Telangana High Court
Amer Ali Khan vs The State Of Telangana on 29 July, 2026
*THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH
AND
*THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN
+ WRIT APPEAL No.641 OF 2026
%29-07-2026
#Amer Ali Khan ...Appellant
vs.
$ The State of Telangana, rep. by its Principal Secretary, Revenue
(Registration & Stamps) Department and 3 others.
... Respondents
!Counsel for the appellant
: Ms. K.Jayasree, learned
counsel for the appellant.
^Counsel for respondents
: Sri Muralidhar Reddy Karatam,
learned Government Pleader for
Revenue (Stamps and
Registration).
<Gist :
>Head Note :
? Cases referred
1. (2015) 16 SCC 31
2. MANU/SC/0280/2024
3. 2023 SCC OnLine Del 7514
4. 2025 SCC OnLine Del 9042
5. 2024 SCC OnLine TS 4017
6. (2015) 3 ALD 279
2
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH
AND
THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN
WRIT APPEAL No.641 of 2026
DATE: 29.07.2026
Between:
Amer Ali Khan
....Appellant
And
The State of Telangana, Rep. by its
Principal Secretary, Revenue
(Registration & Stamps) Department
and 3 others
....Respondents
JUDGMENT
Heard Ms. K.Jayasree, learned counsel for the appellant;
Sri Muralidhar Reddy Katram, learned Government Pleader for
Revenue (Stamps and Registration) for the respondents and perused
the record.
2. This writ appeal is preferred under Clause 15 of the Letters
Patent, against the order dated 04.10.2024 passed by the learned
Single judge in W.P.No.21723 of 2023. By the said order, the learned
Single Judge dismissed the writ petition filed by the appellant herein.
History, Evolution and Object of the Indian Stamp Act, 1899
3. Before examining the rival submissions on the interpretation of
Section 49 of the Indian Stamp Act, 1899 (for short ‘1899 Act’), it
3
would be apposite to advert to the historical evolution, legislative
scheme and underlying object of the enactment. The controversy
involved in the present appeal cannot be resolved by reading Section
49 of 1899 Act in isolation. The provision has to be understood in
the backdrop and the context of the overall statutory framework and
the purpose sought to be achieved by the legislation.
4. The levy of stamp duty in India has its origin in the fiscal
measures introduced during the British period. The first
comprehensive enactment regulating stamp duties was the Stamp
Act of 1869, which was subsequently replaced by the 1899 Act. The
1899 Act was enacted as a consolidating statute to amend and unify
the law relating to stamp duties throughout British India. Subject to
subsequent amendments by Parliament and various State
Legislatures, it continues to constitute the principal legislation
governing the levy and collection of stamp duty on instruments.
5. The Indian Stamp Act is essentially a fiscal legislation. Its
dominant object is to secure revenue to the State by imposing a duty
upon specified instruments recording transactions having legal and
commercial significance. Section 3, being the charging provision,
levies stamp duty on instruments specified in the Schedule to the
Act. Therefore, the incidence of the levy is on the instrument and the
quantum of the levy is based on the transaction embodied therein.
4
The object of the statute is to generate public revenue through
instruments evidencing legally recognised transactions.
6. However, equally significant is the fact that the legislative
scheme does not proceed on the premise that every payment of
stamp duty is absolute, irrevocable or incapable of restitution. On
the contrary, the Legislature itself incorporated an elaborate
mechanism under Chapter V (Sections 49 to 55), captioned
“Allowances for Stamps in Certain Cases”, recognising that
circumstances may arise where the purpose for which stamp duty
was paid is not ultimately fulfilled. These provisions enable the
competent authority, subject to the prescribed conditions, to grant
allowance or refund where the stamp has become “spoiled” or has
otherwise ceased to serve the purpose for which it was purchased or
used.
7. The significance of these provisions has also been noticed by
the Law Commission of India in its 67th Report on the 1899 Act,
wherein it observed that the allowance provisions are intended to
afford relief in cases where expenditure has been incurred on stamps
but the instrument has, by reason of the circumstances enumerated
in the Act, become useless for the purpose for which it was intended.
