KALPATARU PROPERTIES PVT. LTD.versusSTATE OF MAHARASHTRA THROUGH THE PRINCIPAL SECRETARY, REVENUE AND FOREST DEPT. AND ORS.

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                      AGK
                                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                        CIVIL APPELLATE JURISDICTION

                                        WRIT PETITION NO.1856 OF 2017

                      Kalpataru Properties Private Limited             … Petitioner

                                              Vs.

                           1. The State of Maharashtra
                           2. Chief Controlling Revenue Authority
                              and Inspector General of Registration
                              and Collector of Stamps
                           3. The Collector Stamps, Mumbai             … Respondents
ATUL
GANESH
KULKARNI
Digitally signed by   Mr. Mayur Khandeparkar with Mr. Sarthak Utangale,
ATUL GANESH
KULKARNI              and Mr. Dinesh Parmar i/by M/s. Utangale & Co., for
Date: 2026.08.19
12:04:03 +0530        the Petitioner.
                      Smt. Mamta S. Shrivastava, AGP for Respondent Nos.1
                      to 3.



                                           CORAM                 : AMIT BORKAR, J.

                                           RESERVED ON           : AUGUST 17, 2026.

                                           PRONOUNCED ON         : AUGUST 19, 2026

                      JUDGMENT:

                      1.      By the present writ petition filed under Articles 226 and 227
                      of the Constitution of India, the Petitioner has challenged the
                      legality, validity, and propriety of the impugned order dated 18
                      June 2016 passed by Respondent No.2.




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2.     The facts and circumstances leading to the filing of the
present writ petition, as stated by the Petitioner, are as follows. On
16 January 2004, a Development Agreement was entered into
between Precious Finance and Investment Private Limited, being
the Owner, and Kalpataru Construction Overseas Private Limited,
referred to as Kalpataru or the Developer. Under the said
Development Agreement, the Developer was granted exclusive
rights, authority and powers to develop or redevelop the property
admeasuring about 1075.35 sq. mts., bearing Cadastral Survey
Nos. 3/590 and 4/590 of Malabar and Cumballa Hill Division,
Mumbai City, situated at 24-24A, L. Jagmohandas Marg, Mumbai
400036, hereinafter referred to as the said Property. The agreed
consideration was Rs.10,31,00,000/-, and the Development
Agreement contained a covenant for ultimate transfer of the said
Property in favour of the Developer or its nominees. The Owner
executed a Power of Attorney in favour of the Developer. Before
execution of the Development Agreement, Kalpataru had filed an
Application for Adjudication under Section 31 of the Bombay
Stamp Act, 1958, being Adjudication Case No. ADJ/360/2003,
before the Collector of Stamps, Mumbai. By the said application,
Kalpataru had sought determination of the proper stamp duty
payable on the Development Agreement.

3.     According to the determination made by the Office of the
Collector of Stamps, Mumbai, and the Demand Notice issued in the
said   Adjudication   Case,    Kalpataru    paid   stamp    duty      of
Rs.10,31,000/- at the rate of 1% under the then prevailing Article
5(g-a) of Schedule I to the Stamp Act. The amount was paid on 1



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January 2004 by Challan No.155455. An endorsement dated 3
January 2004 to that effect was made by the Collector of Stamps.,
on 4 February 2004, the Development Agreement was presented
before the Office of the Joint Sub-Registrar of Assurances, Mumbai
City No.1 for admission of execution and was duly registered
under Serial No. BBE-1-00856/2004., the name of Kalpataru
Overseas Private Limited was changed to Kalpataru Properties
Private Limited. In May 2007, Kalpataru and the Owner proposed
to execute a Conveyance Deed in respect of the said Property. For
determining the proper stamp duty payable on the proposed
Conveyance Deed, they filed an application being Adjudication
Case No. ADJ/816/M/2007 before the Collector of Stamps,
Mumbai. On 16 May 2007, on the basis of the market value of
Rs.10,31,00,000/- of the said Property as stated in the proposed
Conveyance Deed, which according to the Petitioner was the value
determined at the time of entering into the Development
Agreement, the Collector of Stamps issued a Demand Notice in
Adjudication Case No.816/M/2007. By the said Demand Notice,
Kalpataru was called upon to deposit Rs.51,55,000/- as proper
stamp duty, calculated at the rate of 5% under Article 25(b) of
Schedule I to the Stamp Act.

4.   On 18 May 2007, the Developer deposited Rs.51,55,000/-
towards payment of stamp duty by Challan No.6, and an
endorsement of the same date was made by the Collector of
Stamps on the Conveyance Deed. On 11 June 2007, Kalpataru and
the Owner executed the Deed of Conveyance, by which the said
Property   was    conveyed     for   a   total   consideration      of



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Rs.10,31,00,000/-. The Conveyance Deed was duly registered with
the Sub-Registrar of Assurances, Mumbai City No.1 under Serial
No.6461 of 2007.

