of action.

2. CCRA’s Power of Review

• Lack of Statutory Authority: The Court held that the CCRA lacked express statutory power to review or recall its orders. Jurisdiction cannot be created by consent or participation in proceedings.
• Quasi-Judicial Functioning: The Court emphasized that quasi-judicial authorities can only exercise powers explicitly conferred by law. The CCRA's subsequent orders recalling the refund were deemed ultra vires.

3. Equitable Considerations

• Fairness in Fiscal Matters: The Court highlighted that fiscal statutes should balance fairness and efficiency. Denying a refund on technical grounds of limitation, especially when the appellants acted in good faith, amounted to unjust enrichment by the State.
• Bona Fide Conduct: The Court noted that the appellants were compelled to cancel their purchase due to the developer’s delays and were not at fault.

Judgment

Allowance of Appeal:

• The Supreme Court set aside the High Court’s judgment dated April 18, 2024, and restored the CCRA’s original order granting the refund.
• The Court held that the appellant's claim for a refund fell under the unamended two-year limitation period.

Quashing of CCRA’s Subsequent Orders:

• The Court quashed the CCRA’s orders dated March 3, 2018, and December 16, 2022, as they were passed without statutory authority.

Interest on Refund:

• The Court directed the respondents to process the refund of ₹27,34,500 within four weeks.
• The appellants were awarded simple interest at 6% per annum from January 8, 2018, until the refund’s disbursement. Any further delay would attract interest at 12% per annum.

Key Takeaways

Limitation and Accrued Rights: Amendments curtailing limitation periods cannot retrospectively extinguish accrued rights. Execution, not registration, is the operative date for rights arising under fiscal statutes.

Statutory Powers of Authorities: Quasi-judicial authorities cannot exercise powers beyond those explicitly conferred by law.

Fairness in Refund Cases: Refund claims under fiscal laws should prioritize equity, especially in cases of bona fide conduct.

This judgment reinforces the principles of equity, statutory interpretation, and procedural fairness in fiscal disputes. It safeguards citizens' rights against arbitrary administrative actions and ensures accountability in quasi-judicial processes.

Click Here to Read the Official Judgment