Execution Date Determines Vesting: Upholding Unamended Limitation for Stamp Duty Refunds

1. Introduction

The Supreme Court of India, in the matter of Harshit Harish Jain & Anr. v. The State of Maharashtra & Ors. (2025 INSC 104), has delivered a seminal ruling on how amendments to a statutory time limit for stamp duty refunds should be applied when a cancellation deed is executed prior to, but registered after, the new law’s effective date.

This dispute arose under the Maharashtra Stamp Act, 1958 (“the Act”), particularly focusing on whether the unamended two-year period for seeking a stamp duty refund or the subsequently introduced six-month period under Section 48(1) would govern. The Appellants, purchasers of a residential flat, found themselves compelled to cancel their Sale Agreement because of the developer’s delays. While the Deed of Cancellation was executed before the statutory amendment, it was registered after the amendment. The Appellants were denied refund on the ground of alleged time bar under the new six-month provision.

The Supreme Court has now clarified the critical point in time for determining limitation periods in this context, ruling in favor of the Appellants. This commentary outlines the background, key issues, analysis, and impact of this decision.

2. Summary of the Judgment

• The Court unequivocally held that where a right to seek a stamp duty refund has accrued prior to an amendment in law, the shorter limitation period ushered in by the amendment should not extinguish that vested right. As a result, the two-year period under the unamended Section 48(1) of the Maharashtra Stamp Act, 1958 governed the Appellants’ request for a refund.

• The Court observed that the right to refund was triggered at the time of execution of the Deed of Cancellation (17.03.2015), not on the date of its registration (28.04.2015). Thus, the post-amendment six-month limitation was deemed inapplicable to that vested right.

• The Court further held that the Chief Controlling Revenue Authority (CCRA), having once granted refund, could not recall or review its earlier decision in the absence of any express statutory power to do so under the Act.

• Consequently, all subsequent orders recalling the initial grant of refund were invalidated, and the refund order dated 08.01.2018 was restored. Additionally, the Court directed payment of simple interest at 6% from the date of the original order sanctioning refund and imposed a heightened interest rate (12%) if there was any further delay in releasing the amount.

3. Analysis

The Court relied on several rulings that affirm the principle that when a legislative amendment shortens a limitation period, such curtailment cannot retroactively defeat a vested right. Key among these were:

• M.P. Steel Corporation v. Commissioner of Central Excise: This case clarified that amendments to limitation provisions do not operate retroactively to extinguish a cause of action that has already accrued. The Supreme Court carefully explained that procedural amendments cannot be applied in such a way as to handicap a legitimate claim that was actionable under the prior law.
• Bano Saiyed Parwaz v. Chief Controlling Revenue Authority (2024 SCC OnLine SC 979): This ruling underlined that, in stamp law, the State should not hide behind technicalities in refusing refunds to applicants who had otherwise complied with the substantive law. The Court emphasized that a purely procedural or technical limitation should not wipe out the underlying right where the citizen’s conduct is bona fide.
• Additional references to Committee-Gfil v. Libra Buildtech (P) Ltd. and Kaluram Sitaram were also noted, reinforcing the broader principle that the State should act fairly and avoid unjust enrichment at the expense of citizens.

The Court’s reasoning proceeded step by step:

1. Accrual of Right: The Court focused on the timing of when the right to seek a refund takes effect. According to the unamended version of Section 48(1) of the Maharashtra Stamp Act, a two-year window was available for requesting refunds. The crux of the argument revolved around whether the “date of execution” or the “date of registration” triggered the relevant time limit.
2. Retroactive Curtailment of Limitation: The amended law, coming into effect on 24.04.2015, reduced the two-year time frame to six months. However, the Court ruled that the amendment could not be applied retrospectively to extinguish rights that had already vested before its enforcement date. The M.P. Steel Corporation precedent guided this holding.
3. Lack of Statutory Power to Review: The CCRA had granted the refund on 08.01.2018 but recalled it later in March 2018, citing the new six-month limit. The Court concluded that the Act did not provide any express power of review to the CCRA. Therefore, its subsequent orders recalling or reversing the grant of refund were void.
4. Equity and Fairness: The Court underscored that refusing refund on a technicality, especially when the State had no challenge to the merits of the claim for refund, would result in unfairly retaining the Appellants’ money. Delays caused by changes in the developer’s project and the close timing of legislative amendments were no fault of the Appellants.

This ruling has far-reaching implications for both taxpayers and quasi-judicial authorities:

• Precedential Clarity: The decision clarifies that execution of a document, and not merely its registration date, can be central in determining limitation periods, especially when statutory amendments shorten permissible timelines.
• Checks on Quasi-Judicial Overreach: The Court reinforced the principle that statutory bodies cannot exercise review powers unless explicitly conferred by the governing statute. This will curtail attempts by such authorities to revisit orders on their own initiative.
• Fair Treatment of Genuine Claims: The insistence that the State should not benefit from technical bar of limitations, particularly where activities were conducted in good faith, signals a more equitable approach to refunds and encourages timely, merit-based decisions by revenue authorities.
• Applicability Across Other Laws: While this case specifically interprets Section 48(1) of the Maharashtra Stamp Act, the reasoning about vested rights and retroactive curtailment of limitation can be pertinent to other statutes with similar frameworks.

4. Complex Concepts Simplified

5. Conclusion

The Supreme Court’s judgment in Harshit Harish Jain & Anr. v. The State of Maharashtra & Ors. (2025 INSC 104) establishes that where a party’s right to request stamp duty refund vests before an amending statute reduces the applicable limitation period, the pre-amendment period remains controlling. By focusing on the execution date of the cancellation deed, the Court ensures that legitimate vested rights are not defeated by purely procedural changes. Additionally, the decision draws bright lines around the authority of quasi-judicial bodies, reaffirming that they cannot recall or review their own final orders without express statutory permission. This judgment not only offers much-needed certainty in the realm of stamp law refunds but also amplifies the principle that the State must act fairly and cannot sidestep such fairness through mere technicalities.

In essence, the ruling serves as a robust affirmation of the principle that laws affecting substantive rights must operate prospectively and that parties are entitled to the full benefit of the law as it stood at the time the relevant cause of action arose. Consequently, it will play a pivotal role in providing clarity and predictability to both litigants and revenue authorities in similar disputes going forward.