5.    In the year 2007, the accounts of the Collector of Stamps
were inspected by the Audit Team of the Accountant General (II),
Nagpur. During the said inspection, an audit objection was raised
regarding what was considered to be an incorrect determination of
stamp duty payable on the Conveyance Deed. An Audit Report was
accordingly prepared. The relevant observations recorded therein
were that, as per Recital V of the Conveyance Deed, the Owner had
granted development rights to Kalpataru under the Development
Agreement together with a covenant for transfer of the said
Property in its favour. It was noted that the Owner had
simultaneously   executed    a   Power   of   Attorney    authorizing
Kalpataru to execute the deed of transfer of the said Property in its
own favour. The Audit Report referred to Recital No.(vii),
according to which Kalpataru was put in possession of the said
Property after execution of the Development Agreement. It
referred to Recital D(i), which recorded that Kalpataru had paid
the Owner the entire agreed lump-sum consideration of
Rs.10,31,00,000/- in full and consideration for transfer of the said
Property. Recital D(ii) was understood by the Audit Team as stating
that the transaction had, in every respect, already stood completed
under the Development Agreement dated 16 January 2004, and
that the subsequent Conveyance Deed was executed only for
confirming the nominal title of the Owner at the request of
Kalpataru. On this basis, the Audit Team took the view that the



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Conveyance Deed was merely a confirmation of a conveyance
which had already taken place on 16 January 2004. According to
the Audit objection, stamp duty at the rate of 10%, being the rate
prevailing in 2004, was payable on the consideration of
Rs.10,31,00,000/-,   which      came   to   Rs.1,03,10,000/-.     Since
Rs.10,31,000/- had been paid on the Development Agreement and
Rs.51,55,000/- had been paid on the Conveyance Deed, the Audit
Report concluded that there was a short levy of stamp duty of
Rs.41,24,000/-. The calculation recorded in the Audit Report was
as follows. Consideration was Rs.10,31,00,000/-. Stamp duty at
10%,    according    to   the   rate   prevailing   in   2004,      was
Rs.1,03,10,000/-. Stamp duty paid on the Development Agreement
was Rs.10,31,000/- and stamp duty paid on the Conveyance Deed
was Rs.51,55,000/-. According to the Audit objection, the resulting
short levy was therefore Rs.41,24,000/-.

6.     On 1 July 2011, the Inspector General of Registration and
Controller of Stamps, Maharashtra, referred to hereinafter as the
said Authority, issued a notice to Kalpataru under Section 53A of
the Stamp Act regarding alleged short payment of stamp duty on
the Conveyance Deed, which had earlier been adjudicated in
Adjudication Case No. ADJ/M/816/2007. The notice stated that
stamp duty of Rs.41,24,000/- was short paid on the Conveyance
Deed. Kalpataru was accordingly called upon either to deposit the
said amount or to appear before the said Authority with necessary
documents on 18 July 2011 for hearing on the said issue. On 14
July 2011, Kalpataru submitted an interim reply to the notice
dated 1 July 2011. It was stated that Adjudication Case



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No.816/2007 related to the Conveyance Deed, whereas the nature
of the document referred to in the notice was described as
“Agreement or its Records or Memorandum of an Agreement”.
Kalpataru stated that it had already paid Rs.51,55,000/- as proper
stamp duty on the Conveyance Deed, in accordance with the
adjudication made by the Collector of Stamps, Mumbai in the
Demand Notice dated 16 May 2007. It was pointed out that, under
the heading ‘Required Stamp Duty’, the notice mentioned
Rs.1,03,10,000/- as the stamp duty payable on the Conveyance
Deed, but did not disclose any reason or basis for arriving at that
amount. On 28 July 2011, Kalpataru submitted a detailed reply to
the said Authority in response to the notice dated 1 July 2011.
Kalpataru stated that, under the Development Agreement, the
Owner had granted it exclusive development rights in respect of
the said Property together with a covenant for ultimate transfer
thereof, for a lump-sum consideration of Rs.10,31,00,000/-. It was
stated that the proper stamp duty on the Development Agreement
had already been adjudicated by the Collector of Stamps, Mumbai
in Adjudication Case No. ADJ/360/2003 at Rs.10,31,000/-. The
said amount was paid at the then prevailing rate of 1% of the
consideration or market value under Article 5(g-a) of Schedule I to
the Stamp Act, and the document was certified under Section 41 of
the Stamp Act as having paid proper stamp duty. Kalpataru stated
that the Conveyance Deed had separately been adjudicated in Case
No.ADJ/M/816/2007       and    was    stamped     with    duty      of
Rs.51,55,000/-, calculated at the then prevailing rate of 5% of the
consideration or market value under Article 25(b) of Schedule I to