The legislative recognition of such situations demonstrates that the
Act itself does not regard the levy of stamp duty as an inexorable
5
exaction divorced from the efficacy of the instrument or the purpose
sought to be achieved thereby.
8. The incorporation of Chapter V into the statutory framework
is, therefore, of considerable significance. It embodies the legislative
acknowledgment that while stamp duty is undoubtedly a fiscal
impost, the State is not entitled to retain such levy in every
conceivable situation irrespective of subsequent events. Where the
instrument fails to achieve the object for which it was brought into
existence or the transaction contemplated thereby cannot be
completed for reasons recognised by law, the Act itself contemplates
relief by way of allowance or refund. Thus the statutory provisions
reflect a legislative balance between the State’s legitimate interest in
protecting public revenue and the equally important principle that
fiscal legislation should not operate so as to impose an unwarranted
burden upon a citizen where the very foundation for retaining the
levy has ceased to exist.
9. It is in the backdrop of this legislative history and statutory
scheme that the scope and ambit of Section 49 of the 1899 Act falls
for consideration in the present appeal. The question before this
Court is not merely whether the document in question was executed
and presented for registration, but whether, upon the admitted
refusal of registration and consequent failure of the transaction, the
State can retain the entire stamp duty notwithstanding the absence
6
of any completed conveyance of the transaction intended. The
answer to that question must necessarily be found by construing the
provisions of the Act in a manner consistent with its object, its
legislative scheme and the constitutional principles governing State
action.
Factual matrix
10. The appellant, Sri Amer Ali Khan, represented by his Special
Power of Attorney (SPA) Holder, Sri Mohammed Ghouse Ifthaqri,
entered into a Sale Deed dated 31.08.2021 with Smt. Khairunnisa
Begum, wife of late Syed Yousuf Akhtar, in respect of an open plot of
land admeasuring 3,630 Sq yards situated in Sy Nos.599, 600, 601
and 611, bearing H.No.8-1 (corresponding to Old No.320/1), at
Shaikpet, Hyderabad, with the intention of acquiring title to the said
property through a duly registered conveyance.
11. For completion of the proposed transaction, the appellant
approached the Joint Sub-Registrar-II, Hyderabad (South), Banjara
Hills, the 4th respondent herein, to ascertain the stamp duty, transfer
duty, registration fee and other charges payable in respect of the
proposed sale deed. Pursuant thereto, the requisite particulars were
furnished by the registering authority. Accordingly, the appellant
paid a total sum of Rs.65,37,500/- towards stamp duty and transfer
duty through two e-challans, namely, Challan No.920MPRO50921
dated 05.09.2021 for Rs.10,500/- and Challan No.637RLR130921
7
dated 13.09.2021 for Rs.65,27,000/-. Thereafter, the Sale Deed was
presented for registration on 15.09.2021, whereupon it was admitted
and kept pending as ‘Pending Document No.P-99 of 2021’ on the file
of the 4th respondent.
12. Subsequently, by Refusal Order No.1 of 2021 dated
14.10.2021, the 4th respondent declined to register the document on
the ground that the requirements under the Registration Act, 1908
(for short ‘1908 Act’) had not been complied with. The specific
reasons for refusal, as recorded in the said order, pertained to the
alleged deficiencies and non-compliance with the requirements of the
1908 Act, on the basis of which the registering authority declined
registration of the document.
13. Upon receipt of the refusal order, the appellant did not pursue
the remedy of challenging the said order. Instead, appellant chose to
withdraw the proposal for registration and submitted a
representation dated 25.11.2021 to the 3rd and 4th respondents
seeking refund of the stamp duty, transfer duty, registration fee and
other charges paid in connection with Pending Document No.P-99 of
2021. It is the Appellant’s case that the said representation was
submitted within the period prescribed under Section 50 of the 1899
Act.
14. As no orders were passed on the aforesaid representation, the
appellant approached this Court by filing W.P.No.36625 of 2021,
8
seeking a direction upon the respondents to consider his
representation for refund of the amount paid towards the proposed
registration. By order dated 24.08.2022, the learned Single Judge,
without expressing any opinion on the merits, disposed of the writ
petition directing the District Registrar, Hyderabad (South), to
consider and dispose of the appellant’s representation dated
25.11.2021 strictly in accordance with law, preferably within eight
weeks from the date of receipt of a copy of the order.
