Bombay High Court Grants Relief: Directs No Payment Of Stamp Duty On Individual Members Agreements For Redeveloped Area
Mrs. Nirali Yash Desai, Real Estate Lawyer working with Damji Shamji Shah Group, Mumbai
ABSTRACT
A division bench of Justice G.S. Patel and Justice Neela Gokhale of the Hon’ble Bombay High Court pronounced a landmark judgment on 17th February, 2023 in Adityaraj Builders v/s. State of Maharashtra & ORS pertaining to the levy of stamp duty on the Permanent Alternate Accommodation Agreement (“PAAA”). The petitions challenged the Circulars dated 23rd June, 2015 and 30th March, 2017 issued by the Inspector General of Registration and Controller of Stamps, Maharashtra State charging stamp duty on PAAA’s and related guidelines. The bench observed that the issue was the demand by the stamp authority that the individual PAAA’s for members or existing occupants must also be stamped at a value reckoned at the cost of construction. However, the bench noted that the existing members and the occupants cannot be considered as ‘purchasers’ in any sense of the areas to which they are legally entitled upon reconstruction. The court held that the provision or stipulation for assessing stamp duty on the PAAA on the cost of construction of the new premises in lieu of the old premises cannot be sustained. The court further ruled that the individual members of the society shall be required to pay the stamp duty only in respect of the additional area which is purchased by him/her for consideration.