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the Stamp Act. According to Kalpataru, the endorsement made by
the Collector of Stamps on the Conveyance Deed under Section
32(1)(b) certified that the proper stamp duty payable thereon had
been paid. Kalpataru contended that title in the said Property was
conveyed and transferred in its favour only upon execution of the
Conveyance Deed. It was contended that the said Authority was
relying upon certain recitals in the Conveyance Deed to treat the
earlier Development Agreement as a “conveyance” and was
thereby seeking to levy stamp duty of Rs.1,03,10,000/- at the rate
of 10% under Article 25(b) of Schedule I to the Stamp Act, as
applicable at the relevant time. According to Kalpataru, the alleged
short levy of Rs.41,24,000/- was therefore wrongly calculated.
Kalpataru contended that Article 5(g-a) of Schedule I to the Stamp
Act created a separate category for development agreements and
prescribed stamp duty at the rate of 1%. It was contended that
although the notice was formally issued in respect of the
Conveyance Deed, the reasons, and explanations appearing in the
Inspection Report showed that the said Authority was indirectly
seeking to reassess the stamp duty payable on the Development
Agreement, even though that document was not the subject matter
of the notice. Lastly, Kalpataru contended that the demand was
barred by limitation. According to it, Section 53A(1) of the Stamp
Act permitted the CCRA to exercise the power under the said
provision only within six years from the date of the certificate
issued by the Collector under Sections 32, 39 or 41. Kalpataru
pointed out that the Collector had endorsed the certificate under
Section 41 regarding payment of proper stamp duty on the




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Development Agreement on 3 January 2004, whereas the notice
was issued only on 1 July 2011, after expiry of more than six
years.

7.       On 17 August 2011, the Advocate for Kalpataru addressed
another letter in response to the notice dated 1 July 2011., on 4
October 2011, a second notice was issued by the IGR and
Controller of Stamps, Maharashtra under Section 53A of the
Stamp Act, again calling upon Kalpataru to pay the alleged short
stamp duty of Rs.41,24,000/-., on 1 November 2014, a third notice
was issued under Section 53A, calling upon Kalpataru either to pay
the alleged short stamp duty of Rs.41,24,000/- or to appear before
the said Authority with necessary documents on 19 November
2014 for hearing., on 13 October 2015, a fourth notice was issued
by the IGR and Controller of Stamps, Maharashtra under Section
53A, again calling upon Kalpataru to pay Rs.41,24,000/- as alleged
short payment of stamp duty or to appear before the said Authority
with necessary documents on 27 October 2015 for hearing. On 30
November 2015, Kalpataru submitted its response to the fourth
notice dated 13 October 2015. It was stated that the Office of the
IGR and Controller of Stamps had repeatedly issued notices under
Section 53A in respect of the same document, namely the
Conveyance Deed dated 11 June 2007 by which the said Property
was conveyed to Kalpataru. Kalpataru pointed out that the notice
dated 13 October 2015 was the fourth such notice issued over a
period of four years. It was stated that detailed hearings in the
matter had already taken place and had concluded about four
years earlier, and detailed replies and submissions had been filed



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before the said Authority. Kalpataru referred in this regard to its
letter dated 14 July 2011, filed on 18 July 2011, its letter dated 28
July 2011, filed on 1 August 2011, and its letter dated 17 August
2011, filed on the same date. By the said response, Kalpataru
called upon the said Authority to pass a speaking order on the
notice. It was stated that the notice was only a repetition of the
earlier notices which had already been contested and heard.
Kalpataru     requested       that   its      earlier    communications     and
submissions filed in the proceedings should be treated as its reply
to the notice then under consideration.

8.    On 30 June 2016, the Office of the IGR and Controller of
Stamps      addressed     a     letter       to   KPPL     bearing   Ref.    No.
D.O.14/Rev.25/2011/767-70116, by which the order dated 18
June 2016 passed by the IGR and Controller of Stamps,
Maharashtra in Revision Case No.25 of 2011 was forwarded. By
the said order, it was held that there was a short levy of stamp
duty of Rs.41,24,000/- payable by Kalpataru in respect of the
Conveyance Deed.

9.    Mr. Khandeparkar, learned Advocate for the Petitioner,
submits that the Respondents are in fact seeking to demand stamp
duty on the Development Agreement dated 16 January 2004.
However, according to him, this demand is being made in the form
of a demand for stamp duty on the Deed of Conveyance, by issuing
the first demand notice dated 1 July 2011. He submits that it is for
this reason that the Petitioner has raised the bar of limitation
under Section 53A of the Stamp Act.




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10.   He submits that the Petitioner had applied for adjudication
in Adjudication Case No.1360 of 2003. Pursuant to the said
application, the proper stamp duty payable on the Development
Agreement was determined by the Office of the Deputy Inspector
General of Registration and Deputy Controller of Stamps, Bombay,
which was the predecessor of Respondent No.3. The stamp duty so
determined was paid by the Petitioner. By a Certificate dated 3
January 2004 endorsed on the Development Agreement, the Office
of the Deputy Inspector General of Registration and Deputy
Controller of Stamps, Bombay certified that the proper stamp duty
of Rs.10,31,000/- payable under Article 5(g-a) of the Stamp Act
had been duly paid. According to the Petitioner, the entire
procedure for adjudication and payment of proper stamp duty on
the Development Agreement, as provided under the Stamp Act,
was properly followed and completed. Therefore, according to the
Petitioner, there was no deficit in stamp duty either on the
Development Agreement or on the Deed of Conveyance, as has
been wrongly held and demanded by Respondent No.2 under the
impugned order.