15. Pursuant to the aforesaid direction, the 3rd respondent passed
Proceedings No.Refunds/8087/2021 dated 26.10.2022, whereby the
request for refund was considered component-wise. While directing
refund of the registration fee and user charges on the ground that
the document had not been registered, the 3rd respondent observed
that refund of mutation charges would be considered only after
issuance of appropriate Government guidelines. However, insofar as
the stamp duty and transfer duty amounting to Rs.65,37,500/- were
concerned, the request was rejected on the ground that the duties
paid through the respective challans had already been utilised in
respect of the subject document under the provisions of the 1899 Act
and, therefore, the purpose for which such duties were paid stood
served. The proceedings further disclose that the said decision was
taken based upon the clarification issued by the Commissioner and
Inspector General, Registration and Stamps, vide Memo
No.S2/9935/2021 dated 21.10.2022.
9
16. Aggrieved by the rejection of his claim for refund of the stamp
duty and transfer duty, the appellant instituted W.P.No.21723 of
2023, questioning the legality of the proceedings dated 26.10.2022.
The principal relief sought in the writ petition was to declare the
impugned proceedings insofar as they declined refund of the stamp
duty and transfer duty as illegal and arbitrary and to consequently
direct the respondents to refund the said amount in accordance with
law.
17. Before the learned Single Judge, the appellant contended,
inter alia, that once the proposed conveyance failed on account of
refusal of registration, the very purpose for which the stamp duty
had been paid stood frustrated, entitling him to refund thereof.
18. The respondents opposed the writ petition contending that the
liability to pay stamp duty arises under the 1899 Act, upon
execution of the instrument and is distinct from the process of
registration governed by the 1908 Act. It was their specific stand that
once the document had been executed and presented for registration,
the stamp duty stood utilised and no refund could be claimed merely
because registration was subsequently refused.
19. Upon consideration of the said rival submissions, the learned
Single Judge, by order dated 04.10.2024, dismissed W.P.No.21723 of
2023. The learned Single Judge held that the provisions of the 1899
Act and the 1908 Act operate in distinct fields and that refusal of
10
registration does not, by itself, entitle a party to claim refund of
stamp duty. It was further held that Section 49 of the 1899 Act deals
only with allowances in respect of spoiled stamps and does not
contemplate refund in the case of a document whose registration has
been refused. The decisions relied upon by the appellant were
distinguished on facts, and the proceedings of the District Registrar
were upheld.
20. Aggrieved thereby, the appellant has preferred the present Writ
Appeal.
Submissions on behalf of the appellant
21. Learned counsel appearing for the appellant, assailed the
impugned order and has advanced the following submissions:
i) That the stamp duty and transfer duty were paid solely for the
purpose of effecting registration of the Sale Deed and the
consequent transfer of title in favour of the appellant. It was
contended that, since registration of the document was refused
by the registering authority and the appellant thereafter
withdrew the intent to proceed with the transaction, the
instrument never attained legal efficacy and the intended
conveyance never came into existence. According to the
learned counsel, mere presentation of the document before the
registering authority cannot be equated with completion of the
11transaction or transfer of title, upon which the liability to pay
stamp duty would arise.
ii) That the appellant’s case squarely falls within the scope and
ambit of Section 49(d) of the 1899 Act, particularly clauses (3)
and (5) thereof. It was submitted that Section 49(d)(3)
contemplates grant of allowance where an instrument cannot
be completed so as to effect the intended transaction, while
Section 49(d)(5) provides for allowance where an instrument
totally fails of its intended purpose. Since the Sale Deed could
not be registered and the intended conveyance consequently
failed, it was argued that the instrument could neither be
completed nor achieve the purpose for which it was executed,
thereby entitling the appellant to claim refund under the said
provision.
iii) That the learned Single Judge erred in holding that Section 49
is confined only to cases of ‘spoiled stamps’ and does not
extend to a document whose registration has been refused. It
was argued that the expression ‘spoiled stamps’ employed in
Section 49 is not to be construed in a narrow or literal sense
but in the broader statutory context of stamps becoming
incapable of serving the purpose for which they were intended.