11.   It is submitted that the revision proceedings are barred by
limitation. According to the Petitioner, the case of Respondent
No.2, based on the Audit Report, is that the Development
Agreement dated 16 January 2004 was in fact the document by
which the conveyance had taken place, and that the Deed of
Conveyance dated 11 June 2007 was only a confirmation of that
earlier transaction. On that basis, Respondent No.2 has treated the
Development Agreement as being insufficiently stamped and has



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taken the view that it ought to have been charged with stamp duty
at the rate of 10%. The Petitioner submits that Respondent No.2
has wrongly treated the Development Agreement as an agreement
for sale deemed to be a conveyance by virtue of Explanation 1 to
Article 25 of the Stamp Act. It is submitted that Section 53A(1) of
the Stamp Act permits Respondent No.2 to exercise the power of
revision only within six years from the date of the certificate issued
by Respondent No.3 under Sections 32, 39 or 41 of the Stamp Act.
Admittedly, the certificate was endorsed or issued on the
Development Agreement on 3 January 2004 by the Office of the
Deputy Inspector General of Registration and Deputy Controller of
Stamps, Bombay, which was the predecessor of Respondent No.3.
However, the revision proceedings were started by the first notice
of demand dated 1 July 2011, which was issued more than six
years. According to the Petitioner, the period of six years had
expired on 2 January 2010. Therefore, Respondent No.2 could not
exercise the power of revision in respect of the Development
Agreement.

12.   Smt. Srivastava, learned AGP appearing for the State, on the
other hand, submits that on scrutiny of the document, it was found
that Recital V showed that the vendor, under the agreement dated
16 January 2004, which was registered with the Sub-Registrar,
Mumbai under No. BBE-1/0856/2004 dated 4 February 2004, had
granted rights for redevelopment of the said Property together
with a covenant for transfer of the Property in favour of the
purchaser. It was found that the vendor had executed a Power of
Attorney in favour of the purchaser. According to her, Recital No.



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(vii) showed that the vendor had put the purchaser in possession
of the Property after execution of the Development Agreement
dated 16 January 2004. She submits that Recital D(i) recorded
that the purchaser had paid to the vendor the total agreed lump-
sum consideration of Rs.10,31,00,000/- in full and consideration
for transfer of the said Property by the vendor to the purchaser.
Recital D(ii), according to her, showed that the transaction in every
respect was ipso facto completed under the agreement dated 16
January 2004 and that the subsequent Deed was executed only for
the purpose of confirming the nominal title of the vendor at the
request of the purchaser. It is, therefore, submitted that the
subsequent Deed was only a confirmation of the conveyance which
had already taken place on 16 January 2004. On this basis, it is
contended that stamp duty at the rate of 10%, which was the
prevailing rate in the year 2004, was payable on the consideration
of Rs.10,31,00,000/-, amounting to Rs.1,03,10,000/-. However,
only Rs.51,55,000/- was charged as stamp duty at the rate of 5%
on the subsequent Deed, which according to the State was only a
confirmation deed. It is, therefore, submitted that there was a
short levy of stamp duty of Rs.41,24,000/-. The calculation relied
upon by the State is as follows: Consideration: Rs.10,31,00,000/-;
Stamp duty at 10% prevailing in 2004: Rs.1,03,10,000/-; Less
stamp duty paid on the Development Agreement: Rs.10,31,000/-;
Less stamp duty paid on the subsequent Deed: Rs.51,55,000/-;
Short levy of stamp duty: Rs.41,24,000/-

13.   She states that the Audit had raised an objection regarding
short levy of stamp duty of Rs.41,24,000/- on the document. She



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submits that the question of recovery of the alleged short levy
arose upon execution of the Conveyance Deed dated 11 June
2007. According to her, the proceedings are, therefore, in respect
of the short levy arising from the Deed of Conveyance and not
from the Development Agreement. She submits that Respondent
No.3 had made the endorsement or issued the certificate on the
Deed of Conveyance on 18 May 2007. The intimation regarding
the proceedings was issued to the Petitioner on 1 July 2011,
calling upon the Petitioner to remain present for hearing on 18
July 2011. The notice was received by the Petitioner on 5 July
2011. It is, therefore, submitted that the proceedings were
initiated within the prescribed period and that the contention of
the Petitioner that the proceedings are barred by limitation is not
correct.