According to the learned counsel, where a document fails to
culminate in a valid conveyance on account of refusal of
12
registration, the stamp duty paid thereon becomes equally
incapable of serving its intended purpose and would therefore
fall within the legislative scheme of Section 49 of the 1899 Act.
iv) That the impugned proceedings dated 26.10.2022 rest solely
upon the clarification issued by the 2nd respondent in Memo
No.S2/9935/2021 dated 21.10.2022, wherein it was stated
that stamp duty is not refundable in respect of refused
documents. It was submitted that the said clarification is
merely an executive or administrative instruction without any
statutory force. It is contended that where the Indian Stamp
Act, 1899 permits refund in a given case, the benefit conferred
by the statute cannot be denied by relying upon an internal
departmental circular.
v) That the action of the respondents in refunding the registration
fee and user charges while simultaneously refusing refund of
the stamp duty and transfer duty is arbitrary, discriminatory
and violative of Article 14 of the Constitution of India. It was
contended that, having accepted that no registration had taken
place and consequently directing refund of the registration fee
and user charges, the respondents could not adopt a different
standard insofar as the stamp duty and transfer duty were
concerned.
13
vi) That retention of an amount exceeding Rs.65 lakhs, despite
the admitted failure of the intended conveyance, lacks any
rational basis and results in arbitrary deprivation of the
appellant’s money. It was submitted that the appellant has
neither acquired title to the property nor secured registration
of the document, yet has been denied refund of the substantial
amount paid towards stamp duty and transfer duty.
vii) That the appellant paid the requisite stamp duty and transfer
duty bona fide on the basis of the particulars furnished by the
registering authority for completing the proposed transaction.
Since the transaction ultimately failed and no conveyance
came into existence, the State is not entitled to retain the
amount collected towards stamp duty.
viii) That the appellant’s representation seeking refund was made
on 25.11.2021, well within the period of limitation prescribed
under Section 50 of the 1899 Act. It was therefore contended
that the claim for refund was maintainable and could not have
been rejected on the ground of limitation.
ix) The learned counsel in support of his case has placed reliance
upon the following decisions hereunder:
(i) Committee-GFL v. Libra Buildtech (P) Ltd. and Others 1 to
contend that where the transaction contemplated by the
1
(2015) 16 SCC 31
14parties fails and the purpose for which stamp duty was paid
remains unfulfilled, the party paying such duty is entitled to
seek refund thereof.
(ii) State of Maharashtra and Others v. National Organic
Chemical Industries Limited 2 in support of the contention
that stamp duty paid in circumstances where the statutory
purpose cannot be achieved is liable to be refunded in
accordance with law.
Submissions on behalf of the respondents
22. Per contra, learned Government Pleader (Stamps and
Registration) appearing for the respondents advanced the following
submissions:
i) That the liability to pay stamp duty arises upon the execution
of the instrument and that the object of the levy stands fulfilled
once the instrument is duly executed, stamped and presented
before the registering authority. It was contended that stamp
duty is a fiscal levy on the instrument itself and is not
dependent upon the subsequent act of registration. According
to the respondents, the appellant had already utilized the
stamp duty by affixing the requisite stamps and presenting the
Sale Deed for registration, and therefore, it cannot be
contended that the purpose for which the duty was paid
2
MANU/SC/0280/2024
15remained unfulfilled merely because registration was
subsequently refused.
ii) That the 1899 Act, and the 1908 Act, are two distinct and
independent enactments operating in separate fields. It was
contended that while the 1899 Act governs the levy and
collection of stamp duty on instruments, the 1908 Act
regulates the procedure for registration of documents.
According to the respondents, refusal of registration under the
provisions of the 1908 Act does not affect the levy or collection
of stamp duty under the 1899 Act. Since the stamp duty was
validly levied upon execution of the instrument, the
subsequent refusal of registration does not, by itself, confer
any right upon the appellant to seek refund of the duty already
paid.
iii) That Chapter V of the 1899 Act, dealing with ‘Allowances for
Stamps in Certain Cases’, exhaustively enumerates the
circumstances in which refund or allowance can be granted.