REASONS AND ANALYSIS:

14.   I have considered the rival submissions and gone through the
impugned order passed by the Chief Controlling Revenue
Authority. In my view, the main controversy is whether the
proceeding commenced under Section 53A of the Maharashtra
Stamp Act was, in substance, a proceeding for reopening the stamp
duty already adjudicated in respect of the Development Agreement
dated 16 January 2004, as submitted by the Petitioner. Or whether
it was an independent proceeding concerning the alleged short
levy of stamp duty on the Conveyance Deed executed in the year
2007, as contended by the State. The answer to this question is
important because the question of limitation under Section 53A
will have to be considered with reference to the instrument which



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was, in fact and in substance, sought to be revised.

15.   Before considering the rival submission, it is necessary to see
what is recorded and held in the impugned order. The impugned
order records that the Audit objection was concerning the
“document of Conveyance as to short levy of stamp duty of
Rs.41,24,000/- due to incorrect determination of stamp duty.” At
the same time, the order refers to the contention that the
Development Agreement dated 16 January 2004 was being treated
as an Agreement to Sale and that, according to the Petitioner,
reopening of such determination under Section 53A had become
barred after expiry of six years. Thus, even from the impugned
order, it appears that the question of limitation was connected with
the nature of the transaction and the basis on which the additional
stamp duty was sought to be recovered.

16.   The Development Agreement was executed on 16 January
2004. Before or in connection with its execution, the Petitioner had
approached the competent authority for adjudication. Stamp duty
of Rs.10,31,000/- was determined and paid under Article 5(g-a),
and an endorsement under Section 41 was made on 3 January
2004., the Development Agreement was registered., when the
parties intended to execute the Conveyance Deed, a separate
adjudication proceeding was undertaken in the year 2007. The
Collector of Stamps determined the stamp duty payable on the
Conveyance Deed at Rs.51,55,000/-, being 5% of the consideration
of Rs.10,31,00,000/-. The said amount was paid and the
Conveyance Deed came to be executed and registered.




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17.   It is the submission of the Petitioner that two separate
instruments were placed before the competent stamp authority at
two different stages and both were separately dealt with. The
Development Agreement was adjudicated according to the law
applicable at that time. The Conveyance Deed was presented for
adjudication and stamp duty was paid according to the
determination made in that proceeding. According to the
Petitioner, after both these instruments had gone through the
procedure, Respondent No.2 could not, under the guise of
examining the stamp duty payable on the Conveyance Deed,
reopen the character of the Development Agreement after expiry of
six years.

18.   In my view, the submission of the Petitioner cannot be
rejected only by looking at the description or title of the notice.
The nature of the proceeding has to be seen from the reasons on
which the demand is based. A authority may describe a proceeding
as relating to one particular instrument. However, if the basis of
the demand is that an earlier instrument was wrongly stamped
because it was in truth another kind of instrument, the Court will
have to see the substance of such exercise and not merely the
description given to it.

19.   This aspect becomes more important because the impugned
order proceeds with reference to the Development Agreement
dated 16 January 2004. The reasoning records that the
Development Agreement was executed on 16 January 2004 and
that the Conveyance Deed was executed on the strength of the
Power of Attorney. The order takes note of the contention that the



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principal document was executed in the year 2004 and recovery of
the alleged short levy had become time-barred under Section 53A.

20.   The answer given by Respondent No.2 to this contention is
that “it is on the execution of Conveyance on 16 June 2007 the
instance of recovery against short levy arises due to a Deed of
Conveyance and not the Agreement for Development.” The order
states that the endorsement or certificate on the Conveyance Deed
was made on 18 May 2007 and the first intimation of the
proceeding was issued on 1 July 2011. On this basis, the objection
regarding limitation was rejected.

21.   In my view this reasoning does not answer the objection
raised by the Petitioner. Merely because the demand is described as
arising from the Conveyance Deed does not conclude the matter. It
was necessary for Respondent No.2 to explain why the alleged
deficiency of Rs.41,24,000/- was arising from the Conveyance
Deed and was not arising from the earlier assessment and stamp
duty treatment of the Development Agreement. The calculation
made in the impugned order is significant in this respect. The
order proceeds on the basis that the total stamp duty chargeable at
the rate of 10% in the year 2004 was Rs.1,03,10,000/-. From this
amount, credit is given to the stamp duty of Rs.10,31,000/- paid
on the Development Agreement and Rs.51,55,000/- paid in
connection with the later Conveyance Deed.The alleged short levy
of Rs.41,24,000/- is arrived at subsequently. Therefore, the
foundation of the demand does not appear to be merely that the
Conveyance Deed of 2007 was insufficiently stamped at the rate
applicable in the year 2007. The whole calculation starts from the



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basis that the transaction had attracted stamp duty at the rate of
10% in the year 2004. This becomes clear from the reasoning of
Respondent No.2 concerning Explanation I below Article 25. The
impugned order records:

      “Explanation I. -For the purposes of this article, where in the
      case of agreement to sell an immovable property, the
      possession of any immovable property is transferred [or
      agreed to be transferred to the purchaser before the
      execution, or at the time of execution, or after the execution
      of, such agreement [* * *] then such agreement to sell shall
      be deemed to be a conveyance and stamp duty thereon shall
      be leviable accordingly:
      Provided that, the provisions of section 32A shall apply
      mutatis mutandis to such agreement which is deemed to be a
      conveyance as aforesaid, as they apply to a conveyance
      under that section:
      Provided that, where a conveyance is executed in pursuance
      of such agreement of sale, the stamp duty, if any, already
      paid and recovered on the agreement of sale which is
      deemed to be a conveyance, shall be adjusted.”
22.   On the basis of the above provision, the impugned order
proceeds on the footing that the document described as
Development Agreement was, according to the case put forward by
the Revenue, in substance an Agreement to Sale. It proceeds on
the basis that the stamp duty paid on the earlier document was
liable to be adjusted against the total duty payable. The impugned
order records that the Petitioner had paid 1% at the time of
execution of the document in the year 2004 and, after the
amendment to Article 25, paid a 4% at the time of execution of the
Conveyance Deed. The order then concludes that “the Lower



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Authority has mistaken to apply the percentile properly.”

23.   Therefore, when the reasoning of the impugned order is seen
as a whole, it appears that the Development Agreement is being
treated differently from the manner in which it was adjudicated.
The alleged short levy is worked out by treating the transaction
reflected in the Development Agreement as having attracted stamp
duty applicable to a conveyance in the year 2004, while giving
adjustment for the amounts paid on both the documents. This
appears to be the main basis of the demand.

24.   The Petitioner has relied upon Article 5(g-a), as it stood at
the relevant time. The material part of the provision reads as
follows:

 “Article 5 (ga) [i] if      Five ruppes for every five hundred
 relating    to     giving   rupees or part thereof of the market
 authority or power to a     value of the property.
 promoter of a developer,
                             Provided that, the provisions of
 by     whatever    name
                             section 32A shall, mutatis mutandis,
 called, for construction
                             apply to an instrument under that
 on, development of or,
                             section:
 sale or Transfer (in any
 manner whatsoever) of,      Provided that, if the proper stamp
 any          immoveable     duty is paid under clause (g) of
 property.                   article 48 on a power of attorney
                             executed between the same parties in
                             respect of the same property then,
                             the stamp duty under this article
                             shall be one hundred rupees.”

25.   The above provision dealt with an instrument relating to
authority or power given to a promoter or developer for



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construction, development, sale, or transfer of immovable
property. The Development Agreement was placed before the
competent authority for adjudication under the machinery. The
competent authority determined the stamp duty and made the
necessary endorsement. It is not the case of the Respondents that
the Petitioner had concealed the Development Agreement or
avoided the procedure of adjudication. On the contrary, the
document was voluntarily placed before the competent authority
for determination of proper stamp duty.

26.   This fact, in my view, has considerable importance. This is
not a case where an insufficiently stamped document remained
outside the knowledge of the stamp authority and was discovered
later. The competent authority adjudicated the document. A
certificate was issued under the relevant provision. The document
was acted upon and registered. Therefore, if the case of
Respondent No.2 is that the competent authority in the year 2004
wrongly understood the legal nature of the Development
Agreement and wrongly applied Article 5(g-a), such exercise
would concern the earlier adjudication and certificate.

27.   The Respondents have relied upon the recitals contained in
the Conveyance Deed. According to the State, Recital V shows that
development rights were granted together with a covenant for
transfer of the Property. The Power of Attorney was executed. The
purchaser   was put in      possession    after execution       of the
Development Agreement. Recital D(i) records payment of the full
consideration of Rs.10,31,00,000/-. Recital D(ii), according to the
Respondents, shows that the transaction was already completed in



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every respect under the Development Agreement and that the
Conveyance Deed was executed only for confirmation of title.

28.   The recitals are relevant for deciding the nature of the
transaction. The title or name given to an instrument is not
decisive. A document described as a Development Agreement may,
depending upon its terms and legal effect, attract stamp duty
applicable to another category of instrument. Therefore, the
substance and effect of the transaction will have to be examined.
However, this principle does not answer the question of limitation.
Even if, for examining the submission of the Respondents, it is
assumed that the recitals were capable of supporting the view that
the Development Agreement had characteristics of an agreement
to sale with possession, the question still remains as to when the
authority could exercise the power under Section 53A for revising
the earlier determination. The possibility that there was an error in
the earlier adjudication cannot,, remove the limitation, if the
proceeding      is   in   substance    directed   against   that    earlier
adjudication.