Particular reliance was placed upon Section 49 of the Act to
contend that the Legislature has consciously specified the
situations in which allowance is permissible. It was argued
that refusal of registration on account of non-compliance with
the provisions of the 1908 Act, does not find place amongst the
contingencies enumerated under Section 49, particularly
16
clause (d) thereof. It was further submitted that transfer duty
forms an integral component of stamp duty and both stand on
the same footing.
iv) That the appellant did not challenge Refusal Order No.1 of
2021 before the competent forum under the 1908 Act. Instead,
after receipt of the order of refusal, the appellant voluntarily
chose to withdraw the proposal for registration and sought
refund of the stamp duty. It was contended that the failure of
the proposed transaction was, therefore, attributable to the
appellant’s own decision not to pursue the statutory remedy
available against the order of refusal. Consequently, the
appellant cannot attribute the failure of the transaction to the
respondents and seek refund of the stamp duty on that basis.
v) That the provisions of the 1899 Act constitute an important
source of public revenue and are enacted in the larger fiscal
interest of the State. It was contended that acceptance of the
appellant’s contention would have wide-ranging fiscal
implications and may result in numerous claims for refund of
stamp duty in cases where parties, after executing and
presenting documents for registration, subsequently choose
not to proceed with the transaction. According to the
respondents, such an interpretation would adversely affect
17
public revenue and run contrary to the scheme and object of
the 1899 Act.
vi) The learned Assistant Government Pleader in support of his
case has relied upon the following decisions:
i. Citius Real Estate (P) Limited v. Union of India and another3
ii. Mulakh Raj Dua v. State Govt. N.C.T. of Delhi and another4
iii. P.Badri Premnath v. Commissioner & Inspector General of
Registration & Stamps and others 5iv. Dr.V.Chandra Sekhar v. The Chief Controlling Revenue
Authority and Commissioner, Inspector General of
Registration and Stamps and two others 6
23. We have taken note of the respective contentions urged by the
learned counsel for both sides.
Consideration by this Court
24. The principal question that falls for consideration is whether
the stamp duty and transfer duty paid by the appellant can be said
to have been ‘utilized’ or that the purpose for which such duty was
paid stood achieved merely because the Sale Deed was executed and
presented for registration, notwithstanding the subsequent refusal of
registration. The learned Single Judge proceeded on the premise
that, once the instrument was executed and presented before the
registering authority, the purpose of the stamp duty stood served. In
3 2023 SCC OnLine Del 7514
4 2025 SCC OnLine Del 9042
5 2024 SCC OnLine TS 4017
6
(2015) 3 ALD 279
18
our considered opinion, such an approach overlooks the distinction
between the taxable event attracting stamp duty and the object for
which the duty is paid in the case of a conveyance.
25. It is pertinent to note that the payment of stamp duty in the
case of a Sale Deed, is not an end in itself but forms an integral part
of the statutory process by which a conveyance is intended to be
completed through registration. The duty is paid to facilitate and give
legal effect to the intended transfer embodied in the instrument.
Mere execution or presentation of the document cannot, by itself, be
equated with completion of the intended conveyance. Where
registration is refused and the proposed transaction consequently
fails, the object for which the stamp duty was paid remains
unfulfilled. To hold otherwise would amount to treating the mere
presentation of the instrument as equivalent to the completion of the
transaction, a construction which neither accords with the scheme of
the 1899 Act, nor with the legal consequences flowing from refusal of
registration.
26. At this juncture, it is apposite to extract Section 49 of the 1899
Act hereunder for ready reference:
“49. Allowance for spoiled stamps.– Subject to such rules
as may be made by the State Government as to the evidence to
be required, or the enquiry to be made, the Collector may, on
application made within the period prescribed in section 50, and
if he is satisfied as to the facts, make allowance for impressed
stamps spoiled in the cases herein after mentioned, namely:–
(a) the stamp on any paper inadvertently and undesignedly
spoiled, obliterated or by error in writing or any other means
19rendered unfit for the purpose intended before any instrument
written thereon is executed by any person:
(b) the stamp on any document which is written out wholly or in
part, but which is not signed or executed by any party thereto:
(c) in the case of bills of exchange payable otherwise than on
demand or promissory notes;
(1) the stamp on any such bill of exchange signed by or on behalf
of the drawer which has not been accepted or made use of in
any manner whatever or delivered out of his hands for any
purpose other than by way of tender for acceptance:
Provided that the paper on which any such stamp is
impressed, does not bear any signature intended as or for the
acceptance of any bill of exchange to be afterwards written
thereon:
(2) the stamp on any promissory note signed by or on behalf of
the maker which has not been made use of in any manner
whatever or delivered out of his hands:
(3) the stamp used or intended to be used for any such bill of
exchange or promissory note signed by, or on behalf of, the
drawer thereof, but which from any omission or error has been
spoiled or rendered useless, although the same, being a bill of
exchange may have been presented for acceptance or accepted
or endorsed, or, being a promissory note, may have been
delivered to the payee:
Provided that another completed and duly stamped bill of
exchange or promissory note is produced identical in every
particular, except in the correction of such omission or error as
aforesaid, with the spoiled bill, or note.
(d) the stamp used for an instrument executed by any party
thereto which–
(1) has been afterwards found to be absolutely void in law from
the beginning:
(2) has been afterwards found unfit, by reason of any error or
mistake therein, for the purpose originally intended:
(3) by reason of the death of any person by whom it is necessary
that it should be executed, without having executed the same, or
of the refusal of any such person to execute the same, cannot be
completed so as to effect the intended transaction in the form
proposed:
20
(4) for want of the execution thereof by some material party, and
his inability or refusal to sign the same, is in fact incomplete and
insufficient for the purpose for which it was intended:
(5) by reason of the refusal of any person to act under the same,
or to advance any money intended to be thereby secured, or by
the refusal or non-acceptance of any office thereby granted,
totally fails of the intended purpose:
(6) becomes useless in consequence of the transaction intended
to be thereby effected being effected by some other instrument
between the same parties and bearing a stamp of not less value:
(7) is deficient in value and the transaction intended to be
thereby effected has been effected by some other instrument
between the same parties and bearing a stamp of not less value:
(8) is inadvertently and undesignedly spoiled, and in lieu
whereof another instrument made between the same parties and
for the same purpose is executed and duly stamped:
Provided that, in the case of an executed instrument, no
legal proceeding has been commenced in which the instrument
could or would have been given or offered in evidence and that
the instrument is given up to be cancelled.
Explanation.–The certificate of the Collector under section
32 that the full duty with which an instrument is chargeable,
has been paid is an impressed stamp within the meaning of this
section.
A plain reading of the said provision, particularly clause (d)
provides for allowance in respect of stamps used for an instrument
executed by any party thereto which, inter alia, “cannot be completed
so as to effect the intended transaction” or “totally fails of the
intended purpose”. Therefore, the scope and applicability of these
provisions fall for consideration in the present case.
27. In the case on hand, the Sale Deed was undoubtedly executed
and presented for registration. However, registration of the
document was refused by the registering authority and,
21
consequently, the proposed conveyance never attained legal efficacy.
The intended transaction could not be completed and the object for
which it was executed remained unfulfilled. Prima facie, such a
situation, in our view, bears a direct nexus to the contingencies
contemplated under clauses (3) and (5) of Section 49(d).
28. It is pertinent to note that the expression “spoiled stamps”,
occurring in Chapter V of the Act, cannot be construed in a narrow
or literal sense divorced from the statutory scheme. The legislative
intent underlying Sections 49 to 54 is to provide relief where, for any
of the contingencies specified therein, the instrument is rendered
incapable of achieving the purpose for which the stamp duty was
incurred. The allowance provisions thus recognise that,
notwithstanding payment of stamp duty, circumstances may arise
where the intended transaction cannot be brought to fruition.