29.   The Respondents seek to meet this difficulty by submitting
that the recovery proceeding commenced from the certificate or
endorsement on the Conveyance Deed dated 18 May 2007 and,
therefore, the notice dated 1 July 2011 was within six years. This
submission would have considerable force if the alleged short levy
had arisen from the adjudication of the Conveyance Deed. For
example, if the authority had found that the Conveyance Deed, on
its own contents and having regard to the applicable rate at the
relevant time, was wrongly charged with 5% instead of some other



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rate, limitation could possibly be considered with reference to the
certificate concerning that document. However, this is not what the
impugned order does. It does not say that the Conveyance Deed,
as a Conveyance Deed executed in the year 2007, attracted stamp
duty at 10% under the law applicable to that instrument at that
stage. Instead, the order proceeds on the basis that the transaction
was already substantially completed in the year 2004, that the
Development Agreement was in substance an Agreement to Sale
deemed to be a Conveyance, and that stamp duty at the rate of
10% was payable with reference to the year 2004. The later
Conveyance Deed is then treated as a document in respect of
which the earlier stamp duty could be adjusted.

30.   This reasoning brings the case within the objection raised by
the Petitioner. If the alleged short levy was arrived at by reopening
the legal character and stamp duty chargeability of the
Development Agreement of 2004, the starting point cannot be
shifted to the year 2007 only because a subsequent Conveyance
Deed was executed, and the demand was made with reference to
that deed.

31.   There is one more difficulty in the reasoning of the
impugned order. The order records that the Audit objection was
“limited to the chargeability of stamp duty to the present
document whether it is 10% or 5%.” However, while deciding this
issue, the authority goes back to the Development Agreement of
2004 and treats it as an Agreement to Sale deemed to be a
Conveyance. Thus, the reasoning appears to move between two
different propositions. On one hand, the proceeding is said to



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concern only the Conveyance Deed. On the other hand, the alleged
deficiency is calculated by saying that the earlier Development
Agreement should have attracted stamp duty at 10% in the year
2004.

32.     A quasi judicial order which creates a demand of stamp duty
against a party must identify the instrument in respect of which
the revisional power is being exercised, the earlier certificate
which is sought to be revised or reconsidered, the legal provision
under which such exercise is permissible, and the date from which
limitation is required to be calculated. The impugned order does
not appear to undertake this exercise in a clear manner. The
provisions of Section 4, which were relied upon during the course
of arguments, are relevant in this background. Section 4 provides:

        “Section 4. Several instruments used in single transaction of
        [development agreement,] sale, [lease,] mortgage or
        settlement.—
        (1) Where, in the case of any [development agreement,]
        sale, [lease,] mortgage or settlement, several instruments are
        employed for completing the transaction, the principal
        instrument only shall be chargeable with the duty prescribed
        in Schedule I for the conveyance, [development agreement,]
        [lease,] mortgage or settlement, and each of the other
        instruments shall be chargeable with a duty of [five hundred
        rupees] instead of the duty (if any) prescribed for it in that
        Schedule.
        (2) The parties may determine for themselves which of the
        instruments so employed shall, for the
        purposes of sub-section (1), be deemed to be the principal
        instrument.




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      (3) If the parties fail to determine the principal instrument
      between themselves, then the officer before whom the
      instrument is produced may, for the purposes of this section,
      determine the principal instrument:
      Provided that the duty chargeable on the instrument so
      determined shall be the highest duty which would be
      chargeable in respect of any of the said instruments
      employed.”
33.   Section 4 permits that sometimes several instruments may be
used for completing one transaction. In such a case, identification
of the principal instrument becomes important. Sub section (2)
permits the parties to determine which instrument is to be treated
as the principal instrument. Sub section (3) provides that where
the parties fail to do so, the officer before whom the instrument is
produced may determine the principal instrument. Therefore, if
the case of the Revenue is that the Development Agreement and
the subsequent Conveyance Deed were parts of one transaction,
the scheme required a proper examination of both instruments and
their respective place in the transaction.

34.   The impugned order does not determine the matter on the
basis of Section 4. It does not record that the parties had selected
one instrument as the principal instrument and the other as a
subsidiary instrument. It does not exercise the power under
Section 4(3) for determining which instrument was the principal
instrument. Instead, the order proceeds under Explanation I to
Article 25 and concludes that the Development Agreement was an
Agreement to Sale deemed to be a Conveyance. The difficulty is
that the order seeks to impose the consequence of treating the




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Development Agreement as a deemed Conveyance without dealing
with the earlier adjudication of that instrument within the period
applicable for such exercise. The later Conveyance Deed cannot
give a fresh starting point of limitation for revising the stamp duty
treatment of an earlier document, when the basis of the demand is
that the earlier document was wrongly stamped.

35.   The contention of the Petitioner that the Development
Agreement and the Conveyance Deed were separately adjudicated
cannot be brushed aside. The sequence of events supports this
submission. The Development Agreement was adjudicated under
Article 5(g-a). The Conveyance Deed was separately presented for
adjudication under Article 25(b). The competent authority treated
the two instruments separately at the relevant time. The impugned
order does not explain why the certificate under Section 41 in
respect of the Development Agreement could be reopened after
expiry of six years merely because the Revenue came to a different
view after considering the recitals in the later Conveyance Deed.