29. While there can be no quarrel with the proposition that two
enactments i.e., the 1899 Act and 1908 Act operate in distinct fields,
in the context of a conveyance of immovable property, the two
statutes operate in a complementary manner. While the 1899 Act
governs the fiscal incidence on the instrument, the 1908 Act governs
the legal efficacy of the conveyance. A Sale Deed intended to transfer
immovable property must satisfy the requirements of both
enactments. If the registration is refused, the intended conveyance
remains incomplete and title does not pass in the manner
contemplated by law. It is in this context that the contention of the
22
respondents that the stamp duty stood “utilized” and that the
purpose of the levy stood “served” merely because the document was
presented for registration requires careful scrutiny. Mere execution
and presentation of an instrument cannot, by themselves, be
equated with completion of the intended transaction. Where the
conveyance itself fails on account of refusal of registration, the
question whether the instrument has “failed of its intended purpose”
must necessarily be examined in the light of Section 49(d) and the
legislative object underlying Chapter V of the Act. To hold that the
duty stands irrevocably consumed merely upon presentation of the
instrument would substantially dilute the remedial scheme embodied
in the allowance provisions. A distinct legal scenario arises where an
instrument, execution and registration fails to convey effective title
and a refund of stamp duty is sought, in such a situation, we are not
required to address that hypothesis here, as it is not the controversy
involved in the present case.
30. In the instant case, the impugned decision of the 3rd
respondent is founded upon the clarification issued by the 2nd
respondent, which is in the nature of an executive or administrative
instruction and does not have statutory force. It is a settled principle
of law that executive instructions cannot override, amend or
supplant the provisions of a statute. The 1899 Act, by virtue of
Sections 49 and 50, provides a statutory mechanism for seeking
allowance or refund of stamp duty in the contingencies contemplated
23
therein. Consequently, an administrative circular cannot impose an
absolute prohibition on refund in situations not expressly excluded
by the Act. Therefore, the memo issued by the 2nd respondent cannot
override or curtail the appellant’s statutory claim for allowance under
31. Equally significant is the stand adopted by the respondents in
the impugned proceedings. While directing refund of the registration
fee and user charges, the 3rd respondent expressly recorded that the
“subject document was refused without registration”. The
respondents have thus acknowledged that the intended registration
did not materialise and that the services, for which the registration
fee and user charges were collected were not rendered. Once such a
position is accepted, the refusal to refund the stamp duty and
transfer duty on the premise that the duties stood “utilized” or that
their purpose had been “served” cannot be sustained without
reference to the statutory scheme of the 1899 Act. Such differential
treatment, in the absence of any intelligible basis under the Act, is
arbitrary and falls foul of the mandate of Article 14 of the
Constitution of India.
32. It is also to be noted that the retention of the sum of
Rs.65,37,500/- by the State, despite the admitted failure of the
intended conveyance and without any registration of the instrument
and the transfer of title in favour of the appellant, results in the State
retaining monies for a transaction that never attained legal efficacy.
24
Such retention, in the facts and circumstances of the present case,
amounts to unjust enrichment and cannot be sustained in law.
33. The Hon’ble Supreme Court in Committee-GFL v. Libra
Buildtech Private Limited & Others (supra 1) observed that the
State, while dealing with claims of its citizens, ought not to rely upon
mere technicalities and is expected to act as an honest litigant. The
respondents’ refusal to consider the appellant’s claim solely on the
basis that the stamp duty stood “utilized” upon presentation of the
document, notwithstanding the admitted refusal of registration, does
not accord with the statutory scheme or the principles of fairness
that must inform State action under Article 14 of the Constitution.
The doctrine of restitution, which seeks to restore a party to the
position in which it stood before the failed transaction, equally
supports the appellant’s claim for refund.
34. The decisions relied upon by the learned Government Pleader
for Revenue are clearly distinguishable and do not apply to the facts
and circumstances of the present case, for the following reasons:
i. In Citius Real Estate (P) Limited (supra 3) , the writ petition
(civil) was filed inter alia challenging Section 54 of the Indian
Stamp Act, 1899 to the extent provided for deduction of 10% of
the Stamp duty as ultra vires Article 265 and 300A of the
Constitution of India. In the present case, the controversy that
is involved is whether the appellant is entitled for the refund of
25stamp duty upon a bona fide failure to proceed with the
intended transaction.
ii. In Mulakh Raj Dua (supra 4), the learned Single Judge
allowed the refund of the value of the stamps purchased which
were not used for executing instrument in question. The
subject matter in the said case was deduction of 10% amount
by the revenue authorities which was sought to be declared as
unlawful. The facts and circumstances of the cited cases are
different from the case on hand.
iii. P.Badri Premnath (supra 5), deals with the return of excess
stamp duty after a sale deed was executed and registered in
respect of an immovable property. Upon subsequent
verification, when it was found upon actual measurement that
the extent was lesser than the extent stated in the initially
registered instrument, a rectification deed was executed and a
refund was sought of the duty corresponding to the reduced
extent. The refund was refused by the revenue authorities and
the High Court held that the writ petitioner was not entitled to
claim the refund of the stamp duty in respect of reduced extent
inasmuch as the document was executed and registered. In
contrast, in the instance case at hand, the document was not
registered and the proposed sale transaction did not fructify.
iv. In Dr.V.Chandra Sekhar (supra 6), the petitioner had
engrossed the document on the entire amount of stamp duty,
26
where the document was to be engrossed on stamps in respect
of certain portion and a certain portion of the sum was to be
paid by way of cash. In such a case, the High Court was
pleased to hold that there was no provision in the statute for
the refund of portion of the duty amount. It was held that the
petitioner was not entitled for the money spent in view of
absence of any provision of the statute enabling such a refund.
In the present case, when the document was presented for
registration, the revenue authorities has refused registration of
the same. The transaction intended in the instrument had
failed and was never acted upon nor completed. Further, the
application for refund was made within time.
35. The respondents’ contention that since the appellant
voluntarily withdrew the proposal for registration, he is disentitled to
claim refund of the stamp duty, does not merit consideration. The
withdrawal of the proposal was subsequent to the passing of Refusal
Order No.1 of 2021, whereby the registering authority had already
declined registration of the document. The refusal order had
effectively brought the registration proceedings to an end. The mere
fact that the appellant did not challenge the order of refusal and
instead chose to withdraw the proposal cannot, by itself, defeat a
claim which otherwise arises under the provisions of the 1899 Act.
The right to seek allowance or refund, if otherwise available under
the statute, cannot be made to depend upon whether the order of
27
refusal was challenged in appeal or accepted by the party concerned.
The material consideration is that the intended conveyance never
came into existence and the transaction failed to attain legal efficacy.
Thus, the appellant’s decision not to pursue further proceedings
against the refusal order cannot operate as a bar to his claim for
refund.
36. Further, the appellant submitted his representation seeking
refund on 25.11.2021. The Sale Deed was executed on 31.08.2021,
presented for registration on 15.09.2021, and its registration was
refused by Refusal Order No.1 of 2021 dated 14.10.2021. The
application for refund was thus made well within the period of six
months prescribed under Section 50 of the 1899 Act. Therefore, the
appellant’s claim cannot be said to be barred by limitation.
Conclusion
37. For the foregoing reasons, this Court is of the considered view
that the impugned order dated 04.10.2024 passed by the learned
Single Judge in W.P.No.21723 of 2023 upholding the action of the
respondent authorities in refusing refund of the stamp duty and
transfer duty cannot be sustained. The refusal to grant refund solely
on the basis of an executive instruction, despite the admitted failure
of the intended conveyance, is legally unsustainable. Therefore, the
order dated 04.10.2024 passed by the learned Single Judge warrants
interference.
28
38. Accordingly, the Writ Appeal is allowed. The order dated
04.10.2024 passed by the learned Single Judge in W.P. No.21723 of
2023 is set aside. Consequently, the proceedings of the 3rd
respondent vide Proceedings No.Refunds/8087/2021 dated
26.10.2022, insofar as they reject the appellant’s claim for refund of
the stamp duty and transfer duty amounting to Rs.65,37,500/-
(Rupees Sixty-Five Lakhs Thirty-Seven Thousand Five Hundred
Only), are hereby quashed and set aside. The respondents are
directed to process and refund to the appellant the stamp duty and
transfer duty amounting to Rs.65,37,500/- (Rupees Sixty-Five Lakhs
Thirty-Seven Thousand Five Hundred Only), subject to such
statutory deductions, if any, as are permissible under the provisions
of the Indian Stamp Act, 1899 and the Rules framed thereunder,
within a period of eight (8) weeks from the date of receipt of a copy of
this judgment.
As a sequel, miscellaneous petitions, pending if any, stand
closed. No costs.
_______________________________
APARESH KUMAR SINGH, CJ
______________________________
G.M.MOHIUDDIN,J
Date: 29.07.2026
Note: LR Copy to be marked.
B/o.
ssp