36.   The submission of the State that the notice dated 1 July
2011 was issued within six years from the endorsement on the
Conveyance Deed dated 18 May 2007 is only partly relevant. It
would establish that, if the proceeding was against the
adjudication of the Conveyance Deed, the notice was within the
period calculated from that certificate. However, it does not
answer the question whether the demand was based upon
reassessment of the stamp duty payable on the Development
Agreement of 2004.




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37.   On an overall reading of the impugned order, I find that the
latter appears to be the position. The authority has not recorded
any independent reason for holding that a Conveyance Deed
executed in 2007, after payment of duty at the rate then applied
by the competent authority, was chargeable at the rate of 10%. The
rate of 10% has been brought into the calculation because the
authority considered the transaction as having already amounted
to a conveyance in the year 2004. Therefore, the alleged short levy
of Rs.41,24,000/- appears to be the result of revisiting the
stampability of the Development Agreement.

38.   Once this conclusion is reached, the objection of the
Petitioner   regarding   limitation   becomes     important.      The
Development Agreement had been certified on 3 January 2004.
The first notice starting the proceeding was issued on 1 July 2011.
According to the case of the Petitioner, the period of six years had
expired on 2 January 2010. The impugned order does not give any
satisfactory reason why this limitation should not apply when the
basis of the demand is the alleged incorrect assessment of the
Development Agreement. The impugned order rejects this
objection by stating that the cause for recovery arose on execution
of the Conveyance Deed and not the Development Agreement. In
my view, this conclusion does not properly follow from its own
reasoning. The authority cannot, for the purpose of limitation, say
that the proceeding concerns only the Conveyance Deed and for
calculating the stamp duty, go back and hold that the Development
Agreement was a deemed Conveyance chargeable at the rate
applicable in the year 2004.



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39.   The findings recorded by the authority regarding the recitals
in the documents may justify examination of the true nature of the
transaction. However, I do not find it necessary to decide in this
petition whether the Development Agreement was an Agreement
to Sale deemed to be a Conveyance. That question would require
consideration of the complete terms of the Development
Agreement, the nature of possession, the rights reserved by the
Owner, the effect of the covenant for ultimate transfer and other
provisions governing the transaction. The impugned order notes
the grievance of the Petitioner that the Audit had relied upon
selected recitals and had not considered the entire document.

40.   Even assuming, for the purpose of argument, that the
interpretation of the recitals as made by the Respondents is
accepted, the demand cannot survive unless the power to reopen
the earlier adjudication was exercised within the period prescribed
by Section 53A. The question of limitation does not depend upon
whether the earlier decision was right or wrong. Where the statute
gives a revisional power for a specified period, such power has to
be exercised within that period.

41.   I am unable to accept the reasoning that execution of the
Conveyance Deed in the year 2007 created a fresh period for
revising the stamp duty already adjudicated and certified in
respect of the Development Agreement in the year 2004. The later
document may be relevant for understanding the earlier
transaction. It may provide some material for considering the
nature of the transaction. However, such material,, cannot change
the date of the earlier certificate or extend the period for



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reopening it.

42.   The impugned order directs that the Conveyance Deed
submitted in Adjudication Case No. ADJ/816/M/07 was short
levied with stamp duty of Rs.41,24,000/- and directs the Petitioner
to pay the said amount within thirty days. For the reasons recorded
above, the finding regarding short levy is inseparably based upon
the conclusion that the Development Agreement dated 16 January
2004 should have been treated as a transaction attracting stamp
duty applicable to a conveyance in that year. Since the proceeding
for taking such a view was initiated after expiry of the period of six
years from the certificate dated 3 January 2004, Respondent No.2
could not indirectly achieve, through a proceeding described as
relating to the Conveyance Deed, what could no longer be done in
respect of the Development Agreement.

43.   Consequently, the contention of the Petitioner regarding
limitation deserves to be accepted. The finding of Respondent No.2
that there was a short levy of Rs.41,24,000/- cannot, therefore, be
sustained. The impugned order dated 18 June 2016 is liable to be
quashed and set aside.

44.   In view of the above discussion, the following order is
passed:

      (i)    The Writ Petition is allowed;

      (ii)   The impugned order dated 18 June 2016 passed by
      Respondent No.2, the Chief Controlling Revenue Authority,
      insofar as it holds that the Conveyance Deed in Adjudication
      Case No. ADJ/816/M/07 was short levied by an amount of



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Rs.41,24,000/-, and directs the Petitioner to pay the said
amount, is quashed and set aside;

(iii) Consequently, the demand for recovery of stamp duty
of Rs.41,24,000/- pursuant to the impugned order shall not
survive;

(iv) Rule is made absolute in the aforesaid terms.

(v)   There shall be no order as to costs.

                                       (AMIT BORKAR, J.)




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